Public Storage 2013 Annual Report Download - page 55

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Year Ended December 31, Year Ended December 31,
2013 2012 Change 2012 2011 Change
(Amounts in thousands)
Share-based compensation expense $ 28,413 $ 24,312 $ 4,101 $ 24,312 $ 23,709 $ 603
Costs of senior executives 5,309 4,736 573 4,736 3,332 1,404
Development and acquisition costs 10,475 6,355 4,120 6,355 4,129 2,226
Tax compliance costs and taxes paid 4,704 4,775 (71) 4,775 5,546 (771)
Legal costs 3,550 3,653 (103) 3,653 3,601 52
Public company costs 3,069 2,937 132 2,937 2,919 18
Other costs 11,159 10,069 1,090 10,069 9,174 895
Total $ 66,679 $ 56,837 $ 9,842 $ 56,837 $ 52,410 $ 4,427
Share-based compensation expense includes the amortization of restricted share units (“RSUs”)
and stock options granted to employees, as well as employer taxes incurred upon vesting of RSUs and upon
exercise of employee stock options. The level of share-based compensation expense varies based upon the
level of grants and forfeitures. The increase in share-based compensation costs in 2013 as compared to
2012 is due primarily to additional share-based grants. The increase in share-based compensation costs in
2012 as compared to 2011 is due primarily to additional share-based grants, offset partially by a reduction
of $5.5 million with respect to certain RSUs granted in 2011 under a performance-based plan. We expect
share-based compensation expense to remain flat in 2014 as compared to 2013. See Note 10 to our
December 31, 2013 financial statements for further information on our share-based compensation.
Costs of senior executives represent the cash compensation paid to our chief executive officer and
chief financial officer. The increases in 2013 as compared to 2012 and in 2012 as compared to 2011 are
due to increases in incentive compensation.
Development and acquisition costs represent internal and external expenses related to our
acquisition and development activities and varies primarily based upon the level of development and
acquisition activities undertaken. Incremental legal, transfer tax, and other related costs of approximately
$5.0 million, $1.8 million and $0.8 million were incurred in connection with the acquisition of real estate
facilities in 2013, 2012 and 2011, respectively. The level of such costs to be incurred in 2014 will depend
upon the level of acquisition activities, which is not determinable.
Tax compliance costs and taxes paid include taxes paid to various state and local authorities, the
internal and external costs of filing tax returns, costs associated with complying with federal and state tax
laws, and maintaining our compliance with Internal Revenue Service REIT rules. Such costs vary
primarily based upon the tax rates of the various states in which we do business.
Legal costs include internal personnel as well as fees paid to legal firms and other third parties
with respect to general corporate legal matters and risk management, and varies based upon the level of
litigation.
Public company costs represent the incremental costs of operating as a publicly-traded company,
such as internal and external investor relations expenses, stock listing and transfer agent fees, board of
directors’ costs, and costs associated with maintaining compliance with applicable laws and regulations,
including the Dodd-Frank Act and Sarbanes-Oxley Act.
Our future general and administrative expenses are difficult to estimate, due to their dependence
upon many factors, including those noted above.
Interest expense: Interest expense was $6.4 million, $19.8 million and $24.2 million for 2013,
2012 and 2011, respectively.