Public Storage, Inc. 2002 Annual Report
Public Storage, Inc. 2002 Annual Report
Our spaces are part of great places.
Our spaces are part of great places.
Our spaces are part of great places.
Properties (as of December 31, 2002)
Location
Alabama
Arizona
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Illinois
Indiana
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Minnesota
Missouri
Number
of Properties(1)
Net Rentable
Square Feet
Location
Number
of Properties(1)
Net Rentable
Square Feet
22
15
305
50
13
4
138
62
5
95
18
22
6
11
41
13
15
6
38
895,000
1,003,000
18,562,000
3,145,000
710,000
230,000
8,133,000
3,626,000
247,000
5,829,000
1,050,000
1,316,000
331,000
852,000
2,323,000
794,000
836,000
341,000
2,172,000
Nebraska
Nevada
New Hampshire
New Jersey
New York
North Carolina
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
Tennessee
Texas
Utah
Virginia
Washington
Wisconsin
1
22
2
42
36
24
31
8
25
20
2
24
27
165
6
38
42
9
46,000
1,409,000
131,000
2,449,000
2,127,000
1,266,000
1,925,000
429,000
1,171,000
1,360,000
64,000
1,082,000
1,566,000
11,124,000
324,000
2,294,000
2,657,000
703,000
(1) Storage and properties combining self-storage and commercial space.
Totals
1,403
84,522,000
SELECTED FINANCIAL HIGHLIGHTS
(In thousands except per share data)
For the year ended December 31,
2002(1)
2001(1)
2000(1)
1999(1)
1998(1)
Revenues:
Rental income and tenant reinsurance premiums
Interest and other income
Expenses:
Cost of operations
Depreciation and amortization
General and administrative
Interest Expense
Income before equity in earnings of real
estate entities, minority interest,
discontinued operations and gain (loss)
on disposition of real estate investments
Equity in earnings of real estate entities
Minority interest in income
Net income before discontinued
operations and gain on disposition
of real estate
$ 832,791 $ 767,944 $ 696,050 $ 626,086 $ 535,139
18,614
553,753
16,700
642,786
14,225
782,169
8,661
841,452
18,836
714,886
295,517
179,634
15,619
3,809
494,579
262,988
166,178
21,038
3,227
453,431
245,265
148,195
21,306
3,293
418,059
214,973
137,469
12,491
7,971
372,904
204,106
111,691
11,635
4,507
331,939
346,873
29,888
(44,087)
328,738
38,542
(46,015)
296,827
39,319
(38,356)
269,882
32,183
(16,006)
221,814
26,602
(20,290)
Discontinued operations (2)
Gain (loss) on disposition of real estate investments $
Net income
332,674
(11,395)
(2,541) $
228,126
(1,107)
—
$ 318,738 $ 324,208 $ 297,088 $ 287,885 $ 227,019
321,265
(1,148)
4,091 $
576 $ 2,154 $
286,059
(328)
297,790
(1,278)
Per Common Share:
Distributions
Net income – Basic
Net income – Diluted
Weighted average common shares – Basic
Weighted average common shares – Diluted
$
$
$
1.80 $
1.21 $
1.19 $
1.69 $
1.53 $
1.51 $
1.48 $
1.41 $
1.41 $
1.52 $
1.53 $
1.52 $
123,005
124,571
122,310
123,577
131,566
131,657
126,308
126,669
0.88
1.30
1.30
113,929
114,357
Balance Sheet Data:
Total assets
Total debt
Minority interest (other partnership interests)
Minority interest (preferred partnership interests) $ 285,000 $ 285,000 $ 365,000
Shareholders’ equity
$ 4,843,662 $4,625,879 $4,513,941 $4,214,385 $3,403,904
$ 115,867 $ 168,552 $ 156,003 $ 167,338 $
81,426
$ 154,499 $ 169,601 $ 167,918 $ 186,600 $ 139,325
—
$4,158,969 $3,909,583 $3,724,117 $3,689,100 $ 3,119,340
—
Other Data:
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
$ 588,961 $ 538,534 $ 525,775 $ 463,292 $ 388,407
$ (323,464) $ (306,058) $ (465,464) $ (452,209) $ (365,506)
(7,183) $ (13,131)
$ (211,720) $ (272,596) $ (25,969) $
(1) During 2002, 2001, 2000, 1999 and 1998, we completed several significant business combinations and equity transactions. See
Notes 3, 9, and 10 to the Company’s consolidated financial statements.
(2) During the year ended December 31, 2002, the Company adopted a business plan that included the closure of certain non-strategic
containerized storage facilities (the "Closed Facilities."). The historical operations of the Closed Facilities are classified as discontinued
operations, with the rental income, cost of operations, and depreciation expense with respect to these facilities for current and prior
periods included in the line-item "Discontinued Operations" on the income statement. Also, during 2002, we sold one of our
commercial facilities and classified its historical operations as discontinued operations, with the rental income, cost of operations, and
depreciation expense with respect to this facility for current and prior periods included in the line-item "Discontinued Operations" on
the income statement.
TO THE SHAREHOLDERS OF PUBLIC STORAGE
Our company has been in business for over 30 years. The lessons of 2002 clearly indicate
there is a price to pay for erroneous decisions in business. We paid the price in 2002
and will continue to pay the price into 2003 to correct our errors. The timing of our
missteps has made the price that much higher. As we made mistakes, economic conditions
caused an apparent reduction in overall demand for storage services which was also coupled with
a high level of new openings of self-storage facilities. Our results reflect these judgment errors and
the changing competitive environment. As a result:
• Rental activity was down.
• Rental rates were down.
• Discounts increased dramatically.
• Overall occupancies were down.
Net income per common share was down 21 percent for the year. Funds from operations per
common share declined 6 percent for the year. The principal difference between these two
measures being higher year over year depreciation attributable to acquisition and development
of additional real estate facilities. A computation of our funds from operations is attached to
this letter.
Our results were primarily impacted by four factors:
1. Decline in net operating income at our stabilized self-storage facilities.
2. Operating losses and shutdown expenses associated with our containerized storage
business.
3. Nominal yields on development properties in "fill-up" and continued dilution from build
out of our development pipeline.
4. Offset in part by income from the acquisition of a tenant reinsurance business and
additional real estate investments during 2001 and 2002.
Self-Storage Operations:
The operations of our Consistent Group of self-storage facilities, representing facilities owned
and operated at a stabilized level over the past three years, can be summarized as follows:
(Dollar amounts in thousands)
2002
2001
2000
Base rental income
Promotional discounts
Adjusted base rental income
Late charges and administrative fees collected
Total rental income
$639,528
(16,267)
623,261
21,517
644,778
$649,135
(4,910)
644,225
22,739
666,964
$618,002
(17,365)
600,637
23,026
623,663
Total cost of operations
206,810
202,482
198,857
Net operating income before depreciation
Depreciation
Operating income
437,968
139,393
$298,575
464,482
143,296
$321,186
424,806
136,897
$287,909
Weighted average for the fiscal year:
Square foot occupancy
85.2%
88.9%
91.0%
The loss in occupancy that started in the fourth quarter of 2001 was attributable to a 2001 flawed
marketing strategy, aggressive rate increases and a reduction in discounts. The strategy appeared to work
in the first three quarters of 2001; however, during the fourth quarter of 2001 and through February
of 2002, there was a rapid decline in occupancy levels. This reduction in occupancy level coincided
with a reduction in call volume to our national telephone reservation center apparently attributable to
the absence of significant promotional activity, as well as to deteriorating general economic conditions.
In mid March 2002, in order to counter anemic demand and rental activity, we lowered rental
rates and mounted an aggressive marketing and promotional campaign, using television as the
primary media. The campaign worked as planned; however, we terminated it prematurely,
believing the usual spring and summer upturn in seasonal demand would preclude the need for
media expense and discounts to new customers. We were wrong! Rental activity slowed and the
negative spread of occupancy in our Consistent Group widened once again to unacceptable levels.
We reinstated a marketing and promotional program in mid-August using television as the
primary media, to enhance move-in activity and improve occupancy levels. This program was
backed by promotional discounts offered through our phone center. The program had a positive
impact upon move-in activity for the balance of 2002. We shrank the negative spread in
occupancy year over year from a peak of 6.0 percent at July 31, 2002 to 1.2 percent at year-end.
The program continues into 2003. The cost of restoring our customer base has been high!
With respect to our Consistent Group of self-storage facilities in 2002:
• Promotional discounts given to new tenants amounted to approximately $16.3 million.
• Television advertising costs were approximately $7.7 million.
• Direct property payroll and costs of managing facilities increased by $4.7 million due to
increased incentives to field employees.
We have learned a lot from this experience: about our customers, about various marketing channels
and about operational execution. Our hope is to build from this knowledge and enhance our
competitive position in the industry. Through these efforts, we have rebuilt our customer base.
While our operating environment is certainly challenging, we believe our performance was not
principally due to "industry conditions", but to our own missteps. Just two years ago, we had
concluded a year in which our Consistent Group of facilities enjoyed an average occupancy in
excess of 90.0 percent and a decade in which our Consistent Group of facilities enjoyed an
average net operating income growth in excess of 6.0 percent per year.
Today, our competitors, while not suffering the after effects of our missteps, are suffering none the less.
In general, the industry has seen an influx of new development over the past couple of years (including
new supply from us) leading to an over-supply problem in some markets. In general, occupancies are
down, rental rates are flat to down and developments (including ours) are taking longer to fill-up. The
reasons for this are many, including a recession, a tremendous boom in single family housing and
general lack of "movement" within the economy—people are staying put. In addition, our
competitors are suffering from higher payroll and other operating costs such as snow removal. Other
operators are terminating new developments because of recent disappointing results and perceived
market turbulence. In the long run, this should serve us well as existing supply is absorbed.
Looking ahead, we expect that our 2003 operating results will be below comparable periods in
2002, through at least the first quarter of 2003. This will be due to continued significant
discounting, including one dollar for the first month promotional specials and higher advertising
costs, offset in part by slightly higher occupancies. In addition, we will continue to experience
higher operating costs, including snow removal, payroll, marketing, property taxes and
information systems, both during the first quarter and for the year 2003.
While we continue to "experiment" with various marketing channels, it appears that TV
advertising with a promotional discount produces the greatest return on investment. We
continue to analyze results from all of our marketing programs. Here are some highlights to date:
• We have rented more space in the first two months of 2003 than in any January and
February period in our history.
• We have also had positive net absorption during the first two months of 2003, also never
before seen in January and February.
• Our occupancy level for our Consistent Group at February 28, 2003 is almost 2% ahead
of February 28, 2002.
These positives are offset with higher media cost and a greater level of promotional discounts. Net,
net, our operating results for the first quarter of 2003 will be lower than the first quarter of 2002.
Containerized Storage Operations
During 2002, we evaluated the number of containerized storage facilities in various markets.
Based on this evaluation, we decided to close 22 of the 55 facilities. Shutdown costs of $8.6
million were recorded in 2002. These charges represent two items:
1) An asset impairment charge – effectively writing off all the related equipment, containers,
etc. of the facilities being closed, and
2) An estimate of facility lease obligations after the facility has been closed
The future cash outlay with respect to these charges is estimated to be $2.4 million, representing
the lease obligations. The remaining $6.2 million of the charges represented the write-off of
equipment and containers.
As of December 31 2002, 12 of these 22 facilities had been closed. The remaining 10 properties are
expected to be closed by September 2003 and are expected to generate operating losses in 2003 until
final closure. These expected operating losses were not recorded as part of the shutdown charges.
In addition, a charge of $750,000 was recorded in 2002 relating to the planned disposition of
equipment that will no longer be needed at facilities that are not being closed. This charge was
included in the cost of operations of our containerized storage business.
Going forward, the remaining operational facilities should have a minimal impact on our overall
operating results. We will continue to evaluate the business model, pricing and our operational
effectiveness. Our strategy is to concentrate our remaining 33 facilities in certain select markets.
We have dramatically increased prices for container rentals, transportation and power loading
to improve profitability and segment this product away from our self-storage product. Our goal
is to have this business be able to operate on a "stand alone" basis in one form or another by the
end of 2003.
Development and Acquisition Activities:
As 2002 drew to a close, we had completed the development of 14 new self-storage facilities at a cost
of $92 million. These facilities are located in seven states and contain approximately 1.1 million
square feet of net rentable space. We currently have a development pipeline of 38 projects that are in
construction or that are expected to begin construction by June 2003. These include 22 new
developments and 16 expansions to existing facilities. These 38 projects will be fully funded by the
Company, have total estimated costs of land and building of approximately $200 million, of which
$88 million has already been expended as of December 31, 2002. All developments and expansions
are subject to significant contingencies. Seventeen of these new developments are located in major
cities on the Eastern Seaboard with the balance in California and Hawaii.
During 2002, we acquired nine facilities from unaffiliated owners made up of 502,000 square
feet of net rentable space at a cost of $30 million.
The highlights of our development and acquisition activity include:
• Over the past four years we have developed and opened 49 self-storage facilities with an aggregate
•
cost of approximately $267.0 million (3.1 million square feet).
In addition, over that same period of time, we developed and opened 17 combination facilities
with an aggregate cost of approximately $154.2 million (1.0 million square feet of self-storage space).
• All of these properties were in some stage of fill-up during 2002.
• The dilution to our earnings from the fill-up of these properties is estimated to be $0.15 per
common share in 2002 as compared to $0.11 per common share in 2001. The dilution is created
by the negative spread between our cost of capital and the net operating income generated by
these properties.
We believe that the per share dilution in 2002 may be the "high water" mark for two reasons: (i) our
development activity has slowed, resulting in fewer new store openings over at least the next two years, and
(ii) the newly opened projects continue to fill-up generating higher levels of net operating income.
In 2003, we are estimating that we will open 19 new self-storage facilities at an aggregate cost of
approximately $141 million (1.3 million square feet). From a capital requirement standpoint, we are
estimating that we will spend approximately $100 million on our development activities in 2003,
essentially building out our existing commitments. Going forward, we are targeting a $50 to $75 million
of annual on-going development activity in our core markets.
The acquisition environment is tough. This is due to today’s incredibly low interest rates, the tremendous
volume of private and institutional capital chasing real estate and the perceived stability of self-storage
facility cash flows. Accordingly, we anticipate selling some non-core self-storage assets.
We currently have approximately $20 million of properties up for sale with possibly another $20 million
to be sold before the end of the year. This is our first time selling properties, so there is no assurance that
we will be successful.
Tenant Insurance:
At the end of 2001, we acquired PS Insurance Company from the Hughes family. This company reinsures
policies against losses to goods stored by tenants in our self-storage facilities. After tax net income was
approximately $10.5 million for 2002.
Other Highlights:
Other transactions and events impacting us include:
•
In October 2002 we redeemed our 8.0% Series J Preferred Stock ($150 million). This
redemption was financed with the proceeds from the issuance of our 7.5% Series V ($172.5
million) issued in September 2002.
• At the end of March 2003, we redeemed our 9.2% Series B Preferred Stock ($57.5 million).
• Our balance sheet remains strong and flexible.
• Our attitude towards the kind of leverage that we want on our balance sheet remains
unchanged.
Finally, we are implementing a new property level software package, WEBCHAMP. This software
has been in the development and testing phase for about two years and is now being implemented
at the property level. This system will give us new tools to help us understand our customers,
accelerate our ability to change prices based on local market conditions and improve the speed of
information flow throughout our organization. We have already begun to benefit from this system.
Outlook:
No doubt the industry our Company helped found over 30 years ago, the self-storage business, has
grown and matured. Some might even call it a "mature business". The issues we face today are
the same as those we will face in the long-term.
We operate a great business, characterized by:
• Relatively high return on invested capital at the unit level.
• Nominal required capital investment to maintain our properties.
• Simple to operate with not a lot of technology or regulation.
• Highly fragmented with very few barriers to entry and very few market dominant participants.
These kinds of characteristics attract investor capital. Witness the entrance into the industry of
several well-financed and quality organizations. Our industry will continue to attract capital until
something changes, which most likely will be a lower return on invested capital. We are already
starting to see this.
So what will separate those who survive and prosper from those that come and go? We believe it
is operational excellence with a customer centric focus - a business operation that focuses on
customer preferences, services and values.
How do we compete effectively? We must:
• Provide our customers with a properly priced product, with the right blend of discounts
and rental rates. Our product must be promoted with the appropriate level of marketing.
• Make sure our product is well located, includes appropriate amenities and services and has
an inviting atmosphere, i.e., retail oriented. It needs to be well maintained and convey a
sense of security.
• Hire, train, motivate and lead outstanding people. Our personnel must be customer
focused, knowledgeable and have the ability to provide exceptional service.
The industry participants that excel at delivering good value to their customers should also provide
above average returns to their owners.
Your company, Public Storage, has an incredible franchise and our entire management team is
focused on optimizing its value.
Thank you for your continued interest and support.
Ronald L. Havner, Jr.
Vice-Chairman and Chief Executive Officer
Harvey Lenkin
President and Chief Operating Officer
March 27, 2003
Computation of Funds from Operations
(unaudited)
The following table sets forth our Funds from operations ("FFO") per common share for 2002 and
2001, FFO is a term defined by the National Association of Real Estate Investment Trusts
("NAREIT") by which real estate investment trusts ("REITs") may be compared. It is generally
defined as net income before depreciation and extraordinary items. FFO computations do not factor
out the REIT’s requirement to make either capital expenditures or principal payments on debt.
For the Year Ended
December 31,
2002
2001
(Amounts in thousands, except per share amounts)
Net income
Depreciation and amortization
Depreciation/Amortization included in
$ 318,738
$ 324,208
179,634 166,178
Discontinued Operations
2,014
Less – Depreciation with respect to non-real estate assets
(6,053)
(Gain) loss on sale of real estate assets
2,541
(3,737)
Less – our share of PSB’s gain on sale of real estate
Depreciation from unconsolidated real estate investments 27,078
44,087
Minority interest in income
564,302
Net cash provided by operating activities
1,883
(5,851)
(4,091)
–
25,096
46,015
553,438
(22,125)
(31,737)
499,576
(117,979)
(19,455)
(137,434)
(25,268)
(26,906)
512,128
(148,926)
(21,501)
(170,427)
$ 341,701
$ 362,142
116,075
7,000
1,566
115,520
7,000
1,267
FFO to minority interests – common
FFO to minority interest – preferred
Funds from operations
Senior Preferred
Equity Stock, Series A
Less: preferred stock and equity stock dividends
Funds from operations to Common and Class B
Common Stock
Weighted average shares:
Regular common shares
Class B common stock
Stock option dilution
Weighted average common shares for purposes of
computing fully-diluted FFO per common share
124,641
123,787
FFO per common share
$ 2.74
$
2.93
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2002
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to .
Commission File Number: 1-8389
PUBLIC STORAGE, INC.
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of
incorporation or organization)
701 Western Avenue, Glendale, California
(Address of principal executive offices)
95-3551121
(I.R.S. Employer
Identification Number)
91201-2349
(Zip Code)
Registrant's telephone number, including area code: (818) 244-8080.
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
9.20% Cumulative Preferred Stock, Series B, $.01 par value ..............................................
Adjustable Rate Cumulative Preferred Stock, Series C, $.01 par value...............................
9.50% Cumulative Preferred Stock, Series D, $.01 par value..............................................
10% Cumulative Preferred Stock, Series E, $.01 par value .................................................
9.75% Cumulative Preferred Stock, Series F, $.01 par value ..............................................
Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4% Cumulative Preferred
Stock, Series K, $.01 par value ....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4% Cumulative Preferred
Stock, Series L, $.01 par value.....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 8.75% Cumulative Preferred
Stock, Series M, $.01 par value ...................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 8.600% Cumulative Preferred
Stock, Series Q, $.01 par value ....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 8.000% Cumulative Preferred
Stock, Series R, $.01 par value ....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 7.875% Cumulative Preferred
Stock, Series S, $.01 par value.....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative Preferred
Stock, Series T, $.01 par value.....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative Preferred
Stock, Series U, $.01 par value ....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 7.500% Cumulative Preferred
Stock, Series V $.01 par value .....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series A, $.01
par value ......................................................................................................................
Common Stock, $.10 par value............................................................................................
.....................................................................................................................................
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
Name of each exchange
on which registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange,
Pacific Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[ X ] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of regulation S-K is not contained
herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act) Yes [ X ]
No [ ]
The aggregate market value of the voting stock held by non - affiliates of the registrant as of June 30, 2002:
Common Stock, $0.10 Par Value - $2,835,113,000 (computed on the basis of $37.10 per share which was the
reported closing sale price of the Company's Common Stock on the New York Stock Exchange on June 30, 2002).
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series A, $.01 Par Value - $208,710,000
(computed on the basis of $27.90 per share which was the reported closing sale price of the Depositary Shares Each
Representing 1/1,000 of a Share of Equity Stock, Series A on the New York Stock Exchange on June 30, 2002).
The number of shares outstanding of the registrant's classes of common stock as of March 14, 2003:
Common Stock, $.10 Par Value – 124,681,522 shares
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series A, $.01 Par Value – 8,776,102
depositary shares (representing 8,776,102 shares of Equity Stock, Series A)
Equity Stock, Series AA, $.01 Par Value - 225,000 shares
Equity Stock, Series AAA, $.01 Par Value - 4,289,544 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement to be filed in connection with the annual shareholders’ meeting to be held
in 2003 are incorporated by reference into Part III.
2
ITEM 1.
Business
Forward Looking Statements
PART I
When used within this document, the words “expects,” “believes,” “anticipates,” “should,” “estimates,” and
similar expressions are intended to identify “forward-looking statements” within the meaning of that term in Section
27A of the Securities Exchange Act of 1933, as amended, and in Section 21F of the Securities Exchange Act of
1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties, and other
factors, which may cause the actual results and performance of the Company to be materially different from those
expressed or implied in the forward looking statements. Such factors are described in Item 1A, “Risk Factors” and
include changes in general economic conditions and in the markets in which the Company operates and the impact
of competition from new and existing storage and commercial facilities and other storage alternatives, which could
impact rents and occupancy levels at the Company’s facilities; difficulties in the Company’s ability to evaluate,
finance and integrate acquired and developed properties into the Company’s existing operations and to fill up those
properties, which could adversely affect the Company’s profitability; the impact of the regulatory environment as
well as national, state, and local laws and regulations including, without limitation, those governing Real Estate
Investment Trusts, which could increase the Company’s expense and reduce the Company’s cash available for
distribution; consumers’ failure to accept the containerized storage concept which would reduce the Company’s
profitability; difficulties in raising capital at reasonable rates, which would impede the Company’s ability to grow;
delays in the development process, which could adversely affect the Company’s profitability; and economic
uncertainty due to the impact of war or terrorism could adversely affect our business plan. We disclaim any
obligation to publicly release the results of any revisions to these forward-looking statements reflecting new
estimates, events or circumstances after the date of this report.
General
Public Storage, Inc. (the "Company") is an equity real estate investment trust ("REIT") organized as a
corporation under the laws of California on July 10, 1980. We are a fully integrated, self-administered and self-
managed real estate investment trust (“REIT”) that acquires, develops, owns and operates storage facilities. We are
the largest owner and operator of storage space in the United States with direct and indirect equity investments in
1,403 storage facilities containing approximately 84.5 million square feet of net rentable space at December 31,
2002. Our common stock is traded on the New York Stock Exchange under the symbol “PSA”. We also have a
44% ownership interest in PS Business Parks, Inc., which, as of December 31, 2002, owned and operated
commercial properties containing approximately 14.4 million net rentable square feet of space. PS Business Parks,
Inc. is a public REIT whose common stock trades on the American Stock Exchange under the symbol “PSB.”
We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. To the
extent that the Company continues to qualify as a REIT, it will not be subject to tax, with certain limited exceptions,
on the taxable income that is distributed to our shareholders.
The Company has reported annually to the Securities and Exchange Commission on Form 10-K, which
includes financial statements certified by independent public accountants. The Company has also reported quarterly
to the Securities and Exchange Commission on Form 10-Q, and includes unaudited financial statements with such
filings. The Company expects to continue such reporting.
The Company’s website is www.publicstorage.com, and the company makes available free of charge on its
website its reports on Forms 10-K, 10-Q, and 8-K, and all amendments to those reports as soon as reasonably
practicable after the reports and amendments are electronically filed with or furnished to the SEC.
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Management
Ronald L. Havner, Jr. (45) was appointed as a director, vice chairman, and chief executive officer of the
Company on November 7, 2002. Mr. Havner has been employed by Public Storage or its affiliates in various
financial and operational capacities since 1986 and served as senior vice president and chief financial officer of the
Company from November 1991 until December 1996 when he became chairman, president, and chief executive
officer of PS Business Parks, Inc., (“PSB”) an affiliate of the Company. Mr. Havner continues as chairman and
chief executive officer of PSB.
B. Wayne Hughes (69) is chairman of the board of directors, a position he has held since 1991. Mr. Hughes
plans to remain active in the Company’s business, focusing primarily on strategic and marketing initiatives. Mr.
Hughes established the Public Storage Organization in 1972 and has managed the Company through several market
cycles. Our executive management team and their years of experience with the Company are as follows: Harvey
Lenkin (66), President and Chief Operating Officer; 25 years; John Reyes (42), Chief Financial Officer, 12 years;
and Marvin M. Lotz (60), Senior Vice President – Real Estate Division, 20 years.
Our senior management has a significant ownership position in the Company with executive officers,
directors and their families owning approximately 46.7 million shares or 37% of the common stock as of March 14,
2003.
Investment Objective
Our primary objective is to increase the value of each share through internal growth (by increasing funds
from operations and cash available for distribution) and acquisitions of additional real estate investments. We
believe that our access to capital, geographic diversification and operating efficiencies resulting from our size will
enhance our ability to achieve this objective.
Competition
Competition in the market areas in which we operate is significant and affects the occupancy levels, rental
rates and operating expenses of certain of our facilities. The continued development of new storage facilities has
intensified the competition among storage operators in many market areas in which we operate.
In seeking investments, we compete with a wide variety of institutions and other investors. An increase in
the amount of funds available for real estate investments may increase competition for ownership of interests in
facilities and may reduce yields.
We believe that the significant operating and financial experience of our executive officers and directors,
combined with the Company's capital structure, national investment scope, geographic diversity, economies of scale
and the ''Public Storage'' name, should enable us to compete effectively with other entities.
In recent years consolidation has occurred in the fragmented storage industry. In addition to the Company,
there are two other publicly traded REITs and numerous private regional and local operators operating in the storage
industry. We believe that we are well positioned to capitalize on this consolidation trend due to our demonstrated
access to capital and national presence.
Business Attributes
We believe that the Company possesses several primary business attributes that permit us to compete
effectively:
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Comprehensive distribution system and national telephone reservation system: Our facilities are part of a
comprehensive distribution system encompassing standardized procedures, integrated reporting and information
networks and centralized marketing. This distribution system is designed to maximize revenue through pricing and
occupancy.
A significant component of our distribution system is our national telephone reservation center, which was
implemented in 1996 and 1997 in order to provide added customer service and maximize utilization of available self
- storage space. Customers calling either the toll-free telephone referral system, (800) 44-STORE, or a storage
facility, are directed to the national reservation system. A representative discusses with the customer space
requirements, price and location preferences and also informs the customer of other products and services provided
by the Company and its subsidiaries. We believe that the national telephone reservation system has enhanced our
ability to market storage space.
Containerized storage option: Historically, we offered storage spaces for rent through our traditional self-
storage facilities whereby customers would transport their goods to the facility and rent a space to store their goods.
In late 1996, we organized Public Storage Pickup and Delivery, Inc. as a separate corporation and a related
partnership (the corporation and partnership are collectively referred to as “PSPUD”) to operate storage facilities
that rent portable storage containers to customers for storage in central facilities.
The concept of PSPUD is to provide an alternative to a traditional self-storage facility. PSPUD delivers a
storage container(s) to the customer’s location where the customer, at his convenience, packs his goods into the
storage container. PSPUD will subsequently return to the customer’s location to retrieve the storage container(s) for
storage in a central facility. At December 31, 2002, PSPUD had 33 facilities (excluding certain facilities that are in
the process of being closed) in operation in 11 states.
Retail operations: The Company has historically sold retail items associated with the storage business and
rented trucks at its storage facilities. In order to further supplement and strengthen the existing self-storage business
by further meeting the needs of storage customers, the Company has expanded its retail activities over the last few
years.
In addition, full-service retail stores have been retrofitted to some existing storage facility rental offices or
“built-in” as part of the development of new storage facilities, both in high traffic, high visibility locations. The
strategic objective of these retail stores is to provide a retail environment to (i) rent spaces for the attached storage
facility, (ii) rent spaces for the other Public Storage facilities in adjacent neighborhoods, (iii) sell locks, boxes and
packing materials and (iv) rent trucks and other moving equipment.
Tenant insurance program: On December 31, 2001, the Company purchased all of the capital stock of PS
Insurance Company, Ltd., from Mr. Hughes and members of his family. This insurance company reinsures policies
issued to our customers against loss or damage goods stored by tenants in the Company’s storage facilities. This
subsidiary receives the premiums and bears the risks associated with the re-insurance. The Company believes that
this insurance operation will continue to further supplement and strengthen the existing self-storage business and
provide an additional source of earnings for the Company.
Economies of scale: We are the largest provider of storage space in the industry. As of December 31,
2002, we operated 1,403 storage facilities in which we had an interest and managed 30 storage facilities for third
parties in 37 states. At December 31, 2002, we had over 661,000 spaces rented. The size and scope of the
operations have enabled us to achieve a high level of profit margins and low level of administrative costs relative to
revenues.
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Brand name recognition: Our operations are conducted under the “Public Storage” brand name, which we
believe is the most recognized and established name in the self-storage industry. Our storage operations are
conducted in 37 states, giving us national recognition and prominence. We focus our operations within those states
in the major metropolitan markets. This concentration establishes us as one of the largest providers of storage space
in each market that we operate in and enables us to use a variety of promotional activities, such as television
advertising as well as targeted discounting and referrals which are generally not economically viable for most of our
competitors.
Growth and Investment Strategies
Our growth strategies consist of: (i) improving the operating performance of our stabilized existing
traditional self-storage properties, (ii) acquiring additional interests in entities that own properties operated by the
Company, (iii) acquiring interests in properties that are owned or operated by others, (iv) developing properties in
selected markets, (v) improving the operating performance of the containerized storage operations, and (vi)
participating in the growth of commercial facilities owned primarily by PS Business Parks, Inc. These strategies are
described as follows:
Improve the operating performance of existing properties: We seek to increase the net cash flow
generated by our existing stabilized traditional self-storage properties by a) regularly evaluating our call volume,
reservation activity, and move-in/move-out rates for each of our markets relative to our marketing activities, b)
evaluating market supply and demand factors and, based upon these analyses, adjusting our marketing activities and
rental rates, c) attempting to maximize revenues through evaluating the appropriate balance between occupancy and
rental rates, and d) controlling expense levels. We believe that our property management personnel and systems,
combined with the national telephone reservation system, will continue to enhance our ability to meet these goals.
Acquire properties operated and partially owned by the Company: In addition to our wholly owned
storage facilities, we operate storage facilities on behalf of other entities in which we have partial equity interests.
From time to time, interests in these storage facilities are available for purchase, providing us with a source of
additional acquisition opportunities. We believe these properties include some of the better-located and better-
constructed storage facilities in the industry. Because we manage these properties, we have reliable operating
information prior to acquisition, and these properties are easily integrated into our portfolio. The amount of such
potential acquisition opportunities has decreased over the last several years as we have continued to acquire such
interests. Such potential remaining acquisition opportunities include the remaining equity interests that we do not
own in the entities described as “Other Investments” in Note 6 to the Company’s financial statements, as well as the
“Other Partnership Interests” in Note 9 to the Company’s financial statements for the year ended December 31,
2002.
Acquire properties owned or operated by others: We believe our presence in and knowledge of
substantially all of the major markets in the United States enhances our ability to identify attractive acquisition
opportunities and capitalize on the overall fragmentation in the storage industry. We maintain local market
information on rates, occupancy and competition in each of the markets in which we operate.
With the exception of the March 1999 merger with Storage Trust, our investments in additional facilities
have primarily been through development, rather than acquisitions of real estate facilities. We believe the
development of real estate facilities described below is more attractive under current market conditions, which are
characterized by relatively high prices obtained in sales of existing self-storage facilities, which exceed replacement
cost.
Develop properties in selected markets: Since 1995, the Company and its joint venture partnerships
(described below in Financing) have opened a total of 119 facilities, including 19 facilities in 1998, 24 facilities in
1999, 27 facilities in 2000, 22 facilities in 2001, and 16 facilities in 2002. As of December 31, 2002, the Company
has a development “pipeline” of 38 self-storage facilities and expansions to existing storage facilities with an
aggregate estimated cost of approximately $199.8 million. Development of these facilities is subject to significant
contingencies such as obtaining appropriate governmental agency approvals. The Company continues to seek
attractive sites for development of additional storage facilities.
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Improve the operating performance of containerized storage operations: At December 31, 2002, PSPUD
operated 33 facilities. Nine of the facilities are leased from third parties, while 24 of the facilities are owned by the
Company or PSPUD. 19 of the owned facilities are facilities combine containerized storage and traditional self-
storage space in the same location (“Combination Facilities”), and five facilities are industrial facilities owned by
the Company or PSPUD.
During the year ended December 31, 2002, management adopted a business plan that included the closure
of certain non-strategic containerized storage facilities (the “Closed Facilities”). The number of containerized
facilities operated decreased from 55 facilities in 14 states at December 31, 2001, to 33 facilities in 11 states
(excluding the Closed Facilities) at December 31, 2002.
The rate of fill-up varies from facility to facility. As with the traditional self-storage facilities, PSPUD
believes that the containerized storage business experiences seasonal fluctuations in occupancy levels with
occupancies generally higher in the summer months than in winter months. There can be no assurance as to the
level of PSPUD’s expansion, level of gross rentals, level of move-outs or profitability. Management continues to
evaluate the optimum level of containerized facility operations in each market in which it operates.
The Company is in the process of converting 701,000 net rentable square feet of industrial space previously
used by the discontinued containerized storage operations, into self-storage space.
Participate in the growth of commercial facilities owned primarily by PS Business Parks, Inc.: On
January 2, 1997, we reorganized our commercial property operations into a separate private REIT. The private
REIT contributed its assets to a newly created operating partnership (the “Operating Partnership”) in exchange for a
general partnership interest and limited partnership interests. During 1997, the Company and certain partnerships in
which the Company has a controlling interest contributed substantially all of their commercial properties to the
Operating Partnership in exchange for limited partnership interests or to the private REIT in exchange for common
stock. On March 17, 1998, the private REIT merged into Public Storage Properties XI, Inc., a publicly traded REIT
and an affiliate of the Company and the name of the surviving corporation was changed to PS Business Parks, Inc.
(the REIT and the related Operating Partnership are hereinafter referred to collectively as “PSB”).
The Company and certain partnerships that the Company controls have a 44% common equity interest in
PSB as of December 31, 2002, comprised of its ownership of 5,418,273 shares of 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.
At December 31, 2002, PSB owned and operated 14.4 million net rentable square feet of commercial space
located in eight states.
In addition to our investment in PSB, we have direct interests in four commercial facilities with an
aggregate of 262,000 net rentable square feet. In addition, certain of the Company’s self-storage facilities rent a
total of 992,000 net rentable square feet of commercial space at the same location. This commercial space is
managed by PSB pursuant to management agreements.
Policies with respect to investing activities: Following are the Company’s policies with respect to certain
other investing strategies, each of which may be entered into without a vote of shareholders:
• Making loans to other entities: The Company has made loans in connection with the sale of properties,
has made short-term loans to PS Business Parks, Inc. in the last three years and may make loans to
third parties as part of its investment objectives. However, the Company doesn’t expect such items to
be a significant part of its investing activities.
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•
Investing in the securities of other issuers for the purpose of exercising control: There have been two
instances in the past three years where the Company has invested in the securities of another publicly-
held REIT, one which resulted in control of that REIT (the merger with Storage Trust in 1999), and
one that did not. The Company may engage in these activities in the future as a component of its real
estate acquisition strategy. The Company also owns partnership interests in various consolidated and
unconsolidated partnerships. See “Investments in Real Estate and Real Estate Facilities.”
• To underwrite securities of other issuers: The Company has not engaged in this activity in the last
three years, and does not intend to in the future.
• Short-term investing: The Company has not engaged in investments in real estate or real estate entities
on a short-term basis in the last three years with the exception of the aforementioned investments in the
securities of other REIT’s. Instead, historically, the Company has acquired real estate assets and held
them for an extended period of time. The Company does not anticipate any such short-term
investments.
• Repurchasing or reacquiring the Company’s shares or other securities: The Board of Directors has
authorized the repurchase from time to time of up to 25,000,000 shares of the Company’s common
stock on the open market or in privately negotiated transactions. Cumulatively through December 31,
2002, we repurchased a total of 21,497,020 shares of common stock at an aggregate cost of
approximately $535,862,000. In addition, in 2001 and 2002, we redeemed or repurchased $636.9
million of our senior preferred stock and $80,000,000 of our preferred partnership units for cash,
representing a refinancing of these securities into lower-coupon preferred securities. Any future
repurchases of the Company’s common stock will depend primarily upon the attractiveness of
repurchases compared to our other investment alternatives. Future redemptions or repurchases of the
Company’s preferred securities, which will become available for redemption or repurchase on their
respective call dates, will be dependent upon the spread between market rates and the coupon rates of
these securities.
Financing of the Company’s Growth Strategies
Overview of Financing Strategy: Over the past three years we have funded substantially all of our
acquisitions with permanent capital (retained cash flow as well as common and preferred securities). We have
elected to use preferred securities as a form of leverage despite the fact that the dividend rates of our preferred
securities exceed the prevailing market interest rates on conventional debt, because of certain benefits described in
“Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and
Capital Resources.’’ Our present intent is to continue to finance our growth with substantially permanent capital.
Borrowings: We have in the past used our $200 million line of credit described below under
“Borrowings” as temporary “bridge” financing, and repaid those amounts with permanent capital. In the last four
years, the only additional long-term debt we have incurred has been assumed in connection with property
acquisitions, most notably the merger with Storage Trust in 1999 wherein we assumed $100 million in senior
unsecured notes. While it is not our present intention to issue debt as a long-term financing strategy, we have
broad powers to borrow in furtherance of our objectives without a vote of our shareholders. These powers are
subject to a limitation on unsecured borrowings in the Company's Bylaws described in “Limitations on
Borrowings” below.
Issuance of Senior Securities: The Company has in the last three years, and expects to continue, to issue
additional series of preferred stock that are senior to the Company’s Common Stock and Equity Stock. At
December 31, 2002, we had approximately $1.8 billion of preferred stock outstanding. The preferred stock, which
was issued in series, has general preference rights with respect to liquidation and quarterly distributions. We
intend to continue to issue preferred securities without a vote of our common shareholders.
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Issuance of securities in exchange for property: The Company has issued common equity in exchange
for real estate and other investments in the last three years. Future issuances will be dependent upon market
conditions at the time, including the market prices of our equity securities.
Development Joint Venture Financing: The Company has entered into two separate development joint
venture partnerships since 1997 in order to provide development financing. As of December 31, 2002, these joint
ventures have completed their development activities.
In November 1999, we formed PSAC Development Partners, L.P., (the “Consolidated Development Joint
Venture”) with a joint venture partner (PSAC Storage Investors, LLC) whose partners include a third party
institutional investor, owning approximately 35%, and Mr. Hughes, owning approximately 65%, to develop
approximately $100 million of storage facilities. At December 31, 2002, PSAC Development Partners, L.P had
completed construction on 22 storage facilities with a total cost of approximately $108.5 million. We expect that
this second joint venture partnership will receive no additional capital funding to develop any additional facilities.
PSAC Development Partners, L.P is funded solely with equity capital consisting of 51% from the
Company and 49% from PSAC Storage Investors, LLC. The term of the Consolidated Development Joint Venture
is 15 years; however, during the sixth year PSAC Storage Investors, LLC has the right to cause an early
termination of PSAC Development Partners, L.P. If PSAC Storage Investors, LLC exercises this right, we then
have the option, but not the obligation, to acquire their interest for an amount that will allow them to receive an
annual return of 10.75%. If the Company does not exercise its option to acquire PSAC Storage Investors, LLC’s
interest, PSAC Development Partners, L.P’s assets will be sold to third parties and the proceeds distributed to the
Company and PSAC Storage Investors, LLC in accordance with the partnership agreement. If PSAC Storage
Investors, LLC does not exercise its right to early termination during the sixth year, the partnership will be
liquidated 15 years after its formation with the assets sold to third parties and the proceeds distributed to the
Company and PSAC Storage Investors, LLC in accordance with the partnership agreement.
PSAC Storage Investors, LLC provides Mr. Hughes with a fixed yield of approximately 8.0% per annum
on his preferred non-voting interest (representing an investment of approximately $64.1 million at December 31,
2002). In addition, Mr. Hughes can receive up to 1% of cash flow of the Partnership (estimated to be less than
$50,000 per year) if PSAC Storage Investors, LLC elects an early termination. If PSAC Storage Investors, LLC
does not elect to cause an early termination, Mr. Hughes’ 1% interest can increase to up to 10%.
Disposition of properties: The Company is presently evaluating the sale of certain facilities, which are
located in non-strategic markets and locations, which are estimated to be valued at approximately $23 million. The
Company intends to use the proceeds from these sales as a source of funding for developments and third-party
acquisitions.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-
Liquidity and Capital Resources.’’
Investments in Real Estate and Real Estate Entities
Investment Policies and Practices with respect to our investments: Following are our investment
practices and policies which, though we do not anticipate any significant alteration, can be changed by the Board of
Directors without a shareholder vote:
• Our investments primarily consist of direct ownership of self-storage properties (the nature of our self-
storage properties is described in Item 2, “Properties”), as well as partial interests in entities that own
self-storage properties, which are located in the United States.
• Our investments are acquired both for income and for capital gain.
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• Our partial ownership interests primarily reflect general and limited partnership interests in entities that
own self-storage facilities that are operated by the Company.
• Additional acquired interests in real estate (other than the acquisition properties from third parties) will
include common equity interests in entities in which we already have an interest.
• To a lesser extent, we have interests in existing commercial properties (described in Item 2,
“Properties”), containing commercial and industrial rental space, primarily through our investment in
PS Business Parks.
• The Company is developing 38 storage facilities, including 16 expansions of real estate facilities, for a
total cost of $199.8 million. See “Management’s Discussion and Analysis of Financial Condition
and Results of Operations – Liquidity and Capital Resources.”
The following table outlines our ownership interest in self-storage facilities at December 31, 2002:
Number of
Storage Facilities
Net Rentable Square
Footage of Storage
Space (a)
(in thousands)
Consolidated storage facilities:
Wholly-owned by the Company....................
Owned by Consolidated Entities ...................
Facilities owned by Unconsolidated Entities.....
Total storage facilities in which the Company
has an ownership interest ..............................
847
520
1,367
36
1,403
52,385
29,951
82,336
2,186
84,522
(a) Square footages for the consolidated facilities includes 1,695,000 net rentable square feet of
industrial space for use in containerized storage activities.
In addition to the Company’s interest in self-storage facilities noted above, the Company owns four stand-
alone commercial facilities with an aggregate of 262,000 net rentable square feet, owns five industrial facilities with
an aggregate of 420,000 net rentable square feet used by the continuing containerized storage operations, and has
992,000 net rentable square feet of commercial space at certain of the self-storage facilities. The Company and the
entities it controls also have a 44% common interest in PSB, which at December 31, 2002 owned and operated 14.4
million net rentable square feet of commercial space.
Facilities Owned by Controlled Entities
In addition to our direct ownership of 847 storage facilities, at December 31, 2002, we had controlling
ownership interests in 36 entities owning in aggregate 520 storage facilities. Because of our controlling interest in
each of these entities, we consolidate the assets, liabilities, and results of operations of these entities on the
Company’s financial statements.
Facilities Owned by Unconsolidated Entities
At December 31, 2002, we had ownership interests in PSB and seven limited partnerships (collectively the
“Unconsolidated Entities”). Our ownership interest in these entities is less than 50%.
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Due to the Company’s limited ownership interest and limited control of these entities, we do not
consolidate the accounts of these entities for financial reporting purposes and account for such investments using the
equity method. PSB, which files financial statements with the Securities and Exchange Commission, has debt and
other obligations that are not included on the Company’s financial statements. The seven limited partnerships do
not have any significant amounts of debt or other obligations. See Note 6 to the Company’s financial statements for
the year ended December 31, 2002 for further disclosure regarding the assets and liabilities of the Unconsolidated
Entities.
The following chart sets forth, as of December 31, 2002, the entities in which the Company has a
controlling interest and the entities in which the Company has a minority interest:
Subsidiaries (Controlled Entities)
of the Company
Entities in which the Company
has a Minority Interest (Unconsolidated Entities)
Public Storage Alameda, Ltd. (2)
Public Storage Glendale Freeway, Ltd. (11)
Metropublic Storage Fund (10)
PS Business Parks, Inc. (3)
Public Storage Crescent Fund, Ltd. (4)
Public Storage Partners, Ltd. (5)
Public Storage Partners II, Ltd. (6)
Public Storage Properties, Ltd. (7)
Carson Storage Ventures
Connecticut Storage Fund
Del Amo Storage Partners, Ltd.
Diversified Storage Venture Fund
Downey Storage Partners, Ltd.
Huntington Beach Storage Partners, Ltd.
Monterey Park Properties, Ltd.
PS Co-Investment Partners
PS Insurance Company, Ltd.
PS Orangeco Holdings, Inc.
PS Orangeco, Inc.
PS Partners, Ltd.
PS Partners IV, Ltd. (10)
PS Partners V, Ltd.
PS Partners VI, Ltd.
PS Partners VIII, Ltd.
Public Storage Properties IV, Ltd. (8)
Public Storage Properties V, Ltd. (9)
PSA Institutional Partners, L.P.
PSAC Development Partners, L.P. (1)
Public Storage Euro Fund III, Ltd. (2)
Public Storage Euro Fund IV, Ltd. (2)
Public Storage Euro Fund V, Ltd. (2)
Public Storage Euro Fund VI, Ltd. (2)
Public Storage Euro Fund VII, Ltd. (2)
Public Storage Euro Fund VIII, Ltd. (2)
Public Storage Euro Fund IX, Ltd. (2)
Public Storage Euro Fund X, Ltd. (2)
Public Storage Euro Fund XI, Ltd. (2)
Public Storage Euro Fund XII, Ltd. (2)
Public Storage Euro Fund XIII, Ltd. (2)
Public Storage German Fund II, Ltd. (2)
Public Storage Institutional Fund
Public Storage Institutional Fund II (10)
Public Storage Institutional Fund III
Public Storage Institutional Fund IV (10)
Public Storage Pickup & Delivery, L.P.
STOR-Re Mutual Insurance Company, Inc.
Storage Trust Properties, L.P.
Van Nuys Storage Partners, Ltd.
Whittier Storage Partners, Ltd.
(1) PSAC Storage Investors, LLC owns a direct 49% ownership interest in this entity. The partners of PSAC Storage Investors,
LLC are Mr. Hughes, having an approximately 65% ownership interest, and a third party institutional investor having an
approximately 35% ownership interest.
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(2) B. Wayne Hughes owns approximately 20% of the general partner interest of these entities.
(3) B. Wayne Hughes owns approximately 0.5% of the common shares of PS Business Parks, Inc.
(4) B. Wayne Hughes owns approximately 17.9% of the general partnership interest of this entity.
(5) The Hughes Family owns approximately 24.3% of the limited partnership interests of this entity.
(6) The Hughes Family owns approximately 11.9% of the limited partnership interests of this entity.
(7) The Hughes Family owns 20% of the general partner interests and 30.5% of the limited partnership interests of this entity.
(8) The Hughes Family owns 20% of the general partner interests and 15.5% of the limited partnership interests of this entity.
(9) The Hughes Family owns 20% of the general partner interests and 11.4% of the limited partnership interests of this entity.
(10) B. Wayne Hughes is a general partner of this entity, and has no economic interest.
(11) B. Wayne Hughes is a general partner in this entity and owns a 0.02% equity interest.
Prohibited Investments and Activities
The Company's Bylaws prohibit the Company from purchasing properties in which the Company's officers
or directors have an interest, or from selling properties to such persons, unless the transactions are approved by a
majority of the independent directors and are fair to the Company based on an independent appraisal. This Bylaw
provision may be changed with shareholder approval. See ''Limitations on Debt'' below for other restrictions in the
Bylaws.
Borrowings
We have a $200 million revolving line of credit (the “Credit Agreement”) that has a maturity date of
October 31, 2004 and bears an annual interest rate ranging from the London Interbank Offered Rate (“LIBOR”) plus
0.45% to LIBOR plus 1.50% depending on our credit ratings (currently 0.45%). In addition, we are required to pay
a quarterly commitment fee ranging from 0.20% per annum to 0.30% per annum depending on our credit ratings
(currently the fee is 0.20% per annum). At December 31, 2002, we had no borrowings on our line of credit. At
March 23, 2003, there were no borrowings on our line of credit.
The Credit Agreement includes various covenants, the more significant of which require us to (i) maintain a
balance sheet leverage ratio of less than 0.50 to 1.00, (ii) maintain certain quarterly interest and fixed-charge
coverage ratios (as defined) of not less than 2.50 to 1.0 and 1.75 to 1.0, respectively, and (iii) maintain a minimum
total shareholders’ equity (as defined). In addition, we are limited in our ability to incur additional borrowings (we
are required to maintain unencumbered assets with an aggregate book value equal to or greater than two times our
unsecured recourse debt). We were in compliance with all the covenants of the Credit Agreement at December 31,
2002.
As of December 31, 2002, we had notes payable of approximately $115.9 million. See Notes 7 and 8 to the
consolidated financial statements for a summary of the Company’s borrowings at December 31, 2002.
Subject to a limitation on unsecured borrowings in the Company's Bylaws (described below), we have
broad powers to borrow in furtherance of the Company's objectives. We have incurred in the past, and may incur in
the future, both short-term and long-term indebtedness to increase our funds available for investment in real estate,
capital expenditures and distributions.
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Limitations on Debt
The Bylaws provide that the Board of Directors shall not authorize or permit the incurrence of any
obligation by the Company which would cause our ''Asset Coverage'' of our unsecured indebtedness to become less
than 300%. Asset Coverage is defined in the Bylaws as the ratio (expressed as a percentage) by which the value of
the total assets (as defined in the Bylaws) of the Company less the Company's liabilities (except liabilities for
unsecured borrowings) bears to the aggregate amount of all unsecured borrowings of the Company. This Bylaw
provision may be changed only upon a shareholder vote.
The Company's Bylaws prohibit us from issuing debt securities in a public offering unless the Company's
''cash flow'' (which for this purpose means net income, exclusive of extraordinary items, plus depreciation) for the
most recent 12 months for which financial statements are available, adjusted to give effect to the anticipated use of
the proceeds from the proposed sale of debt securities, would be sufficient to pay the interest on such securities. This
Bylaw provision may be changed only upon a shareholder vote.
Without the consent of holders of the various series of Senior Preferred Stock, we may not take any action
that would result in a ratio of ''Debt'' to ''Assets'' (the ''Debt Ratio'') in excess of 50%. As of December 31, 2002, the
Debt Ratio was approximately 2.0%. ''Debt'' means the liabilities (other than ''accrued and other liabilities'' and
''minority interest'') that should, in accordance with accounting principles generally accepted in the United States, be
reflected on the Company's consolidated balance sheet at the time of determination. ''Assets'' means the Company's
total assets before a reduction for accumulated depreciation and amortization that should, in accordance with
generally accepted accounting principles, be reflected on the consolidated balance sheet at the time of determination.
