Maryland
|
95-3551121
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
701 Western Avenue, Glendale, California
|
91201-2349
|
(Address of principal executive offices)
|
(Zip Code)
|
PUBLIC STORAGE
|
||
INDEX
|
||
PART I
|
FINANCIAL INFORMATION
|
Pages
|
Item 1.
|
Financial Statements (Unaudited)
|
|
Condensed Consolidated Balance Sheets at
June 30, 2011 and December 31, 2010
|
1
|
|
Condensed Consolidated Statements of Income for the
Three and Six Months Ended June 30, 2011 and 2010
|
2
|
|
Condensed Consolidated Statement of Equity
for the Six Months Ended June 30, 2011
|
3
|
|
Condensed Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 2011 and 2010
|
4 - 5
|
|
Notes to Condensed Consolidated Financial Statements
|
6 - 34
|
|
Item 2.
|
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
|
35 – 63
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
64
|
Item 4.
|
Controls and Procedures
|
65
|
PART II
|
OTHER INFORMATION (Items 3 and 5 are not applicable)
|
|
Item 1.
|
Legal Proceedings
|
66
|
Item 1A.
|
Risk Factors
|
66
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
66 – 67
|
Item 4.
|
(Removed and reserved)
|
67
|
Item 6.
|
Exhibits
|
67
|
June 30,
2011
|
December 31,
2010
|
|||||||
ASSETS
|
(Unaudited)
|
|||||||
Cash and cash equivalents
|
$ | 144,487 | $ | 456,252 | ||||
Marketable securities
|
- | 102,279 | ||||||
Real estate facilities, at cost:
|
||||||||
Land
|
2,795,770 | 2,789,227 | ||||||
Buildings
|
7,887,522 | 7,798,120 | ||||||
10,683,292 | 10,587,347 | |||||||
Accumulated depreciation
|
(3,227,804 | ) | (3,061,459 | ) | ||||
7,455,488 | 7,525,888 | |||||||
Construction in process
|
8,531 | 6,928 | ||||||
7,464,019 | 7,532,816 | |||||||
Investment in real estate entities
|
733,054 | 601,569 | ||||||
Goodwill, net
|
174,634 | 174,634 | ||||||
Intangible assets, net
|
33,958 | 42,091 | ||||||
Loans receivable from real estate entities
|
630,606 | 495,229 | ||||||
Other assets
|
91,578 | 90,463 | ||||||
Total assets
|
$ | 9,272,336 | $ | 9,495,333 | ||||
LIABILITIES AND EQUITY
|
||||||||
Notes payable
|
$ | 449,519 | $ | 568,417 | ||||
Accrued and other liabilities
|
227,869 | 205,769 | ||||||
Total liabilities
|
677,388 | 774,186 | ||||||
Redeemable noncontrolling interests in subsidiaries
|
12,325 | 12,213 | ||||||
Commitments and contingencies (Note 11)
|
||||||||
Equity:
|
||||||||
Public Storage shareholders’ equity:
|
||||||||
Cumulative Preferred Shares of beneficial interest, $0.01 par value, 100,000,000 shares authorized, 480,690 shares issued (in series) and outstanding, (486,390 at December 31, 2010) at liquidation preference
|
3,253,527 | 3,396,027 | ||||||
Common Shares of beneficial interest, $0.10 par value, 650,000,000 shares
authorized, 169,507,379 shares issued and outstanding (169,252,819 at
December 31, 2010)
|
16,952 | 16,927 | ||||||
Paid-in capital
|
5,518,738 | 5,515,827 | ||||||
Accumulated deficit
|
(237,689 | ) | (236,410 | ) | ||||
Accumulated other comprehensive income (loss)
|
1,666 | (15,773 | ) | |||||
Total Public Storage shareholders’ equity
|
8,553,194 | 8,676,598 | ||||||
Equity of permanent noncontrolling interests in subsidiaries
|
29,429 | 32,336 | ||||||
Total equity
|
8,582,623 | 8,708,934 | ||||||
Total liabilities and equity
|
$ | 9,272,336 | $ | 9,495,333 |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues:
|
||||||||||||||||
Self-storage facilities
|
$ | 395,378 | $ | 373,536 | $ | 780,513 | $ | 737,609 | ||||||||
Ancillary operations
|
28,891 | 27,077 | 55,806 | 52,235 | ||||||||||||
Interest and other income
|
10,575 | 7,032 | 18,343 | 15,248 | ||||||||||||
434,844 | 407,645 | 854,662 | 805,092 | |||||||||||||
Expenses:
|
||||||||||||||||
Cost of operations:
|
||||||||||||||||
Self-storage facilities
|
129,790 | 127,694 | 265,176 | 260,034 | ||||||||||||
Ancillary operations
|
9,597 | 9,539 | 18,511 | 17,969 | ||||||||||||
Depreciation and amortization
|
89,186 | 84,879 | 177,728 | 169,596 | ||||||||||||
General and administrative
|
12,593 | 10,081 | 26,828 | 20,158 | ||||||||||||
Interest expense
|
5,933 | 7,278 | 12,917 | 14,617 | ||||||||||||
247,099 | 239,471 | 501,160 | 482,374 | |||||||||||||
Income from continuing operations before equity in earnings of real estate entities, foreign currency exchange gain (loss), (loss) gains on disposition of real estate investments, gain on early retirement of debt and asset impairment charges
|
187,745 | 168,174 | 353,502 | 322,718 | ||||||||||||
Equity in earnings of real estate entities
|
12,770 | 8,788 | 26,486 | 18,749 | ||||||||||||
Foreign currency exchange gain (loss)
|
10,496 | (49,204 | ) | 41,748 | (84,047 | ) | ||||||||||
(Loss) gains on disposition of real estate investments
|
(70 | ) | 63 | 128 | 396 | |||||||||||
Gain on early retirement of debt
|
- | 283 | - | 283 | ||||||||||||
Asset impairment charges
|
- | (1,338 | ) | - | (1,949 | ) | ||||||||||
Income from continuing operations
|
210,941 | 126,766 | 421,864 | 256,150 | ||||||||||||
Discontinued operations
|
- | 4,410 | (355 | ) | 4,943 | |||||||||||
Net income
|
210,941 | 131,176 | 421,509 | 261,093 | ||||||||||||
Net income allocated to noncontrolling interests in subsidiaries
|
(4,497 | ) | (6,138 | ) | (8,957 | ) | (12,094 | ) | ||||||||
Net income allocable to Public Storage shareholders
|
$ | 206,444 | $ | 125,038 | $ | 412,552 | $ | 248,999 | ||||||||
Allocation of net income to Public Storage shareholders:
|
||||||||||||||||
Preferred shareholders based on distributions paid
|
$ | 58,639 | $ | 58,879 | $ | 116,256 | $ | 116,987 | ||||||||
Preferred shareholders based on redemptions
|
15,899 | 5,063 | 15,899 | 5,063 | ||||||||||||
Equity Shares, Series A
|
- | - | - | 5,131 | ||||||||||||
Equity Shares, Series A based on redemptions
|
- | - | - | 25,746 | ||||||||||||
Restricted share units
|
391 | 259 | 823 | 497 | ||||||||||||
Common shareholders
|
131,515 | 60,837 | 279,574 | 95,575 | ||||||||||||
$ | 206,444 | $ | 125,038 | $ | 412,552 | $ | 248,999 | |||||||||
Net income per common share – basic
|
||||||||||||||||
Continuing operations
|
$ | 0.78 | $ | 0.33 | $ | 1.65 | $ | 0.54 | ||||||||
Discontinued operations
|
- | 0.03 | - | 0.03 | ||||||||||||
$ | 0.78 | $ | 0.36 | $ | 1.65 | $ | 0.57 | |||||||||
Net income per common share – diluted
|
||||||||||||||||
Continuing operations
|
$ | 0.77 | $ | 0.33 | $ | 1.64 | $ | 0.53 | ||||||||
Discontinued operations
|
- | 0.03 | - | 0.03 | ||||||||||||
$ | 0.77 | $ | 0.36 | $ | 1.64 | $ | 0.56 | |||||||||
Basic weighted average common shares outstanding
|
169,492 | 168,804 | 169,404 | 168,641 | ||||||||||||
Diluted weighted average common shares outstanding
|
170,401 | 169,629 | 170,392 | 169,470 |
Cumulative Preferred Shares
|
Common Shares
|
Paid-in Capital
|
Accumulated
Deficit
|
Accumulated Other Comprehensive (Loss) Income
|
Total
Public Storage Shareholders’ Equity
|
Equity of Permanent Noncontrolling Interests
In Subsidiaries
|
Total Equity
|
|||||||||||||||||||||||||
Balance at December 31, 2010
|
$ | 3,396,027 | $ | 16,927 | $ | 5,515,827 | $ | (236,410 | ) | $ | (15,773 | ) | $ | 8,676,598 | $ | 32,336 | $ | 8,708,934 | ||||||||||||||
Issuance of cumulative preferred shares (15,000,000 shares) (Note 7)
|
375,000 | - | (11,336 | ) | - | - | 363,664 | - | 363,664 | |||||||||||||||||||||||
Redemption of cumulative preferred shares (20,700,000 shares) (Note 7)
|
(517,500 | ) | - | - | - | - | (517,500 | ) | - | (517,500 | ) | |||||||||||||||||||||
Issuance of common shares in connection with share-based compensation (254,560 shares) (Note 9)
|
- | 25 | 12,948 | - | - | 12,973 | - | 12,973 | ||||||||||||||||||||||||
Share-based compensation expense, net of cash compensation in lieu of common shares (Note 9)
|
- | - | 8,503 | - | - | 8,503 | - | 8,503 | ||||||||||||||||||||||||
Adjustments of redeemable noncontrolling interests in subsidiaries to liquidation value (Note 6)
|
- | - | - | (218 | ) | - | (218 | ) | - | (218 | ) | |||||||||||||||||||||
Acquisition of permanent noncontrolling interests in subsidiaries
|
- | - | (7,204 | ) | - | - | (7,204 | ) | (4,822 | ) | (12,026 | ) | ||||||||||||||||||||
Net income
|
- | - | - | 421,509 | - | 421,509 | - | 421,509 | ||||||||||||||||||||||||
Net income allocated to (Note 6):
|
||||||||||||||||||||||||||||||||
Redeemable noncontrolling interests in subsidiaries
|
- | - | - | (461 | ) | - | (461 | ) | - | (461 | ) | |||||||||||||||||||||
Permanent noncontrolling equity interests
|
- | - | - | (8,496 | ) | - | (8,496 | ) | 8,496 | - | ||||||||||||||||||||||
Distributions to equity holders:
|
||||||||||||||||||||||||||||||||
Cumulative preferred shares (Note 7)
|
- | - | - | (116,256 | ) | - | (116,256 | ) | - | (116,256 | ) | |||||||||||||||||||||
Permanent noncontrolling interests in subsidiaries
|
- | - | - | - | - | - | (6,581 | ) | (6,581 | ) | ||||||||||||||||||||||
Holders of unvested restricted share units
|
- | - | - | (821 | ) | - | (821 | ) | - | (821 | ) | |||||||||||||||||||||
Common shares ($1.75 per share)
|
- | - | - | (296,536 | ) | - | (296,536 | ) | - | (296,536 | ) | |||||||||||||||||||||
Other comprehensive income (Note 2)
|
- | - | - | - | 17,439 | 17,439 | - | 17,439 | ||||||||||||||||||||||||
Balance at June 30, 2011
|
$ | 3,253,527 | $ | 16,952 | $ | 5,518,738 | $ | (237,689 | ) | $ | 1,666 | $ | 8,553,194 | $ | 29,429 | $ | 8,582,623 |
For the Six Months Ended
June 30,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 421,509 | $ | 261,093 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Loss (gain) on disposition of real estate investments, including amounts in discontinued operations
|
125 | (5,483 | ) | |||||
Gain on early retirement of debt
|
- | (283 | ) | |||||
Asset impairment charges, including amounts in discontinued operations
|
- | 2,544 | ||||||
Depreciation and amortization, including amounts in discontinued operations
|
177,739 | 170,091 | ||||||
Distributions received from real estate entities in excess of equity in earnings of real estate entities
|
2,892 | 6,272 | ||||||
Foreign currency exchange (gain) loss
|
(41,748 | ) | 84,047 | |||||
Other
|
21,947 | 7,331 | ||||||
Total adjustments
|
160,955 | 264,519 | ||||||
Net cash provided by operating activities
|
582,464 | 525,612 | ||||||
Cash flows from investing activities:
|
||||||||
Capital improvements to real estate facilities
|
(44,292 | ) | (37,002 | ) | ||||
Construction in process
|
(10,531 | ) | (8,371 | ) | ||||
Acquisition of real estate facilities and property intangibles (Note 3)
|
(34,361 | ) | (66,378 | ) | ||||
Proceeds from sales of other real estate investments
|
400 | 10,753 | ||||||
Loans to real estate entities
|
(358,877 | ) | - | |||||
Proceeds from repayments of loans receivable from real estate entities
|
27,289 | 1,532 | ||||||
Proceeds from disposition of loan receivable from real estate entities (Note 2)
|
121,317 | - | ||||||
Acquisition of investments in real estate entities
|
(1,274 | ) | - | |||||
Net sales (purchases) of marketable securities
|
102,230 | (95,248 | ) | |||||
Other investing activities
|
3,841 | 9,811 | ||||||
Net cash used in investing activities
|
(194,258 | ) | (184,903 | ) | ||||
Cash flows from financing activities:
|
||||||||
Principal payments on notes payable
|
(126,813 | ) | (55,181 | ) | ||||
Net proceeds from the issuance of common shares
|
12,973 | 26,215 | ||||||
Issuance of cumulative preferred shares
|
363,664 | 140,216 | ||||||
Repurchases of cumulative preferred shares
|
(517,500 | ) | (155,000 | ) | ||||
Repurchases of Equity Shares, Series A
|
- | (205,366 | ) | |||||
Acquisition of permanent noncontrolling equity interests
|
(12,026 | ) | - | |||||
Distributions paid to Public Storage shareholders
|
(413,613 | ) | (367,565 | ) | ||||
Distributions paid to noncontrolling interests
|
(7,148 | ) | (12,261 | ) | ||||
Net cash used in financing activities
|
(700,463 | ) | (628,942 | ) | ||||
Net decrease in cash and cash equivalents
|
(312,257 | ) | (288,233 | ) | ||||
Net effect of foreign exchange translation on cash
|
492 | (1,220 | ) | |||||
Cash and cash equivalents at the beginning of the period
|
456,252 | 763,789 | ||||||
Cash and cash equivalents at the end of the period
|
$ | 144,487 | $ | 474,336 |
For the Six Months Ended
June 30,
|
||||||||
2011
|
2010
|
|||||||
Supplemental schedule of non cash investing and financing activities:
|
||||||||
Foreign currency translation adjustment:
|
||||||||
Real estate facilities, net of accumulated depreciation
|
$ | (486 | ) | $ | 828 | |||
Investment in real estate entities
|
(16,543 | ) | 19,108 | |||||
Loan receivable from real estate entities
|
(41,666 | ) | 83,140 | |||||
Accumulated other comprehensive loss
|
59,187 | (104,296 | ) | |||||
Adjustments of redeemable noncontrolling interests to fair values:
|
||||||||
Accumulated deficit
|
(218 | ) | (160 | ) | ||||
Redeemable noncontrolling interests
|
218 | 160 | ||||||
Conversion of note receivable from Shurgard Europe to investment (Note 2)
|
||||||||
Loan receivable from real estate entities
|
116,560 | - | ||||||
Investment in real estate entities
|
(116,560 | ) | - | |||||
Real estate acquired in connection with elimination of intangible assets
|
(4,738 | ) | - | |||||
Intangible assets eliminated in connection with acquisition of real estate
|
4,738 | - | ||||||
Real estate acquired in exchange for assumption of note payable
|
(9,679 | ) | (131,698 | ) | ||||
Note payable assumed in connection with acquisition of real estate
|
9,679 | 131,698 | ||||||
1.
|
Description of the Business
|
2.
|
Summary of Significant Accounting Policies
|
For the Three Months Ended
June 30,
|
For the Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
Net income
|
$ | 210,941 | $ | 131,176 | $ | 421,509 | $ | 261,093 | ||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Aggregate foreign currency translation adjustments for the period (a)
|
12,840 | (59,676 | ) | 59,187 | (104,296 | ) | ||||||||||
Adjust for foreign currency translation adjustments recognized during the period:
|
||||||||||||||||
Foreign currency (gain) loss (b)
|
(10,496 | ) | 49,204 | (41,748 | ) | 84,047 | ||||||||||
Other comprehensive income (loss) for the period
|
2,344 | (10,472 | ) | 17,439 | (20,249 | ) | ||||||||||
Total comprehensive income
|
$ | 213,285 | $ | 120,704 | $ | 438,948 | $ | 240,844 |
(a)
|
Included in the foreign currency gain for the three and six months ended June 30, 2011 are realized gains of $0.6 million and $1.0 million, respectively, in connection with €6.2 million and €16.1 million of principal repayments during these respective periods. These gains represent the difference between the spot rates on the date the amounts were initially funded by us (1.32 U.S. Dollars per Euro) and the repayment dates.
|
(b)
|
The foreign currency exchange gains and losses reflected on our condensed consolidated statements of income are comprised primarily of foreign currency exchange gains and losses on the Euro-denominated loan to Shurgard Europe.
|
For the Three Months Ended
June 30,
|
For the Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
Net income allocable to common shareholders from continuing operations and discontinued operations:
|
||||||||||||||||
Net income allocable to common shareholders
|
$ | 131,515 | $ | 60,837 | $ | 279,574 | $ | 95,575 | ||||||||
Eliminate: Discontinued operations allocable to common shareholders
|
- | (4,410 | ) | 355 | (4,943 | ) | ||||||||||
Net income from continuing operations allocable to common shareholders
|
$ | 131,515 | $ | 56,427 | $ | 279,929 | $ | 90,632 | ||||||||
Weighted average common shares and equivalents outstanding:
|
||||||||||||||||
Basic weighted average common shares outstanding
|
169,492 | 168,804 | 169,404 | 168,641 | ||||||||||||
Net effect of dilutive stock options - based on treasury stock method using average market price
|
909 | 825 | 988 | 829 | ||||||||||||
Diluted weighted average common shares outstanding
|
170,401 | 169,629 | 170,392 | 169,470 |
3.
|
Real Estate Facilities
|
Six Months Ended
June 30, 2011
|
||||
(Amounts in thousands)
|
||||
Operating facilities, at cost:
|
||||
Beginning balance
|
$ | 10,587,347 | ||
Capital improvements
|
44,292 | |||
Acquisition of real estate facilities
|
46,026 | |||
Newly developed facilities opened for operations
|
8,928 | |||
Disposition of real estate facilities
|
(4,080 | ) | ||
Impact of foreign exchange rate changes
|
779 | |||
Ending balance
|
10,683,292 | |||
Accumulated depreciation:
|
||||
Beginning balance
|
(3,061,459 | ) | ||
Depreciation expense
|
(169,607 | ) | ||
Disposition of real estate facilities
|
3,555 | |||
Impact of foreign exchange rate changes
|
(293 | ) | ||
Ending balance
|
(3,227,804 | ) | ||
Construction in process:
|
||||
Beginning balance
|
6,928 | |||
Current development
|
10,531 | |||
Newly developed facilities opened for operations
|
(8,928 | ) | ||
Ending balance
|
8,531 | |||
Total real estate facilities at June 30, 2011
|
$ | 7,464,019 |
4.
|
Investments in Real Estate Entities
|
Investments in Real Estate Entities at
|
||||||||
June 30,
2011
|
December 31,
2010
|
|||||||
(Amounts in thousands)
|
||||||||
PSB
|
$ | 327,126 | $ | 323,795 | ||||
Shurgard Europe
|
391,887 | 264,681 | ||||||
Other Investments
|
14,041 | 13,093 | ||||||
Total
|
$ | 733,054 | $ | 601,569 | ||||
Equity in Earnings of Real Estate Entities
|
||||||||||||||||
For the Three Months Ended
June 30,
|
For the Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
PSB
|
$ | 6,081 | $ | 4,914 | $ | 14,865 | $ | 11,188 | ||||||||
Shurgard Europe
|
6,242 | 3,459 | 10,769 | 6,769 | ||||||||||||
Other Investments
|
447 | 415 | 852 | 792 | ||||||||||||
Total
|
$ | 12,770 | $ | 8,788 | $ | 26,486 | $ | 18,749 |
2011
|
2010
|
|||||||
(Amounts in thousands)
|
||||||||
For the six months ended June 30,
|
||||||||
Total revenue
|
$ | 146,912 | $ | 136,416 | ||||
Costs of operations
|
(49,921 | ) | (44,217 | ) | ||||
Depreciation and amortization
|
(41,777 | ) | (36,638 | ) | ||||
General and administrative
|
(3,318 | ) | (5,149 | ) | ||||
Other items
|
(1,916 | ) | 3,919 | |||||
Net income
|
$ | 49,980 | $ | 54,331 | ||||
At June 30,
2011
|
At December 31, 2010
|
|||||||
(Amounts in thousands)
|
||||||||
Total assets (primarily real estate)
|
$ | 1,619,289 | $ | 1,621,057 | ||||
Debt (a)
|
181,684 | 144,511 | ||||||
Other liabilities
|
51,553 | 53,421 | ||||||
Preferred stock and units
|
604,129 | 651,964 | ||||||
Common equity and units
|
781,923 | 771,161 | ||||||
(a)
|
$116 million of the debt at June 30, 2011 is payable to us.
|
For the Three Months Ended
June 30,
|
For the Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
Our 49% equity share of Shurgard Europe’s net loss
|
$ | (1,599 | ) | $ | (2,336 | ) | $ | (3,608 | ) | $ | (5,408 | ) | ||||
Add our 49% equity share of amounts received from Shurgard Europe:
|
||||||||||||||||
Interest on Shurgard Loans
|
7,517 | 5,603 | 13,806 | 11,783 | ||||||||||||
Trademark license fee
|
324 | 192 | 571 | 394 | ||||||||||||
Total equity in earnings of Shurgard Europe
|
$ | 6,242 | $ | 3,459 | $ | 10,769 | $ | 6,769 |
For the Three Months Ended
June 30,
|
For the Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
Self-storage and ancillary revenues
|
$ | 66,024 | $ | 55,659 | $ | 128,272 | $ | 114,067 | ||||||||
Interest and other income (expense)
|
86 | (287 | ) | 203 | (211 | ) | ||||||||||
Self-storage and ancillary cost of operations
|
(27,687 | ) | (23,253 | ) | (53,962 | ) | (48,712 | ) | ||||||||
Trademark license fee payable to Public Storage
|
(661 | ) | (390 | ) | (1,166 | ) | (805 | ) | ||||||||
Depreciation and amortization
|
(18,236 | ) | (17,400 | ) | (36,701 | ) | (36,139 | ) | ||||||||
General and administrative
|
(2,924 | ) | (1,744 | ) | (5,620 | ) | (3,656 | ) | ||||||||
Interest expense on third party debt
|
(3,776 | ) | (2,674 | ) | (7,292 | ) | (5,451 | ) | ||||||||
Interest expense on debt due to Public Storage
|
(15,341 | ) | (11,436 | ) | (28,176 | ) | (24,045 | ) | ||||||||
Expenses from foreign currency exchange
|
(749 | ) | (237 | ) | (106 | ) | (430 | ) | ||||||||
Net loss
|
$ | (3,264 | ) | $ | (1,762 | ) | $ | (4,548 | ) | $ | (5,382 | ) | ||||
Net income allocated to permanent noncontrolling equity interests in subsidiaries (a)
|
- | (3,006 | ) | (2,816 | ) | (5,655 | ) | |||||||||
Net loss allocated to Shurgard Europe
|
$ | (3,264 | ) | $ | (4,768 | ) | $ | (7,364 | ) | $ | (11,037 | ) |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Amounts in thousands)
|
||||||||
Total assets (primarily self-storage facilities)
|
$ | 1,587,122 | $ | 1,503,961 | ||||
Total debt to third parties
|
283,740 | 279,174 | ||||||
Total debt to Public Storage
|
514,606 | 495,229 | ||||||
Other liabilities
|
88,206 | 73,027 | ||||||
Equity
|
700,570 | 656,531 | ||||||
(a)
|
Includes depreciation expense allocated to the permanent noncontrolling equity interests in subsidiaries totaling nil and $2,851,000 in the three months ended June 30, 2011 and 2010, respectively, and $2,062,000 and $5,997,000 in the six months ended June 30, 2011 and 2010, respectively.
