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PUBLIC STORAGE
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
F-27
We amortize the grant-date fair value of awards (net of anticipated forfeitures) as compensation
expense over the service period. The service period begins on the grant date and ends on the vesting date. For
awards that are earned solely upon the passage of time and continued service, the entire cost of the award is
amortized on a straight-line basis over the service period. For awards with performance conditions, the
individual cost of each vesting is amortized separately over each individual service period (the “accelerated
attribution” method).
Stock Options
Stock options vest over a three to five-year period, expire ten years after the grant date, and the
exercise price is equal to the closing trading price of our common shares on the grant date. Employees cannot
require the Company to settle their award in cash. We use the Black-Scholes option valuation model to
estimate the fair value of our stock options.
Outstanding stock option grants are included on a one-for-one basis in our diluted weighted average
shares, to the extent dilutive, after applying the treasury stock method (based upon the average common share
price during the period) to assumed exercise proceeds and measured but unrecognized compensation.
The stock options outstanding at December 31, 2013 have an aggregate intrinsic value (the excess, if
any, of each option’s market value over the exercise price) of approximately $142.2 million and remaining
average contractual lives of approximately five years. Other than stock options granted in 2012 and 2013, all
stock options outstanding at December 31, 2013 have exercise prices of $123 or less. The aggregate intrinsic
value of exercisable stock options at December 31, 2013 amounted to approximately $117.4 million.
Additional information with respect to stock options during 2013, 2012 and 2011 is as follows:
2013 2012 2011
Weighted Weighted Weighted
Average Average Average
Number Exercise Number Exercise Number Exercise
of Price of Price of Price
Options per Share Options per Share Options per Share
Options outstanding January 1, 2,253,510 $ 76.14 2,591,066 $ 74.30 2,950,892 $ 69.43
Granted 235,000 153.89 35,000 144.97 135,000 120.77
Exercised (286,299) 71.06 (341,156) 68.26 (448,826) 58.86
Cancelled (28,000) 55.25 (31,400) 55.54 (46,000) 48.95
Options outstanding December 31, 2,174,211 $ 85.49 2,253,510 $ 76.14 2,591,066 $ 74.30
Options exercisable at December 31, 1,581,954 $ 76.29 1,401,883 $ 76.23 1,200,356 $ 76.94