Our bank and senior unsecured debt agreements contain various financial covenants, including limitations
on the level of indebtedness of 30% of total capitalization (as defined) and the prohibition of the payment of
dividends upon the occurrence of an event of default (as defined).
Employees
We have 4,500 employees at December 31, 2002 who render services on behalf of the Company, primarily
personnel engaged in property operation, substantially all of whom are employed by a clearing company that
provides certain administrative and cost-sharing services to the Company and other owners of properties operated by
the Company.
Federal Income Tax
We believe that we have operated, and intend to continue to operate, in such a manner as to qualify as a
REIT under the Internal Revenue Code of 1986, but no assurance can be given that it will at all times so qualify. To
the extent that we continue to qualify as a REIT, we will not be taxed, with certain limited exceptions, on the taxable
income (including gains from the sale of securities and properties) that is distributed to our shareholders. For Federal
tax purposes, distributions to shareholders are treated by the shareholders as ordinary income, capital gains, return of
capital or a combination thereof. Distributions in excess of taxable income (as defined) are treated as nontaxable
returns of capital.
On December 17, 1999, the Work Incentives Improvement Act of 1999 (the “Act”), which included certain
provisions affecting REITs, was enacted. The REIT provisions of the Act generally are effective for taxable years
beginning after December 31, 2000. The Act was intended to ease the restrictions on a REIT’s ability to own the
stock of taxable companies. The Act allows REITs to own up to 100% of the stock of companies that have made a
joint election with the REIT to be treated as “taxable REIT subsidiaries” (“TRS”). A TRS will be subject to federal
income tax on income as a regular corporation. Under prior law, a REIT generally could not own more than 10% of
the voting securities of other issuers. Under the Act, the prior law 10% voting securities test was expanded so that
REITs also are prohibited from owing more than 10% of the value of outstanding securities of any one corporate
issuer, except for companies that elect to be treated as TRSs or companies that qualify for certain grandfather
provisions in the Act.
13
An important effect of the Act is that TRSs are permitted to offer noncustomary services to the tenants of
the REIT (such services could be provided under prior law only by “independent contractors” from which the REIT
could not earn any income). TRSs also are able to engage in other income producing activities that typically had
been undertaken by REITs only through entities in which a REIT could have a substantial economic interest, but
was limited to a 10% or less voting interest. The Act includes certain limitations that prevent income shifting
between a REIT and its TRS, in an effort to ensure that TRSs in fact are taxable on the income that they earn. In
addition, under prior law, a REIT could not own securities of any single issuer with a value in excess of 5% of the
value of all the assets of the REIT. The Act also relaxed this limitation, so that a REIT may own a TRS (or TRSs),
so long as the aggregate value of the TRSs, when combined with all other non-REIT assets, does not exceed 25% of
the value of all assets of the REIT. The Company and certain affiliates have jointly made the TRS election.
Insurance
We believe that our properties are adequately insured. Our facilities have historically carried
comprehensive insurance, including fire, earthquake, liability and extended coverage through STOR-Re Mutual
Insurance Company, Inc. (“STOR-Re”), one of the Consolidated Entities, and insures portions of these risks through
nationally recognized insurance carriers. STOR-Re also insures affiliates of the Company.
The Company, Stor-RE, and its affiliates’ maximum aggregate annual exposure for losses that are below
the deductibles set forth in the third-party insurance contracts, assuming multiple significant events occur, is
approximately $30 million. In addition, if losses exhaust the third-party insurers’ limit of coverage of $125,000,000
for property coverage and $101,000,000 for general liability, our exposure could be greater. These limits are higher
than estimates of maximum probable losses that could occur from individual catastrophic events (i.e., earthquake
and wind damage) determined in recent engineering and actuarial studies.
ITEM 1A.
Risk Factors
In addition to the other information in our Form 10-K, you should consider the following factors in
evaluating the Company:
The Hughes family could control us.
At March 14, 2003, the Hughes family owned approximately 37% of our outstanding shares of common
stock. Consequently, the Hughes family could control matters submitted to a vote of our shareholders, including
electing directors, amending our organizational documents, dissolving and approving other extraordinary
transactions, such as a takeover attempt, even though such actions may be favorable to the other common
shareholders.
Provisions in our organizational documents may prevent changes in control.
Restrictions in our organizational documents may further limit changes in control. Unless our board of
directors waives these limitations, no shareholder may own more than (1) 2.0% of our outstanding shares of our
common stock or (2) 9.9% of the outstanding shares of each class or series of our preferred or equity stock. Our
organizational documents in effect provide, however, that the Hughes family may continue to own the shares of our
common stock held by them at the time of the 1995 reorganization. These limitations are designed, to the extent
possible, to avoid a concentration of ownership that might jeopardize our ability to qualify as a real estate
investment trust or REIT. These limitations, however, also may make a change of control significantly more
difficult (if not impossible) even if it would be favorable to the interests of our public shareholders. These
provisions will prevent future takeover attempts not approved by our board of directors even if a majority of our
public shareholders deem it to be in their best interests because they would receive a premium for their shares over
the shares’ then market value or for other reasons.
14
We would incur adverse tax consequences if we fail to qualify as a REIT.
You will be subject to the risk that we may not qualify as a REIT. As a REIT, we must distribute at least
90% of our REIT taxable income to our shareholders, which include not only holders of our common stock and
equity stock but also holders of our preferred stock. Failure to pay full dividends on the preferred stock would
prevent us from paying dividends on our common stock and could jeopardize our qualification as a REIT.
For any taxable year that we fail to qualify as a REIT and the relief provisions do not apply, we would be
taxed at the regular corporate rates on all of our taxable income, whether or not we make any distributions to our
shareholders. Those taxes would reduce the amount of cash available for distribution to our shareholders or for
reinvestment. As a result, our failure to qualify as a REIT during any taxable year could have a material adverse
effect upon us and our shareholders. Furthermore, unless certain relief provisions apply, we would not be eligible to
elect REIT status again until the fifth taxable year that begins after the first year for which we fail to qualify.
We may pay some taxes.
Even if we qualify as a REIT for Federal income tax purposes, we are required to pay some federal, state
and local taxes on our income and property. Several corporate subsidiaries of the Company have elected to be
treated as “taxable REIT subsidiaries” of the Company for federal income tax purposes since January 1, 2001. A
taxable REIT subsidiary is a fully taxable corporation and is limited in its ability to deduct interest payments made
to us. In addition, we will be subject to a 100% penalty tax on some payments that we receive if the economic
arrangements among our tenants, our taxable REIT subsidiaries and us are not comparable to similar arrangements
among unrelated parties. To the extent that the Company or any taxable REIT subsidiary is required to pay federal,
state or local taxes, we will have less cash available for distribution to shareholders.
We would incur a corporate level tax if we sell certain assets.
We will generally be subject to a corporate level tax on any net built-in gain if before November 2005 we
sell any of the assets we acquired in the November 1995 reorganization.
We and our shareholders are subject to financing risks.
Debt increases the risk of loss. In making real estate investments, we may borrow money, which increases
the risk of loss. At December 31, 2002, our debt of $115.9 million was approximately 2.4% of our total assets.
Certain securities have a liquidation preference over our common stock and Equity Stock, Series A. If we
liquidated, holders of our preferred securities would be entitled to receive liquidating distributions, plus any accrued
and unpaid distributions, before any distribution of assets to the holders of our common stock and Equity Stock,
Series A. Holders of preferred securities are entitled to receive, when declared by our board of directors, cash
distributions in preference to holders of our common stock and Equity Stock, Series A.
Since our business consists primarily of acquiring and operating real estate, we are subject to real estate
operating risks.
The value of our investments may be reduced by general risks of real estate ownership. Since we derive
substantially all of our income from real estate operations, we are subject to the general risks of owning real estate-
related assets, including:
•
•
•
lack of demand for rental spaces or units in a locale;
changes in general economic or local conditions;
potential terrorist attacks;
15
•
•
•
•
changes in supply of or demand for similar or competing facilities in an area;
the impact of environmental protection laws;
changes in interest rates and availability of permanent mortgage funds which may render the sale or
financing of a property difficult or unattractive; and
changes in tax, real estate and zoning laws.
There is significant competition among self-storage facilities and from other storage alternatives. Most of
our properties are self-storage facilities, which generated 94% of our rental revenue during 2002. Local market
conditions will play a significant part in how competition will affect us. Competition in the market areas in which
many of our properties are located from other self-storage facilities and other storage alternatives is significant and
has affected the occupancy levels, rental rates and operating expenses of some of our properties. Any increase in
availability of funds for investment in real estate may accelerate competition. Further development of self-storage
facilities may intensify competition among operators of self-storage facilities in the market areas in which we
operate. As discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations
– Self-Storage Operations, the revenues of the Consistent Group of facilities declined 3.3% in the year ended
December 31, 2002 as compared to 2001. Such competition could have been a factor in this decline.
We may incur significant environmental costs and liabilities. As an owner and operator of real properties,
under various federal, state and local environmental laws, we are required to clean up spills or other releases of
hazardous or toxic substances on or from our properties. Certain environmental laws impose liability whether or not
the owner knew of, or was responsible for, the presence of the hazardous or toxic substances. In some cases,
liability may not be limited to the value of the property. The presence of these substances, or the failure to properly
remediate any resulting contamination, also may adversely affect the owner’s or operator’s ability to sell, lease or
operate its property or to borrow using its property as collateral.
We have conducted preliminary environmental assessments of most of our properties (and intend to
conduct these assessments in connection with property acquisitions) to evaluate the environmental condition of, and
potential environmental liabilities associated with, our properties. These assessments generally consist of an
investigation of environmental conditions at the property (not including soil or groundwater sampling or analysis),
as well as a review of available information regarding the site and publicly available data regarding conditions at
other sites in the vicinity. In connection with these property assessments, our operations and recent property
acquisitions, we have become aware that prior operations or activities at some facilities or from nearby locations
have or may have resulted in contamination to the soil or groundwater at these facilities. In this regard, some of our
facilities are or may be the subject of federal or state environment investigations or remedial actions. We have
obtained, with respect to recent acquisitions, and intend to obtain with respect to pending or future acquisitions,
appropriate purchase price adjustments or indemnifications that we believe are sufficient to cover any related
potential liability. Although we cannot provide any assurance, based on the preliminary environmental assessments,
we believe we have funds available to cover any liability from environmental contamination or potential
contamination and we are not aware of any environmental contamination of our facilities material to our overall
business, financial condition or results of operation.
Delays in development and fill-up of our properties would reduce our profitability: During 2002, the
Company opened a total of 14 newly developed self-storage facilities at a total cost of approximately $92,109,000,
and at December 31, 2002 the Company had 38 projects in development that were expected to begin construction by
June 30, 2003. These 38 projects have total estimated costs of $199,760,000. Construction delays due to weather,
unforeseen site conditions, personnel problems, and other factors, as well as cost overruns, would adversely affect
the Company’s profitability. Delays in the rent-up of newly developed facilities as a result of competition or other
factors would also adversely impact the Company’s profitability.
16
Property taxes can increase and cause a decline in yields on investments. Each of our properties is subject
to real property taxes. These real property taxes may increase in the future as property tax rates change and as our
properties are assessed or reassessed by tax authorities. Such increases could adversely impact the Company’s
profitability.
We must comply with the Americans with Disabilities Act and fire and safety regulations, which can
require significant expenditures: All our properties must comply with the Americans with Disabilities Act and
with related regulations (the “ADA”). The ADA has separate compliance requirements for “public accomodations”
and “commercial facilities,” but generally requires that buildings be made accessible to persons with disabilities.
Various state laws impose similar requirements. A failure to comply with the ADA or similar state laws could result
in government imposed fines on us and the award of damages to individuals affected by the failure. In addition, we
must operate our properties in compliance with numerous local fire and safety regulations, building codes, and other
land use regulations. Compliance with these requirements can require us to spend substantial amounts of money,
which would reduce cash otherwise available for distribution to shareholders. Failure to comply with these
requirements could also affect the marketability of our real estate facilities.
We have no interest in Canadian self-storage facilities owned by the Hughes family.
The Hughes Family has ownership interests in, and operates, approximately 38 self-storage facilities in
Canada under the name “Public Storage.” Our personnel are engaged in the supervision and the operation of these
properties and in providing certain administrative services, and the Canadian owners reimburse us at cost for these
services. We have a right of first refusal to acquire the stock or assets of the corporation engaged in these operations
if the Hughes family or the corporation agrees to sell them. However, we have no interest in the operations of this
corporation, have no right to acquire this stock or assets unless the Hughes family decides to sell, and receive no
benefit from the profits and increases in value of the Canadian mini-warehouses. There may be conflicts of interest
in allocating the time of our personnel between our properties and the Canadian properties. The Board of Directors
is currently evaluating these arrangements.
Our portable self-storage business has incurred operating losses.
Public Storage Pickup & Delivery (“PSPUD”) was organized in 1996 to operate a portable self-storage
business. We own all of the economic interest of PSPUD. Since PSPUD will operate profitably only if it can
succeed in the relatively new field of portable self-storage, we cannot provide any assurance as to its profitability.
PSPUD incurred operating losses of $5,135,000 in 2000, $2,218,000 in 2001 and $10,058,000 in 2002. PSPUD
closed 22 facilities that were deemed not strategic to the Company’s business plan during 2002.
The operating loss for 2002 includes a write-down for impaired assets totaling $6,937,000 ($750,000 of
which relates to continuing operations) and lease termination charges of $2,447,000 (see Note 4 to the financial
statements for more information).
Terrorist attacks and the possibility of wider armed conflict may have an adverse impact on our business and
operating results and could decrease the value of our assets.
Terrorist attacks and other acts of violence or war, such as those that took place on September 11, 2001,
could have a material adverse impact on our business and operating results. There can be no assurance that there
will not be further terrorist attacks against the United States or its businesses or interests. Attacks or armed conflicts
that directly impact one or more of our properties could significantly affect our ability to operate those properties
and thereby impair our operating results. Further, we may not have insurance coverage for losses caused by a
terrorist attack. Such insurance may not be available, or if it is available and we decide to obtain such terrorist
coverage, the cost for the insurance may be significant in relationship to the risk overall. In addition, the adverse
effects that such violent acts and threats of future attacks could have on the U.S. economy could similarly have a
material adverse effect on our business and results of operations. Finally, further terrorist acts could cause the
United States to enter into a wider armed conflict which could further impact our business and operating results.
17
President Bush’s proposed tax cut could adversely affect the price of our stock.
President Bush has proposed a tax reduction package that would, among other things, substantially reduce
or eliminate the taxation of dividends paid by corporations other than REITs. If the double taxation of corporate
dividends were to be eliminated or reduced, certain of the relative tax advantage of being a REIT would be
eliminated or reduced, which may have an adverse effect on the price of our stock. This adverse effect may take
place prior to the adoption of any tax cut based upon the market’s perception of the likelihood of implementation of
such a provision.
ITEM 2.
Properties
At December 31, 2002, we had direct and indirect ownership interests in 1,403 storage facilities located in
37 states:
At December 31, 2002
Number of Storage
Facilities (a)
Net Rentable Square Feet
(in Thousands)
California:
Northern...........................
Southern...........................
Texas .......................................
Florida .....................................
Illinois .....................................
Georgia ....................................
Colorado ..................................
New Jersey ..............................
Washington..............................
Maryland .................................
Missouri...................................
Virginia ...................................
New York ................................
Ohio.........................................
Oregon.....................................
Tennessee ................................
North Carolina.........................
South Carolina.........................
Kansas .....................................
Nevada.....................................
Alabama ..................................
Other states (17 states).............
Totals ...............................
140
165
165
138
95
62
50
42
42
41
38
38
36
31
25
27
24
24
22
22
22
154
1,403
7,916
10,646
11,124
8,133
5,829
3,626
3,145
2,449
2,657
2,323
2,172
2,294
2,127
1,925
1,171
1,566
1,266
1,082
1,316
1,409
895
9,451
84,522
(a) Includes 1,367 self-storage facilities owned by the Company and entities controlled by the Company. The remaining 36
facilities are self-storage facilities owned by entities in which the Company has an interest; however, the Company does not
have a controlling interest in such entities. See Schedule III: Real Estate and Accumulated Depreciation in the Company’s
2002 financials, for a complete list of properties consolidated by the Company.
Our facilities are generally operated to maximize cash flow through the regular review and, when
warranted by market conditions, adjustment of scheduled rents. For the year ended December 31, 2002, the
weighted average occupancy level and the weighted average annual realized rent per rentable square foot for our
storage facilities were approximately 82.9% and $9.64, respectively. Included in the 1,403 storage facilities are 66
newly developed facilities opened since January 1, 1999, substantially all of which were in the fill-up stage in the
year ended December 31, 2002.
At December 31, 2002, 24 of our facilities were encumbered by an aggregate of $20.6 million in mortgage
debt.
18
The Company has no specific policy as to the maximum size of any one particular self-storage facility.
However, none of our facilities involves, or is expected to involve, 1% or more of the Company's total assets, gross
revenues or net income.
Description of Storage facilities: Storage facilities, which comprise the majority of our investments
(approximately 94% based on rental revenue), are designed to offer accessible storage space for personal and
business use at a relatively low cost. A user rents a fully enclosed space which is for the user's exclusive use and to
which only the user has access on an unrestricted basis during business hours. On-site operation is the responsibility
of property managers who are supervised by district managers. Some storage facilities also include rentable
uncovered parking areas for vehicle storage, as well as space for portable storage containers. Leases for storage
facilities space may be on a long-term or short-term basis, although typically spaces are rented on a month-to-month
basis. Rental rates vary according to the location of the property and the size of the storage space. All of our storage
facilities are operated under the "Public Storage" name.
Users of space in storage facilities include both individuals and large and small businesses. Individuals
usually employ this space for storage of furniture, household appliances, personal belongings, motor vehicles, boats,
campers, motorcycles and other household goods. Businesses normally employ this space for storage of excess
inventory, business records, seasonal goods, equipment and fixtures.
Storage facilities in which we have invested generally consist of three to seven buildings containing an
aggregate of between 350 to 750 storage spaces, most of which have between 25 and 400 square feet and an interior
height of approximately 8 to 12 feet.
We experience minor seasonal fluctuations in the occupancy levels of storage facilities with occupancies
generally higher in the summer months than in the winter months. We believe that these fluctuations result in part
from increased moving activity during the summer.
Our storage facilities are geographically diversified and are located primarily in or near major metropolitan
markets in 37 states in the United States. Generally our storage facilities are located in heavily populated areas and
close to concentrations of apartment complexes, single family residences and commercial developments. However,
there may be circumstances in which it may be appropriate to own a property in a less populated area, for example,
in an area that is highly visible from a major thoroughfare and close to, although not in, a heavily populated area.
Moreover, in certain population centers, land costs and zoning restrictions may create a demand for space in nearby
less populated areas.
Competition from other self-storage facilities in the market areas in which many of our properties are
located is significant and has affected the occupancy levels, rental rates, and operating expenses of some of our
properties.
Since our investments are primarily storage facilities, our ability to preserve our investments and achieve
our objectives is dependent in large part upon success in this field. Historically, upon stabilization after an initial
fill-up period, our storage facility interests have generally shown a high degree of consistency in generating cash
flows, despite changing economic conditions. We believe that our storage facilities, upon stabilization, have
attractive characteristics consisting of high profit margins, a broad tenant base and low levels of capital expenditures
to maintain their condition and appearance.
Commercial Properties: In addition to our interest in 1,403 storage facilities, we have an interest in PSB,
which, as of December 31, 2002, owns and operates 14.4 million net rentable square feet in eight states. At
December 31, 2002, our investment in PS Business Parks represents less than 6% of our total assets based upon cost.
The market value of our investment in PSB at December 31, 2002 of $404.6 million represents 8% of the book value
of our total assets at December 31, 2002 of $4.8 billion. We also directly own four commercial properties with
262,000 net rentable square feet, have 992,000 net rentable square feet of commercial space that is located at certain
of the self-storage facilities, and own five industrial facilities with an aggregate of 420,000 net rentable square feet
that are being used by the continuing containerized storage operations.
19
The commercial properties owned by PSB consist of flex space, office space and industrial space. PSB
owns approximately 10.9 million square feet of flex space, which is defined as buildings that are configured with a
combination of part warehouse space and part office space and can be designed to fit a wide variety of uses. The
warehouse component of the flex space has a variety of uses including light manufacturing and assembly, storage
and warehousing, showroom, laboratory, distribution and research and development activities. The office
component of flex space is complementary to the warehouse component by enabling businesses to accommodate
management and production staff in the same facility. PSB also owns approximately 2.2 million square feet of low-
rise suburban office space, generally either in business parks that combine office and flex space or in desirable
submarkets where the economics of the market demand an office build-out, and approximately 1.3 million square
feet of industrial space that have characteristics similar to the warehouse component of the flex space.
Environmental Matters: Our practice is to conduct environmental investigations in connection with
property acquisitions. As a result of environmental investigations of our properties, which commenced in 1995, we
recorded an amount, which in management’s best estimate, will be sufficient to satisfy anticipated costs of known
investigation and remediation requirements. Although there can be no assurance, we are not aware of any
environmental contamination of any of our facilities which individually or in the aggregate would be material to the
Company’s overall business, financial condition, or results of operations.
ITEM 3.
Legal Proceedings
Salaam, et. al v. Public Storage, Inc. (filed February 2000) (Superior Court- Sacramento County)
The plaintiffs in this case are suing the Company on behalf of a purported class of California resident
property managers who claim that they were not compensated for all the hours they worked. The named plaintiffs
have indicated that their claims total less than $20,000 in aggregate. This maximum potential liability can only be
increased if a class is certified or if claims are permitted to be brought on behalf of the others under the California
Unfair Business Practices Act. The plaintiffs’ motion for class certification was denied in August 2002; the
plaintiffs have appealed this denial. This denial does not deal with the claim under the California Unfair Business
Practices Act.
The Company is continuing to vigorously contest the claims in this case and intends to resist any expansion
beyond the named plaintiffs on the grounds of lack of commonality of claims. The Company’s resistance will
include opposing the plaintiffs’ appeal of the court’s denial of class certification and opposing the claim on behalf of
others under the California Unfair Business Practices Act.
Henriquez v. Public Storage, Inc. (Filed June 2002; Dismissed January, 2003)(Superior Court – Los Angeles
County)
The plaintiff in this case filed a suit against the Company on behalf of a purported class of renters who
rented self-storage units from the Company. Plaintiff alleged that the Company misrepresents the size of its units
and sought damages and injunctive and declaratory relief under California statutory and common law relating to
consumer protection, unfair competition, fraud and deceit and negligent misrepresentation. In January 2003, the
plaintiff caused this suit to be dismissed. The plaintiff’s attorney has advised that he anticipates filing a similar suit
against the Company on behalf of a new plaintiff. However, the Company cannot presently determine the potential
total damages, if any, or the ultimate outcome of any such litigation. If a new suit is filed, the Company intends to
vigorously contest any claims on which it is based.
20
Equity Resource Fund XV v. Public Storage Inc. (Filed August 1997) (Massachusetts Superior Court –
Middlesex County)
In February 2000, the Company entered into a settlement of litigation arising out of a 1997 tender offer for
limited partnership units in two affiliated partnerships. Under the settlement agreement, the Company agreed to sell
to the plaintiff units representing a 4% interest in each of the partnerships for a total payment of approximately
$1,523,000. The plaintiff failed to tender the full purchase price at the scheduled closing and the settlement
collapsed.
In September 2000, the plaintiff amended its complaint to add a claim for breach of the settlement
agreement seeking specific enforcement and a claim seeking damages for unfair and deceptive trade practices in
connection with the alleged breach. By amending the complaint the Company believes the plaintiff elected to
abandon its underlying claims in the litigation. The Company asserted affirmative defenses including the material
breach by the plaintiff. Cross motions for summary judgment were filed by the parties. In July 2002, the court
granted plaintiff’s motion for summary judgment as to its claim for breach of the settlement agreement and granted
the Company’s motion for summary judgment to dismiss plaintiff’s claim for unfair and deceptive trade practices.
In March 2003, the court granted plaintiff’s motion to compel the sale of the units to the plaintiff. The
Company is considering whether to appeal. If the Company is compelled to sell the units to plaintiff, the Company
would incur a loss of approximately $1,839,000, which has been accrued as a loss on sale of real estate investments
in the Company’s income statement during 2002.
PS Insurance Company
In November 2002, a shareholder of the Company made a demand on the Board of Directors that
challenged the fairness of the Company’s acquisition of PS Insurance Company, Ltd. (“PSIC”) and demanded that
the Board recover the profits earned by PSIC from November 1995 through December 2001. The transaction, which
had an acquisition cost of approximately $24.5 million, was approved by the independent directors of Board in
March 2001 and closed in December 2001. PSIC was formerly owned by B. Wayne Hughes, the Chairman of the
Board (and previously also the Chief Executive Officer) of the Company, and members of his family. In December
2002, the Board held a special meeting to authorize an inquiry by its independent directors to review the fairness to
the Company’s shareholders of its acquisition of PSIC and whether the Company should be entitled to be paid by
Mr. Hughes and his family an amount equal to PSIC’s profits since November 1995. The inquiry is currently
ongoing.
The Company is a party to various claims, complaints, and other legal actions that have arisen in the
normal course of business from time to time. The Company believes that the outcome of these other pending legal
proceedings, in the aggregate, will not have a material adverse effect upon the operations or financial portion of the
Company.
ITEM 4.
Submission of Matters to a Vote of Security Holders
The Company did not submit any matter to a vote of security holders in the fourth quarter of the fiscal year
ended December 31, 2002.
ITEM 4A.
Executive Officers of the Company
The following is a biographical summary of the current executive officers of the Company:
21
Ronald L. Havner, Jr., age 45, was appointed Vice Chairman and Chief Executive Officer of the Company
on November 7, 2002. Mr. Havner has been employed by the Company in various accounting and operational
capacities since 1986 and served as Senior Vice President and Chief Financial Officer of the Company from
November 1991 until December 1996 when be became Chairman, President and Chief Executive Officer of PS
Business Parks, Inc. (AMEX: symbol PSB) an affiliate of the Company. He is a member of the National
Association of Real Estate Investment Trusts (NAREIT) and the Urban Land Institute (ULI) and a Director of
Business Machine Security, Inc. and Mobile Storage Group, Inc. Mr. Havner earned a Bachelor of Arts degree in
Economics from the University of California, Los Angeles.
Harvey Lenkin, age 66, became President and a director of the Company in November 1991. Mr. Lenkin
has been employed by the Company for 25 years. He has been a director of PSB since March 1998 and was
President of PSB from 1990 until March 1998. He is a member of the Board of Governors of the National
Association of Real Estate Investment Trusts, Inc. (NAREIT).
Marvin M. Lotz, age 60, became a director of the Company in May 1999. Mr. Lotz has been a Senior Vice
President of the Company since November 1995. He served as president of the property management division from
1988 until July 2002 with overall responsibility for the Company’s mini-warehouse operations. In July 2002, Mr.
Lotz became president of the real estate division with overall responsibility for the Company’s acquisition and
development activity.
John Reyes, age 42, a certified public accountant, joined the Company in 1990 and was Controller of the
Company from 1992 until December 1996 when he became Chief Financial Officer. He became a Vice President of
the Company in November 1995 and a Senior Vice President of the Company in December 1996. From 1983 to
1990, Mr. Reyes was employed by Ernst & Young.
ITEM 5.
Market for the Registrant’s Common Equity and Related Stockholder Matters
a.
Market Price of the Registrant’s Common Equity:
PART II
The Common Stock (NYSE:PSA) has been listed on the New York Stock Exchange since October
19, 1984 and on the Pacific Exchange since December 26, 1996. The Depositary Shares Each Representing
1/1,000 of a Share of Equity Stock, Series A (NYSE:PSAA) (see section d. below) have been listed on the
New York Stock Exchange since February 14, 2000.
The following table sets forth the high and low sales prices of the Common Stock on the New
York Stock Exchange composite tapes for the applicable periods.
Year
2001
2002
Quarter
1st
2nd
3rd
4th
1st
2nd
3rd
4th
High
$ 26.750
30.200
34.850
35.150
$ 38.400
39.290
37.900
32.530
Range
Low
$ 24.125
26.060
29.150
32.480
$ 33.190
34.950
29.000
27.980
The following table sets forth the high and low sales prices of the Depositary Shares Each
Representing 1/1,000 of a Share of Equity Stock, Series A on the New York Stock Exchange composite
tapes for the applicable periods.
22
Year
2001
2002
Quarter
1st
2nd
3rd
4th
1st
2nd
3rd
4th
High
$ 25.250
25.050
26.550
27.480
$ 28.250
28.400
28.180
27.700
Range
Low
$ 22.563
23.250
24.360
25.900
$ 26.650
27.160
25.700
26.050
As of March 19, 2003, there were approximately 20,887 holders of record of the Common Stock
and approximately 14,267 holders of the Depositary Shares Each Representing 1/1,000 of a Share of Equity
Stock, Series A.
b.
Dividends
We have paid quarterly distributions to our shareholders since 1981, our first full year of
operations. Overall distributions on Common Stock for 2002 amounted to $209.1 million or $1.80 per
share.
Holders of Common Stock are entitled to receive distributions when and if declared by the
Company’s Board of Directors out of any funds legally available for that purpose. We are required to
distribute at least 90% of our net taxable ordinary income prior to the filing of the Company’s tax return
and 85%, subject to certain adjustments, during the calendar year, to maintain our REIT status for federal
income tax purposes. It is our intention to pay distributions of not less than this required amount.
For Federal tax purposes, distributions to shareholders are treated as ordinary income, capital
gains, return of capital or a combination thereof. For 2002, the dividends paid to the common shareholders
($1.80 per share), on all the various classes of preferred stock, and on our Equity Stock, Series A were
characterized as 100% ordinary income.
For 2001, the dividends paid to the common shareholders ($1.69 per share), on all the various
classes of preferred stock and on Equity Stock, Series A were characterized as ordinary income and long-
term capital gain. The quarterly breakdown is as follows:
Treatment of dividends paid for 2001
Ordinary Income ................
Long-term Capital Gain .....
Total...................................
1st Quarter
96.60%
3.40%
100.00%
2nd Quarter
99.67%
0.33%
100.00%
3rd Quarter
100.00%
0.00%
100.00%
4th Quarter
100.00%
0.00%
100.00%
In 2000, distributions to common shareholders were $1.48 per share and were 98.3% ordinary
income and 1.7% long-term capital gain.
23
c.
Equity Stock
The Company is authorized to issue 200,000,000 shares of Equity Stock. The Articles of
Incorporation provide that the Equity Stock may be issued from time to time in one or more series and
gives the Board of Directors broad authority to fix the dividend and distribution rights, conversion and
voting rights, redemption provisions and liquidation rights of each series of Equity Stock.
In April 2001, the Company completed a public offering of 2,210,500 depositary shares each
representing 1/1,000 of a share of Equity Stock, Series A, (“Equity Stock A”) raising net proceeds of
approximately $51,836,000. In May 2001, the Company completed a direct placement of 830,000
depositary shares, raising net proceeds of approximately $20,294,000. In November 2001, the Company
completed a direct placement of 100,000 depositary shares, raising net proceeds of approximately
$2,690,000. In January 2000, we issued 4,300,555 depositary shares (2,200,555 shares as part of a special
distribution declared on November 15, 1999 and 2,100,000 shares in a separate public offering). In
addition, in the second quarter of 2000, we issued 52,547 depositary shares to a related party in connection
with the acquisition of real estate facilities. In December 2000, we issued 1,282,500 depositary shares in a
public offering. All of the issuances of the depositary shares described in this paragraph were registered
under the Securities Act at the time of issuance.
At December 31, 2002, we had 8,776,102 depositary shares outstanding, each representing
1/1,000 of a share of Equity Stock A. The Equity Stock A ranks on a parity with common stock and junior
to the Senior Preferred Stock with respect to distributions and liquidation and has a liquidation amount
which cannot exceed $24.50 per share. Distributions with respect to each depositary share shall be the
lesser of: a) five times the per share dividend on the Common Stock or b) $2.45 per annum. Except in
order to preserve the Company’s federal income tax status as a REIT, we may not redeem the depositary
shares before March 31, 2010. On or after March 31, 2010, we may, at our option, redeem the depositary
shares at $24.50 per depositary share. If the Company fails to preserve its federal income tax status as a
REIT, each depositary share will be convertible into .956 shares of our common stock. The depositary
shares are otherwise not convertible into common stock. Holders of depositary shares vote as a single class
with our holders of common stock on shareholder matters, but the depositary shares have the equivalent of
one-tenth of a vote per depositary share. We have no obligation to pay distributions on the depositary
shares if no distributions are paid to common shareholders.
In June 1997, we contributed $22,500,000 (225,000 shares) of equity stock, now designated as
Equity Stock, Series AA (“Equity Stock AA”) to a partnership in which we are the general partner. As a
result of this contribution, we obtained a controlling interest in the partnership and began to consolidate the
accounts of the partnership and therefore the equity stock is eliminated in consolidation. The Equity Stock
AA ranks on a parity with Common Stock and junior to the Senior Preferred Stock with respect to general
preference rights and has a liquidation amount of ten times the amount paid to each Common Share up to a
maximum of $100 per share. Quarterly distributions per share on the Equity Stock AA are equal to the
lesser of (i) 10 times the amount paid per Common Stock or (ii) $2.20. We have no obligation to pay
distributions if no distributions are paid to common shareholders.
In November 1999, we sold $100,000,000 (4,289,544 shares) of Equity Stock, Series AAA
(“Equity Stock AAA”) to a newly formed joint venture. We control the joint venture and consolidate the
accounts of the joint venture, and accordingly the Equity Stock AAA is eliminated in consolidation. The
Equity Stock AAA ranks on a parity with common stock and junior to the Senior Preferred Stock (as
defined below) with respect to general preference rights, and has a liquidation amount equal to 120% of the
amount distributed to each common share. Annual distributions per share are equal to the lesser of (i) five
times the amount paid per common share or (ii) $2.1564. We have no obligation to pay distributions if no
distributions are paid to common shareholders.
24
ITEM 6.
Selected Financial Data
Revenues:
Rental income and tenant reinsurance premiums ....
Interest and other income........................................
Expenses:
Cost of operations ...................................................
Depreciation and amortization ................................
General and administrative .....................................
Interest expense.......................................................
Income before equity in earnings of real estate
entities, minority interest, discontinued operations
and gain (loss) on disposition of real estate
investments .............................................................
Equity in earnings of real estate entities .....................
Minority interest in income .......................................
Net income before discontinued operations and gain
on disposition of real estate.....................................
Discontinued operations (2)........................................
Gain/(loss) on disposition of real estate investments ..
Net income .................................................................
Per Common Share:
Distributions ...............................................................
Net income – Basic.....................................................
Net income – Diluted..................................................
2002(1)
$832,791
8,661
841,452
295,517
179,634
15,619
3,809
494,579
346,873
29,888
(44,087)
332,674
(11,395)
(2,541)
$318,738
For the year ended December 31,
2001(1)
1999 (1)
2000(1)
(Amounts in thousands, except per share data)
$767,944
14,225
782,169
262,988
166,178
21,038
3,227
453,431
328,738
38,542
(46,015)
321,265
(1,148)
4,091
$324,208
$696,050
18,836
714,886
245,265
148,195
21,306
3,293
418,059
296,827
39,319
(38,356)
297,790
(1,278)
576
$297,088
$626,086
16,700
642,786
214,973
137,469
12,491
7,971
372,904
269,882
32,183
(16,006)
286,059
(328)
2,154
$287,885
1998 (1)
$535,139
18,614
553,753
204,106
111,691
11,635
4,507
331,939
221,814
26,602
(20,290)
228,126
(1,107)
-
$227,019
$1.80
$1.21
$1.19
$1.69
$1.53
$1.51
$1.48
$1.41
$1.41
$1.52
$1.53
$1.52
$0.88
$1.30
$1.30
Weighted average common shares – Basic.................
Weighted average common shares – Diluted..............
123,005
124,571
122,310
123,577
131,566
131,657
126,308
126,669
113,929
114,357
Balance Sheet Data:
Total assets ................................................................. $4,843,662
$115,867
Total debt....................................................................
$154,499
Minority interest (other partnership interests) ............
Minority interest (preferred partnership interests) ......
$285,000
Shareholders’ equity................................................... $4,158,969
$4,625,879
$168,552
$169,601
$285,000
$3,909,583
$4,513,941
$156,003
$167,918
$365,000
$3,724,117
$4,214,385
$167,338
$186,600
-
$3,689,100
$3,403,904
$81,426
$139,325
-
$3,119,340
Other Data:
Net cash provided by operating activities ...................
Net cash used in investing activities ...........................
Net cash provided used in financing activities............
$588,961
$(323,464)
$(211,720)
$538,534
$(306,058)
$(272,596)
$525,775
$(465,464)
$(25,969)
$463,292
$(452,209)
$(7,183)
$388,407
$(365,506)
$(13,131)
(1) During 2002, 2001, 2000, 1999 and 1998, we completed several significant business combinations and equity transactions.
See Notes 3, 9, and 10 to the Company’s consolidated financial statements.
(2) During the year ended December 31, 2002, the Company adopted a business plan that included the closure of certain non-
strategic containerized storage facilities (the “Closed Facilities.”). The historical operations of the Closed Facilities are
classified as discontinued operations, with the rental income, cost of operations, and depreciation expense with respect to these
facilities for current and prior periods included in the line-item “Discontinued Operations – Containerized Storage” on the
income statement. Also, during 2002, we sold one of our commercial facilities and classified its historical operations as
discontinued operations, with the rental income, cost of operations, and depreciation expense with respect to this facility for
current and prior periods included in the line-item “Discontinued Operations” on the income statement.
25
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our consolidated financial
statements and notes thereto.
Forward Looking Statements: When used within this document, the words “expects,” “believes,”
“anticipates,” “should,” “estimates,” and similar expressions are intended to identify “forward-looking statements”
within the meaning of that term in Section 27A of the Securities Exchange Act of 1933, as amended, and in Section
21F of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and
unknown risks, uncertainties, and other factors, which may cause the actual results and performance of the Company
to be materially different from those expressed or implied in the forward looking statements. Such factors are
described in Item 1A, “Risk Factors” and include changes in general economic conditions and in the markets in
which the Company operates and the impact of competition from new and existing storage and commercial facilities
and other storage alternatives, which could impact rents and occupancy levels at the Company’s facilities;
difficulties in the Company’s ability to evaluate, finance and integrate acquired and developed properties into the
Company’s existing operations and to fill up those properties, which could adversely affect the Company’s
profitability; the impact of the regulatory environment as well as national, state, and local laws and regulations
including, without limitation, those governing Real Estate Investment Trusts, which could increase the Company’s
expense and reduce the Company’s cash available for distribution; consumers’ failure to accept the containerized
storage concept which would reduce the Company’s profitability; difficulties in raising capital at reasonable rates,
which would impede the Company’s ability to grow; delays in the development process, which could adversely
affect the Company’s profitability; and economic uncertainty due to the impact of war or terrorism could adversely
affect our business plan. We disclaim any obligation to publicly release the results of any revisions to these
forward-looking statements reflecting new estimates, events or circumstances after the date of this report.
Critical Accounting Policies
Qualification as a REIT – Income Tax Expense: We believe that we have been organized and operated,
and we intend to continue to operate, as a qualifying REIT under the Internal Revenue Code and applicable state
laws. A qualifying REIT generally does not pay corporate level income taxes on its taxable income that is
distributed to its shareholders, and accordingly, we do not pay or record as an expense income tax on the share of
our taxable income that is distributed to shareholders.
Given the complex nature of the REIT qualification requirements, the ongoing importance of factual
determinations and the possibility of future changes in our circumstances, we cannot provide any assurance that we
actually have satisfied or will satisfy the requirements for taxation as a REIT for any particular taxable year. For
any taxable year that we fail or have failed to qualify as a REIT and applicable relief provisions did not apply, we
would be taxed at the regular corporate rates on all of our taxable income, whether or not we made or make any
distributions to our shareholders. Any resulting requirement to pay corporate income tax, including any applicable
penalties or interest, could have a material adverse impact on our financial condition or results of operations. Unless
entitled to relief under specific statutory provisions, we also would be disqualified from taxation as a REIT for the
four taxable years following the year during which qualification was lost. There can be no assurance that we would
be entitled to any statutory relief.
26
Impairment of Long Lived Assets: Substantially all of our assets consist of long-lived assets, including
real estate, assets associated with the containerized storage business, goodwill, and other intangible assets. We
quarterly evaluate our long-lived assets for impairment. As described in Note 2 to the consolidated financial
statements, the evaluation of goodwill for impairment entails valuation of the reporting unit to which goodwill is
allocated, which involves significant judgment in the area of projecting earnings, determining appropriate price-
earnings multiples, and discount rates. In addition, the evaluation of other long-lived assets for impairment requires
determining whether indicators of impairment exist, which is a subjective process. When any indicators of
impairment are found, the evaluation of such long-lived assets then entails projections of future operating cashflows,
which also involves significant judgment. We have identified no such impairments at December 31, 2002, other
than those denoted with respect to the containerized storage activities. However, future events, or facts and
circumstances that currently exist that we have not yet identified, could cause us to conclude in the future that our
long lived assets are impaired. Any resulting impairment loss could have a material adverse impact on our financial
condition and results of operations.
Estimated Useful Lives of Long-Lived Assets: Substantially all of our assets consist of depreciable, long-
lived assets. We record depreciation expense with respect to these assets based upon their estimated useful lives.
Any change in the estimated useful lives of those assets, caused by functional or economic obsolescence or other
factors, could have a material adverse impact on our financial condition or results of operations.
Estimated level of Retained Risk liabilities: As described in Note 2 to the consolidated financial
statements, we retain certain risks with respect to property perils, legal liability, and other such risks. In connection
with our retention of these risks, we accrue losses based upon our estimated level of losses incurred using certain
actuarial assumptions followed in the insurance industry and based upon our experience. While we believe that the
amounts of the accrued losses are adequate, the ultimate liability may be in excess of or less than the amounts
provided.
Accruals for Contingencies: We are exposed to business and legal liability risks with respect to events that
have occurred, but in accordance with accounting principles generally accepted in the United States, we have not
accrued for such potential liabilities because the loss is either not probable or not estimable or because we are not
aware of the event. Future events and the result of pending litigation could result in such potential losses becoming
probable and estimable, which could have a material adverse impact on our financial condition or results of
operations. Some of these potential losses, which we are aware of, are described in Note 16 to the consolidated
financial statements.
Accruals for Operating Expenses: We accrue for property tax expense and other operating expenses based
upon estimates and historical trends and current and anticipated local and state government rules and regulations. If
these estimates and assumptions are incorrect, our expenses could be misstated.
Overview: The self-storage industry is highly fragmented and is composed predominantly of numerous
local and regional operators. Competition in the markets in which we operate is significant and has increased over
the past several years due to additional development of self-storage facilities. We believe that the increase in
competition has had a negative impact to our occupancy levels and rental rates in many markets. However, we
believe that we possess several distinguishing characteristics that enable us to compete effectively with other owners
and operators.
We are the largest owner and operator of self-storage facilities in the United States with ownership interests
as of December 31, 2002 in 1,403 self-storage facilities containing approximately 84.5 million net rentable square
feet. All of our facilities are operated under the “Public Storage” brand name, which we believe is the most
recognized and established name in the self-storage industry. Located in the major metropolitan markets of 37
states, our self-storage facilities are geographically diverse, giving us national recognition and prominence. This
concentration establishes us as one of the dominant providers of storage space in most markets in which we operate
and enables us to use a variety of promotional activities, such as television advertising as well as targeted
discounting and referrals, which are generally not economically viable to most of our competitors. In addition, we
believe that the geographic diversity of the portfolio reduces the impact from regional economic downturns and
provides a greater degree of revenue stability.
27
We will continue to focus our growth strategies on: (i) improving the operating performance of our existing
self-storage properties, (ii) increasing our ownership of self-storage facilities, (iii) improving the operating
performance of our containerized storage business, and (iv) participating in the growth of PS Business Parks, Inc.
(“PSB”). Major elements of these strategies are as follows:
• We will focus on enhancing the operating performance of our self-storage properties, primarily
through increases in revenues achieved through the telephone reservation center and associated
marketing efforts. However, during 2002, the Consistent Group of facilities (defined below) exhibited
reductions in rental income and net operating income before depreciation of 3.3% and 5.7%,
respectively, over the prior year. We believe that these reductions were attributable to the impact of
changes in our marketing strategy as well as to general economic conditions. See “Self-Storage
Operations – Consistent Group of Facilities” for further discussion. We expect future increases in
rental income to come from increases in occupancy and increases in realized rent, although there can
be no assurance.
• We expect to continue our development program, though at a level of development that is lower than
that experienced in the last three years. Over the past four years, the Company and the Consolidated
Development Joint Venture has developed and opened a total of 66 storage facilities at a cost of
approximately $421.2 million, containing approximately 4,905,000 net rentable square feet. We have
a total of 38 projects identified for openings after December 31, 2002 at an estimated total cost of
$199.8 million. These 38 projects are comprised of 22 self-storage facilities and expansions of 16
existing self-storage facilities.
• We will acquire facilities from third parties. This activity has not contributed significantly to our
growth over the past three years, as we have acquired only 17 self-storage facilities from third parties.
We believe that our national telephone reservation system and marketing organization present an
opportunity for increased revenues through higher occupancies of the properties acquired from third
parties, as well as cost efficiencies through greater critical mass.
• We will attempt to continue to acquire self-storage facilities from affiliates or interests in affiliated
entities that own self-storage facilities which we manage, as they become available from time to time.
The pool of such available acquisitions has continued to decrease as we have acquired such remaining
interests over the last several years.
• We will continue to focus on improving the operations of the containerized storage operations. Over
the last three years, we have developed facilities that combine containerized storage and traditional
self-storage. These facilities have replaced facilities previously leased from third parties, thereby
reducing third-party lease expense. During 2002, we identified 22 containerized storage facilities that
no longer fit into our business plan going forward. These 22 facilities have been or will be closed
thereby reducing the number of containerized facilities from 55 to 33 facilities. We continue to
evaluate the optimum level of containerized facility operations in each market in which we operate and
may close additional facilities during 2003. In addition, we continue to refine the operating model of
the containerized storage business.
• Through our investment in PSB, we will continue to participate in the growth of this company’s
investment in approximately 14.4 million net rentable square feet of commercial space at December
31, 2002.
28
Results of Operations
Net income: Net income was $318,738,000 for 2002 compared to $324,208,000 for 2001, representing a
decrease of 1.7%. The decrease in net income was caused primarily by a decrease in the operating results of our
Consistent Group of self-storage properties, increased depreciation expense resulting primarily from new property
additions, and charges relating to the planned closure of several containerized storage facilities. The impact of these
items was partially offset by increased earnings generated by the acquisition of additional real estate investments
during 2001 and 2002, the earnings generated by the tenant reinsurance business that was acquired at the end of
2001, reduced general and administrative expense, and a decrease in income allocated to minority interests.
Net income was $324,208,000 for 2001 compared to $297,088,000 for 2000, representing an increase of
9.1%. The increase was primarily the result of improved operating results of our Consistent Group self-storage
properties, reduced operating losses from the containerized storage business and increased earnings generated by the
acquisition of additional real estate investments during 2000 and 2001. The impact of these items was offset
partially by an increased allocation of income to minority combined with an increase in depreciation expense during
2001 resulting from new property additions during 2000 and 2001.
Net income per share: Net income was $1.19 per common share, on a diluted basis, for 2002 compared to
$1.51 per common share for 2001. In addition to those factors denoted above with respect to the reduction in net
income in 2002, net income per share, on a diluted basis, decreased due to (i) an increase in net income allocated to
both our preferred and Equity Stock, Series A shareholders and (ii) an increase in weighted average diluted common
shares outstanding. Diluted weighted average common equivalent shares outstanding totaled 124,571,000 for 2002
compared to 123,577,000 for 2001.
Net income was $1.51 per common share, on a diluted basis, for 2001 compared to $1.41 per common
share in 2000. This increase was due to the same factors denoted above with respect to the increase in net income in
2001 combined with a decrease in weighted average shares outstanding due to our common share repurchase
activities, offset partially by an increase in net income allocated to both our preferred and Equity Stock, A
shareholders. Diluted weighted average shares outstanding decreased from 131,657,000 in 2000 to 123,577,000 in
2001, as a result of the impact of common share repurchases in 2001.
In computing net income allocable to common shareholders for each period, aggregate dividends paid to
the holders of the Equity Stock, Series A and preferred equity securities have been deducted in determining net
income allocable to the common shareholders. Distributions paid to the holders of the Equity Stock, Series A
totaled $21,501,000 in 2002, $19,455,000 in 2001 and $11,042,000 in 2000. Distributions paid to our preferred
shareholders totaled $148,926,000 in 2002, $117,979,000 in 2001 and $100,138,000 in 2000.
Real Estate Operations
Self - Storage Operations: Our self-storage operations are by far the largest component of our operating
activities, representing approximately 91% of our revenues generated during 2002. Rental income, with respect to
our self-storage operations, has grown from $653,110,000 in 2000 to $721,662,000 in 2001, representing an increase
of 10.5%. In 2002, rental income grew to $763,287,000, representing an increase of 5.8% as compared to 2001. The
year over year improvements in rental income include changes in the performance of those properties that we owned
throughout the three year period and the increase in the number of properties in our portfolio either through our
acquisition or development activities.
At the end of 1999, we had a total of 1,202 self-storage facilities included in our consolidated financial
statements. Since that time we have increased the number of self-storage facilities by 165 (2000 - 40 facilities, 2001
- 22 facilities and 2002 - 103 facilities). To enhance year over year comparisons, the following table summarizes,
and the ensuing discussion describes, the self-storage operating results based upon the following categories:
(i)
1,152 self-storage facilities that are reflected in the financial statements on a stabilized basis for
the entire three years ended December 31, 2002 (the “Consistent Group”),
29
(ii)
66 development facilities that were opened since January 1, 1999 (the “Developed Facilities”),
(iii)
(iv)
(v)
113 facilities that were acquired in the three years ended December 31, 2002 (the “Acquired
Facilities”),
36 facilities that were owned throughout the three years ended December 31, 2002 but were not
stabilized, (the “Expansion Facilities”), and
one facility that was disposed of during the three years ended December 31, 2002 (the “Disposed
Facility”):
Self - storage operations summary:
Year Ended December 31,
Year Ended December 31,
Rental income (a):
Consistent Group (b)..............................................
Acquired Facilities (c) ...........................................
Expansion Facilities (d) .........................................
Developed Facilities (e) .........................................
Disposed Facility (f) ..............................................
Total rental income ............................................
Cost of operations:
Consistent Group ...................................................
Acquired Facilities.................................................
Expansion Facilities...............................................
Developed Facilities ..............................................
Disposed Facility ...................................................
Total cost of operations..........................................
Net operating income before depreciation:
Consistent Group ...................................................
Acquired Facilities.................................................
Expansion Facilities...............................................
Developed Facilities ..............................................
Disposed Facility ...................................................
Total net operating income before depreciation.....
Depreciation ..............................................................
Operating income...................................................