|
2011
|
2010
|
|||||||
(Amounts in thousands)
|
||||||||
For the six months ended June 30,
|
||||||||
Total revenue
|
$ | 8,537 | $ | 8,250 | ||||
Cost of operations and other expenses
|
(3,343 | ) | (3,325 | ) | ||||
Depreciation and amortization
|
(1,249 | ) | (1,233 | ) | ||||
Net income
|
$ | 3,945 | $ | 3,692 | ||||
June 30,
|
December 31,
|
|||||||
2011 | 2010 | |||||||
(Amounts in thousands)
|
||||||||
Total assets (primarily self-storage facilities)
|
$ | 35,101 | $ | 35,353 | ||||
Total accrued and other liabilities
|
1,334 | 884 | ||||||
Total Partners’ equity
|
33,767 | 34,469 |
5.
|
Line of Credit and Notes Payable
|
June 30,
2011
|
December 31,
2010
|
|||||||
Unsecured Notes Payable:
|
||||||||
5.875% effective and stated note rate, interest only and payable semi-annually, matures in March 2013
|
$ | 186,460 | $ | 186,460 | ||||
5.7% effective rate, 7.75% stated note rate, interest only and payable semi-annually, matured in February 2011 (carrying amount includes $215 of unamortized premium at December 31, 2010)
|
- | 103,532 | ||||||
|
||||||||
Secured Notes Payable:
|
||||||||
4.8% average effective rate mortgage notes payable, secured by 93 real estate facilities with a net book value of approximately $570 million at June 30, 2011 and stated fixed rates between 4.95% and 7.80%, maturing at varying dates between January 2012 and September 2028 (carrying amount includes $5,401 of unamortized premium at June 30, 2011 and $6,137 at December 31, 2010)
|
263,059 | 278,425 | ||||||
Total notes payable
|
$ | 449,519 | $ | 568,417 |
Unsecured
Notes Payable
|
Secured Notes Payable
|
Total
|
||||||||||
2011 (remainder)
|
$ | - | $ | 5,859 | $ | 5,859 | ||||||
2012
|
- | 71,244 | 71,244 | |||||||||
2013
|
186,460 | 79,582 | 266,042 | |||||||||
2014
|
- | 49,625 | 49,625 | |||||||||
2015
|
- | 37,023 | 37,023 | |||||||||
Thereafter
|
- | 19,726 | 19,726 | |||||||||
$ | 186,460 | $ | 263,059 | $ | 449,519 | |||||||
Weighted average effective rate
|
5.9 | % | 4.8 | % | 5.3 | % | ||||||
6.
|
Noncontrolling Interests in Subsidiaries
|
7.
|
Public Storage Shareholders’ Equity
|
At June 30, 2011
|
At December 31, 2010
|
||||||||||||||||||||
Series
|
Earliest Redemption
Date
|
Dividend Rate
|
Shares Outstanding
|
Liquidation Preference
|
Shares Outstanding
|
Liquidation Preference
|
|||||||||||||||
(Dollar amounts in thousands)
|
|||||||||||||||||||||
Series W
|
10/6/08
|
6.500 | % | 5,300 | $ | 132,500 | 5,300 | $ | 132,500 | ||||||||||||
Series X
|
11/13/08
|
6.450 | % | 4,800 | 120,000 | 4,800 | 120,000 | ||||||||||||||
Series Y
|
1/2/09
|
6.850 | % | 350,900 | 8,772 | 350,900 | 8,772 | ||||||||||||||
Series Z
|
3/5/09
|
6.250 | % | 4,500 | 112,500 | 4,500 | 112,500 | ||||||||||||||
Series A
|
3/31/09
|
6.125 | % | 4,600 | 115,000 | 4,600 | 115,000 | ||||||||||||||
Series C
|
9/13/09
|
6.600 | % | 4,425 | 110,625 | 4,425 | 110,625 | ||||||||||||||
Series D
|
2/28/10
|
6.180 | % | 5,400 | 135,000 | 5,400 | 135,000 | ||||||||||||||
Series E
|
4/27/10
|
6.750 | % | 5,650 | 141,250 | 5,650 | 141,250 | ||||||||||||||
Series F
|
8/23/10
|
6.450 | % | 9,893 | 247,325 | 9,893 | 247,325 | ||||||||||||||
Series G
|
12/12/10
|
7.000 | % | 4,000 | 100,000 | 4,000 | 100,000 | ||||||||||||||
Series H
|
1/19/11
|
6.950 | % | 4,200 | 105,000 | 4,200 | 105,000 | ||||||||||||||
Series I
|
5/3/11
|
7.250 | % | - | - | 20,700 | 517,500 | ||||||||||||||
Series K
|
8/8/11
|
7.250 | % | 16,990 | 424,756 | 16,990 | 424,756 | ||||||||||||||
Series L
|
10/20/11
|
6.750 | % | 8,267 | 206,665 | 8,267 | 206,665 | ||||||||||||||
Series M
|
1/9/12
|
6.625 | % | 19,065 | 476,634 | 19,065 | 476,634 | ||||||||||||||
Series N
|
7/2/12
|
7.000 | % | 6,900 | 172,500 | 6,900 | 172,500 | ||||||||||||||
Series O
|
4/15/15
|
6.875 | % | 5,800 | 145,000 | 5,800 | 145,000 | ||||||||||||||
Series P
|
10/7/15
|
6.500 | % | 5,000 | 125,000 | 5,000 | 125,000 | ||||||||||||||
Series Q
|
4/14/16
|
6.500 | % | 15,000 | 375,000 | - | - | ||||||||||||||
Total Cumulative Preferred Shares
|
480,690 | $ | 3,253,527 | 486,390 | $ | 3,396,027 |
8.
|
Related Party Transactions
|
|
For the three months ended June 30, 2011
|
Domestic
Self-Storage
|
Europe
Self-Storage
|
Commercial
|
Other Items Not Allocated to Segments
|
Total Consolidated
|
||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Self-storage facilities
|
$ | 395,378 | $ | - | $ | - | $ | - | $ | 395,378 | ||||||||||
Ancillary operations
|
- | - | 3,620 | 25,271 | 28,891 | |||||||||||||||
Interest and other income
|
- | 9,854 | 328 | 393 | 10,575 | |||||||||||||||
395,378 | 9,854 | 3,948 | 25,664 | 434,844 | ||||||||||||||||
Expenses:
|
||||||||||||||||||||
Cost of operations:
|
||||||||||||||||||||
Self-storage facilities
|
129,790 | - | - | - | 129,790 | |||||||||||||||
Ancillary operations
|
- | - | 1,352 | 8,245 | 9,597 | |||||||||||||||
Depreciation and amortization
|
88,531 | - | 655 | - | 89,186 | |||||||||||||||
General and administrative
|
- | - | - | 12,593 | 12,593 | |||||||||||||||
Interest expense
|
- | - | - | 5,933 | 5,933 | |||||||||||||||
218,321 | - | 2,007 | 26,771 | 247,099 | ||||||||||||||||
Income (loss) from continuing operations before equity in earnings of real estate entities, foreign currency exchange gain and loss on disposition of other real estate investments
|
177,057 | 9,854 | 1,941 | (1,107 | ) | 187,745 | ||||||||||||||
Equity in earnings of real estate entities
|
447 | 6,242 | 6,081 | - | 12,770 | |||||||||||||||
Foreign currency exchange gain
|
- | 10,496 | - | - | 10,496 | |||||||||||||||
Loss on disposition of other real estate investments
|
- | - | - | (70 | ) | (70 | ) | |||||||||||||
Income (loss) from continuing operations
|
177,504 | 26,592 | 8,022 | (1,177 | ) | 210,941 | ||||||||||||||
Discontinued operations
|
- | - | - | - | - | |||||||||||||||
Net income (loss)
|
$ | 177,504 | $ | 26,592 | $ | 8,022 | $ | (1,177 | ) | $ | 210,941 |
|
For the three months ended June 30, 2010
|
Domestic
Self-Storage
|
Europe
Self-Storage
|
Commercial
|
Other Items Not Allocated to Segments
|
Total Consolidated
|
||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Self-storage facilities
|
$ | 373,536 | $ | - | $ | - | $ | - | $ | 373,536 | ||||||||||
Ancillary operations
|
- | - | 3,516 | 23,561 | 27,077 | |||||||||||||||
Interest and other income
|
- | 6,031 | - | 1,001 | 7,032 | |||||||||||||||
373,536 | 6,031 | 3,516 | 24,562 | 407,645 | ||||||||||||||||
Expenses:
|
||||||||||||||||||||
Cost of operations:
|
||||||||||||||||||||
Self-storage facilities
|
127,694 | - | - | - | 127,694 | |||||||||||||||
Ancillary operations
|
- | - | 1,412 | 8,127 | 9,539 | |||||||||||||||
Depreciation and amortization
|
84,224 | - | 655 | - | 84,879 | |||||||||||||||
General and administrative
|
- | - | - | 10,081 | 10,081 | |||||||||||||||
Interest expense
|
- | - | - | 7,278 | 7,278 | |||||||||||||||
211,918 | - | 2,067 | 25,486 | 239,471 | ||||||||||||||||
Income (loss) from continuing operations before equity in earnings of real estate entities, foreign currency exchange loss, gains on disposition of other real estate investments, net, gain on early retirement of debt and asset impairment charges
|
161,618 | 6,031 | 1,449 | (924 | ) | 168,174 | ||||||||||||||
Equity in earnings of real estate entities
|
415 | 3,459 | 4,914 | - | 8,788 | |||||||||||||||
Foreign currency exchange loss
|
- | (49,204 | ) | - | - | (49,204 | ) | |||||||||||||
Gains on disposition of other real estate investments, net
|
- | - | - | 63 | 63 | |||||||||||||||
Gain on early retirement of debt
|
- | - | - | 283 | 283 | |||||||||||||||
Asset impairment charges
|
- | - | - | (1,338 | ) | (1,338 | ) | |||||||||||||
Income (loss) from continuing operations
|
162,033 | (39,714 | ) | 6,363 | (1,916 | ) | 126,766 | |||||||||||||
Discontinued operations
|
- | - | - | 4,410 | 4,410 | |||||||||||||||
Net income (loss)
|
$ | 162,033 | $ | (39,714 | ) | $ | 6,363 | $ | 2,494 | $ | 131,176 |
|
For the six months ended June 30, 2011
|
Domestic
Self-Storage
|
Europe
Self-Storage
|
Commercial
|
Other Items Not Allocated to Segments
|
Total Consolidated
|
||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Self-storage facilities
|
$ | 780,513 | $ | - | $ | - | $ | - | $ | 780,513 | ||||||||||
Ancillary operations
|
- | - | 7,420 | 48,386 | 55,806 | |||||||||||||||
Interest and other income
|
- | 16,657 | 523 | 1,163 | 18,343 | |||||||||||||||
780,513 | 16,657 | 7,943 | 49,549 | 854,662 | ||||||||||||||||
Expenses:
|
||||||||||||||||||||
Cost of operations:
|
||||||||||||||||||||
Self-storage facilities
|
265,176 | - | - | - | 265,176 | |||||||||||||||
Ancillary operations
|
- | - | 2,866 | 15,645 | 18,511 | |||||||||||||||
Depreciation and amortization
|
176,400 | - | 1,328 | - | 177,728 | |||||||||||||||
General and administrative
|
- | - | - | 26,828 | 26,828 | |||||||||||||||
Interest expense
|
- | - | - | 12,917 | 12,917 | |||||||||||||||
441,576 | - | 4,194 | 55,390 | 501,160 | ||||||||||||||||
Income (loss) from continuing operations before equity in earnings of real estate entities, foreign currency exchange gain and gains on disposition of other real estate investments
|
338,937 | 16,657 | 3,749 | (5,841 | ) | 353,502 | ||||||||||||||
Equity in earnings of real estate entities
|
852 | 10,769 | 14,865 | - | 26,486 | |||||||||||||||
Foreign currency exchange gain
|
- | 41,748 | - | - | 41,748 | |||||||||||||||
Gains on disposition of other real estate investments
|
- | - | - | 128 | 128 | |||||||||||||||
Income (loss) from continuing operations
|
339,789 | 69,174 | 18,614 | (5,713 | ) | 421,864 | ||||||||||||||
Discontinued operations
|
- | - | - | (355 | ) | (355 | ) | |||||||||||||
Net income (loss)
|
$ | 339,789 | $ | 69,174 | $ | 18,614 | $ | (6,068 | ) | $ | 421,509 |
|
For the six months ended June 30, 2010
|
Domestic
Self-Storage
|
Europe
Self-Storage
|
Commercial
|
Other Items Not Allocated to Segments
|
Total Consolidated
|
||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Self-storage facilities
|
$ | 737,609 | $ | - | $ | - | $ | - | $ | 737,609 | ||||||||||
Ancillary operations
|
- | - | 7,213 | 45,022 | 52,235 | |||||||||||||||
Interest and other income
|
- | 12,673 | - | 2,575 | 15,248 | |||||||||||||||
737,609 | 12,673 | 7,213 | 47,597 | 805,092 | ||||||||||||||||
Expenses:
|
||||||||||||||||||||
Cost of operations:
|
||||||||||||||||||||
Self-storage facilities
|
260,034 | - | - | - | 260,034 | |||||||||||||||
Ancillary operations
|
- | - | 2,849 | 15,120 | 17,969 | |||||||||||||||
Depreciation and amortization
|
168,286 | - | 1,310 | - | 169,596 | |||||||||||||||
General and administrative
|
- | - | - | 20,158 | 20,158 | |||||||||||||||
Interest expense
|
- | - | - | 14,617 | 14,617 | |||||||||||||||
428,320 | - | 4,159 | 49,895 | 482,374 | ||||||||||||||||
Income (loss) from continuing operations before equity in earnings of real estate entities, foreign currency exchange loss, gains on disposition of other real estate investments, net, gain on early retirement of debt and asset impairment charges
|
309,289 | 12,673 | 3,054 | (2,298 | ) | 322,718 | ||||||||||||||
Equity in earnings of real estate entities
|
792 | 6,769 | 11,188 | - | 18,749 | |||||||||||||||
Foreign currency exchange loss
|
- | (84,047 | ) | - | - | (84,047 | ) | |||||||||||||
Gains on disposition of other real estate investments, net
|
- | - | - | 396 | 396 | |||||||||||||||
Gain on early retirement of debt
|
- | - | - | 283 | 283 | |||||||||||||||
Asset impairment charges
|
(611 | ) | - | - | (1,338 | ) | (1,949 | ) | ||||||||||||
Income (loss) from continuing operations
|
309,470 | (64,605 | ) | 14,242 | (2,957 | ) | 256,150 | |||||||||||||
Discontinued operations
|
- | - | - | 4,943 | 4,943 | |||||||||||||||
Net income (loss)
|
$ | 309,470 | $ | (64,605 | ) | $ | 14,242 | $ | 1,986 | $ | 261,093 |
·
|
general risks associated with the ownership and operation of real estate including changes in demand, potential liability for environmental contamination, adverse changes in tax, including property tax, real estate and zoning laws and regulations, and the impact of natural disasters;
|
·
|
risks associated with downturns in the national and local economies in the markets in which we operate, including risks related to current economic conditions and the economic health of our tenants;
|
·
|
the impact of competition from new and existing self-storage and commercial facilities and other storage alternatives;
|
·
|
difficulties in our ability to successfully evaluate, finance, integrate into our existing operations and manage acquired and developed properties;
|
·
|
risks associated with international operations including, but not limited to, unfavorable foreign currency rate fluctuations, that could adversely affect our earnings and cash flows;
|
·
|
risks related to our participation in joint ventures;
|
·
|
the impact of the regulatory environment as well as national, state, and local laws and regulations including, without limitation, those governing environmental, tax and tenant insurance matters and real estate investment trusts (“REITs”), and risks related to the impact of new laws and regulations;
|
·
|
risks associated with a possible failure by us to qualify as a REIT under the Internal Revenue Code of 1986, as amended;
|
·
|
disruptions or shutdowns of our automated processes and systems or breaches of our data security;
|
·
|
difficulties in raising capital at a reasonable cost; and
|
·
|
economic uncertainty due to the impact of war or terrorism.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
Percentage
Change
|
2011
|
2010
|
Percentage
Change
|
|||||||||||||||||||
FFO per diluted common share prior to adjustments for the following items
|
$ | 1.43 | $ | 1.27 | 12.6 | % | $ | 2.71 | $ | 2.41 | 12.4 | % | ||||||||||||
Foreign currency exchange gain (loss)
|
0.06 | (0.29 | ) | 0.25 | (0.50 | ) | ||||||||||||||||||
Application of EITF D-42 to the redemption of our securities and our equity share from PSB
|
(0.09 | ) | (0.04 | ) | (0.07 | ) | (0.19 | ) | ||||||||||||||||
Incremental general and administrative expenses
resulting from property acquisitions
|
(0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||
Impairment of long-lived assets
|
- | (0.01 | ) | - | (0.02 | ) | ||||||||||||||||||
FFO per diluted common share, as reported
|
$ | 1.39 | $ | 0.92 | 51.1 | % | $ | 2.88 | $ | 1.69 | 70.4 | % |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Amounts in thousands, except per share data)
|
||||||||||||||||
Computation of Funds from Operations (“FFO”) allocable to Common Shares:
|
||||||||||||||||
Net Income
|
$ | 210,941 | $ | 131,176 | $ | 421,509 | $ | 261,093 | ||||||||
Add back – depreciation and amortization
|
89,186 | 84,879 | 177,728 | 169,596 | ||||||||||||
Add back – depreciation from unconsolidated real estate investments
|
17,638 | 14,987 | 34,426 | 30,307 | ||||||||||||
Add back – depreciation and amortization included in Discontinued Operations
|
- | 326 | 11 | 495 | ||||||||||||
Eliminate – loss (gain) on sale of real estate investments
|
70 | (63 | ) | (128 | ) | (396 | ) | |||||||||
Eliminate – (gain) on sale of real estate included in Discontinued Operations
|
- | (4,650 | ) | 253 | (5,087 | ) | ||||||||||
Eliminate – gain on our share of PSB’s sale of real estate
|
- | - | - | (2,112 | ) | |||||||||||
Consolidated FFO allocable to our equity holders
|
317,835 | 226,655 | 633,799 | 453,896 | ||||||||||||
Less: allocations of FFO to noncontrolling equity interests:
|
||||||||||||||||
Preferred unitholders, based upon distributions paid
|
- | (1,813 | ) | - | (3,625 | ) | ||||||||||
Other noncontrolling equity interests in subsidiaries
|
(4,983 | ) | (4,668 | ) | (9,912 | ) | (9,265 | ) | ||||||||
Consolidated FFO allocable to Public Storage shareholders
|
312,852 | 220,174 | 623,887 | 441,006 | ||||||||||||
Less: allocations of FFO to:
|
||||||||||||||||
Preferred shareholders, based upon distributions paid
|
(58,639 | ) | (58,879 | ) | (116,256 | ) | (116,987 | ) | ||||||||
Preferred shareholders, based on redemptions
|
(15,899 | ) | (5,063 | ) | (15,899 | ) | (5,063 | ) | ||||||||
Restricted share unitholders
|
(691 | ) | (551 | ) | (1,419 | ) | (1,157 | ) | ||||||||
Equity Shares, Series A, based upon distributions paid
|
- | - | - | (5,131 | ) | |||||||||||
Equity Shares, Series A, based redemptions
|
- | - | - | (25,746 | ) | |||||||||||
Remaining FFO allocable to Common Shares
|
$ | 237,623 | $ | 155,681 | $ | 490,313 | $ | 286,922 | ||||||||
Weighted average shares and FFO per share:
|
||||||||||||||||
Regular common shares
|
169,492 | 168,804 | 169,404 | 168,641 | ||||||||||||
Weighted average share options outstanding using treasury method
|
909 | 825 | 988 | 829 | ||||||||||||
Weighted average common shares for purposes of computing fully-diluted FFO per common share
|
170,401 | 169,629 | 170,392 | 169,470 | ||||||||||||
FFO per diluted common share
|
$ | 1.39 | $ | 0.92 | $ | 2.88 | $ | 1.69 | ||||||||
Self-Storage Operations
Summary
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
2011
|
2010
|
Percentage
Change
|
2011
|
2010
|
Percentage
Change
|
|||||||||||||||||||
(Dollar amounts in thousands)
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Same Store Facilities
|
$ | 371,853 | $ | 357,637 | 4.0 | % | $ | 734,790 | $ | 708,551 | 3.7 | % | ||||||||||||
Other Facilities
|
23,525 | 15,899 | 48.0 | % | 45,723 | 29,058 | 57.4 | % | ||||||||||||||||
Total rental income
|
395,378 | 373,536 | 5.8 | % | 780,513 | 737,609 | 5.8 | % | ||||||||||||||||
Cost of operations:
|
||||||||||||||||||||||||
Same Store Facilities
|
121,958 | 122,283 | (0.3 | )% | 249,383 | 249,744 | (0.1 | )% | ||||||||||||||||
Other Facilities
|
7,832 | 5,411 | 44.7 | % | 15,793 | 10,290 | 53.5 | % | ||||||||||||||||
Total cost of operations
|
129,790 | 127,694 | 1.6 | % | 265,176 | 260,034 | 2.0 | % | ||||||||||||||||
Net operating income (a):
|
||||||||||||||||||||||||
Same Store Facilities
|
249,895 | 235,354 | 6.2 | % | 485,407 | 458,807 | 5.8 | % | ||||||||||||||||
Other Facilities
|
15,693 | 10,488 | 49.6 | % | 29,930 | 18,768 | 59.5 | % | ||||||||||||||||
Total net operating income
|
265,588 | 245,842 | 8.0 | % | 515,337 | 477,575 | 7.9 | % | ||||||||||||||||
Total depreciation and amortization expense:
|
||||||||||||||||||||||||
Same Store Facilities
|
(78,527 | ) | (81,421 | ) | (3.6 | )% | (154,654 | ) | (158,906 | ) | (2.7 | )% | ||||||||||||
Other Facilities
|
(10,004 | ) | (2,803 | ) | 256.9 | % | (21,746 | ) | (9,380 | ) | 131.8 | % | ||||||||||||
Total depreciation and amortization expense
|
(88,531 | ) | (84,224 | ) | 5.1 | % | (176,400 | ) | (168,286 | ) | 4.8 | % | ||||||||||||
Total net income
|
$ | 177,057 | $ | 161,618 | 9.6 | % | $ | 338,937 | $ | 309,289 | 9.6 | % | ||||||||||||
Number of facilities at period end:
|
||||||||||||||||||||||||
Same Store Facilities
