Public Storage 2010 Annual Report Download - page 95

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010
F-13
Loan Receivable from Shurgard Europe
As of December 31, 2010, we KDG D ¼373.7 million loan receivable from Shurgard Europe totaling
$495.2 million ¼PLOOLRQWRWDOLQJ.7 million at December 31, 2009). The loan, as amended, bears
interest at a fixed rate of 9.0% per annum and matures March 31, 2013. Prior to being amended on October 31,
2009, the loan bore interest at a fixed rate of 7.5% per annum and matured on March 31, 2010. All other
material terms and conditions remained the same after the amendment.
The loan is denominated in Euros and is translated to U.S. Dollars for financial statement purposes.
During each applicable period, because we expect repayment of the loan within two years of each respective
balance sheet date, we recognize foreign exchange rate gains or losses in income as a result of changes in
exchange rates between the Euro and the U.S. Dollar, totaling a loss of $41,932,000, a gain of $9,342,000 and a
loss of $25,086,000 in 2010, 2009 and 2008, respectively.
For the years ended December 31, 2010, 2009 and 2008, we recorded interest income of approximately
$24,268,000, $24,013,000 and $17,859,000, respectively, related to the loan. These amounts reflect 51% of the
aggregate interest on the loans, with the other 49%, reflecting our ownership interest in Shurgard Europe,
classified as equity in earnings of real estate entities. Loan fees collected from Shurgard Europe are amortized
on a straight-line basis as interest income over the applicable term to which the fee applies. We received
$24,539,000 ¼,200,000) in principal repayments on the loan during the year ended December 31, 2010.
Although there can be no assurance, we believe that Shurgard Europe has sufficient liquidity and
collateral, and we have sufficient creditor rights, such that credit risk relating to the loan is minimal. In
addition, we believe the interest rate on the loan approximates the market rate for loans with similar credit
characteristics and tenor, and that the carrying value of the loan approximates fair value. The characteristics of
the loan and comparative metrics utilized in our evaluation represent significant unobservable inputs, which are
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Other Comprehensive Income
Other comprehensive income consists primarily of foreign currency translation adjustments. Other
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equity section of our consolidated balance sheet, and is added to our net income in determining total
comprehensive income for the period as reflected in the following table:
For the Year Ended December 31,
2010 2009 2008
(Amounts in thousands)
Net income ......................................................
.
$ 696,114 $ 790,456 $ 973,872
Other comprehensive income (loss):
Aggregate foreign currency translation
adjustments for the period (a)................
.
(43,035) 26,591 (69,504)
Adjust for foreign currency translation
adjustments recognized during the
period:
Gain on disposition of real estate
investments, net .........................
.
--(37,854)
Foreign currency loss (gain) (b) .....
.
42,264 (9,662) 25,362
Other comprehensive income (loss) income
for the period .........................................
.
(771) 16,929 (81,996)
Total comprehensive income ..........................
.
$ 695,343 $ 807,385 $ 891,876