2002
2001
Percentage
Change
2001
2000
Percentage
Change
(Dollar amounts in thousands)
$644,778
73,538
19,848
25,123
-
763,287
206,810
22,306
7,884
13,957
-
250,957
437,968
51,232
11,964
11,166
-
512,330
171,415
$340,915
$666,964
19,516
19,962
14,870
350
721,662
202,482
7,258
9,608
9,652
211
229,211
464,482
12,258
10,354
5,218
139
492,451
158,476
$333,975
(3.3)%
276.8%
(0.6)%
69.0%
(100.0)%
5.8%
2.1%
207.3%
(17.9)%
44.6%
(100.0)%
9.5%
(5.7)%
317.9%
15.5%
114.0%
(100.0)%
4.0%
8.2%
2.1%
$666,964
19,516
19,962
14,870
350
721,662
202,482
7,258
9,608
9,652
211
229,211
464,482
12,258
10,354
5,218
139
492,451
158,476
$333,975
$623,663
5,657
19,417
3,715
658
653,110
198,857
1,605
6,788
2,908
304
210,462
424,806
4,052
12,629
807
354
442,648
141,425
$301,223
6.9%
245.0%
2.8%
300.3%
(46.8)%
10.5%
1.8%
352.2%
41.5%
231.9%
(30.6)%
8.9%
9.3%
202.5%
(18.0)%
546.6%
(60.7)%
11.3%
12.1%
10.9%
Number of self-storage facilities (at end of period):
1,367
1,264
8.1%
1,264
1,242
1.8%
Net rentable square feet (in thousands, at end of
period):.......................................................................
82,336
76,432
7.7%
76,432
74,091
3.2%
(a) Rental income includes late charges and administrative fees and is net of promotional discounts given. Rental income does
not include retail sales or truck rental income generated at the facilities.
(b) The Consistent Group includes 1,152 facilities containing 67,009,000 net rentable square feet that were owned throughout
the three years ended December 31, 2002, and operated at a mature, stabilized occupancy level throughout the periods
presented.
(c) The Acquired Facilities includes 113 facilities containing 6,652,000 net rentable square feet that were acquired in the three
year period ending December 31, 2002. Substantially all of these facilities were mature, stabilized facilities at the time of
their acquisition.
30
(d) The Expansion Facilities includes 36 facilities containing 3,770,000 net rentable square feet (of which 817,000 square feet is
industrial space developed for containerized storage activities). These facilities were owned for the entire three year period
ending December 31, 2002, however, year over year operating results are not comparable throughout the periods presented
due primarily to expansions in their net rentable square or their conversion into Combination Facilities. Such construction
activities can cause a drop in revenue levels, as existing capacity is made unavailable in order to accommodate construction
activities. During the three years ended December 31, 2002, we completed construction on expansion projects with a total
cost of $121.5 million.
(e) The Developed Facilities includes 66 facilities containing 4,905,000 net rentable square feet (of which 878,000 square feet is
industrial space for use in containerized storage activities, see “Containerized Storage” and “Discontinued Operations”).
These facilities were developed and opened since January 1, 1999 at a total cost of $421.2 million.
(f) The Disposed Facility includes one facility that was disposed of during 2001 as a result of being condemned by a
government agency.
Self Storage Operations - Consistent Group of Facilities
At December 31, 2002, we owned 1,152 self-storage facilities that have operated at a stabilized level of
operations throughout the three-year period. The Consistent Group of facilities contains approximately 67,009,000
net rentable square feet, representing approximately 81% of the aggregate net rentable square feet of our self-storage
portfolio. Revenues and operating expenses with respect to this group of properties are set forth in the above Self-
Storage Operations table under the caption, “Consistent Group.” The following table sets forth additional operating
data with respect to the Consistent Group of facilities:
31
CONSISTENT GROUP
Year Ended December 31,
Year Ended December 31,
2002
2001
Percentage
Change
2001
2000
Percentage
Change
(Dollar amounts in thousands, except rents per square foot)
Base rental income ....................................................
Promotional discounts...............................................
Adjusted base rental income .................................
Late charges and administrative fees collected .........
Total rental income ...............................................
$639,528
(16,267)
623,261
21,517
644,778
$649,135
(4,910)
644,225
22,739
666,964
Cost of operations:
Property taxes ...................................................
Direct property payroll......................................
Cost of managing facilities ...............................
Advertising and promotion ...............................
Utilities .............................................................
Repairs and maintenance ..................................
Telephone reservation center ............................
Property insurance ............................................
Other .................................................................
Total cost of operations.........................................
59,168
50,419
19,323
17,892
15,185
15,068
9,051
5,552
15,152
206,810
57,078
47,152
17,856
18,850
15,475
16,908
9,782
5,444
13,937
202,482
Net operating income before depreciation ................
Depreciation..............................................................
Operating income......................................................
437,968
139,393
$298,575
464,482
143,296
$321,186
(1.5)%
231.3%
(3.3)%
(5.4)%
(3.3)%
3.7%
6.9%
8.2%
(5.1)%
(1.9)%
(10.9)%
(7.5)%
2.0%
8.7%
2.1%
(5.7)%
(2.7)%
(7.0)%
$649,135
(4,910)
644,225
22,739
666,964
$618,002
(17,365)
600,637
23,026
623,663
57,078
47,152
17,856
18,850
15,475
16,908
9,782
5,444
13,937
202,482
56,863
47,834
16,178
10,089
14,626
20,692
11,478
5,474
15,623
198,857
464,482
143,296
$321,186
424,806
136,897
$287,909
5.0%
(71.7)%
7.3%
(1.2)%
6.9%
0.4%
(1.4)%
10.4%
86.8%
5.8%
(18.3)%
(14.8)%
(0.5)%
(10.8)%
1.8%
9.3%
4.7%
11.6%
Gross margin (before depreciation)...........................
67.9%
69.6%
(2.4)%
69.6%
68.1%
2.2%
Weighted average for the fiscal year:
Square foot occupancy (a) ....................................
Realized annual rent per occupied square foot (b).
Realized annual rent per available square foot (c).
85.2%
$10.92
$9.30
88.9%
$10.81
$9.61
(4.2)%
1.0%
(3.2)%
88.9%
$10.81
$9.61
Weighted average at December 31:
Square foot occupancy...........................................
In place annual rent per occupied square foot (d) ..
Posted annual rent per square foot (e)....................
84.3%
$11.51
$11.51
85.3%
$11.62
$13.18
(1.2)%
(0.9)%
(12.7)%
85.3%
$11.62
$13.18
91.0%
$9.85
$8.96
88.9%
$10.49
$11.41
(2.3)%
9.7%
7.3%
(4.0)%
10.8%
15.5%
Total net rentable square feet (in thousands)..............
67,009
67,009
-
67,009
67,009
-
(a) Square foot occupancies represent weighted average occupancy levels over the entire fiscal year.
(b) Realized annual rent per occupied square foot is computed by dividing adjusted base rental income by the weighted average
occupied square footage for the year. Realized rents per square foot take into consideration promotional discounts, bad debt
costs, credit card fees and other costs which reduce rental income from the contractual amounts due.
(c) Annualized revenue per available square foot represents adjusted base rental income divided by total available net rentable
square feet.
(d) In place annual rent per occupied square foot represents contractual rents per occupied square foot without reductions for
promotional discounts.
(e) Posted annual rent per square foot represents the rents charged to new tenants prior to any promotional discounts.
32
The Consistent Group’s operating income increased 11.6% in 2001 as compared to 2000. The Consistent
Group’s net operating income before depreciation increased 9.3% in 2001 as compared to 2000, with rental income
increasing 6.9% and cost of operations increasing 1.8%. The 6.9% increase in rental income was primarily the
result of higher realized annual rent per occupied square foot ($10.81 for 2001 as compared to $9.85 for 2000,
representing an increase of 9.7%), offset partially by a reduction in weighted average occupancy levels from 91.0%
in 2000 to 88.9% in 2001, representing a 2.3% reduction in average occupancy. The 1.8% increase in cost of
operations was due to increases in promotional and advertising expenses.
The Consistent group’s operating income decreased 7.0% in 2002 as compared to 2001. The Consistent
Group’s net operating income before depreciation decreased 5.7% in 2002 as compared to 2001, with rental income
decreasing 3.3% and cost of operations increasing 2.1%. The 3.3% decrease in rental income was primarily the
result of lower average occupancy levels which decreased from 88.9% in 2001 to 85.2% in 2002, representing a
4.2% decrease, offset partially by higher realized annual rent per occupied square foot ($10.92 for fiscal 2002
compared to $10.81 for fiscal 2001, representing an increase of 1.0%). The 2.1% increase in cost of operations was
due primarily to increases in payroll, cost of managing facilities, and property taxes.
We attribute the decrease in operating income in 2002 primarily to a change in our operating strategy
during 2001 and secondarily to increased competition and economic factors, though we are not able to quantify the
relative impact of each of these factors.
Historically, our marketing strategy was to offer a variety of promotional discounts and to conservatively
price our space to attract new tenants. During 2000, the Consistent Group’s occupancy levels averaged 91.0%. This
relatively high occupancy level was attained and sustained through a variety of promotional activities offering new
tenants move-in promotional discounts aggregating $17.4 million in 2000. This annual level of discounts was
consistent with those given in years prior to 2000.
In 2001, we changed our marketing strategy and began to aggressively increase rental rates and reduce the
amount of promotional discounts offered to new tenants. We believed that this strategy had the benefit of
significantly increasing our rental income, with the potential risk of lowering occupancy levels. During the first nine
months of 2001, this strategy significantly enhanced the growth in our rental income, which for the first nine months
of 2001 was approximately 7.0% higher than for the same period in 2000. The downside to our more aggressive
strategy was that our average occupancy levels during the first nine months of 2001 were approximately 2.1% below
the level experienced during the same period in 2000. We believed that the decrease in occupancy levels was a
manageable reduction and was more than offset by the increase in rental income attained through higher rental rates
and less promotional discounting.
During the fourth quarter of 2001, there was a rapid decline in our occupancy levels. This reduction
coincided with a reduction in call volume into our national telephone reservation center which we believe was
attributable to the absence of any significant promotional discounts offered to tenants as well as to general economic
conditions. In addition, during this time frame we also experienced unusually high levels of move-out activity. At
September 30, 2001, the average occupancy level of the Consistent Group of facilities was 89.9% compared to
91.4% one year earlier, representing a reduction of 1.6%. Three months later, at December 31, 2001, the average
occupancy level of the Consistent Group of facilities was 85.3% compared to 88.8% one year earlier, representing a
reduction of 3.9%. Accordingly, the year over year negative spread in occupancy levels widened significantly from
September 30, 2001 through December 31, 2001.
Although we were very pleased with the rental growth experienced in fiscal 2001, we were very concerned
about the sudden and rapid decline in our occupancy levels experienced in the fourth quarter of 2001. This decline
in occupancy levels continued into fiscal 2002 as our average occupancy levels decreased to 83.1% at the end of
February 2002 compared to 87.9% one year earlier, representing a reduction of 5.5%.
33
In the second half of March 2002, in order to enhance move-in activity, we significantly reduced rental
rates charged to new incoming tenants and began a national television advertising campaign that offered a
significant promotional discount to new move-ins. The advertising campaign was run from the second half of
March 2002 through the first half of May 2002. The campaign resulted in increased move-in activity during April
and May 2002 compared to the same period in the prior year and helped us improve occupancy levels. The months
of May through July are seasonally high rental activity months, accordingly, in the middle of May we terminated the
advertising campaign and discontinued promotional discounts. Unfortunately, we underestimated the weakness in
demand and in the absence of significant promotional discounts, rental activity during June and July 2002 decreased
as compared to the same periods in 2001. Consequently, our average occupancy levels for the Consistent Group of
facilities continued to decline relative to the occupancies experienced in 2001. At the end of July 2002, our
occupancy levels were 85.8% as compared to 91.3% at the end of July 2001, representing a reduction of 6.0%.
Beginning in mid-August 2002 and through the remainder of the year, we reinstated a promotional discount
program and advertised on television in selected markets in an effort to enhance move-in activity and improve
occupancy levels. This program had a positive impact upon move-in activity throughout the third and fourth
quarters and helped stabilize our occupancy levels. By December 31, 2002, the reduction in the year-over-year
occupancy levels was reduced to 1.2% (84.3% at December 31, 2002 compared to 85.3% at December 31, 2001)
from the 6.0% year-over-year reduction that was experienced at July 31, 2002.
Stabilizing our occupancy levels during 2002 came with a significant price. Promotional discounts
increased from approximately $4,910,000 in 2001 to $16,267,000 in 2002, resulting in a negative impact to our
rental income.
In hindsight, the aggressive rental rates and lack of promotional discounts that produced a 9.3% increase in
our net operating income in 2001 as compared to 2000, put significant pressure on our occupancy levels during
2002. In order to reestablish our occupancy levels, we had to revert back to a marketing program that has worked in
the past, namely reasonable rental rates combined with a promotional discount program. In the process of
reestablishing our occupancy levels during 2002, we incurred significant cost relative to 2001. These costs came in
the form of higher discounts given and increased costs associated with advertising on television, resulting in a
significant adverse impact to our comparative operating results.
During 2003, we expect to continue promotional discounting and television advertising, though the level of
such activities cannot be estimated at this time. The up front costs of these marketing activities, and the increases in
discounts, are expected to continue to adversely impact our operating income during 2003. The following table sets
forth our rental income, cost of television advertising, promotional discounts given, and average occupancies for
each of the quarters in 2002, 2001 and 2000:
34
For the Quarter Ended
March 31
June 30
September 30
December 31
Entire Year
(amounts in thousands)
Total rental income:
2002
2001
2000
$ 162,082
$ 160,071
$ 149,297
$ 159,999
$ 166,215
$ 155,633
$ 164,753
$ 171,805
$ 160,520
$ 157,944
$ 168,873
$ 158,213
$ 644,778
$ 666,964
$ 623,663
Television advertising:
2002
2001
2000
$
$
$
546
-
-
$
$
$
1,379
902
-
$
$
$
1,883
4,272
-
$ 3,842
$ 2,614
76
$
$
$
$
7,650
7,788
76
Promotional discounts given:
2002
2001
2000
$
$
$
998
2,629
5,485
$
$
$
5,216
1,831
5,086
$
$
$
4,181
318
3,795
$ 5,872
132
$
$ 2,999
$ 16,267
4,910
$
$ 17,365
Weighted average occupancy:
83.6%
88.1%
90.4%
2002
2001
2000
86.3%
89.9%
92.1%
85.8%
90.7%
91.9%
85.0%
86.9%
89.7%
85.2%
88.9%
91.0%
During the first two months of 2003, our occupancy levels, continued to improve. The weighted average
occupancy level for our Consistent Group of facilities was 84.6% at February 28, 2003 as compared to 83.1% at
February 28, 2002, representing an increase of 1.8%. This increase, however, has come at a significant cost.
Television advertising for the two months ended February 28, 2003 was $785,000 as compared to $366,000 for the
same period in 2002. Promotional discounts for the two months ended February 28, 2003 were $6,821,000 as
compared to only $102,000 for the same period in 2002. Therefore, despite the increase in average physical
occupancy, net operating income for our Consistent Group facilities was lower in the two months ended February
28, 2003 as compared to the same period in 2002.
We are continuously evaluating our call volume, reservation activity, and move-in/move-out rates for each
of our markets relative to our marketing activities and rental rates. In addition, we are evaluating market supply and
demand factors and based upon these analyses we are continuing to adjust our marketing activities in an effort to
increase our occupancy levels and ultimately our rental income.
Cost of Operations
Cost of operations increased approximately 2.1% in 2002 as compared to 2001. Cost of managing facilities
principally includes payroll related to supervisory personnel combined with associated overhead costs. Cost of
managing facilities and direct property payroll have increased 8.2% and 6.9%, respectively, in 2002 compared to
2001. These increases are principally due to adjustments to incentive compensation programs that will continue to
have an impact in 2003. Repairs and maintenance cost has consistently been reduced since 2000, however, we do
not anticipate this trend to continue into 2003. We anticipate increased repair and maintenance costs as a result of
heavy snow in the Northeastern states and costs to remedy mold issues at several facilities in Southern states. We
also expect that property taxes will continue to increase into fiscal 2003.
35
Cost of operations for 2001 increased approximately 1.8% as compared to 2000. Advertising and
promotion costs, which principally includes television and yellow page advertising cost, increased 86.8% in 2001.
Television advertising cost was approximately $7,788,000 in 2001 compared to only $76,000 in 2000. Yellow page
advertising cost was $7,380,000 in 2001 compared to $6,871,000 in 2000. Promotional advertising is an important
part of our operational strategy. Our advertising activities have increased customer call volume into our national
reservation system, where one of our representatives discusses with the customer space requirements, price and
location preferences and also informs the customer of other products and services provided by the Company and its
subsidiaries. During 2001, we closed our telephone reservation center in Texas and aggregated all the call volume
into a single center in California. As a result of the closure, telephone reservation costs decreased from $11.5
million in 2000 to $9.8 million in 2001.
The following table sets forth regional trends in our consistent group of facilities with respect to rental
income, cost of operations, net operating income, weighted average occupancy levels, and realized rent per net
rentable square foot.
36
Consistent Group Operating Trends by Region
Year Ended December 31,
Year Ended December 31,
2002
2001
Percentage
Change
2001
2000
Percentage
Change
(Dollar amounts in thousands, except rents per square foot)
Rental income:
Southern California (114 facilities) ...
Northern California (106 facilities) ...
Texas (140 facilities).........................
Florida (108 facilities).......................
Illinois (80 facilities) .........................
Georgia (56 facilities) .......................
All other states (548 facilities) ..........
Total rental income.................................
$ 101,549
75,388
61,996
54,423
51,121
23,177
277,124
644,778
$ 102,106
79,782
64,771
56,347
53,786
24,317
285,855
666,964
Cost of operations:
Southern California ............................
Northern California ............................
Texas ..................................................
Florida................................................
Illinois ................................................
Georgia...............................................
All other states ...................................
Total cost of operations ..........................
24,159
18,961
26,083
19,493
19,998
7,556
90,560
206,810
21,507
18,403
25,812
20,313
19,001
8,210
89,236
202,482
Net operating income before depreciation:
Southern California ............................
Northern California ............................
Texas ..................................................
Florida................................................
Illinois ................................................
Georgia...............................................
All other states ...................................
Total net operating income .....................
77,390
56,427
35,913
34,930
31,123
15,621
186,564
$ 437,968
80,599
61,379
38,959
36,034
34,785
16,107
196,619
$ 464,482
Weighted average occupancy:
Southern California ............................
Northern California ............................
Texas ..................................................
Florida................................................
Illinois ................................................
Georgia...............................................
All other states ...................................
Total weighted average occupancy.........
86.9%
84.5%
84.5%
85.1%
84.4%
84.3%
85.3%
85.2%
90.7%
89.7%
89.3%
88.2%
89.5%
86.4%
88.5%
88.9%
Realized annual rent per occupied square foot:
Southern California ............................
Northern California ............................
Texas ..................................................
Florida................................................
Illinois ................................................
Georgia...............................................
All other states ...................................
$ 15.69
12.73
8.19
9.88
12.26
8.25
10.41
$ 15.16
12.71
8.08
9.86
12.11
8.48
10.34
Total realized annual rent per square
(0.5)%
(5.5)%
(4.3)%
(3.4)%
(5.0)%
(4.7)%
(3.1)%
(3.3)%
12.3%
3.0%
1.0%
(4.0)%
5.2%
(8.0)%
1.5%
2.1%
(4.0)%
(8.1)%
(7.8)%
(3.1)%
(10.5)%
(3.0)%
(5.1)%
(5.7)%
(4.2)%
(5.8)%
(5.4)%
(3.5)%
(5.7)%
(2.4)%
(3.6)%
(4.2)%
3.5%
0.2%
1.4%
(0.2%
1.2%
(2.7)%
(0.7)%
$ 102,106
79,782
64,771
56,347
53,786
24,317
285,855
666,964
$ 92,664
73,568
60,949
52,775
50,282
23,341
270,084
623,663
21,507
18,403
25,812
20,313
19,001
8,210
89,236
202,482
21,289
17,373
24,304
19,305
19,348
8,260
88,978
198,857
80,599
61,379
38,959
36,034
34,785
16,107
196,619
$ 464,482
71,375
56,195
36,645
33,470
30,934
15,081
181,106
$ 424,806
90.7%
89.7%
89.3%
88.2%
89.5%
86.4%
88.5%
88.9%
95.7%
93.5%
90.0%
88.4%
91.5%
86.9%
90.5%
91.0%
$ 15.16
12.71
8.08
9.86
12.11
8.48
10.34
$ 12.96
11.20
7.60
9.19
11.05
8.04
9.51
10.2%
8.4%
6.3%
6.8%
7.0%
4.2%
5.8%
6.9%
1.0%
5.9%
6.2%
5.2%
(1.8)%
(0.6)%
0.3%
1.8%
12.9%
9.2%
6.3%
7.7%
12.4%
6.8%
8.6%
9.3%
(5.2)%
(4.1)%
(0.8)%
(0.2)%
(2.2)%
(0.6)%
(2.2)%
(2.3)%
17.0%
13.5%
6.3%
7.3%
9.6%
5.5%
8.7%
foot: .....................................................
$ 10.92
$ 10.81
1.0%
$ 10.81
$
9.85
9.7%
37
Self-Storage Operations - Acquired Facilities
Over the past three years, we acquired 113 self-storage facilities containing 6,652,000 net rentable square
feet. Substantially all of these facilities were mature, stabilized facilities at the time of their acquisition. The
following table summarizes operating data with respect to these facilities.
ACQUIRED FACILITIES
Year Ended December 31,
Year Ended December 31,
2002
2001
Change
2001
2000
Change
(Dollar amounts in thousands)
Rental income (a):
Self-storage facilities acquired in 2002..................
Self-storage facilities acquired in 2001..................
Self-storage facilities acquired in 2000..................
Total rental income ............................................
$ 53,497
445
19,596
73,538
Cost of operations:
Self-storage facilities acquired in 2002..................
Self-storage facilities acquired in 2001..................
Self-storage facilities acquired in 2000..................
Total cost of operations......................................
$ 15,822
191
6,293
22,306
Net operating income before depreciation:
Self-storage facilities acquired in 2002..................
Self-storage facilities acquired in 2001..................
Self-storage facilities acquired in 2000..................
Net operating income.........................................
Depreciation ..............................................................
Operating Income ..................................................
$ 37,675
254
13,303
51,232
15,211
$ 36,021
$
$
$
$
-
143
19,373
19,516
$ 53,497
302
223
54,022
-
55
7,203
7,258
$ 15,822
136
(910)
15,048
-
88
12,170
12,258
2,948
9,310
$ 37,675
166
1,133
38,974
12,263
$ 26,711
$
$
-
143
19,373
19,516
-
55
7,203
7,258
$
-
88
12,170
12,258
2,948
$ 9,310
$
$
-
-
5,657
5,657
-
-
1,605
1,605
$
-
-
4,052
4,052
65
$ 3,987
$
$
-
143
13,716
13,859
-
55
5,598
5,653
$
-
88
8,118
8,206
2,883
$ 5,323
Weighted average square foot occupancy during the
period:
Self-storage facilities acquired in 2002..................
Self-storage facilities acquired in 2001..................
Self-storage facilities acquired in 2000..................
85.2%
67.4%
79.1%
83.6%
-
55.8%
77.1%
76.3%
-
20.8%
2.6%
9.6%
-
55.8%
77.1%
76.3%
-
-
77.2%
77.2%
-
-
(0.1)%
(1.2)%
Number of self-storage facilities (at end of period)....
113
26
87
26
25
1
Net rentable square feet (in thousands, at end of
period) ...................................................................
Cumulative acquisition cost (at end of period)...........
6,652
$ 507,386
1,576
$ 146,843
5,076
$360,543
1,576
$ 146,843
1,516
$ 143,340
60
$ 3,503
Rental income and cost of operations for the Acquired Facilities have increased significantly in 2002 and
2001, due to the acquisition of new facilities.
The 2002 acquisitions include 78 properties acquired from affiliated entities, including 47 properties
acquired on January 16, 2002 from an affiliated development joint venture and 31 properties acquired on January 1,
2002 in connection with business combinations with two affiliated partnerships (see Note 3 to the consolidated
financial statements). The 2001 acquisition includes one facility acquired from a third party. The 2000 acquisitions
include 13 facilities acquired in business combinations, 5 facilities acquired from entities in which we had an
interest, and 7 facilities acquired from third parties.
38
Similar to our Consistent Group of facilities, the Acquired Facilities have experienced operating difficulties
over the past year. Marketing and promotional strategies, as described above with respect to our Consistent Group,
were employed in 2002, and will continued to be employed in 2003 to enhance occupancy levels and rental income
in 2003 of the Acquired Facilities.
Self-Storage Operations - Expansion Facilities
Throughout the three-year period ended December 31, 2002, we expanded 36 self-storage facilities or
converted them to Combination Facilities. These activities caused a drop in revenue levels, as existing capacity was
made unavailable in order to accommodate construction activities. Accordingly, the operating results are not
comparable in each of the three years ended December 31, 2002. At December 31, 2002, the weighted average
occupancy level were approximately 69.4% as compared to 78.6% one year earlier. The operating results for these
facilities are presented in the Self-Storage Operations table above under the caption, “Expansion Facilities.”
Depreciation expense with respect to the expansion facilities was $6,188,000 in 2002, $4,986,000 in 2001
and $3,594,000 in 2000. The increases in depreciation expense are due to the opening of the expanded facilities.
These 36 facilities contain approximately 3,770,000 net rentable square feet at December 31, 2002 (which
includes the expanded space, and 817,000 square feet of industrial space developed for containerized storage
activities – see “Containerized Storage” and “Discontinued Operations”). The aggregate construction costs to
complete these expansions totaled approximately $121,510,000 during the three years ended December 31, 2002.
Self-Storage Operations –Developed Facilities
During the past three years, we have opened 49 newly developed self-storage facilities and 17 facilities that
contain both self-storage and portable self-storage at the same location (“Combination Facilities”). These newly
developed facilities have an aggregate of 4,905,000 net rentable square feet (of which 878,000 net square feet is
industrial space developed for containerized storage activities – see “Containerized Storage” and “Discontinued
Operations”). Aggregate development cost for these 66 facilities was approximately $421.2 million. The operating
results of the self-storage facilities and Combination facilities are reflected in the Self-Storage Operations table
under the caption, “Developed Facilities.”
39
Year ended December 31,
Year ended December 31,
2002
2001
2000
(Amounts in thousands, except No. of facilities)
Change
2001
Change
Rental income:
Self-storage facilities.............................
Combination facilities ...........................
Total rental income ...........................
$ 18,360
6,763
25,123
$ 11,580
3,290
14,870
$ 6,780
3,473
10,253
$ 11,580
3,290
14,870
$ 3,063
652
3,715
$ 8,517
2,638
11,155
Cost of operations:
Self-storage facilities.............................
Combination facilities ...........................
Total cost of operations .....................
Net operating income before depreciation:
Self-storage facilities.............................
Combination facilities ...........................
Net operating income.........................
Depreciation..............................................
8,921
5,036
13,957
9,439
1,727
11,166
10,623
6,590
3,062
9,652
4,990
228
5,218
7,246
2,331
1,974
4,305
4,449
1,499
5,948
3,377
6,590
3,062
9,652
4,990
228
5,218
7,246
2,325
583
2,908
4,265
2,479
6,744
738
69
807
869
4,252
159
4,411
6,377
Operating income (loss) ........................
$
543
$ (2,028)
$ 2,571
$
(2,028)
$
(62)
$ (1,966)
Self-storage facilities, at end of period:
Number of facilities ..............................
Net rentable square feet ........................
49
3,061
35
2,154
14
907
35
2,154
23
1,356
12
798
Total development cost .........................
$ 267,004
$ 174,895
$ 92,109
$ 174,895
$ 107,990
$ 66,905
Combination facilities, at end of period:
Number of facilities ..............................
Net rentable square feet ........................
17
1,844
15
1,605
2
239
15
1,605
5
605
10
1,000
Total development cost .........................
$ 154,177
$ 139,325
$ 14,852
$ 139,325
$ 33,321
$106,004
40
The following table summarizes operating data for the 49 newly developed self-storage facilities that
opened over the last four years:
DEVELOPED SELF-STORAGE FACILITIES
Year Ended December 31,
Year Ended December 31,
2002
2001
Change
2001
2000
Change
(Dollar amounts in thousands)
Rental income (a):
Self-storage facilities developed in 2002 ...............
Self-storage facilities developed in 2001 ...............
Self-storage facilities developed in 2000 ...............
Self-storage facilities developed in 1999 ...............
Total rental income ............................................
Cost of operations:
Self-storage facilities developed in 2002 ...............
Self-storage facilities developed in 2001 ...............
Self-storage facilities developed in 2000 ...............
Self-storage facilities developed in 1999 ...............
Total cost of operations......................................
Net operating income before depreciation:
Self-storage facilities developed in 2002 ...............
Self-storage facilities developed in 2001 ...............
Self-storage facilities developed in 2000 ...............
Self-storage facilities developed in 1999 ...............
Net operating income.............................................
Depreciation ..............................................................
Operating income (loss).........................................
$
$
$
$
1,435
4,474
9,332
3,119
18,360
1,399
2,667
3,782
1,073
8,921
36
1,807
5,550
2,046
9,439
7,032
2,407
$
$
$
$
-
1,608
7,074
2,898
11,580
-
1,368
4,186
1,036
6,590
-
240
2,888
1,862
4,990
4,522
468
$
$
$
$
1,435
2,866
2,258
221
6,780
1,399
1,299
(404)
37
2,331
36
1,567
2,662
184
4,449
2,510
1,939
$
$
$
$
Weighted average square foot occupancy during the
period:
Self-storage facilities opened in 2002....................
Self-storage facilities opened in 2001....................
Self-storage facilities opened in 2000....................
Self-storage facilities opened in 1999....................
20.6%
41.7%
76.1%
87.9%
51.6%
-
20.3%
56.7%
78.7%
45.2%
-
105.4%
34.2%
11.7%
14.2%
-
1,608
7,074
2,898
11,580
-
1,368
4,186
1,036
6,590
-
240
2,888
1,862
4,990
4,522
468
-
20.3%
56.7%
78.7%
45.2%
$
$
$
$
-
-
1,750
1,313
3,063
-
-
1,453
872
2,325
-
-
297
441
738
798
(60)
$
$
$
$
-
1,608
5,324
1,585
8,517
-
1,368
2,733
164
4,265
-
240
2,591
1,421
4,252
3,724
528
-
-
24.8%
46.2%
29.1%
-
-
128.6%
70.3%
55.3%
Unlike many other forms of real estate, we are unable to pre-lease our newly developed facilities due to the
nature of our tenants. Accordingly, at the time a newly developed facility first opens for operation the facility is
entirely vacant generating no rental income. Historically, we estimated that on average it took approximately 24
months for a newly developed facility to fill up and reach a targeted occupancy level of approximately 90%. We
believe that the current economic environment has extended the fill-up period beyond 24 months notwithstanding
our marketing efforts to enhance the fill-up process.
Similar to our Consistent Group of facilities, the newly developed self-storage facilities participated in
promotional discounting and advertising activities to enhance occupancy levels. During 2002, the Newly-
Developed Facilities had a weighted average occupancy level of approximately 51.6%.
Property operating expenses are substantially fixed, consisting primarily of payroll, property taxes, utilities,
and marketing costs. The rental revenue of a newly developed facility will generally not cover its property operating
expenses (excluding depreciation) until the facility has reach an occupancy level of approximately 30% to 34%.
However, at that occupancy level, the rental revenues from the facility are still not sufficient to cover related
depreciation expense and cost of capital with respect to the facility’s development cost. During construction of the
self-storage facility, we capitalize interest costs and include such cost as part of the overall development cost of the
facility. Once the facility is opened for operations interest is no longer capitalized.
41
Due to the relationship between the generation of rental income and immediate recognition of expenses
upon opening of a facility, our development activities have had a negative impact on our net income. We estimate
that our net income has been negatively impacted by approximately $29,016,000, $21,416,000, and $8,352,000 in
the years ended December 31, 2002, 2001, and 2000, respectively, as a result of the difference between the revenues
generated by the Developed Facilities and the related operating costs denoted above. These amounts include
approximately $10,623,000, $7,246,000, and $869,000 for the years ended December 31, 2002, 2001 and 2000,
respectively, in depreciation expense.
We continue to develop facilities, despite the short-term earnings dilution experienced during the fill-up
period, because we believe that the ultimate returns on developed facilities are favorable. In addition, we believe
that it is advantageous for us to continue to expand our asset base and benefit from the resultant increased critical
mass, with facilities that will improve our portfolio’s overall average construction and location quality.
We expect that over at least the next 24 months, the Developed Facilities will continue to have a negative
impact to our earnings, however, to a much lesser degree than experienced in 2002. Furthermore, the 38 expansion
and newly developed facilities in our development pipeline described in “Liquidity and Capital Resources –
Acquisition and Development of Facilities” that will be opened for operation over the next 12 – 24 months will also
negatively impact our earnings until they reach a stabilized occupancy level.
Commercial Property Operations: Commercial property operations included in our consolidated financial
statements include commercial space owned by the Company and entities consolidated by the Company. We have a
much larger interest in commercial properties through our ownership interest in PSB. Our investment in PSB is
accounted for on the equity method of accounting, and accordingly our share of PSB’s earnings is reflected as
“Equity in earnings of real estate entities”, see below.
Our commercial operations are comprised of 992,000 net rentable commercial space operated at certain of
the self-storage facilities and three stand-alone commercial facilities having a total of 195,000 net rentable square
feet. In addition, we own an industrial building with 67,000 net rentable square feet that was opened in 2001 at a
total cost of $9,993,000. This facility was previously used by our containerized storage operations and is currently
being evaluated for repurposing or disposition.
The following table sets forth the historical commercial property amounts included in the financial
statements:
Commercial Property Operations
(excluding discontinued operations):
Year Ended December 31,
2002
2001
Rental income
..........................
Cost of operations.......................
Net operating income.............
Depreciation expense..................
Operating income...................
$11,781
4,462
7,319
2,544
$4,775
$12,070
3,861
8,209
2,569
$5,640
Year Ended December 31,
2001
Change
(Amounts in thousands)
$12,070
3,861
8,209
$(289)
601
(890)
(25)
$(865)
2,569
$5,640
2000
Change
$10,849
3,701
7,148
2,176
$4,972
$1,221
160
1,061
393
$668
The decrease in rental income in 2002 as compared to 2001 is due primarily to a vacancy in one of the three
stand-alone commercial facilities, which cause a reduction in rental income of approximately $1.2 million during
2002.
During 2002, we sold one of our commercial facilities to a third party for an aggregate $3.9 million in cash.
The historical operations with respect to this facility are classified as “Discontinued Operations” in our income
statement and are not included in the above table.
42
Containerized Storage Operations: In August 1996, Public Storage Pickup & Delivery (“PSPUD”), a
subsidiary of the Company, made its initial entry into the containerized storage business through its acquisition of a
single facility operator located in Irvine, California. At December 31, 2001, PSPUD had 55 facilities that had been
opened between 1996 and 2001 either through development or leasing of facilities. During 2002, we reevaluated
our operational strategy and closed, or are in the process of closing, 22 facilities (the “Closed Facilities”). At
December 31, 2002, PSPUD operated 33 facilities in 11 states, which are located in major markets in which we
have significant market presence with respect to our traditional self-storage facilities. The operations with respect to
the Closed Facilities, including historical operating results for previous periods, are not included in the table below
and instead are included in Discontinued Operations. PSPUD’s operations, which exclude the Closed Facilities, are
reflected on the table below:
Containerized storage
(excluding discontinued operations):
Rental and other income ........................
Cost of operations:
Direct operating costs (a)..................
Facility lease expense .......................
Total cost of operations .................
Operating income prior to
depreciation..................................
Depreciation expense (b)........................
Operating income (loss) .........................
Year Ended December 31,
Year Ended December 31,
2002
2001
Change
2001
2000
Change
$37,776
$34,212
(Dollar amounts in thousand)
$34,212
$3,564
$32,091
$2,121
28,153
2,534
30,687
7,089
(5,675)
$1,414
24,899
5,017
29,916
4,296
(5,133)
$(837)
3,254
(2,483)
771
2,793
(542)
$2,251
24,899
5,017
29,916
4,296
(5,133)
$(837)
23,336
7,766
31,102
989
(4,594)
$(3,605)
1,563
(2,749)
(1,186)
3,307
(539)
$2,768
(a) Includes an asset impairment charge recorded in the amount of $750,000 in 2002, with respect to machinery and
equipment of the containerized storage facilities that remain open, because such equipment is no longer required based
upon our current operating plan. The amounts for 2001 and 2000, include container obsolescence charges in the
amount of $555,000 and $1,226,000, respectively.
(b) Depreciation expense principally relates to the depreciation related to the containers, however, depreciation expense for
2002, 2001 and 2000 includes $1,098,000, $711,000, and $337,000, respectively, with respect to real estate facilities.
Rental and other income includes monthly rental charges to customers for storage of the containers and
service fees charged for pickup and delivery of containers to customers’ homes. Rental income increased to
$37,776,000 in 2002 as compared to $34,212,000 in 2000 as a result of higher per container rents and an increase in
the number of occupied containers. At December 31, 2002, there were approximately 63,582 occupied containers in
the 33 facilities that are reflected in “ongoing” operations. We continue to evaluate the business operations and
additional facilities may be closed.
Direct operating costs principally includes payroll, equipment lease expense, utilities and vehicle expenses
(fuel and insurance). During 2002, an asset impairment charge was recorded in the amount of $750,000 with respect
to machinery and equipment of the containerized storage facilities that remain open because such equipment is no
longer required based upon our current operating plan.
Over the past three years, facility lease expense has continued to decrease ($ 2,534,000 in 2002, $5,017,000
in 2001 and $7,766,000 in 2000). The reduction over the past three years is principally the result of moving the
operations from leased facilities to wholly-owned facilities, and thus eliminating the lease expense paid to third
parties.
At December 31, 2002, nine of the 33 containerized storage facilities are leased from third parties. The
remaining 24 facilities were operated in facilities owned by the Company, comprised of 19 combination facilities
with an aggregate of 994,000 square feet of industrial space (this square footage is a component of the total net
rentable square footage of the Expansion Facilities and the Developed Facilities in the table above) and five
industrial facilities having an aggregate of 420,000 net rentable square feet.
43
The containerized storage operations may continue to adversely impact our future earnings and cash flows.
There can be no assurance as to the level of the containerized storage business’s expansion, level of gross rentals,
level of move-outs or profitability.
See “Discontinued Operations” below for a discussion of operating results of the Closed Facilities.
Tenant Reinsurance Operations: On December 31, 2001, we acquired PS Insurance Company, Ltd. (“PS
Insurance”) from a related party. PS Insurance reinsures policies against losses to goods stored by tenants in our
self-storage facilities. Effective January 1, 2002, the operations of PS Insurance are included in the income
statement under “Revenues – tenant reinsurance premiums” and “Cost of operations – tenant reinsurance.” The
tenant reinsurance business earned $19,947,000 in revenues for the year ended December 31, 2002 and incurred
$9,411,000 in operating expenses, generating a net operating profit of $10,536,000.
The level of tenant reinsurance revenues is largely dependent upon our occupancy level and move-in
activity. As of December 31, 2002, approximately 37% of our self-storage tenant base have such policies. New
insurance business comes from tenants who sign up for insurance as they move into our self-storage facilities.
We have outside third-party insurance coverage for losses from any individual event that exceeds a loss of
$500,000, to a limit of $10,000,000. Losses below these amounts are recorded as cost of operations for the tenant
reinsurance operations.
Equity in earnings of real estate entities: In addition to our ownership of equity interests in PSB, we had
general and limited partnership interests in seven limited partnerships at December 31, 2002 (PSB and the limited
partnerships are collectively referred to as the “Unconsolidated Entities”). Due to our limited ownership interest and
limited control of these entities, we do not consolidate the accounts of these entities for financial reporting purposes,
and account for such investments using the equity method.
Equity in earnings of real estate entities for the year ended December 31, 2002 consists of our pro rata
share of the Unconsolidated Entities based upon our ownership interest for the period. The following table sets
forth the significant components of equity in earnings of real estate entities:
Historical summary:
Year Ended December 31,
2002
2001
Year Ended December 31,
Dollar
Change
2001
(Amounts in thousands)
Property operations:
PSB ...............................................................
Development Joint Venture (1) .....................
Acquired partnerships (2)..............................
Other investments (3) ....................................
Depreciation:
PSB ...............................................................
Development Joint Venture (1) .....................
Acquired partnerships (2)..............................
Other investments (3) ....................................
Other: (4)
PSB (5)..........................................................
Development Joint Venture (1) .....................
Acquired partnerships (2)..............................
Other investments (3) ....................................
$63,233
288
-
6,759
70,280
(25,459)
(65)
-
(1,554)
(27,078)
(14,368)
-
-
1,054
(13,314)
$51,335
6,146
10,097
6,669
74,247
(17,534)
(2,064)
(3,779)
(1,719)
(25,096)
(11,440)
145
(441)
1,127
(10,609)
$11,898
(5,858)
(10,097)
90
(3,967)
(7,925)
1,999
3,779
165
(1,982)
(2,928)
(145)
441
(73)
(2,705)
$51,335
6,146
10,097
6,669
74,247
(17,534)
(2,064)
(3,779)
(1,719)
(25,096)
(11,440)
145
(441)
1,127
(10,609)
2000
$42,562
4,541
11,071
5,653
63,827
(14,672)
(1,887)
(3,056)
(2,210)
(21,825)
(3,940)
40
(934)
2,151
(2,683)
Dollar
Change
$8,773
1,605
(974)
1,016
10,420
(2,862)
(177)
(723)
491
(3,271)
(7,500)
105
493
(1,024)
(7,926)
Total equity in earnings of real estate entities ..
$29,888
$38,542
$(8,654)
$38,542
$39,319
$(777)
44
(1) Amounts include our pro rata share of the earnings for the Development Joint Venture. In 2002, we acquired a controlling
interest in this partnership and began to consolidate the operations of this partnership, and no longer account for our interest
in these partnerships using the equity method (see Note 3 to the consolidated financial statements).
(2) Amounts include our pro rata share of the earnings for two partnerships. In 2002, we acquired a controlling interest in and
began to consolidate the operating results of these partnerships. Accordingly, we no longer account for our interest in these
partnerships using the equity method (see Note 3 to the consolidated financial statements) effective January 1, 2002. In
addition, for 2000, these amounts include our pro rata share of earnings with respect to an investment prior to its disposal in
2000 and a partnership prior to its consolidation in 2000.
(3) Amounts include equity in earnings recorded for investments that have been held consistently throughout the three years
ended December 31, 2002.
(4) “Other” reflects our share of general and administrative expense, interest expense, interest income, and other non-property,
non-depreciation related operating results of these entities.
(5) These amounts include our pro-rata share of gain on disposition of real estate investments totaling $3,737,000 and
$3,210,000, respectively, during 2002 and 2000. These gains are included in the line item “Gain on disposition of real estate
and real estate investments” on our consolidated statements of income.
The decrease in equity in earnings of real estate entities when comparing 2002 to 2001, is caused by the
consolidation of the Development Joint Venture and two additional partnerships (as discussed in Note 3 to the
consolidated financial statements), partially offset by our pro-rata share of PSB’s gain on sale of real estate
investments totaling $3,737,000 for 2002.
Equity in earnings of PSB represents our pro rata share (approximately 44% at December 31, 2002) of the
earnings of PS Business Parks, Inc., a publicly traded real estate investment trust (American Stock Exchange symbol
“PSB”) organized by the Company on January 2, 1997. As of December 31, 2002, we owned 5,418,273 common
shares and 7,305,355 operating partnership units (units which are convertible into common shares on a one-for-one
basis) in PSB. At December 31, 2002, PSB owned and operated 14.4 million net rentable square feet of commercial
space located in nine states. PSB also manages approximately 992,000 net rentable square feet of commercial space
owned by the Company and affiliated entities at December 31, 2002 pursuant to property management agreements.
Accordingly, our future equity income from PSB will be dependent entirely upon PSB’s operating results.
PSB’s filings and selected financial information can be accessed through the Securities and Exchange Commission,
and on its website, www.psbusinessparks.com.
Equity in earnings of entities that we either no longer hold at December 31, 2002, or which were
consolidated in the three years ended December 31, 2002, are included in the line-item “Newly Consolidated and
Disposed Investments.”
On January 16, 2002, we acquired the remaining 70% ownership interest in the Development Joint Venture
for cash totaling approximately $153,078,000. As a result, we began consolidating the operating results of the
Development Joint Venture and no further equity in earnings will be recorded with respect to this entity for periods
after January 16, 2002. Effective January 1, 2002 (see Note 3 to the financial statements), we began consolidating
the operating results of two other partnerships and no longer record equity in these entity’s earnings with respect to
our investments in these partnerships. Effective September 15, 2001, we acquired the interest we didn’t own in a
partnership owning 13 real estate facilities for an aggregate of $81,169,000, and began consolidating the operating
results of this entity. During 2000, we disposed of an investment in a publicly-held real estate investment trust for
an aggregate of $47,875,000. Our earnings with respect our interests in these entities are included in the table above
in the line “Acquired Partnerships.” No further equity in earnings will be recorded with respect to these entities for
periods after their respective dates of consolidation or disposal.
45
The “Other Investments” includes our equity in earnings with respect to our pro-rata share of earnings with
respect to seven limited partnerships, for which we held an approximately consistent level of equity interest during
the three years ended December 31, 2002. These limited partnerships were formed by the Company during the
1980’s. The Company is the general partner in each limited partnership, and manages each of these facilities for a
management fee that is included in “interest and other income.” The limited partners consist of numerous individual
investors, including the Company, which throughout the 1990’s acquired units of limited partnership interests in
these limited partnerships in various transactions.
Our future earnings with respect to the “Other investments” will be dependent upon the operating results of
the 36 self-storage facilities that these entities own. The operating characteristics of these facilities are similar to
those of the Company’s self-storage facilities, and are subject to the same operational issues as the Consistent Group
of self-storage facilities as discussed above with respect to Self-Storage Operations. See Note 6 to the consolidated
financial statements for the operating results of these entities for the years ended December 31, 2002 and 2001..
Other Income and Expense Items
Interest and other income: Interest in other income includes (i) the net operating results from our third
party property management operations, (ii) the net operating results from our merchandise sales and consumer truck
rentals and (iii) interest income.
Interest and other income has decreased in 2002 as compared to 2001 principally as a result of lower cash
balances invested in interest bearing accounts, lower interest rates, and the reduction in income generated from
affiliated entities that were acquired by the Company. Interest and other income has increased in 2001 as compared
to 2000 principally as a result of higher average cash balances invested in interest bearing accounts and the
aforementioned nonrecurring other income recorded in 2001. The changes in average cash balances are primarily
due to the timing of investing proceeds from the issuance of equity securities into real estate assets.
Depreciation and amortization: Depreciation and amortization expense was $179,634,000 in 2002,
$166,178,000 in 2001 and $148,195,000 in 2000. Included in depreciation expense with respect to our real estate
facilities was $167,485,000 in 2002, $152,447,000 in 2001 and $134,629,000 in 2000; the increases are due to the
acquisition and development of additional real estate facilities in 1999 through 2001. Depreciation expense with
respect to other assets, primarily depreciation of equipment and containers associated with the containerized storage
operations, was $5,545,000 in 2002, $4,422,000 in 2001 and $4,257,000 in 2000. Amortization expense with respect
to intangible assets totaled $6,604,000 for the year ended December 31, 2002 and $9,309,000 for the years ended
December 31, 2001 and 2000, respectively.
Depreciation and amortization during 2002 with respect to real estate facilities acquired or developed
during 2002 amounted to $11,540,000 which was for a partial period for the time they were acquired until December
31, 2002, and we expect the annual depreciation expense with respect to these facilities for 2003 and forward will
approximate $14,398,000.
General and administrative expense: General and administrative expense was $15,619,000 in 2002,
$21,038,000 in 2001 and $21,306,000 in 2000. General and administrative costs for each year principally consist of
state income taxes, investor relation expenses, and corporate and executive salaries. In addition, general and
administrative expense includes expenses that vary depending upon the Company’s activity levels in certain areas,
such as overhead associated with the acquisition and development of real estate facilities, employee severance, and
product research and development expenditures.
During 2001 and 2000, we incurred higher levels of expenditures for product research, development
overhead, consulting fees, lease termination costs relating to our PSPUD business and employee severance costs.
Such costs totaled approximately $5,630,000 in 2001 and $5,963,000 in 2000. The reduction in general and
administrative expense during 2002 was largely due to the reduction in these types of expenditures.
46
We expect that the level of general and administrative expense in 2003 will approximate that experienced
in 2002.
Interest expense: Interest expense was $3,809,000 in 2002, $3,227,000 in 2001 and $3,293,000 in 2000.
Debt and related interest expense remain relatively low compared to our overall asset base. The increase in interest
expense in 2002 compared to 2001 and 2000 is principally the result of decreased capitalized interest. Capitalized
interest expense totaled $6,513,000 in 2002, $8,992,000 in 2001 and $9,778,000 in 2000 in connection with our
development activities.
The combined interest expense and capitalized interest was $10,322,000 in 2002, $12,219,000 in 2001 and
$13,071,000 in 2000.
We expect that our aggregate interest cost (interest expensed and capitalized interest combined) during
fiscal 2003 will continue to decline as a result of principal amortization. During fiscal 2003, scheduled principal
amortization approximates $39.8 million. The amount of interest which will be capitalized during fiscal 2003 will
be dependent on our development activities which we believe will be lower than what was incurred during 2002.
Minority interest in income: Minority interest in income represents the income allocable to equity interests
in Consolidated Entities, which are not owned by the Company. The following table summarizes minority interest
in income for each of the three years ended December 31, 2002:
Description
Minority interest in income for the year ended
December 31,
2001
December 31,
2002
December 31,
2000
Preferred partnership interests..................................
Consolidated Development Joint Venture (a) ..........
Newly Consolidated Partnerships (b).......................
Convertible Partnership Units (c).............................
Acquired minority interests (d) ................................
Other minority interests (e) ......................................
$
26,906
2,399
3,357
283
1,591
9,551
(in thousands)
31,737
$
1,074
-
359
3,250
9,595
$ 24,859
325
-
577
4,154
8,441
Total minority interests in income ...........................
$
44,087
$
46,015
$ 38,356
(a) These amounts reflect income allocated to the minority interests in the Consolidated Development Joint Venture.
Included in minority interest in income is $3,227,000, $2,386,000 and $25,000 in depreciation expense for the
years ended December 31, 2002, 2001, and 2000, respectively.
(b) These amounts reflect the minority interests in two partnerships that we began consolidating effective January 1,
2002, as described in Note 3 to the Company’s consolidated financial statements. Included in minority interest in
income for the year ended December 31, 2002 is $721,000 in depreciation expense.
(c) These amounts reflect the minority interests represented by the Convertible Partnership Units (see Note 9 to the
consolidated financial statements). Included in minority interest is $354,000, $308,000 and $377,000 in
depreciation expense for the years ended December 31, 2002, 2001, and 2000, respectively.
(d) These amounts reflect income allocated to minority interests that the Company acquired during the three years
ended December 31, 2002, and are therefore no longer outstanding at December 31, 2002. Included in minority
interest in income is $1,246,000, $2,272,000 and $3,273,000 in depreciation expense for the years ended
December 31, 2002, 2001, and 2000, respectively.