|
1,931 | 1,931 | - | |||||||||||||||||||||
Other Facilities
|
105 | 87 | 20.7 | % | ||||||||||||||||||||
Net rentable square footage at period end (in thousands):
|
||||||||||||||||||||||||
Same Store Facilities
|
121,582 | 121,582 | - | |||||||||||||||||||||
Other Facilities
|
7,784 | 6,132 | 26.9 | % |
|
Net Operating Income
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Amounts in thousands)
|
||||||||||||||||
Net operating income:
|
||||||||||||||||
Same Store Facilities
|
$ | 249,895 | $ | 235,354 | $ | 485,407 | $ | 458,807 | ||||||||
Other Facilities
|
15,693 | 10,488 | 29,930 | 18,768 | ||||||||||||
Total net operating income from self-storage
|
265,588 | 245,842 | 515,337 | 477,575 | ||||||||||||
Depreciation and amortization expense:
|
||||||||||||||||
Same Store Facilities
|
(78,527 | ) | (81,421 | ) | (154,654 | ) | (158,906 | ) | ||||||||
Other Facilities
|
(10,004 | ) | (2,803 | ) | (21,746 | ) | (9,380 | ) | ||||||||
Total depreciation and amortization expense from self-storage
|
(88,531 | ) | (84,224 | ) | (176,400 | ) | (168,286 | ) | ||||||||
Net income:
|
||||||||||||||||
Same Store Facilities
|
171,368 | 153,933 | 330,753 | 299,901 | ||||||||||||
Other Facilities
|
5,689 | 7,685 | 8,184 | 9,388 | ||||||||||||
Total net income from self-storage
|
177,057 | 161,618 | 338,937 | 309,289 | ||||||||||||
Ancillary operating revenue
|
28,891 | 27,077 | 55,806 | 52,235 | ||||||||||||
Interest and other income
|
10,575 | 7,032 | 18,343 | 15,248 | ||||||||||||
Ancillary cost of operations
|
(9,597 | ) | (9,539 | ) | (18,511 | ) | (17,969 | ) | ||||||||
Depreciation and amortization, commercial
|
(655 | ) | (655 | ) | (1,328 | ) | (1,310 | ) | ||||||||
General and administrative expense
|
(12,593 | ) | (10,081 | ) | (26,828 | ) | (20,158 | ) | ||||||||
Interest expense
|
(5,933 | ) | (7,278 | ) | (12,917 | ) | (14,617 | ) | ||||||||
Equity in earnings of real estate entities
|
12,770 | 8,788 | 26,486 | 18,749 | ||||||||||||
Foreign currency exchange gain (loss)
|
10,496 | (49,204 | ) | 41,748 | (84,047 | ) | ||||||||||
(Loss) gains on disposition of real estate investments
|
(70 | ) | 63 | 128 | 396 | |||||||||||
Gain on early retirement of debt
|
- | 283 | - | 283 | ||||||||||||
Asset impairment charges
|
- | (1,338 | ) | - | (1,949 | ) | ||||||||||
Discontinued operations
|
- | 4,410 | (355 | ) | 4,943 | |||||||||||
Net income of the Company
|
$ | 210,941 | $ | 131,176 | $ | 421,509 | $ | 261,093 |
SAME STORE FACILITIES
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
2011
|
2010
|
Percentage
Change
|
2011
|
2010
|
Percentage
Change
|
|||||||||||||||||||
(Dollar amounts in thousands, except weighted average amounts)
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Rental income
|
$ | 352,801 | $ | 340,378 | 3.6 | % | $ | 697,141 | $ | 674,532 | 3.4 | % | ||||||||||||
Late charges and administrative fees
|
19,052 | 17,259 | 10.4 | % | 37,649 | 34,019 | 10.7 | % | ||||||||||||||||
Total revenues (a)
|
371,853 | 357,637 | 4.0 | % | 734,790 | 708,551 | 3.7 | % | ||||||||||||||||
Cost of operations:
|
||||||||||||||||||||||||
Property taxes
|
40,054 | 39,075 | 2.5 | % | 81,306 | 79,307 | 2.5 | % | ||||||||||||||||
Direct property payroll
|
25,230 | 24,605 | 2.5 | % | 50,810 | 49,454 | 2.7 | % | ||||||||||||||||
Media advertising
|
3,291 | 6,463 | (49.1 | )% | 7,289 | 11,768 | (38.1 | )% | ||||||||||||||||
Other advertising and promotion
|
6,738 | 6,568 | 2.6 | % | 12,444 | 11,617 | 7.1 | % | ||||||||||||||||
Utilities
|
8,503 | 7,918 | 7.4 | % | 18,487 | 17,504 | 5.6 | % | ||||||||||||||||
Repairs and maintenance
|
10,976 | 10,631 | 3.2 | % | 21,680 | 23,624 | (8.2 | )% | ||||||||||||||||
Telephone reservation center
|
2,485 | 2,893 | (14.1 | )% | 4,976 | 5,672 | (12.3 | )% | ||||||||||||||||
Property insurance
|
2,530 | 2,571 | (1.6 | )% | 4,991 | 4,938 | 1.1 | % | ||||||||||||||||
Other cost of management
|
22,151 | 21,559 | 2.7 | % | 47,400 | 45,860 | 3.4 | % | ||||||||||||||||
Total cost of operations (a)
|
121,958 | 122,283 | (0.3 | )% | 249,383 | 249,744 | (0.1 | )% | ||||||||||||||||
Net operating income (b)
|
249,895 | 235,354 | 6.2 | % | 485,407 | 458,807 | 5.8 | % | ||||||||||||||||
Depreciation and amortization expense
|
(78,527 | ) | (81,421 | ) | (3.6 | )% | (154,654 | ) | (158,906 | ) | (2.7 | )% | ||||||||||||
Net income
|
$ | 171,368 | $ | 153,933 | 11.3 | % | $ | 330,753 | $ | 299,901 | 10.3 | % | ||||||||||||
Gross margin (before depreciation and amortization expense)
|
67.2 | % | 65.8 | % | 2.1 | % | 66.1 | % | 64.8 | % | 2.0 | % | ||||||||||||
Weighted average for the period:
|
||||||||||||||||||||||||
Square foot occupancy (c)
|
92.3 | % | 91.0 | % | 1.4 | % | 91.1 | % | 89.6 | % | 1.7 | % | ||||||||||||
Realized annual rent per occupied square foot (d)(e)
|
$ | 12.58 | $ | 12.31 | 2.2 | % | $ | 12.59 | $ | 12.38 | 1.7 | % | ||||||||||||
REVPAF (e)(f)
|
$ | 11.61 | $ | 11.20 | 3.7 | % | $ | 11.47 | $ | 11.10 | 3.3 | % | ||||||||||||
Weighted average at June 30:
|
||||||||||||||||||||||||
Square foot occupancy
|
93.1 | % | 91.7 | % | 1.5 | % | ||||||||||||||||||
In place annual rent per occupied square foot (g)
|
$ | 13.74 | $ | 13.55 | 1.4 | % | ||||||||||||||||||
Total net rentable square feet (in thousands)
|
121,582 | 121,582 | - | |||||||||||||||||||||
Number of facilities
|
1,931 | 1,931 | - | |||||||||||||||||||||
(a)
|
Revenues and cost of operations do not include ancillary revenues and expenses generated at the facilities with respect to tenant reinsurance and retail sales. “Other costs of management” included in cost of operations principally represents all the indirect costs incurred in the operations of the facilities. Indirect costs principally include supervisory costs and corporate overhead cost incurred to support the operating activities of the facilities.
|
(b)
|
See “Net Operating Income” above for a reconciliation of this non-GAAP measure to our net income in our condensed consolidated statements of income for the three and six months ended June 30, 2011 and 2010.
|
(c)
|
Square foot occupancies represent weighted average occupancy levels over the entire period.
|
(d)
|
Realized annual rent per occupied square foot is computed by annualizing the result of dividing rental income (which excludes late charges and administrative fees) by the weighted average occupied square feet for the period. Realized annual rent per occupied square foot takes into consideration promotional discounts that reduce rental income from the contractual amounts due.
|
(e)
|
Late charges and administrative fees are excluded from the computation of realized annual rent per occupied square foot and REVPAF. Exclusion of these amounts provides a better measure of our ongoing level of revenue, by excluding the volatility of late charges, which are dependent principally upon the level of tenant delinquency, and administrative fees, which are charged upon move-in volumes and are therefore dependent principally upon the absolute level of move-ins for a period.
|
(f)
|
Realized annual rent per available foot or “REVPAF” is computed by dividing rental income (which excludes late charges and administrative fees) by the total available net rentable square feet for the period.
|
(g)
|
In place annual rent per occupied square foot represents annualized contractual rents per occupied square foot without reductions for promotional discounts and excludes late charges and administrative fees.
|
Same Store Year-over-Year Change
|
||||||||||||
Three Months Ended:
|
Rental
income
|
Realized rent
per occupied
square foot
|
Square foot occupancy
|
|||||||||
March 31, 2010
|
(2.3 | )% | (2.9 | )% | 0.6 | % | ||||||
June 30, 2010
|
(0.4 | )% | (1.4 | )% | 1.1 | % | ||||||
September 30, 2010
|
1.1 | % | (0.5 | )% | 1.6 | % | ||||||
December 31, 2010
|
2.2 | % | 0.4 | % | 1.8 | % | ||||||
For entire year: 2010
|
0.1 | % | (1.1 | )% | 1.2 | % | ||||||
March 31, 2011
|
3.0 | % | 1.4 | % | 1.7 | % | ||||||
June 30, 2011
|
3.6 | % | 2.2 | % | 1.4 | % |
For the Quarter Ended
|
||||||||||||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
Entire Year
|
||||||||||||||||
(Amounts in thousands, except for per square foot amount)
|
||||||||||||||||||||
Total revenues:
|
||||||||||||||||||||
2011
|
$ | 362,937 | $ | 371,853 | ||||||||||||||||
2000
|
$ | 350,914 | $ | 357,637 | $ | 368,589 | $ | 364,074 | $ | 1,441,214 | ||||||||||
Total cost of operations:
|
||||||||||||||||||||
2011
|
$ | 127,425 | $ | 121,958 | ||||||||||||||||
2010
|
$ | 127,461 | $ | 122,283 | $ | 120,461 | $ | 101,417 | $ | 471,622 | ||||||||||
Property tax expense:
|
||||||||||||||||||||
2011
|
$ | 41,252 | $ | 40,054 | ||||||||||||||||
2010
|
$ | 40,232 | $ | 39,075 | $ | 38,954 | $ | 25,076 | $ | 143,337 | ||||||||||
Media advertising expense:
|
||||||||||||||||||||
2011
|
$ | 3,998 | $ | 3,291 | ||||||||||||||||
2010
|
$ | 5,305 | $ | 6,463 | $ | 3,084 | $ | - | $ | 14,852 | ||||||||||
Other advertising and promotion expense:
|
||||||||||||||||||||
2011
|
$ | 5,706 | $ | 6,738 | ||||||||||||||||
2010
|
$ | 5,049 | $ | 6,568 | $ | 5,542 | $ | 4,918 | $ | 22,077 | ||||||||||
REVPAF:
|
||||||||||||||||||||
2011
|
$ | 11.33 | $ | 11.61 | ||||||||||||||||
2010
|
$ | 10.99 | $ | 11.20 | $ | 11.51 | $ | 11.38 | $ | 11.27 | ||||||||||
Weighted average realized annual rent per occupied square foot:
|
||||||||||||||||||||
2011
|
$ | 12.62 | $ | 12.58 | ||||||||||||||||
2010
|
$ | 12.45 | $ | 12.31 | $ | 12.65 | $ | 12.79 | $ | 12.55 | ||||||||||
Weighted average occupancy levels for the period:
|
||||||||||||||||||||
2011
|
89.8 | % | 92.3 | % | ||||||||||||||||
2010
|
88.3 | % | 91.0 | % | 91.0 | % | 89.0 | % | 89.8 | % | ||||||||||
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
(Amounts in thousands, except for weighted average data)
|
||||||||||||||||||||||||
Same Store Facilities Operating Trends by Region
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Southern California (184 facilities)
|
$ | 54,293 | $ | 53,352 | 1.8 | % | $ | 107,670 | $ | 106,202 | 1.4 | % | ||||||||||||
Northern California (168 facilities)
|
38,501 | 37,189 | 3.5 | % | 75,894 | 73,567 | 3.2 | % | ||||||||||||||||
Texas (231 facilities)
|
37,163 | 35,418 | 4.9 | % | 73,229 | 70,161 | 4.4 | % | ||||||||||||||||
Florida (184 facilities)
|
35,216 | 33,907 | 3.9 | % | 69,802 | 67,408 | 3.6 | % | ||||||||||||||||
Illinois (121 facilities)
|
23,047 | 22,456 | 2.6 | % | 45,726 | 44,663 | 2.4 | % | ||||||||||||||||
Washington (91 facilities)
|
19,592 | 18,945 | 3.4 | % | 38,735 | 37,603 | 3.0 | % | ||||||||||||||||
Georgia (90 facilities)
|
13,214 | 12,681 | 4.2 | % | 26,259 | 25,263 | 3.9 | % | ||||||||||||||||
All other states (862 facilities)
|
150,827 | 143,689 | 5.0 | % | 297,475 | 283,684 | 4.9 | % | ||||||||||||||||
Total revenues
|
371,853 | 357,637 | 4.0 | % | 734,790 | 708,551 | 3.7 | % | ||||||||||||||||
Cost of operations:
|
||||||||||||||||||||||||
Southern California
|
12,083 | 12,664 | (4.6 | )% | 24,509 | 25,534 | (4.0 | )% | ||||||||||||||||
Northern California
|
9,595 | 10,061 | (4.6 | )% | 19,576 | 20,351 | (3.8 | )% | ||||||||||||||||
Texas
|
14,176 | 14,636 | (3.1 | )% | 28,331 | 28,865 | (1.8 | )% | ||||||||||||||||
Florida
|
13,048 | 12,902 | 1.1 | % | 26,181 | 25,695 | 1.9 | % | ||||||||||||||||
Illinois
|
11,227 | 10,450 | 7.4 | % | 23,275 | 21,762 | 7.0 | % | ||||||||||||||||
Washington
|
5,269 | 5,116 | 3.0 | % | 10,619 | 10,324 | 2.9 | % | ||||||||||||||||
Georgia
|
4,678 | 4,758 | (1.7 | )% | 9,416 | 9,394 | 0.2 | % | ||||||||||||||||
All other states
|
51,882 | 51,696 | 0.4 | % | 107,476 | 107,819 | (0.3 | )% | ||||||||||||||||
Total cost of operations
|
121,958 | 122,283 | (0.3 | )% | 249,383 | 249,744 | (0.1 | )% | ||||||||||||||||
Net operating income:
|
||||||||||||||||||||||||
Southern California
|
42,210 | 40,688 | 3.7 | % | 83,161 | 80,668 | 3.1 | % | ||||||||||||||||
Northern California
|
28,906 | 27,128 | 6.6 | % | 56,318 | 53,216 | 5.8 | % | ||||||||||||||||
Texas
|
22,987 | 20,782 | 10.6 | % | 44,898 | 41,296 | 8.7 | % | ||||||||||||||||
Florida
|
22,168 | 21,005 | 5.5 | % | 43,621 | 41,713 | 4.6 | % | ||||||||||||||||
Illinois
|
11,820 | 12,006 | (1.5 | )% | 22,451 | 22,901 | (2.0 | )% | ||||||||||||||||
Washington
|
14,323 | 13,829 | 3.6 | % | 28,116 | 27,279 | 3.1 | % | ||||||||||||||||
Georgia
|
8,536 | 7,923 | 7.7 | % | 16,843 | 15,869 | 6.1 | % | ||||||||||||||||
All other states
|
98,945 | 91,993 | 7.6 | % | 189,999 | 175,865 | 8.0 | % | ||||||||||||||||
Total net operating income
|
$ | 249,895 | $ | 235,354 | 6.2 | % | $ | 485,407 | $ | 458,807 | 5.8 | % | ||||||||||||
Weighted average occupancy:
|
||||||||||||||||||||||||
Southern California
|
92.6 | % | 92.0 | % | 0.7 | % | 92.1 | % | 91.3 | % | 0.9 | % | ||||||||||||
Northern California
|
93.5 | % | 92.0 | % | 1.6 | % | 92.5 | % | 90.9 | % | 1.8 | % | ||||||||||||
Texas
|
92.2 | % | 90.7 | % | 1.7 | % | 90.6 | % | 89.3 | % | 1.5 | % | ||||||||||||
Florida
|
91.4 | % | 90.3 | % | 1.2 | % | 90.4 | % | 89.4 | % | 1.1 | % | ||||||||||||
Illinois
|
91.8 | % | 89.8 | % | 2.2 | % | 90.5 | % | 88.6 | % | 2.1 | % | ||||||||||||
Washington
|
91.8 | % | 91.5 | % | 0.3 | % | 90.8 | % | 90.1 | % | 0.8 | % | ||||||||||||
Georgia
|
91.0 | % | 88.3 | % | 3.1 | % | 89.7 | % | 87.2 | % | 2.9 | % | ||||||||||||
All other states
|
92.6 | % | 91.2 | % | 1.5 | % | 91.1 | % | 89.5 | % | 1.8 | % | ||||||||||||
Total weighted average occupancy
|
92.3 | % | 91.0 | % | 1.4 | % | 91.1 | % | 89.6 | % | 1.7 | % | ||||||||||||
Same Store Facilities Operating Trends by Region (Continued)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
(Amounts in thousands, except for weighted average data)
|
||||||||||||||||||||||||
Realized annual rent per occupied
square foot:
|
||||||||||||||||||||||||
Southern California
|
$ | 17.95 | $ | 17.75 | 1.1 | % | $ | 17.88 | $ | 17.77 | 0.6 | % | ||||||||||||
Northern California
|
16.23 | 15.94 | 1.8 | % | 16.17 | 15.95 | 1.4 | % | ||||||||||||||||
Texas
|
9.99 | 9.73 | 2.7 | % | 10.03 | 9.81 | 2.2 | % | ||||||||||||||||
Florida
|
11.95 | 11.71 | 2.0 | % | 11.95 | 11.75 | 1.7 | % | ||||||||||||||||
Illinois
|
12.39 | 12.40 | (0.1 | )% | 12.49 | 12.52 | (0.2 | )% | ||||||||||||||||
Washington
|
13.51 | 13.16 | 2.7 | % | 13.51 | 13.27 | 1.8 | % | ||||||||||||||||
Georgia
|
9.21 | 9.16 | 0.5 | % | 9.26 | 9.23 | 0.3 | % | ||||||||||||||||
All other states
|
11.75 | 11.43 | 2.8 | % | 11.79 | 11.49 | 2.6 | % | ||||||||||||||||
Total realized rent per square foot
|
$ | 12.58 | $ | 12.31 | 2.2 | % | $ | 12.59 | $ | 12.38 | 1.7 | % | ||||||||||||
REVPAF:
|
||||||||||||||||||||||||
Southern California
|
$ | 16.62 | $ | 16.32 | 1.8 | % | $ | 16.47 | $ | 16.23 | 1.5 | % | ||||||||||||
Northern California
|
15.18 | 14.66 | 3.5 | % | 14.95 | 14.50 | 3.1 | % | ||||||||||||||||
Texas
|
9.21 | 8.83 | 4.3 | % | 9.08 | 8.75 | 3.8 | % | ||||||||||||||||
Florida
|
10.92 | 10.57 | 3.3 | % | 10.81 | 10.51 | 2.9 | % | ||||||||||||||||
Illinois
|
11.37 | 11.14 | 2.1 | % | 11.30 | 11.09 | 1.9 | % | ||||||||||||||||
Washington
|
12.40 | 12.04 | 3.0 | % | 12.27 | 11.96 | 2.6 | % | ||||||||||||||||
Georgia
|
8.37 | 8.08 | 3.6 | % | 8.30 | 8.05 | 3.1 | % | ||||||||||||||||
All other states
|
10.88 | 10.42 | 4.4 | % | 10.74 | 10.29 | 4.4 | % | ||||||||||||||||
Total REVPAF
|
$ | 11.61 | $ | 11.20 | 3.7 | % | $ | 11.47 | $ | 11.10 | 3.3 | % | ||||||||||||
OTHER FACILITIES
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
(Dollar amounts in thousands, except square foot amounts)
|
||||||||||||||||||||||||
Rental income:
|
||||||||||||||||||||||||
Facilities placed into service in 2011
|
$ | 740 | $ | - | $ | 740 | $ | 1,167 | $ | - | $ | 1,167 | ||||||||||||
Facilities placed into service in 2010
|
7,807 | 2,279 | 5,528 | 15,193 | 2,279 | 12,914 | ||||||||||||||||||
Expansion facilities
|
14,978 | 13,620 | 1,358 | 29,363 | 26,779 | 2,584 | ||||||||||||||||||
Total rental income
|
23,525 | 15,899 | 7,626 | 45,723 | 29,058 | 16,665 | ||||||||||||||||||
Cost of operations before depreciation and amortization expense:
|
||||||||||||||||||||||||
Facilities placed into service in 2011
|
$ | 294 | $ | - | $ | 294 | $ | 470 | $ | - | $ | 470 | ||||||||||||
Facilities placed into service in 2010
|
2,955 | 818 | 2,137 | 5,944 | 818 | 5,126 | ||||||||||||||||||
Expansion facilities
|
4,583 | 4,593 | (10 | ) | 9,379 | 9,472 | (93 | ) | ||||||||||||||||
Total cost of operations
|
7,832 | 5,411 | 2,421 | 15,793 | 10,290 | 5,503 | ||||||||||||||||||
Net operating income before depreciation and amortization expense:
|
||||||||||||||||||||||||
Facilities placed into service in 2011
|
$ | 446 | $ | - | $ | 446 | $ | 697 | $ | - | $ | 697 | ||||||||||||
Facilities placed into service in 2010
|
4,852 | 1,461 | 3,391 | 9,249 | 1,461 | 7,788 | ||||||||||||||||||
Expansion facilities
|
10,395 | 9,027 | 1,368 | 19,984 | 17,307 | 2,677 | ||||||||||||||||||
Total net operating income (a)
|
15,693 | 10,488 | 5,205 | 29,930 | 18,768 | 11,162 | ||||||||||||||||||
Depreciation and amortization expense
|
(10,004 | ) | (2,803 | ) | (7,201 | ) | (21,746 | ) | (9,380 | ) | (12,366 | ) | ||||||||||||
Net income
|
$ | 5,689 | $ | 7,685 | $ | (1,996 | ) | $ | 8,184 | $ | 9,388 | $ | (1,204 | ) | ||||||||||
At June 30:
|
||||||||||||||||||||||||
Square foot occupancy:
|
||||||||||||||||||||||||
Facilities placed into service in 2011
|
76.0 | % | - | - | ||||||||||||||||||||
Facilities placed into service in 2010
|
80.6 | % | 89.5 | % | (9.9 | )% | ||||||||||||||||||
Expansion facilities
|
89.9 | % | 89.1 | % | 0.9 | % | ||||||||||||||||||
85.6 | % | 89.2 | % | (4.0 | )% | |||||||||||||||||||
In place annual rent per occupied square foot:
|
||||||||||||||||||||||||
Facilities placed into service in 2011
|
$ | 10.78 | $ | - | - | |||||||||||||||||||
Facilities placed into service in 2010
|
15.54 | 16.15 | (3.8 | )% | ||||||||||||||||||||
Expansion facilities
|
16.51 | 16.37 | 0.9 | % | ||||||||||||||||||||
$ | 15.83 | $ | 16.31 | (2.9 | )% | |||||||||||||||||||
Number of Facilities:
|
||||||||||||||||||||||||
Facilities placed into service in 2011
|
7 | - | 7 | |||||||||||||||||||||
Facilities placed into service in 2010
|
42 | 31 | 11 | |||||||||||||||||||||
Expansion facilities
|
56 | 56 | - | |||||||||||||||||||||
105 | 87 | 18 | ||||||||||||||||||||||
Net rentable square feet (in thousands):
|
||||||||||||||||||||||||
Facilities placed into service in 2011
|
651 | - | 651 | |||||||||||||||||||||
Facilities placed into service in 2010
|
2,660 | 1,968 | 692 | |||||||||||||||||||||
Expansion facilities
|
4,473 | 4,164 | 309 | |||||||||||||||||||||
7,784 | 6,132 | 1,652 | ||||||||||||||||||||||
(a)
|
See “Net Operating Income” above for a reconciliation of this non-GAAP measure to our net income in our condensed consolidated statements of income for the three and six months ended June 30, 2011 and 2010.
