Public Storage 2013 Annual Report Download - page 50

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40
Equity in earnings from Shurgard Europe increased to $33.2 million for the year ended
December 31, 2012 from $29.2 million for the same period in 2011. The increase is due to our equity share
of (i) improved property operations, (ii) reduced interest expense due to a reduction in interest rates and
repayment of principal on third-party debt (iii) the impact of Shurgard Europe’s March 2, 2011 acquisition
of the remaining 80% interest it did not own in two joint ventures that owned 72 self-storage facilities,
partially offset by (iv) a reduction in foreign currency exchange rates when converting Euros into
U.S. Dollars for reporting purposes.
Shurgard Europe has no development pipeline and no expectations in the short-term of acquiring
any facilities from third parties. Accordingly, at least in the short-term, our future earnings from Shurgard
Europe will be affected primarily by the operating results of its existing facilities, as well as the exchange
rate between the U.S. Dollar and currencies in the countries Shurgard Europe conducts its business,
principally the Euro.
European Same Store Facilities: The Shurgard Europe Same Store Pool represents the 163
facilities (8.7 million net rentable square feet, representing 86% of the aggregate net rentable square feet of
Shurgard Europe’s self-storage portfolio) that have been consolidated and operated by Shurgard Europe on
a stabilized basis since January 1, 2011 and therefore provide meaningful comparisons for 2011, 2012 and
2013. We evaluate the performance of these facilities because Shurgard Europe’s ability to effectively
manage stabilized facilities represents an important measure of its ability to grow its earnings over the
long-term.
The following table reflects 100% of the operating results of those 163 facilities. We restate the
exchange rates used in prior year’s presentation to the actual exchange rates for 2013. However, only our
pro rata share of the operating results for these facilities, based upon the actual exchange rates for each
period, is included in “equity in earnings of unconsolidated real estate entities” on our statements of
income.
In Note 4 to our December 31, 2013 financial statements, we disclose Shurgard Europe’s
consolidated operating results for the years ended December 31, 2013, 2012 and 2011. Shurgard Europe’s
consolidated operating results include 24 additional facilities that are not Same Store Facilities, and are
based upon historical exchange rates rather than constant exchange rates for each of the respective periods.