(e) These amounts reflect income allocated to minority interests that were outstanding consistently throughout the
three years ended December 31, 2002. Included in minority interest in income is $2,539,000, $2,881,000 and
$3,463,000 in depreciation expense for the year ended December 31, 2002, 2001, and 2000, respectively.
47
On March 17, 2000, one of our consolidated operating partnerships issued $240.0 million of 9.5% Series N
Cumulative Redeemable Perpetual Preferred Units. On March 29, 2000 the partnership issued $75.0 million of
9.125% Series O Cumulative Redeemable Perpetual Preferred Units and on August 11, 2000, issued $50.0 million
of 8.75% Series P Cumulative Redeemable Perpetual Preferred Units. In August 2001, we repurchased, at par, $30
million of 9.125% Series O Cumulative Redeemable Perpetual Preferred Units. In October 2001, we repurchased, at
par, $50 million of 8.75% Series P Cumulative Redeemable Perpetual Preferred Units. For the years ended
December 31, 2000, 2001, and 2002, the holders of our preferred partnership units were paid in aggregate
approximately $24,859,000, $31,737,000 and $26,906,000, respectively, in distributions and received a
corresponding allocation of minority interest in earnings for the respective period. We estimate that during 2003 we
will pay aggregate distributions totaling $26.9 million to these units with a corresponding allocation of income to
minority interest in earnings.
In November 1999, we formed a development joint venture (the “Consolidated Development Joint
Venture”) with a joint venture partner whose partners include an institutional investor and the Company’s Chairman
and former CEO, B. Wayne Hughes (“Mr. Hughes”). The Consolidated Development Joint Venture is funded solely
with equity capital consisting of 51% from the Company and 49% from the joint venture partner. Included in
minority interest in income for the years ended December 31, 2000, 2001, and 2002 is $325,000, $1,074,000, and
$2,399,000, respectively, representing our joint venture partner’s pro rata interest in the operations of the
Consolidated Development Joint Venture. The facilities in the entity are newly developed facilities that are all in the
fill-up phase. The increase in minority interest in income in 2002 and 2001 as compared to the preceding years with
respect to the Consolidated Development Joint Venture is due to the opening and fill-up of the facilities owned by
this entity. We expect that such minority interest in income will continue to increase during 2003 as the facilities
continue to fill-up and increase the earnings of this entity.
Newly Consolidated Partnerships reflect the minority interests in two partnerships that we began
consolidating effective January 1, 2002, as described in Note 3 to the consolidated financial statements. In addition,
as described in Note 8, during 2002 we recorded the pending sale of a partnership interest in the Newly
Consolidated Partnerships, and for all periods following the sale of this interest, income will be allocated to these
interests.
The acquired minority interests reflect interests in the consolidated entities that the Company acquired in
the three years ended December 31, 2002 and are therefore no longer outstanding. There will be no further income
allocated to these interests in 2003 and beyond.
Other minority interests reflect income allocated to minority interests that have maintained a consistent
level of interest throughout the three years ended December 31, 2002, comprised of investments in the Consolidated
Entities and the Operating Partnership Units described in Note 9 to the Company’s financial statements. The level
of income allocated to these interests in the future is dependent upon the operating results of the storage facilities
that these entities own, as well as any acquisitions of minority interests that the Company does in the future. We
recently mailed an information statement relating to the April 28, 2003 acquisition by the Company of all of the
remaining limited partnership interest not currently owned by the Company in PS Partners IV, Ltd., a partnership
which is consolidated with the Company, for an aggregate of $23,360,000. Included in minority interest in income
for the year ended December 31, 2002, with respect to these interests was approximately $1,412,000 including
$685,000 in depreciation expense. If completed, the transaction would have the effect of reducing minority interest
in income on a go forward basis. See Acquisition and Development of Facilities below.
Discontinued Operations: As described more fully in the Note 4 to the consolidated financial statements,
we implemented a business plan which included the closure of certain non-strategic containerized storage facilities
(the “Closed Facilities”). Also, we sold one of our commercial facilities to a third party for an aggregate $3.9
million in cash.
48
During 2002, in connection with the closure or planned closure of these facilities, we recorded asset
impairment losses with respect to the furniture, fixtures, and equipment totaling $6,187,000. In addition, lease
termination costs for the expected remaining lease liability following closure of the facilities were recorded in the
amount of $2,447,000.
The historical operations of the Closed Facilities (including the asset impairment losses and lease
termination costs) are classified as discontinued operations, with the rental income, cost of operations, and
depreciation expense with respect to these facilities for current and prior periods included in the line-item
“Discontinued Operations” on the income statement.
Following are the amounts with respect to the Closed Facilities and the commercial facility sold that are included in
Discontinued Operations.
Discontinued Operations:
Year Ended December 31,
Year Ended December 31,
2002
2001
Change
2001
2000
Change
(Dollar amounts in thousand)
Rental income (a):
Containerized storage facilities ......
Commercial properties....................
Total rental income ...................
$14,343
268
14,611
$13,474
460
13,934
Cost of operations (a):
Containerized storage facilities.........
15,274
Commercial properties......................
84
Depreciation and amortization (a):
Containerized storage facilities ........
Commercial properties.....................
Total expenses ...........................
1,907
107
17,372
13,088
111
1,767
116
15,082
$869
(192)
677
2,186
(27)
140
(9)
2,290
$13,474
460
13,934
$5,823
492
6,315
$7,651
(32)
7,619
13,088
111
1,767
116
15,082
6,696
125
657
115
7,593
6,392
(14)
1,110
1
7,489
Loss before charges ................................
(2,761)
(1,148)
(1,613)
(1,148)
(1,278)
(130)
Discontinued operation charges (b) ........
8,634
-
8,634
-
-
-
Net discontinued operations (c)..............
$(11,395)
$(1,148)
$(10,247)
$(1,148)
$(1,278)
$(130)
(a) These amounts represent the historical operations of the Closed Facilities and the commercial property sold. Amounts with
respect to these facilities for periods prior to 2002 were previously classified as containerized storage rental income,
containerized storage – cost of operations, and depreciation expense in the financial statements.
(b) Amount includes asset impairment charges totaling $6,187,000 and lease termination costs totaling $2,447,000.
(c) The net discontinued operations have resulted in reductions to our earnings per share of $0.09, $0.01 and $0.01 per diluted
common share for each of the three years ended December 31, 2002, 2001 and 2000, respectively.
Many of the Closed Facilities are in the process of closing which may take up to several months to
complete. We expect that these facilities will continue to generate operating losses until final closure.
49
Gain (loss) in disposition of real estate: In the year ended December 31, 2002, we recorded a net loss on
disposition of real estate of $2,541,000, as compared to a gain of $4,091,000 and $576,000, respectively, in 2001
and 2000. The net loss in 2002 is composed of a loss on disposition of land and a commercial facility totaling
$702,000 as described in Note 6, combined with a loss on disposition of partnership interests in the amount of
$1,839,000 as described in Note 9. The gain in 2001 is related to the disposition of two real estate facilities and a
parcel of land. The gain in 2000 is composed a $296,000 gain on the sale of eight storage facilities and two parcels
of land, and a $280,000 gain on the sale of investments.
Liquidity and Capital Resources
We believe that our internally generated net cash provided by operating activities will continue to be
sufficient to enable us to meet our operating expenses, capital improvements, debt service requirements and
distributions to shareholders for the foreseeable future.
Operating as a real estate investment trust (“REIT”), our ability to retain cash flow for reinvestment is
restricted. In order for us to maintain our REIT status, a substantial portion of our operating cash flow must be used
to make distributions to our shareholders (see “Requirement to Pay Distributions” below). However, despite the
significant distribution requirements, we have been able to retain a significant amount of our operating cash flow.
The following table summarizes our ability to fund distributions to the minority interest, capital improvements to
maintain our facilities, and distributions to our shareholders through the use of cash provided by operating activities.
The remaining cash flow generated is available to make both scheduled and optional principal payments on debt and
for reinvestment.
Net cash provided by operating activities ...........................................................
For the Year Ended December 31,
(Amount in thousands)
2001
$538,534
2002
$588,961
2000
$525,775
Allocable to minority interests (Preferred Units)................................................
Allocable to minority interests (common equity) ...............................................
(26,906)
(25,268)
(31,737)
(22,125)
(24,859)
(20,635)
Cash from operations allocable to our shareholders ...........................................
536,787
484,672
480,281
Capital improvements to maintain our facilities:
Storage facilities..............................................................................................
Commercial properties....................................................................................
Add back: minority interest share of capital improvements to maintain
facilities .......................................................................................................
Remaining operating cash flow available for distributions to our shareholders..
Distributions paid:
Preferred stock dividends...............................................................................
Equity Stock, Series A dividends...................................................................
Regular distributions to Common and Class B shareholders .........................
Special distributions to Common and Class B shareholders (a).....................
(25,952)
(1,041)
926
510,720
(148,926)
(21,501)
(221,299)
-
(34,436)
(1,042)
1,267
450,461
(117,979)
(19,455)
(162,481)
(42,115)
(32,410)
(613)
728
447,986
(100,138)
(11,042)
(115,460)
(78,673)
Cash available for principal payments on debt and reinvestment .......................
$118,994
$108,431
$142,673
(a) The special distribution for 2001 was declared in August 2001 and paid in September 2001. The special distribution for
2000 was declared in August 2000 and paid in September 2000. In each instance, the special distribution enabled the
Company to maintain its REIT status with respect to the distribution requirements.
Our financial profile is characterized by a low level of debt to total capitalization, increasing net income,
increasing cash flow from operations, and a conservative dividend payout ratio with respect to the common stock.
We expect to fund our growth strategies with cash on hand at December 31, 2002, internally generated retained cash
flows, and proceeds from issuing equity securities. In general, our current strategy is to continue to finance our
growth with permanent capital, either common or preferred equity. We have in the past used our $200 million line
50
of credit as temporary “bridge” financing, and repaid those amounts with internally generated cash flows and
proceeds from the placement of permanent capital. As of December 31, 2002, we had no outstanding borrowings
under our $200 million bank line of credit.
Over the past three years we have funded substantially all of our acquisitions with permanent capital (both
common and preferred securities). We have elected to use preferred securities as a form of leverage despite the fact
that the dividend rates of our preferred securities exceed the prevailing market interest rates on conventional debt.
We have chosen this method of financing for the following reasons: (i) under the REIT structure, a significant
amount of operating cash flow needs to be distributed to our shareholders making it difficult to repay debt with
operating cash flow alone, (ii) our perpetual preferred stock has no sinking fund requirement, or maturity date and
does not require redemption, all of which eliminate any future refinancing risks, (iii) after the end of a non-call
period, we have the option to redeem the preferred stock at any time, which in 2002 and 2001 enabled us to
effectively refinance higher coupon preferred stock with new preferred stock at lower rates, (iv) preferred stock does
not contain onerous covenants, thus allowing us to maintain significant financial flexibility, and (v) dividends on the
preferred stock can be applied to our REIT distribution requirements.
Our credit ratings on each of our series of Cumulative Preferred Stock by each of the three major credit
agencies are “Baa2” by Moody’s and BBB+ by both Standard & Poor’s and Fitch IBCA.
Our portfolio of real estate facilities remains substantially unencumbered. At December 31, 2002, we had
mortgage debt outstanding of $20.6 million (which encumbers real estate with a book value of $56.4 million) and
unsecured debt in the amount of $95.3 million, and real estate facilities with a book value of approximately $4.1
billion.
We believe that our size and financial flexibility enables us to access capital when appropriate. During
2002 and 2001, we completed the following capital raising activities (amounts are presented net of issuance costs):
Securities issued
Date issued
Cumulative
Preferred Stock
Equity Stock,
Series A
8.60% Cumulative Preferred Stock, Series Q
Public issuance of Equity Stock, Series A
Direct placement of Equity Stock, Series A
8.00% Cumulative Preferred Stock, Series R
7.875% Cumulative Preferred Stock, Series S
Direct placement of Equity Stock, Series A
7.625% Cumulative Preferred Stock, Series T
7.625% Cumulative Preferred Stock, Series U
7.500% Cumulative Preferred Stock, Series V
January 19, 2001
April 11, 2001
May 31, 2001
September 28, 2001
October 31, 2001
November 21, 2001
January 18, 2002
February 19, 2002
September 30, 2002
(in thousands)
$
$ 166,966
-
-
493,085
139,022
-
145,075
145,075
166,866
-
51,836
20,294
-
-
2,690
-
-
-
$ 1,256,089
$ 74,820
The net proceeds raised through the issuance of our Cumulative Preferred Stock, Series R and Series S in
2001, and Series V in 2002 allowed us to take advantage of favorable rate spreads. Accordingly, at our option, we
redeemed for cash our Cumulative Preferred Stock Series G, Series H, Series I in 2001 and Series A and Series J in
2002, each having higher coupon rates than either the Series R, Series S or Series V. In addition, during 2001 we
repurchased all of our outstanding Series P Partnership Preferred Units and a portion of our outstanding Series O
Partnership Preferred Units. These transactions, summarized below, represented a refinancing of a portion of our
permanent capital structure into lower coupon securities.
51
Security Redeemed or Repurchased
Date Redeemed or
Repurchased
Cumulative
Preferred Stock
Preferred
Partnership
Units
9.125% Cumulative Preferred Units, Series O
8 7/8% Cumulative Preferred Stock, Series G
8.45% Cumulative Preferred Stock, Series H
8.75% Cumulative Preferred Units, Series P
8 5/8% Cumulative Preferred Stock, Series I
10.0% Cumulative Preferred Units, Series A
8.0% Cumulative Preferred Stock, Series J
August 31, 2001
September 28, 2001
October 5, 2001
October 15, 2001
November 13, 2001
September 30, 2002
October 7, 2002
(in thousands)
$
-
172,525
168,775
-
100,025
45,643
150,018
$ 30,000
-
-
50,000
-
-
-
$ 636,986
$ 80,000
The Cumulative Preferred Stock amounts listed above include redemption cost of approximately $25,000
per redemption for 2001 and $18,000 per redemption for 2002.
We have called for redemption our 9.2% Senior Preferred Stock Series B which will be redeemed on
March 31, 2003. The aggregate redemption amount for this security is $25 per share or approximately $57.5 million
in the aggregate, plus accrued dividends.
Requirement to Pay Distributions: We have operated, and intend to continue to operate, in such a manner
as to qualify as a REIT under the Internal Revenue Code of 1986, but no assurance can be given that we will at all
times so qualify. To the extent that the Company continues to qualify as a REIT, we will not be taxed, with certain
limited exceptions, on the taxable income that is distributed to our shareholders, provided that at least 90% of our
taxable income is so distributed to our shareholders prior to filing of the Company’s tax return. We have satisfied
the REIT distribution requirement since 1980.
Aggregate dividends paid during 2002, totaled $148.9 million to the holders of our Cumulative Preferred
Stock, $209.1 million to the holders of our Common Stock, $12.2 million to the holders of our Class B Common
Stock and $21.5 million to the holders of our Equity Stock, Series A. Although we have not finalized the calculation
of our 2002 taxable income, we believe that the aggregate dividends paid in 2002 to our shareholders were designed
to enable us to continue to qualify as a REIT.
We estimate that the distribution requirements for fiscal 2003 with respect to our Cumulative Preferred
Stock outstanding, and assuming the redemption of Cumulative Preferred Stock, Series B, will be approximately
$144.2 million.
During 2002, we paid distributions totaling $26.9 million with respect to our Preferred Partnership Units.
We estimate the annual distributions requirements with respect to the preferred partnership units outstanding at
December 31, 2002 to be approximately $26.9 million.
For 2003, distributions with respect to the Common Stock and Equity Stock, Series A will be determined
based upon our REIT distribution requirements after taking into consideration distributions to the preferred
shareholders. We anticipate that, at a minimum, quarterly distributions per common share will remain at $0.45 per
common share (increased from $0.22 per common share during 2000 and in the first two quarters of 2001). For the
first quarter of 2003, a quarterly distribution of $0.45 per common share has been declared by our Board of
Directors. Prior to 2002, in addition to the regular quarterly dividends paid to our common shareholder, we also
paid special distributions. These special distributions were necessary to meet our distribution requirements in order
to maintain our REIT tax status. While we don’t expect to need a special distribution in 2003, the need to make a
special distribution is not determinable at this time and will depend in large part on our taxable income relative to
the distributions being paid to all of our shareholders.
With respect to the depositary shares of Equity Stock, Series A, we have no obligation to pay distributions
if no distributions are paid to the common shareholders. To the extent that we do pay common distributions in any
year, the holders of the depositary shares receive annual distributions equal to the lesser of (i) five times the per
52
share dividend on the common stock or (ii) $2.45. The depositary shares are noncumulative, and have no
preference over our Common Stock either as to dividends or in liquidation.
Capital Improvement Requirements: During 2003, we have budgeted approximately $25.0 million for
capital improvements. Capital improvements include major repairs or replacements to the facilities which keep the
facilities in good operation condition and maintain their visual appeal. Capital improvements do not include costs
relating to the development or expansion of facilities.
Debt Service Requirements: We do not believe we have any significant refinancing risks with respect to
our mortgage debt, all of which is fixed rate. At December 31, 2002, we had total outstanding notes payable of
approximately $115.9 million. See Note 7 to the consolidated financial statements for approximate principal
maturities of such borrowings. We anticipate that our retained operating cash flow will continue to be sufficient to
enable us to make scheduled principal payments. It is our current intent to fully amortize our debt as opposed to
refinance debt maturities with additional debt.
Acquisition and Development of Facilities: During 2002, we acquired nine self-storage facilities for
approximately $30.1 million. During 2001, we acquired one self-storage facility for approximately $3.5 million.
During 2000, we acquired a commercial facility and 12 storage facilities at an aggregate cost of approximately $67.1
million. Our low level of third party acquisitions over the past three years is not indicative of either the supply of
facilities offered for sale or our ability to finance the acquisitions, but is primarily due to prices sought by sellers and
our lack of desire to pay such prices. During fiscal 2003, we will continue to seek to acquire additional self-storage
facilities from third parties, however, it is difficult to estimate the amount of third party acquisitions we will
undertake.
On January 16, 2002, we acquired the remaining 70% interest in the Development Joint Venture for
approximately $153,078,000 in cash. The Development Joint Venture was formed in April 1997 with equity capital
consisting of 30% from the Company and 70% from an institutional investor, which owns 47 storage facilities
opened since 1997. This transaction was principally financed with the capital raised through the issuance of our
7.625% Cumulative Preferred Stock, Series T. On April 19, 2002, we acquired through a merger all of the
remaining limited partnership interest not currently owned by the Company in PS Partners V, Ltd., a partnership
which is consolidated with the Company. The acquisition cost consisted of approximately 533,796 shares
($20,054,000) of our common stock and approximately $12,815,000 in cash. On September 19, 2002, we acquired
through a merger all of the remaining limited partnership interest not currently owned by the Company in PS
Partners VI, Ltd., a partnership which is consolidated with the Company. The acquisition cost consisted of
approximately 557,812 shares ($17,850,000) of our common stock and approximately $12,347,000 in cash.
On September 15, 2000, we acquired the remaining ownership interests in an affiliated partnership, of
which we were the general partner, for an aggregate acquisition cost of $81.2 million. This partnership owned 13
self-storage facilities.
We recently mailed an information statement relating to the April 28, 2003 acquisition by the Company of
all of the 52,851 limited partnership units that it did not own in PS Partners IV, Ltd., a partnership which is
consolidated with the Company. The acquisition of the 52,851 units will be accomplished through a merger of a
subsidiary of the Company into the partnership and the conversion of the 52,851 units into either cash or common
stock of the Company. Each unit will be converted into the right to receive a value of $442 in our common stock or,
at the election of the unitholder, in cash. We expect that the cash portion of the transaction will be funded by
available cash on hand or, if necessary, borrowings on our line of credit.
In November 1999, we formed a second joint venture partnership for the development of approximately
$100 million of self-storage facilities. The venture is funded solely with equity capital consisting of 51% from us
and 49% from the joint venture partner. The term of the joint venture is 15 years. After six years, the joint venture
partner has the right to cause the Company to purchase the joint venture partner’s interest for an amount necessary to
provide them with a maximum return of 10.75% or less in certain circumstances. At December 31, 2002, this
development joint venture was fully committed having developed 22 facilities (approximately 1,413,000 net rentable
sq. ft.) for $108 million.
53
We currently have a development “pipeline” of 38 self-storage facilities, combination facilities, and
expansions to existing self-storage facilities with an aggregate estimated cost of approximately $199.8 million.
Approximately $87.5 million of development cost has been incurred as of December 31, 2002. We have acquired
the land for 36 of these projects, which have an aggregate estimated cost of approximately $188.6 million, and costs
incurred as of December 31, 2002 of approximately $86.7 million. The remaining 2 facilities represent identified
sites where we have an agreement in place to acquire the land, generally within one year. We anticipate that the
development of these projects will be funded solely by the Company.
The development and fill-up of these storage facilities is subject to significant contingencies such as obtaining
appropriate governmental approvals. We estimate that the amount remaining to be spent of approximately $112.2
million will be incurred over the next 18 – 24 months. The following table sets forth certain information with
respect to our development pipeline.
DEVELOPMENT PIPELINE SUMMARY
Number
of
projects
Net
rentable
sq. ft.
Total estimated
development
costs
Costs incurred
through
12/31/02
(Amounts in thousands)
Costs to
complete
1,155
$ 123,739
$
76,814
$
46,925
Facilities currently under construction:
Self-storage facilities
Expansions to existing self-storage
facilities
Facilities awaiting construction, where
land is acquired:
Self-storage facilities
Expansions of existing self-storage
facilities
Self-storage facilities awaiting
construction, where land has not yet been
acquired
Total Development Pipeline
16
1
17
4
15
19
2
38
69
1,224
6,203
129,942
29,007
29,602
58,609
272
661
933
123
2,800
79,614
6,161
964
7,125
3,403
50,328
22,846
28,638
51,484
11,209
777
10,432
2,280
$ 199,760
$
87,516
$ 112,244
Included in expansions above is approximately $13 million associated with the conversion of 701,000 net
rentable square feet of industrial space, previously used by the discontinued containerized facility operations, into
self-storage space.
In addition to the above projects, we have 9 parcels of land held for development with total costs of
approximately $17,807,000 at December 31, 2002. These parcels will either be developed or sold.
Stock Repurchase Program: The Company’s Board of Directors has authorized the repurchase from time
to time of up to 25,000,000 shares of the Company’s common stock on the open market or in privately negotiated
transactions. During 2001, we repurchased a total of 10,585,593 common shares, for a total aggregate cost of
approximately $276.9 million. From the inception of the repurchase program through December 31, 2002, we have
repurchased a total of 21,497,020 shares of common stock at an aggregate cost of approximately $535.9 million.
We have not repurchased any significant amounts of our common stock since January 2002.
ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
To limit our exposure to market risk, we principally finance our operations and growth with permanent
equity capital consisting either of common or preferred stock. At December 31, 2002, the Company’s debt as a
percentage of total shareholders’ equity (based on book values) was 2.8%.
54
Our preferred stock is not redeemable at the option of the holders. Except under certain conditions relating
to the Company’s qualification as a REIT, the Senior Preferred Stock is not redeemable by the Company prior to the
following dates: Series B – March 31, 2003, Series C – June 30, 1999, Series D – September 30, 2004, Series E –
January 31, 2005, Series F – April 30, 2005, Series K – January 19, 2004, Series L – March 10, 2004, Series M –
August 17, 2004, Series Q – January 19, 2006, Series R – September 28, 2006, Series S – October 31, 2006, Series
T – January 18, 2007, Series U – February 19, 2007 and Series V – September 30, 2007. On or after the respective
dates, each of the series of Senior Preferred Stock will be redeemable at the option of the Company, in whole or in
part, at $25 per share (or depositary share in the case of the Series K through Series V), plus accrued and unpaid
dividends.
Our market risk sensitive instruments include notes payable, which totaled $115,867,000 at December 31,
2002. All of our notes payable bear interest at fixed rates. See Note 7 to the consolidated financial statements for
terms, valuations and approximate principal maturities of the notes payable as of December 31, 2002.
ITEM 8.
Financial Statements and Supplementary Data
The financial statements of the Company at December 31, 2002 and December 31, 2001 and for each of the
three years in the period ended December 31, 2002 and the report of Ernst & Young LLP, Independent Auditors,
thereon and the related financial statement schedule, are included elsewhere herein. Reference is made to the Index
to Financial Statements and Schedules in Item 15.
ITEM 9.
Disagreements on Accounting and Financial Disclosure
Not applicable.
55
ITEM 10.
Directors and Executive Officers of the Registrant
PART III
The information required by this item with respect to directors is hereby incorporated by reference to the
material appearing in the Company’s definitive proxy statement filed in connection with the annual shareholders’
meeting to be held on May 8, 2003 (the “Proxy Statement”) under the caption “ Election of Directors.” Information
required by this item with respect to executive officers is provided in Item 4A of this report. See “Executive
Officers of the Company.”
ITEM 11.
Executive Compensation
The information required by this item is hereby incorporated by reference to the material appearing in the
Proxy Statement under the captions “Compensation” and “Compensation Committee Interlocks and Insider
Participation.”
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management
The information required by this item is hereby incorporated by reference to the material appearing in the
Proxy Statement under the captions “Election of Directors – Security Ownership of Certain Beneficial Owners” and
“Security Ownership of Management.”
The following table sets forth information as of December 31, 2002 on the Company’s equity
compensation plans:
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
Weighted
average exercise
price of
outstanding
options, warrants
and rights
Number of securities
remaining available
for future issuance
under equity
compensation plans
5,714,223
$25.77
4,188,523
225,001
$26.35
164,167
Equity compensation plans approved
by security holders
Equity compensation plans not
approved by security holders
The outstanding options granted under plans not approved by the Company’s shareholders were granted
under the Company’s 2001 Non-Executive/Non-Director Plan, which does not allow participation by the Company’s
executive officers and directors. The principal terms of this plan are as follows: (1) 500,000 shares of common
stock were authorized for grant, (2) this plan is administered by the Equity Awards Committee, except that grants in
excess of 100,000 shares to any one person requires approval by the Executive Equity Awards Committee, (3)
options are granted at fair market value on the date of grant, (4) options have a ten year term and (5) options vest
over three years in equal installments.
ITEM 13.
Certain Relationships and Related Transactions
The information required by this item is hereby incorporated by reference to the material appearing in the
Proxy Statement under the caption “Compensation Committee Interlocks and Insider Participation – Certain
Relationships and Related Transactions.”
56
ITEM 14.
Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information
required to be disclosed in reports the Company files and submits under the Exchange Act, is recorded, processed,
summarized and reported within the time periods specified in accordance with SEC guidelines and that such
information is communicated to the Company's management, including its Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure based on the definition of "disclosure
controls and procedures" in Rule 13a-14(c) of the Exchange Act. In designing and evaluating the disclosure controls
and procedures, management recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control objectives. Also, the Company has
investments in certain unconsolidated entities. As the Company does not control or manage these entities, its
disclosure controls and procedures with respect to such entities are substantially more limited than those it maintains
with respect to its consolidated subsidiaries.
Within 90 days prior to the date of this report, the Company carried out an evaluation, under the
supervision and with the participation of the Company's management, including the Company's Chief Executive
Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based upon this evaluation, the Company's Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. There
have been no significant changes in the Company's internal controls or in other factors that could significantly affect
the internal controls subsequent to the date of the Company’s evaluation.
57
ITEM 15.
Exhibits, Financial Statement Schedules and Reports on Form 8-K
a.
1. Financial Statements
PART IV
The financial statements listed in the accompanying Index to Financial Statements and Schedules
hereof are filed as part of this report.
2. Financial Statement Schedules
The financial statements schedules listed in the accompanying Index to Financial Statements and
Schedules are filed as part of this report.
3. Exhibits
See Index to Exhibits contained herein.
b.
Reports on Form 8-K
Not applicable.
c.
Exhibits:
See Index to Exhibits contained herein.
d.
Financial Statement Schedules
Not applicable.
58
PUBLIC STORAGE, INC.
INDEX TO EXHIBITS
(Items 15(a)(3) and 15(c))
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.15
Restated Articles of Incorporation. Filed with Registrant’s Registration Statement No. 33-54557 and
incorporated herein by reference.
Certificate of Determination for the 10% Cumulative Preferred Stock, Series A. Filed with Registrant’s
Registration Statement No. 33-54557 and incorporated herein by reference.
Certificate of Determination for the 9.20% Cumulative Preferred Stock, Series B. Filed with Registrant’s
Registration Statement No. 33-54557 and incorporated herein by reference.
Amendment to Certificate of Determination for the 9.20% Cumulative Preferred Stock, Series B. Filed
with Registrant’s Registration Statement No. 33-56925 and incorporated herein by reference.
Certificate of Determination for the 8.25% Convertible Preferred Stock. Filed with Registrant’s
Registration Statement No. 33-54557 and incorporated herein by reference.
Certificate of Determination for the Adjustable Rate Cumulative Preferred Stock, Series C. Filed with
Registrant’s Registration Statement No. 33-54557 and incorporated herein by reference.
Certificate of Determination for the 9.50% Cumulative Preferred Stock, Series D. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the 9.50% Cumulative Preferred Stock, Series D and
incorporated herein by reference.
Certificate of Determination for the 10% Cumulative Preferred Stock, Series E. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the 10% Cumulative Preferred Stock, Series E and
incorporated herein by reference.
Certificate of Determination for the 9.75% Cumulative Preferred Stock, Series F. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the 9.75% Cumulative Preferred Stock, Series F and
incorporated herein by reference.
Certificate of Determination for the Convertible Participating Preferred Stock. Filed with Registrant’s
Registration Statement No. 33-63947 and incorporated herein by reference.
Certificate of Amendment of Articles of Incorporation. Filed with Registrant’s Registration Statement No.
33-63947 and incorporated herein by reference.
Certificate of Determination for the 8-7/8% Cumulative Preferred Stock, Series G. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8-7/8% Cumulative Preferred Stock, Series G and incorporated herein by reference.
Certificate of Determination for the 8.45% Cumulative Preferred Stock, Series H. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8.45% Cumulative Preferred Stock, Series H and incorporated herein by reference.
Certificate of Determination for the Convertible Preferred Stock, Series CC. Filed with Registrant’s
Registration Statement No. 333-03749 and incorporated herein by reference.
Certificate of Correction of Certificate of Determination for the Convertible Participating Preferred Stock.
Filed with Registrant’s Registration Statement No. 333-08791 and incorporated herein by reference.
59
3.16
3.17
3.18
3.19
3.20
3.21
3.22
3.23
3.24
3.25
3.26
3.27
3.28
3.29
3.30
3.31
Certificate of Determination for 8-5/8% Cumulative Preferred Stock, Series I. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8-5/8% Cumulative Preferred Stock, Series I and incorporated herein by reference.
Certificate of Amendment of Articles of Incorporation. Filed with Registrant’s Registration Statement No.
333-18395 and incorporated herein by reference.
Certificate of Determination for Equity Stock, Series A. Filed with Registrant’s Form 10-Q for the
quarterly period ended June 30, 1997 and incorporated herein by reference.
Certificate of Determination for Equity Stock, Series AA. Filed with Registrant’s Form 10-Q for the
quarterly period ended September 30, 1999 and incorporated herein by reference.
Certificate Decreasing Shares Constituting Equity Stock, Series A. Filed with Registrant’s Form 10-Q for
the quarterly period ended September 30, 1999 and incorporated herein by reference.
Certificate of Determination for Equity Stock, Series A. Filed with Registrant’s Form 10-Q for the
quarterly period ended September 30, 1999 and incorporated herein by reference.
Certificate of Determination for 8% Cumulative Preferred Stock, Series J. Filed with Registrant’s Form 8-
A/A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of 8%
Cumulative Preferred Stock, Series J and incorporated herein by reference.
Certificate of Correction of Certificate of Determination for the 8.25% Convertible Preferred Stock. Filed
with Registrant’s Registration Statement No. 333-61045 and incorporated herein by reference.
Certificate of Determination for 8-1/4% Cumulative Preferred Stock, Series K. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8-1/4% Cumulative Preferred Stock, Series K and incorporated herein by reference.
Certificate of Determination for 8-1/4% Cumulative Preferred Stock, Series L. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8-1/4% Cumulative Preferred Stock, Series L and incorporated herein by reference.
Certificate of Determination for 8.75% Cumulative Preferred Stock, Series M. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8.75% Cumulative Preferred Stock, Series M and incorporated herein by reference.
Certificate of Determination for Equity Stock, Series AAA. Filed with Registrant’s Current Report on
Form 8-K dated November 15, 1999 and incorporated herein by reference.
Certificate of Determination for 9.5% Cumulative Preferred Stock, Series N. Filed with Registrant’s
Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference.
Certificate of Determination for 9.125% Cumulative Preferred Stock, Series O. Filed with Registrant’s
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2000 and incorporated herein by
reference.
Certificate of Determination for 8.75% Cumulative Preferred Stock, Series P. Filed with Registrant’s
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 and incorporated herein by
reference.
Certificate of Determination for 8.600% Cumulative Preferred Stock, Series, Q. Filed with Registrant’s
Form 8-A/A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8.600% Cumulative Preferred Stock, Series Q and incorporated herein by reference.
3.32
Amendment to Certificate of Determination for Equity Stock, Series A. Filed with Registrant’s Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2001 and incorporated herein by reference.
60
3.33
3.34
3.35
3.36
3.37
3.38
3.39
3.40
3.41
3.42
3.43
3.44
3.45
3.46
10.1
10.2
Certificate of Determination for 8.000% Cumulative Preferred Stock, Series R. Filed with Registrant’s
Form 8-A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of
8.000% Cumulative Preferred Stock, Series R and incorporated herein by reference.
Certificate of Determination for 7.875% Cumulative Preferred Stock, Series S. Filed with Registrant’s
Form 8-A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of
7.875% Cumulative Preferred Stock, Series S and incorporated herein by reference.
Certificate of Determination for 7.625% Cumulative Preferred Stock, Series T. Filed with Registrant’s
Form 8-A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of
7.625% Cumulative Preferred Stock, Series T and incorporated herein by reference.
Certificate of Determination for 7.625% Cumulative Preferred Stock, Series U. Filed with Registrant’s
Form 8-A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of
7.625% Cumulative Preferred Stock, Series U and incorporated herein by reference.
Amendment to Certificate of Determination for 7.625% Cumulative Preferred Stock, Series T. Filed with
Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002 and
incorporated herein by reference.
Certificate of Determination for 7.500% Cumulative Preferred Stock, Series V. Filed with Registrant’s
Form 8-A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of
7.500% Cumulative Preferred Stock, Series V and incorporated herein by reference.
Bylaws, as amended. Filed with Registrant’s Registration Statement No. 33-64971 and incorporated herein
by reference.
Amendment to Bylaws adopted on May 9, 1996. Filed with Registrant’s Registration Statement No. 333-
03749 and incorporated herein by reference.
Amendment to Bylaws adopted on June 26, 1997. Filed with Registrant’s Registration Statement No. 333-
41123 and incorporated herein by reference.
Amendment to Bylaws adopted on January 6, 1998. Filed with Registrant’s Registration Statement No.
333-41123 and incorporated herein by reference.
Amendment to Bylaws adopted on February 10, 1998. Filed with Registrant’s Current Report on Form 8-K
dated February 10, 1998 and incorporated herein by reference.
Amendment to Bylaws adopted on March 4, 1999. Filed with Registrant’s Current Report on Form 8-K
dated March 4, 1999 and incorporated herein by reference.
Amendment to Bylaws adopted on May 6, 1999. Filed with Registrants’ Form 10-Q for the quarterly period
ended March 31, 1999 and incorporated herein by reference.
Amendment to Bylaws adopted on November 7, 2002. Filed with Registrant’s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2002 and incorporated herein by reference.
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 and incorporated herein by reference.
Amended Management Agreement between Registrant and Public Storage Commercial Properties Group,
Inc. dated as of February 21, 1995. Filed with Registrant’s Annual Report on Form 10-K for the year
ended December 31, 1994 and incorporated herein by reference.
10.3
Loan Agreement between Registrant and Aetna Life Insurance Company dated as of July 11, 1988. Filed
with Registrant’s Current Report on Form 8-K dated July 14, 1988 and incorporated herein by reference.
61
10.4
10.5
10.6
Amendment to Loan Agreement between Registrant and Aetna Life Insurance Company dated as of
September 1, 1993. Filed with Registrant’s Annual Report on Form 10-K for the year ended December 31,
1993 and incorporated herein by reference.
Second Amended and Restated Credit Agreement by and among Registrant, Wells Fargo Bank, National
Association, as agent, and the financial institutions party thereto dated as of February 25, 1997. Filed with
Registrant’s Registration Statement No. 333-22665 and incorporated herein by reference.
Note Assumption and Exchange Agreement by and among Public Storage Management, Inc., Public
Storage, Inc., Registrant and the holders of the notes dated as of November 13, 1995. Filed with
Registrant’s Registration Statement No. 33-64971 and incorporated herein by reference.
10.7
Registrant’s 1990 Stock Option Plan. Filed with Registrant’s Annual Report on Form 10-K for the year
ended December 31, 1994 and incorporated herein by reference.
10.8* Registrant’s 1994 Stock Option Plan. Filed with Registrant’s Annual Report on Form 10-K for the year
ended December 31, 1997 and incorporated herein by reference.
10.9* Registrant’s 1996 Stock Option and Incentive Plan. Filed with Registrant’s Annual Report on Form 10-K
for the year ended December 31, 2000 and incorporated herein by reference.
10.10 Deposit Agreement dated as of December 13, 1995, among Registrant, The First National Bank of Boston,
and the holders of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a
Share of 8-7/8% Cumulative Preferred Stock, Series G. Filed with Registrant’s Form 8-A/A Registration
Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of 8-7/8% Cumulative
Preferred Stock, Series G and incorporated herein by reference.
10.11 Deposit Agreement dated as of January 25, 1996, among Registrant, The First national Bank of Boston, and
the holders of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a
Share of 8.45% Cumulative Preferred Stock, Series H. Filed with Registrant’s Form 8-A/A Registration
Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of 8.45% Cumulative
Preferred Stock, Series H and incorporated herein by reference.
10.12** Employment Agreement between Registrant and B. Wayne Hughes dated as of November 16, 1995. Filed
with Registrant’s Annual Report on Form 10-K for the year ended December 31,1995 and incorporated
herein by reference.
10.13 Deposit Agreement dated as of November 1, 1996, among Registrant, The First National Bank of Boston,
and the holders of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a
Share of 8-5/8% Cumulative Preferred Stock, Series I. Filed with Registrant’s Form 8-A/A Registration
Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of 8-5/8% Cumulative
Preferred Stock, Series I and incorporated herein by reference.
10.14 Limited Partnership Agreement of PSAF Development Partners, L.P. between PSAF Development, Inc.
and the Limited Partner dated as of April 10, 1997. Filed with Registrant’s Form 10-Q for the quarterly
period ended March 31, 1997 and incorporated herein by reference.
10.15 Deposit Agreement dated as of August 28, 1997 among Registrant, The First National Bank of Boston, and
the holders of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a
Share of 8% Cumulative Preferred Stock, Series J. Filed with Registrant’s Form 8-A/A Registration
Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of 8% Cumulative
Preferred Stock, Series J and incorporated herein by reference.
10.16 Agreement of Limited Partnership of PS Business Parks, L.P. dated as of March 17, 1998. Filed with PS
Business Parks, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998 and
incorporated herein by reference.
62
10.17 Deposit Agreement dated as of January 19, 1999 among Registrant, BankBoston, N.A. and the holders of
the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4%
Cumulative Preferred Stock, Series K. Filed with Registrant’s Form 8-A/A Registration Statement relating
to the Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4% Cumulative Preferred Stock,
Series K and incorporated herein by reference.
10.18 Agreement and Plan of Merger among Storage Trust Realty, Registrant and Newco Merger Subsidiary, Inc.
dated as of November 12, 1998. Filed with Registrant’s Registration Statement No. 333-68543 and
incorporated herein by reference.
10.19 Amendment No. 1 to Agreement and Plan of Merger among Storage Trust Realty, Registrant, Newco
Merger Subsidiary, Inc. and STR Merger Subsidiary, Inc. dated as of January 19, 1999. Filed with
registrant’s Registration Statement No. 333-68543 and incorporated herein by reference.
10.20 Amended and Restated Agreement of Limited Partnership of Storage Trust Properties, L.P., dated as of
March 12, 1999. Filed with Registrant’s Form 10-Q for the quarterly period ended June 30, 1999 and
incorporated herein by reference.
10.21* Storage Trust Realty 1994 Share Incentive Plan. Filed with Storage Trust Realty’s Annual Report on Form
10-K for the year ended December 31, 1997 and incorporated herein by reference.
10.22 Amended and Restated Storage Trust Realty Retention Bonus Plan effective as of November 12, 1998.
Filed with Registrant’s Registration Statement No. 333-68543 and incorporated herein by reference.
10.23 Deposit Agreement dated as of March 10, 1999 among Registrant, BankBoston, N.A. and the holders of the
depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4%
Cumulative Preferred Stock, Series L. Filed with Registrant’s Form 8-A/A Registration Statement relating
to the Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4% Cumulative Preferred Stock,
Series L and incorporated herein by reference.
10.24 Note Purchase Agreement and Guaranty Agreement with respect to $100,000,000 of Senior Notes of
Storage Trust Properties, L.P. Filed with Storage Trust Realty’s Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by reference.
10.25 Deposit Agreement dated as of August 17, 1999 among Registrant, BankBoston, N.A. and the holders of
the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of 8.75%
Cumulative Preferred Stock, Series M. Filed with Registrant’s Form 8-A/A Registration Statement relating
to the Depositary Shares Each Representing 1/1,000 of a Share of 8.75% Cumulative Preferred Stock,
Series M and incorporated herein by reference.
10.26 Limited Partnership Agreement of PSAC Development Partners, L.P. among PS Texas Holdings, Ltd., PS
Pennsylvania Trust and PSAC Storage Investors, L.L.C. dated as November 15, 1999. Filed with
Registrant’s Current Report on Form 8-K dated November 15, 1999 and incorporated herein by reference.
10.27 Agreement of Limited Liability Company of PSAC Storage Investors, L.L.C. dated as of November 15,
1999. Filed with Registrant’s Current Report on Form 8-K dated November 15, 1999 and incorporated
herein by reference.
10.28 Deposit Agreement dated as of January 14, 2000 among Registrant, BankBoston, N.A. and the holders of
the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of Equity
Stock, Series A. Filed with Registrant’s Form 8-A/A Registration Statement relating to the Depositary
Shares Each Representing 1/1,000 of a Share of Equity Stock, Series A and incorporated herein by
reference.
10.29 Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P. among PS
Texas Holdings, Ltd. and the Limited Partners dated as of March 29, 2000. Filed with Registrant’s Annual
Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference.
63
10.30 Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P. among PS
Texas Holdings, Ltd. and the Limited Partners dated as of August 11, 2000. Filed with Registrant’s
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 and incorporated herein by
reference.
10.31* Registrant’s 2000 Non-Executive/Non-Director Stock Option and Incentive Plan. Filed with Registrant’s
Registration Statement No, 333-52400 and incorporated herein by reference.
10.32 Deposit Agreement dated as of January 19, 2001 among Registrant, Fleet National Bank and the holders of
the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of 8.600%
Cumulative Preferred Stock, Series Q. Filed with Registrant’s Form 8-A/A Registration Statement relating
to the Depositary Shares Each Representing 1/1,000 of a Share of 8.600% Cumulative Preferred Stock,
Series Q and incorporated herein by reference.
10.33* Registrant’s 2001 Non-Executive/Non-Director Stock Option and Incentive Plan. Filed with Registrant’s
Registration Statement No. 333-59218 and incorporated herein by reference.
10.34* Registrant’s 2001 Stock Option and Incentive Plan. Filed with Registrant’s Registration Statement No.
333-59218 and incorporated herein by reference.
10.35 Deposit Agreement dated as of September 28, 2001 among Registrant, Fleet National Bank and the holders
of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of
8.000% Cumulative Preferred Stock, Series R. Filed with Registrant’s Form 8-A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share of 8.000% Cumulative Preferred
Stock, Series R and incorporated herein by reference.
10.36 Deposit Agreement dated as of October 31, 2001 among Registrant, Fleet National Bank and the holder of
the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of 7.875%
Cumulative Preferred Stock, Series S. Filed with Registrant’s Form 8-A Registration Statement relating to
the Depositary Shares Each Representing 1/1,000 of a Share of 7.875% Cumulative Preferred Stock, Series
S and incorporated herein by reference.
10.37 Credit Agreement by and among Registrant, Wells Fargo Bank, National Association, as agent, and the
financial institutions party thereto dated as of November 1, 2001. Filed with Registrant’s Quarterly Report
on Form 10-Q for the quarterly period ended September 30, 2001 and incorporated herein by reference.
10.38 Deposit Agreement dated as of January 18, 2002 among Registrant, Fleet National Bank and the holders of
the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of 7.625%
Cumulative Preferred Stock, Series T. Filed with Registrant's Form 8-A Registration Statement relating to
the Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative Preferred Stock, Series
T and incorporated herein by reference.
10.39 Deposit Agreement dated as of February 19, 2002 among Registrant, Fleet National Bank and the holders
of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of
7.625% Cumulative Preferred Stock, Series U. Filed with Registrant’s Form 8-A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative Preferred
Stock, Series U and incorporated herein by reference.
10.40 Deposit Agreement dated as of September 30, 2002 among Registrant, Fleet National Bank and the holders
of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share of
7.500% Cumulative Preferred Stock, Series V. Filed with Registrant’s Form 8-A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share of 7.500% Cumulative Preferred
Stock, Series V and incorporated herein by reference.
11
12
Statement Re: Computation of Ratio of Earnings Per Share. Filed herewith.
Statement Re: Computation of Ratio of Earnings to Fixed Charges. Filed herewith.
99.1
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed herewith.
64
99.2
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
99.3
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
99.4
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
99.5
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
*
**
Compensatory benefit plan.
Management contract.
65
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: March 28, 2003
PUBLIC STORAGE, INC.
By: /s/ Harvey Lenkin
Harvey Lenkin, President
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates
indicated.
Signature
/s/ Ronald L. Havner, Jr.
Ronald L. Havner, Jr.
/s/ Harvey Lenkin
Harvey Lenkin
/s/ Marvin M. Lotz
Marvin M. Lotz
B. Wayne Hughes, Jr.
/s/ John Reyes
John Reyes
/s/ B. Wayne Hughes
B. Wayne Hughes
/s/ Robert J. Abernethy
Robert J. Abernethy
/s/ Dann V. Angeloff
Dann V. Angeloff
/s/ William C. Baker
William C. Baker
Thomas J. Barrack, Jr.
/s/ Uri P. Harkham
Uri P. Harkham
/s/ Daniel C. Staton
Daniel C. Staton
Title
Vice-Chairman of the Board, Chief
Executive Officer and Director
(principal executive officer)
President and Director
Date
March 28, 2003
March 28, 2003
Senior Vice President and Director
March 28, 2003
March 28, 2003
March 28, 2003
March 28, 2003
March 28, 2003
March 28, 2003
March 28, 2003
March 28, 2003
Vice President and Director
Senior Vice President and
Chief Financial Officer
(principal financial officer and principal accounting officer)
Chairman of the Board
Director
Director
Director
Director
Director
Director
66
PUBLIC STORAGE, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND SCHEDULES
(Item 15 (a))
Report of Independent Auditors .........................................................................................................
Consolidated balance sheets as of December 31, 2002 and 2001.......................................................
For each of the three years in the period ended December 31, 2002:
Consolidated statements of income ....................................................................................................
Consolidated statements of shareholders’ equity ..............................................................................
Page
References
F-1
F-2
F-3
F-4
Consolidated statements of cash flows...............................................................................................
F-5 – F-6
Notes to consolidated financial statements.........................................................................................
F-7 – F- 37
Schedule:
III – Real estate and accumulated depreciation ..................................................................................
F-38 – F-74
All other schedules have been omitted since the required information is not present or not present in amounts
sufficient to require submission of the schedule, or because the information required is included in the consolidated
financial statements or notes thereto.
67
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Public Storage, Inc.
We have audited the accompanying consolidated balance sheets of Public Storage, Inc. as of December 31, 2002 and
2001, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three
years in the period ended December 31, 2002. Our audits also included the financial statement schedule listed in the
Index at Item 15(a). These financial statements and financial statement schedule are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these financial statements and financial
statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Public Storage, Inc. at December 31, 2002 and 2001, and the consolidated results
of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity
with accounting principles generally accepted in the United States. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.
Los Angeles, California
February 21, 2003
ERNST & YOUNG L L P
F-1
PUBLIC STORAGE, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2002 and 2001
(amounts in thousands, except share data)
ASSETS
Cash and cash equivalents................................................................................................
Real estate facilities, at cost:
Land .............................................................................................................................
Buildings......................................................................................................................
Accumulated depreciation............................................................................................
Construction in process................................................................................................
Land held for development ..........................................................................................
Investment in real estate entities ......................................................................................
Goodwill ..........................................................................................................................
Intangible assets, net ........................................................................................................
Notes receivable, including amounts due from related parties.........................................
Other assets......................................................................................................................
Total assets...............................................................................................
LIABILITIES AND SHAREHOLDERS’ EQUITY
Line of credit borrowings.................................................................................................
Notes payable...................................................................................................................
Accrued and other liabilities ............................................................................................
Total liabilities .................................................................................................
Minority interest:
Preferred partnership interests......................................................................................
Other partnership interests ...........................................................................................
Commitments and contingencies
Shareholders’ equity:
Cumulative Preferred Stock, $0.01 par value, 50,000,000 shares authorized,
9,258,486 shares issued (in series) and outstanding, (11,156,500 at December
31, 2001) at liquidation preference ..........................................................................
Common Stock, $0.10 par value, 200,000,000 shares authorized, 116,991,455 shares
issued and outstanding (114,961,915 at December 31, 2001)..................................
Equity Stock, Series A, $0.01 par value, 200,000,000 shares authorized, 8,776.102
shares issued and outstanding ..................................................................................
Class B Common Stock, $0.10 par value, 7,000,000 shares authorized and issued.....
Paid-in capital ..............................................................................................................
Cumulative net income ................................................................................................
Cumulative distributions paid ......................................................................................
Total shareholders’ equity................................................................................
Total liabilities and shareholders’ equity..................................................
December 31,
2002
December 31,
2001
$
103,124
$
49,347
1,304,881
3,683,645
4,988,526
(987,546)
4,000,980
87,516
17,807
4,106,303
329,679
78,204
117,893
24,324
84,135
4,843,662
-
115,867
129,327
245,194
285,000
154,499
$
$
1,165,111
3,265,943
4,431,054
(819,932)
3,611,122
121,181
30,001
3,762,304
479,300
78,204
124,497
59,344
72,883
4,625,879
25,000
143,552
93,143
261,695
285,000
169,601
$
$
1,817,025
1,540,150
11,699
11,496
-
700
2,371,194
2,030,007
(2,071,656)
4,158,969
4,843,662
$
-
700
2,325,898
1,711,269
(1,679,930)
3,909,583
4,625,879
$
See accompanying notes.
F-2
PUBLIC STORAGE, INC.
CONSOLIDATED STATEMENTS OF INCOME
For each of the three years in the period ended December 31, 2002
(amounts in thousands, except per share data)
Revenues:
Rental income:
Self-storage facilities.......................................................................
Commercial properties ....................................................................
