Public Storage 2010 Annual Report Download - page 93

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010
F-11
and cash equivalents and restricted cash are only invested in instruments with an investment grade rating. See
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instrument.
At December 31, 2010, due primarily to our investment in and loan receivable from Shurgard Europe,
our operations and our financial position are affected by fluctuations in currency exchange rates between the
Euro, and to a lesser extent, other European currencies, against the U.S. Dollar.
We estimate the fair value of our notes payable to be $574,419,000 at December 31, 2010, based
primarily upon discounting the future cash flows under each respective note at an interest rate that approximates
loans with similar credit quality and term to maturity. The characteristics of the notes payable and comparative
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is utilized in FASB Codification Section 820-10-35-47.
We have estimated the fair value of our financial instruments using available market information and
appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop
estimates of market value. Accordingly, estimated fair values are not necessarily indicative of the amounts that
could be realized in current market exchanges.
Goodwill
Goodwill represents the excess of acquisition cost over the fair value of net tangible and identifiable
intangible assets acquired in business combinations, and has an indeterminate life. Each business combination
from which our goodwill arose was for the acquisition of single businesses and accordingly, the allocation of
our goodwill to our business segments is based directly on such acquisitions. Our goodwill balance of
$174,634,000 is reported net of accumulated amortization of $85,085,000 as of December 31, 2010 and 2009.
Intangible Assets
Our tenant intangibles are finite-lived intangible assets representing primarily the estimated value of
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Intangibles are amortized relative to the benefit of the tenants in place to each period. Accumulated
amortization reflects those individual real estate facilities where the related Tenant Intangibles had not been
fully amortized at each applicable date.
At December 31, 2010, our Tenant Intangibles have a net book value of $23,267,000 ($19,446,000 at
December 31, 2009). Accumulated amortization totaled $21,844,000 at December 31, 2010 ($14,688,000 at
December 31, 2009), and amortization expense of $13,261,000, $5,530,000 and $51,158,000 was recorded for
the years ended December 31, 2010, 2009 and 2008, respectively. During the year ended December 31, 2010,
our Tenant Intangibles were increased by $17,280,000 in connection with the acquisition of 42 self-storage
facilities (Note 4) and were reduced by $198,000 with an impairment charge for a facility that was subsequently
disposed.
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Shurgard Europe pursuant to a licensing agreement, with a book value of $18,824,000 at December 31, 2010
and 2009. The Shurgard trade name has an indefinite life and, accordingly, we do not amortize this asset but
instead analyze it on an annual basis for impairment. No impairments have been noted from any of our annual
evaluations.
Evaluation of Asset Impairment
We evaluate our real estate, tenant intangible assets, and other long-lived assets for impairment on a
quarterly basis. We first evaluate these assets for indicators of impairment, and if any indicators of impairment
are noted, we determine whether the carrying value of such assets is in excess of the future estimated