Public Storage 2009 Annual Report Download - page 37

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cause shutdowns. Nearly half of our move-ins comes from sales channels dependent upon telecommunications
(telephone or Internet).
We have no interest in Canadian self-storage facilities owned by the Hughes Family.
The Hughes Family has ownership interests in, and operates, 52 self-storage facilities in Canada under the
name “Public Storage”, which name we license to the Hughes Family for use in Canada on a non-exclusive basis.
We currently do not own any interests in these facilities nor do we own any facilities in Canada. We have a right of
first refusal to acquire the stock or assets of the corporation engaged in the operation of the self-storage facilities in
Canada if the Hughes Family or the corporation agrees to sell them. However, we have no ownership interest in the
operations of this corporation, have no right to acquire their stock or assets unless the Hughes family decides to sell,
and receive no benefit from the profits and increases in value of the Canadian self-storage facilities. Although we
have no current plans to enter the Canadian self-storage market, if we choose to do so without acquiring the Hughes
Family interests in their Canadian self-storage properties, our right to use the Public Storage name in Canada may be
shared with the Hughes Family unless we are able to terminate the license agreement.
Through our subsidiaries, we continue to reinsure risks relating to loss of goods stored by tenants in the
self-storage facilities in Canada in which the Hughes Family has ownership interests. We acquired the tenant
insurance business on December 31, 2001 through our acquisition of PS Insurance Company, or PSICH. For the
years ended December 31, 2009 and 2008, PSICH received $642,000 and $768,000, respectively, in reinsurance
premiums attributable to the Canadian Facilities. Since PSICH’s right to provide tenant reinsurance to the Canadian
Facilities may be qualified, there is no assurance that these premiums will continue.
We are subject to laws and governmental regulations and actions that affect our operating results and
financial condition.
Our business is subject to regulation under a wide variety of U.S. federal, state and local laws, regulations
and policies including those imposed by the SEC, the Sarbanes-Oxley Act of 2002 and New York Stock Exchange,
as well as applicable labor laws. Although we have policies and procedures designed to comply with applicable laws
and regulations, failure to comply with the various laws and regulations may result in civil and criminal liability,
fines and penalties, increased costs of compliance and restatement of our financial statements.
There can also be no assurance that, in response to current economic conditions or the current political
environment or otherwise, laws and regulations will not be implemented or changed in ways that adversely affect
our operating results and financial condition, such as current federal legislative proposals to expand health care
coverage costs or facilitate union activity or otherwise increase operating costs.
Our tenant insurance business is subject to governmental regulation which could reduce our profitability or
limit our growth.
We hold Limited Lines Self Storage Insurance Agent licenses from a number of individual state
Departments of Insurance and are subject to state governmental regulation and supervision. This state governmental
supervision could reduce our profitability or limit our growth by increasing the costs of regulatory compliance,
limiting or restricting the products or services we provide or the methods by which we provide products and
services, or subjecting our businesses to the possibility of regulatory actions or proceedings. Our continued ability
to maintain these Limited Lines Self Storage Insurance Agent licenses in the jurisdictions in which we are licensed
depends on our compliance with the rules and regulations promulgated from time to time by the regulatory
authorities in each of these jurisdictions. Furthermore, state insurance departments conduct periodic examinations,
audits and investigations of the affairs of insurance agents.
In all jurisdictions, the applicable laws and regulations are subject to amendment or interpretation by
regulatory authorities. Generally, such authorities are vested with relatively broad discretion to grant, renew and
revoke licenses and approvals and to implement regulations. Accordingly, we may be precluded or temporarily
suspended from carrying on some or all of our activities or otherwise fined or penalized in a given jurisdiction. No