Containerized storage facilities .......................................................
Tenant reinsurance premiums...............................................................
Interest and other income .....................................................................
$
Expenses:
Cost of operations:
Storage facilities..............................................................................
Commercial properties ....................................................................
Containerized storage facilities .......................................................
Tenant reinsurance ..........................................................................
Depreciation and amortization ..............................................................
General and administrative ...................................................................
Interest expense.....................................................................................
Income before equity in earnings of real estate entities, minority
interest, discontinued operations and gain (loss) on disposition of real
estate and real estate investments .........................................................
Equity in earnings of real estate entities (including the Company’s pro-
rata share of gain on sale of real estate investments in the amount of
$3,737,000 in 2002 and $3,210,000 in 2000) .......................................
Minority interest in income:
Preferred partnership interests ..............................................................
Other partnership interests ....................................................................
Net income before discontinued operations and gain (loss) on
disposition of real estate .......................................................................
Discontinued operations (Note 4).............................................................
Gain (loss) on disposition of real estate and real estate investments .......
2002
2001
2000
763,287
11,781
37,776
19,947
8,661
841,452
250,957
4,462
30,687
9,411
179,634
15,619
3,809
494,579
$
721,662
12,070
34,212
-
14,225
782,169
229,211
3,861
29,916
-
166,178
21,038
3,227
453,431
$
653,110
10,849
32,091
-
18,836
714,886
210,462
3,701
31,102
-
148,195
21,306
3,293
418,059
346,873
328,738
296,827
29,888
(26,906)
(17,181)
332,674
(11,395)
(2,541)
38,542
(31,737)
(14,278)
321,625
(1,148)
4,091
39,319
(24,859)
(13,497)
297,790
(1,278)
576
Net income ...............................................................................................
$
318,738
$
324,208
$
297,088
Net income allocation:
Allocable to preferred shareholders......................................................
Allocable to Equity Stock, Series A .....................................................
Allocable to common shareholders.......................................................
$
$
148,926
21,501
148,311
318,738
$
$
117,979
19,455
186,774
324,208
$
$
100,138
11,042
185,908
297,088
Net income per common share:
Basic.........................................................................................................
Diluted......................................................................................................
Net income per common share, prior to discontinued operations:
Basic.........................................................................................................
Diluted......................................................................................................
Basic weighted average common shares outstanding ...............................
Diluted weighted average common shares outstanding ............................
$1.21
$1.19
$1.30
$1.28
123,005
124,571
$1.53
$1.51
$1.54
$1.52
122,310
123,577
$1.41
$1.41
$1.42
$1.42
131,566
131,657
See accompanying notes.
F-3
PUBLIC STORAGE, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For each of the three years in the period ended December 31, 2002
(Amounts in thousands, except share and per share amounts)
Cumulative
Preferred
Stock
Common
Stock
Class B
Common
Stock
$
12,671
-
50
(351)
-
-
-
-
-
12,370
Balances at December 31, 1999................................................................ $ 1,155,150
-
-
-
-
-
Issuance of Equity Stock, Series A (5,635.602 shares)...........................
Issuance of Common Stock (498,451 shares) ........................................
Repurchase of Common Stock (3,491,600 shares) ................................
Issuance costs: Preferred operating partnership units (Note 8) ...............
Net income .............................................................................................
Distributions to shareholders:
$
Cumulative Preferred Stock................................................................
Equity Stock, Series A........................................................................
Common Stock ($1.48 per share) .......................................................
Balances at December 31, 2000................................................................
Issuance of Cumulative Preferred Stock; Series Q (6,900 shares), Series
R (20,400 shares) and Series S (5,750 shares) ....................................
Redemption of Cumulative Preferred Stock; Series G (6,900 shares),
Series H (6,750 shares) and Series I (4,000 shares) ............................
Issuance of Equity Stock, Series A (3,140.500 shares)...........................
Issuance of Common Stock (1,843,634 shares) .....................................
Repurchase of Common Stock (10,585,593 shares) ..............................
Issuance of Put Option (Note 9) ............................................................
Net income .............................................................................................
Distributions to shareholders:
Cumulative Preferred Stock................................................................
Equity Stock, Series A........................................................................
Common Stock ($1.69 per share) .......................................................
Balances at December 31, 2001................................................................
Issuance of Cumulative Preferred Stock; Series T (6,000 shares), Series
U (6,000 shares) and Series V (6,900 shares) .....................................
Redemption of Cumulative Preferred Stock; Series A (1,825,000
shares) and Series J (6,000 shares) .....................................................
Issuance of Common Stock (2,040,540 shares) ......................................
Repurchase of Common Stock (11,000 shares) ......................................
Stock Option expense .............................................................................
Net income .............................................................................................
Distributions to shareholders:
-
-
-
1,155,150
826,250
-
(441,250)
-
-
-
-
-
-
-
-
1,540,150
472,500
(195,625)
-
-
-
-
-
-
184
(1,058)
-
-
-
-
-
11,496
-
-
204
(1)
-
-
700
-
-
-
-
-
-
-
-
700
-
-
-
-
-
-
-
-
-
-
700
-
-
-
-
-
-
Paid-in
Capital
Cumulative
Net Income
$ 2,463,193 $ 1,089,973
-
-
-
-
297,088
113,354
11,387
(77,448)
(3,750)
-
Cumulative
Distributions
$ (1,032,587)
-
-
-
-
-
Total
Shareholders’
Equity
$ 3,689,100
113,354
11,437
(77,799)
(3,750)
297,088
-
-
-
2,506,736
-
-
-
1,387,061
(100,138)
(11,042)
(194,133)
(1,337,900)
(27,177)
-
(75)
74,820
46,487
(275,803)
910
-
-
-
-
2,325,898
-
-
-
-
-
324,208
-
-
-
1,711,269
(15,484)
-
(36)
61,033
(380)
163
-
-
-
-
-
318,738
-
-
-
-
-
-
-
(117,979)
(19,455)
(204,596)
(1,679,930)
-
-
-
-
-
-
(100,138)
(11,042)
(194,133)
3,724,117
799,073
(441,325)
74,820
46,671
(276,861)
910
324,208
(117,979)
(19,455)
(204,596)
3,909,583
457,016
(195,661)
61,237
(381)
163
318,738
(148,926)
(21,501)
(12,222)
(209,077)
$ 4,158,969
Cumulative Preferred Stock................................................................
Equity Stock, Series A........................................................................
Class B Common Stock ......................................................................
Common Stock ($1.80 per share) .......................................................
-
-
-
-
Balances at December 31, 2002................................................................ $ 1,817,025
-
-
-
-
11,699
$
$
-
-
-
-
700
-
-
-
-
$ 2,371,194 $ 2,030,007
-
-
-
-
(148,926)
(21,501)
(12,222)
(209,077)
$ (2,071,656)
See accompanying notes.
F-4
PUBLIC STORAGE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For each of the three years in the period ended December 31, 2002
(amounts in thousands)
Cash flows from operating activities:
Net income................................................................................................................. $ 318,738
Adjustments to reconcile net income to net cash provided by operating
$ 324,208
$ 297,088
2002
2001
2000
activities:
Gain included in equity in earnings of real estate investments ..............................
Loss (gain) on disposition of real estate and real estate investments .....................
Depreciation and amortization ...............................................................................
Depreciation included in equity in earnings of real estate entities .........................
Depreciation, impairment losses, and other items associated with
discontinued operations (Note 4) .......................................................................
Minority interest in income....................................................................................
Other operating activities.......................................................................................
Total adjustments...............................................................................................
Net cash provided by operating activities ..........................................................
Cash flows from investing activities:
Principal payments received on mortgage notes receivable...................................
Issuance of notes receivable to affiliates................................................................
Business combinations (Note 3) ............................................................................
Capital improvements to real estate facilities .......................................................
Construction in process..........................................................................................
Acquisition of minority interests............................................................................
Acquisition of real estate facilities.........................................................................
Acquisition of investments in real estate entities ...................................................
Proceeds from the sale of real estate facilities and real estate investments ............
Other investing activities .......................................................................................
Net cash used in investing activities ..................................................................
(3,737)
2,541
179,634
27,078
10,648
44,087
9,972
270,223
588,961
35,513
-
(139,680)
(26,993)
(101,110)
(27,544)
(30,117)
(33,956)
15,209
(14,786)
(323,464)
Cash flows from financing activities:
(25,000)
Net borrowings on line of credit ............................................................................
(27,685)
Principal payments on notes payable .....................................................................
23,333
Net proceeds from the issuance of Common Stock ...............................................
457,016
Net proceeds from the issuance of Cumulative Preferred Stock ............................
-
Net proceeds from the issuance of Equity Stock, Series A ....................................
-
Net proceeds from the issuance of preferred partnership units ..............................
-
Issuance of Put Option (Note 9).............................................................................
(381)
Repurchase of Common Stock...............................................................................
-
Repurchase of preferred partnership units .............................................................
(195,661)
Redemption of Cumulative Preferred Stock ..........................................................
(391,726)
Distributions paid to shareholders..........................................................................
(52,174)
Distributions paid to minority interests..................................................................
558
Investment by minority interests............................................................................
(211,720)
Net cash used in financing activities..................................................................
53,777
Net increase (decrease) in cash and cash equivalents ....................................................
Cash and cash equivalents at the beginning of the year .................................................
49,347
Cash and cash equivalents at the end of the year ........................................................... $ 103,124
$
-
(4,091)
166,178
25,096
1,883
46,015
(20,755)
214,326
538,534
2,199
(35,000)
6,276
(35,478)
(184,290)
(11,841)
(3,503)
(55,468)
19,936
(8,889)
(306,058)
25,000
(12,451)
15,857
799,073
74,820
-
910
(276,861)
(80,000)
(441,325)
(342,030)
(53,862)
18,273
(272,596)
(40,120)
89,467
49,347
(3,210)
(576)
148,195
21,825
772
38,356
23,325
228,687
525,775
7,650
(11,400)
(66,776)
(33,023)
(232,918)
(31,271)
(62,938)
(78,356)
58,319
(14,751)
(465,464)
-
(11,335)
4,608
-
68,318
361,250
-
(77,799)
-
-
(343,388)
(45,494)
17,871
(25,969)
34,342
55,125
89,467
$
See accompanying notes.
F-5
PUBLIC STORAGE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For each of the three years in the period ended December 31, 2002
(amounts in thousands)
(Continued)
2002
2001
2000
Supplemental schedule of non cash investing and financing activities:
Business combinations (Note 3):
Real estate facilities .............................................................................
Investment in real estate entities ..........................................................
Other assets ..........................................................................................
Accrued and other liabilities ................................................................
Minority interest...................................................................................
Goodwill ..............................................................................................
$(330,426)
160,236
(8,187)
23,891
14,806
-
$
-
-
(4,538)
6,993
-
(26,993)
$ (82,163)
14,393
(183)
1,177
-
-
Acquisition of real estate facilities in exchange for minority interests,
common stock, and the reduction of investment in real estate entities ....
Minority interest acquired in exchange for the sale of real estate facilities
Cancellation of mortgage notes receivable to acquire real estate facilities .
Reduction of investment in real estate entities in exchange for real estate
facilities ...................................................................................................
Disposition of real estate facilities in exchange for notes receivable, other
assets, and investment in real estate entities ............................................
Notes receivable issued in connection with real estate dispositions............
Disposition of minority interest in exchange for other assets:
Other assets ..........................................................................................
Minority interest...................................................................................
Acquisition of minority interest in exchange for common stock:
Real estate facilities .............................................................................
Minority interest...................................................................................
Distributions payable ..................................................................................
Exchange of Cumulative Preferred Stock, Series B for Cumulative
Preferred Stock, Series T:
Reduction in Cumulative Preferred Stock, Series B...........................
Increase in Cumulative Preferred Stock, Series T ..............................
Issuance of Common Stock.........................................................................
In connection with business combinations...........................................
To acquire minority interests and real estate........................................
Issuance of Equity Stock, Series A in connection with special distribution
to common shareholders and in connection with acquisition of real
estate facilities .........................................................................................
-
-
-
-
493
(493)
(1,450)
3,289
(39,780)
(25,668)
-
(2,150)
2,150
-
37,904
-
-
-
-
16,150
(305)
-
-
-
-
-
-
-
30,814
-
(19,281)
(6,427)
-
3,144
20,265
(3,690)
-
-
-
(22,988)
(82,086)
-
-
-
6,829
-
-
45,037
See accompanying notes.
F-6
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
1.
Description of the business
Public Storage, Inc. (the “Company”) is a California corporation, which was organized in 1980. We
are a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) whose principal
business activities include the acquisition, development, ownership and operation of self-storage facilities which
offer storage spaces for lease, usually on a month-to-month basis, for personal and business use. In addition, to
a much lesser extent, we have interests in commercial properties, containing commercial and industrial rental
space, and interests in facilities that lease storage containers.
We invest in real estate facilities by acquiring wholly owned facilities or by acquiring interests in real
estate entities which own facilities. At December 31, 2002, we had direct and indirect equity interests in 1,403
storage facilities located in 37 states and operating under the “Public Storage” name. We also have direct and
indirect equity interests in approximately 16.1 million net rentable square feet of commercial space located in
11 states.
2.
Summary of significant accounting policies
Basis of presentation
The consolidated financial statements include the accounts of the Company and 33 controlled entities
(the “Consolidated Entities”). Collectively, the Company and the Consolidated Entities own a total of 1,376
real estate facilities, consisting of 1,367 self-storage facilities, six containerized storage facilities and three
commercial properties.
At December 31, 2002, we had equity investments in seven limited partnerships in which we do not
have a controlling interest. These limited partnerships collectively own 36 self-storage facilities, which are
managed by the Company. In addition, we own approximately 44% of the common equity of PS Business
Parks, Inc. (“PSB”), which owns and operates 14.4 million net rentable square feet of commercial space as of
December 31, 2002. We do not control these entities, accordingly, our investments in these limited partnerships
and PSB are accounted for using the equity method.
Certain amounts previously reported have been reclassified to conform to the December 31, 2002
presentation, including Discontinued Operations (see Note 4).
Use of estimates
The preparation of the consolidated financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ
from those estimates.
Income taxes
For all taxable years subsequent to 1980, the Company qualified and intends to continue to qualify as a
REIT, as defined in Section 856 of the Internal Revenue Code. As a REIT, we are not taxed 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 2002, 2001 and 2000; accordingly, no provision for income taxes has been made in
the accompanying financial statements.
F-7
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Financial instruments
The methods and assumptions used to estimate the fair value of financial instruments is described
below. 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.
For purposes of financial statement presentation, we consider all highly liquid debt instruments
purchased with a maturity of three months or less to be cash equivalents.
Due to the short period to maturity of our cash and cash equivalents, accounts receivable, and other
financial assets included in other assets, and accrued and other liabilities, the carrying values as presented on the
consolidated balance sheets are reasonable estimates of fair value. The carrying amount of notes receivable
approximates fair value because the applicable interest rates approximates market rates for these loans. Notes
receivable were all current at December 31, 2002. A comparison of the carrying amount of notes payable to
their estimated fair value is included in Note 8, “Notes Payable.”
Financial assets that are exposed to credit risk consist primarily of cash and cash equivalents, accounts
receivable, and notes receivable. Cash and cash equivalents, which consist of short-term investments, including
commercial paper, are only invested in entities with an investment grade rating. Notes receivable are secured by
real estate facilities that we believe are valued (unaudited) in excess of the related note receivable. Accounts
receivable from customers are a component of other assets, and are not a significant component of total assets.
Included in cash and cash equivalents at December 31, 2002 is $11,423,000 held by STOR-Re Mutual
Insurance Company, Inc. (“STOR-Re”), a newly consolidated entity (see Note 3). Insurance and other
regulations place significant restrictions on our ability to withdraw these funds for purposes other than
insurance activities.
Real estate facilities
Real estate facilities are recorded at cost. Costs associated with the acquisition, 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.
Expenditures for repairs and maintenance are charged to expense when incurred. Depreciation is computed
using the straight-line method over the estimated useful lives of the buildings and improvements, which are
generally between 5 and 25 years.
Evaluation of asset impairment
In August 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial
Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS
No. 144”). In June 2001, the FASB issued Statement of Financial Accounting Standards No. 142, “Goodwill
and Other Intangible Assets” (“SFAS No. 142”). We adopted both of these statements effective January 1,
2002.
F-8
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
With respect to goodwill, we evaluate impairment annually through a two-step process. In the first
step, if the fair value of the reporting unit to which the goodwill applies is equal to or greater than the carrying
amount of the assets of the reporting unit, including the goodwill, the goodwill is considered unimpaired and the
second step is unnecessary. If, however, the carrying amount is less than the fair value of the reporting unit, the
second step is performed. In this test, we compute the implied fair value of the goodwill based upon the
allocations that would be made to the goodwill, other assets and liabilities of the reporting unit if a business
combination transaction were consummated at the fair value of the reporting unit. An impairment loss is
recorded to the extent that the implied fair value of the goodwill is less than the goodwill’s carrying amount.
No impairment of our goodwill was identified in our annual evaluation.
With respect to other long-lived assets, we evaluate such assets on a quarterly basis. We first evaluate
these assets for indicators of impairment such as a) a significant decrease in the market price of a long-lived
asset, b) a significant adverse change in the extent or manner in which a long-lived asset is being used or in its
physical condition, c) a significant adverse change in legal factors or the business climate that could affect the
value of the long-lived asset, d) an accumulation of costs significantly in excess of the amount originally
projected for the acquisition or construction of the long-lived asset, or e) a current-period operating or cash flow
loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates
continuing losses associated with the use of the long-lived asset. When any such indicators of impairment are
noted, we compare the carrying value of these assets to the future estimated undiscounted cash flows
attributable to these assets. If the asset’s recoverable amount is less than the carrying value of the asset, then an
impairment charge is booked for the excess of carrying value over the asset’s fair value.
Any long-lived assets which we expect to sell or dispose of prior to their previously estimated useful
life are stated at the lower of their estimated net realizable value or their carrying value (less cost to sell), and
are evaluated throughout the sales process for impairment.
Impairments were identified with respect to our other long-lived assets with respect to Discontinued
Operations as described further in Note 4. In addition, our evaluations identified impairments with respect to
machinery and equipment that is no longer required for the continuing containerized storage operations, and
accordingly an asset impairment charge of $750,000 was recorded for the year ended December 31, 2002. No
other impairments were identified.
Accounting for Employee Stock Options
We utilize the Fair Value Method (described below) of accounting for our employee stock options
issued after December 31, 2001, and utilize the APB 25 Method (described below) for employee stock options
issued prior to January 1, 2002. Accordingly, a total of $163,000 in related compensation expense was recorded
in the year ended December 31, 2002 and included in general and administrative expense. See Note 12 for a
full discussion of our accounting with respect to employee stock options.
Other assets
Other assets primarily consist of furniture, fixtures, equipment, and other such assets associated with
the containerized storage operations, system development and computer software costs, assets associated with
the truck rental business, accounts receivable, and prepaid expenses. Accounts receivable due from tenants are
net of allowances for estimated doubtful accounts.
F-9
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Other assets includes assets utilized in our containerized storage business which totaled $20,275,000
and $30,699,000 at December 31, 2002 and 2001, respectively. The carrying amounts are net of accumulated
depreciation and, in the case of the amount at December 31, 2002, net of asset impairment charges. As
discussed in Note 4, during 2002 an impairment charge of $6,187,000 was recorded with respect to assets used
in the containerized storage operations. In addition, included in cost of operations – containerized storage is an
impairment charge of $750,000 with respect to assets used in the continuing containerized storage operations.
Included in depreciation and amortization expense for 2002, 2001 and 2000 is $5,545,000, $4,422,000,
and $4,257,000 respectively, related to depreciation of other assets. Included in discontinued operations for
2002, 2001, and 2000, respectively, is depreciation expense of $1,322,000 and $1,515,000, and $544,000
respectively, related to depreciation of furniture, fixtures, and equipment of the discontinued operations of the
containerized storage business.
Other assets at December 31, 2002 also includes investments totaling $13,801,000 in held to maturity
debt securities owned by STOR-Re (see Note 3) stated at amortized cost, which approximates fair value.
Accrued and other liabilities
Accrued and other liabilities consist primarily of trade payables, real and personal property tax
accruals, accrued interest, and losses and loss adjustment liabilities, as discussed below.
STOR-Re (see Note 3), provides limited property and liability insurance coverage to the Company and
affiliates of the Company. This entity accrues liabilities for losses and loss adjustment expense, which at
December 31, 2002 totaled $22,911,000. PS Insurance Company, Ltd. reinsures policies against claims for
losses to goods stored by tenants in our self-storage facilities (see Note 3). This entity accrues liabilities for
losses and loss adjustment expense, which at December 31, 2002 totaled $2,135,000.
These liabilities for losses and loss adjustment expenses include an amount determined from loss
reports and individual cases and an amount, based on recommendations from an outside actuary using a
frequency and severity method, for losses incurred but not reported. Determining the liability for unpaid losses
and loss adjustment expense is based upon estimates and while we believe that the amount is adequate, the
ultimate liability may be in excess of or less than the amounts provided. The methods for making such
estimates and for establishing the resulting liability are continually reviewed.
The Company, Stor-RE, and its affiliates’ maximum aggregate annual exposure for losses that are
below the deductibles set forth in the third-party insurance contracts, assuming multiple significant events
occur, is approximately $30 million. In addition, if losses exhaust the third-party insurers’ limit of coverage of
$125,000,000 for property coverage and $101,000,000 for general liability, our exposure could be greater.
These limits are higher than estimates of maximum probable losses that could occur from individual
catastrophic events (i.e., earthquake and wind damage) determined in recent engineering and actuarial studies.
PS Insurance Company, Ltd. has outside third-party insurance coverage for losses from any individual
event that exceeds a loss of $500,000, to a limit of $10,000,000. Losses below the third-party insurers’
deductible amounts are accrued as cost of operations for the tenant reinsurance operations.
Intangible assets and goodwill
Intangible assets consist of property management contracts ($165,000,000) and the excess of the
acquisition cost over the fair value of net tangible and identifiable intangible assets or “goodwill” ($94,719,000)
acquired in business combinations.
F-10
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Prior to January 1, 2002, we amortized goodwill using the straight-line method over 25 years.
Goodwill on our balance sheet has an indeterminate life and, in accordance with the provisions of Statement of
Financial Accounting Standards No. 142, amortization of goodwill ceased effective January 1, 2002. Our other
intangibles continue to be amortized over 25 years. Had we continued to amortize goodwill in 2002, net income
would have been $316,033,000, and basic and diluted earnings per share, respectively, would have been $1.18
and $1.17, respectively.
Goodwill is net of accumulated amortization of $16,515,000 at December 31, 2002 and 2001. At
December 31, 2002, property management contracts are net of accumulated amortization of $47,107,000
($40,503,000 at December 31, 2001). Included in depreciation and amortization expense for 2002 and 2001 is
$6,604,000 with respect to the amortization of property management contracts. In addition, included in
depreciation and amortization expense for 2001 is $2,705,000 relating to the amortization of goodwill.
Revenue and expense recognition
Rental income, which is generally earned pursuant to month-to-month leases for storage space, is
recognized as earned. Tenant reinsurance premiums are recognized as premiums are collected. Interest income
is recognized as earned. Equity in earnings of real estate entities is recognized based on our ownership interest
in the earnings of each of the unconsolidated real estate entities. Cost of operations, general and administrative
cost and interest are expensed as incurred. We accrue for property tax expense based upon estimates and
historical trends. If these estimates are incorrect, the timing of expense recognition could be affected.
Environmental costs
Our policy is to accrue environmental assessments and/or remediation cost when it is probable that
such efforts will be required and the related costs can be reasonably estimated. Our current practice is to
conduct environmental investigations in connection with property acquisitions. Although there can be no
assurance, we are not aware of any environmental contamination of any of our facilities, which individually or
in the aggregate would be material to our overall business, financial condition, or results of operations.
Net income per common share
Cumulative Preferred Stock dividends totaling $148,926,000, $117,979,000 and $100,138,000 for the
years ended December 31, 2002, 2001 and 2000, respectively, have been deducted from net income to arrive at
net income allocable to our common shareholders.
Net income allocated to our common shareholders has been further allocated among our two classes of
common stock; our regular common stock and our Equity Stock, Series A. The allocation among each class
was based upon the two-class method. Under the two-class method, earnings per share for each class of
common stock is determined according to dividends declared (or accumulated) and participation rights in
undistributed earnings. Under the two-class method, the Equity Stock, Series A for the years ended December
31, 2002, 2001 and 2000 were allocated approximately $21,501,000, $19,455,000 and $11,042,000,
respectively, of net income. The remaining $148,311,000, $186,774,000, and $185,908,000, for the years
ended December 31, 2002, 2001, and 2000, respectively, was allocated to the regular common shares.
Basic net income per share is computed using the weighted average common shares outstanding (prior
to the dilutive impact of stock options outstanding). Diluted net income per common share is computed using
the weighted average common shares outstanding (adjusted for the dilutive impact of stock options outstanding
that totaled 1,566,000 in 2002, 1,267,000 in 2001 and 91,000 shares in 2000).
F-11
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Commencing January 1, 2000, the 7,000,000 Class B common shares outstanding began to participate
in distributions of the Company’s earnings. Distributions per share of Class B common stock are equal to 97%
of the per share distribution paid to the regular common shares. As a result of this participation in the
distribution of our earnings, we have include 6,790,000 (7,000,000 x 97%) Class B common shares in the
weighted average common equivalent shares for the years ended December 31, 2001 and 2000.
As of March 31, 2002, the remaining contingency for the conversion of the Class B common stock into
regular common stock had been satisfied (see Note 10). As a result, beginning April 1, 2002, we began to
include all 7,000,000 Class B common shares in the computation of the weighted average common equivalent
shares. The Class B common stock converted into 7,000,000 shares of common stock on January 1, 2003.
Reclassifications
Certain amounts previously reported have been reclassified to conform to the December 31, 2002
presentation, including Discontinued Operations (see Note 4).
3.
Business combinations
Development Joint Venture
On January 16, 2002, we acquired the remaining 70% interest we did not own in a partnership (the
“Development Joint Venture”). The Development Joint Venture was formed in April 1997 to develop self-
storage facilities and was funded with equity capital consisting of 30% from the Company and 70% from an
institutional investor. The Development Joint Venture developed and owns a total of 47 self-storage facilities.
Prior to January 16, 2002, we accounted for our investment in the Development Joint Venture using the equity
method of accounting. The aggregate cost of this business combination was $268,209,000, consisting of our
pre-existing investment in the Development Joint Venture of $115,131,000 and cash of $153,078,000 paid to
the institutional investor to acquire its interest.
STOR-Re Mutual Insurance Company, Inc. (STOR-Re)
As a result of obtaining a controlling ownership interest, effective July 1, 2002 we began consolidating
STOR-Re. Accordingly, the assets and liabilities and operating results subsequent to July 1, 2002 of STOR-
Re are included on our financial statements. Our investment in STOR-Re, which at June 30, 2002 was classified
as an Other Asset in the amount of $8,541,000, was allocated to the cash, other assets, and liabilities of STOR-
Re as described in the table below.
STOR-Re was formed in 1994 as an association captive insurance company owned by the Company
and its affiliates. STOR-Re provides limited property and liability insurance to the Company and its affiliates.
The Company also utilizes other insurance carriers to provide property and liability coverage in excess of
STOR-Re’s limitations.
Prior to July 1, 2002, the insurance premiums paid to STOR-Re were included in property operating
expenses. After June 30, 2002, the insured liabilities costs incurred by STOR-Re with respect to the Company
and the Consolidated Entities facilities are presented as property operating expenses. The insured liability costs
incurred by STOR-Re are substantially equivalent to the premiums paid by the Company and its affiliates;
accordingly, the consolidation of STOR-Re had no material impact upon the Company’s income statement. The
net operating results of STOR-Re with respect to its insurance services provided to the Unconsolidated Entities
are included in “interest and other income.”
F-12
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Other Partnerships
As a result of obtaining a controlling ownership interest, we began to consolidate the accounts of two
publicly-held limited partnerships owning 31 self-storage facilities in which we are the general partner,
effective January 1, 2002. Our $45,105,000 investment at December 31, 2001 was allocated to the cash, other
assets, liabilities, and minority interests of these entities as described in the table below. Prior to 2002, we
accounted for our investment in these entities using the equity method of accounting.
During 2000, we acquired the remaining ownership interests in a partnership, of which we are the
general partner, for an aggregate acquisition cost of $81,169,000, consisting of cash of $66,776,000 and the
reduction of our pre-existing investment in the amount of $14,393,000. Prior to the acquisition, we accounted
for our investment in the partnership using the equity method of accounting.
PS Insurance Company, Ltd.
On December 31, 2001, we acquired all of the capital stock of PS Insurance Company, Ltd. (“PS
Insurance Company”), which reinsures policies against losses to goods stored by tenants in our self-storage
facilities and which owned, and continues to own, 301,032 shares of the Company’s common stock. Prior to
December 31, 2001, PS Insurance Company was owned by our chairman and former chief executive officer, B.
Wayne Hughes, and members of his family (collectively, “Hughes”).
The acquisition cost was $24,538,000, which was composed of $30,814,000 in common stock
(1,439,765 shares issued to Hughes less the 301,032 shares held by PS Insurance Company) valued at the
market price of the common stock at the time the acquisition agreement was entered into and announced
publicly) less $6,276,000 cash held by PS Insurance Company.
The purchase price was allocated first to the tangible assets and liabilities of PS Insurance Company.
The difference between the purchase price and the net tangible assets was determined to be related to the value
of the ongoing operations of the enterprise as a whole (and not to any specific intangible asset) and was
therefore allocated to goodwill. The goodwill has an indeterminate life and therefore will not be amortized.
Each of the business combinations, indicated above, has been accounted for using the purchase
method. Accordingly, allocations of the total acquisition cost to the net assets acquired were made based upon
the fair value of such assets and liabilities assumed with respect to the transactions, with the remainder, if any,
allocated to goodwill. Accordingly, allocations of the total acquisition cost to the net assets acquired were
made based upon the fair value of such assets and liabilities assumed with respect to the transactions occurring
in 2002, 2001, and 2000 are summarized as follows:
F-13
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
2002 business combinations:
Real estate facilities ..............
Cash ......................................
Other assets ...........................
Accrued and other liabilities
Minority interest ...................
2001 business combinations:
Goodwill ...............................
Other assets ...........................
Accrued and other liabilities .
2000 business combinations:
Real estate facilities ..............
Other assets...........................
Accrued and other liabilities.
Development
Joint Venture
$ 269,898
-
1,122
(2,811)
-
$ 268,209
$
$
$
$
-
-
-
-
-
-
-
-
STOR - Re
Partnership
Acquisitions
(Amounts in thousands)
PS Insurance
Acquisition
Total
$
$
$
$
$
$
-
12,647
14,553
(18,659)
-
8,541
$ 60,528
751
1,053
(2,421)
(14,806)
$ 45,105
$
$
-
-
-
-
-
-
$ 330,426
13,398
16,728
(23,891)
(14,806)
$ 321,855
-
-
-
-
-
-
-
-
$
$
-
-
-
-
$ 26,993
4,538
(6,993)
$ 24,538
$ 26,993
4,538
(6,993)
$ 24,538
$ 82,163
183
(1,177)
81,169
$
$
$
-
-
-
-
$ 82,163
183
(1,177)
$ 81,169
The historical operating results of the above acquisitions prior to each respective acquisition date have
not been included in the Company’s historical operating results. Pro forma data (unaudited) for each of the two
years ended December 31, 2002 as though the business combinations above had been effective at the beginning
of fiscal 2001 are as follows:
Revenues ..........................................................................
Net income........................................................................
Net income per common share (Basic) .............................
Net income per common share (Diluted)..........................
For the Years
Ended December 31,
2001
2002
(in thousands except per share data)
$842,799
$318,503
$1.20
$1.19
$852,255
$328,793
$1.55
$1.53
The pro forma data does not purport to be indicative either of results of operations that would have
occurred had the transactions occurred at the beginning of fiscal 2001 or future results of operations of the
Company. Certain pro forma adjustments were made to the combined historical amounts to reflect (i) expected
reductions in general and administrative expense, (ii) estimated increased interest expense from bank
borrowings to finance the cash portion of the acquisition cost and (iii) estimated increase in depreciation
expense.
4.
Discontinued Operations
SFAS No. 144 addresses accounting for discontinued operations. The Statement requires the
segregation of all disposed components of an entity with operations that (i) can be distinguished from the rest of
the entity and (ii) will be eliminated from the ongoing operations of the entity in a disposal transaction.
F-14
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
During 2002, we adopted a business plan that included the closure of several non-strategic
containerized storage facilities (the “Closed Facilities”), representing components of our containerized storage
business. The related assets of the Closed Facilities (consisting primarily of storage containers) were deemed
not recoverable from future operations, and as a result an asset impairment charge for the excess of these assets’
net book value over their fair value was recorded in 2002 totaling $6,187,000. In addition, lease termination
costs, representing the expected remaining lease liability following closure of the facilities, were recorded in the
amount of $2,447,000 for 2002.
In accordance with SFAS 144, the historical operations of the Closed Facilities (including the asset
impairment and lease termination costs) are classified as discontinued operations, with the rental income, cost
of operations, and depreciation expense with respect to these facilities for current and prior periods included in
the line-item “Discontinued Operations” on the income statement.
During 2002, we sold one of our commercial facilities to a third party. The historical operations with
respect to this facility for current and prior periods is included in Discontinued Operations.
The following table summarizes the historical operations of the Closed Facilities and the commercial
property sold:
Discontinued Operations:
2002
Year ended December 31,
2001
(Amounts in thousands)
2000
Rental income (a):
Containerized storage facilities .......
Commercial properties ....................
Total rental income..................
$ 14,343
268
14,611
$ 13,474
460
13,934
$ 5,823
492
6,315
Cost of operations (a):
Containerized storage facilities ......
Commercial properties ....................
Depreciation and amortization (a): .....
Containerized storage facilities ......
Commercial properties ....................
Total expenses .........................
15,274
84
1,907
107
17,372
13,088
111
1,767
116
15,082
6,696
125
657
115
7,593
Loss before charges ............................
(2,761)
(1,148)
(1,278)
Discontinued operation charges (b) ....
(8,634)
-
-
Net discontinued operations (c) ..........
$ (11,395)
$ (1,148)
$ (1,278)
(a) These amounts represent the historical operations of the Closed Facilities and the commercial property sold. Amounts with
respect to these facilities for periods prior to 2002 were previously classified as rental income, cost of operations, and
depreciation expense in the financial statements.
(b) Amount includes asset impairment charges totaling $6,187,000 and lease termination costs totaling $2,447,000.
(c) The net discontinued operations have resulted in reductions to our earnings per share of $0.09, $0.01 and $0.01 per diluted
common share for each of the three years ended December 31, 2002, 2001 and 2000, respectively.
Other than accruals for future lease termination costs, there are no significant assets or liabilities of the
discontinued operations.
F-15
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
5.
Real estate facilities
Activity in real estate facilities during 2002, 2001 and 2000 is as follows:
Operating facilities, at cost:
Beginning balance .....................................................................
Property acquisitions:
Business combinations (Note 3) ...........................................
Other acquisitions.................................................................
Disposition of facilities .............................................................
Newly developed facilities opened for operations.....................
Acquisition of minority interest (Note 8) ..................................
Capital improvements................................................................
Ending balance ..........................................................................
Accumulated depreciation:
Beginning balance .....................................................................
Additions during the year (a).....................................................
Disposition of facilities .............................................................
Ending balance ..........................................................................
Construction in process:
Beginning balance ....................................................................
Current development.................................................................
Transfers to land held for development ....................................
Newly developed facilities opened for operations ....................
Ending balance .........................................................................
Land held for development:
2002
2001
(Amounts in thousands)
2000
$ 4,431,054
$ 4,134,417
$ 3,822,433
330,426
30,117
(4,619)
134,775
39,780
26,993
4,988,526
(819,932)
(168,023)
409
(987,546)
121,181
101,110
-
(134,775)
87,516
-
3,503
(9,603)
264,161
3,098
35,478
4,431,054
(668,018)
(152,901)
987
(819,932)
217,140
171,865
(3,663)
(264,161)
121,181
82,163
67,107
(20,516)
135,095
15,112
33,023
4,134,417
(533,412)
(134,857)
251
(668,018)
125,812
226,423
-
(135,095)
217,140
Beginning balance .....................................................................
Acquisitions...............................................................................
Transfers from construction in process......................................
Dispositions...............................................................................
Ending balance ..........................................................................
Total real estate facilities ..............................................................
30,001
-
-
(12,194)
17,807
$ 4,106,303
21,447
12,425
3,663
(7,534)
30,001
$ 3,762,304
14,952
6,495
-
-
21,447
$ 3,704,986
(a) Included in additions for the years ended December 31, 2002, 2001, and 2000, respectively, is $538,000, $454,000, and
$228,000 in real estate depreciation expense with respect to discontinued operations. See Note 4.
Operating Facilities
During 2002, we opened 14 newly developed traditional self-storage facilities with an aggregate cost
of $92,109,000 and two newly developed facilities that combine traditional self-storage facilities and
containerized storage facilities in the same location (“Combination Facilities”) with an aggregate cost of
$14,852,000. We also completed expansions to existing self-storage facilities with a total cost of $27,814,000.
and acquired nine self-storage facilities, in separate transactions from third parties, for $30,117,000 cash.
During 2002, we sold four plots of land and one commercial facility for an aggregate of $15,702,000,
consisting of $15,209,000 of cash and notes receivable in the amount of $493,000. An aggregate loss in the
amount of $702,000 was recorded on the sale of these properties.
During 2001, we opened 12 newly developed self-storage facilities at a total cost of approximately
$66,905,000 and 10 Combination Facilities at a total cost of approximately $106,004,000. In addition, we
opened an industrial facility we had acquired and renovated for use in the containerized storage operations, at a
F-16
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
total cost of approximately $9,993,000. We also completed expansions to existing self-storage facilities with a
total cost of approximately $81,259,000 and acquired one self-storage facility from a third party for
approximately $3,503,000 in cash.
During 2001, we disposed of two facilities and a parcel of land for a total of $20,241,000, composed of
$19,936,000 cash and a note receivable of $305,000. An aggregate gain of $4,091,000 was recorded on these
dispositions.
During 2000, we acquired a total of 13 facilities for an aggregate cost of $82,163,000 in connection
with a business combination (Note 3). In addition, we acquired 7 storage facilities from third parties for an
aggregate of $41,638,000 cash, and 5 storage facilities from entities in which we had an equity interest for at an
aggregate cost of $19,539,000, composed of $15,370,000 cash, the issuance of Equity Stock, Series A
($1,025,000) and an existing investment ($3,144,000). In addition, we acquired one industrial facility for
$5,930,000 cash.
During 2000, we opened 18 newly-developed traditional self-storage facilities at a total cost of
$82,819,000, 5 combination facilities at a total cost of $33,321,000 and opened an industrial facility we had
acquired and renovated for use in the containerized storage operations at a total cost of $6,518,000. In
addition, we completed expansions of existing storage facilities at a total cost of $12,437,000.
During 2000, we disposed of eight storage facilities and two parcels of land for an aggregate of
$20,561,000, consisting of cash ($10,444,000), the acquisition of minority interest ($6,427,000), and a note
receivable ($3,690,000). An aggregate gain of $296,000 was recorded on these dispositions.
At December 31, 2002, the unaudited adjusted basis of real estate facilities for Federal income tax
purposes was approximately $3.0 billion.
Construction in process and land held for development
Construction in process consists of land and development costs relating to the development of storage
facilities. At December 31, 2002, construction in process consists primarily of 20 facilities being developed on
newly acquired land and the expansion of 16 existing self-storage facilities. In addition, we have nine parcels of
land held for development with total costs of approximately $17,807,000.
6.
Investments in real estate entities
At December 31, 2002, our investments in real estate entities consist of ownership interests in seven
partnerships, which principally own self-storage facilities, and our ownership interest in PSB. These interests
are non-controlling interests of less than 50% and are accounted for using the equity method of accounting.
Accordingly, earnings are recognized based upon our ownership interest in each of the partnerships. The
accounting policies of these entities are similar to the Company’s.
During 2002, 2001 and 2000, we recognized earnings from our investments of $29,888,000,
$38,542,000 and $39,319,000, respectively, and received cash distributions totaling $19,496,000, $24,124,000
and $16,984,000, respectively. In addition, during 2002 and 2000, we recognized gains of $3,737,000 and
$3,210,000, respectively, representing our share of PSB’s gains on sale of real estate and real estate
investments; these gains are presented in “Equity in earnings from real estate entities” in our consolidated
income statement.
During 2002, 2001, and 2000, we invested a total of $223,000, $15,954,000, and $37,406,000 in the
real estate entities.
F-17
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
The following table sets forth our investments in the Unconsolidated Entities at December 31, 2002
and 2001 and our equity in earnings of real estate investments for each of the three years ended December 31,
2002:
Investments in Real Estate Entities at
December 31,
Equity in Earnings of Real Estate Entities for the year ended
PSB (a) ..........................................
Development Joint Venture (b) .....
Acquired Partnerships (b)..............
Other investments ..........................
Total ........................................
2002
$ 273,790
-
-
55,889
$ 329,679
2001
$ 267,472
114,908
45,105
51,815
$ 479,300
2002
$ 23,406
223
-
6,259
$ 29,888
December 31,
2001
$ 22,361
4,227
5,877
6,077
$ 38,542
2000
$ 23,950
2,694
7,081
5,594
$ 39,319
(a)
Included in equity in earnings for 2002 and 2000 is our pro rata share of PSB’s gain on sale of real estate in the amount
of $3,737,000 and $3,210,000, respectively.
(b) Represents amounts associated with investments no longer held as of December 31, 2002. As described in Note 3, in
2002 we began consolidating the results of the Development Joint Venture and two other partnerships (the Acquired
Partnerships), and as a result eliminated our respective investment in each entity.
Investment in PS Business Parks, Inc.
On January 2, 1997, we reorganized our commercial property operations into an entity now known as
PS Business Parks, Inc., a REIT traded on the American Stock Exchange, and an operating partnership
controlled by PS Business Parks, Inc. (collectively, the REIT and the operating partnership are referred to as
“PSB”). The Company and certain partnerships in which the Company has a controlling interest have a 44%
common equity interest in PSB as of December 31, 2001. This 44% common equity interest is comprised of the
ownership of 5,418,273 shares of common stock and 7,305,355 limited partnership units in the operating
partnership; these limited partnership units are convertible at our option, subject to certain conditions, on a one-
for-one basis into PSB common stock. Based upon PSB’s trading price at December 31, 2002 ($31.80), the
shares and units had a market value of approximately $404.6 million as compared to a book value of $273.8
million.
At December 31, 2002, PSB owned and operated approximately 14.4 million net rentable square feet
of commercial space. In addition, PSB manages 992,000 net rentable square feet of commercial space owned
by the Company and the Consolidated Entities pursuant to property mangement agreements.
The following table sets forth the condensed statements of operations for each of the two years ended
December 31, 2002, and the condensed balance sheets of PSB at December 31, 2002 and 2001. These amounts
below represent 100% of PSB’s balances and not our pro-rata share.
F-18
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
For the year ended December 31,
Total revenue ........................................................................
Gain on real estate investments .............................................
Cost of operations and other expenses ..................................
Depreciation and amortization ..............................................
Discontinued operations........................................................
Minority interest....................................................................
Net income ........................................................................
At December 31,
Total assets (primarily real estate).........................................
Total debt ..............................................................................
Other liabilities......................................................................
Preferred equity and preferred minority interests..................
Common equity.....................................................................
Other Investments
For the Year Ended December 31,
2002
(Amount in thousands)
2001
$
$
$
$
$
$
201,265
8,164
(63,467)
(57,658)
1,296
(32,170)
57,430
1,156,802
70,279
36,902
388,563
661,058
164,938
8
(49,302)
(39,680)
1,395
(27,489)
49,870
1,169,955
165,145
45,188
318,750
640,872
The Other Investments consist primarily of an average 40% common equity ownership, which we
owned throughout the three-year period ending December 31, 2002, in eight limited partnerships (collectively,
the “Other Investments”) owning an aggregate of 36 storage facilities. During 2002 and 2001, we acquired
additional equity interests in these entities for a total of $223,000 and $299,000, respectively.
The following table sets forth certain condensed financial information (representing 100% of these
entities’ balances and not our pro-rata share) with respect to Other Investments:
For the year ended December 31,
Total revenue...........................................
Cost of operations and other expenses ....
Depreciation and amortization ................
Net income ........................................
At December 31,
Total assets (primarily storage facilities).
Total debt ................................................
Other liabilities........................................
Partners’ equity .......................................
$
$
$
2002
2001
(Amount in thousands)
25,884
(8,605)
(2,535)
14,744
$
$
26,673
(9,266)
(2,560)
14,847
$
56,731
5,450
1,121
50,160
58,222
11,357
976
45,889
7.
Revolving line of credit
We have a $200 million revolving line of credit (the “Credit Agreement”) that has a maturity date of
October 31, 2004 and bears an annual interest rate ranging from the London Interbank Offered Rate (“LIBOR”)
plus 0.45% to LIBOR plus 1.50% depending on our credit ratings (currently 0.45%). In addition, we are
required to pay a quarterly commitment fee ranging from 0.20% per annum to 0.30% per annum depending on
our credit ratings (currently the fee is 0.20% per annum). At December 31, 2002, we had no borrowings on our
line of credit.
F-19
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
The Credit Agreement includes various covenants, the more significant of which requires us to (i)
maintain a balance sheet leverage ratio of less than 0.50 to 1.00, (ii) maintain certain quarterly interest and
fixed-charge coverage ratios (as defined) of not less than 2.50 to 1.0 and 1.75 to 1.0, respectively, and (iii)
maintain a minimum total shareholders’ equity (as defined). In addition, we are limited in our ability to incur
additional borrowings (we are required to maintain unencumbered assets with an aggregate book value equal to
or greater than two times our unsecured recourse debt). We were in compliance with all the covenants of the
Credit Agreement at December 31, 2002.
8.
Notes payable
Notes payable at December 31, 2002 and 2001 consist of the following:
2002
2001
Carrying
amount
Carrying
Fair value
amount
(Amounts in thousands)
Fair value
Unsecured senior notes:
7.08% note due November 2003.................................................
7.47% note due January 2004 .....................................................
7.66% note due January 2007 .....................................................
$ 10,000
29,300
56,000
$ 10,000
29,300
56,000
$ 19,750
44,000
56,000
$ 19,750
44,000
56,000
Mortgage notes payable:
10.55% mortgage notes secured by real estate facilities,
principal and interest payable monthly, due August 2004 ....
18,167
19,409
21,142
22,499
7.134% to 10.5% mortgage notes secured by real estate
facilities, principal and interest payable monthly, due at
varying dates between May 2004 and September 2028 ........
Total notes payable .........................................................
2,400
$ 115,867
2,400
$ 117,109
2,660
$ 143,552
2,660
$ 144,909
All of our notes payable are fixed rate. The senior notes require interest and principal payments to be
paid semi-annually and have various restrictive covenants, all of which have been met at December 31, 2002.
The 10.55% mortgage notes consist of five notes, which are cross-collateralized by 19 properties and
are due to a life insurance company. Although there is a negative spread between the carrying value and the
estimated fair value of the notes, the notes provide for the prepayment of principal subject to the payment of
penalties, which exceed this negative spread. Accordingly, prepayment of the notes at this time would not be
economically practicable (unaudited).
Mortgage notes payable are secured by 24 real estate facilities having an aggregate net book value of
approximately $56.4 million at December 31, 2002.
At December 31, 2002, approximate principal maturities of notes payable are as follows:
F-20
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
2003..........................................
2004..........................................
2005..........................................
2006..........................................
2007..........................................
Thereafter .................................
Weighted average rate ..............
Unsecured
Senior Notes
$
$
35,900
25,800
11,200
11,200
11,200
-
95,300
7.5%
Mortgage debt
Total
(in thousands)
3,884
$
15,063
156
170
185
1,109
20,567
$
10.2%
$ 39,784
40,863
11,356
11,370
11,385
1,109
$ 115,867
7.9%
Interest paid (including interest related to the borrowings under the Credit Agreement) during 2002,
2001 and 2000 was $10,322,000, $12,219,000 and $13,071,000, respectively. In addition, in 2002, 2001 and
2000, capitalized interest totaled $6,513,000, $8,992,000 and $9,778,000, respectively, related to construction
of real estate facilities.
9.
Minority interest
In consolidation, we classify ownership interests in the net assets of each of the Consolidated Entities,
other than our own, as minority interest on the consolidated financial statements. Minority interest in income
consists of the minority interests’ share of the operating results of the Company relating to the consolidated
operations of the Consolidated Entities.
Preferred partnership interests:
During 2000, one of our consolidated operating partnerships issued in aggregate $365.0 million of
preferred partnership units: March 17, 2000, - $240.0 million of 9.5% Series N Cumulative Redeemable
Perpetual Preferred Units, March 29, 2000 - $75.0 million of 9.125% Series O Cumulative Redeemable
Perpetual Preferred Units, and August 11, 2000 - $50.0 million of 8.75% Series P Cumulative Redeemable
Perpetual Preferred Units.
We incurred approximately $3,750,000 in costs in connection with the issuances; these costs were
recorded as a reduction to Paid in Capital during 2000. The issuance of these units in 2000 had the effect of
increasing minority interest by $365.0 million. For the years ended December 31, 2002 and 2001, the holders
of these preferred units were paid in aggregate approximately $26,906,000 and $31,737,000, respectively, in
distributions and received an equivalent allocation of minority interest in earnings.
During 2001, we repurchased all of the 8.75% Series P Cumulative Redeemable Perpetual Preferred
Units amount and $30 million of the 9.125% Series O Cumulative Redeemable Perpetual Preferred Units. The
units were repurchased at an amount equal to the original issuance price.
The following table summarizes the preferred partnership units outstanding:
F-21
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Series
Distribution
Rate
At December 31, 2002 and 2001
Carrying
Amount
Units
Outstanding
(Dollar amounts and Units in
thousands)
Series N ....................
Series O ....................
9.500%
9.125%
9,600
1,800
$240,000
45,000
Total..........................
11,400
$285,000
These preferred units are not redeemable during the first 5 years, thereafter, at our option, we can call
the units for redemption at the issuance amount plus any unpaid distributions. The units are not redeemable by
the holder. Subject to certain conditions, the Series N preferred units are convertible into shares of 9.5% Series
N Cumulative Preferred Stock, and the Series O preferred units are convertible into shares of 9.125% Series O
Cumulative Preferred Stock of the Company.
Other partnership interests:
Minority interest at December 31, 2002 and 2001, and minority interest in income for the three years
ended December 31, 2002 with respect to the other partnership interests are comprised of the following:
Minority interest at
Minority interest in income for the year ended
Description of Minority Interest
December 31,
2002
December 31,
2001
December 31,
2002
December 31,
2001
December 31,
2000
(Amounts in thousands)
Consolidated Development Joint
Venture ........................................
Convertible Partnership Units .........
Newly consolidated partnerships ....
Other consolidated partnerships ......
$ 75,432
6,274
18,215
54,578
$
82,879
6,418
-
80,304
$
2,399
283
3,357
11,142
$
1,074
359
-
12,845
$
325
577
-
12,595
Total other partnership interests ......
