Public Storage 2010 Annual Report Download - page 46

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32
Europe.
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Net income with respect to our self-storage operations increased by $0.8 million during the year ended
December 31, 2010, when compared to the same period in 2009. This was due to a $21.7 million increase in
revenues with respect to the Other Facilities due primarily to the acquisition of 42 facilities during 2010, partially
offset by increased amortization of tenant intangible assets at these 42 facilities. Net income with respect to our
self-storage operations increased by $12.7 million during the year ended December 31, 2009, when compared to the
same period in 2008. This was due to a) declining amortization of tenant intangible assets acquired in the merger
with Shurgard in 2006, b) a 1.9% reduction in cost of operations for the Same Store facilities, and c) a $11.3 million
increase in revenues with respect to the Other Facilities, offset by d) a 3.1% decrease in revenues for our Same Store
facilities and e) the deconsolidation of the facilities owned by Shurgard Europe effective April 1, 2008.
Net Operating Income
:H UHIHU KHUHLQ WR QHW RSHUDWLQJ LQFRPH ³12,´ RI RXU VHOI-storage facilities, which is a non-GAAP
financial measure that excludes the impact of depreciation and amortization expense. Although depreciation and
amortization are a component of GAAP net income, we believe that NOI is a meaningful measure of operating
performance, because we utilize NOI in making decisions with respect to capital allocations, property performance,
and comparing period-to-period and market-to-market property operating results. In addition, we believe the
investment community utilizes NOI in determining operating performance and real estate values, and does not
consider depreciation expense as it is based upon historical cost. NOI is not a substitute for net operating income
after depreciation and amortization or net income in evaluating our operating results. The following reconciles NOI
generated by our self-storage segment to our consolidated net income in our December 31, 2010 consolidated
financial statements.