|
Historical summary:
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||||||||||
Net operating income (1):
|
||||||||||||||||||||||||
PSB
|
$ | 19,904 | $ | 19,757 | $ | 147 | $ | 39,596 | $ | 37,932 | $ | 1,664 | ||||||||||||
Shurgard Europe
|
18,827 | 11,686 | 7,141 | 33,434 | 23,956 | 9,478 | ||||||||||||||||||
Other Investments
|
687 | 654 | 33 | 1,348 | 1,267 | 81 | ||||||||||||||||||
39,418 | 32,097 | 7,321 | 74,378 | 63,155 | 11,223 | |||||||||||||||||||
Depreciation:
|
||||||||||||||||||||||||
PSB
|
(8,480 | ) | (7,631 | ) | (849 | ) | (16,998 | ) | (15,087 | ) | (1,911 | ) | ||||||||||||
Shurgard Europe
|
(8,938 | ) | (7,129 | ) | (1,809 | ) | (16,973 | ) | (14,770 | ) | (2,203 | ) | ||||||||||||
Other Investments
|
(220 | ) | (227 | ) | 7 | (455 | ) | (450 | ) | (5 | ) | |||||||||||||
(17,638 | ) | (14,987 | ) | (2,651 | ) | (34,426 | ) | (30,307 | ) | (4,119 | ) | |||||||||||||
Other (2):
|
||||||||||||||||||||||||
PSB (3)
|
(5,343 | ) | (7,212 | ) | 1,869 | (7,733 | ) | (11,657 | ) | 3,924 | ||||||||||||||
Shurgard Europe
|
(3,647 | ) | (1,098 | ) | (2,549 | ) | (5,692 | ) | (2,417 | ) | (3,275 | ) | ||||||||||||
Other Investments
|
(20 | ) | (12 | ) | (8 | ) | (41 | ) | (25 | ) | (16 | ) | ||||||||||||
(9,010 | ) | (8,322 | ) | (688 | ) | (13,466 | ) | (14,099 | ) | 633 | ||||||||||||||
Total equity in earnings of real estate entities:
|
||||||||||||||||||||||||
PSB
|
6,081 | 4,914 | 1,167 | 14,865 | 11,188 | 3,677 | ||||||||||||||||||
Shurgard Europe
|
6,242 | 3,459 | 2,783 | 10,769 | 6,769 | 4,000 | ||||||||||||||||||
Other Investments
|
447 | 415 | 32 | 852 | 792 | 60 | ||||||||||||||||||
Total equity in earnings of real estate entities
|
$ | 12,770 | $ | 8,788 | $ | 3,982 | $ | 26,486 | $ | 18,749 | $ | 7,737 |
(1)
|
These amounts represent our pro-rata share of the net operating income of the Unconsolidated Entities. See also “net operating income” above for a discussion of this non-GAAP measure.
|
(2)
|
“Other” reflects our share of general and administrative expense, interest expense, interest income, gains on sale of real estate assets, and other non-property; non-depreciation related operating results of these entities.
|
(3)
|
Includes our pro rata share totaling $3.0 million from PSB’s gain on preferred unit repurchases for the six months ended June 30, 2011, $1.0 million from PSB’s loss on preferred equity redemptions for the three and six months ended June 30, 2010 and $2.1 million from PSB’s gain on sale of a property for the six months ended June 30, 2010.
|
Selected Operating Data for the 150 facilities operated by Shurgard Europe on a stabilized basis since January 1, 2009 (“Europe Same Store Facilities”):
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
2011
|
2010
|
Percentage
Change
|
2011
|
2010
|
Percentage
Change
|
|||||||||||||||||||
(Dollar amounts in thousands, except weighted average data,
utilizing constant exchange rates) (a)(b)
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Rental income
|
$ | 46,928 | $ | 46,533 | 0.8 | % | $ | 91,601 | $ | 90,565 | 1.1 | % | ||||||||||||
Late charges and administrative fees collected
|
868 | 817 | 6.2 | % | 1,718 | 1,537 | 11.8 | % | ||||||||||||||||
Total revenues
|
47,796 | 47,350 | 0.9 | % | 93,319 | 92,102 | 1.3 | % | ||||||||||||||||
Cost of operations (excluding depreciation and amortization expense):
|
||||||||||||||||||||||||
Property taxes
|
2,629 | 2,231 | 17.8 | % | 5,058 | 4,698 | 7.7 | % | ||||||||||||||||
Direct property payroll
|
6,301 | 6,175 | 2.0 | % | 11,770 | 11,653 | 1.0 | % | ||||||||||||||||
Advertising and promotion
|
1,890 | 1,322 | 43.0 | % | 3,250 | 2,872 | 13.2 | % | ||||||||||||||||
Utilities
|
988 | 833 | 18.6 | % | 2,322 | 2,115 | 9.8 | % | ||||||||||||||||
Repairs and maintenance
|
1,302 | 1,243 | 4.7 | % | 3,029 | 2,397 | 26.4 | % | ||||||||||||||||
Property insurance
|
264 | 316 | (16.5 | )% | 524 | 613 | (14.5 | )% | ||||||||||||||||
Other costs of management
|
7,647 | 8,035 | (4.8 | )% | 15,300 | 15,759 | (2.9 | )% | ||||||||||||||||
Total cost of operations
|
21,021 | 20,155 | 4.3 | % | 41,253 | 40,107 | 2.9 | % | ||||||||||||||||
Net operating income (c)
|
$ | 26,775 | $ | 27,195 | (1.5 | )% | $ | 52,066 | $ | 51,995 | 0.1 | % | ||||||||||||
Gross margin
|
56.0 | % | 57.4 | % | (2.4 | )% | 55.8 | % | 56.5 | % | (1.2 | )% | ||||||||||||
Weighted average for the period:
|
||||||||||||||||||||||||
Square foot occupancy (d)
|
85.7 | % | 85.3 | % | 0.5 | % | 85.4 | % | 85.4 | % | 0.0 | % | ||||||||||||
Realized annual rent per occupied square foot (e)(f)
|
$ | 27.79 | $ | 27.69 | 0.4 | % | $ | 27.22 | $ | 26.91 | 1.2 | % | ||||||||||||
REVPAF (f)(g)
|
$ | 23.82 | $ | 23.62 | 0.8 | % | $ | 23.25 | $ | 22.98 | 1.2 | % | ||||||||||||
Weighted average at June 30:
|
||||||||||||||||||||||||
Square foot occupancy
|
86.4 | % | 86.0 | % | 0.5 | % | ||||||||||||||||||
In place annual rent per occupied square foot (h)
|
$ | 30.32 | $ | 29.57 | 2.5 | % | ||||||||||||||||||
Total net rentable square feet (in thousands)
|
7,881 | 7,881 | - | |||||||||||||||||||||
Average Euro to the U.S. Dollar: (a)
|
||||||||||||||||||||||||
Constant exchange rates used herein
|
1.438 | 1.438 | - | 1.402 | 1.402 | - | ||||||||||||||||||
Actual historical exchange rates
|
1.438 | 1.273 | 13.0 | % | 1.402 | 1.329 | 5.5 | % |
(a)
|
In order to isolate changes in the underlying operations from the impact of exchange rates, the amounts in this table are presented on a constant exchange rate basis. The amounts for the three and six months ended June 30, 2010 have been restated using the actual exchange rate for the three and six months ended June 30, 2011, respectively.
|
(b)
|
We include our pro-rata share of these operating results in our condensed consolidated statements of income in “equity in earnings of real estate entities.” The amounts incorporated in our financial statements are based upon the actual weighted average exchange rates for each period.
|
(c)
|
We present net operating income “NOI” of the Europe Same-Store Facilities, which is a non-GAAP financial measure that excludes the impact of depreciation and amortization expense. Although depreciation and amortization is a component of GAAP net income, we believe that NOI is a meaningful measure of operating performance, because we utilize NOI in making decisions with respect to capital allocations, segment performance, and comparing period-to-period and market-to-market property operating results. In addition, the investment community utilizes NOI in determining real estate values, and does not consider depreciation expense as it is based upon historical cost. NOI is not a substitute for net operating income after depreciation and amortization in evaluating our operating results.
|
(d)
|
Square foot occupancies represent weighted average occupancy levels over the entire period.
|
(e)
|
Realized annual rent per occupied square foot is computed by annualizing the result of dividing rental income before late charges and administrative fees by the weighted average occupied square feet for the period. Realized annual rent per occupied square foot takes into consideration promotional discounts which reduce rental income from the contractual amounts due.
|
(f)
|
Late charges and administrative fees are excluded from the computation of realized annual rent per occupied square foot and REVPAF. Exclusion of these amounts provides a better measure of our ongoing level of revenue, by excluding the volatility of late charges, which are dependent principally upon the level of tenant delinquency, and administrative fees, which are dependent principally upon the absolute level of move-ins for a period.
|
(g)
|
Realized annual rent per available foot or “REVPAF” is computed by dividing rental income before late charges and administrative fees by the total available net rentable square feet for the period.
|
(h)
|
In place annual rent per occupied square foot represents annualized contractual rents per occupied square foot without reductions for promotional discounts and excludes late charges and administrative fees.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||||||||||
Ancillary Revenues:
|
||||||||||||||||||||||||
Tenant reinsurance
|
$ | 17,468 | $ | 16,719 | $ | 749 | $ | 34,223 | $ | 32,281 | $ | 1,942 | ||||||||||||
Commercial
|
3,620 | 3,516 | 104 | 7,420 | 7,213 | 207 | ||||||||||||||||||
Merchandise and other
|
7,803 | 6,842 | 961 | 14,163 | 12,741 | 1,422 | ||||||||||||||||||
Total revenues
|
28,891 | 27,077 | 1,814 | 55,806 | 52,235 | 3,571 | ||||||||||||||||||
Ancillary Cost of Operations:
|
||||||||||||||||||||||||
Tenant reinsurance
|
3,260 | 3,086 | 174 | 6,378 | 5,812 | 566 | ||||||||||||||||||
Commercial
|
1,352 | 1,412 | (60 | ) | 2,866 | 2,849 | 17 | |||||||||||||||||
Merchandise and other
|
4,985 | 5,041 | (56 | ) | 9,267 | 9,308 | (41 | ) | ||||||||||||||||
Total cost of operations
|
9,597 | 9,539 | 58 | 18,511 | 17,969 | 542 | ||||||||||||||||||
Depreciation – commercial operations:
|
655 | 655 | - | 1,328 | 1,310 | 18 | ||||||||||||||||||
Ancillary net income:
|
||||||||||||||||||||||||
Tenant reinsurance
|
14,208 | 13,633 | 575 | 27,845 | 26,469 | 1,376 | ||||||||||||||||||
Commercial
|
1,613 | 1,449 | 164 | 3,226 | 3,054 | 172 | ||||||||||||||||||
Merchandise and other
|
2,818 | 1,801 | 1,017 | 4,896 | 3,433 | 1,463 | ||||||||||||||||||
Total ancillary net income
|
$ | 18,639 | $ | 16,883 | $ | 1,756 | $ | 35,967 | $ | 32,956 | $ | 3,011 |
For the Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
(Amount in thousands)
|
||||||||
Net cash provided by operating activities (a)
|
$ | 582,464 | $ | 525,612 | ||||
Capital improvements to maintain our facilities
|
(44,292 | ) | (37,002 | ) | ||||
Remaining operating cash flow available for distributions to equity holders
|
538,172 | 488,610 | ||||||
Distributions paid to noncontrolling interests
|
(7,148 | ) | (12,261 | ) | ||||
Cash from operations allocable to Public Storage shareholders
|
531,024 | 476,349 | ||||||
Distributions paid to Public Storage shareholders
|
(413,613 | ) | (367,565 | ) | ||||
Cash from operations available for principal payments on debt and reinvestment (b)
|
$ | 117,411 | $ | 108,784 |
(a)
|
Represents net cash provided by operating activities for each respective period as presented in our June 30, 2011 condensed consolidated statements of cash flows.
|
(b)
|
We present cash from operations for principal payments on debt and reinvestment because we believe it is an important measure to evaluate our ongoing liquidity. This measure is not a substitute for cash flows from operations or net cash flows in evaluating our liquidity, ability to repay our debt, or to meet our distribution requirements.
|
Unsecured debt
|
Secured debt
|
Total
|
||||||||||
2011 (remainder)
|
$ | - | $ | 5,859 | $ | 5,859 | ||||||
2012
|
- | 71,244 | 71,244 | |||||||||
2013
|
186,460 | 79,582 | 266,042 | |||||||||
2014
|
- | 49,625 | 49,625 | |||||||||
2015
|
- | 37,023 | 37,023 | |||||||||
Thereafter
|
- | 19,726 | 19,726 | |||||||||
$ | 186,460 | $ | 263,059 | $ | 449,519 |
Cumulative preferred shareholders
|
$ | 116,256 | ||
Common shareholders and restricted share unitholders
|
297,357 | |||
Total REIT qualifying distributions
|
$ | 413,613 |
Total
|
2011
(Remainder)
|
2012
|
2013
|
2014
|
2015
|
Thereafter
|
||||||||||||||||||||||
Long-term debt (1)
|
$ | 500,797 | $ | 17,484 | $ | 92,451 | $ | 276,251 | $ | $53,773 | $ | 38,447 | $ | 22,391 | ||||||||||||||
Operating leases (2)
|
68,053 | 2,468 | 3,957 | 4,013 | 3,939 | 5,094 | 48,582 | |||||||||||||||||||||
Construction commitments (3)
|
8,099 | 6,479 | 1,620 | - | - | - | - | |||||||||||||||||||||
Total
|
$ | 576,949 | $ | 26,431 | $ | 98,028 | $ | 280,264 | $ | 57,712 | $ | 43,541 | $ | 70,973 |
(1)
|
Amounts include principal and fixed-rate interest payments on our notes payable based on their contractual terms. See Note 5 to our June 30, 2011 condensed consolidated financial statements for additional information on our notes payable.
|
(2)
|
We lease land, equipment and office space under various operating leases. Certain leases are cancelable; however, significant penalties would be incurred upon cancellation. Amounts reflected above consider continuance of the lease without cancellation.
|
(3)
|
Includes contractual obligations for development and capital expenditures at June 30, 2011.
|
Remainder of
2011
|
2012
|
2013
|
2014
|
2015
|
Thereafter
|
Total
|
Fair Value
|
|||||||||||||||||||||||||
Fixed rate debt
|
$ | 5,859 | $ | 71,244 | $ | 266,042 | $ | 49,625 | $ | 37,023 | $ | 19,726 | $ | 449,519 | $ | 455,928 | ||||||||||||||||
Average interest rate
|
5.36 | % | 5.43 | % | 5.25 | % | 5.03 | % | 5.03 | % | 5.03 | % | ||||||||||||||||||||
Variable rate debt (1)
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Average interest rate
|
||||||||||||||||||||||||||||||||
(1)
|
Amounts include borrowings under our line of credit, which expires in March 2012. As of June 30, 2011, we have no borrowings under our line of credit.
|
PART II.
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Period Covered
|
Total Number of Shares Redeemed
|
Average Price Paid per Share
|
||||||
April 1, 2011 – April 30, 2011
|
- | - | ||||||
May 1, 2011 – May 31, 2011
|
||||||||
Preferred Shares - Series I
|
14,000,000 | $ | 25.00 | |||||
June 1, 2011 – June 30, 2011
|
||||||||
Preferred Shares - Series I
|
6,700,000 | $ | 25.00 | |||||
Total
|
20,700,000 | $ | 25.00 |
Item 4.
|
(Removed and reserved)
|
PUBLIC STORAGE
|
|
BY:
|
/s/ John Reyes
|
John Reyes
Senior Vice President and Chief Financial Officer
(Principal financial officer and duly authorized officer)
|
3.1
|
Articles of Amendment and Restatement of Declaration of Trust of Public Storage, a Maryland real estate investment trust. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.2
|
Bylaws of Public Storage, a Maryland real estate investment trust. Filed with the Registrant’s Current Report on Form 8-K dated May 11, 2010 and incorporated by reference herein.
|
3.3
|
Articles Supplementary for Public Storage 6.500% Cumulative Preferred Shares, Series W. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.4
|
Articles Supplementary for Public Storage 6.450% Cumulative Preferred Shares, Series X. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.5
|
Articles Supplementary for Public Storage 6.850% Cumulative Preferred Shares, Series Y. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.6
|
Articles Supplementary for Public Storage 6.250% Cumulative Preferred Shares, Series Z. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.7
|
Articles Supplementary for Public Storage 6.125% Cumulative Preferred Shares, Series A. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.8
|
Articles Supplementary for Public Storage 6.600% Cumulative Preferred Shares, Series C. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.9
|
Articles Supplementary for Public Storage 6.180% Cumulative Preferred Shares, Series D. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.10
|
Articles Supplementary for Public Storage 6.750% Cumulative Preferred Shares, Series E. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.11
|
Articles Supplementary for Public Storage 6.450% Cumulative Preferred Shares, Series F. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.12
|
Articles Supplementary for Public Storage 7.000% Cumulative Preferred Shares, Series G. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.13
|
Articles Supplementary for Public Storage 6.950% Cumulative Preferred Shares, Series H. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.14
|
Articles Supplementary for Public Storage 7.250% Cumulative Preferred Shares, Series I. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.15
|
Articles Supplementary for Public Storage 7.250% Cumulative Preferred Shares, Series K. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.16
|
Articles Supplementary for Public Storage 6.750% Cumulative Preferred Shares, Series L. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.17
|
Articles Supplementary for Public Storage 6.625% Cumulative Preferred Shares, Series M. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
3.18
|
Articles Supplementary for Public Storage 7.000% Cumulative Preferred Shares, Series N. Filed with the Registrant’s Current Report on Form 8-K dated June 28, 2007 and incorporated by reference herein.
|
3.19
|
Articles Supplementary for Public Storage 6.875% Cumulative Preferred Shares, Series O. Filed with the Registrant’s Current Report on Form 8-K dated April 8, 2010 and incorporated by reference herein.
|
3.20
|
Articles Supplementary for Public Storage 6.5% Cumulative Preferred Shares, Series P. Filed with the Registrant’s Current Report on Form 8-K dated October 6, 2010 and incorporated by reference herein.
|
3.21
|
Articles Supplementary for Public Storage 6.5% Cumulative Preferred Shares, Series Q. Filed with the Registrant’s Current Report on Form 8-K dated April 6, 2011 and incorporated by reference herein.
|
3.22
|
Articles Supplementary for Public Storage 6.35% Cumulative Preferred Shares, Series R. Filed with the Registrant’s Current Report on Form 8-K dated July 19, 2011 and incorporated by reference herein.
|
4.1
|
Master Deposit Agreement, dated as of May 31, 2007. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
|
10.1
|
Amended Management Agreement between Registrant and Public Storage Commercial Properties Group, Inc. dated as of February 21, 1995. Filed with Public Storage Inc.’s (“PSI”) Annual Report on Form 10-K for the year ended December 31, 1994 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.2
|
Second Amended and Restated Management Agreement by and among Registrant and the entities listed therein dated as of November 16, 1995. Filed with PS Partners, Ltd.’s Annual Report on Form 10-K for the year ended December 31, 1996 (SEC File No. 001-11186) and incorporated herein by reference.
|
10.3
|
Limited Partnership Agreement of PSAF Development Partners, L.P. Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1997 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.4
|
Agreement of Limited Partnership of PS Business Parks, L.P. Filed with PS Business Parks, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998 (SEC File No. 001-10709) and incorporated herein by reference.
|
10.5
|
Amended and Restated Agreement of Limited Partnership of Storage Trust Properties, L.P. (March 12, 1999). Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.6
|
Limited Partnership Agreement of PSAC Development Partners, L.P. Filed with PSI’s Current Report on Form 8-K dated November 15, 1999 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.7
|
Agreement of Limited Liability Company of PSAC Storage Investors, L.L.C. Filed with PSI’s Current Report on Form 8-K dated November 15, 1999 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.8
|
Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P. Filed with PSI’s Annual Report on Form 10-K for the year ended December 31, 1999 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.9
|
Amendment to Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P. Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.10
|
Second Amendment to Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P. Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.11
|
Third Amendment to Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P. Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.12
|
Limited Partnership Agreement of PSAF Acquisition Partners, L.P. Filed with PSI’s Annual Report on Form 10-K for the year ended December 31, 2003 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.13
|
Credit Agreement by and among Registrant, Wells Fargo Bank, National Association and Wachovia Bank, National Association as co-lead arrangers, and the other financial institutions party thereto, dated March 27, 2007. Filed with PSI’s Current Report on Form 8-K on April 2, 2007 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.14*
|
Post-Retirement Agreement between Registrant and B. Wayne Hughes dated as of March 11, 2004. Filed with Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 and incorporated herein by reference.