$ 154,499
$ 169,601
$
17,181
$
14,278
$
13,497
Consolidated Development Joint Venture
In November 1999, we formed a development joint venture (the “Consolidated Development Joint
Venture”) with a joint venture partner (PSAC Storage Investors, LLC) whose partners include a third party
institutional investor and Mr. Hughes, to develop approximately $100 million of storage facilities and to
purchase $100 million of the Company’s Equity Stock, Series AAA (see Note 10). At December 31, 2002, the
Consolidated Development Joint Venture was fully committed, having completed construction on 22 storage
facilities with a total cost of approximately $108.5 million.
F-22
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
The Consolidated Development Joint Venture is funded solely with equity capital consisting of 51%
from the Company and 49% from PSAC Storage Investors. The accounts of the Consolidated Development
Joint Venture are included in the Company’s consolidated financial statements. The accounts of PSAC Storage
Investors are not included in the Company’s consolidated financial statements, as the Company has no
ownership interest in this entity. Minority interests primarily represent the total contributions received from
PSAC Storage Investors combined with the accumulated net income allocated to PSAC Storage Investors, net
of cumulative distributions. The amounts included in our financial statements with respect to the minority
interest in the Consolidated Development Joint Venture are denoted in the tables above.
The term of the Consolidated Development Joint Venture is 15 years; however, during the sixth year
PSAC Storage Investors has the right to cause an early termination of the partnership. If PSAC Storage
Investors exercises this right, we then have the option, but not the obligation, to acquire their interest for an
amount that will allow them to receive an annual return of 10.75%. If the Company does not exercise its option
to acquire PSAC Storage Investors’ interest, the partnership’s assets will be sold to third parties and the
proceeds distributed to the Company and PSAC Storage Investors in accordance with the partnership
agreement. If PSAC Storage Investors does not exercise its right to early termination during the sixth year, the
partnership will be liquidated 15 years after its formation with the assets sold to third parties and the proceeds
distributed to the Company and PSAC Storage Investors in accordance with the partnership agreement.
PSAC Storage Investors, LLC provides Mr. Hughes with a fixed yield of approximately 8.0% per
annum on his preferred non-voting interest (representing an investment of approximately $64.1 million at
December 31, 2002 and 2001). In addition, Mr. Hughes receives 1% of the remaining cash flow of PSAC
Storage Investors, LLC (estimated to be less than $50,000 per year). If PSAC Storage Investors, LLC does not
elect to cause an early termination, Mr. Hughes’ 1% interest in residual cash flow can increase to 10%.
In consolidation, the Equity Stock, Series AAA owned by the joint venture and the related dividend
income has been eliminated. Minority interests primarily represent the total contributions received from PSAC
Storage Investors combined with the accumulated net income allocated to PSAC Storage Investors, net of
cumulative distributions.
Convertible Partnership Units
As of December 31, 2002, one of our Consolidated Entities had approximately 237,935 operating
partnership units (“Convertible Units”) outstanding, representing a limited partnership interest in the
partnership. The Convertible Units are convertible on a one-for-one basis (subject to certain limitations) into
common shares of the Company at the option of the unitholder. Minority interest in income with respect to
Convertible Units reflects the Convertible Units’ share of the net income of the Company, with net income
allocated to minority interests with respect to weighted average outstanding Convertible Units on a per unit
basis equal to diluted earnings per common share. During the years ended December 31, 2002 and 2001, no
units were converted. During the year ended December 31, 2000, 277,104 Convertible Units were redeemed in
connection with the sale of real estate facilities (reducing minority interest by $6,427,000) and 255,853
Convertible Units were converted into shares of the Company’s common stock (reducing minority interest by
$6,829,000).
Newly consolidated partnerships
As described in Note 3, effective January 1, 2002, we began consolidating the results of two
partnerships owning 31 properties, and as a result, minority interest increased by $14,806,000 in 2002.
F-23
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Other consolidated partnerships
At December 31, 2002, the Other Consolidated Partnerships reflect common equity interests that the
Company does not own in 23 entities owning an aggregate of 141 real estate facilities.
During fiscal 2002, we acquired minority interests in the Consolidated Entities for an aggregate cash
cost of $27,544,000 and issued an aggregate of 1,091,608 shares ($37,904,000) of our common stock; these
acquisitions had the effect of reducing minority interest by $25,668,000, with the excess of cost over underlying
book value ($39,780,000) allocated to real estate.
In addition, during 2002, we recorded the pending sale of a partnership interest in the Consolidated
Entities for an aggregate of $1,450,000. We recorded a loss on sale of the interest in the amount of $1,839,000.
As a result of this pending sale, minority interest increased by $3,289,000. This sale is subject to litigation; see
Note 16.
During 2001, we acquired minority interests in the Consolidated Entities for an aggregate cash cost of
$11,841,000; these acquisitions had the effect of reducing minority interest by $8,743,000, with the excess of
cost over underlying book value ($3,098,000) to real estate.
10.
Shareholders’ equity
Cumulative Preferred Stock
At December 31, 2002 and 2001, we had the following series of Cumulative Preferred Stock
outstanding:
Series
Series A
Series B
Series C
Series D
Series E
Series F
Series J
Series K
Series L
Series M
Series Q
Series R
Series S
Series T
Series U
Series V
Dividend
Rate
10.000%
9.200%
Adjustable
9.500%
10.000%
9.750%
8.000%
8.250%
8.250%
8.750%
8.600%
8.000%
7.875%
7.625%
7.625%
7.500%
At December 31, 2002
At December 31, 2001
$
Carrying
Shares
Outstanding
Amount
(Dollar amount in thousands)
-
57,500
30,000
30,000
54,875
57,500
-
115,000
115,000
56,250
172,500
510,000
143,750
152,150
150,000
172,500
-
2,300,000
1,200,000
1,200,000
2,195,000
2,300,000
-
4,600
4,600
2,250
6,900
20,400
5,750
6,086
6,000
6,900
$
Carrying
Shares
Outstanding
Amount
(Dollar amount in thousands)
45,625
1,825,000
59,650
2,386,000
30,000
1,200,000
30,000
1,200,000
54,875
2,195,000
57,500
2,300,000
150,000
6,000
115,000
4,600
115,000
4,600
56,250
2,250
172,500
6,900
510,000
20,400
143,750
5,750
-
-
-
-
-
-
Total Cumulative Preferred Stock
9,258,486
$ 1,817,025
11,156,500
$ 1,540,150
F-24
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
During 2002, we issued our Series T, Series U and Series V Cumulative Preferred Stock: Series T –
issued on January 18, 2002, net proceeds of $145,075,000, Series U – issued on February 19, 2002, net
proceeds of $145,075,000 and Series V – issued September 30, 2002, net proceeds of $166,866,000.
During 2002, we redeemed our Series A and Series J Cumulative Preferred Stock, at par, at a total cost
of $45,643,000 and $150,018,000 (including related redemption expenses), respectively.
On August 30, 2002, in a privately negotiated transaction, we exchanged an aggregate of 86,000 shares
(par value of $2,150,000) of our Preferred Stock, Series B for 86 shares (representing 86,000 depositary shares
with a par value of $2,150,000) of our Preferred Stock, Series T.
In addition, on March 31, 2003 (unaudited), we will redeem all outstanding shares of our 9.20%
Cumulative Preferred Stock, Series B at a redemption price of $25 per share for a total of $57,500,000 plus
accrued dividends.
During 2001, we issued our Series Q, Series R and Series S Preferred Stock: Series Q – issued on
January 19, 2001, net proceeds of $166,966,000, Series R – issued on September 28, 2001, net proceeds of
$493,085,000 and Series S – issued October 31, 2001, net proceeds of $139,022,000.
The Series A through Series V (collectively the “Cumulative Senior Preferred Stock”) have general
preference rights with respect to liquidation and quarterly distributions. Holders of the preferred stock, 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 or failure to maintain a Debt Ratio (as defined) of 50% or
less, holders of all outstanding series of preferred stock (voting as a single class without regard to series) will
have the right to elect two additional members to serve on the Company’s Board of Directors until events of
default have been cured. At December 31, 2002, there were no dividends in arrears and the Debt Ratio was
2.0%.
Except under certain conditions relating to the Company’s qualification as a REIT, the Senior
Preferred Stock is not redeemable prior to the following dates: Series B – March 31, 2003, Series C – June 30,
1999, Series D – September 30, 2004, Series E – January 31, 2005, Series F – April 30, 2005, Series K –
January 19, 2004, Series L – March 10, 2004, Series M – August 17, 2004, Series Q – January 19, 2006, Series
R – September 28, 2006 , Series S – October 31, 2006, Series T – January 18, 2007, Series U – February 19,
2007 and Series V – September 30, 2007. On or after the respective dates, each of the series of Cumulative
Senior Preferred Stock will be redeemable, at the option of the Company, in whole or in part, at $25 per share
(or depositary share in the case of the Series K through Series V), plus accrued and unpaid dividends.
Common Stock
During 2002, 2001 and 2000, we issued and repurchased shares of our common stock as follows:
2002
2001
(Dollar amount in thousands)
2000
Exercise of stock options ......................
Acquisition of minority interests .......
Business Combinations (Note 3) .......
Conversion of Convertible Units .......
Repurchases of common stock (a) .....
Shares
948,932
1,091,608
-
-
(11,000)
2,029,540
Amount
Shares
Amount
Shares
$
704,901
-
1,138,733
-
(10,585,593)
15,857
-
30,814
-
(276,861)
(8,741,959) $ (230,190)
242,598
-
-
255,853
(3,491,600)
(2,993,149)
$
$
23,333
37,904
-
-
(381)
60,856
F-25
$
Amount
4,608
-
-
6,829
(77,799)
$ (66,362)
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
(a) Includes 10,000 shares purchased in January 2001 from a corporation wholly-owned by a director of the Company for an
aggregate of $251,875 cash. Includes 2,619,893 shares purchased in March 2001 from a limited liability company of which
a director of the Company is a controlling member for an aggregate of $68,064,820 in cash. In each transaction, the
purchase price approximated market value as of the date of each transaction.
As previously announced, the Board of Directors authorized the repurchase from time to time of up to
10,000,000 shares of the Company’s common stock on the open market or in privately negotiated transactions.
On March 4, 2000, the Board of Directors increased the authorized number of shares that the Company could
repurchase to 15,000,000. On March 15, 2001, the Board of Directors increased the authorized number of
shares the Company could repurchase to 20,000,000. During 2001, the Board of Directors increased the
authorized number of shares the Company could repurchase to 25,000,000. Cumulatively through December
31, 2002, we repurchased a total of 21,497,020 shares of common stock at an aggregate cost of approximately
$535,862,000.
During 2001, we entered into an arrangement with a financial institution whereby we sold to the
institution the right to require us to purchase from the institution (or, at our option, pay in cash or common stock
the differential between the market price and $26.26 per share) up to 1,000,000 shares of our common stock at a
price of $26.26 on certain dates in September 2001 and October 2001. In exchange for this right, the financial
institution paid us $910,000, the amount of which was reflected as an increase to our paid-in capital. The right
expired without being exercised.
At December 31, 2002, we had 10,291,914 shares of common stock reserved in connection with the
Company’s stock option plans (Note 12), 7,000,000 shares of common stock reserved for the conversion of the
Class B Common Stock and 237,935 shares reserved for the conversion of Convertible Units.
Class B Common Stock
The Class B Common Stock participates in distributions at the rate of 97% of the per share
distributions on the Common Stock, provided that cumulative distributions of at least $0.22 per quarter per
share have been paid on the Common Stock. The Class B Common Stock will not participate in liquidating
distributions, not be entitled to vote (except as expressly required by California law) and automatically converts
into Common Stock, on a share for share basis, upon the later to occur of FFO, as defined, per common share
aggregating $3.00 during any period of four consecutive calendar quarters or January 1, 2003. The financial
condition of attaining FFO per common share was met on March 31, 2002, accordingly, on January 1, 2003, the
Class B Common Stock converted into Common Stock on a share for share basis.
Equity Stock
The Company is authorized to issue up to 200,000,000 shares of Equity Stock. The Articles of
Incorporation provide that the Equity Stock may be issued from time to time in one or more series and gives the
Board of Directors broad authority to fix the dividend and distribution rights, conversion and voting rights,
redemption provisions and liquidation rights of each series of Equity Stock.
Equity Stock, Series A
As of December 31, 2002, there were 8,776,102 depositary shares, each representing 1/1,000 of a
share, of Equity Stock, Series A outstanding. The following table summarizes the activity:
F-26
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
2002
2001
2000
Depositary
Shares
Issuance
Amount
Depositary
Shares
Issuance
Amount
Depositary
Shares
Issuance
Amount
(Dollar amounts in thousands)
8,776,102
-
-
-
$ 188,174
-
-
-
5,635,602
2,210,500
930,000
-
$ 113,354
51,836
22,984
-
-
3,382,500
-
2,200,555
$
-
68,318
-
44,011
-
-
-
-
52,547
1,025
8,776,102
$ 188,174
8,776,102
$ 188,174
5,635,602
$ 113,354
Amount at beginning
of year .......................
Public offerings.............
Direct placements .........
Special dividend ...........
Issued to related party
in connection with
the acquisition of
real estate facilities ....
Amount at end of
year ...............................
The issuance amounts have been recorded as part of paid-in capital on the consolidated balance sheet.
The Equity Stock, Series A ranks on a parity with our common stock and junior to the Cumulative
Preferred Stock with respect to general preference rights and has a liquidation amount which cannot exceed
$24.50 per share. Distributions with respect to each depositary share shall be the lesser of: a) five times the per
share dividend on the common stock or b) $2.45 per annum. Except in order to preserve the Company’s federal
income tax status as a REIT, we may not redeem the depositary shares before March 31, 2010. On or after
March 31, 2010, we may, at our option, redeem the depositary shares at $24.50 per depositary share. If the
Company fails to preserve its federal income tax status as a REIT, each depositary share will be convertible into
0.956 shares of our common stock. The depositary shares are otherwise not convertible into common stock.
Holders of depositary shares vote as a single class with our holders of common stock on shareholder matters,
but the depositary shares have the equivalent of one-tenth of a vote per depositary share. We have no obligation
to pay distributions if no distributions are paid to common shareholders.
Equity Stock, Series AA
In June 1997, we contributed $22,500,000 (225,000 shares) of equity stock, now designated as Equity
Stock, Series AA (Equity Stock AA”) to a partnership in which we are the general partner. The Company has a
controlling interest in the partnership and therefore consolidates the accounts of the partnership. As a result, the
Equity Stock AA is eliminated in consolidation. The Equity Stock AA ranks on a parity with our common
stock and junior to the Cumulative Preferred Stock with respect to general preference rights and has a
liquidation amount of ten times the amount paid to each common share up to a maximum of $100 per share.
Quarterly distributions per share on the Equity Stock AA are equal to the lesser of (i) 10 times the amount paid
per share of Common Stock or (ii) $2.20. We have no obligation to pay distributions on these shares if no
distributions are paid to common shareholders.
If the Company determines that it is necessary to maintain its status as a Real Estate Investment Trust,
subject to certain limitations it may cause the redemption of shares of Equity Stock, Series AA at a price of
$100 per share. The shares are not otherwise redeemable or convertible into shares of any other class or series
of the Company’s capital stock. Other than as required by law, the Equity Stock, Series AA has no voting
rights.
F-27
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Equity Stock, Series AAA
In November 1999, we sold $100,000,000 (4,289,544 shares) of Equity Stock, Series AAA (“Equity
Stock AAA”) to a newly formed joint venture. We control the joint venture and consolidate the accounts of the
joint venture, and accordingly the Equity Stock AAA is eliminated in consolidation. The Equity Stock AAA
ranks on a parity with our common stock and junior to the Cumulative Preferred Stock (as defined below) with
respect to general preference rights, and has a liquidation amount equal to 120% of the amount distributed to
each common share. Annual distributions per share are equal to the lesser of (i) five times the amount paid per
common share or (ii) $2.1564. We have no obligation to pay distributions on these shares if no distributions are
paid to common stockholders.
Upon liquidation of the Consolidated Development Joint Venture, at the Company’s option either a)
each share of Equity Stock, Series AAA shall convert into 1.2 shares of our common stock or b) the Company
can redeem the Equity Stock, Series AAA at a per share amount equal to 120% of the market price of our
common stock. In addition, if the Company determines that it is necessary to maintain its status as a Real
Estate Investment Trust, subject to certain limitations it may cause the redemption of shares of Equity Stock,
Series AAA at a per share amount equal to 120% of the market price of our common stock. The shares are not
otherwise redeemable or convertible into shares of any other class or series of the Company’s capital stock.
Other than as required by law, the Equity Stock, Series AAA has no voting rights.
Dividends
On August 9, 2001, the Board of Directors increased the quarterly distribution paid on the Company’s
common stock from $0.22 to $0.45, an increase of $0.23 or 104.5% over the previous quarterly distribution.
Also on this date, the Board of Directors declared a special distribution to the common shareholders of $0.35
per common share in cash, which was paid on September 30, 2001.
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. Distributions declared in 2002,
by the Board of Directors on our common stock, Equity Stock, Series A, and all the various preferred stock
series were characterized 100% as ordinary income.
The following summarizes dividends during 2002, 2001 and 2000:
F-28
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Cumulative Preferred Stock
Series A
Series B
Series C
Series D
Series E
Series F
Series G
Series H
Series I
Series J
Series K
Series L
Series M
Series Q
Series R
Series S
Series T
Series U
Series V
Common Stock
Common Stock
Equity Stock, Series A
Class B Common Stock
2002
2001
2000
Per share
Total
Per share
Total
Per share
Total
(in thousands, except per share data)
$1.875
$2.343
$1.688
$2.375
$2.500
$2.437
-
-
-
$1.533
$2.063
$2.063
$2.188
$2.150
$2.000
$1.969
$1.809
$1.641
$0.469
$1.800
$2.450
$1.746
$3,422
5,389
2,024
2,850
5,488
5,606
-
-
-
9,200
9,488
9,488
4,922
14,835
40,800
11,320
11,011
9,849
3,234
148,926
209,077
21,501
12,222
$391,726
$2.500
$2.300
$1.688
$2.375
$2.500
$2.437
$1.664
$1.608
$1.869
$2.000
$2.063
$2.063
$2.188
$2.048
$0.500
$0.334
-
-
-
$1.690
$2.450
$1.639
$4,563
5,488
2,024
2,850
5,488
5,606
11,482
10,853
7,475
12,000
9,488
9,488
4,922
14,134
10,200
1,918
-
-
-
117,979
$2.500
$2.300
$1.711
$2.375
$2.500
$2.437
$2.219
$2.112
$2.156
$2.000
$2.063
$2.063
$2.188
-
-
-
-
-
-
$4,563
5,488
2,052
2,850
5,488
5,606
15,309
14,259
8,625
12,000
9,488
9,488
4,922
-
-
-
-
-
-
100,138
193,121
19,455
11,475
$342,030
$1.480
$2.363
$1.436
184,084
11,042
10,049
$305,313
The dividend rate on the Series C Preferred Stock is adjusted quarterly and is equal to the highest of
one of three U.S. Treasury indices (Treasury Bill Rate, Ten Year Constant Maturity Rate, and Thirty Year
Constant Maturity Rate) multiplied by 110%. However, the dividend rate for any dividend period will not be
less than 6.75% per annum nor greater than 10.75% per annum. The dividend rate with respect to the first
quarter of 2003 will be equal to 6.75% per annum.
11.
Related Party Transactions
On December 31, 2001, the Company purchased all of the capital stock of PS Insurance Company
from B. Wayne Hughes, who is Chairman, and at the time was chief executive officer of the Company, and
members of his family. This acquisition is discussed more fully in Note 3.
In November 1999, we formed the Consolidated Development Joint Venture with a joint venture
partner whose partners include an institutional investor and Mr. Hughes. This transaction is discussed more
fully in Note 8.
Ronald L. Havner, Jr. is our vice-chairman and chief executive officer, and he is chairman and chief
executive officer of PSB. Mr. Havner’s compensation is allocated between the Company and PSB.
F-29
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
On December 31, 2001, the Company acquired equity interests in the Consolidated Entities from Mr.
Hughes for a cash price of $786,770, a price representing the Hughes family’s original cost in these equity
interests. This amount is included in the acquisition of minority interests described as the “Other consolidated
partnerships” in Note 9.
In January 2001, the Company repurchased 10,000 shares of common stock from a corporation
wholly-owned by a director of the Company for an aggregate of $251,875 cash. In March 2001, the Company
repurchased 2,619,893 shares of common stock from a limited liability company of which a director of the
Company is a controlling member for an aggregate of $68,064,820 cash. In each transaction, the purchase price
approximated market value as of the date of each transaction.
In December 2001, the Company loaned $35,000,000 to PSB. This loan bore interest at the rate of
3.25% per year. This loan, which was repaid in full on January 28, 2002, was included in Notes Receivable at
December 31, 2001.
In June 2002, we sold an undeveloped parcel of land at cost to PSB for an aggregate of $1,100,000
cash.
PSB manages certain of the commercial facilities owned by the Company pursuant to management
agreements for a management fee equal to 5% of revenues. The Company paid a total of $578,000, $642,000,
and $589,000, respectively, in 2002, 2001 and 2000 in management fees with respect to PSB’s property
management services.
12.
Stock options
The Company has a 1990 Stock Option Plan (the “1990 Plan”) which provides for the grant of non-
qualified stock options. The Company has a 1994 Stock Option Plan (the “1994 Plan”), a 1996 Stock Option
and Incentive Plan (the “1996 Plan”) and a 2000 Non-Executive/Non-Director Stock Option and Incentive Plan
(the “2000 Plan”), each of which provides for the grant of non-qualified options and incentive stock options.
(The 1990 Plan, the 1994 Plan, the 1996 Plan and the 2000 Plan are collectively referred to as the “PSI Plans”).
Under the PSI Plans, the Company has granted non-qualified options to certain directors, officers and key
employees to purchase shares of the Company’s common stock at a price equal to the fair market value of the
common stock at the date of grant. Generally, options under the Plans vest over a three-year period from the
date of grant at the rate of one-third per year and expire (i) under the 1990 Plan, five years after the date they
became exercisable and (ii) under the 1994 Plan, the 1996 Plan and the 2000 Plan, ten years after the date of
grant. The 1996 Plan and the 2000 Plan also provide for the grant of restricted stock to officers, key employees
and service providers on terms determined by an authorized committee of the Board of Directors; no shares of
restricted stock have been granted. In connection with the Storage Trust merger in March 1999, we assumed
the outstanding non-qualified options under the Storage Trust Realty 1994 Share Incentive Plan (the “Storage
Trust Plan”), which were converted into non-qualified options to purchase our common stock (the PSI Plans
and the Storage Trust Plan are collectively referred to as the “Plans.”)
Information with respect to the Plans during 2002, 2001 and 2000 is as follows:
F-30
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Options outstanding January 1
Granted
Exercised
Canceled
Options outstanding December 31
Number
of
Options
6,677,334
792,000
(948,932)
(581,178)
5,939,224
Option price range at December 31 (a)
Options exercisable at December 31
Options available for grant at December 31
3,666,641
4,352,690
2002
2001
2000
Average
Price per
Share
$24.81
33.20
24.59
26.61
$25.79
$14.88
to $37.40
$24.46
Number
of
Options
6,412,576
1,776,500
(704,901)
(806,841)
6,677,334
2,618,889
4,563,512
Average
Price per
Share
$23.65
27.93
22.50
24.51
$24.81
$14.88
to $34.68
$24.14
Number
of
Options
3,024,274
3,762,500
(242,598)
(131,600)
6,412,576
1,680,083
33,171
Average
Price per
Share
$24.08
23.06
18.99
26.01
$23.65
$14.13
to $33.56
$23.83
(a) Approximately 5,059,000, 6,532,334 and 6,362,575 of options outstanding at December 31, 2002, 2001 and 2000, had
exercise prices less than $30.
Accounting for stock options
Accounting principles generally accepted in the United States permit, but do not require, companies to
recognize compensation expense for stock-based awards based on their fair value at date of grant, which is then
amortized as compensation expense over the vesting period (the “Fair Value Method”). Companies can also
elect to disclose, but not recognize as an expense, stock option expense when stock options are granted to
employees at an exercise price equal to the market price at the date of grant (the “APB 25 Method”).
Companies can change their accounting method from the APB 25 Method to the Fair Value Method,
and in doing so can elect between three different methods of transition. The first is the prospective method,
whereby the Company applies the recognition provisions of the Fair Value Method to all stock options granted
after the beginning of the fiscal year in which the company adopts the Fair Value Method. The second is the
retroactive restatement method, whereby the company restates all periods presented to reflect compensation cost
utilizing the fair value method for all periods. The third is the modified prospective method, where the
company applies the Fair Value Method from the beginning of the current fiscal year with respect to all options
which vest during the year regardless of when they were granted
For periods prior to December 31, 2001, we utilized the APB 25 Method of accounting for employee
stock options. As of January 1, 2002, we adopted the Fair Value Method, and have elected to use the
prospective method of transition described above. Accordingly, we recognize compensation expense in our
income statement using the Fair Value Method only with respect to stock options issued after January 1, 2002.
The following table sets forth financial disclosures with respect to the accounting for stock options:
F-31
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Selected information with respect to employee stock options
For the years ended December 31,
2001
2002
2000
Average estimated value per option granted, utilizing the Black-
Scholes method ................................................................................
$1.86
$1.48
$2.30
Assumptions used in valuing options with the Black-Scholes
method:
Expected life of options in years................................................
Risk-free interest rate.................................................................
Expected volatility .....................................................................
Expected dividend yield.............................................................
Net income information with respect to each year
Net income, as reported....................................................................
Add back: stock-based employee compensation expense included in
net income ...................................................................................
Less: stock-based employee compensation cost that would have been
included if the fair value method were applied for all awards.....
5
3.2%
0.170
7%
5
4.1%
0.155
7%
5
6.2%
0.191
7%
$318,738
$324,208
$297,088
163
(3,595)
(4,176)
(1,671)
Net income, assuming consistent application of the fair value
method .........................................................................................
$315,306
$320,032
$295,417
Earnings per share, as reported:
Basic ...........................................................................................
Diluted .........................................................................................
$1.21
$1.19
Earnings per share, assuming consistent application of the fair
value method
Basic ...........................................................................................
Diluted .........................................................................................
$1.18
$1.17
$1.53
$1.51
$1.49
$1.48
$1.41
$1.41
$1.40
$1.40
13.
Disclosures regarding segment reporting
Description of each reportable segment
Our reportable segments reflect significant operating activities that are evaluated separately by
management. We have four reportable segments: self-storage operations, containerized storage operations,
commercial property operations, and tenant reinsurance operations.
F-32
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
The self-storage segment comprises the direct ownership, development, and operation of traditional
storage facilities, and the ownership of equity interests in entities that own storage properties. The
containerized storage operations represent another segment. The commercial property segment reflects our
interest in the ownership, operation, and management of commercial properties. The vast majority of the
commercial property operations are conducted through PSB, and to a much lesser extent the Company and
certain of its unconsolidated subsidiaries own commercial space, managed by PSB, within facilities that
combines storage and commercial space for rent. The tenant reinsurance segment reflects the operations of PS
Insurance Company, which reinsures policies against losses to goods stored by tenants in our self-storage
facilities
Measurement of segment profit or loss
We evaluate performance and allocate resources based upon the net segment income of each segment.
Net segment income represents net income in conformity with accounting principles generally accepted in the
United States and our significant accounting policies as denoted in Note 2, before interest and other income,
interest expense, corporate general and administrative expense, and minority interest in income. The
accounting policies of the reportable segments are the same as those described in the Summary of Significant
Accounting Policies.
Interest and other income, interest expense, corporate general and administrative expense, and minority
interest in income are not allocated to segments because management does not utilize them to evaluate the
results of operations of each segment.
Measurement of segment assets
No segment data relative to assets or liabilities is presented, because management does not consider the
historical cost of the Company’s real estate facilities and investments in real estate entities in evaluating the
performance of operating management or in evaluating alternative courses of action. The only other types of
assets that might be allocated to individual segments are trade receivables, payables, and other assets which
arise in the ordinary course of business, but they are also not a significant factor in the measurement of segment
performance.
Presentation of segment information
Our income statement provides most of the information required in order to determine the performance
of each of the Company’s three segments. The following tables reconcile the performance of each segment, in
terms of segment revenues and segment income, to our consolidated revenues and net income. It further
provides detail of the segment components of the income statement item, “Equity in earnings of real estate
entities.”
The following table reconciles revenue by segment to the Company’s consolidated revenues:
Reconciliation of Revenues by Segment
Year Ended December 31,
2001
2002
Change
2001
(amounts in thousands)
Year Ended December 31,
2000
Change
Self-storage facility rentals ....................
Commercial property rentals..................
Containerized storage rentals.................
Tenant re-insurance premiums...............
Interest and other income (not allocated
to segments)........................................
Total revenues ................................
$ 763,287
11,781
37,776
19,947
$ 721,662
12,070
34,212
-
$
41,625
(289)
3,564
19,947
$ 721,662
12,070
34,212
-
$ 653,110
10,849
32,091
-
$
68,552
1,221
2,121
-
8,661
$ 841,452
14,225
$ 782,169
$
(5,564)
59,283
14,225
$ 782,169
18,836
$ 714,886
$
(4,611)
67,283
F-33
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
The following table sets forth a reconciliation of each segment’s net income to the Company’s
consolidated net income:
Reconciliation of Net Income by Segment:
Self-storage
Self-storage net operating income ....................
Self-storage depreciation ..................................
Equity in earnings – storage property
Year Ended December 31,
Year Ended December 31,
2002
2001
Change
2001
2000
Change
(Dollar amounts in thousands)
$512,330
(171,415)
$492,451
(158,476)
$19,879
(12,939)
$492,451
(158,476)
$442,648
(141,425)
$49,803
(17,051)
operations .....................................................
7,047
22,912
(15,865)
22,912
21,265
1,647
Equity in earnings – depreciation (self-
storage) ........................................................
Total self-storage segment net income........
(1,619)
346,343
(7,562)
349,325
5,943
(2,982)
(7,562)
349,325
(7,153)
315,335
(409)
33,990
Commercial properties
Commercial properties .....................................
Depreciation and amortization – commercial
7,319
8,209
(890)
8,209
7,148
1,061
properties ......................................................
(2,544)
(2,569)
25
(2,569)
(2,176)
(393)
Equity in earnings – commercial property
operations .....................................................
Equity in earnings – depreciation (commercial
properties) ....................................................
Discontinued operations (Note 4) ....................
Total commercial property segment net
63,233
51,335
11,898
51,335
42,562
8,773
(25,459)
77
(17,534)
233
(7,925)
(156)
(17,534)
233
(14,672)
252
(2,862)
(19)
income .....................................................
42,626
39,674
2,952
39,674
33,114
6,560
Containerized storage
Containerized storage net operating income .....
Containerized storage depreciation ...................
Discontinued operations (Note 4) ....................
7,089
(5,675)
(11,472)
4,296
(5,133)
(1,381)
2,793
(542)
(10,091)
4,296
(5,133)
(1,381)
989
(4,594)
(1,530)
3,307
(539)
149
Total containerized storage segment net
loss........................................................
(10,058)
(2,218)
(7,840)
(2,218)
(5,135)
2,917
Tenant Reinsurance
Tenant reinsurance operating income...........
10,536
-
10,536
-
-
-
Other items not allocated to segments
Equity in earnings – general and
administrative and other ..............................
Interest and other income..................................
General and administrative ..............................
Interest expense ................................................
Minority interest in income .............................
Gain/(loss) on disposition of real estate............
Total other items not allocated to segments
(13,314)
8,661
(15,619)
(3,809)
(44,087)
(2,541)
(70,709)
(10,609)
14,225
(21,038)
(3,227)
(46,015)
4,091
(62,573)
(2,705)
(5,564)
5,419
(582)
1,928
(6,632)
(8,136)
(10,609)
14,225
(21,038)
(3,227)
(46,015)
4,091
(62,573)
(2,683)
18,836
(21,306)
(3,293)
(38,356)
576
(46,226)
(7,926)
(4,611)
268
66
(7,659)
3,515
(16,347)
Total consolidated company net income ..
$318,738
$324,208
$(5,470)
$324,208
$297,088
$27,120
14.
Events subsequent to December 31, 2002 (Unaudited)
We have called for redemption all of the outstanding shares of our 9.20% Cumulative Preferred Stock,
Series B, at $25 per share plus accrued dividends. The redemption will be completed on March 31, 2003.
F-34
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
On April 28, 2003 we expect to acquire all of the 52,851 limited partnership units that we did not own
in PS Partners IV, Ltd., a partnership which is consolidated with the Company. The acquisition of the 52,851
units will be accomplished through a merger of a subsidiary of the Company into the partnership and the
conversion of the 52,851 units into either cash or common stock of the Company. Each unit will be converted
into the right to receive a value of $442 in our common stock or, cash at the election of the unitholder.
15.
Recent accounting pronouncements and guidance
In June 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“FAS 146”), which is
effective for disposal activities entered into after December 31, 2002, with early adoption encouraged. FAS 146
requires that a liability for costs associated with exit or disposal activities be recognized when the liability is
incurred. Current accounting principles generally accepted in the United States result in the recognition of such
liabilities at the time management has committed to an exit plan. There would have been no material impact
upon the Company’s income statement if we had early adopted this standard in 2002. The impact of this
statement on the Company’s future operating results cannot be determined at this time, because such impact is
dependent upon the Company’s future level of exit and disposal activities, which is unknown.
16.
Commitments and Contingencies
Legal proceedings
Salaam, et. Al V. Public Storage, Inc. (filed February 2000)
The plaintiffs in this case are suing the Company on behalf of a purported class of California resident
property managers who claim that they were not compensated for all the hours they worked. The named
plaintiffs have indicated that their claims total less than $20,000 in aggregate. This maximum potential liability
cannot be estimated, but can only be increased if a class is certified or if claims are permitted to be brought on
behalf of the others under the California Unfair Business Practices Act. The plaintiffs’ motion for class
certification was denied in August 2002; the plaintiffs have appealed this denial. This denial does not deal with
the claim under the California Unfair Business Practices Act.
The Company is continuing to vigorously contest the claims in this case and intends to resist any
expansion beyond the named plaintiffs on the grounds of lack of commonality of claims. The Company’s
resistance will include opposing the plaintiffs’ appeal of the court’s denial of class certification and opposing
the claim on behalf of others under the California Unfair Business Practices Act.
Henriquez v. Public Storage, Inc. (Filed June 2002; Dismissed January, 2003)
The plaintiff in this case filed a suit against the Company on behalf of a purported class of renters who
rented self-storage units from the Company. Plaintiff alleged that the Company misrepresents the size of its
units and sought damages and injunctive and declaratory relief under California statutory and common law
relating to consumer protection, unfair competition, fraud and deceit and negligent misrepresentation. In
January 2003, the plaintiff caused this suit to be dismissed. The plaintiff’s attorney has advised that he
anticipates filing a similar suit against the Company on behalf of a new plaintiff. The Company cannot
presently determine the potential total damages, if any, or the ultimate outcome of any such litigation. If a new
suit is filed, the Company intends to vigorously contest any claims on which it is based.
F-35
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
The Company is a party to various claims, complaints, and other legal actions that have arisen in the
normal course of business from time to time, that are not described above. We believe that it is unlikely that the
outcome of these other pending legal proceedings, in the aggregate, will have a material adverse effect upon the
operations or financial position of the Company.
Sale of Partnership Units
In February 2000, the Company entered into a settlement of litigation arising out of a 1997 tender offer
for limited partnership units in two affiliated partnerships. Under the settlement agreement, the Company
agreed to sell to the plaintiff units representing a 4% interest in each of the partnerships for a total payment of
approximately $1,523,000. The plaintiff failed to tender the full purchase price at the scheduled closing and the
settlement collapsed.
In September 2000, the plaintiff amended its complaint to add a claim for breach of the settlement
agreement seeking specific enforcement and a claim seeking damages for unfair and deceptive trade practices in
connection with the alleged breach. By amending the complaint the Company believes the plaintiff elected to
abandon its underlying claims in the litigation. The Company asserted affirmative defenses including the
material breach by the plaintiff. Cross motions for summary judgment were filed by the parties. In July 2002,
the court granted plaintiff’s motion for summary judgment as to its claim for breach of the settlement agreement
and granted the Company’s motion for summary judgment to dismiss plaintiff’s claim for unfair and deceptive
trade practices.
In March 2003, the court granted plaintiff’s motion to compel the sale of the units to the plaintiff. The
Company is considering whether to appeal. If the Company is compelled to sell the units to plaintiff, the
Company would incur a loss of approximately $1,839,000, which has been accrued as a loss on sale of real
estate investments in the Company’s income statement during 2002.
Insurance and Loss Exposure
Our facilities have historically carried comprehensive insurance, including fire, earthquake, liability
and extended coverage through STOR-Re, one of the Consolidated Entities, and insures portions of these risks
through nationally recognized insurance carriers. STOR-Re also insures affiliates of the Company.
The Company, Stor-RE, and its affiliates’ maximum aggregate annual exposure for losses that are
below the deductibles set forth in the third-party insurance contracts, assuming multiple significant events
occur, is approximately $30 million. In addition, if losses exhaust the third-party insurers’ limit of coverage of
$125,000,000 for property coverage and $101,000,000 for general liability, our exposure could be greater.
These limits are higher than estimates of maximum probable losses that could occur from individual
catastrophic events (i.e., earthquake and wind damage) determined in recent engineering and actuarial studies.
PS Insurance Company reinsures policies against claims for losses to goods stored by tenants at our
self-storage facilities (see Note 3). PSIC reinsures its risks with third-party insures from any individual event
that exceeds a loss of $500,000 up to the policy limit of $10,000,000.
F-36
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
17.
Supplementary quarterly financial data (unaudited)
Three months ended
March 31,
2002
June 30,
2002
September 30,
2002
December 31,
2002
Revenues from operations (a) ...........
$ 203,790
Cost of operations (a)........................
Net income ........................................
Per Common Share (Note 2):
Net income - Basic .......................
Net income - Diluted....................
$
$
$
$
67,365
87,455
0.38
0.37
(in thousands, except per share data)
$ 205,657
$ 215,797
$
$
$
$
69,668
80,718
$ 76,004
$ 83,351
0.30
0.30
$
$
0.32
0.32
Three months ended
$ 207,547
$
$
$
$
82,480
67,214
0.20
0.20
March 31,
2001
June 30,
2001
September 30,
2001
December 31,
2001
Revenues from operations (a) ...........
$ 181,758
Cost of operations (a)........................
Net income ........................................
Per Common Share (Note 2):
Net income – Basic .......................
Net income – Diluted ....................
$
$
$
$
63,852
74,635
0.34
0.34
(in thousands, except per share data)
$ 190,459
$ 199,818
$
$
$
$
62,881
81,773
$ 67,658
$ 83,604
0.40
0.39
$
$
0.41
0.41
$ 195,909
$
$
$
$
68,597
84,196
0.38
0.38
(a) Revenues and cost of operations as presented in this table differ from the revenue and cost of operations as presented
in the Company’s quarterly reports due primarily to the impact of discontinued operations accounting with respect to
certain containerized storage facilities that were closed in 2002, as described in Note 4.
F-37
Date
Acquired
Description
Mini-warehouses
San Jose / Snell
San Jose / Tully
San Carlos / Storage
1/1/81 Newport News / Jefferson Avenue
1/1/81 Virginia Beach / Diamond Springs
8/1/81
10/1/81 Tampa / Lazy Lane
6/1/82
6/1/82
6/1/82 Mountain View
6/1/82 Cupertino / Storage
10/1/82 Sorrento Valley
10/1/82 Northwood
12/1/82 Port/Halsey
12/1/82 Sacto/Folsom
Platte
1/1/83
1/1/83
Semoran
1/1/83 Raleigh/Yonkers
3/1/83 Blackwood
4/1/83 Vailsgate
5/1/83 Delta Drive
6/1/83 Ventura
9/1/83
9/1/83
9/1/83 Webster/Keystone
9/1/83 Dover
9/1/83 Newcastle
9/1/83 Newark
9/1/83
9/1/83 Hobart
9/1/83
9/1/83
10/1/83 Orlando J. Y. Parkway
11/1/83 Aurora
11/1/83 Campbell
11/1/83 Col Springs/Ed
11/1/83 Col Springs/Mv
11/1/83 Thorton
11/1/83 Oklahoma City
11/1/83 Tucson
Ft. Wayne/W. Coliseum
Ft. Wayne/Bluffton
Southington
Southhampton
Langhorne
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
463,000
527,000
-
-
669,000
807,000
1,153,000
907,000
823,000
1,244,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
108,000
186,000
312,000
282,000
645,000
780,000
1,180,000
572,000
1,002,000
1,034,000
357,000
396,000
409,000
442,000
203,000
213,000
103,000
67,000
658,000
124,000
331,000
449,000
107,000
227,000
208,000
263,000
215,000
160,000
88,000
383,000
505,000
1,379,000
471,000
320,000
418,000
454,000
343,000
591,000
652,000
391,000
637,000
12,123,000
569,000
562,000
460,000
(809,000)
325,000
(407,000)
656,000
391,000
6,157,000
442,000
278,000
445,000
222,000
195,000
326,000
643,000
725,000
468,000
427,000
319,000
495,000
583,000
286,000
172,000
375,000
310,000
(511,000)
155,000
266,000
118,000
838,000
636,000
1,071,000
1,094,000
1,815,000
1,899,000
1,579,000
1,387,000
1,182,000
1,270,000
1,343,000
1,522,000
1,150,000
329,000
953,000
1,882,000
914,000
1,559,000
990,000
481,000
1,734,000
1,233,000
1,738,000
1,688,000
1,462,000
2,163,000
2,031,000
3,549,000
1,491,000
1,395,000
675,000
1,512,000
758,000
1,849,000
1,640,000
1,036,000
1,400,000
1,030,000
778,000
F-38
-
-
-
-
-
-
-
-
-
-
326,000
323,000
428,000
720,000
425,000
595,000
505,000
241,000
583,000
546,000
806,000
813,000
627,000
817,000
746,000
1,445,000
838,000
535,000
285,000
622,000
341,000
474,000
554,000
441,000
536,000
620,000
420,000
108,000
186,000
312,000
282,000
4,528,000
781,000
1,181,000
573,000
652,000
1,035,000
357,000
396,000
409,000
443,000
203,000
213,000
103,000
68,000
659,000
123,000
331,000
450,000
107,000
227,000
208,000
263,000
215,000
160,000
88,000
383,000
506,000
1,381,000
472,000
320,000
418,000
455,000
343,000
1,662,000
1,746,000
2,206,000
2,536,000
9,819,000
1,955,000
1,743,000
1,729,000
884,000
1,846,000
1,069,000
1,308,000
1,772,000
8,758,000
1,781,000
2,432,000
1,940,000
943,000
2,511,000
2,106,000
3,187,000
3,225,000
2,557,000
3,407,000
3,096,000
5,489,000
2,912,000
2,216,000
1,132,000
2,509,000
1,408,000
1,810,000
2,348,000
1,743,000
2,054,000
2,487,000
1,834,000
1,770,000
1,932,000
2,518,000
2,818,000
14,347,000
2,736,000
2,924,000
2,302,000
1,536,000
2,881,000
1,426,000
1,704,000
2,181,000
9,201,000
1,984,000
2,645,000
2,043,000
1,011,000
3,170,000
2,229,000
3,518,000
3,675,000
2,664,000
3,634,000
3,304,000
5,752,000
3,127,000
2,376,000
1,220,000
2,892,000
1,914,000
3,191,000
2,820,000
2,063,000
2,472,000
2,942,000
2,177,000
1,429,000
1,488,000
1,915,000
2,145,000
2,104,000
1,603,000
1,467,000
1,390,000
729,000
1,445,000
670,000
853,000
1,087,000
2,097,000
1,172,000
1,491,000
1,216,000
583,000
1,535,000
1,259,000
1,987,000
2,051,000
1,544,000
2,073,000
1,867,000
3,328,000
1,786,000
1,309,000
690,000
1,518,000
844,000
1,079,000
1,458,000
1,046,000
1,268,000
1,495,000
1,068,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Independence
Fremont/Albrae
11/1/83 Webster/Nasa
12/1/83 Charlotte
12/1/83 Greensboro/Market
12/1/83 Greensboro/Electra
12/1/83 Columbia
12/1/83 Richmond
12/1/83 Augusta
12/1/83 Tacoma
1/1/84
1/1/84 Belton
1/1/84 Gladstone
1/1/84 Hickman/112
1/1/84 Holmes
1/1/84
1/1/84 Merriam
1/1/84 Olathe
Shawnee
1/1/84
1/1/84
Topeka
2/1/84 Unicorn/Nkoxville
2/1/84 Central/Knoxville
3/1/84 Marrietta/Cobb
3/1/84 Manassas
3/1/84
4/1/84
4/1/84 Milwaukie/Oregon
5/1/84 Raleigh/Departure
5/1/84 Virginia Beach
5/1/84
5/1/84 Garland
6/1/84
6/1/84 Baltimore
6/1/84
Laurel
6/1/84 Delran
6/1/84 Orange Blossom
6/1/84 Cincinnati
6/1/84
7/1/84
8/1/84 Medley
Pico Rivera
Providence
Philadelphia/Grant
Lorton
Florence
Trevose/Old Lincoln
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,570,000
165,000
214,000
112,000
171,000
176,000
97,000
553,000
636,000
175,000
275,000
257,000
289,000
221,000
255,000
107,000
205,000
75,000
662,000
449,000
73,000
320,000
743,000
92,000
289,000
302,000
509,000
1,041,000
356,000
435,000
382,000
501,000
279,000
226,000
402,000
185,000
421,000
584,000
1,066,000
465,000
658,000
353,000
518,000
430,000
333,000
400,000
491,000
667,000
472,000
456,000
383,000
381,000
433,000
341,000
466,000
257,000
720,000
597,000
313,000
409,000
354,000
390,000
279,000
525,000
725,000
522,000
243,000
542,000
870,000
706,000
325,000
250,000
607,000
449,000
428,000
361,000
2,457,000
1,274,000
1,653,000
869,000
1,318,000
1,360,000
747,000
1,173,000
1,659,000
858,000
1,799,000
1,848,000
1,333,000
1,848,000
1,469,000
992,000
1,420,000
1,049,000
1,887,000
1,281,000
542,000
1,556,000
807,000
1,087,000
584,000
2,484,000
2,121,000
3,262,000
844,000
2,040,000
1,793,000
2,349,000
1,472,000
924,000
1,573,000
740,000
1,749,000
1,016,000
F-39
1,372,000
442,000
794,000
382,000
492,000
468,000
324,000
487,000
532,000
378,000
640,000
618,000
455,000
609,000
480,000
361,000
502,000
356,000
692,000
455,000
259,000
553,000
321,000
423,000
311,000
788,000
776,000
971,000
360,000
682,000
634,000
824,000
573,000
398,000
672,000
376,000
582,000
464,000
1,573,000
165,000
214,000
112,000
171,000
176,000
97,000
554,000
637,000
175,000
275,000
257,000
289,000
221,000
255,000
107,000
205,000
75,000
663,000
450,000
73,000
320,000
744,000
92,000
289,000
302,000
500,000
1,041,000
356,000
436,000
382,000
502,000
279,000
226,000
402,000
185,000
421,000
585,000
4,892,000
2,181,000
3,105,000
1,604,000
2,328,000
2,258,000
1,404,000
2,059,000
2,681,000
1,903,000
2,911,000
2,922,000
2,171,000
2,838,000
2,382,000
1,694,000
2,388,000
1,662,000
3,298,000
2,332,000
1,114,000
2,518,000
1,481,000
1,900,000
1,174,000
3,797,000
3,631,000
4,755,000
1,447,000
3,263,000
3,297,000
3,878,000
2,370,000
1,572,000
2,852,000
1,565,000
2,759,000
1,840,000
6,465,000
2,346,000
3,319,000
1,716,000
2,499,000
2,434,000
1,501,000
2,613,000
3,318,000
2,078,000
3,186,000
3,179,000
2,460,000
3,059,000
2,637,000
1,801,000
2,593,000
1,737,000
3,961,000
2,782,000
1,187,000
2,838,000
2,225,000
1,992,000
1,463,000
4,099,000
4,131,000
5,796,000
1,803,000
3,699,000
3,679,000
4,380,000
2,649,000
1,798,000
3,254,000
1,750,000
3,180,000
2,425,000
3,057,000
1,375,000
1,983,000
1,022,000
1,500,000
1,413,000
894,000
1,325,000
1,748,000
1,183,000
1,852,000
1,876,000
1,363,000
1,794,000
1,504,000
1,078,000
1,496,000
1,051,000
2,049,000
1,390,000
706,000
1,581,000
972,000
1,219,000
746,000
2,398,000
2,256,000
2,994,000
878,000
2,064,000
1,967,000
2,456,000
1,406,000
937,000
1,696,000
926,000
1,727,000
1,113,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Simi Valley
Portland
Fern Park
Fairfield
8/1/84 Oklahoma City
8/1/84 Newport News
8/1/84 Kaplan/Walnut Hill
8/1/84 Kaplan/Irving
9/1/84 Cockrell Hill
11/1/84 Omaha
11/1/84 Hialeah
12/1/84 Austin/Lamar
12/1/84 Pompano
12/1/84 Fort Worth
12/1/84 Montgomeryville
1/1/85 Cranston
1/1/85 Bossier City
2/1/85
2/1/85 Hurst
3/1/85 Chattanooga
3/1/85
3/1/85
3/1/85
3/1/85 Houston / Westheimer
4/1/85 Austin/ S. First
4/1/85 Cincinnati/ E. Kemper
4/1/85 Cincinnati/ Colerain
4/1/85
4/1/85
5/1/85
5/1/85 Milwaukie/ Mcloughlin
5/1/85 Manchester/ S. Willow
5/1/85
Longwood
5/1/85 Columbus/Busch Blvd.
5/1/85 Columbus/Kinnear Rd.
5/1/85 Worthington
5/1/85 Arlington
6/1/85 N. Hollywood/ Raymer
6/1/85 Grove City/ Marlane Drive
6/1/85 Reynoldsburg
7/1/85
7/1/85
Florence/ Tanner Lane
Laguna Hills
Tacoma/ Phillips Rd.
