Public Storage 2013 Annual Report Download - page 27

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We are subject to laws and governmental regulations and actions that require us to incur compliance
costs affecting our operating results and financial condition.
Our business is subject to regulation under a wide variety of U.S. federal, state and local laws,
regulations and policies including those imposed by the SEC, the Sarbanes-Oxley Act of 2002, the Dodd-
Frank Wall Street Reform and Consumer Protection Act and New York Stock Exchange, as well as
applicable labor laws. Although we have policies and procedures designed to comply with applicable laws
and regulations, failure to comply with the various laws and regulations may result in civil and criminal
liability, fines and penalties, increased costs of compliance, restatement of our financial statements and
could also affect the marketability of our real estate facilities.
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, 2013, we recorded a total of
$67.8 million in net income from our tenant reinsurance activities.
ITEM 1B. Unresolved Staff Comments
None.