|
10.15*
|
Shurgard Storage Centers, Inc. 1995 Long Term Incentive Compensation Plan. Incorporated by reference to Appendix B of Definitive Proxy Statement dated June 8, 1995 filed by Shurgard (SEC File No. 001-11455).
|
10.16*
|
Shurgard Storage Centers, Inc. 2000 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.27 Annual Report on Form 10-K for the year ended December 31, 2000 filed by Shurgard (SEC File No. 001-11455).
|
10.17*
|
Shurgard Storage Centers, Inc. 2004 Long Term Incentive Compensation Plan. Incorporated by reference to Appendix A of Definitive Proxy Statement dated June 7, 2004 filed by Shurgard (SEC File No. 001-11455).
|
10.18*
|
Public Storage, Inc. 1996 Stock Option and Incentive Plan. Filed with PSI’s Annual Report on Form 10-K for the year ended December 31, 2000 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.19*
|
Public Storage, Inc. 2000 Non-Executive/Non-Director Stock Option and Incentive Plan. Filed with PSI’s Registration Statement on Form S-8 (SEC File No. 333-52400) and incorporated herein by reference.
|
10.20*
|
Public Storage, Inc. 2001 Non-Executive/Non-Director Stock Option and Incentive Plan. Filed with PSI’s Registration Statement on Form S-8 (SEC File No. 333-59218) and incorporated herein by reference.
|
10.21*
|
Public Storage, Inc. 2001 Stock Option and Incentive Plan (“2001 Plan”). Filed with PSI’s Registration Statement on Form S-8 (SEC File No. 333-59218) and incorporated herein by reference.
|
10.22*
|
Form of 2001 Plan Non-qualified Stock Option Agreement. Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.23*
|
Form of 2001 Plan Restricted Share Unit Agreement. Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.24*
|
Form of 2001 Plan Non-Qualified Outside Director Stock Option Agreement. Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.25*
|
Public Storage, Inc. Performance-Based Compensation Plan for Covered Employees. Filed with PSI’s Current Report on Form 8-K dated May 11, 2005 (SEC File No. 001-0839) and incorporated herein by reference.
|
10.26*
|
Public Storage 2007 Equity and Performance-Based Incentive Compensation Plan. Filed as Exhibit 4.1 to Registrant’s Registration Statement on Form S-8 (SEC File No. 333-144907) and incorporated herein by reference.
|
10.27*
|
Form of 2007 Plan Restricted Stock Unit Agreement. Filed with Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 and incorporated herein by reference.
|
10.28*
|
Form of 2007 Plan Stock Option Agreement. Filed with Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 and incorporated herein by reference.
|
10.29*
|
Form of Indemnity Agreement. Filed with Registrant’s Amendment No. 1 to Registration Statement on Form S-4 (SEC File No. 333-141448) and incorporated herein by reference.
|
12
|
Statement Re: Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends. Filed herewith.
|
31.1
|
Rule 13a – 14(a) Certification. Filed herewith.
|
31.2
|
Rule 13a – 14(a) Certification. Filed herewith.
|
32
|
Section 1350 Certifications. Filed herewith.
|
101 .INS**
|
XBRL Instance Document
|
101 .SCH**
|
XBRL Taxonomy Extension Schema
|
101 .CAL**
|
XBRL Taxonomy Extension Calculation Linkbase
|
101 .DEF**
|
XBRL Taxonomy Extension Definition Linkbase
|
101 .LAB**
|
XBRL Taxonomy Extension Label Linkbase
|
101 .PRE**
|
XBRL Taxonomy Extension Presentation Link
|
_
|
(1) SEC File No. 001-33519 unless otherwise indicated.
|
*
|
Denotes management compensatory plan agreement or arrangement.
|
**
|
Furnished herewith.
|
For the Six Months Ended
June 30,
|
For the Year Ended December 31,
|
|||||||||||||||||||||||||||
2011
|
2010
|
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||||||||||||||
Net income
|
$ | 421,509 | $ | 261,093 | $ | 696,114 | $ | 790,456 | $ | 973,872 | $ | 487,078 | $ | 345,909 | ||||||||||||||
Less: Income allocated to noncontrolling interests in subsidiaries which do not have fixed charges
|
(8,248 | ) | (7,941 | ) | (16,561 | ) | (17,203 | ) | (17,668 | ) | (16,527 | ) | (16,014 | ) | ||||||||||||||
Less: Equity in earnings of investments
|
(26,486 | ) | (18,749 | ) | (38,352 | ) | (53,244 | ) | (20,391 | ) | (12,738 | ) | (11,895 | ) | ||||||||||||||
Add: Cash distributions from investments
|
29,378 | 25,201 | 49,888 | 49,408 | 43,455 | 23,606 | 17,699 | |||||||||||||||||||||
Less: Impact of discontinued operations
|
355 | (4,943 | ) | (8,032 | ) | 7,104 | 8,029 | 683 | (3,902 | ) | ||||||||||||||||||
Adjusted net income
|
416,508 | 254,661 | 683,057 | 776,521 | 987,297 | 482,102 | 331,797 | |||||||||||||||||||||
Interest expense
|
12,917 | 14,617 | 30,225 | 29,916 | 43,944 | 63,671 | 33,062 | |||||||||||||||||||||
Total earnings available to cover fixed charges
|
$ | 429,425 | $ | 269,278 | $ | 713,282 | $ | 806,437 | $ | 1,031,241 | $ | 545,773 | $ | 364,859 | ||||||||||||||
Total fixed charges - interest expense (including capitalized interest)
|
$ | 13,138 | $ | 14,809 | $ | 30,610 | $ | 30,634 | $ | 45,942 | $ | 68,417 | $ | 35,778 | ||||||||||||||
Cumulative preferred share cash dividends
|
$ | 116,256 | $ | 116,987 | $ | 232,745 | $ | 232,431 | $ | 239,721 | $ | 236,757 | $ | 214,218 | ||||||||||||||
Preferred partnership unit cash distributions
|
- | 3,625 | 5,930 | 9,455 | 21,612 | 21,612 | 19,055 | |||||||||||||||||||||
Allocations pursuant to EITF Topic D-42
|
15,899 | 5,063 | 8,289 | (78,218 | ) | (33,851 | ) | - | 31,493 | |||||||||||||||||||
Total preferred distributions
|
$ | 132,155 | $ | 125,675 | $ | 246,964 | $ | 163,668 | $ | 227,482 | $ | 258,369 | $ | 264,766 | ||||||||||||||
Total combined fixed charges and preferred share distributions
|
$ | 145,293 | $ | 140,484 | $ | 277,574 | $ | 194,302 | $ | 273,424 | $ | 326,786 | $ | 300,544 | ||||||||||||||
Ratio of earnings to fixed charges
|
32.69 | x | 18.18 | x | 23.30 | x | 26.32 | x | 22.45 | x | 7.98 | x | 10.20 | x | ||||||||||||||
Ratio of earnings to fixed charges and preferred share distributions
|
2.96 | x | 1.92 | x | 2.57 | x | 4.15 | x | 3.77 | x | 1.67 | x | 1.21 | x |
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Public Storage;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Public Storage;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Cumulative Preferred Shares of beneficial interest | ||
Par value | $ 0.01 | $ 0.01 |
Shares authorized | 100,000,000 | 100,000,000 |
Shares issued (in series) | 480,690 | 486,390 |
Shares outstanding | 480,690 | 486,390 |
Common Shares of beneficial interest | ||
Par value | $ 0.1 | $ 0.1 |
Shares authorized | 650,000,000 | 650,000,000 |
Shares issued | 169,507,379 | 169,252,819 |
Shares outstanding | 169,507,379 | 169,252,819 |
Noncontrolling Interests in Subsidiaries (Preferred Partnership Interests) (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
Preferred Partnership Interests [Member]
|
Jun. 30, 2010
Preferred Partnership Interests [Member]
|
Dec. 31, 2010
7.250% Series J Preferred Units [Member]
|
|
Dividend payment per share percentage | 5.54% | 7.25% | ||
Value of preferred partnership units repurchased | $ 100,400,000 | |||
Preferred partnership units par value | 100,000,000 | |||
Allocation of income to preferred partnership interests based upon cash distributions | $ 1,812,000 | $ 3,625,000 |
Investments in Real Estate Entities (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Investments in Real Estate Entities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments in Real Estate Entities and Equity in Earnings of Real Estate |
|
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Schedule of Selected Financial Information of PSB |
|
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Public Storage Equity in Earnings Shurgard Europe |
|
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Schedule of Selected Financial Information of Shurgard Europe |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Selected Financial Information of Other Investments |
|
Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Aug. 03, 2011
|
|
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Public Storage | |
Entity Central Index Key | 0001393311 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 170,633,565 |
Line of Credit and Notes Payable (Narrative) (Details) (USD $)
|
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
Aug. 05, 2011
|
|
Line of Credit and Notes Payable | ||||
Expiration of "Credit Agreement" | May 27, 2012 | |||
Credit Agreement aggregate limit | $ 300,000,000 | |||
Credit agreement interest rate minimum spread (LIBOR) | 0.35% | |||
Credit agreement interest rate maximum spread (LIBOR) | 1.00% | |||
Credit agreement interest at June 30, 2011 spread (LIBOR) | 0.35% | |||
Quarterly facility fee, minimum | 0.10% | |||
Quarterly facility fee, maximum | 0.25% | |||
Quarterly facility fee | .10% | |||
Outstanding borrowings on Credit Agreement | 0 | 0 | ||
Reduction in borrowing capability to amount of letters of credit | 18,477,000 | 17,777,000 | ||
Mortgage debt aggregate fair value | 9,679,000 | |||
Debt assumed | 8,776,000 | |||
Interest rate debt fair value, percent | 2.90% | |||
Stated note rate | 5.54% | |||
Initial premium | 903,000 | |||
Interest capitalized as real estate | 221,000 | 192,000 | ||
Interest expense with respect to our notes payable, capital leases and lines of credit | 13,138,000 | 14,809,000 | ||
Cash paid for interest expense | 14,992,000 | 16,657,000 | ||
Amortization of premium | $ (1,854,000) | $ (1,848,000) |
Segment Information (Tables)
|
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Information |
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Investments in Real Estate Entities (Schedule of Selected Financial Information of Other Investments) (Details) (Other Long-term Investments [Member], USD $)
In Thousands |
6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Dec. 31, 2010
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Other Long-term Investments [Member]
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Total revenue | $ 8,537 | $ 8,250 | |
Cost of operations and other expenses | (3,343) | (3,325) | |
Depreciation and amortization | (1,249) | (1,233) | |
Net income | 3,945 | 3,692 | |
Total assets (primarily self-storage facilities) | 35,101 | 35,353 | |
Total accrued and other liabilities | 1,334 | 884 | |
Total Partners' equity | $ 33,767 | $ 34,469 |
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Line of Credit and Notes Payable
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Jun. 30, 2011
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Line of Credit and Notes Payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit and Notes Payable |
At June 30, 2011, we have a revolving credit agreement (the "Credit Agreement") which expires on March 27, 2012, with an aggregate limit with respect to borrowings and letters of credit of $300 million. Amounts drawn on the Credit Agreement bear an annual interest rate ranging from the London Interbank Offered Rate ("LIBOR") plus 0.35% to LIBOR plus 1.00% depending on our credit ratings (LIBOR plus 0.35% at June 30, 2011). In addition, we are required to pay a quarterly facility fee ranging from 0.10% per annum to 0.25% per annum depending on our credit ratings (0.10% per annum at June 30, 2011). We had no outstanding borrowings on our Credit Agreement at June 30, 2011 or at August 5, 2011. At June 30, 2011, we had undrawn standby letters of credit, which reduce our borrowing capacity with respect to our line of credit by the amount of the letters of credit, totaling $18,477,000 ($17,777,000 at December 31, 2010). The carrying amounts of our notes payable at June 30, 2011 and December 31, 2010 consist of the following (dollar amounts in thousands):
Substantially all of our debt was acquired in connection with a property or other acquisition, and in such cases an initial premium or discount is established for any difference between the stated note balance and estimated fair value of the note. This initial premium or discount is amortized over the remaining term of the notes using the effective interest method. Estimated fair values are based upon discounting the future cash flows under each respective note at an interest rate that approximates those of loans with similar credit characteristics and term to maturity. These inputs for fair value represent significant unobservable inputs, which are "Level 3" inputs as the term is defined in the Codification. During the six months ended June 30 2011, we assumed mortgage debt in connection with the acquisition of a real estate facility. This debt was recorded at its estimated fair value of approximately $9,679,000 with an estimated market rate of approximately 2.90% as compared to the actual assumed note balance of $8,776,000 with a stated interest rate of 5.54%. This initial premium of $903,000 is being amortized over the remaining term of the mortgage note using the effective interest method.
The notes payable and Credit Agreement have various customary restrictive covenants, all of which we were in compliance with at June 30, 2011.
At June 30, 2011, approximate principal maturities of our notes payable are as follows (amounts in thousands):
We incurred interest expense (including interest capitalized as real estate totaling $221,000 and $192,000 for the six months ended June 30, 2011 and 2010, respectively) with respect to our notes payable, capital leases and line of credit aggregating $13,138,000 and $14,809,000 for the six months ended June 30, 2011 and 2010, respectively. These amounts were comprised of $14,992,000 and $16,657,000 in cash paid for the six months ended June 30, 2011 and 2010, respectively, less $1,854,000 and $1,848,000 in amortization of premium, respectively. |
Description of the Business (Details)
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6 Months Ended | ||||
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Dec. 31, 2010
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Jun. 30, 2011
Shurgard Europe [Member]
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Jun. 30, 2011
London [Member]
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Jun. 30, 2011
Public Storage [Member]
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Jun. 30, 2011
PS Business Parks [Member]
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PSA self-storage facilities | 1 | 2,054 | |||
Interest in Shurgard Europe | 49.00% | 49.00% | |||
Number of facilities owned by Shurgard Europe | 188 | ||||
Net rentable square feet | 10,100,000 | 130,300,000 | 23,500,000 | ||
Number of states with facilities | 38 | 11 |
Investments in Real Estate Entities (Schedule of Selected Financial Information of PSB) (Details) (PSB Real Estate Investment [Member], USD $)
In Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2011
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Dec. 31, 2010
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PSB Real Estate Investment [Member]
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Total revenue | $ 146,912 | $ 136,416 |
Costs of operations | (49,921) | (44,217) |
Depreciation and amortization | (41,777) | (36,638) |
General and administrative | (3,318) | (5,149) |
Other items | (1,916) | 3,919 |
Net income | 49,980 | 54,331 |
Total assets (primarily real estate) | 1,619,289 | 1,621,057 |
Debt | 181,684 | 144,511 |
Other liabilities | 51,553 | 53,421 |
Preferred stock and units | 604,129 | 651,964 |
Common equity and units | $ 781,923 | $ 771,161 |
Real Estate Facilities (Schedule of Real Estate Activities) (Details) (USD $)
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6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Dec. 31, 2010
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Beginning balance (Operating facilities, at cost) | $ 10,587,347,000 | ||
Capital improvements | 44,292,000 | 37,002,000 | |
Acquisition of real estate facilities | 34,361,000 | 66,378,000 | |
Ending balance (Operating facilities, at cost) | 10,683,292,000 | ||
Beginning balance, (Accumulated depreciation) | (3,061,459,000) | ||
Ending balance, (Accumulated depreciation) | (3,227,804,000) | ||
Beginning balance, (Construction in process) | 6,928,000 | ||
Current development | 10,531,000 | 8,371,000 | |
Ending balance, (Construction in process) | 8,531,000 | ||
Total real estate facilities at June 30, 2011 | 7,464,019,000 | 7,532,816,000 | |
Operating Facilities at Cost:
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Beginning balance (Operating facilities, at cost) | 10,587,347,000 | ||
Capital improvements | 44,292,000 | ||
Acquisition of real estate facilities | 46,026,000 | ||
Newly developed facilities opened for operations | 8,928,000 | ||
Disposition of real estate facilities | (4,080,000) | ||
Impact of foreign exchange rate changes | 779,000 | ||
Ending balance (Operating facilities, at cost) | 10,683,292,000 | ||
Accumulated Depreciation:
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Disposition of real estate facilities | 3,555,000 | ||
Impact of foreign exchange rate changes | (293,000) | ||
Beginning balance, (Accumulated depreciation) | (3,061,459,000) | ||
Depreciation expense | (169,607,000) | ||
Ending balance, (Accumulated depreciation) | (3,227,804,000) | ||
Construction in Process:
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Newly developed facilities opened for operations | (8,928,000) | ||
Beginning balance, (Construction in process) | 6,928,000 | ||
Current development | 10,531,000 | ||
Ending balance, (Construction in process) | $ 8,531,000 |
Public Storage Shareholders' Equity (Tables)
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Jun. 30, 2011
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Cumulative Preferred Shares Of Beneficial Interest |
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Segment Information
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Jun. 30, 2011
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Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 10. Segment Information
Our reportable segments reflect significant operating activities that are evaluated separately by management, and are organized based upon their operating characteristics. Each of our segments is evaluated by management based upon net segment income. Net segment income represents net income in conformity with GAAP and our significant accounting policies as denoted in Note 2. We have adjusted the classification of the "Presentation of Segment Information" below with respect to the three and six months ended June 30, 2010 to be consistent with our current segment definition.
Following is the description of and basis for presentation for each of our segments.
Domestic Self-Storage Segment
The Domestic Self-Storage Segment comprises our domestic self-storage rental operations, and is our predominant segment. It includes the operations of the 2,036 self storage facilities owned by the Company and the Subsidiaries, as well as our equity share of the 19 self-storage facilities that we account for on the equity method. None of our interest and other income, interest expense or the related debt, general and administrative expense, or gains and losses on the sale of self-storage facilities is allocated to our Domestic Self-Storage segment because management does not consider these items in evaluating the results of operations of the Domestic Self-Storage segment. At June 30, 2011, the assets of the Domestic Self-Storage segment are comprised principally of our self-storage facilities with a book value of $7.5 billion ($7.5 billion at December 31, 2010), Property Intangibles with a book value of approximately $15.2 million ($23.3 million at December 31, 2010), and the Other Investments with a net book value of $14.0 million ($13.1 million at December 31, 2010). Substantially all of our other assets totaling $91.6 million, and our accrued and other liabilities totaling $227.9 million, ($90.5 million and $205.8 million, respectively, at December 31, 2010) are directly associated with the Domestic Self-Storage segment.
Europe Self-Storage Segment
The Europe Self-Storage segment comprises our interest in Shurgard Europe, which has a separate management team that, under the direction of Public Storage and the institutional investor which owns a 51% equity interest in Shurgard Europe, makes the financing, capital allocation, and other significant decisions for this operation. The Europe Self-Storage segment presentation includes our equity share of Shurgard Europe's operations, the interest and other income received from Shurgard Europe, as well as specific general and administrative expense, disposition gains, and foreign currency exchange gains and losses that management considers in evaluating our investment in Shurgard Europe. At June 30, 2011, our condensed consolidated balance sheet includes an investment in Shurgard Europe with a book value of $391.9 million ($264.7 million at December 31, 2010) and a loan receivable from Shurgard Europe totaling $514.6 million ($495.2 million at December 31, 2010).
Commercial Segment
The Commercial segment comprises our investment in PSB, a publicly-traded REIT with a separate management team that makes its financing, capital allocation and other significant decisions. The Commercial segment also includes our direct interest in certain commercial facilities, substantially all of which are managed by PSB. The Commercial segment presentation includes our equity income from PSB, as well as the revenues and expenses of our commercial facilities. At June 30, 2011, the assets of the Commercial segment are comprised principally of our investment in PSB which has a book value of $327.1 million ($323.8 million at December 31, 2010) and a loan receivable from PSB totaling $116.0 million (nil at December 31, 2010).
Presentation of Segment Information
The following tables reconcile the performance of each segment, in terms of segment income, to our consolidated net income (amounts in thousands):
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Description of the Business
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6 Months Ended | ||
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Jun. 30, 2011
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Description of the Business | |||
Description of the Business |
Public Storage (referred to herein as "the Company", "the Trust", "we", "us", or "our"), a Maryland real estate investment trust, was organized in 1980. Our principal business activities include the acquisition, development, ownership and operation of self-storage facilities which offer storage spaces for lease, generally on a month-to-month basis, for personal and business use. Our self-storage facilities are located primarily in the United States ("U.S."). We also have interests in self-storage facilities located in seven Western European countries.
At June 30, 2011, we had direct and indirect equity interests in 2,054 self-storage facilities (with approximately 130.3 million net rentable square feet) located in 38 states operating under the "Public Storage" name. In Europe, we own one facility in London, England and we have a 49% interest in Shurgard Europe, which owns 188 self-storage facilities (with approximately 10.1 million net rentable square feet), all operating under the "Shurgard" name. We also have direct and indirect equity interests in approximately 23.5 million net rentable square feet of commercial space located in 11 states in the U.S. primarily operated by PS Business Parks, Inc. ("PSB") under the "PS Business Parks" name.
Any reference to the number of properties, square footage, number of tenant reinsurance policies outstanding and the aggregate coverage of such reinsurance policies are unaudited and outside the scope of our independent registered public accounting firm's audit of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). |
Summary of Significant Accounting Policies (Discontinued Operations and Net Income per Common Share) (Narrative) (Details) (USD $)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Gains (losses) on disposition of other real estate facilities, net | $ (70,000) | $ 63,000 | $ 128,000 | $ 396,000 |
Impairment charge on real estate assets | 1,735,000 | |||
Equity Shares, Series A based on redemptions | 25,746,000 | |||
Equity Shares, Series A, redemption date | Apr. 15, 2010 | Apr. 15, 2010 | ||
Discontinued Operations [Member]
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Gains (losses) on disposition of other real estate facilities, net | 4,650,000 | (253,000) | 5,087,000 | |
Impairment charge on real estate assets | $ 397,000 |
Public Storage Shareholders' Equity
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Jun. 30, 2011
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Public Storage Shareholders' Equity |
Cumulative Preferred Shares
At June 30, 2011 and December 31, 2010, we had the following series of Cumulative Preferred Shares of beneficial interest outstanding:
The holders of our Cumulative Preferred Shares have general preference rights with respect to liquidation and quarterly distributions. Holders of the preferred shares, except under certain conditions and as noted below, will not be entitled to vote on most matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of all outstanding series of preferred shares (voting as a single class without regard to series) will have the right to elect two additional members to serve on our Board of Trustees until the arrearage has been cured. At June 30, 2011, there were no dividends in arrears.
Except under certain conditions relating to the Company's qualification as a REIT, the Cumulative Preferred Shares are not redeemable prior to the dates indicated on the table above. On or after the respective dates, each of the series of Cumulative Preferred Shares will be redeemable, at the option of the Company, in whole or in part, at $25.00 per share (or depositary share as the case may be), plus accrued and unpaid dividends. Holders of the Cumulative Preferred Shares do not have the right to require the Company to redeem such shares.