San Diego/ Kearny Mesa Rd
Scottsdale/ 70th St
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
397,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
340,000
356,000
971,000
677,000
380,000
109,000
886,000
643,000
399,000
122,000
215,000
175,000
184,000
737,000
231,000
202,000
285,000
144,000
338,000
850,000
778,000
232,000
253,000
218,000
1,224,000
396,000
458,000
371,000
355,000
202,000
241,000
221,000
201,000
967,000
150,000
204,000
783,000
632,000
579,000
708,000
888,000
3,453,000
1,087,000
519,000
347,000
511,000
669,000
37,000
380,000
340,000
521,000
339,000
246,000
501,000
304,000
241,000
484,000
763,000
375,000
313,000
401,000
369,000
425,000
292,000
382,000
(128,000)
309,000
409,000
393,000
393,000
455,000
264,000
379,000
443,000
347,000
326,000
1,310,000
2,395,000
2,359,000
1,592,000
913,000
806,000
1,784,000
947,000
1,386,000
928,000
2,085,000
722,000
1,542,000
1,389,000
1,220,000
1,573,000
941,000
1,107,000
1,187,000
1,179,000
1,282,000
1,573,000
1,717,000
1,477,000
3,303,000
1,204,000
742,000
2,129,000
1,645,000
1,559,000
1,865,000
1,824,000
1,497,000
848,000
1,157,000
1,568,000
1,750,000
1,368,000
F-40
652,000
1,013,000
1,041,000
639,000
675,000
399,000
672,000
443,000
698,000
303,000
776,000
267,000
656,000
520,000
480,000
683,000
438,000
432,000
527,000
-
170,000
223,000
230,000
209,000
1,213,000
167,000
210,000
199,000
669,000
592,000
771,000
709,000
618,000
143,000
471,000
598,000
264,000
174,000
340,000
356,000
972,000
679,000
380,000
109,000
887,000
644,000
399,000
122,000
215,000
175,000
184,000
738,000
231,000
202,000
285,000
144,000
338,000
851,000
779,000
232,000
253,000
218,000
1,225,000
396,000
459,000
371,000
355,000
202,000
241,000
221,000
201,000
968,000
150,000
204,000
784,000
633,000
2,541,000
4,116,000
4,287,000
5,682,000
2,675,000
1,724,000
2,802,000
1,900,000
2,753,000
1,268,000
3,241,000
1,329,000
2,719,000
2,247,000
1,946,000
2,757,000
1,683,000
1,780,000
2,198,000
1,941,000
1,826,000
2,109,000
2,348,000
2,055,000
4,940,000
1,663,000
1,333,000
2,200,000
2,623,000
2,560,000
3,029,000
2,926,000
2,570,000
1,254,000
2,007,000
2,609,000
2,360,000
1,867,000
2,881,000
4,472,000
5,259,000
6,361,000
3,055,000
1,833,000
3,689,000
2,544,000
3,152,000
1,390,000
3,456,000
1,504,000
2,903,000
2,985,000
2,177,000
2,959,000
1,968,000
1,924,000
2,536,000
2,792,000
2,605,000
2,341,000
2,601,000
2,273,000
6,165,000
2,059,000
1,792,000
2,571,000
2,978,000
2,762,000
3,270,000
3,147,000
2,771,000
2,222,000
2,157,000
2,813,000
3,144,000
2,500,000
1,477,000
2,455,000
2,527,000
1,774,000
1,628,000
1,029,000
1,668,000
1,072,000
1,598,000
760,000
1,877,000
814,000
1,547,000
1,312,000
1,138,000
1,560,000
958,000
1,033,000
1,227,000
1,360,000
1,217,000
1,386,000
1,531,000
1,369,000
2,890,000
1,093,000
884,000
1,458,000
1,516,000
1,425,000
1,699,000
1,639,000
1,448,000
854,000
1,129,000
1,451,000
1,593,000
1,201,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Lilburn
Indianapolis/ Pike Place
Indianapolis/ Beach Grove
7/1/85 Concord/ Hwy 29
7/1/85 Columbus/Morse Rd.
7/1/85 Columbus/Kenney Rd.
7/1/85 Westerville
7/1/85
Springfield
7/1/85 Dayton/Needmore Road
7/1/85 Dayton/Executive Blvd.
7/1/85
9/1/85 Madison/ Copps Ave.
9/1/85 Columbus/ Sinclair
Philadelphia/ Tacony St
9/1/85
10/1/85 N. Hollywood/ Whitsett
10/1/85 Portland/ SE 82nd St
10/1/85 Perrysburg/ Helen Dr.
10/1/85 Columbus/ Ambleside
10/1/85
10/1/85
10/1/85 Hartford/ Roberts
10/1/85 Wichita/ S. Rock Rd.
10/1/85 Wichita/ E. Harry
10/1/85 Wichita/ S. Woodlawn
10/1/85 Wichita/ E. Kellogg
10/1/85 Wichita/ S. Tyler
10/1/85 Wichita/ W. Maple
10/1/85 Wichita/ Carey Lane
10/1/85 Wichita/ E. Macarthur
10/1/85
Joplin/ S. Range Line
10/1/85 San Antonio/ Wetmore Rd.
10/1/85 San Antonio/ Callaghan
10/1/85 San Antonio/ Zarzamora
10/1/85 San Antonio/ Hackberry
10/1/85 San Antonio/ Fredericksburg
10/1/85 Dallas/ S. Westmoreland
10/1/85 Dallas/ Alvin St.
10/1/85 Fort Worth/ W. Beach St.
10/1/85 Fort Worth/ E. Seminary
10/1/85 Fort Worth/ Cockrell St.
11/1/85 Everett/ Evergreen
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150,000
195,000
199,000
199,000
90,000
144,000
160,000
331,000
450,000
307,000
118,000
1,524,000
354,000
110,000
124,000
229,000
198,000
219,000
501,000
313,000
263,000
185,000
294,000
234,000
192,000
220,000
264,000
306,000
288,000
364,000
388,000
287,000
474,000
359,000
356,000
382,000
323,000
706,000
381,000
422,000
429,000
476,000
329,000
411,000
429,000
243,000
419,000
339,000
291,000
384,000
321,000
(26,000)
22,000
254,000
246,000
362,000
244,000
84,000
114,000
(35,000)
78,000
(50,000)
23,000
(101,000)
195,000
529,000
382,000
595,000
2,461,000
435,000
172,000
172,000
187,000
206,000
171,000
528,000
750,000
1,510,000
1,531,000
1,517,000
699,000
1,108,000
1,207,000
969,000
1,150,000
893,000
1,782,000
2,576,000
496,000
1,590,000
1,526,000
1,531,000
1,342,000
1,481,000
1,478,000
1,050,000
905,000
658,000
1,004,000
805,000
674,000
775,000
904,000
1,079,000
1,016,000
1,281,000
1,367,000
1,009,000
1,670,000
1,266,000
1,252,000
1,346,000
1,136,000
2,294,000
F-41
189,000
670,000
598,000
620,000
332,000
460,000
569,000
424,000
151,000
110,000
186,000
332,000
96,000
140,000
139,000
215,000
176,000
319,000
142,000
74,000
91,000
55,000
151,000
68,000
63,000
93,000
98,000
621,000
523,000
669,000
1,002,000
554,000
734,000
565,000
532,000
560,000
519,000
1,061,000
150,000
195,000
199,000
199,000
90,000
144,000
159,000
330,000
451,000
307,000
118,000
1,526,000
354,000
110,000
124,000
229,000
198,000
219,000
643,000
285,000
263,000
185,000
294,000
234,000
192,000
220,000
264,000
306,000
288,000
364,000
389,000
287,000
475,000
359,000
356,000
382,000
323,000
707,000
1,320,000
2,602,000
2,558,000
2,613,000
1,360,000
1,979,000
2,206,000
1,637,000
1,719,000
1,342,000
2,259,000
3,290,000
913,000
1,704,000
1,687,000
2,000,000
1,764,000
2,162,000
1,722,000
1,236,000
1,110,000
678,000
1,233,000
823,000
760,000
767,000
1,197,000
2,229,000
1,921,000
2,545,000
4,829,000
1,998,000
2,575,000
2,003,000
1,971,000
2,112,000
1,826,000
3,882,000
1,470,000
2,797,000
2,757,000
2,812,000
1,450,000
2,123,000
2,365,000
1,967,000
2,170,000
1,649,000
2,377,000
4,816,000
1,267,000
1,814,000
1,811,000
2,229,000
1,962,000
2,381,000
2,365,000
1,521,000
1,373,000
863,000
1,527,000
1,057,000
952,000
987,000
1,461,000
2,535,000
2,209,000
2,909,000
5,218,000
2,285,000
3,050,000
2,362,000
2,327,000
2,494,000
2,149,000
4,589,000
897,000
1,445,000
1,446,000
1,469,000
757,000
1,108,000
1,266,000
927,000
1,120,000
857,000
1,479,000
2,173,000
624,000
1,104,000
1,056,000
1,301,000
1,158,000
1,388,000
1,082,000
856,000
725,000
467,000
891,000
551,000
510,000
514,000
758,000
1,104,000
1,012,000
1,253,000
1,388,000
1,057,000
1,372,000
1,075,000
1,050,000
1,129,000
984,000
2,107,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
11/1/85 Seattle/ Empire Way
12/1/85 Milpitas
12/1/85 Pleasanton/ Santa Rita
12/1/85 Amherst/ Niagra Falls
12/1/85 West Sams Blvd.
12/1/85 MacArthur Rd.
12/1/85 Brockton/ Main
12/1/85 Eatontown/ Hwy 35
12/1/85 Denver/ Leetsdale
1/1/86 Mapleshade/ Rudderow
1/1/86 Bordentown/ Groveville
Sun Valley/ Sheldon
1/1/86
1/1/86
Las Vegas/ Highland
2/1/86 Costa Mesa/ Pomona
2/1/86 Brea/ Imperial Hwy
Skokie/ McCormick
2/1/86
2/1/86 Colorado Springs/ Sinton
2/1/86 Oklahoma City/ Penn
2/1/86 Oklahoma City/ 39th
3/1/86
3/1/86
3/3/86
4/1/86 Reno/ Telegraph
4/1/86
4/1/86
4/1/86
5/1/86 Westlake Village
5/1/86
6/1/86 Richland Hills
6/1/86 West Valley/So. 3600
7/1/86 Colorado Springs/ Hollow Tree
7/1/86 West LA/Purdue Ave.
7/1/86 Capital Heights/Central Ave.
Pontiac/Dixie Hwy.
7/1/86
Portland/Johns Landing Area
7/1/86
8/1/86
Laurel/Ft. Meade Rd.
8/1/86 Hammond / Calumet
9/1/86 Kansas City/S. 44th.
St. Louis/Kirkham
St. Louis/Reavis
Fort Worth/East Loop
Jacksonville/ Wiley
St. Louis/ Forder
Tampa / 56th
Sacramento/Franklin Blvd.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
358,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,652,000
1,623,000
1,226,000
132,000
164,000
204,000
153,000
308,000
603,000
362,000
196,000
544,000
432,000
1,405,000
1,069,000
638,000
535,000
146,000
238,000
140,000
517,000
450,000
649,000
199,000
192,000
196,000
1,205,000
872,000
543,000
208,000
574,000
2,415,000
649,000
259,000
663,000
475,000
97,000
509,000
661,000
265,000
365,000
248,000
(266,000)
193,000
(205,000)
480,000
232,000
328,000
167,000
357,000
283,000
386,000
377,000
284,000
319,000
161,000
320,000
290,000
325,000
533,000
488,000
228,000
210,000
249,000
248,000
483,000
445,000
422,000
277,000
257,000
374,000
135,000
(19,000)
291,000
497,000
560,000
5,348,000
1,577,000
2,078,000
701,000
1,159,000
1,628,000
2,020,000
4,067,000
847,000
1,811,000
981,000
1,836,000
848,000
1,520,000
2,165,000
1,912,000
1,115,000
829,000
812,000
510,000
1,133,000
1,360,000
1,051,000
1,001,000
958,000
804,000
995,000
978,000
857,000
1,552,000
726,000
3,585,000
3,851,000
2,091,000
1,637,000
1,475,000
751,000
1,906,000
F-42
2,223,000
274,000
327,000
401,000
381,000
646,000
681,000
1,670,000
403,000
828,000
472,000
801,000
425,000
703,000
967,000
790,000
615,000
410,000
473,000
334,000
535,000
-
675,000
405,000
388,000
369,000
435,000
394,000
410,000
415,000
418,000
1,231,000
1,287,000
758,000
538,000
632,000
366,000
745,000
1,654,000
1,625,000
1,227,000
132,000
164,000
204,000
153,000
308,000
604,000
362,000
196,000
545,000
433,000
1,407,000
1,070,000
639,000
536,000
146,000
238,000
140,000
518,000
451,000
650,000
199,000
192,000
196,000
1,206,000
873,000
544,000
208,000
575,000
2,419,000
650,000
259,000
664,000
476,000
97,000
510,000
8,230,000
2,114,000
2,769,000
1,350,000
1,274,000
2,467,000
2,496,000
6,217,000
1,481,000
2,967,000
1,620,000
2,993,000
1,555,000
2,607,000
3,508,000
2,985,000
2,048,000
1,400,000
1,605,000
1,134,000
1,992,000
1,892,000
2,213,000
1,634,000
1,556,000
1,422,000
1,677,000
1,854,000
1,711,000
2,389,000
1,420,000
5,069,000
5,511,000
2,984,000
2,155,000
2,397,000
1,614,000
3,210,000
9,884,000
3,739,000
3,996,000
1,482,000
1,438,000
2,671,000
2,649,000
6,525,000
2,085,000
3,329,000
1,816,000
3,538,000
1,988,000
4,014,000
4,578,000
3,624,000
2,584,000
1,546,000
1,843,000
1,274,000
2,510,000
2,343,000
2,863,000
1,833,000
1,748,000
1,618,000
2,883,000
2,727,000
2,255,000
2,597,000
1,995,000
7,488,000
6,161,000
3,243,000
2,819,000
2,873,000
1,711,000
3,720,000
4,364,000
1,391,000
1,786,000
728,000
697,000
1,294,000
1,319,000
3,281,000
779,000
1,521,000
839,000
1,598,000
808,000
1,377,000
1,847,000
1,537,000
1,006,000
733,000
857,000
590,000
1,024,000
1,258,000
1,194,000
883,000
854,000
765,000
873,000
1,039,000
959,000
1,258,000
723,000
2,673,000
2,898,000
1,537,000
1,155,000
1,234,000
875,000
1,694,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Lakewood / Wadsworth - 6th
9/1/86
10/1/86 Peralta/Fremont
10/1/86 Birmingham/Highland
10/1/86 Birmingham/Riverchase
10/1/86 Birmingham/Eastwood
10/1/86 Birmingham/Forestdale
10/1/86 Birmingham/Centerpoint
10/1/86 Birmingham/Roebuck Plaza
10/1/86 Birmingham/Greensprings
10/1/86 Birmingham/Hoover-Lorna
10/1/86 Midfield/Bessemer
10/1/86 Huntsville/Leeman Ferry Rd.
10/1/86 Huntsville/Drake
10/1/86 Anniston/Whiteside
10/1/86 Houston/Glenvista
10/1/86 Houston/I-45
10/1/86 Houston/Rogerdale
10/1/86 Houston/Gessner
10/1/86 Houston/Richmond-Fairdale
10/1/86 Houston/Gulfton
10/1/86 Houston/Westpark
10/1/86
Jonesboro
10/1/86 Houston / South Loop West
10/1/86 Houston / Plainfield Road
10/1/86 Houston / North Freeway
10/1/86 Houston / Old Katy Road
10/1/86 Houston / Long Point
10/1/86 Austin / Research Blvd.
11/1/86 Arleta / Osborne Street
12/1/86 Lynnwood / 196th Street
12/1/86 N. Auburn / Auburn Way N.
12/1/86 Gresham / Burnside & 202nd
12/1/86 Denver / Sheridan Boulevard
12/1/86 Marietta / Cobb Parkway
12/1/86 Hillsboro / T.V. Highway
12/1/86 San Antonio / West Sunset Road
12/31/86 Monrovia / Myrtle Avenue
12/31/86 Chatsworth / Topanga
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
919,000
618,000
1,070,000
851,000
89,000
262,000
166,000
152,000
265,000
101,000
347,000
372,000
170,000
158,000
253,000
59,000
595,000
704,000
1,631,000
1,032,000
1,502,000
1,732,000
503,000
157,000
1,299,000
904,000
719,000
1,365,000
451,000
1,390,000
987,000
1,063,000
606,000
351,000
1,033,000
536,000
461,000
1,206,000
1,149,000
1,447,000
663,000
303,000
233,000
432,000
301,000
254,000
325,000
271,000
339,000
364,000
315,000
271,000
252,000
200,000
544,000
792,000
600,000
922,000
1,019,000
977,000
195,000
234,000
1,177,000
708,000
60,000
996,000
611,000
546,000
267,000
5,763,000
394,000
386,000
830,000
739,000
266,000
557,000
201,000
247,000
3,155,000
1,074,000
786,000
1,338,000
1,184,000
948,000
1,305,000
399,000
1,173,000
1,128,000
355,000
992,000
1,172,000
566,000
1,043,000
1,146,000
2,792,000
1,693,000
2,506,000
3,036,000
854,000
718,000
3,491,000
2,319,000
1,987,000
3,431,000
1,187,000
1,710,000
663,000
1,602,000
1,144,000
1,056,000
2,792,000
2,764,000
574,000
1,594,000
2,446,000
1,243,000
F-43
1,027,000
458,000
401,000
646,000
613,000
518,000
526,000
418,000
282,000
428,000
104,000
555,000
532,000
332,000
467,000
610,000
1,232,000
745,000
1,150,000
1,385,000
433,000
371,000
1,366,000
920,000
609,000
1,274,000
563,000
672,000
290,000
571,000
533,000
482,000
1,007,000
1,016,000
414,000
649,000
-
-
1,071,000
852,000
150,000
278,000
232,000
190,000
273,000
340,000
16,000
266,000
95,000
198,000
248,000
107,000
596,000
705,000
1,633,000
1,033,000
1,504,000
1,734,000
504,000
157,000
1,301,000
905,000
662,000
1,367,000
452,000
1,392,000
988,000
1,306,000
607,000
351,000
1,034,000
537,000
462,000
1,208,000
1,150,000
1,449,000
4,844,000
1,834,000
1,359,000
2,400,000
2,032,000
1,682,000
2,148,000
849,000
2,125,000
2,026,000
849,000
1,778,000
1,961,000
1,050,000
2,053,000
2,547,000
4,622,000
3,359,000
4,673,000
5,396,000
1,481,000
1,323,000
6,032,000
3,946,000
2,713,000
5,699,000
2,360,000
2,926,000
1,219,000
7,693,000
2,070,000
1,924,000
4,628,000
4,518,000
1,253,000
2,798,000
2,646,000
1,488,000
5,915,000
2,686,000
1,509,000
2,678,000
2,264,000
1,872,000
2,421,000
1,189,000
2,141,000
2,292,000
944,000
1,976,000
2,209,000
1,157,000
2,649,000
3,252,000
6,255,000
4,392,000
6,177,000
7,130,000
1,985,000
1,480,000
7,333,000
4,851,000
3,375,000
7,066,000
2,812,000
4,318,000
2,207,000
8,999,000
2,677,000
2,275,000
5,662,000
5,055,000
1,715,000
4,006,000
3,796,000
2,937,000
2,674,000
965,000
758,000
1,292,000
1,062,000
866,000
1,103,000
476,000
1,104,000
1,057,000
454,000
970,000
1,025,000
582,000
1,141,000
1,488,000
2,393,000
1,885,000
2,553,000
2,945,000
775,000
712,000
3,399,000
2,230,000
1,556,000
3,302,000
1,383,000
1,618,000
684,000
1,746,000
1,174,000
1,071,000
2,507,000
2,465,000
770,000
1,538,000
1,715,000
1,100,000
Date
Acquired
Description
12/31/86 Houston / Larkwood
12/31/86 Northridge
12/31/86 Santa Clara / Duane
12/31/86 Oyster Point
12/31/86 Walnut
San Antonio/Austin Hwy.
3/1/87 Annandale / Ravensworth
4/1/87 City Of Industry / Amar
5/1/87 Oklahoma City / W. Hefner
7/1/87 Oakbrook Terrace
8/1/87
10/1/87 Plantation/S. State Rd.
10/1/87 Rockville/Fredrick Rd.
2/1/88 Anaheim/Lakeview
6/7/88 Mesquite / Sorrento Drive
7/1/88
Fort Wayne
1/1/92 Costa Mesa
3/1/92 Dallas / Walnut St.
5/1/92 Camp Creek
9/1/92 Orlando/W. Colonial
9/1/92
10/1/92 Stockton/Mariners
11/18/92 Virginia Beach/General Booth Blvd
Jacksonville/Arlington
1/1/93 Redwood City/Storage
1/1/93 City Of Industry
San Jose/Felipe
1/1/93
1/1/93 Baldwin Park/Garvey Ave
3/19/93 Westminister / W. 80th
4/26/93 Costa Mesa / Newport
5/13/93 Austin /N. Lamar
5/28/93
5/28/93 Tampa/Nebraska Avenue
6/9/93 Calabasas / Ventura Blvd.
6/9/93 Carmichael / Fair Oaks
Santa Clara / Duane
6/9/93
6/10/93 Citrus Heights / Sylvan Road
6/25/93 Trenton / Allen Road
6/30/93 Los Angeles/W.Jefferson Blvd
7/16/93 Austin / So. Congress Ave
Jacksonville/Phillips Hwy.
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
223,000
1,378,000
548,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
921,000
-
-
-
-
-
-
-
-
-
-
247,000
3,624,000
1,950,000
1,569,000
767,000
679,000
748,000
459,000
912,000
400,000
924,000
1,695,000
995,000
928,000
101,000
533,000
537,000
576,000
368,000
554,000
381,000
599,000
907,000
1,611,000
1,124,000
840,000
840,000
2,141,000
919,000
406,000
550,000
1,762,000
573,000
454,000
438,000
623,000
1,085,000
777,000
356,000
3,392,000
394,000
365,000
3,592,000
265,000
510,000
249,000
71,000
(44,000)
(225,000)
(219,000)
8,000
3,400,000
70,000
673,000
290,000
309,000
149,000
218,000
177,000
385,000
246,000
309,000
308,000
350,000
243,000
146,000
7,555,000
201,000
158,000
190,000
243,000
107,000
193,000
218,000
169,000
331,000
602,000
1,922,000
1,004,000
1,490,000
613,000
1,621,000
2,052,000
941,000
2,688,000
850,000
1,801,000
3,305,000
1,505,000
1,011,000
1,524,000
980,000
1,008,000
1,075,000
713,000
1,065,000
730,000
1,119,000
1,684,000
2,991,000
2,088,000
1,561,000
1,586,000
3,989,000
1,695,000
771,000
1,043,000
3,269,000
1,052,000
834,000
822,000
1,166,000
2,017,000
1,445,000
F-44
-
-
-
-
-
596,000
702,000
417,000
399,000
164,000
298,000
519,000
256,000
-
143,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
247,000
3,628,000
1,952,000
1,571,000
770,000
680,000
749,000
460,000
913,000
400,000
925,000
1,697,000
996,000
1,046,000
101,000
536,000
538,000
577,000
368,000
555,000
381,000
600,000
908,000
1,613,000
1,125,000
841,000
841,000
2,144,000
1,423,000
406,000
551,000
1,764,000
574,000
455,000
439,000
624,000
1,086,000
778,000
958,000
5,310,000
1,396,000
1,853,000
4,202,000
2,481,000
3,263,000
1,606,000
3,157,000
970,000
1,873,000
3,603,000
1,768,000
4,293,000
1,737,000
1,650,000
1,297,000
1,383,000
862,000
1,282,000
907,000
1,503,000
1,929,000
3,298,000
2,395,000
1,910,000
1,828,000
4,132,000
8,746,000
972,000
1,200,000
3,457,000
1,294,000
940,000
1,014,000
1,383,000
2,185,000
1,775,000
1,205,000
8,938,000
3,348,000
3,424,000
4,972,000
3,161,000
4,012,000
2,066,000
4,070,000
1,370,000
2,798,000
5,300,000
2,764,000
5,339,000
1,838,000
2,186,000
1,835,000
1,960,000
1,230,000
1,837,000
1,288,000
2,103,000
2,837,000
4,911,000
3,520,000
2,751,000
2,669,000
6,276,000
10,169,000
1,378,000
1,751,000
5,221,000
1,868,000
1,395,000
1,453,000
2,007,000
3,271,000
2,553,000
582,000
2,064,000
873,000
1,142,000
861,000
1,360,000
998,000
868,000
2,301,000
737,000
1,367,000
2,596,000
1,255,000
1,335,000
964,000
1,135,000
1,229,000
651,000
413,000
606,000
422,000
678,000
831,000
1,329,000
1,034,000
840,000
781,000
1,637,000
1,997,000
447,000
512,000
1,413,000
576,000
402,000
458,000
550,000
880,000
812,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
8/1/93 Gaithersburg / E. Diamond
8/11/93 Atlanta / Northside
8/11/93 Smyrna/ Rosswill Rd
8/13/93 So. Brunswick/Highway
10/1/93 Denver / Federal Blvd
10/1/93 Citrus Heights
10/1/93 Lakewood / 6th Ave
10/27/93 Houston / S Shaver St
11/3/93 Upland/S. Euclid Ave.
11/16/93 Norcross / Jimmy Carter
11/16/93 Seattle / 13th
12/9/93 Salt Lake City
12/16/93 West Valley City
12/21/93 Pinellas Park / 34th St. W
12/28/93 New Orleans / S. Carrollton Ave
12/29/93 Orange / Main
12/29/93 Sunnyvale / Wedell
12/29/93 El Cajon / Magnolia
12/29/93 Orlando / S. Semoran Blvd.
12/29/93 Tampa / W. Hillsborough Ave
12/29/93
12/29/93 Fullerton / W. Commonwealth
12/29/93 N. Lauderdale / Mcnab Rd
12/29/93 Los Alimitos / Cerritos
12/29/93 Frederick / Prospect Blvd.
12/29/93
12/29/93 Gardena / Western Ave.
12/29/93 Palm Bay / Bobcock Street
1/10/94 Hialeah / W. 20Th Ave.
1/12/94 Sunnyvale / N. Fair Oaks Ave
1/12/94 Honolulu / Iwaena
1/12/94 Miami / Golden Glades
1/21/94 Herndon / Centreville Road
2/8/94
2/28/94 Arlingtn/Old Jeffersn Davishwy
3/8/94 Beaverton / Sw Barnes Road
3/21/94 Austin / Arboretum
3/25/94 Tinton Falls / Shrewsbury Ave
Indianapolis / E. Washington
Irving / West Loop 12
Las Vegas/S. Martin Luther King Blvd.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
602,000
1,150,000
446,000
1,076,000
875,000
527,000
798,000
481,000
431,000
627,000
1,085,000
765,000
683,000
607,000
1,575,000
1,238,000
554,000
421,000
462,000
352,000
341,000
904,000
628,000
695,000
573,000
403,000
552,000
409,000
1,855,000
689,000
-
579,000
1,584,000
1,383,000
735,000
942,000
473,000
1,074,000
165,000
302,000
204,000
313,000
194,000
114,000
4,000
188,000
420,000
198,000
622,000
(25,000)
189,000
225,000
404,000
1,417,000
780,000
533,000
647,000
428,000
197,000
1,039,000
701,000
701,000
581,000
493,000
594,000
527,000
221,000
331,000
688,000
397,000
343,000
1,073,000
284,000
176,000
2,773,000
226,000
1,139,000
2,149,000
842,000
2,033,000
1,633,000
987,000
1,489,000
896,000
807,000
1,167,000
2,015,000
1,422,000
1,276,000
1,134,000
2,941,000
2,317,000
1,037,000
791,000
872,000
665,000
643,000
1,687,000
1,182,000
1,299,000
1,082,000
775,000
1,035,000
775,000
3,497,000
1,285,000
3,382,000
1,081,000
2,981,000
2,592,000
1,399,000
1,810,000
897,000
2,033,000
F-45
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
603,000
1,151,000
447,000
1,077,000
876,000
528,000
686,000
482,000
509,000
628,000
1,086,000
634,000
684,000
608,000
1,577,000
1,595,000
726,000
543,000
602,000
437,000
355,000
1,161,000
799,000
875,000
693,000
506,000
696,000
526,000
1,592,000
658,000
-
558,000
1,360,000
1,438,000
631,000
808,000
1,556,000
922,000
1,303,000
2,450,000
1,045,000
2,345,000
1,826,000
1,100,000
1,605,000
1,083,000
1,149,000
1,364,000
2,636,000
1,528,000
1,464,000
1,358,000
3,343,000
3,377,000
1,645,000
1,202,000
1,379,000
1,008,000
826,000
2,469,000
1,712,000
1,820,000
1,543,000
1,165,000
1,485,000
1,185,000
3,981,000
1,647,000
4,070,000
1,499,000
3,548,000
3,610,000
1,787,000
2,120,000
2,587,000
2,411,000
1,906,000
3,601,000
1,492,000
3,422,000
2,702,000
1,628,000
2,291,000
1,565,000
1,658,000
1,992,000
3,722,000
2,162,000
2,148,000
1,966,000
4,920,000
4,972,000
2,371,000
1,745,000
1,981,000
1,445,000
1,181,000
3,630,000
2,511,000
2,695,000
2,236,000
1,671,000
2,181,000
1,711,000
5,573,000
2,305,000
4,070,000
2,057,000
4,908,000
5,048,000
2,418,000
2,928,000
4,143,000
3,333,000
524,000
1,015,000
475,000
961,000
722,000
456,000
631,000
462,000
465,000
555,000
1,148,000
245,000
592,000
567,000
1,277,000
1,252,000
625,000
472,000
554,000
393,000
345,000
922,000
645,000
665,000
578,000
446,000
543,000
453,000
1,502,000
610,000
1,492,000
597,000
1,146,000
1,336,000
707,000
851,000
693,000
947,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Irwindale / Central Ave.
3/25/94 East Brunswick / Milltown Road
3/25/94 Mercerville / Quakerbridge Road
3/31/94 Hypoluxo
4/26/94 No. Highlands / Roseville Road
5/12/94 Fort Pierce/Okeechobee Road
5/24/94 Hempstead/Peninsula Blvd.
5/24/94 La/Huntington
6/9/94 Chattanooga / Brainerd Road
6/9/94 Chattanooga / Ringgold Road
6/18/94 Las Vegas / S. Valley View Blvd
6/23/94 Las Vegas / Tropicana
6/23/94 Henderson / Green Valley Pkwy
6/24/94 Las Vegas / N. Lamb Blvd.
6/30/94 Birmingham / W. Oxmoor Road
7/20/94 Milpitas / Dempsey Road
8/17/94 New Orleans/I-10
8/17/94 Beaverton / S.W. Denny Road
8/17/94
8/17/94 Suitland / St. Barnabas Rd
8/17/94 North Brunswick / How Lane
8/17/94 Lombard / 64th
8/17/94 Alsip / 27th
9/15/94 Huntsville / Old Monrovia Road
9/27/94 West Haven / Bull Hill Lane
9/30/94 San Francisco / Marin St.
9/30/94 Baltimore / Hillen Street
9/30/94 San Francisco /10th & Howard
9/30/94 Montebello / E. Whittier
9/30/94 Arlington / Collins
9/30/94 Miami / S.W. 119th Ave
9/30/94 Blackwood / Erial Road
9/30/94 Concord / Monument
9/30/94 Rochester / Lee Road
9/30/94 Houston / Bellaire
9/30/94 Austin / Lamar Blvd
9/30/94 Milwaukee / Lovers Lane Rd
9/30/94 Monterey / Del Rey Oaks
9/30/94 St. Petersburg / 66Th St.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,282,000
1,109,000
735,000
980,000
438,000
2,053,000
483,000
613,000
761,000
837,000
750,000
1,047,000
869,000
532,000
1,260,000
784,000
663,000
674,000
1,530,000
1,238,000
847,000
406,000
613,000
455,000
1,227,000
580,000
1,423,000
383,000
228,000
656,000
774,000
1,092,000
469,000
623,000
781,000
469,000
1,093,000
427,000
318,000
257,000
1,844,000
333,000
280,000
300,000
152,000
232,000
396,000
157,000
217,000
179,000
39,000
386,000
206,000
198,000
117,000
93,000
292,000
115,000
131,000
109,000
245,000
5,297,000
1,229,000
261,000
251,000
150,000
243,000
66,000
119,000
378,000
224,000
215,000
147,000
119,000
100,000
173,000
2,411,000
2,111,000
1,404,000
1,835,000
842,000
3,832,000
905,000
1,170,000
1,433,000
1,571,000
1,408,000
1,960,000
1,629,000
1,004,000
2,358,000
1,470,000
1,245,000
1,263,000
2,913,000
2,323,000
1,583,000
765,000
1,157,000
873,000
2,339,000
1,095,000
2,668,000
732,000
435,000
1,221,000
1,437,000
2,027,000
871,000
1,157,000
1,452,000
871,000
1,897,000
793,000
F-46
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,100,000
951,000
631,000
841,000
375,000
1,765,000
414,000
526,000
654,000
719,000
644,000
899,000
670,000
462,000
1,081,000
673,000
569,000
579,000
1,314,000
1,063,000
727,000
348,000
526,000
1,966,000
1,373,000
498,000
1,222,000
329,000
195,000
564,000
664,000
937,000
402,000
535,000
670,000
402,000
904,000
366,000
2,911,000
2,526,000
3,352,000
2,307,000
1,185,000
4,420,000
1,126,000
1,489,000
1,936,000
1,846,000
1,731,000
2,287,000
1,867,000
1,460,000
2,743,000
1,779,000
1,456,000
1,451,000
3,421,000
2,613,000
1,834,000
932,000
1,489,000
4,659,000
3,422,000
1,438,000
3,120,000
936,000
711,000
1,379,000
1,666,000
2,560,000
1,162,000
1,460,000
1,710,000
1,057,000
2,186,000
1,027,000
4,011,000
3,477,000
3,983,000
3,148,000
1,560,000
6,185,000
1,540,000
2,015,000
2,590,000
2,565,000
2,375,000
3,186,000
2,537,000
1,922,000
3,824,000
2,452,000
2,025,000
2,030,000
4,735,000
3,676,000
2,561,000
1,280,000
2,015,000
6,625,000
4,795,000
1,936,000
4,342,000
1,265,000
906,000
1,943,000
2,330,000
3,497,000
1,564,000
1,995,000
2,380,000
1,459,000
3,090,000
1,393,000
1,123,000
978,000
2,342,000
899,000
502,000
1,601,000
448,000
586,000
782,000
691,000
670,000
855,000
358,000
698,000
1,004,000
664,000
534,000
525,000
1,248,000
911,000
668,000
359,000
577,000
851,000
1,203,000
539,000
1,106,000
359,000
362,000
484,000
585,000
949,000
449,000
529,000
621,000
411,000
814,000
403,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
9/30/94 Dayton Bch / N. Nova Road
9/30/94 Maple Shade / Route 38
9/30/94 Marlton / Route 73 N.
9/30/94 Naperville / E. Ogden Ave
9/30/94 Long Beach / South Street
9/30/94 Aloha / S.W. Shaw
9/30/94 Alexandria / S. Pickett
9/30/94 Houston / Highway 6 North
9/30/94 San Antonio/Nacogdoches Rd
9/30/94 San Ramon/San Ramon Valley
9/30/94 San Rafael / Merrydale Rd
9/30/94 San Antonio / Austin Hwy
9/30/94 Sharonville / E. Kemper
10/7/94 Alcoa / Airport Plaza Drive
10/13/94 Davie / State Road 84
10/13/94 Carrollton / Marsh Lane
10/31/94 Sherman Oaks / Van Nuys Blvd
12/19/94 Salt Lake City/West North Temple
12/27/94 Knoxville / Chapman Highway
12/28/94 Milpitas / Watson
12/28/94 Las Vegas / Jones Blvd
12/28/94 Venice / Guthrie
12/30/94 Apple Valley / Foliage Ave
1/4/95 Chula Vista / Main Street
Pantego / West Park
1/5/95
1/12/95 Roswell / Alpharetta
1/23/95 North Bergen / Tonne
1/23/95 San Leandro / Hesperian
1/24/95 Nashville / Elm Hill
2/3/95 Reno / S. Mccarron Blvd
2/15/95 Schiller Park
2/15/95 Lansing
2/15/95 Pleasanton
2/15/95 LA/Sepulveda
2/28/95 Decatur / Flat Shoal
2/28/95 Smyrna / S. Cobb
2/28/95 Downey / Bellflower
2/28/95 Vallejo / Lincoln
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
396,000
994,000
938,000
683,000
1,778,000
805,000
1,550,000
1,120,000
571,000
1,530,000
1,705,000
592,000
574,000
543,000
744,000
770,000
1,278,000
490,000
753,000
1,575,000
1,208,000
578,000
910,000
735,000
315,000
423,000
1,564,000
734,000
338,000
1,080,000
1,688,000
1,514,000
1,257,000
1,453,000
970,000
663,000
916,000
445,000
150,000
179,000
82,000
116,000
283,000
137,000
222,000
225,000
209,000
369,000
213,000
185,000
236,000
182,000
867,000
1,402,000
908,000
(55,000)
412,000
239,000
163,000
131,000
223,000
184,000
156,000
303,000
340,000
127,000
362,000
176,000
264,000
161,000
71,000
112,000
409,000
241,000
135,000
193,000
735,000
1,846,000
1,742,000
1,268,000
3,307,000
1,495,000
2,879,000
2,083,000
1,060,000
2,840,000
3,165,000
1,098,000
1,070,000
1,017,000
1,467,000
1,437,000
2,461,000
917,000
1,411,000
2,925,000
2,243,000
1,073,000
1,695,000
1,802,000
735,000
993,000
3,772,000
1,726,000
791,000
2,537,000
3,939,000
3,534,000
2,932,000
3,390,000
2,288,000
1,559,000
2,158,000
1,052,000
F-47
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
339,000
853,000
805,000
586,000
1,526,000
691,000
1,331,000
961,000
490,000
1,313,000
1,463,000
508,000
493,000
466,000
639,000
1,023,000
1,425,000
385,000
646,000
1,352,000
1,036,000
496,000
781,000
736,000
315,000
423,000
1,553,000
735,000
338,000
1,081,000
1,690,000
1,516,000
1,258,000
1,455,000
971,000
664,000
917,000
446,000
942,000
2,166,000
1,957,000
1,481,000
3,842,000
1,746,000
3,320,000
2,467,000
1,350,000
3,426,000
3,620,000
1,367,000
1,387,000
1,276,000
2,439,000
2,586,000
3,222,000
967,000
1,930,000
3,387,000
2,578,000
1,286,000
2,047,000
1,985,000
891,000
1,296,000
4,123,000
1,852,000
1,153,000
2,712,000
4,201,000
3,693,000
3,002,000
3,500,000
2,696,000
1,799,000
2,292,000
1,244,000
1,281,000
3,019,000
2,762,000
2,067,000
5,368,000
2,437,000
4,651,000
3,428,000
1,840,000
4,739,000
5,083,000
1,875,000
1,880,000
1,742,000
3,078,000
3,609,000
4,647,000
1,352,000
2,576,000
4,739,000
3,614,000
1,782,000
2,828,000
2,721,000
1,206,000
1,719,000
5,676,000
2,587,000
1,491,000
3,793,000
5,891,000
5,209,000
4,260,000
4,955,000
3,667,000
2,463,000
3,209,000
1,690,000
367,000
766,000
685,000
530,000
1,340,000
634,000
1,156,000
916,000
487,000
1,265,000
1,279,000
531,000
497,000
517,000
839,000
881,000
1,176,000
151,000
761,000
1,157,000
885,000
452,000
723,000
774,000
362,000
485,000
1,354,000
623,000
533,000
923,000
1,212,000
1,031,000
828,000
976,000
1,017,000
660,000
763,000
460,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
2/28/95 Lynnwood / 180th St
2/28/95 Kent / Pacific Hwy
2/28/95 Kirkland
2/28/95 Federal Way/Pacific
2/28/95 Tampa / S. Dale
2/28/95 Burlingame/Adrian Rd
2/28/95 Miami / Cloverleaf
2/28/95 Pinole / San Pablo
2/28/95 South Gate / Firesto
2/28/95 San Jose / Mabury
2/28/95 La Puente / Valley Blvd
2/28/95 San Jose / Capitol E
2/28/95 Milwaukie / 40th Street
2/28/95 Portland / N. Lombard
2/28/95 Miami / Biscayne
2/28/95 Chicago / Clark Street
2/28/95 Palatine / Dundee
2/28/95 Williamsville/Transit
2/28/95 Amherst / Sheridan
3/2/95
3/2/95 Burien / 1St Ave South
3/2/95 Kent / South 238th Street
3/31/95 Cheverly / Central Ave
Sandy / S. State Street
5/1/95
Largo / Ulmerton Roa
5/3/95
5/8/95
Fairfield/Western Street
5/8/95 Dallas / W. Mockingbird
5/8/95
5/25/95 Falls Church / Gallo
6/12/95 Baltimore / Old Waterloo
6/12/95 Pleasant Hill / Hookston
6/12/95 Mountain View/Old Middlefield
6/30/95 San Jose / Blossom Hill
6/30/95 Fairfield / Kings Highway
6/30/95 Pacoima / Paxton Street
6/30/95 Portland / Prescott
6/30/95 St. Petersburg
6/30/95 Dallas / Audelia Road
East Point / Lakewood
Everett / Highway 99
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,008,000
-
-
-
516,000
728,000
1,254,000
785,000
791,000
2,280,000
606,000
639,000
1,442,000
892,000
591,000
1,215,000
576,000
812,000
1,313,000
442,000
698,000
284,000
484,000
859,000
763,000
763,000
911,000
1,043,000
263,000
439,000
1,440,000
884,000
350,000
769,000
766,000
2,095,000
1,467,000
1,811,000
840,000
647,000
352,000
1,166,000
205,000
148,000
217,000
270,000
234,000
315,000
218,000
233,000
350,000
141,000
222,000
145,000
114,000
199,000
131,000
328,000
178,000
181,000
158,000
234,000
263,000
267,000
166,000
(302,000)
139,000
85,000
163,000
333,000
212,000
134,000
133,000
107,000
179,000
224,000
139,000
179,000
198,000
822,000
1,205,000
1,711,000
2,932,000
1,832,000
1,852,000
5,349,000
1,426,000
1,502,000
3,449,000
2,088,000
1,390,000
2,852,000
1,388,000
1,900,000
3,076,000
1,031,000
1,643,000
670,000
1,151,000
2,022,000
1,783,000
1,783,000
2,164,000
2,442,000
654,000
1,030,000
3,371,000
2,071,000
835,000
1,850,000
1,848,000
4,913,000
3,444,000
4,273,000
1,976,000
1,509,000
827,000
2,725,000
F-48
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
517,000
729,000
1,255,000
786,000
792,000
2,283,000
607,000
640,000
1,444,000
893,000
592,000
1,216,000
580,000
813,000
1,315,000
443,000
699,000
284,000
485,000
860,000
764,000
764,000
912,000
924,000
263,000
440,000
1,442,000
885,000
350,000
770,000
767,000
2,097,000
1,469,000
1,813,000
841,000
648,000
352,000
1,167,000
1,409,000
1,858,000
3,148,000
2,101,000
2,085,000
5,661,000
1,643,000
1,734,000
3,797,000
2,228,000
1,611,000
2,996,000
1,498,000
2,098,000
3,205,000
1,358,000
1,820,000
851,000
1,308,000
2,255,000
2,045,000
2,049,000
2,329,000
2,259,000
793,000
1,114,000
3,532,000
2,403,000
1,047,000
1,983,000
1,980,000
5,018,000
3,621,000
4,495,000
2,114,000
1,687,000
1,025,000
3,546,000
1,926,000
2,587,000
4,403,000
2,887,000
2,877,000
7,944,000
2,250,000
2,374,000
5,241,000
3,121,000
2,203,000
4,212,000
2,078,000
2,911,000
4,520,000
1,801,000
2,519,000
1,135,000
1,793,000
3,115,000
2,809,000
2,813,000
3,241,000
3,183,000
1,056,000
1,554,000
4,974,000
3,288,000
1,397,000
2,753,000
2,747,000
7,115,000
5,090,000
6,308,000
2,955,000
2,335,000
1,377,000
4,713,000
526,000
643,000
1,053,000
794,000
762,000
1,889,000
593,000
651,000
1,370,000
721,000
620,000
1,007,000
530,000
724,000
1,061,000
516,000
643,000
320,000
478,000
822,000
780,000
771,000
768,000
349,000
334,000
377,000
1,138,000
862,000
447,000
641,000
648,000
1,558,000
1,159,000
1,466,000
677,000
577,000
380,000
1,369,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Independence /E. 42nd
6/30/95 Miami Gardens
6/30/95 Grand Prairie / 19th
6/30/95
Joliet / Jefferson Street
6/30/95 Bridgeton / Pennridge
6/30/95 Portland / S.E.92nd
6/30/95 Houston / S.W. Freeway
6/30/95 Milwaukee / Brown
6/30/95 Orlando / W. Oak Ridge
6/30/95 Lauderhill / State Road
6/30/95 Orange Park /Blanding Blvd
6/30/95 St. Petersburg /Joe'S Creek
6/30/95 St. Louis / Page Service Drive
6/30/95
6/30/95 Cherry Hill / Dobbs Lane
6/30/95 Edgewater Park / Route 130
6/30/95 Beaverton / S.W. 110
6/30/95 Markham / W. 159Th Place
6/30/95 Houston / N.W. Freeway
6/30/95 Portland / Gantenbein
6/30/95 Upper Chichester/Market St.
6/30/95 Fort Worth / Hwy 80
6/30/95 Greenfield/ S. 108th
6/30/95 Altamonte Springs
6/30/95 East Hazel Crest / Halsted
6/30/95 Seattle / Delridge Way
6/30/95 Elmhurst / Lake Frontage Rd
6/30/95 Los Angeles / Beverly Blvd
6/30/95 Lawrenceville / Brunswick
6/30/95 Richmond / Carlson
6/30/95 Liverpool / Oswego Road
6/30/95 Rochester / East Ave
6/30/95 Pasadena / E. Beltway
7/13/95 Tarzana / Burbank Blvd
7/31/95 Orlando / Lakehurst
7/31/95 Livermore / Portola
7/31/95 San Jose / Tully
7/31/95 Mission Bay
7/31/95 Las Vegas / Decatur
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
911,000
1,222,000
1,512,000
3,752,000
-
823,000
566,000
501,000
283,000
638,000
537,000
358,000
698,000
644,000
394,000
704,000
531,000
438,000
716,000
683,000
572,000
230,000
447,000
537,000
569,000
379,000
728,000
566,000
483,000
760,000
748,000
787,000
841,000
865,000
545,000
578,000
757,000
2,895,000
450,000
921,000
912,000
1,617,000
1,147,000
183,000
145,000
175,000
171,000
167,000
5,294,000
164,000
205,000
135,000
204,000
197,000
169,000
176,000
123,000
113,000
152,000
129,000
122,000
165,000
113,000
132,000
204,000
118,000
165,000
163,000
156,000
313,000
115,000
297,000
245,000
150,000
140,000
391,000
152,000
190,000
277,000
461,000
278,000
1,929,000
1,329,000
1,181,000
661,000
1,497,000
1,254,000
849,000
1,642,000
1,508,000
918,000
1,642,000
1,241,000
1,023,000
1,676,000
1,593,000
1,342,000
539,000
1,066,000
1,262,000
1,329,000
891,000
1,707,000
1,326,000
1,127,000
1,779,000
1,758,000
1,886,000
1,961,000
2,025,000
1,279,000
1,375,000
1,767,000
6,823,000
1,063,000
2,157,000
2,137,000
3,785,000
2,697,000
F-49
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
824,000
567,000
502,000
283,000
639,000
1,608,000
358,000
699,000
645,000
394,000
705,000
532,000
439,000
717,000
684,000
573,000
230,000
448,000
538,000
570,000
379,000
729,000
567,000
484,000
761,000
749,000
788,000
842,000
866,000
546,000
579,000
758,000
2,898,000
451,000
922,000
913,000
1,619,000
1,148,000
2,111,000
1,473,000
1,355,000
832,000
1,663,000
5,477,000
1,013,000
1,846,000
1,642,000
1,122,000
1,838,000
1,409,000
1,198,000
1,798,000
1,705,000
1,493,000
668,000
1,187,000
1,426,000
1,441,000
1,023,000
1,910,000
1,443,000
1,291,000
1,941,000
1,913,000
2,198,000
2,075,000
2,321,000
1,523,000
1,524,000
1,906,000
7,211,000
1,214,000
2,346,000
2,413,000
4,244,000
2,974,000
2,935,000
2,040,000
1,857,000
1,115,000
2,302,000
7,085,000
1,371,000
2,545,000
2,287,000
1,516,000
2,543,000
1,941,000
1,637,000
2,515,000
2,389,000
2,066,000
898,000
1,635,000
1,964,000
2,011,000
1,402,000
2,639,000
2,010,000
1,775,000
2,702,000
2,662,000
2,986,000
2,917,000
3,187,000
2,069,000
2,103,000
2,664,000
10,109,000
1,665,000
3,268,000
3,326,000
5,863,000
4,122,000
693,000
504,000
474,000
319,000
577,000
634,000
366,000
653,000
557,000
411,000
610,000
486,000
432,000
565,000
539,000
504,000
253,000
436,000
478,000
477,000
365,000
651,000
480,000
460,000
656,000
631,000
829,000
658,000
773,000
518,000
519,000
622,000
2,407,000
409,000
767,000
799,000
1,469,000
968,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Las Vegas / Rainbow
Tucker / Lawrenceville
7/31/95 Pleasanton / Stanley
7/31/95 Castro Valley / Grove
7/31/95 Honolulu / Kaneohe
7/31/95 Chicago / Wabash Ave
7/31/95 Springfield / Parker
7/31/95 Huntington Bch/Gotham
7/31/95 Tucker / Lawrenceville
7/31/95 Marietta / Canton Road
7/31/95 Wheeling / Hintz
8/1/95 Gresham / Division
8/1/95
8/1/95 Decatur / Covington
8/11/95 Studio City/Ventura
8/12/95 Smyrna / Hargrove Road
9/1/95 Hayward / Mission Blvd
Park City / Belvider
9/1/95
9/1/95 New Castle/Dupont Parkway
9/1/95
9/1/95 Mountain View / Reng
9/1/95 Venice / Cadillac
Simi Valley /Los Angeles
9/1/95
9/1/95
Spring Valley/Foreman
9/6/95 Darien / Frontage Road
9/30/95 Whittier
9/30/95 Van Nuys/Balboa
9/30/95 Huntington Beach
9/30/95 Monterey Park
9/30/95 Downey
9/30/95 Del Amo
9/30/95 Carson
9/30/95 Van Nuys/Balboa Blvd
10/31/95 San Lorenzo /Hesperian
10/31/95 Chicago / W. 47th Street
10/31/95 Los Angeles / Eastern
11/15/95 Costa Mesa
11/15/95 Plano / E. 14th
11/15/95 Citrus Heights/Sunrise
11/15/95 Modesto/Briggsmore Ave
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
82,000
-
-
-
-
-
-
-
-
-
-
-
1,624,000
757,000
1,215,000
645,000
765,000
765,000
630,000
600,000
450,000
607,000
600,000
720,000
1,285,000
1,020,000
1,020,000
600,000
990,000
1,050,000
945,000
930,000
1,590,000
1,095,000
975,000
215,000
295,000
176,000
124,000
191,000
474,000
375,000
1,920,000
1,590,000
300,000
455,000
522,000
705,000
520,000
470,000
203,000
85,000
2,037,000
646,000
149,000
168,000
175,000
226,000
120,000
102,000
254,000
199,000
157,000
346,000
158,000
105,000
158,000
113,000
126,000
213,000
190,000
156,000
104,000
206,000
130,000
170,000
129,000
154,000
144,000
119,000
317,000
381,000
202,000
133,000
68,000
91,000
125,000
111,000
3,811,000
1,772,000
2,846,000
1,535,000
1,834,000
1,808,000
1,480,000
1,423,000
1,054,000
1,428,000
1,405,000
1,694,000
3,015,000
3,038,000
2,383,000
1,405,000
2,369,000
2,459,000
2,216,000
2,182,000
3,724,000
2,572,000
2,321,000
384,000
657,000
321,000
346,000
317,000
742,000
735,000
4,504,000
3,716,000
708,000
1,070,000
1,218,000
1,646,000
1,213,000
1,097,000
F-50
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
772,000
1,165,000
723,000
785,000
816,000
940,000
422,000
-
-
-
-
-
-
-
-
1,626,000
758,000
2,136,000
646,000
766,000
766,000
631,000
601,000
451,000
608,000
601,000
721,000
1,287,000
1,021,000
1,021,000
601,000
991,000
1,051,000
946,000
931,000
1,592,000
1,096,000
976,000
215,000
295,000
176,000
124,000
191,000
475,000
375,000
1,922,000
1,592,000
300,000
456,000
523,000
706,000
521,000
471,000
4,012,000
1,856,000
3,962,000
2,180,000
1,982,000
1,975,000
1,654,000
1,648,000
1,173,000
1,529,000
1,658,000
1,892,000
3,170,000
3,383,000
2,540,000
1,509,000
2,526,000
2,571,000
2,341,000
2,394,000
3,912,000
2,727,000
2,424,000
1,362,000
1,952,000
1,214,000
1,260,000
1,287,000
1,825,000
1,276,000
4,819,000
4,095,000
910,000
1,202,000
1,285,000
1,736,000
1,337,000
1,207,000
5,638,000
2,614,000
6,098,000
2,826,000
2,748,000
2,741,000
2,285,000
2,249,000
1,624,000
2,137,000
2,259,000
2,613,000
4,457,000
4,404,000
3,561,000
2,110,000
3,517,000
3,622,000
3,287,000
3,325,000
5,504,000
3,823,000
3,400,000
1,577,000
2,247,000
1,390,000
1,384,000
1,478,000
2,300,000
1,651,000
6,741,000
5,687,000
1,210,000
1,658,000
1,808,000
2,442,000
1,858,000
1,678,000
1,264,000
589,000
1,110,000
911,000
650,000
670,000
585,000
582,000
405,000
503,000
601,000
653,000
992,000
1,027,000
793,000
478,000
789,000
807,000
734,000
800,000
1,233,000
851,000
784,000
456,000
722,000
433,000
477,000
459,000
826,000
397,000
1,310,000
1,029,000
279,000
357,000
385,000
503,000
434,000
376,000
Date
Acquired
Description
11/15/95 So San Francisco/Spruce
11/15/95 Pacheco/Buchanan Circle
11/16/95 Palm Beach Gardens
11/16/95 Delray Beach
Tigard/S.W. Pacific
1/1/96 Bensenville/York Rd
Louisville/Preston
1/1/96
San Jose/Aborn Road
1/1/96
1/1/96
Englewood/Federal
1/1/96 W. Hollywood/Santa Monica
1/1/96 Orland Hills/W. 159th
1/1/96 Merrionette Park
1/1/96 Denver/S Quebec
1/1/96
1/1/96 Coram/Middle Count
1/1/96 Houston/FM 1960
1/1/96 Kent/Military Trail
Turnersville/Black
1/1/96
1/1/96
Sewell/Rts. 553
1/1/96 Maple Shade/Fellowship
1/1/96 Hyattsville/Kenilworth
1/1/96 Waterbury/Captain
1/1/96 Bedford Hts/Miles
Livonia/Newburgh
1/1/96
1/1/96
Sunland/Sunland Blvd.
