Public Storage 2012 Annual Report Download - page 98

PUBLIC STORAGE
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
F-19
2012 2011 2010
(Amounts in thousands)
For the year ended December 31,
Total revenue ........................................... $ 13,590 $ 13,143 $ 12,629
Cost of operations and other expenses ..... (4,300) (4,989) (4,853)
Depreciation and amortization................. (2,140) (2,252) (2,197)
Net income ........................................ $ 7,150 $ 5,902 $ 5,579
As of December 31,
Total assets (primarily self-storage
facilities) ............................................ $ 27,710 $ 29,510
Total accrued and other liabilities ........... 1,291 1,396
Total Partners’ equity .............................. 26,419 28,114
5. Loan Receivable from Unconsolidated Real Estate Entity
As of December 31, 2012 and 2011, we had a Euro-denominated loan receivable from Shurgard
Europe with a balance of €311.0 million at both periods ($411.0 million at December 31, 2012 and
$402.7 million at December 31, 2011), which bears interest at a fixed rate of 9.0% per annum and matures
February 15, 2015. We believe that the interest rate on the loan to Shurgard Europe approximates the market
rate for loans with similar credit characteristics and tenor, and that the fair value of the loan approximates book
value. In our evaluation, we considered that Shurgard Europe has sufficient operating cash flow, liquidity and
collateral, and we have sufficient creditor rights such that credit risk is mitigated.
Because we expect repayment of this loan in the foreseeable future, foreign exchange rate gains or
losses due to changes in exchange rates between the Euro and the U.S. Dollar are recognized in income, under
“foreign currency gain (loss).” For 2012, 2011 and 2010, we recorded interest income with respect to this loan
(representing 51% of the aggregate interest received; see Note 4) of approximately $18.7 million, $23.0 million
and $24.3 million, respectively. We have received a total of €80.9 million in principal repayments on this loan
since its inception on March 31, 2008.
On February 9, 2011, we loaned PSB $121.0 million. The loan had a six-month term and bore interest
at a rate of three-month LIBOR plus 0.85% (1.13% per annum for the term of the loan). For 2011, we recorded
interest income of approximately $0.7 million related to the loan. The loan was repaid in 2011.
In March 2011, we provided bridge financing to Shurgard Europe totaling $237.9 million, bearing
interest at a fixed rate of 7.0% per annum and denominated in U.S. Dollars, which it used to acquire its partner’s
80% interests in two joint ventures. In June 2011, our joint venture partner in Shurgard Europe effectively
purchased 51% of the loan from us for $121.3 million and the entire loan balance was exchanged for an equity
interest in Shurgard Europe. In addition to interest on the bridge financing, during 2011, we received $1.5
million in other income from our joint venture partner for our interim funding of its 51% pro rata share of
Shurgard Europe’s cost to acquire the interests.
6. Line of Credit and Notes Payable
We have a $300 million revolving line of credit (the “Credit Facility”) that expires on March 21, 2017.
Amounts drawn on the Credit Facility bear annual interest at rates ranging from LIBOR plus 0.925% to LIBOR
plus 1.850% depending on our credit ratings (LIBOR plus 0.950% at December 31, 2012). In addition, we are
required to pay a quarterly facility fee ranging from 0.125% per annum to 0.400% per annum depending on our
credit ratings (0.125% per annum at December 31, 2012). At December 31, 2012, outstanding borrowings
under this Credit Facility totaled $133.0 million. We had no outstanding borrowings on our Credit Facility at