Public Storage 2013 Annual Report Download - page 49

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39
Historical summary: Year Ended December 31, Year Ended December 31,
2013 2012 Change 2012 2011 Change
(Amounts in thousands)
Equity in earnings:
PSB $ 23,199 $ 10,638 $ 12,561 $ 10,638 $ 27,781 $ (17,143)
Shurgard Europe 32,694 33,223 (529) 33,223 29,152 4,071
Other Investments 1,686 1,725 (39) 1,725 1,771 (46)
Total equity in earnings $ 57,579 $ 45,586 $ 11,993 $ 45,586 $ 58,704 $ (13,118)
Investment in PSB: At December 31, 2013, we have an approximate 42% common equity
interest in PSB, comprised of our ownership of 7,158,354 shares of PSB’s common stock and 7,305,355
limited partnership units in an operating partnership controlled by PSB (41% as of December 31, 2012,
comprised of our ownership of 5,801,606 shares of PSB’s common stock and 7,305,355 limited partnership
units at December 31, 2012). The limited partnership units are convertible at our option, subject to certain
conditions, on a one-for-one basis into PSB common stock.
During 2013, we purchased 406,748 shares of PSB common stock in open-market transactions at
an average cost of $73.15 per share.
On November 7, 2013, we purchased 950,000 shares of PSB common stock from PSB at $79.25
per share, concurrent with PSB’s sale of 1,495,000 additional shares to the public at the same price per
share.
At December 31, 2013, PSB owned and operated 29.7 million rentable square feet of commercial
space located in eight states. PSB also manages commercial space that we own pursuant to property
management agreements.
Equity in earnings from PSB increased to $23.2 million in 2013 from $10.6 million in 2012. This
increase was due primarily to EITF D-42 charges from PSB’s redemptions of preferred securities recorded
in 2012, combined with increases in operating income for its newly acquired and same-park facilities. See
Note 4 to our December 31, 2013 financial statements for selected financial information on PSB, as well as
PSB’s filings and selected financial information that can be accessed through the SEC, and on PSB’s
website, www.psbusinessparks.com.
Equity in earnings from PSB decreased to $10.6 million in 2012, as compared to $27.8 million in
2011. This decrease was principally due to (i) the impact of PSB’s redemptions of preferred securities in
2011 and 2012, which reduced income allocated to the common equity holders in 2012, and increased
income allocable to the common equity holders in 2011, (ii) increased depreciation and interest expense as
a result of the properties PSB acquired in 2011 and 2012, partially offset by (iii) incremental income
generated by the properties PSB acquired in 2011 and 2012.
Our investment in PSB provides us with some diversification.
Investment in Shurgard Europe: Equity in earnings of Shurgard Europe represents our 49%
equity share of Shurgard Europe’s net income. At December 31, 2013, Shurgard Europe’s operations are
comprised of 187 wholly-owned facilities with 10 million net rentable square feet. Selected financial data
for Shurgard Europe for 2013, 2012 and 2011 is included in Note 4 to our December 31, 2013 financial
statements. As described in more detail in Note 4, we receive interest income and trademark license fees
from Shurgard Europe.
Equity in earnings from Shurgard Europe decreased to $32.7 million for the year ended
December 31, 2013 from $33.2 million for the same period in 2012.