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55
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
To limit our exposure to market risk, we principally finance our operations and growth with permanent
equity capital consisting of retained operating cash flow, capital raised through the issuance of common shares and
preferred shares. At December 31, 2010, our debt as a percentage of total equity (based on book values) was 6.5%.
Our preferred shares are not redeemable at the option of the holders. These shares, however, are
redeemable, after a set period of time, at our option. At December 31, 2010, our Series W, Series X, Series Y,
Series Z, Series A, Series C, Series D, Series E, Series F and Series G preferred shares are currently redeemable by
us at our option. UQGHUFHUWDLQFRQGLWLRQVUHODWLQJWRWKH&RPSDQ\¶VTXDOLILFDWLRQDVD5(,7WKHSUHIHUUHGVKDUHV
are not redeemable by the Company pursuant to its redemption option prior to the dates set forth in Note 8 to our
December 31, 2010 consolidated financial statements.
Our market-risk sensitive instruments include notes payable, which totaled $568,417,000 at December 31,
2010.
We have foreign currency exposures related to our investment in Shurgard Europe, which has a book value
of $264.7 million at December 31, 2010. We also have a loan receivable from Shurgard Europe, which is
GHQRPLQDWHGLQ(XURVWRWDOLQJ¼373.7 million ($495.2 million) at December 31, 2010.
The table below summarizes annual debt maturities and weighted-average interest rates on our outstanding
debt at the end of each year and fair values required to evaluate our expected cash-flows under debt agreements and
our sensitivity to interest rate changes at December 31, 2010 (dollar amounts in thousands).
2011 2012 2013 2014 2015 Thereafter Total Fair Value
Fixed rate debt.................
.
$ 133,775 $ 70,761 $ 265,583 $ 49,111 $ 29,133 $ 20,054 $ 568,417 $ 574,419
Average interest rate .......
.
5.40% 5.43% 5.25% 5.03% 5.03% 5.03%
Variable rate debt (1) ......
.
$ - $ - $ - $ - $ - $ - $ - $ -
Average interest rate .......
.
(1) Amounts include borrowings under our line of credit, which expires in March 2012. As of December 31, 2010, we
have no borrowings under our line of credit.