Public Storage 2003 Annual Report Download - page 56

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46
Equity in earnings of real estate entities for the year ended December 31, 2003 consists of our pro-rata
share of the Unconsolidated Entities based upon our ownership interest for the period. The following table sets forth
the significant components of equity in earnings of real estate entities:
Historical summary: Year Ended December 31, Dollar Year Ended December 31, Dollar
2003 2002 Change 2002 2001 Change
(Amounts in thousands)
Property operations:
PSB............................................................... $64,242 $65,212 $(970) $65,212 $52,200 $13,012
Disposed Investments (1) ............................. 10 325 (315) 325 16,278 (15,953)
Other Investments (2)................................... 6,278 5,667 611 5,667 5,769 (102)
70,530 71,204 (674) 71,204 74,247 (3,043)
Depreciation:
PSB............................................................... (26,048) (25,459) (589) (25,459) (17,534) (7,925)
Disposed Investments (1) ............................. - (65) 65 (65) (5,843) 5,778
Other Investments (2)................................... (1,705) (1,554) (151) (1,554) (1,719) 165
(27,753) (27,078) (675) (27,078) (25,096) (1,982)
Other: (3)
PSB (4)......................................................... (18,507) (15,292) (3,215) (15,292) (11,440) (3,852)
Disposed Investments (1) ............................. - - - - (296) 296
Other Investments (2)................................... 696 1,054 (358) 1,054 1,127 (73)
(17,811) (14,238) (3,573) (14,238) (10,609) (3,629)
Total equity in earnings of real estate entities .. $24,966 $29,888 $(4,922) $29,888 $38,542 $(8,654)
(1) Amounts include our pro-rata share of the earnings for the Development Joint Venture, which we began to consolidate
effective January 16, 2002 and two partnerships that we began to consolidate effective January 1, 2002. On the respective
dates of consolidation, we had obtained a controlling interest in these partnerships and began to consolidate the operations of
these partnerships, and no longer account for our interest in these partnerships using the equity method (see Note 3 to the
consolidated financial statements). Amounts also include income with respect to an investment that was disposed of in the
second quarter of 2003.
(2) Amounts include equity in earnings recorded for investments that have been held consistently throughout the three years
ended December 31, 2003.
(3) Other reflects our share of general and administrative expense, interest expense, interest income, and other non-property,
non-depreciation related operating results of these entities.
(4) Our equity in earnings includes our pro-rata share of gain on disposition of real estate investments totaling $187,000 and
$3,737,000, respectively, during 2003 and 2002 (none in 2001).
The decrease in equity in earnings of real estate entities when comparing 2002 to 2001, is caused by the
consolidation of the Development Joint Venture and two additional partnerships (as discussed in Note 3 to the
consolidated financial statements), partially offset by our pro-rata share of PSBs gain on sale of real estate
investments totaling $3,737,000 for 2002.
The decrease in equity in earnings of real estate entities when comparing 2003 to 2002, is caused by the net
impact of PSBs gains, losses, and impairment charges recorded in these periods.
Equity in earnings of PSB represents our pro-rata share (approximately 44% at December 31, 2003 and
2002) of the earnings of PS Business Parks, Inc., a publicly traded real estate investment trust (American Stock
Exchange symbol PSB) organized by the Company on January 2, 1997. As of December 31, 2003, we owned
5,418,273 common shares and 7,305,355 operating partnership units (units which are convertible into common
shares on a one-for-one basis) in PSB. At December 31, 2003, PSB owned and operated 18.3 million net rentable
square feet of commercial space located in eight states. PSB also manages approximately 960,000 net rentable
square feet of commercial space owned by the Company and affiliated entities at December 31, 2003 pursuant to
property management agreements.