Upon issuance of our Cumulative Preferred Shares of beneficial interest, we classify the liquidation value as preferred equity on our consolidated balance sheet with any issuance costs recorded as a reduction to paid-in capital.
In April and May 2011, we issued 15,000,000 depositary shares each representing 1/1,000 of our 6.500% Cumulative Preferred Shares, Series Q for gross proceeds of $375,000,000, and we incurred $11,336,000 in issuance costs.
In May and June 2011, we redeemed our Series I Cumulative Preferred Shares, at par. The aggregate redemption amount, before payment of accrued dividends, was $517,500,000. In applying EITF D-42 to this redemption, we allocated $15,899,000 of income from our common shareholders to the holders of our Preferred Shares, representing the excess of the amount paid over the initial issuance proceeds, in the three and six months ended June 30, 2011.
On April 13, 2010, we issued 5,800,000 depositary shares each representing 1/1,000 of our 6.875% Cumulative Preferred Shares, Series O for gross proceeds of $145,000,000.
On May 18, 2010, we redeemed our remaining Series V Cumulative Preferred Shares at par value plus accrued dividends. In applying EITF D-42 to this redemption, we allocated $5,063,000 of income from our common shareholders to the holders of our Preferred Shares, representing the excess of the amount paid over the initial issuance proceeds, in the three and six months ended June 30, 2010.
See Note 12 "Subsequent Events" for further discussion regarding our Cumulative Preferred Shares.
Equity Shares, Series A
On April 15, 2010, we redeemed all of our outstanding shares of Equity Shares, Series A at $24.50 per share for aggregate redemption amount of $205.4 million.
During the three months ended March 31, 2010, we allocated income and paid quarterly distributions to the holders of the Equity Shares, Series A totaling $5.1 million ($0.6125 per share) based on 8,377,193 weighted average depositary shares outstanding. As a result of the redemption on April 15, 2010, no distributions were paid for the three months ended June 30, 2010. Net income allocated to the Equity Shares, Series A for the six months ended June 30, 2010 also includes $25.7 million ($3.07 per share), representing the excess of cash paid to redeem the securities over the original net issuance proceeds.
Equity Shares, Series AAA
On August 31, 2010, we retired all 4,289,544 outstanding shares of Equity Shares, Series AAA ("Equity Shares AAA"). During the six months ended June 30, 2010, we paid quarterly distributions to the holder of the Equity Shares, Series AAA of $0.5391 per share. As a result of the retirement on August 31, 2010, no further distributions will be paid for the period subsequent to June 30, 2010. For all periods presented, the Equity Shares, Series AAA and related dividends are eliminated in consolidation as the shares were held by one of our wholly-owned subsidiaries.
Dividends
The unaudited characterization of dividends for Federal income tax purposes is made based upon earnings and profits of the Company, as defined by the Internal Revenue Code. Common share dividends, including amounts paid to our restricted share unitholders, totaled $161.5 million ($0.95 per share) and $135.5 million ($0.80 per share), for the three months ended June 30, 2011 and 2010, respectively, and $297.4 million ($1.75 per share) and $245.4 million ($1.45 per share), for the six months ended June 30, 2011 and 2010, respectively. Equity Shares, Series A dividends totaled $5.1 million ($0.6125 per share) for the three months ended March 31, 2010 (none in 2011). Preferred share dividends totaled $58.6 million and $58.9 million for the three months ended June 30, 2011 and 2010, respectively, and $116.3 million and $117.0 million for the six months ended June 30, 2011 and 2010, respectively. |
Subsequent Events
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6 Months Ended |
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Jun. 30, 2011
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Subsequent Events | |
Subsequent Events | 12. Subsequent Events
As of June 30, 2011, we are under contract to acquire two properties for approximately $23.3 million. One property is in Florida and the other property is in California. These acquisitions closed on July 7, 2011 and July 12, 2011, respectively.
During July 2011, we issued 19,500,000 depositary shares (including the exercise of the underwriters' over-allotment option) at $25.00 per depositary share, with each depositary share representing 1/1,000 of a 6.35% Cumulative Preferred Share of Beneficial Interest, Series R, resulting in gross proceeds of $487.5 million.
On July 22 2011, we called for redemption all of our outstanding 16,990,244 depositary shares each representing 1/1,000 of a 7.250% Cumulative Preferred Share of Beneficial Interest, Series K at par. The aggregate redemption amount, before payment of accrued dividends, to be paid on August 22, 2011, is $424,756,100. In applying EITF D-42 to this redemption, we will allocate approximately $13.1 million of income from our common shareholders to the holders of our Preferred Shares, representing the excess of the amount paid over the initial issuance proceeds, in the quarter ending September 30, 2011. |
Related Party Transactions
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6 Months Ended | ||
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Jun. 30, 2011
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Related Party Transactions | |||
Related Party Transactions |
The Hughes Family have ownership interests in, and operate approximately 53 self-storage facilities in Canada ("PS Canada") using the "Public Storage" brand name pursuant to a royalty-free trademark license agreement with the Company. We currently do not own any interests in these facilities nor do we own any facilities in Canada. The Hughes Family owns approximately 16.7% of our common shares outstanding at June 30, 2011. We have a right of first refusal to acquire the stock or assets of the corporation that manages the 53 self-storage facilities in Canada, if the Hughes Family or the corporation agrees to sell them. However, we have no interest in the operations of this corporation, we have no right to acquire this stock or assets unless the Hughes Family decides to sell and we receive no benefit from the profits and increases in value of the Canadian self-storage facilities.
We reinsure risks relating to loss of goods stored by tenants in the self-storage facilities in Canada. During the six months ended June 30, 2011 and 2010, we received $292,000 and $315,000 (based upon historical exchange rates between the U.S. Dollar and Canadian Dollar in effect as the revenues were earned), respectively, in reinsurance premiums attributable to the Canadian facilities. Since our right to provide tenant reinsurance to the Canadian facilities may be qualified, there is no assurance that these premiums will continue.
PS Canada holds approximately a 2.2% interest in Stor-RE, a consolidated entity that provides liability and casualty insurance for PS Canada, the Company and certain affiliates of the Company for occurrences prior to April 1, 2004.
The Hughes Family owns 47.9% of the voting stock and the Company holds 46% of the voting and 100% of the nonvoting stock (representing substantially all the economic interest) of a private REIT. The private REIT owns limited partnership interests in five affiliated partnerships. The Hughes Family also owns limited partnership interests in all of these partnerships, and, together with the Company, Mr. Hughes is a co-general partner in three of these partnerships. The Company and the Hughes Family receive distributions from these entities in accordance with the terms of the partnership agreements or other organizational documents.
On June 30, 2011, we entered into merger agreements to acquire all of the units of limited partnership interest and general partnership interests we do not currently own in each of the five affiliated partnerships referenced above in which the private REIT and the Hughes Family own limited partnership interests. For three of these partnerships, Mr. Hughes is a co-general partner along with the Company. These mergers have been approved by Public Storage and the Hughes Family, who together own a majority of the limited partnership units outstanding and therefore can approve the mergers without the vote of the other limited partners. The merger consideration was based upon independent appraisals, dated April 5, 2011 from a nationally recognized appraisal firm, with allocation of the net asset value based upon the liquidation provisions of the relevant partnership documents. Under the merger agreements, the Hughes Family will be selling all of its general and limited partnership interests in these five Partnerships for approximately $54,599,000, reflecting the same pricing and terms as the public limited partners (see "Permanent Noncontrolling Interests in Subsidiaries" in Note 6 "Noncontrolling Interests in Subsidiaries"). In addition, the Hughes Family's interests in the private REIT will be acquired for $238,000, based upon the merger value of the interests in these five partnerships owned by the private REIT. Our board of trustees appointed a special committee of independent trustees to review the terms of these acquisitions. The special committee unanimously determined that the transactions were advisable and fair to and in the respective best interests of Public Storage and its shareholders not affiliated with the Hughes Family. A limited partner in four of the relevant limited partnerships has brought a putative class action lawsuit in California state court alleging, among other things, that the mergers provide for insufficient consideration for the relevant units of limited partnership interest. The limited partner seeks, among other things, to enjoin the consummation of the mergers. We believe that the lawsuit is without merit, and we intend to defend it vigorously. While there can be no assurance, and the transactions are subject to certain customary closing conditions, as well as the pending litigation, these transactions are currently scheduled to close in late August 2011.
The Hughes Family also had interests in 18 additional limited partnerships until we acquired these interests from them on June 30, 2011. The acquisition price was based upon independent appraisals of the partnership's facilities, dated April 5, 2011 from a nationally recognized appraisal firm, with allocation of the net asset value based upon the liquidation provisions of the relevant partnership documents. We paid the Hughes Family $13,300,000 for their interests. The special committee of our board of trustees also reviewed the terms of each of these purchases and unanimously determined that the purchases were fair to and in the respective best interests of Public Storage and its shareholders not affiliated with the Hughes Family. As of August 5, 2011, Mr. Hughes has withdrawn as general partner in all but one of these 18 partnerships, where his withdrawal is pending receipt of the required consent of a limited partner.
The Hughes Family also owns shares of common stock in PSB. |
Summary of Significant Accounting Policies (Evaluation of Asset Impairment and Foreign Currency Translation) (Narrative) (Details) (USD $)
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3 Months Ended | 6 Months Ended | 12 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Dec. 31, 2010
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Total impairment charge | $ 2,544,000 | ||||
Impairment of real estate facilities | 1,735,000 | ||||
Impairment of intangible assets related to ground lease | 198,000 | ||||
Other assets impairment charge | 611,000 | ||||
Impairment of goodwill | 0 | 0 | |||
End of period exchange rates USD to Euro | 1.439 | 1.439 | 1.325 | ||
Average exchange rates USD to Euro | 1.438 | 1.273 | 1.402 | 1.329 | |
Discontinued Operations [Member]
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Impairment of real estate facilities | $ 397,000 |
Noncontrolling Interests in Subsidiaries
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6 Months Ended | ||
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Jun. 30, 2011
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Noncontrolling Interests in Subsidiaries | |||
Noncontrolling Interests in Subsidiaries |
In consolidation, we classify ownership interests in the net assets of each of the Subsidiaries, other than our own, as "noncontrolling interests in subsidiaries." Interests that have the ability to require us, except in an entity liquidation, to redeem the underlying securities for cash, assets, or other securities that would not also be classified as equity are presented on our balance sheet outside of equity. At the end of each reporting period, if the book value is less than the estimated amount to be paid upon a redemption occurring on the related balance sheet date, these interests are increased to adjust to their estimated liquidation value (which approximates fair value), with the offset against retained earnings. All other noncontrolling interests in subsidiaries are presented as a component of equity, "permanent noncontrolling interests in subsidiaries."
Redeemable Noncontrolling Interests in Subsidiaries
At June 30, 2011, the Redeemable Noncontrolling Interests in Subsidiaries represent equity interests in three entities that own in aggregate 14 self-storage facilities, and are presented at estimated liquidation value (which approximates fair value). We estimate the liquidation value by applying the related provisions of the governing documents to our estimate of the fair value of the underlying net assets (principally real estate assets). During the six months ended June 30, 2011 and 2010, these interests were increased by $218,000 and $160,000, respectively, to adjust to their estimated liquidation value. During the three and six months ended June 30, 2011, we allocated a total of $241,000 and $461,000, respectively, of income to these interests. During the same periods in 2010, we allocated a total of $234,000 and $457,000, respectively, of income to these interests. During the six months ended June 30, 2011 and 2010, we paid distributions to these interests totaling $567,000 and $588,000, respectively.
Permanent Noncontrolling Interests in Subsidiaries
The Permanent Noncontrolling Interests in Subsidiaries represent equity interests in 16 entities that own an aggregate of 59 self-storage facilities. These interests are presented as equity because the holders of the interests do not have the ability to require us to redeem them for cash or other assets, or other securities that would not also be classified as equity.
On June 30, 2011, we acquired all the partnership interests held by the Hughes Family in 15 limited partnerships which we consolidate in our accompanying financial statements. The acquisition cost was approximately $12,026,000 in cash. These acquisitions reduced our Permanent Noncontrolling Interests in Subsidiaries by $4,822,000 with the excess of cost over the underlying book value of $7,204,000 recorded as a reduction to paid-in capital.
During the three and six months ended June 30, 2011, we allocated a total of $4,256,000 and $8,496,000, respectively, in income to these interests. During the same periods in 2010, we allocated a total of $4,091,000 and $8,012,000, respectively, in income to these interests. During the six months ended June 30, 2011 and 2010, we paid distributions to these interests totaling $6,581,000 and $8,048,000, respectively.
Preferred Partnership Interests
On October 25, 2010, we repurchased all of our 7.25% Series J Preferred Partnership units, representing all of our preferred partnership interests that were outstanding on that date, for an aggregate of $100,400,000 ($100,000,000 par value) plus accrued and unpaid dividends. During the three and six months ended June 30, 2010, we allocated a total of $1,812,000 and $3,625,000, respectively, in income to these interests based upon distributions paid. At June 30, 2011 and December 31, 2010, we had no preferred partnership interests outstanding. |
Noncontrolling Interests in Subsidiaries (Redeemable and Other and Permanent Noncontrolling Interest) (Narrative) (Details) (USD $)
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6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
Equity Of Redeemable Noncontrolling Interest In Subsidiaries [Member]
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Jun. 30, 2010
Equity Of Redeemable Noncontrolling Interest In Subsidiaries [Member]
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Jun. 30, 2011
Equity Of Redeemable Noncontrolling Interest In Subsidiaries [Member]
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Jun. 30, 2010
Equity Of Redeemable Noncontrolling Interest In Subsidiaries [Member]
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Mar. 31, 2011
Permanent Noncontrolling Interests In Subsidiaries [Member]
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Jun. 30, 2011
Permanent Noncontrolling Interests In Subsidiaries [Member]
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Jun. 30, 2011
Other Permanent Noncontrolling Interests In Subsidiaries [Member]
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Jun. 30, 2010
Other Permanent Noncontrolling Interests In Subsidiaries [Member]
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Jun. 30, 2011
Other Permanent Noncontrolling Interests In Subsidiaries [Member]
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Jun. 30, 2010
Other Permanent Noncontrolling Interests In Subsidiaries [Member]
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Noncontrolling interests in Subsidiaries represent equity interests in three entities | 3 | |||||||||||
Noncontrolling interests in Subsidiaries represent equity interests in 14 self-storage facilities | 14 | |||||||||||
Equity interests value increase | $ 218,000 | $ 160,000 | ||||||||||
Redeemable noncontrolling interests in subsidiaries | 461,000 | 241,000 | 234,000 | 461,000 | 457,000 | |||||||
Distributions paid to noncontrolling interests | (7,148,000) | (12,261,000) | 567,000 | 588,000 | ||||||||
Income allocated to other permanent noncontrolling interest in subsidiaries | 4,256,000 | 4,091,000 | 8,496,000 | 8,012,000 | ||||||||
Distributions to Permanent and Other noncontrolling interests | 6,581,000 | 6,581,000 | 8,048,000 | |||||||||
Permanent Noncontrolling Interests in Subsidiaries, number of entities | 16 | |||||||||||
Permanent Noncontrolling Interests in Subsidiaries, number of self-storage facilities | 59 | |||||||||||
Acquisition cost | 154,300,000 | |||||||||||
Acquisition cost | 12,026,000 | 12,026,000 | ||||||||||
Decrease in Permanent Noncontrolling Interests | 4,822,000 | |||||||||||
Underlying book value | $ 7,204,000 | |||||||||||
Number of consolidated limited partnership interests acquired from Hughes Family | 15 |
Condensed Consolidated Statement of Equity (Parenthetical) (USD $)
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6 Months Ended |
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Jun. 30, 2011
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Condensed Consolidated Statement of Equity (Parenthetical) | |
Issuance of cumulative preferred shares, shares | 15,000,000 |
Redemption of cumulative preferred shares, shares | 20,700,000 |
Issuance of common shares in connection with share-based compensation, shares | 254,560 |
Common shares, per share value | $ 1.75 |
Summary of Significant Accounting Policies
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Summary of Significant Accounting Policies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") as defined in the Financial Accounting Standards Board Accounting Standards Codification (the "Codification"), including the related guidance with respect to interim financial information, and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation have been reflected in these unaudited condensed consolidated financial statements. Operating results for the three and six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011 due to seasonality and other factors. The accompanying unaudited condensed consolidated financial statements should be read together with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010.
Certain amounts previously reported in our December 31, 2010 and June 30, 2010 financial statements have been reclassified to conform to the June 30, 2011 presentation, as a result of discontinued operations.
Codification Section 810-10-15-14 stipulates that generally any entity with a) insufficient equity to finance its activities without additional subordinated financial support provided by any parties, or b) equity holders that, as a group, lack the characteristics specified in the Codification which evidence a controlling financial interest, is considered a Variable Interest Entity ("VIE").
When we are the general partner, we are presumed to control the partnership unless the limited partners possess either a) the substantive ability to dissolve the partnership or otherwise remove us as general partner without cause (commonly referred to as "kick-out rights"), or b) the right to participate in substantive operating and financial decisions of the limited partnership that are expected to be made in the course of the partnership's business.
The accounts of entities we control that are not VIE's, and VIE's that we have a controlling financial interest in, are included in our condensed consolidated financial statements, and all intercompany balances and transactions are eliminated. We account for our investment in entities that we do not consolidate using the equity method of accounting or, if we do not have the ability to exercise significant influence over an investee, the cost method of accounting. Changes in consolidation status are reflected effective the date the change of control or determination of primary beneficiary status occurred, and previously reported periods are not restated. The entities that we consolidate, for the periods in which the reference applies, are referred to hereinafter as the "Subsidiaries." The entities that we have an interest in but do not consolidate, for the periods in which the reference applies, are referred to hereinafter as the "Unconsolidated Entities" or the "Real Estate Entities."
Collectively, at June 30, 2011, the Company and its Subsidiaries own a total of 2,042 real estate facilities included in continuing operations, consisting of 2,035 self-storage facilities in the U.S., one self-storage facility in London, England and six commercial facilities in the U.S.
At June 30, 2011, the Unconsolidated Entities are comprised of PSB, Shurgard Europe, and various limited and joint venture partnerships (the partnerships referred to as the "Other Investments"). At June 30, 2011, the Other Investments own in aggregate 19 self-storage facilities with 1.1 million net rentable square feet in the U.S.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Income Taxes
For all taxable years subsequent to 1980, the Company has qualified and intends to continue to qualify as a real estate investment trust ("REIT"), as defined in Section 856 of the Internal Revenue Code. As a REIT, we do not incur federal or significant state tax on that portion of our taxable income which is distributed to our shareholders, provided that we meet certain tests. We believe we have met these tests during 2010, for the two quarters ended June 30, 2011, and we expect to meet these tests for the rest of 2011 and, accordingly, no provision for federal income taxes has been made in the accompanying condensed consolidated financial statements on income produced and distributed on real estate rental operations. We have business operations in taxable REIT subsidiaries that are subject to regular corporate tax on their taxable income, and such corporate taxes attributable to these operations are presented in ancillary cost of operations in our accompanying condensed consolidated statements of income. We also are subject to certain state taxes, which are presented in general and administrative expense in our accompanying condensed consolidated statements of income. We have concluded that there are no significant uncertain tax positions requiring recognition in our financial statements with respect to all tax periods which remain subject to examination by major tax jurisdictions as of June 30, 2011.
Real Estate Facilities
Real estate facilities are recorded at cost. Costs associated with the development, construction, renovation and improvement of properties are capitalized. Interest, property taxes and other costs associated with development incurred during the construction period are capitalized as building cost. Legal services, due diligence, transfer taxes, and other internal and external transaction costs associated with acquisitions are expensed as incurred. Costs associated with the sale of real estate facilities or interests in real estate investments are expensed as incurred. Expenditures for repairs and maintenance are expensed when incurred. Depreciation expense is computed using the straight-line method over the estimated useful lives of the buildings and improvements, which generally range from 5 to 25 years.
Acquisitions of operating self-storage facilities are accounted for under the provisions of Codification Section 805, "Business Combinations." The net acquisition cost includes cash paid to the seller as well as the fair value of any mortgage debt assumed. In the case of multiple facilities acquired in a single transaction, the aggregate acquisition cost is allocated to each facility based upon the relative estimated fair value of each facility. Any difference between the acquisition cost and the fair value of the real estate facilities is recorded as goodwill. The acquisition cost of each facility is allocated based upon the relative estimated fair values of the underlying land, buildings, and intangibles such as the self-storage tenants in place. Significant judgment is used to estimate fair values in recording our business combinations, and the valuation process utilizes significant unobservable inputs, which are "Level 3" inputs as the term is defined in Codification Section 820-10-35-52.
Other Assets
Other assets primarily consist of prepaid expenses, accounts receivable, interest receivable, and restricted cash. During the six months ended June 30, 2010, we recorded impairment charges with respect to other assets totaling $611,000. These amounts are included in "asset impairment charges" on our condensed consolidated statement of income for the six months ended June 30, 2010.
Accrued and Other Liabilities
Accrued and other liabilities consist primarily of trade payables, property tax accruals, tenant prepayments of rents, accrued interest payable, accrued payroll, contingent casualty and other losses which are accrued when probable and to the extent they are estimable, and estimated losses we expect to pay related to our tenant reinsurance activities. When it is at least reasonably possible that a significant unaccrued contingent loss has occurred, we disclose the nature of that potential loss under "Legal Matters" in Note 11 "Commitments and Contingencies".
Financial Instruments
We have estimated the fair value of our financial instruments using available market information and generally accepted valuation methodologies. Considerable judgment is required in interpreting market data to develop estimates of market value. Accordingly, estimated fair values are not necessarily indicative of the amounts that could be realized in current market exchanges.
For purposes of financial statement presentation, we consider all highly liquid financial instruments such as short-term treasury securities, money market funds with daily liquidity and a rating of at least AAA by Standard and Poor's, or investment grade (rated A1 by Standard and Poor's) short-term commercial paper with remaining maturities of three months or less at the date of acquisition to be cash equivalents. Any such cash and cash equivalents which are restricted from general corporate use due to insurance or other regulations, or based upon contractual requirements, are included in other assets.
Marketable securities consist of short-term investments in high-grade corporate securities rated A1 by Standard and Poor's. Because we have the positive intent and ability to hold these securities to maturity, the securities are stated at amortized cost and the related unrecognized gains and losses are excluded from earnings and other comprehensive income. The difference between interest income that is imputed using the effective interest method and the actual note interest collected is recorded as an adjustment to the marketable security balance; our marketable securities were decreased $49,000 and $202,000 during the six months ended June 30, 2011 and 2010, respectively, in applying the effective interest method. The amortized cost, gross unrecognized holding losses, and fair value of our marketable securities were $102,279,000, ($41,000) and $102,238,000, respectively, at December 31, 2010. The characteristics of the marketable securities and comparative metrics utilized in our evaluation represent significant observable inputs, which are "Level 2" inputs as the term is defined in Codification Section 820-10-35-47. We periodically assess our marketable securities for other-than-temporary impairment. Any such other-than-temporary impairment from credit loss is recognized as a realized loss and measured as the excess of carrying value over fair value at the time the assessment is made. During each of the six months ended June 30, 2011 and 2010, we had no other-than-temporary impairment losses. All of our marketable securities held as of December 31, 2010 matured during the three months ended March 31, 2011. As of June 30, 2011, we held no marketable securities.
