Public Storage 2010 Annual Report Download - page 9
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Ancillary Operations
(Amounts in millions)
Revenues Net income
2010 2009 2010 2009
Merchandise sales $ 25 $ 30 $ 7 $ 9
Tenant reinsurance premiums 65 63 55 53
Totals $ 90 $ 93 $ 62 $ 62
Merchandise sales declined for many reasons, most importantly, poor sales execution. We
are working to improve execution and pricing in 2011. Tenant reinsurance continues to
improve as a greater percentage of existing customers use this product. We expect this trend
to continue.
Dividend Policy
Since 1990, our dividend policy has been to distribute only our taxable income attributable to
common shareholders. While we may have been the first public REIT to have adopted this policy,
as discussed below, our philosophy before 1990 was quite different.
Over the last 20 years, we have paid dividends of about $30 per share and retained earnings of
$22 per share. During this period, our share price has increased from $7 to $101, so it would
appear that a dollar of retained earnings has produced more than a dollar of value. In 2010, our
REIT dividend pa4.
Our dividends will increase as a percentage of our earnings for two reasons. First, the extraordinary
tax benefits we realized from structuring the 2006, $5.5 billion Shurgard merger as taxable are
nearly gone. Second, most of our earnings come from properties we have owned a long time
and which have ever decreasing levels of depreciation. We will continue our long stated policy
of setting our dividends based on our taxable income. However, in future years we will have
less earnings to reinvest in a productive, tax efficient manner.
30th Anniversary as a Public Company
We had our 30th anniversary as a public company in 2010. In 1980, our Company, then called
Storage Equities, went public at $15 per share, raising $30 million. We were one of many entities
sponsored by the private company, Public Storage, which was founded in 1972. In 1995, we
acquired the private company and were renamed “Public Storage.”
(4) Green Street Advisors, Real Estate Securities Monthly, March 2011.