Public Storage 2010 Annual Report Download - page 99

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010
F-17
unconsolidated entities, for an aggregate cost of $55,957,000, consisting of $43,569,000 in cash, $2,138,000 in
existing investments, and assumed mortgage debt totaling $10,250,000. The aggregate cost was allocated
$52,932,000 to real estate facilities and $3,025,000 to intangibles. During 2008, we received net proceeds from
disposals totaling $2,227,000, and recorded a gain on disposition of $1,283,000. In addition, we recorded an
impairment charge with respect to real estate facilities totaling $250,000 in 2008.
At December 31, 2010, the adjusted basis of real estate facilities for federal tax purposes was
approximately $7.3 billion (unaudited).
5. Investments in Real Estate Entities
The following table sets forth our investments in the real estate entities at December 31, 2010 and
2009, and our equity in earnings of real estate entities for each of the three years ended December 31, 2010
(amounts in thousands):
Investments in Real Estate Entities at
December 31,
Equity in Earnings of Real Estate Entities for the
Year Ended December 31,
2010 2009 2010 2009 2008
PSB..........................................
.
$ 323,795 $ 326,145 $ 20,719 $ 35,108 $ 14,325
Shurgard Europe ......................
.
264,681 272,345 15,872 16,269 4,134
Other Investments ...................
.
13,093 13,826 1,761 1,867 1,932
Total ..................................
.
$ 601,569 $ 612,316 $ 38,352 $ 53,244 $ 20,391
Included in equity in earnings of real estate entities for the year ended December 31, 2009 is
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36%¶VUHSXUFKDVHVRISUHIHUUHGVWRFNDQGSUHIHUUHG units for amounts that were less than the related book value,
during the period. During 2008, we disposed of one of the Other Investments in exchange for another asset
valued at $5,300,000, and recorded a loss on disposition of real estate investments for a total of $9,423,000.
During the years ended December 31, 2010, 2009 and 2008, we received cash distributions from our
investments in real estate entities totaling $49,888,000, $49,408,000 and $43,455,000, respectively.
During the years ended December 31, 2010 and 2009, our investment in Shurgard Europe increased by
approximately $789,000 and $15,764,000, respectively, due to the impact of changes in foreign currency
exchange rates. During the year ended December 31, 2009, our investments in real estate entities increased by
$48,118,000 due to (i) $17,825,000 representing our acquisition of an additional 383,333 shares of PSB
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Investment in PSB
PSB is a REIT traded on the New York Stock Exchange, which controls an operating partnership
(collectively, the REIT and the operating partnership are referred tRDV³36%´:HKDYHDFRPPRQHTXLW\
interest in PSB as of December 31DQGFRPSULVHGRIRXURZQHUVKLSRIVKDUHVRI36%¶V
common stock and 7,305,355 limited partnership units in the operating partnership. The limited partnership
units are convertible at our option, subject to certain conditions, on a one-for-one basis into PSB common stock.
Based upon the closing price at December 31, 2010 ($55.72 per share of PSB common stock), the shares and
units we owned had a market value of approximately $730.3 million as compared to our book value of
$323.8 million. We account for our investment in PSB using the equity method.
During the year ended December 31, 2009, PSB sold 3,450,000 shares of its common stock in a public
offering for net proceeds of $153.6 million. In accordance with FASB ASC Topic 323, Investments ± Equity
Method and Joint Ventures, we recognized a gain totaling $30,293,000 on the share issuance by PSB, as if we