Due to the short maturity and the underlying characteristics of our cash and cash equivalents, other assets, and accrued and other liabilities, we believe the carrying values as presented on the condensed consolidated balance sheets are reasonable estimates of fair value.
Financial assets that are exposed to credit risk consist primarily of cash and cash equivalents, accounts receivable, the loan receivable from PSB, the loans receivable from Shurgard Europe, and restricted cash. Cash and cash equivalents and restricted cash are only invested in instruments with an investment grade rating. See "Loans Receivable from Shurgard Europe" below for information regarding our fair value measurement of this instrument.
At June 30, 2011, due primarily to our investment in and loans receivable from Shurgard Europe, our operations and our financial position are affected by fluctuations in currency exchange rates between the Euro, and to a lesser extent, other European currencies, against the U.S. Dollar.
We estimate the fair value of our notes payable to be $455,928,000 at June 30, 2011, based primarily upon discounting the future cash flows under each respective note at an interest rate that approximates loans with similar credit quality and term to maturity. The characteristics of the notes payable and comparative metrics utilized in our evaluation represent significant observable inputs, which are "Level 2" inputs as the term is utilized in Codification Section 820-10-35-47.
We have estimated the fair value of our financial instruments using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop estimates of market value. Accordingly, estimated fair values are not necessarily indicative of the amounts that could be realized in current market exchanges.
Goodwill
Goodwill represents the excess of acquisition cost over the fair value of net tangible and identifiable intangible assets acquired in business combinations, and has an indeterminate life. Each business combination from which our goodwill arose was for the acquisition of single businesses and accordingly, the allocation of our goodwill to our business segments is based directly on such acquisitions. Our goodwill balance of $174,634,000 is reported net of accumulated amortization of $85,085,000 as of June 30, 2011 and December 31, 2010.
Intangible Assets
Our intangible assets primarily represent the unamortized portion of the estimated acquisition-date fair values of the tenants in place and, to a lesser extent, leasehold interests in land (collectively, the "Property Intangibles"). Property Intangibles are finite-lived and are amortized relative to the benefit of the tenants in place or the land lease expense to each period. Accumulated amortization reflects those individual real estate facilities where the related Property Intangibles had not been fully amortized at each applicable date.
At June 30, 2011, our Property Intangibles have a net book value of $15,134,000 ($23,267,000 at December 31, 2010). Accumulated amortization totaled $25,518,000 at June 30, 2011 ($21,844,000 at December 31, 2010), and amortization expense of $2,636,000 and $2,408,000 was recorded for the three months ended June 30, 2011 and 2010, respectively, and $6,147,000 and $3,314,000 was recorded for the six months ended June 30, 2011 and 2010, respectively. During the six months ended June 30, 2011, our Property Intangibles were increased by $2,752,000 in connection with the acquisition of six self-storage facilities and the leasehold interest in the land of one of our existing self-storage facilities (Note 3). The acquisition of this leasehold interest resulted in the reclassification of Property Intangibles totaling $4,738,000 to real estate facilities, during the six months ended June 30, 2011.
In addition to the Property Intangibles, we also have an intangible asset representing the estimated acquisition-date fair value of the "Shurgard" trade name, which is used by Shurgard Europe pursuant to a licensing agreement, with a book value of $18,824,000 at June 30, 2011 and December 31, 2010. The Shurgard trade name has an indefinite life and, accordingly, we do not amortize this asset but instead analyze it on an annual basis for impairment. No impairments have been noted from any of our annual evaluations.
Evaluation of Asset Impairment
We evaluate our real estate, Property Intangibles, and other long-lived assets for impairment on a quarterly basis. We first evaluate these assets for indicators of impairment, and if any indicators of impairment are noted, we determine whether the carrying value of such assets is in excess of the future estimated undiscounted cash flows attributable to these assets. If there is excess carrying value over such future undiscounted cash flows, an impairment charge is recorded for the excess of carrying value over the assets' estimated fair value. Any long-lived assets which we expect to sell or otherwise dispose of prior to their estimated useful life are stated at the lower of their estimated net realizable value (estimated fair value less cost to sell) or their carrying value. During the six months ended June 30, 2010, we recorded impairment charges totaling $2,544,000, comprised of $1,735,000 in real estate facilities, of which $397,000 is reflected under "discontinued operations" on our condensed consolidated statements of income, $611,000 in other assets, and $198,000 in intangible assets related to a ground lease and which is reflected under "discontinued operations" on our condensed consolidated statements of income. No additional impairments were identified from our evaluations in any periods presented in the accompanying condensed consolidated financial statements.
We evaluate impairment of goodwill annually by reporting unit. No impairment of our goodwill was identified in our annual evaluation at December 31, 2010, nor were there any indicators of impairment at June 30, 2011.
Revenue and Expense Recognition
Rental income, which is generally earned pursuant to month-to-month leases for storage space, as well as late charges and administrative fees, are recognized as earned. Promotional discounts are recognized as a reduction to rental income over the promotional period, which is generally during the first month of occupancy. Ancillary revenues and interest and other income are recognized when earned. Equity in earnings of real estate entities is recognized based on our ownership interest in the earnings of each of the Unconsolidated Entities.
We accrue for property tax expense based upon actual amounts billed for the related time periods and, in some circumstances due to taxing authority assessment and billing timing and disputes of assessed amounts, estimates and historical trends. If these estimates are incorrect, the timing and amount of expense recognition could be affected. Cost of operations, general and administrative expense, interest expense, as well as television, yellow page, and other advertising expenditures are expensed as incurred.
Foreign Currency Exchange Translation
The local currency is the functional currency for the foreign operations we have an interest in. Assets and liabilities included on our consolidated balance sheets, including our equity investment in, and our loan receivable from, Shurgard Europe, are translated at end-of-period exchange rates, while revenues, expenses, and equity in earnings in the related real estate entities, are translated at the average exchange rates in effect during the period. The Euro, which represents the functional currency used by a majority of the foreign operations we have an interest in, was translated at an end-of-period exchange rate of approximately 1.439 U.S. Dollars per Euro at June 30, 2011 (1.325 at December 31, 2010), and average exchange rates of 1.438 and 1.273 for the three months ended June 30, 2011 and 2010, respectively, and 1.402 and 1.329 for the six months ended June 30, 2011 and 2010, respectively. Equity is translated at historical rates and the resulting cumulative translation adjustments, to the extent not included in net income, are included as a component of accumulated other comprehensive income (loss) until the translation adjustments are realized. See "Other Comprehensive Income" below for further information regarding our foreign currency translation gains and losses.
Fair Value Accounting
As the term is used in our financial statements, "fair value" is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. We prioritize the inputs used in measuring fair value based upon a three-tier fair value hierarchy described in the Codification Section 820-10-35. See "Loan Receivable from Shurgard Europe" below, and "Financial Instruments" and "Real Estate Facilities" above, as well as "Redeemable Noncontrolling Interests in Subsidiaries" and "Other Permanent Noncontrolling Interests in Subsidiaries" in Note 6 for information regarding our fair value measurements.
Loans Receivable from Real Estate Entities
On February 9, 2011, we loaned PSB $121.0 million. The loan has a six-month term, no prepayment penalties, and bears interest at a rate of three-month LIBOR plus 0.85% (1.10% per annum at June 30, 2011). For the three and six months ended June 30, 2011, we recorded interest income of approximately $328,000 and $523,000, respectively, related to the loan. We received $5,000,000 in principal repayments on this loan during the three months ended June 30, 2011. As of June 30, 2011, the loan totaled $116.0 million.
As of June 30, 2011, we had a €357.6 million loan receivable from Shurgard Europe totaling $514.6 million (€373.7 million totaling $495.2 million at December 31, 2010), which bears interest at a fixed rate of 9.0% per annum and matures March 31, 2013. This loan is denominated in Euros and is translated to U.S. Dollars for financial statement purposes. During each applicable period, because we expect repayment of this Euro-denominated loan within two years of each respective balance sheet date, we recognize foreign exchange rate gains or losses in income due to changes in exchange rates between the Euro and the U.S. Dollar. Foreign currency gains totaled $10,565,000 and $41,666,000 in the three and six months ended June 30, 2011, respectively, as compared to losses of $48,680,000 and $83,140,000 for the same periods in 2010. Loan fees collected from Shurgard Europe are amortized on a straight-line basis as interest income over the applicable term to which the fee applies. We received €16.1 million ($22.3 million) in principal repayments on this loan during the six months ended June 30, 2011 and €18.2 million ($24.5 million) in the year ended December 31, 2010.
On February 28, 2011, we loaned Shurgard Europe an additional $237.9 million. This loan bore interest at a fixed rate of 7.0% per annum and was denominated in U.S. Dollars.
On June 15, 2011, our joint venture partner in Shurgard Europe effectively purchased 51% of the $237.9 million loan from us for $121.3 million. The loan was effectively exchanged for an equity interest in Shurgard Europe.
For the three and six months ended June 30, 2011 we recorded interest income of approximately $7,824,000 and $14,370,000, respectively, as compared to $5,833,000 and $12,263,000 for the same periods in 2010, related to the loans to Shurgard Europe. These amounts reflect 51% of the aggregate interest on the loans, with the other 49%, reflecting our ownership interest in Shurgard Europe, classified as equity in earnings of real estate entities.
Although there can be no assurance, we believe that Shurgard Europe has sufficient liquidity and collateral, and we have sufficient creditor rights, such that credit risk relating to the loan to Shurgard Europe is mitigated. In addition, we believe the interest rates on the loans to Shurgard Europe approximate the market rate for loans with similar credit characteristics and tenor, and that the carrying values of the loans to Shurgard Europe approximate fair value. The characteristics of the loans to Shurgard Europe and comparative metrics utilized in our evaluation represent significant unobservable inputs, which are "Level 3" inputs as the term is utilized in Codification Section 820-10-35-52.
Other Comprehensive Income
Other comprehensive income consists primarily of foreign currency translation adjustments to the extent not recognized on our condensed consolidated statements of income. Other comprehensive income is reflected as an adjustment to "Accumulated Other Comprehensive Income" in the equity section of our condensed consolidated balance sheet, and is added to our net income in determining total comprehensive income for the period as reflected in the following table:
Discontinued Operations
The revenues and expenses of operating units (including individual real estate facilities) that can be segregated from the other operations of the Company, and either i) have been eliminated from the ongoing operations of the Company or ii) are expected to be eliminated from the ongoing operations of the Company within the next year pursuant to a committed plan of disposal, are reclassified and presented for all periods as "discontinued operations" on our condensed consolidated statements of income.
Included in discontinued operations are the historical operations of (i) land-leased facilities that were disposed of in 2010 and 2011 when the respective land leases expired, and (ii) two self-storage facilities that were disposed of in 2010. In addition to revenues and expenses of these operating units, discontinued operations is comprised primarily of a $253,000 loss on disposition of a land-leased facility for the six months ended June 30, 2011, $4,650,000 and $5,087,000 in gains on disposition of real estate facilities for the three and six months ended June 30, 2010, respectively, and a $397,000 impairment charge on real estate incurred in the six months ended June 30, 2010.
Net Income per Common Share
We first allocate net income to our noncontrolling interests in subsidiaries (Note 6) and preferred shareholders to arrive at net income allocable to our common shareholders and Equity Shares, Series A. Net income allocated to preferred shareholders or noncontrolling interests in subsidiaries includes any excess of the cash required to redeem any preferred securities in the period over the net proceeds from the original issuance of the securities (or, if securities are redeemed for less than the original issuance proceeds, income allocated to the holders of the redeemed securities is reduced).
The remaining net income is allocated among our regular common shares, restricted share units, and our Equity Shares, Series A based upon the dividends declared (or accumulated) for each security in the period, combined with each security's participation rights in undistributed earnings. Net income allocated to the Equity Shares, Series A for the six months ended June 30, 2010 also includes $25.7 million, representing the excess of cash paid to redeem the securities over the original issuance proceeds. We redeemed all of these securities on April 15, 2010.
Net income allocated to our regular common shares from continuing operations is computed by eliminating the net income or loss from discontinued operations allocable to our regular common shares, from net income allocated to our regular common shares.
Basic net income per share, basic net income (loss) from discontinued operations per share, and basic net income from continuing operations per share are computed using the weighted average common shares outstanding. Diluted net income per share, diluted net income (loss) from discontinued operations per share, and diluted net income from continuing operations per share are computed using the weighted average common shares outstanding, adjusted for the impact, if dilutive, of stock options outstanding (Note 9).
The following table reflects the components of the calculations of our basic and diluted net income per share, basic and diluted net income (loss) from discontinued operations per share, and basic and diluted net income from continuing operations per share which are not already otherwise set forth on the face of our condensed consolidated statements of income:
|
Investments in Real Estate Entities (Investment in Shurgard Europe) (Narrative) (Details)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
USD ($)
|
Dec. 31, 2010
USD ($)
|
Jun. 30, 2011
Shurgard Europe Investment [Member]
USD ($)
|
Mar. 31, 2011
Shurgard Europe Investment [Member]
EUR (€)
|
Jun. 30, 2010
Shurgard Europe Investment [Member]
USD ($)
|
Jun. 30, 2011
Shurgard Europe Investment [Member]
USD ($)
|
Jun. 30, 2010
Shurgard Europe Investment [Member]
USD ($)
|
Dec. 31, 2010
Shurgard Europe Investment [Member]
|
|
Interest in Shurgard Europe | 49.00% | 49.00% | 49.00% | |||||
Pro rata share of acquisition cost, percentage | 51.00% | |||||||
Proceeds from partnership contribution | $ 1,692,000 | |||||||
Directly owned facilities | 188 | 116 | ||||||
Loans receivable from affiliates | 630,606,000 | 495,229,000 | 237,900,000.00000 | 237,900,000.00000 | ||||
Shurgard Europe interest in other self storage facilities | 80.00% | 20.00% | ||||||
Number of self storage facilities in which Shurgard has partial interest | 72 | |||||||
Payments to acquire Shurgard Europe | 172,000,000 | |||||||
Trademark license fee payable to Public Storage | 661,000 | 390,000 | 1,166,000 | 805,000 | ||||
Interest expense on debt due to Public Storage | $ 15,341,000 | $ 11,436,000 | $ 28,176,000 | $ 24,045,000 |
Summary of Significant Accounting Policies (Goodwill and Intangible Assets) (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Goodwill, net | $ 174,634,000 | $ 174,634,000 | $ 174,634,000 | ||
Accumulated amortization of goodwill | 85,085,000 | 85,085,000 | |||
Tenant intangibles net book value | 15,134,000 | 23,267,000 | |||
Accumulated amortization, tenant intangibles | 25,518,000 | 25,518,000 | 21,844,000 | ||
Amortization expense, tenant intangibles | 2,636,000 | 2,408,000 | 6,147,000 | 3,314,000 | |
Shurgard trade name | 18,824,000 | 18,824,000 | 18,824,000 | ||
Shurgard trade name, impairment | 0 | ||||
Acquisition Of Self Storage Facilities And Leasehold Interest In The Land Of One Facility [Member]
|
|||||
Land lease intangible assets | 4,738,000 | ||||
Increase in tenant intangibles | $ 2,752,000 | ||||
Number of self storage facilities acquired | 6 | ||||
Number of self storage facilities, leasehold interest acquired | 1 |
Public Storage Shareholders' Equity (Dividends) (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Mar. 31, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2010
Series A Preferred Stock [Member]
|
Mar. 31, 2010
Series A Preferred Stock [Member]
|
Jun. 30, 2010
Series A Preferred Stock [Member]
|
|
Common stock dividends paid in aggregate | $ 161,500,000 | $ 135,500,000 | $ 297,400,000 | $ 245,400,000 | ||||
Common stock dividends paid per share | $ 0.95 | $ 0.80 | $ 1.75 | $ 1.45 | ||||
Equity shares Series A distributions paid | 0 | 5,100,000 | 25,700,000 | |||||
Equity shares, Series A dividends per share | $ 0.0000 | $ 0.6125 | ||||||
Preferred shareholders based on distributions paid | $ 58,639,000 | $ 58,879,000 | $ 116,256,000 | $ 116,987,000 |
Share-Based Compensation (Stock Options) (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Share-Based Compensation | |||||
Stock option compensation expense | $ 796,000 | $ 825,000 | $ 1,499,000 | $ 1,425,000 | |
Stock options granted | 35,000 | ||||
Stock options exercised | 207,729 | ||||
Stock options forfeited | 29,500 | ||||
Stock options outstanding | 2,748,663 | 2,748,663 | 2,950,892 | ||
Stock Option Dilution Ratio | 1.0 | ||||
Vesting period, minimum | five | ||||
Vesting period, maximum | eight |
Line of Credit and Notes Payable (Maturities of Notes Payable) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
2011 (remainder) | $ 5,859 | |
2012 | 71,244 | |
2013 | 266,042 | |
2014 | 49,625 | |
2015 | 37,023 | |
Thereafter | 19,726 | |
Total notes payable | 449,519 | 568,417 |
Weighted average effective rate | 5.30% | |
Secured Notes Payable [Member]
|
||
2011 (remainder) | 5,859 | |
2012 | 71,244 | |
2013 | 79,582 | |
2014 | 49,625 | |
2015 | 37,023 | |
Thereafter | 19,726 | |
Total notes payable | 263,059 | |
Weighted average effective rate | 4.80% | |
Unsecured Debt [Member]
|
||
2013 | 186,460 | |
Total notes payable | $ 186,460 | |
Weighted average effective rate | 5.90% |
Commitments and Contingencies (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Commitments and Contingencies | ||||
Aggregate limit for property coverage | $ 75,000,000 | $ 75,000,000 | ||
Aggregate limit for general liability coverage | 102,000,000 | 102,000,000 | ||
Tenant insurance program against claims | 5,000.00 | 5,000.00 | ||
Third-party insurance coverage for claims paid exceeding amount for individual event | 1,000,000.00 | 1,000,000.00 | ||
Third-party limit for insurance coverage claims paid for individual event | 25,000,000.00 | 25,000,000.00 | ||
Tenant certificate holders participating in insurance program | 691,000 | 691,000 | ||
Aggregate coverage of tenants participating in insurance program | 1,500,000,000 | 1,500,000,000 | ||
Future minimum lease payments required under operating leases due in 2011 | 2,000,000 | 2,000,000 | ||
Future minimum lease payments required under operating leases due in 2012 | 4,000,000 | 4,000,000 | ||
Future minimum lease payments required under operating leases due in 2013 | 4,000,000 | 4,000,000 | ||
Future minimum lease payments required under operating leases due in 2014 | 4,000,000 | 4,000,000 | ||
Future minimum lease payments required under operating leases due in 2015 | 5,000,000 | 5,000,000 | ||
Future minimum lease payments required under operating leases due thereafter | 49,000,000 | 49,000,000 | ||
Operating leases, rent expense | 1,400,000 | 1,600,000 | 2,700,000 | 3,400,000 |
The number of limited partnerships that the private REIT owns | 5 | 5 | ||
Acquisition cost | $ 154,300,000 | $ 154,300,000 | ||
Number of limited partnership interests mergers private REIT and Hughes Family limited partnerships | 4 |
Real Estate Facilities
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Facilities |
Activity in real estate facilities is as follows:
During the six months ended June 30, 2011, we acquired five operating self-storage facilities in Nevada and one in New York (524,000 net rentable square feet) and the leasehold interest in the land of one of our existing self-storage facilities from third parties for $44,040,000, consisting of $34,361,000 of cash and the assumption of mortgage debt with a fair value of $9,679,000. The aggregate cost of $44,040,000, combined with the elimination of the $4,738,000 book value of a land lease intangible asset related to the acquired leasehold interest was allocated $46,026,000 to real estate facilities and $2,752,000 to intangible assets.
