Public Storage 2011 Annual Report Download - page 90

PUBLIC STORAGE
NOTES TO FINANCIAL STATEMENTS
December 31, 2011
F-10
Collectively, at December 31, 2011, the Company and the Subsidiaries own 2,041 self-storage
facilities in the U.S., one self-storage facility in London, England and six commercial facilities in the U.S. At
December 31, 2011, the Unconsolidated Real Estate Entities are comprised of PSB, Shurgard Europe, as well as
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Investments own in aggregate 17 self-storage facilities with 1.0 million net rentable square feet in the U.S.
Use of Estimates
The financial statements and accompanying notes reflect our estimates and assumptions. Actual
results could differ from those estimates.
Income Taxes
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Revenue Code. As a REIT, we do not incur federal income tax if we distribute 100% of our REIT taxable
income (generally, net rents and gains from real property, dividends, and interest) each year, and if we meet
certain organizational and operational rules. We believe we will meet these REIT requirements in 2011, and
that we have met them for all other periods presented herein. Accordingly, we have recorded no federal income
tax expense related to our REIT taxable income.
Our merchandise and tenant reinsurance operations are subject to corporate income tax, and such taxes
are included in ancillary cost of operations. We also incur income and other taxes in certain states, which are
included in general and administrative expense.
We recognize tax benefits of income tax positions that are subject to audit only if we believe it is more
likely than not that the position would be sustained (including the impact of appeals, as applicable), assuming
the relevant taxing authorities had full knowledge of the relevant facts and circumstances of our positions. As
of December 31, 2011, we had no tax benefits that were not recognized.
Real Estate Facilities
Real estate facilities are recorded at cost. Costs associated with the development, construction,
renovation and improvement of properties, including interest and property taxes incurred during the
construction period, are capitalized. Internal and external transaction costs associated with acquisitions or
dispositions of real estate and equity interests in real estate are expensed as incurred. Expenditures for repairs
and maintenance are expensed as incurred. Buildings and improvements are depreciated on a straight-line basis
over estimated useful lives ranging generally between 5 to 25 years.
Acquisitions of interests in operating self-storage facilities, including the acquisition of a controlling
interest in facilities we have a partial interest in, are accounted for under the provisions of Codification
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their interests, the fair value of our existing investment, the fair value of any liabilities assumed, and the fair
value of remaining noncontrolling interests, is allocated to the underlying land, buildings, and identified
intangible assets based upon the relative individual estimated fair values. Any difference between the net
acquisition cost and the fair value of the net tangible and intangible assets acquired is recorded as goodwill.
Other Assets
Other assets primarily consist of prepaid expenses, accounts receivable, and restricted cash. During
the years ended December 31, 2011 and 2010, we recorded asset impairment charges with respect to other
assets totaling $1.9 million and $1.0 million, respectively.