Public Storage 2012 Annual Report Download - page 34

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The Patient Protection and Affordable Care Act as well as other healthcare reform legislation recently
passed or being considered by Congress and state legislatures (collectively, the “Healthcare Legislation”) are
expected to impact our business beginning in 2014. Based on its current form, we believe that the Healthcare
Legislation will at least moderately increase our costs; however, there could be a significant further negative impact
to our costs and business depending upon how the various governmental agencies design and implement the specific
regulations to implement the Patient Protection and Affordable Care Act, the nature of further legislation that may
be passed at the national and local level, and other factors.
In response to current economic conditions or the current political environment or otherwise, laws and
regulations could be implemented or changed in ways that adversely affect our operating results and financial
condition, such as legislation that could facilitate union activity or that would otherwise increase operating costs.
All our properties must comply with the Americans with Disabilities Act and with related regulations and
similar state law requirements, as well as various real estate and zoning laws and regulations, which are subject to
change and could become more costly to comply with in the future. Compliance with these requirements can
require us to incur significant expenditures, which would reduce cash otherwise available for distribution to
shareholders. A failure to comply with these laws could lead to fines or possible awards of damages to individuals
affected by the non-compliance. Failure to comply with these requirements could also affect the marketability of
our real estate facilities.
Our tenant insurance business is subject to governmental regulation which could reduce our profitability or
limit our growth.
We hold Limited Lines Self-Service Storage Insurance Agent licenses from a number of individual state
Departments of Insurance and are subject to state governmental regulation and supervision. Our continued ability to
maintain these Limited Lines Self-Service Storage Insurance Agent licenses in the jurisdictions in which we are
licensed depends on our compliance with related rules and regulations. The regulatory authorities in each
jurisdiction generally have broad discretion to grant, renew and revoke licenses and approvals, to promulgate,
interpret, and implement regulations, and to evaluate compliance with regulations through periodic examinations,
audits and investigations of the affairs of insurance agents. As a result of regulatory or private action in any
jurisdiction, we may be temporarily or permanently suspended from continuing some or all of our reinsurance
activities, or otherwise fined or penalized or suffer an adverse judgment. For the year ended December 31, 2012, we
recorded a total of $63.5 million in net income from our tenant reinsurance activities.
Developments in California may have an adverse impact on our business and financial results.
Approximately one fifth of our U.S. properties, and our corporate headquarters, are located in California.
California is facing budgetary problems and deficits. Actions that may be taken in response to these problems, such
as increases in property taxes, changes to sales taxes, adoption of a proposed “Business Net Receipts Tax” or other
governmental efforts to raise revenues, could adversely impact our business and results of operations. There has
been legislative discussion regarding the repeal of certain components of “Proposition 13,” which, if so repealed,
could result in a substantial increase in our property tax expense.