Public Storage 2010 Annual Report Download - page 58

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operating results will also be impacted by the ultimate returns realized on the reinvestment of the cash proceeds
received in connection with this transaction, including the proceeds from the collection of the loan receivable and
the timing thereof.
At December 31, 2010 6KXUJDUG (XURSH¶V operations comprise 188 facilities with an aggregate of
approximately 10 million net rentable square feet. The portfolio consists of 116 wholly-owned facilities and 72
facilities owned by two joint venture partnerships, in which Shurgard Europe has a 20% equity interest.
Our equity in earnings from Shurgard Europe is comprised of our 49% equity share in the net income of
Shurgard Europe, as well as 49% of the interest earned with respect to the loan receivable from Shurgard Europe
and 49% of trademark license fees received from Shurgard Europe, which are reclassified in consolidation from
interest and other income to equity in earnings of Shurgard Europe. The amount of interest reclassified was
approximately $24.1 million in 2010, $23.9 million in 2009 and $17.8 million in 2007.
Equity in earnings from our investment in Shurgard Europe for the year ended December 31, 2010 was
$15,872,000 as compared to $16,269,000 for the same period in 2009, representing a decrease of $397,000. This
decrease is due primarily to i) the effect of a change in the average exchange rate of the Euro relative to the U.S.
Dollar to 1.326 for the year ended December 31, 2010, as compared to 1.393 for the same period in 2009, (ii) an
increase in general and administrative expense, and (iii) additional depreciation expense, offset partially by iv) our
pro-rata share of 6KXUJDUG(XURSH¶VVDPH-VWRUHSURSHUWLHV¶LQFUHDVHLQQHWRSHUDWLQJLQFRPHRQDFRQVWDQWH[FKDQJH
rate basis (see table below) and (v) improvements in operating income from recently developed facilities.
Equity in earnings from our investment in Shurgard Europe for the year ended December 31, 2009 was
$16,269,000 compared to $4,134,000 for the same period in 2008, representing an increase of $12,135,000. This
increase includes i) a reduction in our pro-UDWDVKDUHRI6KXUJDUG(XURSH¶VGHSUHFLDWLRQH[SHQVHSULPDULO\GXHWR
declines in tenant intangible amortization, ii) our pro-UDWD VKDUH RI D UHGXFWLRQ LQ 6KXUJDUG (XURSH¶V WKLUG SDUW\
interest expense (joint ventures in which Shurgard Europe has a 20% interest refinanced their outstanding debt,
effective November 1, 2009, at substantially lower interest rates), (iii) the timing of our disposition of the 51%
interest in Shurgard Europe as equity in earnings for 2008 only includes amounts for the period of April 1, 2008
through December 31, 2008 while the 2009 includes amounts for the entire year, offset by iv) our pro-rata share of
6KXUJDUG(XURSH¶VVDPH-VWRUHSURSHUWLHV¶GHFOLQHLQQHWRSHUDWLQJLQFRPH on a constant exchange rate basis, and (v)
the effect of a change in the average exchange rate of the Euro relative to the U.S. Dollar to 1.393 for the year ended
December 31, 2009 as compared to 1.470 for the same period in 2008.
:HHYDOXDWHWKHSHUIRUPDQFHPHWULFVRI6KXUJDUG(XURSH¶V6DPH6tore Facilities in order to evaluate the
performance of our investment in Shurgard Europe, because the Shurgard Europe Same Store Facilities represent the
primary driver of our pro-rata share of earnings of Shurgard Europe.
The Shurgard Europe Same Store Facilities represent those 91 facilities that have been wholly-owned by
Shurgard Europe and stabilized since January 1, 2008 and therefore provide meaningful comparisons for 2008,
2009, and 2010. The following table reflects the operating results of these 91 facilities.