Public Storage 2010 Annual Report Download - page 67

53
the respective subsidiary less any required reserves for capital expenditures or debt repayment. Such non-
controlling interests received a total of $18,612,000 in 2010, $18,812,000 in 2009 and $17,716,000 in 2008, which
represents our expectations with respect to future distribution levels.
Obligations with Respect to Acquisition and Development Activities: At December 31, 2010, we were
under contract to acquire five self-storage facilities for an aggregate of $19.5 million, which we closed in
January 2011. In February 2011, we acquired the leasehold interest in one of our existing self-storage properties for
approximately $6.6 million. During 2011, we will continue to seek to acquire self-storage facilities from third
parties; however, it is difficult to estimate the amount of third party acquisitions we will undertake.
We have a minimal development pipeline at December 31, 2010 and have no current plan to expand our
development activities. We plan on financing these activities in one or more of the following ways: with available
cash on-hand, the assumption of existing debt, borrowings on our line of credit, or the net proceeds from the
issuance of common or preferred securities.
European Activities: We have a 49% interest in Shurgard Europe and our institutional partner owns the
remaining 51% interest. As of December 31, 2010, Shurgard Europe RZHG XV ¼3.7 million ($495.2 million)
pursuant to a loan agreement. The loan matures on March 31, 2013, and bears interest at 9.0% per annum. The loan
is unsecured and can be prepaid in part or in full at anytime without penalty. During the year ended December 31,
2010, Shurgard Europe UHSDLG¼18.2 million ($24.5 million) of the loan. Future payments will be dependent upon
6KXUJDUG(XURSH¶VPDQDJHPHQW¶Vevaluation of uses for its available capital.
Shurgard Europe has a 20% interest in two joint ventures (First Shurgard and Second Shurgard). The two
joint ventures colOHFWLYHO\KDGDSSUR[LPDWHO\¼205.8 million ($272.7 million) of outstanding debt payable to third
parties at December 31, 2010, which is non-recourse to Shurgard Europe. One of the joint venture loans, totaling
¼94.5 million ($125.2 million), is due May 2011, with a right to extend one year. The other joint venture loan,
WRWDOLQJ¼111.3 million ($147.5 million), was recently refinanced and is now due in July 2013. Both joint venture
ORDQV DUH VHFXUHG E\ WKH MRLQW YHQWXUHV¶ UHVSHFWLYH IDFLOLWLHV, and are not guaranteed by Public Storage, Shurgard
Europe or any third party.
Shurgard Europe and its joint venture partner each have the option to initiate a liquidation of First Shurgard
or Second Shurgard. Under the terms of the governing agreements, initiating a liquidation would result, if the
process is not otherwise halted by the initiating party, in either a sale of interests between the two partners or, in
FHUWDLQFLUFXPVWDQFHVWKHVDOHRIDVVHWVWRDWKLUGSDUW\,WLV6KXUJDUG(XURSH¶VGHVLUHWRDFTXire its joint venture
SDUWQHU¶VLQWHUHVWVLQ)LUVW6KXUJDUGDQG 6HFRQG6KXUJDUGDWVRPH SRLQW LQ WKH IXWXUH  7KHUH LV QR DVVXUDQFH WKDW
VXFK DQ DFTXLVLWLRQ ZRXOG RFFXU RU WKH WLPLQJ WKHUHRI DQG ZRXOG GHSHQG XSRQ 6KXUJDUG (XURSH¶V DYDLODEOH
capital, comparison to other investment alternatives, the potential value of the properties to a third party, and the
MRLQWYHQWXUHSDUWQHU¶VGHVLUHWRVHOODWDSULFHWKDWZRXOGEHDWWUDFWLYHWR6KXUJDUG(XURSH
Redemption of Preferred Securities: As of December 31, 2010, several series of our preferred securities
were redeemable at our option upon at least 30 days notice with dividend rates ranging from 6.125% to 7.000% and
have an aggregate redemption value of approximately $1.2 billion. During 2011, we have an additional $1.3 billion
liquidation value of our preferred securities that become redeemable, most notably $518 million of our 7.25%
Series I Cumulative Preferred Shares and $425 million of our 7.25% Series K Cumulative Preferred Shares, which
are available for redemption on May 3, 2011 and August 8, 2011, respectively. Generally our strategy is to redeem
a preferred security with the proceeds from the issuance of a new preferred series having a lower dividend rate, thus
reducing our cost of capital, but not necessarily reducing our overall leverage. Accordingly, the redemption of any
of the series of preferred securities that are callable will depend upon many factors including current dividend rates
that we might pay on newly issued preferred securities. None of our preferred securities are redeemable at the
option of the holders.
5HSXUFKDVHVRI &RPSDQ\¶V&RPPRQ6hares: Our Board of Trustees has authorized the repurchase from
time to time of up to 35,000,000 of our common shares on the open market or in privately negotiated transactions.
During 2010, we did not repurchase any of our common shares. From the inception of the repurchase program
through February 28, 2011, we have repurchased a total of 23,721,916 common shares at an aggregate cost of