During the six months ended June 30, 2011, we completed two expansion projects to existing facilities at an aggregate cost of $8,928,000. During the six months ended June 30, 2011, net proceeds with respect to dispositions totaled $400,000 and we recorded a net loss of $125,000 ($128,000 included in "gains on disposition of real estate facilities, net" and a loss of $253,000 included in discontinued operations). |
Investments in Real Estate Entities (Schedule of Investments in Real Estate Entities and Equity in Earnings of Real Estate) (Details) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Investments in real estate entities | $ 733,054 | $ 733,054 | $ 601,569 | ||
Equity in earnings of real estate entities | 12,770 | 8,788 | 26,486 | 18,749 | |
PSB Real Estate Investment [Member]
|
|||||
Investments in real estate entities | 327,126 | 327,126 | 323,795 | ||
Equity in earnings of real estate entities | 6,081 | 4,914 | 14,865 | 11,188 | |
Shurgard Europe Investment [Member]
|
|||||
Investments in real estate entities | 391,887 | 391,887 | 264,681 | ||
Equity in earnings of real estate entities | 6,242 | 3,459 | 10,769 | 6,769 | |
Other Long-term Investments [Member]
|
|||||
Investments in real estate entities | 14,041 | 14,041 | 13,093 | ||
Equity in earnings of real estate entities | $ 447 | $ 415 | $ 852 | $ 792 |
Summary of Significant Accounting Policies (Basis of Presentation and Consolidation Policy) (Narrative) (Details)
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Owned real estate facilities | 2,042 |
Owned self storage facilities in U.S. | 2,035 |
Commercial facilities in U.S. | 6 |
Other Long-term Investments [Member]
|
|
Owned self storage facilities in U.S. | 19 |
Net rentable square feet | 1,100,000 |
London [Member]
|
|
Owned self storage facilities in U.S. | 1 |
Segment Information (Narrative) (Details) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Dec. 31, 2010
|
|
Book value of tenant intangible assets | $ 174,634,000 | $ 174,634,000 |
Loans receivable from affiliates | 630,606,000 | 495,229,000 |
Commercial [Member]
|
||
Investments net book value | 327,100,000 | 323,800,000 |
Loans receivable from affiliates | 116,000,000 | 0 |
Europe Self-Storage [Member]
|
||
Institutional investor ownership in Shurgard | 51.00% | |
Book value of self-storage facilities | 391,900,000 | 264,700,000 |
Loans receivable from affiliates | 514,600,000 | 495,200,000 |
Domestic Self-Storage [Member]
|
||
Number of self-storage facilities owned by the Company | 2,036 | |
Number of self-storage facilities accounted for by the equity method | 19 | |
Book value of self-storage facilities | 7,500,000,000 | 7,500,000,000 |
Book value of tenant intangible assets | 15,200,000 | 23,300,000 |
Book value of other investments | 14,000,000 | 13,100,000 |
Other assets | 91,600,000 | 90,500,000 |
Accrued and other liabilities | $ 227,900,000 | $ 205,800,000 |
Summary of Significant Accounting Policies (Loans Receivable from Affiliates) (Narrative) (Details)
|
6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
USD ($)
|
Jun. 30, 2010
USD ($)
|
Dec. 31, 2010
USD ($)
|
Jun. 30, 2011
Existing Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Mar. 31, 2011
Existing Loan [Member]
Shurgard Europe [Member]
|
Jun. 30, 2010
Existing Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Jun. 30, 2011
Existing Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Jun. 30, 2011
Existing Loan [Member]
Shurgard Europe [Member]
EUR (€)
|
Jun. 30, 2010
Existing Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Dec. 31, 2010
Existing Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Dec. 31, 2010
Existing Loan [Member]
Shurgard Europe [Member]
EUR (€)
|
Jun. 30, 2011
New Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Mar. 31, 2011
New Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Jun. 30, 2010
New Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Jun. 30, 2011
New Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Jun. 30, 2010
New Loan [Member]
Shurgard Europe [Member]
USD ($)
|
Jun. 30, 2011
New Loan [Member]
Equity Investment In Shurgard Europe [Member]
|
Jun. 30, 2011
PS Business Parks [Member]
USD ($)
|
Mar. 31, 2011
PS Business Parks [Member]
|
Jun. 30, 2011
PS Business Parks [Member]
USD ($)
|
Jun. 30, 2011
Equity Investment In Shurgard Europe [Member]
USD ($)
|
|
Loan to affiliate | $ 121,000,000 | ||||||||||||||||||||
Term of loan (months) | 6 | 6 | |||||||||||||||||||
% Spread over LIBOR | 0.85% | ||||||||||||||||||||
% Spread over LIBOR, annum | 1.10% | ||||||||||||||||||||
Interest income, loan receivable | 7,824,000 | 5,833,000 | 14,370,000 | 12,263,000 | 328,000 | 523,000 | |||||||||||||||
Loans receivable from affiliates | 630,606,000 | 495,229,000 | 514,600,000 | 514,600,000 | 357,600,000 | 495,200,000 | 373,700,000 | 237,900,000 | 237,900,000 | 237,900,000 | 116,000,000 | 116,000,000 | |||||||||
Proceeds from sale of notes receivable | 121,317,000 | 121,300,000 | |||||||||||||||||||
Proceeds from repayments of loan receivable | 27,289,000 | 1,532,000 | 22,300,000 | 16,100,000 | 24,500,000 | 18,200,000 | 5,000,000 | ||||||||||||||
Loan receivable interest rate | 9.00% | 7.00% | |||||||||||||||||||
Maturity date | Mar. 31, 2013 | May 31, 2011 | Aug. 09, 2011 | ||||||||||||||||||
Translation adjustment on loan to affiliate gain (loss) | $ 10,565,000 | $ (48,680,000) | $ 41,666,000 | $ (83,140,000) | |||||||||||||||||
Percentage of aggregate interest on the loans | 51.00% | 51.00% | 51.00% | ||||||||||||||||||
Ownership interest | 49.00% | 49.00% | 49.00% | ||||||||||||||||||
Net rentable square feet | 23,500,000 |
Investments in Real Estate Entities (Other Investments) (Narrative) (Details) (Other Long-term Investments [Member], USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Other Long-term Investments [Member]
|
|
Other equity ownership | 24.00% |
Number of self storage facilities owned, other | 19 |
Payments to aquire investments | $ 1,274,000 |
Percentage of amounts in financial information | 100.00% |
Summary of Significant Accounting Policies (Other Assets and Financial Instruments) (Narrative) (Details) (USD $)
|
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Summary of Significant Accounting Policies | |||
Other assets impairment charge | $ 611,000 | ||
Marketable securities decrease | 49,000 | 202,000 | |
Amortized cost of marketable securities | 102,279,000 | ||
Gross unrecognized holding losses of marketable securities | (41,000) | ||
Fair value of marketable securities | 102,238,000 | ||
Fair value of notes payable | 455,928,000 | ||
Other-than-temporary impairment | $ 0 | $ 0 |
Commitments and Contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies
Legal Matters
We are a party to various legal proceedings and subject to various claims and complaints that have arisen in the normal course of business. We believe that the likelihood of these pending legal matters resulting in a material loss to the Company, either individually or in the aggregate, is remote.
Insurance and Loss Exposure
We have historically carried customary property, earthquake, general liability and workers compensation coverage through internationally recognized insurance carriers, subject to customary levels of deductibles. The aggregate limits on these policies of $75 million for property coverage and $102 million for general liability are higher than estimates of maximum probable loss that could occur from individual catastrophic events determined in recent engineering and actuarial studies; however, in case of multiple catastrophic events, these limits could be exhausted.
Our tenant insurance program reinsures a program that provides insurance to certificate holders against claims for property losses due to specific named perils (earthquakes and floods are not covered by these policies) to goods stored by tenants at our self-storage facilities for individual limits up to a maximum of $5,000. We have third-party insurance coverage for claims paid exceeding $1,000,000 resulting from any one individual event, to a limit of $25,000,000. At June 30, 2011, there were approximately 691,000 certificate holders held by our tenants participating in this program, representing aggregate coverage of approximately $1.5 billion. Because each certificate represents insurance of goods held by a tenant at our self-storage facilities, the geographic concentration of this $1.5 billion in coverage is dispersed throughout all of our U.S. facilities. We rely on a third-party insurance company to provide the insurance and are subject to licensing requirements and regulations in several states.
Operating Lease Obligations
We lease land, equipment and office space under various operating leases. At June 30, 2011, the approximate future minimum rental payments required under our operating leases for each calendar year is as follows: $2 million for the remainder of 2011, $4 million per year in 2012 through 2014, $5 million in 2015 and an aggregate of $49 million in payments thereafter.
Expenses under operating leases were approximately $1.4 million and $2.7 million for the three and six months ended June 30, 2011, respectively, as compared to $1.6 million and $3.4 million for the three and six months ended June 30, 2010, respectively.
Affiliated Partnership Acquisitions
On June 30, 2011, we entered into merger agreements to acquire all of the units of limited partnership interest and general partnership interests we do not currently own in five limited partnerships that are consolidated in our condensed consolidated financial statements as of and for the three and six months ended June 30, 2011. The aggregate consideration, which will be paid in the form of Public Storage Common Shares or, at the option of each individual unitholder, cash, totals approximately $154.3 million. These mergers have been approved by Public Storage and the Hughes Family, who together have a majority of the limited partnership units outstanding and therefore can approve the mergers without the vote of the other limited partners. A limited partner in four of the relevant limited partnerships has brought a putative class action lawsuit in California state court alleging, among other things, that the mergers provide for insufficient consideration for the relevant units of limited partnership interest. The limited partner seeks, among other things, to enjoin the consummation of the mergers. We believe that the lawsuit is without merit, and we intend to defend it vigorously. While there can be no assurance, and the transactions are subject to certain customary closing conditions, as well as the pending litigation, these transactions are currently scheduled to close in late August 2011. |
Public Storage Shareholders' Equity (Equity Shares, Series A) (Narrative) (Details) (Series A Preferred Stock [Member], USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2010
|
Mar. 31, 2010
|
Jun. 30, 2010
|
Apr. 15, 2010
|
|
Series A Preferred Stock [Member]
|
||||
Preferred stock redemption price per share | $ 24.50 | |||
Aggregate redemption amount | $ 205,400,000 | |||
Equity shares Series A distributions paid | 0 | 5,100,000 | 25,700,000 | |
Equity shares, Series A per depositary share | $ 0.6125 | $ 3.07 | ||
Shares outstanding | 8,377,193 |
Share-Based Compensation (Restricted Share Units) (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Restricted share units granted | 88,725 | ||||
Restricted share units forfeited | 37,754 | ||||
Restricted share units vested | 72,844 | ||||
Common shares issued upon vesting | 46,831 | ||||
Cash paid in lieu of common shares issued | $ 2,946,000 | $ 2,946,000 | |||
Common shares issued in lieu of cash compensation paid to employees | 26,013 | ||||
Restricted share units outstanding | 462,522 | 462,522 | 484,395 | ||
Restricted share unit expense | 5,955,000 | 2,346,000 | 10,322,000 | 4,378,000 | |
Restricted stock expenses related to payroll taxes | 50,000 | 25,000 | 372,000 | 339,000 | |
Restricted share vested in percentage (per year) | 20.00% | ||||
Restricted share granted on achievement of target | 267,000 | ||||
Restricted share units grants in future period | 267,000 | ||||
Maximum [Member] | Revenue Growth Rate Target Range 3 [Member]
|
|||||
Restricted share unit award to targeted award level | 200.00% | ||||
Minimum [Member] | Revenue Growth Rate Target Range 1 [Member]
|
|||||
Restricted share unit award to targeted award level | 50.00% | ||||
Performance Based Restricted Share Plan [Member]
|
|||||
Restricted share unit expense | $ 3,397,000 | $ 5,666,000 | |||
Revenue Growth Rate Target Range 1 [Member]
|
|||||
Same-store required revenue growth over 2010 | 2.00% | ||||
Revenue Growth Rate Target Range 2 [Member]
|
|||||
Same-store required revenue growth over 2010 | 3.00% | ||||
Restricted share unit award to targeted award level | 100.00% | ||||
Revenue Growth Rate Target Range 3 [Member]
|
|||||
Same-store required revenue growth over 2010 | 4.00% | ||||
Restricted share unit award to targeted award level | 200.00% |
Investments in Real Estate Entities
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Investments in Real Estate Entities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Real Estate Entities |
The following table sets forth our investments in the Real Estate Entities at June 30, 2011 and December 31, 2010, and our equity in earnings of real estate entities for the three and six months ended June 30, 2011 and 2010:
Included in equity in earnings of real estate entities for the six months ended June 30, 2011 is $3,017,000, representing our share of the earnings allocated from PSB's preferred shareholders as a result of PSB's repurchases of preferred units for amounts that were less than the related book value.
During the six months ended June 30, 2011 and 2010, we received cash distributions from our investment in real estate entities totaling $29,378,000 and $25,021,000, respectively.
During the three and six months ended June 30, 2011, our investment in Shurgard Europe increased by approximately $116,560,000 due to the effective exchange of a note receivable from Shurgard Europe for an equity interest in Shurgard Europe (Note 2), and the acquisition of an additional equity interests in the "other investments" for approximately $1,274,000 in cash. During the six months ended June 30, 2011 and 2010, our investment in Shurgard Europe increased by approximately $16,543,000 and decreased by $19,108,000, respectively, due to the impact of changes in foreign currency exchange rates. Investment in PSB
PSB is a REIT traded on the New York Stock Exchange, which controls an operating partnership (collectively, the REIT and the operating partnership are referred to as "PSB"). We have a 41% common equity interest in PSB as of June 30, 2011 and December 31, 2010, comprised of our ownership of 5,801,606 shares of PSB's common stock and 7,305,355 limited partnership units in the operating partnership. The limited partnership units are convertible at our option, subject to certain conditions, on a one-for-one basis into PSB common stock. Based upon the closing price at June 30, 2011 ($55.10 per share of PSB common stock), the shares and units we owned had a market value of approximately $722.2 million, as compared to our book value of $327.1 million. We account for our investment in PSB using the equity method.
The following table sets forth selected financial information of PSB; the amounts represent 100% of PSB's balances and not our pro-rata share.
Investment in Shurgard Europe
At June 30, 2011 and December 31, 2010, we had a 49% equity investment in Shurgard Europe, which we account for using the equity method. At December 31, 2010, Shurgard Europe owned 116 facilities directly and had a 20% interest in 72 self-storage facilities located in Europe which operate under the "Shurgard" name. On March 2, 2011, Shurgard Europe acquired the 80% interests in the joint ventures it did not own for €172.0 million, and as a result, wholly-owns all 188 facilities. We provided the funding for this acquisition through a loan to Shurgard Europe totaling $237.9 million. This loan was extinguished in the three months ended June 30, 2011 (Note 2).
Our equity in earnings of Shurgard Europe includes our 49% equity share of Shurgard Europe's operations. In addition, we received $1,692,000 from our joint venture partner for funding our joint venture partner's 51% pro rata share of the acquisition cost from March 2, 2011 until June 15, 2011, and recorded this amount as interest and other income for the three and six months ended June 30, 2011.
For the three and six months ended June 30, 2011, we also received from Shurgard Europe $15,341,000 and $28,176,000, respectively, of interest on the loans provided to Shurgard Europe and $661,000 and $1,166,000, respectively, of trademark license fees. For the three and six months ended June 30, 2010, we also received from Shurgard Europe $11,436,000 and $24,045,000, respectively, of interest on the loans provided to Shurgard Europe and $390,000 and $805,000, respectively, of trademark license fees. For financial statement purposes, 49% of the interest and license fees have been classified as equity in earnings (see table below), and the remaining 51% as interest and other income.
The following table sets forth selected consolidated financial information of Shurgard Europe. These amounts are based upon 100% of Shurgard Europe's balances (on a consolidated basis, including the operations of the joint ventures' 72 self-storage facilities), rather than our pro rata share, and are based upon our historical acquired book basis.
Other Investments
At June 30, 2011, the "Other Investments" include an aggregate common equity ownership of approximately 24% in entities that collectively own 19 self-storage facilities. We account for our investments in these entities using the equity method.
On June 30, 2011, we acquired certain partnership interests owned by Mr. Hughes (the Company's Chairman of the Board of Trustees), and his family and entities that are wholly owned or controlled by them (collectively, the "Hughes Family"), in three limited partnerships. The acquisition cost was approximately $1,274,000 in cash. We continue to account for our investments in these three entities using the equity method.
The following table sets forth certain condensed financial information (representing 100% of these entities' balances and not our pro-rata share) with respect to the Other Investments' 19 facilities:
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Summary of Significant Accounting Policies (Tables)
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Jun. 30, 2011
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Summary of Significant Accounting Policies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Comprehensive Income |
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Earnings Per Share Calculation |
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Subsequent Events (Narrative) (Details) (USD $)
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6 Months Ended | 1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2011
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Jul. 31, 2011
Series R Preferred Stock [Member]
|
Jul. 31, 2011
Series K Preferred Stock [Member]
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Sep. 30, 2011
Series K Preferred Stock [Member]
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Jul. 31, 2011
Redeemable Preferred Stock [Member]
|
|
Number of properties acquired | 2 | ||||
Acquisition cost of real estate facilities | $ 23,300,000 | ||||
Depositary shares issued | 19,500,000 | ||||
Preferred shares per depositary share | 0.001 | 0.001 | |||
Stated note rate | 5.54% | 6.35% | 7.25% | ||
Gross proceeds from issuance of depositary shares | 487,500,000 | ||||
Redemption of cumulative preferred shares | 16,990,244 | ||||
Depositary shares value, per share | $ 25.00 | ||||
Aggregate redemption amount, before payment of accrued dividends | 424,756,100 | ||||
Income allocation for preferred shares | $ 13,100,000 |
Segment Information (Summary of Segment Information) (Details) (USD $)
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3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Self-storage facilities | $ 395,378,000 | $ 373,536,000 | $ 780,513,000 | $ 737,609,000 | ||||||
Ancillary operations | 28,891,000 | 27,077,000 | 55,806,000 | 52,235,000 | ||||||
Interest and other income | 10,575,000 | 7,032,000 | 18,343,000 | 15,248,000 | ||||||
Total revenues | 434,844,000 | 407,645,000 | 854,662,000 | 805,092,000 | ||||||
Self-storage facilities | 129,790,000 | 127,694,000 | 265,176,000 | 260,034,000 | ||||||
Ancillary operations | 9,597,000 | 9,539,000 | 18,511,000 | 17,969,000 | ||||||
Depreciation and amortization | 89,186,000 | 84,879,000 | 177,728,000 | 169,596,000 | ||||||
General and administrative | 12,593,000 | 10,081,000 | 26,828,000 | 20,158,000 | ||||||
Interest expense | 5,933,000 | 7,278,000 | 12,917,000 | 14,617,000 | ||||||
Total expenses | 247,099,000 | 239,471,000 | 501,160,000 | 482,374,000 | ||||||
Income (loss) from continuing operations before equity in earnings of real estate entities, foreign currency exchange loss, gains on disposition of other real estate investments and asset impairment charges | 187,745,000 | 168,174,000 | 353,502,000 | 322,718,000 | ||||||
Equity in earnings of real estate entities | 12,770,000 | 8,788,000 | 26,486,000 | 18,749,000 | ||||||
Foreign currency exchange gain (loss) | 10,496,000 | [1] | (49,204,000) | [1] | 41,748,000 | [1] | (84,047,000) | [1] | ||
Gains on disposition of other real estate investments, net | (70,000) | 63,000 | 128,000 | 396,000 | ||||||
Gain on early retirement of debt | 283,000 | 283,000 | ||||||||
Asset impairment charges | (1,338,000) | (1,949,000) | ||||||||
Income (loss) from continuing operations | 210,941,000 | 126,766,000 | 421,864,000 | 256,150,000 | ||||||
Discontinued operations | 4,410,000 | (355,000) | 4,943,000 | |||||||
Net income (loss) | 210,941,000 | 131,176,000 | 421,509,000 | 261,093,000 | ||||||
Domestic Self-Storage [Member]
|
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Self-storage facilities | 395,378,000 | 373,536,000 | 780,513,000 | 737,609,000 | ||||||
Total revenues | 395,378,000 | 373,536,000 | 780,513,000 | 737,609,000 | ||||||
Self-storage facilities | 129,790,000 | 127,694,000 | 265,176,000 | 260,034,000 | ||||||
Depreciation and amortization | 88,531,000 | 84,224,000 | 176,400,000 | 168,286,000 | ||||||
Total expenses | 218,321,000 | 211,918,000 | 441,576,000 | 428,320,000 | ||||||
Income (loss) from continuing operations before equity in earnings of real estate entities, foreign currency exchange loss, gains on disposition of other real estate investments and asset impairment charges | 177,057,000 | 161,618,000 | 338,937,000 | 309,289,000 | ||||||
Equity in earnings of real estate entities | 447,000 | 415,000 | 852,000 | 792,000 | ||||||
Asset impairment charges | (611,000) | |||||||||
Income (loss) from continuing operations | 177,504,000 | 162,033,000 | 339,789,000 | 309,470,000 | ||||||
Net income (loss) | 177,504,000 | 162,033,000 | 339,789,000 | 309,470,000 | ||||||
Europe Self-Storage [Member]
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||||||||||
Interest and other income | 9,854,000 | 6,031,000 | 16,657,000 | 12,673,000 | ||||||
Total revenues | 9,854,000 | 6,031,000 | 16,657,000 | 12,673,000 | ||||||
Income (loss) from continuing operations before equity in earnings of real estate entities, foreign currency exchange loss, gains on disposition of other real estate investments and asset impairment charges | 9,854,000 | 6,031,000 | 16,657,000 | 12,673,000 | ||||||
Equity in earnings of real estate entities | 6,242,000 | 3,459,000 | 10,769,000 | 6,769,000 | ||||||
Foreign currency exchange gain (loss) | 10,496,000 | (49,204,000) | 41,748,000 | (84,047,000) | ||||||
Income (loss) from continuing operations | 26,592,000 | (39,714,000) | 69,174,000 | (64,605,000) | ||||||
Net income (loss) | 26,592,000 | (39,714,000) | 69,174,000 | (64,605,000) | ||||||
Commercial [Member]
|
||||||||||
Ancillary operations | 3,620,000 | 3,516,000 | 7,420,000 | 7,213,000 | ||||||
Interest and other income | 328,000 | 523,000 | ||||||||
Total revenues | 3,948,000 | 3,516,000 | 7,943,000 | 7,213,000 | ||||||
Ancillary operations | 1,352,000 | 1,412,000 | 2,866,000 | 2,849,000 | ||||||
Depreciation and amortization | 655,000 | 655,000 | 1,328,000 | 1,310,000 | ||||||
Total expenses | 2,007,000 | 2,067,000 | 4,194,000 | 4,159,000 | ||||||
Income (loss) from continuing operations before equity in earnings of real estate entities, foreign currency exchange loss, gains on disposition of other real estate investments and asset impairment charges | 1,941,000 | 1,449,000 | 3,749,000 | 3,054,000 | ||||||
Equity in earnings of real estate entities | 6,081,000 | 4,914,000 | 14,865,000 | 11,188,000 | ||||||
Income (loss) from continuing operations | 8,022,000 | 6,363,000 | 18,614,000 | 14,242,000 | ||||||
Net income (loss) | 8,022,000 | 6,363,000 | 18,614,000 | 14,242,000 | ||||||
Other Items Not Allocated to Segments [Member]
|
||||||||||
Ancillary operations | 25,271,000 | 23,561,000 | 48,386,000 | 45,022,000 | ||||||
Interest and other income | 393,000 | 1,001,000 | 1,163,000 | 2,575,000 | ||||||
Total revenues | 25,664,000 | 24,562,000 | 49,549,000 | 47,597,000 | ||||||
Ancillary operations | 8,245,000 | 8,127,000 | 15,645,000 | 15,120,000 | ||||||
General and administrative | 12,593,000 | 10,081,000 | 26,828,000 | 20,158,000 | ||||||
Interest expense | 5,933,000 | 7,278,000 | 12,917,000 | 14,617,000 | ||||||
Total expenses | 26,771,000 | 25,486,000 | 55,390,000 | 49,895,000 | ||||||
Income (loss) from continuing operations before equity in earnings of real estate entities, foreign currency exchange loss, gains on disposition of other real estate investments and asset impairment charges | (1,107,000) | (924,000) | (5,841,000) | (2,298,000) | ||||||
Gains on disposition of other real estate investments, net | (70,000) | 63,000 | 128,000 | 396,000 | ||||||
Gain on early retirement of debt | 283,000 | 283,000 | ||||||||
Asset impairment charges | (1,338,000) | (1,338,000) | ||||||||
Income (loss) from continuing operations | (1,177,000) | (1,916,000) | (5,713,000) | (2,957,000) | ||||||
Discontinued operations | 4,410,000 | (355,000) | 4,943,000 | |||||||
Net income (loss) | $ (1,177,000) | $ 2,494,000 | $ (6,068,000) | $ 1,986,000 | ||||||
|
Investments in Real Estate Entities (Investments) (Narrative) (Details) (USD $)
|
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
PSB Real Estate Investment [Member]
|
|||
PSB gain on repurchase of preferred stock | $ 3,017,000 | ||
Cash distributions from real estate investment entities | 29,378,000 | 25,021,000 | |
Equity interest percentage in PSB | 41.00% | 41.00% | |
Common shares owned of PSB | 5,801,606 | 5,801,606 | 5,801,606 |
LP units in PSB | 7,305,355 | 7,305,355 | 7,305,355 |
PSB LP unit conversion to stock basis | 1 for 1 | ||
Closing price per share PSB stock | $ 55.10 | ||
Market value of PSB stock and LP units | 722,200,000 | ||
Book Value of PSB stock and LP units | 327,100,000 | ||
Percentage of amounts in financial information | 100.00% | ||
Shurgard Europe Investment [Member]
|
|||
Increase in investment due to reclassification of note receivable | 116,560,000 | ||
Payments to Acquire Equity Method Investments | 1,274,000 | ||
Changes in Shurgard Europe investment from foreign currency exchange rates | $ 16,543,000 | $ (19,108,000) |
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