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43
(d) Contract rent represents the applicable contractual monthly rent charged to tenants, excluding the impact of
promotional discounts, late charges and administrative fees.
NOI increased 2.9% in 2014 as compared to 2013, principally due to an increase of 2.9% in
revenue, partially offset by an increase of 2.7% in cost of operations. NOI decreased 2.9% in 2013 as
compared to 2012, principally due to a decrease of 1.5% in revenue and an increase of 0.5% in cost of
operations. Due to the limited number of facilities in this portfolio and lack of geographic concentration, as
well as recent volatile economic conditions in Western Europe, it is difficult to estimate revenue growth.
However, based upon current trends, it appears that revenue should increase modestly in the first quarter of
2015.
Other Investments: The “Other Investments” at December 31, 2014 are comprised primarily of
our equity in earnings from various limited partnerships that own an aggregate of 13 self-storage facilities
(750,000 net rentable square feet). Our future earnings with respect to the Other Investments will be
dependent upon the operating results of the facilities these entities own.
Ancillary Operations
Ancillary revenues and expenses include amounts associated with (i) the reinsurance of policies
against losses to goods stored by tenants in our self-storage facilities in the U.S., (ii) merchandise sales, (iii)
commercial property operations, and (iv) management of 41 self-storage facilities owned by third parties
and the Unconsolidated Real Estate Entities.
Commercial property operations are included in our commercial segment and all other ancillary
revenues and costs of operations are not allocated to any segment. See Note 11 to our December 31, 2014
financial statements for further information regarding our segments and for a reconciliation of these
ancillary revenues and cost of operations to our net income.
The following table sets forth our ancillary operations as presented on our income statements:
Year Ended December 31,
Year Ended December 31,
2014
2013
Change
2013
2012
Change
(Amounts in thousands)
Ancillary Revenues:
Tenant reinsurance
premiums
$
95,056
$
84,904
$
10,152
$
84,904
$
77,977
$
6,927
Commercial
15,720
14,510
1,210
14,510
14,071
439
Merchandise and other
34,746
32,449
2,297
32,449
31,591
858
Total revenues
145,522
131,863
13,659
131,863
123,639
8,224
Ancillary Cost of Operations:
Tenant reinsurance
25,600
17,067
8,533
17,067
14,429
2,638
Commercial
5,247
5,228
19
5,228
4,908
320
Merchandise and other
20,975
18,780
2,195
18,780
18,926
(146)
Total cost of operations
51,822
41,075
10,747
41,075
38,263
2,812
Commercial depreciation
3,045
2,779
266
2,779
2,810
(31)
Ancillary net income:
Tenant reinsurance
69,456
67,837
1,619
67,837
63,548
4,289
Commercial
7,428
6,503
925
6,503
6,353
150
Merchandise and other
13,771
13,669
102
13,669
12,665
1,004
Total ancillary net income
$
90,655
$
88,009
$
2,646
$
88,009
$
82,566
$
5,443