1/1/96 Des Moines
1/1/96 Oxonhill/Indianhead
1/1/96
Sacramento/N. 16th
1/1/96 Houston/Westheimer
1/1/96
San Pablo/San Pablo
1/1/96 Bowie/Woodcliff
1/1/96 Milwaukee/S. 84th
1/1/96 Clinton/Malcolm Road
San Gabriel
1/3/96
San Francisco, Second St.
1/5/96
1/12/96 San Antonio, TX
2/29/96 Naples, FL/Old US 41
2/29/96 Lake Worth, FL/S. Military Tr.
2/29/96 Brandon, FL/W Brandon Blvd.
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,905,000
1,681,000
657,000
600,000
667,000
211,000
615,000
481,000
3,415,000
917,000
818,000
1,849,000
633,000
507,000
635,000
409,000
165,000
323,000
331,000
509,000
434,000
835,000
635,000
631,000
448,000
772,000
582,000
1,508,000
565,000
718,000
444,000
593,000
1,005,000
2,880,000
912,000
849,000
1,782,000
1,928,000
346,000
209,000
150,000
168,000
175,000
78,000
97,000
128,000
210,000
206,000
95,000
171,000
126,000
103,000
221,000
160,000
119,000
116,000
125,000
128,000
131,000
267,000
115,000
84,000
101,000
256,000
157,000
202,000
141,000
99,000
249,000
207,000
229,000
198,000
75,000
147,000
168,000
904,000
4,444,000
3,951,000
1,540,000
1,407,000
1,602,000
1,060,000
1,342,000
1,395,000
4,577,000
2,392,000
2,020,000
1,941,000
1,206,000
1,421,000
1,294,000
1,670,000
1,360,000
1,138,000
1,421,000
1,757,000
2,089,000
1,577,000
1,407,000
1,965,000
1,350,000
2,017,000
2,610,000
2,274,000
1,232,000
2,336,000
1,868,000
2,123,000
2,345,000
6,814,000
2,170,000
2,016,000
4,723,000
4,523,000
F-51
-
-
-
-
895,000
594,000
759,000
777,000
2,552,000
1,342,000
1,122,000
1,086,000
705,000
792,000
783,000
956,000
758,000
658,000
803,000
1,000,000
1,162,000
929,000
783,000
1,090,000
768,000
1,141,000
1,466,000
1,304,000
713,000
1,292,000
1,091,000
1,187,000
-
-
-
-
-
-
1,907,000
1,683,000
658,000
601,000
668,000
211,000
616,000
482,000
3,419,000
918,000
819,000
1,851,000
634,000
508,000
636,000
409,000
165,000
323,000
331,000
510,000
435,000
836,000
636,000
632,000
449,000
773,000
583,000
1,510,000
566,000
719,000
445,000
594,000
1,006,000
2,883,000
913,000
850,000
1,784,000
1,930,000
4,788,000
4,158,000
1,689,000
1,574,000
2,671,000
1,732,000
2,197,000
2,299,000
7,335,000
3,939,000
3,236,000
3,196,000
2,036,000
2,315,000
2,297,000
2,786,000
2,237,000
1,912,000
2,349,000
2,884,000
3,381,000
2,772,000
2,304,000
3,138,000
2,218,000
3,413,000
4,232,000
3,778,000
2,085,000
3,726,000
3,207,000
3,516,000
2,573,000
7,009,000
2,244,000
2,162,000
4,889,000
5,425,000
6,695,000
5,841,000
2,347,000
2,175,000
3,339,000
1,943,000
2,813,000
2,781,000
10,754,000
4,857,000
4,055,000
5,047,000
2,670,000
2,823,000
2,933,000
3,195,000
2,402,000
2,235,000
2,680,000
3,394,000
3,816,000
3,608,000
2,940,000
3,770,000
2,667,000
4,186,000
4,815,000
5,288,000
2,651,000
4,445,000
3,652,000
4,110,000
3,579,000
9,892,000
3,157,000
3,012,000
6,673,000
7,355,000
1,390,000
1,200,000
544,000
528,000
706,000
450,000
583,000
621,000
1,873,000
1,041,000
840,000
824,000
531,000
573,000
638,000
703,000
564,000
496,000
572,000
706,000
733,000
695,000
563,000
737,000
574,000
807,000
871,000
958,000
515,000
829,000
740,000
763,000
847,000
2,012,000
662,000
640,000
1,392,000
2,059,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Irvine
Jacksonville
Jupiter FL/Military Trail
2/29/96 Coral Springs FL/W Sample Rd.
2/29/96 Delray Beach FL/S Military Tr.
2/29/96
2/29/96 Lakeworth FL/Lake Worth Rd
2/29/96 New Port Richey/State Rd 54
2/29/96 Sanford FL/S Orlando Dr
3/8/96 Atlanta/Roswell
3/31/96 Oakland
3/31/96 Saratoga
3/31/96 Randallstown
3/31/96 Plano
3/31/96 Houston
3/31/96
3/31/96 Milwaukee
3/31/96 Carrollton
3/31/96 Torrance
3/31/96
3/31/96 Dallas
3/31/96 Houston
3/31/96 Baltimore
3/31/96 New Haven
4/1/96 Chicago/Pulaski
4/1/96
4/1/96
4/1/96 Weymouth
4/1/96
4/1/96 Rockville/Randolph
4/1/96
4/1/96 Houston/Westheimer
4/3/96 Naples
6/26/96 Boca Raton
6/28/96 Venice
6/30/96 Las Vegas
6/30/96 Bedford Park
6/30/96 Los Angeles
6/30/96 Silver Spring
6/30/96 Newark
6/30/96 Brooklyn
Las Vegas/Desert Inn
Torrance/Crenshaw
St. Louis/Barrett Station Road
Simi Valley/East Street
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,480,000
941,000
2,280,000
737,000
857,000
734,000
898,000
1,065,000
2,339,000
1,359,000
650,000
543,000
1,920,000
542,000
578,000
1,415,000
713,000
315,000
669,000
842,000
740,000
764,000
1,115,000
916,000
485,000
630,000
1,153,000
970,000
1,390,000
1,187,000
3,180,000
669,000
921,000
606,000
692,000
1,513,000
1,051,000
783,000
225,000
178,000
290,000
156,000
145,000
1,894,000
94,000
244,000
126,000
240,000
126,000
120,000
503,000
109,000
107,000
158,000
192,000
1,728,000
447,000
177,000
(241,000)
152,000
115,000
87,000
150,000
111,000
148,000
67,000
4,203,000
216,000
967,000
160,000
188,000
195,000
96,000
247,000
114,000
416,000
8,148,000
2,222,000
5,347,000
1,742,000
2,025,000
1,749,000
3,649,000
2,764,000
6,081,000
3,527,000
1,682,000
1,402,000
4,975,000
1,402,000
1,495,000
3,675,000
1,845,000
810,000
1,724,000
2,180,000
1,907,000
1,869,000
2,729,000
2,243,000
1,187,000
1,542,000
2,823,000
2,374,000
3,402,000
2,809,000
7,468,000
1,575,000
2,155,000
1,419,000
1,616,000
3,535,000
2,458,000
1,830,000
F-52
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,484,000
942,000
2,283,000
738,000
858,000
976,000
899,000
1,066,000
2,342,000
1,361,000
651,000
544,000
1,922,000
543,000
579,000
1,417,000
714,000
315,000
670,000
843,000
669,000
765,000
1,116,000
917,000
486,000
631,000
1,154,000
971,000
1,392,000
1,188,000
3,184,000
670,000
922,000
607,000
693,000
1,515,000
1,052,000
784,000
8,369,000
2,399,000
5,634,000
1,897,000
2,169,000
3,401,000
3,742,000
3,007,000
6,204,000
3,765,000
1,807,000
1,521,000
5,476,000
1,510,000
1,601,000
3,831,000
2,036,000
2,538,000
2,170,000
2,356,000
1,737,000
2,020,000
2,843,000
2,329,000
1,336,000
1,652,000
2,970,000
2,440,000
7,603,000
3,024,000
8,431,000
1,734,000
2,342,000
1,613,000
1,711,000
3,780,000
2,571,000
2,245,000
11,853,000
3,341,000
7,917,000
2,635,000
3,027,000
4,377,000
4,641,000
4,073,000
8,546,000
5,126,000
2,458,000
2,065,000
7,398,000
2,053,000
2,180,000
5,248,000
2,750,000
2,853,000
2,840,000
3,199,000
2,406,000
2,785,000
3,959,000
3,246,000
1,822,000
2,283,000
4,124,000
3,411,000
8,995,000
4,212,000
11,615,000
2,404,000
3,264,000
2,220,000
2,404,000
5,295,000
3,623,000
3,029,000
2,337,000
751,000
1,564,000
597,000
653,000
988,000
1,045,000
899,000
1,709,000
1,073,000
543,000
454,000
1,557,000
454,000
473,000
1,076,000
611,000
406,000
668,000
676,000
522,000
529,000
753,000
582,000
300,000
413,000
734,000
605,000
1,874,000
917,000
2,370,000
530,000
679,000
495,000
490,000
1,063,000
700,000
714,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Spring Valley/S Pascack rd
7/2/96 Glen Burnie/Furnace Br Rd
7/22/96 Lakewood/W Hampton
8/13/96 Norcross/Holcomb Bridge Rd
9/5/96
9/16/96 Dallas/Royal Lane
9/16/96 Colorado Springs/Tomah Drive
9/16/96 Lewisville/S. Stemmons
9/16/96 Las Vegas/Boulder Hwy.
9/16/96 Sarasota/S. Tamiami Trail
9/16/96 Willow Grove/Maryland Road
9/16/96 Houston/W. Montgomery Rd.
9/16/96 Denver/W. Hampden
9/16/96 Littleton/Southpark Way
9/16/96 Petaluma/Baywood Drive
9/16/96 Canoga Park/Sherman Way
Jacksonville/South Lane Ave.
9/16/96
9/16/96 Newport News/Warwick Blvd.
9/16/96 Greenbrook/Route 22
9/16/96 Monsey/Route 59
9/16/96 Santa Rosa/Santa Rosa Ave.
9/16/96 Fort Worth/Brentwood
9/16/96 Glendale/San Fernando Road
9/16/96 Houston/Harwin
9/16/96
9/16/96 Fairfield/Dixie Highway
9/16/96 Mesa/Country Club Drive
9/16/96 San Francisco/Geary Blvd.
9/16/96 Houston/Gulf Freeway
9/16/96 Las Vegas/S. Decatur Blvd.
9/16/96 Tempe/McKellips Road
9/16/96 Richland Hills/Airport Fwy.
10/11/96 Hampton/Pembroke Road
10/11/96 Norfolk/Widgeon Road
10/11/96 Richmond/Bloom Lane
10/11/96 Virginia Beach/Southern Blvd
10/11/96 Chesapeake/Military Hwy
10/11/96 Richmond/Midlothian Park
10/11/96 Roanoke/Peters Creek Road
Irvine/Cowan Street
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,755,000
717,000
955,000
1,260,000
1,008,000
731,000
603,000
947,000
584,000
673,000
524,000
1,084,000
922,000
861,000
1,543,000
554,000
575,000
1,227,000
1,068,000
575,000
823,000
2,500,000
549,000
1,890,000
427,000
701,000
2,957,000
701,000
1,037,000
823,000
473,000
1,080,000
1,110,000
1,188,000
282,000
912,000
762,000
819,000
156,000
73,000
122,000
282,000
202,000
106,000
137,000
244,000
112,000
83,000
184,000
143,000
237,000
147,000
529,000
182,000
144,000
243,000
109,000
104,000
134,000
121,000
129,000
211,000
106,000
163,000
260,000
3,303,000
140,000
210,000
143,000
(254,000)
(360,000)
(204,000)
227,000
373,000
450,000
232,000
4,150,000
2,092,000
3,117,000
2,966,000
2,426,000
1,759,000
1,451,000
2,279,000
1,407,000
1,620,000
1,261,000
2,609,000
2,221,000
2,074,000
3,716,000
1,334,000
1,385,000
2,954,000
2,572,000
1,385,000
2,016,000
6,124,000
1,344,000
4,631,000
1,046,000
1,718,000
7,244,000
1,718,000
2,539,000
1,972,000
1,158,000
2,346,000
2,405,000
2,512,000
610,000
1,974,000
1,588,000
1,776,000
F-53
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,757,000
717,000
956,000
1,261,000
1,009,000
732,000
604,000
948,000
585,000
674,000
525,000
1,085,000
923,000
862,000
1,545,000
555,000
576,000
1,228,000
1,069,000
576,000
824,000
2,503,000
550,000
1,892,000
428,000
702,000
2,960,000
702,000
1,038,000
824,000
474,000
915,000
909,000
996,000
282,000
913,000
763,000
820,000
4,304,000
2,165,000
3,238,000
3,247,000
2,627,000
1,864,000
1,587,000
2,522,000
1,518,000
1,702,000
1,444,000
2,751,000
2,457,000
2,220,000
4,243,000
1,515,000
1,528,000
3,196,000
2,680,000
1,488,000
2,149,000
6,242,000
1,472,000
4,840,000
1,151,000
1,880,000
7,501,000
5,020,000
2,678,000
2,181,000
1,300,000
2,257,000
2,246,000
2,500,000
837,000
2,346,000
2,037,000
2,007,000
6,061,000
2,882,000
4,194,000
4,508,000
3,636,000
2,596,000
2,191,000
3,470,000
2,103,000
2,376,000
1,969,000
3,836,000
3,380,000
3,082,000
5,788,000
2,070,000
2,104,000
4,424,000
3,749,000
2,064,000
2,973,000
8,745,000
2,022,000
6,732,000
1,579,000
2,582,000
10,461,000
5,722,000
3,716,000
3,005,000
1,774,000
3,172,000
3,155,000
3,496,000
1,119,000
3,259,000
2,800,000
2,827,000
1,162,000
575,000
854,000
935,000
710,000
502,000
449,000
660,000
419,000
450,000
408,000
711,000
649,000
585,000
1,034,000
450,000
424,000
845,000
691,000
392,000
589,000
1,562,000
421,000
1,253,000
303,000
500,000
1,882,000
707,000
703,000
590,000
390,000
354,000
364,000
408,000
316,000
741,000
730,000
596,000
Date
Acquired
Description
10/11/96 Orlando/E Oakridge Rd
10/11/96 Orlando/South Hwy 17-92
10/25/96 Austin/Renelli
10/25/96 Austin/Santiago
10/25/96 Dallas/East N.W. Highway
10/25/96 Dallas/Denton Drive
10/25/96 Houston/Hempstead
10/25/96 Pasadena/So. Shaver
10/31/96 Houston/Joel Wheaton Rd
10/31/96 Mt Holly/541 Bypass
11/13/96 Town East/Mesquite
11/14/96 Bossier City LA
12/5/96 Lake Forest/Bake Parkway
12/16/96 Cherry Hill/Old Cuthbert
12/16/96 Oklahoma City/SW 74th
12/16/96 Oklahoma City/S Santa Fe
12/16/96 Oklahoma City/S. May
12/16/96 Arlington/S. Watson Rd.
12/16/96 Richardson/E. Arapaho
12/23/96 Eagle Rock/Colorado
12/23/96 Upper Darby/Lansdowne
12/23/96 Plymouth Meeting /Chemical
12/23/96 Philadelphia/Byberry
12/23/96 Ft. Lauderdale/State Road
12/23/96 Englewood/Costilla
12/23/96 Lilburn/Beaver Ruin Road
12/23/96 Carmichael/Fair Oaks
12/23/96 Portland/Division Street
12/23/96 Napa/Industrial
12/23/96 Wheatridge/W. 44th Avenue
12/23/96 Las Vegas/Charleston
12/23/96 Las Vegas/South Arvill
12/23/96 Los Angeles/Santa Monica
12/23/96 Warren/Schoenherr Rd.
12/23/96 Portland/N.E. 71st Avenue
12/23/96 Seattle/Pacific Hwy. South
12/23/96 Broadview/S. 25th Avenue
12/23/96 Winter Springs/W. St. Rte 434
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
927,000
1,170,000
1,710,000
900,000
698,000
900,000
518,000
420,000
465,000
360,000
330,000
633,000
971,000
645,000
375,000
360,000
360,000
930,000
1,290,000
330,000
899,000
1,109,000
1,019,000
1,199,000
1,739,000
600,000
809,000
989,000
660,000
1,439,000
1,049,000
929,000
3,328,000
749,000
869,000
689,000
1,289,000
689,000
217,000
182,000
220,000
199,000
153,000
133,000
214,000
188,000
184,000
160,000
119,000
(158,000)
568,000
299,000
109,000
138,000
130,000
410,000
221,000
371,000
170,000
132,000
140,000
157,000
129,000
151,000
179,000
120,000
131,000
133,000
118,000
117,000
204,000
169,000
177,000
185,000
203,000
103,000
2,020,000
2,549,000
3,990,000
2,100,000
1,628,000
2,100,000
1,207,000
980,000
1,085,000
840,000
770,000
1,488,000
2,173,000
1,505,000
875,000
840,000
840,000
2,170,000
3,010,000
813,000
2,272,000
2,802,000
2,575,000
3,030,000
4,393,000
1,515,000
2,045,000
2,499,000
1,666,000
3,636,000
2,651,000
2,348,000
8,407,000
1,894,000
2,196,000
1,742,000
3,257,000
1,742,000
F-54
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
928,000
1,171,000
1,712,000
901,000
699,000
901,000
519,000
420,000
466,000
360,000
330,000
558,000
974,000
646,000
375,000
360,000
360,000
931,000
1,292,000
445,000
900,000
1,110,000
1,020,000
1,200,000
1,741,000
601,000
810,000
990,000
661,000
1,441,000
1,050,000
930,000
3,332,000
750,000
870,000
690,000
1,291,000
690,000
2,236,000
2,730,000
4,208,000
2,298,000
1,780,000
2,232,000
1,420,000
1,168,000
1,268,000
1,000,000
889,000
1,405,000
2,738,000
1,803,000
984,000
978,000
970,000
2,579,000
3,229,000
1,069,000
2,441,000
2,933,000
2,714,000
3,186,000
4,520,000
1,665,000
2,223,000
2,618,000
1,796,000
3,767,000
2,768,000
2,464,000
8,607,000
2,062,000
2,372,000
1,926,000
3,458,000
1,844,000
3,164,000
3,901,000
5,920,000
3,199,000
2,479,000
3,133,000
1,939,000
1,588,000
1,734,000
1,360,000
1,219,000
1,963,000
3,712,000
2,449,000
1,359,000
1,338,000
1,330,000
3,510,000
4,521,000
1,514,000
3,341,000
4,043,000
3,734,000
4,386,000
6,261,000
2,266,000
3,033,000
3,608,000
2,457,000
5,208,000
3,818,000
3,394,000
11,939,000
2,812,000
3,242,000
2,616,000
4,749,000
2,534,000
616,000
750,000
1,129,000
643,000
498,000
619,000
455,000
339,000
371,000
291,000
261,000
235,000
603,000
521,000
290,000
298,000
297,000
788,000
856,000
171,000
631,000
349,000
708,000
825,000
1,123,000
442,000
590,000
685,000
492,000
944,000
703,000
632,000
2,137,000
541,000
647,000
536,000
891,000
495,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
12/23/96 Tampa/15th Street
12/23/96 Pompano Beach/S. Dixie Hwy.
12/23/96 Overland Park/Mastin
12/23/96 Auburn/R Street
12/23/96 Federal Heights/W. 48th Ave.
12/23/96 Decatur/Covington
12/23/96 Forest Park/Jonesboro Rd.
12/23/96 Mangonia Park/Australian Ave.
12/23/96 Whittier/Colima
12/23/96 Kent/Pacific Hwy South
12/23/96 Topeka/8th Street
12/23/96 Denver East Evans
12/23/96 Pittsburgh/California Ave.
12/23/96 Ft. Lauderdale/Powerline
12/23/96 Philadelphia/Oxford
12/23/96 Dallas/Lemmon Ave.
12/23/96 Alsip/115th Street
12/23/96 Green Acres/Jog Road
12/23/96 Pompano Beach/Sample Road
12/23/96 Wyndmoor/Ivy Hill
12/23/96 W. Palm Beach/Belvedere
12/23/96 Renton 174th St.
12/23/96 Sacramento/Northgate
12/23/96 Phoenix/19th Avenue
12/23/96 Bedford Park/Cicero
12/23/96 Lake Worth/Lk Worth
12/23/96 Arlington/Algonquin
12/23/96 Seattle/15th Avenue
12/23/96 Southington/Spring
12/23/96 Clifton/Broad Street
12/23/96 Hillside/Glenwood
12/23/96 Nashville/Dickerson Pike
12/23/96 Madison/Gallatin Road
12/30/96 Concorde/Treat
12/30/96 Virginia Beach
12/30/96 San Mateo
1/22/97 Austin, 1033 E. 41 Street
4/12/97 Annandale / Backlick
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
420,000
930,000
990,000
690,000
720,000
930,000
540,000
840,000
540,000
930,000
150,000
1,740,000
630,000
660,000
900,000
1,710,000
750,000
600,000
1,320,000
2,160,000
960,000
960,000
1,021,000
991,000
1,321,000
1,111,000
991,000
781,000
811,000
1,411,000
563,000
990,000
780,000
1,396,000
535,000
2,408,000
257,000
955,000
209,000
253,000
3,147,000
186,000
88,000
157,000
152,000
148,000
81,000
141,000
125,000
182,000
112,000
282,000
140,000
139,000
1,910,000
131,000
154,000
188,000
184,000
214,000
140,000
184,000
218,000
162,000
296,000
167,000
130,000
133,000
260,000
182,000
221,000
126,000
120,000
166,000
63,000
322,000
1,060,000
2,292,000
2,440,000
1,700,000
1,774,000
2,292,000
1,331,000
2,070,000
1,331,000
2,292,000
370,000
4,288,000
1,552,000
1,626,000
2,218,000
4,214,000
1,848,000
1,479,000
3,253,000
5,323,000
2,366,000
2,366,000
2,647,000
2,569,000
3,426,000
2,880,000
2,569,000
2,024,000
2,102,000
3,659,000
4,051,000
2,440,000
1,922,000
3,258,000
1,248,000
5,619,000
3,633,000
2,229,000
F-55
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
420,000
931,000
1,308,000
691,000
721,000
931,000
541,000
841,000
541,000
931,000
150,000
1,742,000
631,000
661,000
901,000
1,712,000
751,000
601,000
1,322,000
2,163,000
961,000
961,000
1,022,000
992,000
1,323,000
1,112,000
992,000
782,000
812,000
1,413,000
564,000
991,000
781,000
1,398,000
536,000
2,411,000
257,000
956,000
1,269,000
2,544,000
5,269,000
1,885,000
1,861,000
2,448,000
1,482,000
2,217,000
1,411,000
2,432,000
495,000
4,468,000
1,663,000
1,907,000
2,357,000
4,351,000
3,757,000
1,609,000
3,405,000
5,508,000
2,549,000
2,579,000
2,786,000
2,752,000
3,642,000
3,041,000
2,864,000
2,190,000
2,231,000
3,790,000
4,310,000
2,621,000
2,142,000
3,382,000
1,367,000
5,782,000
3,696,000
2,550,000
1,689,000
3,475,000
6,577,000
2,576,000
2,582,000
3,379,000
2,023,000
3,058,000
1,952,000
3,363,000
645,000
6,210,000
2,294,000
2,568,000
3,258,000
6,063,000
4,508,000
2,210,000
4,727,000
7,671,000
3,510,000
3,540,000
3,808,000
3,744,000
4,965,000
4,153,000
3,856,000
2,972,000
3,043,000
5,203,000
4,874,000
3,612,000
2,923,000
4,780,000
1,903,000
8,193,000
3,953,000
3,506,000
379,000
714,000
772,000
516,000
469,000
638,000
420,000
588,000
382,000
653,000
174,000
1,132,000
454,000
551,000
605,000
1,110,000
683,000
436,000
879,000
1,381,000
673,000
682,000
727,000
698,000
950,000
795,000
778,000
579,000
592,000
953,000
1,137,000
710,000
597,000
860,000
371,000
1,422,000
867,000
617,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
4/12/97 Ft. Worth / West Freeway
4/12/97 Campbell / S. Curtner
4/12/97 Aurora / S. Idalia
4/12/97 Santa Cruz / Capitola
Indianapolis / Lafayette Road
4/12/97
4/12/97
Indianapolis / Route 31
4/12/97 Farmingdale / Broad Hollow Rd.
4/12/97 Tyson's Corner / Springhill Rd.
4/12/97 Fountain Valley / Newhope
4/12/97 Dallas / Winsted
4/12/97 Columbia / Broad River Rd.
4/12/97 Livermore / S. Front Road
4/12/97 Garland / Plano
4/12/97 San Jose / Story Road
4/12/97 Aurora / Abilene
4/12/97 Antioch / Sunset Drive
4/12/97 Rancho Cordova / Sunrise
4/12/97 Berlin / Wilbur Cross
4/12/97 Whittier / Whittier Blvd.
4/12/97 Peabody / Newbury Street
4/12/97 Denver / Blake
4/12/97 Evansville / Green River Road
4/12/97 Burien / First Ave. So.
4/12/97 Rancho Cordova / Mather Field
4/12/97 Sugar Land / Eldridge
4/12/97 Columbus / Eastland Drive
4/12/97 Slickerville / Black Horse Pike
4/12/97 Seattle / Aurora
4/12/97 Gaithersburg / Christopher Ave.
4/12/97 Manchester / Tolland Turnpike
6/25/97 L.A./Venice Blvd.
6/25/97 Kirkland-Totem
6/25/97
6/25/97 Dallas
6/25/97 Atlanta
6/25/97 Bensalem
6/25/97 Evansville
6/25/97 Austin
Idianapolis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
667,000
2,550,000
1,002,000
1,037,000
682,000
619,000
1,568,000
3,861,000
1,137,000
1,375,000
121,000
876,000
889,000
1,352,000
1,406,000
1,035,000
1,048,000
756,000
648,000
1,159,000
602,000
470,000
792,000
494,000
705,000
602,000
539,000
1,145,000
972,000
807,000
523,000
2,131,000
471,000
699,000
1,183,000
1,159,000
429,000
813,000
244,000
677,000
418,000
310,000
267,000
271,000
543,000
1,208,000
312,000
453,000
151,000
186,000
218,000
329,000
356,000
218,000
336,000
247,000
136,000
407,000
173,000
151,000
245,000
160,000
215,000
214,000
194,000
253,000
262,000
202,000
1,782,000
176,000
98,000
61,000
83,000
65,000
27,000
54,000
1,556,000
5,950,000
2,338,000
2,420,000
1,590,000
1,444,000
3,658,000
9,010,000
2,653,000
3,209,000
282,000
2,044,000
2,073,000
3,156,000
3,280,000
2,416,000
2,445,000
1,764,000
1,513,000
2,704,000
1,405,000
1,096,000
1,847,000
1,153,000
1,644,000
1,405,000
1,258,000
2,671,000
2,268,000
1,883,000
1,221,000
4,972,000
1,098,000
1,631,000
2,761,000
2,705,000
1,000,000
1,897,000
F-56
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
668,000
2,553,000
1,003,000
1,038,000
683,000
620,000
1,570,000
3,866,000
1,138,000
1,377,000
121,000
877,000
890,000
1,354,000
1,408,000
1,036,000
1,049,000
757,000
649,000
1,160,000
603,000
471,000
793,000
495,000
706,000
603,000
540,000
1,146,000
973,000
808,000
1,045,000
2,134,000
472,000
700,000
1,184,000
1,160,000
401,000
814,000
1,799,000
6,624,000
2,755,000
2,729,000
1,856,000
1,714,000
4,199,000
10,213,000
2,964,000
3,660,000
433,000
2,229,000
2,290,000
3,483,000
3,634,000
2,633,000
2,780,000
2,010,000
1,648,000
3,110,000
1,577,000
1,246,000
2,091,000
1,312,000
1,858,000
1,618,000
1,451,000
2,923,000
2,529,000
2,084,000
2,481,000
5,145,000
1,195,000
1,691,000
2,843,000
2,769,000
1,055,000
1,950,000
2,467,000
9,177,000
3,758,000
3,767,000
2,539,000
2,334,000
5,769,000
14,079,000
4,102,000
5,037,000
554,000
3,106,000
3,180,000
4,837,000
5,042,000
3,669,000
3,829,000
2,767,000
2,297,000
4,270,000
2,180,000
1,717,000
2,884,000
1,807,000
2,564,000
2,221,000
1,991,000
4,069,000
3,502,000
2,892,000
3,526,000
7,279,000
1,667,000
2,391,000
4,027,000
3,929,000
1,456,000
2,764,000
457,000
1,544,000
647,000
652,000
481,000
438,000
1,043,000
2,420,000
699,000
903,000
161,000
536,000
569,000
849,000
869,000
631,000
695,000
517,000
397,000
743,000
390,000
323,000
514,000
346,000
473,000
419,000
385,000
705,000
625,000
518,000
392,000
1,243,000
299,000
419,000
681,000
648,000
262,000
464,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
6/25/97 Harbor City
6/25/97 Birmingham
6/25/97 Sacramento
6/25/97 Carrollton
6/25/97 La Habra
6/25/97 Lombard
6/25/97 Fairfield
6/25/97 Seattle
6/25/97 Bellevue
6/25/97 Citrus Heights
6/25/97 San Jose
6/25/97 Stanton
6/25/97 Garland
6/25/97 Westford
6/25/97 Dallas
6/25/97 Wheat Ridge
6/25/97 Berlin
6/25/97 Gretna
6/25/97 Spring
6/25/97 Sacramento
6/25/97 Houston/South Dairyashford
6/25/97 Naperville
6/25/97 Carrollton
6/25/97 Waipahu
6/25/97 Davis
6/25/97 Decatur
6/25/97
6/25/97 Chicoppe
6/25/97 Alexandria
6/25/97 Houston/Veterans Memorial Dr.
6/25/97 Los Angeles/Olympic
6/25/97 Littleton
6/25/97 Metairie
6/25/97 Louisville
6/25/97 East Hazel Crest
6/25/97 Edmonds
6/25/97 Foster City
6/25/97 Chicago
Jacksonville
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,244,000
539,000
489,000
441,000
822,000
1,527,000
740,000
1,498,000
1,653,000
642,000
1,273,000
948,000
486,000
857,000
1,627,000
1,054,000
825,000
1,069,000
461,000
592,000
856,000
1,108,000
1,158,000
1,620,000
628,000
951,000
653,000
663,000
1,533,000
458,000
4,392,000
1,340,000
1,229,000
717,000
753,000
1,187,000
1,064,000
1,160,000
218,000
88,000
(201,000)
36,000
55,000
1,722,000
34,000
255,000
70,000
506,000
14,000
52,000
53,000
68,000
631,000
339,000
261,000
425,000
186,000
886,000
274,000
349,000
476,000
515,000
228,000
379,000
287,000
304,000
483,000
183,000
1,223,000
449,000
453,000
284,000
272,000
407,000
318,000
423,000
2,904,000
1,258,000
1,396,000
1,029,000
1,918,000
3,564,000
1,727,000
3,494,000
3,858,000
1,244,000
2,971,000
2,212,000
1,135,000
1,999,000
3,797,000
2,459,000
1,925,000
2,494,000
1,077,000
1,380,000
1,997,000
2,585,000
2,702,000
3,780,000
1,465,000
2,220,000
1,525,000
1,546,000
3,576,000
1,070,000
10,247,000
3,126,000
2,868,000
1,672,000
1,757,000
2,770,000
2,483,000
2,708,000
F-57
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,245,000
540,000
490,000
442,000
823,000
2,049,000
741,000
1,500,000
1,655,000
643,000
1,274,000
949,000
487,000
858,000
1,629,000
1,055,000
826,000
1,070,000
462,000
721,000
857,000
1,109,000
1,159,000
1,622,000
629,000
952,000
654,000
664,000
1,535,000
459,000
4,397,000
1,342,000
1,230,000
718,000
754,000
1,188,000
1,065,000
1,161,000
3,121,000
1,345,000
1,194,000
1,064,000
1,972,000
4,764,000
1,760,000
3,747,000
3,926,000
1,749,000
2,984,000
2,263,000
1,187,000
2,066,000
4,426,000
2,797,000
2,185,000
2,918,000
1,262,000
2,137,000
2,270,000
2,933,000
3,177,000
4,293,000
1,692,000
2,598,000
1,811,000
1,849,000
4,057,000
1,252,000
11,465,000
3,573,000
3,320,000
1,955,000
2,028,000
3,176,000
2,800,000
3,130,000
4,366,000
1,885,000
1,684,000
1,506,000
2,795,000
6,813,000
2,501,000
5,247,000
5,581,000
2,392,000
4,258,000
3,212,000
1,674,000
2,924,000
6,055,000
3,852,000
3,011,000
3,988,000
1,724,000
2,858,000
3,127,000
4,042,000
4,336,000
5,915,000
2,321,000
3,550,000
2,465,000
2,513,000
5,592,000
1,711,000
15,862,000
4,915,000
4,550,000
2,673,000
2,782,000
4,364,000
3,865,000
4,291,000
774,000
333,000
289,000
261,000
475,000
1,028,000
416,000
1,007,000
941,000
449,000
688,000
524,000
294,000
499,000
1,048,000
635,000
496,000
700,000
308,000
469,000
542,000
677,000
758,000
1,005,000
406,000
609,000
455,000
470,000
923,000
303,000
2,613,000
832,000
789,000
466,000
483,000
747,000
642,000
739,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
6/25/97 Philadelphia
6/25/97 Dallas/Vilbig Rd.
6/25/97 Staten Island
6/25/97 Pelham Manor
6/25/97
Irving
6/25/97 Elk Grove
6/25/97 LAX
6/25/97 Denver
6/25/97 Plano
6/25/97 Lynnwood
6/25/97 Lilburn
6/25/97 Parma
6/25/97 Davie
6/25/97 Allen Park
6/25/97 Aurora
6/25/97 San Diego/16th Street
6/25/97 Sterling Heights
6/25/97 East L.A./Boyle Heights
6/25/97 Springfield/Alban Station
6/25/97 Littleton
6/25/97 Sacramento/57th Street
6/25/97 Miami
8/13/97 Santa Monica / Wilshire Blvd.
10/1/97 Marietta /Austell Rd
10/1/97 Denver / Leetsdale
10/1/97 Baltimore / York Road
10/1/97 Bolingbrook
10/1/97 Kent / Central
10/1/97 Geneva / Roosevelt
10/1/97 Denver / Sheridan
10/1/97 Mountlake Terrace
10/1/97 Carol Stream/ St.Charles
10/1/97 Marietta / Cobb Park
10/1/97 Venice / Rose
10/1/97 Ventura / Ventura Blvd
10/1/97 Studio City/ Ventura
10/1/97 Madison Heights
10/1/97 Lax / Imperial
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
924,000
508,000
1,676,000
1,209,000
469,000
642,000
1,312,000
1,316,000
1,369,000
839,000
507,000
881,000
1,086,000
953,000
808,000
932,000
766,000
957,000
1,317,000
868,000
869,000
1,762,000
2,040,000
398,000
1,407,000
1,538,000
737,000
483,000
355,000
429,000
1,017,000
185,000
420,000
5,468,000
911,000
2,421,000
428,000
1,662,000
322,000
209,000
555,000
538,000
197,000
244,000
484,000
476,000
404,000
343,000
325,000
480,000
577,000
510,000
400,000
592,000
437,000
482,000
651,000
461,000
464,000
823,000
257,000
258,000
203,000
313,000
207,000
204,000
174,000
156,000
229,000
164,000
295,000
616,000
226,000
149,000
2,047,000
202,000
2,155,000
1,184,000
3,910,000
2,820,000
1,093,000
1,497,000
3,062,000
3,071,000
3,193,000
1,959,000
1,182,000
2,055,000
2,533,000
2,223,000
1,886,000
2,175,000
1,787,000
2,232,000
3,074,000
2,026,000
2,029,000
4,111,000
4,760,000
1,326,000
1,682,000
1,952,000
1,776,000
1,321,000
1,302,000
1,105,000
1,783,000
1,187,000
1,131,000
5,478,000
2,227,000
1,610,000
1,686,000
2,079,000
F-58
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
468,000
595,000
705,000
613,000
469,000
460,000
400,000
612,000
419,000
431,000
1,836,000
768,000
541,000
572,000
724,000
925,000
509,000
1,678,000
1,210,000
470,000
643,000
1,314,000
1,318,000
1,371,000
840,000
508,000
882,000
1,087,000
954,000
809,000
933,000
767,000
958,000
1,319,000
869,000
870,000
1,764,000
2,042,000
398,000
1,409,000
1,540,000
738,000
484,000
355,000
430,000
1,018,000
185,000
420,000
5,474,000
912,000
2,424,000
429,000
1,664,000
2,476,000
1,392,000
4,463,000
3,357,000
1,289,000
1,740,000
3,544,000
3,545,000
3,595,000
2,301,000
1,506,000
2,534,000
3,109,000
2,732,000
2,285,000
2,766,000
2,223,000
2,713,000
3,723,000
2,486,000
2,492,000
4,932,000
5,015,000
2,052,000
2,478,000
2,968,000
2,595,000
1,993,000
1,936,000
1,660,000
2,623,000
1,770,000
1,857,000
7,924,000
3,220,000
2,297,000
4,304,000
3,003,000
3,401,000
1,901,000
6,141,000
4,567,000
1,759,000
2,383,000
4,858,000
4,863,000
4,966,000
3,141,000
2,014,000
3,416,000
4,196,000
3,686,000
3,094,000
3,699,000
2,990,000
3,671,000
5,042,000
3,355,000
3,362,000
6,696,000
7,057,000
2,450,000
3,887,000
4,508,000
3,333,000
2,477,000
2,291,000
2,090,000
3,641,000
1,955,000
2,277,000
13,398,000
4,132,000
4,721,000
4,733,000
4,667,000
574,000
348,000
1,030,000
772,000
327,000
413,000
845,000
826,000
820,000
555,000
375,000
587,000
753,000
634,000
522,000
687,000
520,000
630,000
860,000
563,000
594,000
1,137,000
1,221,000
527,000
657,000
758,000
672,000
514,000
511,000
440,000
654,000
451,000
472,000
1,857,000
818,000
597,000
585,000
766,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Justice / Industrial
10/1/97
10/1/97 Burbank / San Fernando
10/1/97 Pinole / Appian Way
10/1/97 Denver / Tamarac Park
10/1/97 Gresham / Powell
10/1/97 Warren / Mound Road
10/1/97 Woodside/Brooklyn
10/1/97 Enfield / Elm Street
10/1/97 Roselle / Lake Street
10/1/97 Milwaukee / Appleton
10/1/97 Emeryville / Bay St
10/1/97 Monterey / Del Rey
10/1/97 San Leandro / Washington
10/1/97 Boca Raton / N.W. 20
10/1/97 Washington Dc/So Capital
10/1/97 Lynn / Lynnway
10/1/97 Pompano Beach
10/1/97 Lake Oswego/ N.State
10/1/97 Daly City / Mission
10/1/97 Odenton / Route 175
10/1/97 Novato / Landing
10/1/97 St. Louis / Lindberg
10/1/97 Oakland/International
10/1/97 Stockton / March Lane
10/1/97 Des Plaines / Golf Rd
10/1/97 Morton Grove / Wauke
10/1/97 Los Angeles / Jefferson
10/1/97 Los Angeles / Martin
10/1/97 San Leandro / E. 14th
10/1/97 Tucson / Tanque Verde
10/1/97 Randolph / Warren St
10/1/97 Forrestville / Penn.
10/1/97 Bridgeport
10/1/97 North Hollywood/Vine
10/1/97 Santa Cruz / Portola
10/1/97 Hyde Park / River St
10/1/97 Dublin / San Ramon Rd
10/1/97 Vallejo / Humboldt
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
233,000
1,825,000
728,000
2,545,000
322,000
268,000
5,016,000
399,000
312,000
324,000
1,602,000
257,000
660,000
1,140,000
1,437,000
463,000
1,077,000
465,000
389,000
456,000
2,416,000
584,000
358,000
663,000
1,363,000
2,658,000
1,090,000
869,000
627,000
345,000
2,330,000
1,056,000
4,877,000
906,000
535,000
626,000
942,000
473,000
138,000
202,000
186,000
367,000
204,000
191,000
373,000
275,000
193,000
220,000
186,000
201,000
175,000
381,000
431,000
366,000
537,000
262,000
248,000
248,000
237,000
224,000
228,000
122,000
209,000
3,601,000
234,000
110,000
112,000
160,000
462,000
244,000
584,000
176,000
152,000
247,000
158,000
148,000
1,181,000
2,210,000
1,827,000
1,692,000
1,298,000
1,025,000
3,950,000
1,900,000
1,411,000
1,385,000
1,830,000
1,048,000
1,142,000
2,256,000
4,489,000
3,059,000
1,527,000
1,956,000
2,921,000
2,104,000
3,496,000
1,508,000
1,568,000
1,398,000
3,093,000
3,232,000
1,580,000
1,152,000
1,289,000
1,709,000
1,914,000
2,347,000
2,739,000
2,379,000
1,526,000
1,748,000
1,999,000
1,651,000
F-59
410,000
752,000
626,000
658,000
446,000
364,000
1,392,000
652,000
495,000
491,000
637,000
360,000
401,000
782,000
1,531,000
1,077,000
540,000
670,000
971,000
732,000
275,000
124,000
127,000
110,000
236,000
327,000
126,000
92,000
102,000
135,000
153,000
188,000
228,000
183,000
122,000
139,000
153,000
129,000
233,000
1,827,000
729,000
2,548,000
322,000
268,000
5,022,000
399,000
312,000
324,000
1,604,000
257,000
661,000
1,141,000
1,439,000
464,000
1,078,000
466,000
389,000
457,000
2,419,000
585,000
358,000
664,000
1,365,000
2,661,000
1,091,000
870,000
628,000
345,000
2,333,000
1,057,000
4,883,000
907,000
536,000
627,000
943,000
474,000
1,729,000
3,162,000
2,638,000
2,714,000
1,948,000
1,580,000
5,709,000
2,827,000
2,099,000
2,096,000
2,651,000
1,609,000
1,717,000
3,418,000
6,449,000
4,501,000
2,603,000
2,887,000
4,140,000
3,083,000
4,005,000
1,855,000
1,923,000
1,629,000
3,536,000
7,157,000
1,939,000
1,353,000
1,502,000
2,004,000
2,526,000
2,778,000
3,545,000
2,737,000
1,799,000
2,133,000
2,309,000
1,927,000
1,962,000
4,989,000
3,367,000
5,262,000
2,270,000
1,848,000
10,731,000
3,226,000
2,411,000
2,420,000
4,255,000
1,866,000
2,378,000
4,559,000
7,888,000
4,965,000
3,681,000
3,353,000
4,529,000
3,540,000
6,424,000
2,440,000
2,281,000
2,293,000
4,901,000
9,818,000
3,030,000
2,223,000
2,130,000
2,349,000
4,859,000
3,835,000
8,428,000
3,644,000
2,335,000
2,760,000
3,252,000
2,401,000
452,000
797,000
674,000
746,000
485,000
379,000
1,246,000
661,000
524,000
494,000
652,000
376,000
421,000
803,000
1,316,000
1,043,000
564,000
667,000
953,000
625,000
1,170,000
522,000
536,000
463,000
1,035,000
1,646,000
529,000
383,000
422,000
516,000
604,000
767,000
951,000
704,000
479,000
536,000
685,000
507,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
10/1/97 Fremont/Warm Springs
10/1/97 Seattle / Stone Way
10/1/97 W. Olympia
10/1/97 Mercer/Parkside Ave
10/1/97 Bridge Water / Main
10/1/97 Norwalk / Hoyt Street
11/2/97 Lansing
11/7/97 Phoenix
11/13/97 Tinley Park
3/17/98 Houston/De Soto Dr.
3/17/98 Houston / East Freeway
3/17/98 Austin/Ben White
3/17/98 Arlington/E.Pioneer
3/17/98 Las Vegas/Tropicana
3/17/98 Branford / Summit Place
3/17/98 Las Vegas / Charleston
3/17/98 So. San Francisco
3/17/98 Pasadena / Arroyo Prkwy
3/17/98 Tempe / E. Broadway
3/17/98 Phoenix / N. 43rd Ave
3/17/98 Phoenix/No. 43rd
3/17/98 Phoenix / Black Canyon
3/17/98 Phoenix/Black Canyon
3/17/98 Nesconset / Southern
St. Louis / Hwy. 141
4/1/98
4/1/98
Island Park / Austin
4/1/98 Akron / Brittain Rd.
4/1/98
4/1/98 Havertown/West Chester
4/1/98
4/1/98 Chicago / Cuyler
4/1/98 Chicago Heights/West
4/1/98 Arlington Hts/University
4/1/98 Cicero / Ogden
4/1/98 Chicago/W. Howard St.
4/1/98 Chicago/N. Western Ave
4/1/98 Chicago/Northwest Hwy
4/1/98 Chicago/N. Wells St.
Patchogue/W.Sunrise
Schiller Park/River
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
848,000
829,000
149,000
359,000
445,000
2,369,000
758,000
1,197,000
1,422,000
659,000
593,000
692,000
922,000
1,285,000
728,000
791,000
1,550,000
3,005,000
633,000
443,000
380,000
380,000
136,000
1,423,000
659,000
2,313,000
275,000
936,000
1,254,000
568,000
1,400,000
468,000
670,000
1,678,000
974,000
1,453,000
925,000
1,446,000
244,000
280,000
267,000
205,000
255,000
535,000
120,000
124,000
49,000
90,000
128,000
75,000
147,000
128,000
105,000
106,000
77,000
132,000
125,000
141,000
362,000
128,000
185,000
100,000
4,472,000
(626,000)
(209,000)
118,000
92,000
64,000
87,000
64,000
77,000
267,000
124,000
107,000
64,000
89,000
2,885,000
2,180,000
1,096,000
1,763,000
2,054,000
3,049,000
1,768,000
2,793,000
3,319,000
1,537,000
1,384,000
1,614,000
2,152,000
2,998,000
1,698,000
1,845,000
3,617,000
7,012,000
1,476,000
1,033,000
886,000
886,000
317,000
3,321,000
1,628,000
3,015,000
2,248,000
2,184,000
2,926,000
1,390,000
2,695,000
1,804,000
3,004,000
2,266,000
2,875,000
3,205,000
2,412,000
2,828,000
F-60
225,000
173,000
90,000
141,000
159,000
253,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
849,000
830,000
149,000
359,000
446,000
2,372,000
759,000
1,198,000
1,424,000
660,000
594,000
693,000
923,000
1,287,000
729,000
792,000
1,552,000
3,009,000
634,000
444,000
380,000
380,000
136,000
1,425,000
1,346,000
1,376,000
670,000
937,000
1,250,000
569,000
1,402,000
469,000
671,000
1,680,000
975,000
1,455,000
926,000
1,448,000
3,353,000
2,632,000
1,453,000
2,109,000
2,467,000
3,834,000
1,887,000
2,916,000
3,366,000
1,626,000
1,511,000
1,688,000
2,298,000
3,124,000
1,802,000
1,950,000
3,692,000
7,140,000
1,600,000
1,173,000
1,248,000
1,014,000
502,000
3,419,000
5,413,000
3,326,000
1,644,000
2,301,000
3,022,000
1,453,000
2,780,000
1,867,000
3,080,000
2,531,000
2,998,000
3,310,000
2,475,000
2,915,000
4,202,000
3,462,000
1,602,000
2,468,000
2,913,000
6,206,000
2,646,000
4,114,000
4,790,000
2,286,000
2,105,000
2,381,000
3,221,000
4,411,000
2,531,000
2,742,000
5,244,000
10,149,000
2,234,000
1,617,000
1,628,000
1,394,000
638,000
4,844,000
6,759,000
4,702,000
2,314,000
3,238,000
4,272,000
2,022,000
4,182,000
2,336,000
3,751,000
4,211,000
3,973,000
4,765,000
3,401,000
4,363,000
832,000
629,000
347,000
529,000
605,000
900,000
460,000
661,000
704,000
334,000
335,000
349,000
462,000
625,000
381,000
398,000
731,000
1,385,000
330,000
261,000
205,000
228,000
123,000
674,000
603,000
634,000
264,000
480,000
612,000
310,000
617,000
417,000
668,000
580,000
675,000
728,000
539,000
641,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Silver Spring/Hill
La Downtwn/10 Fwy
Fraser/Groesbeck Hwy
San Diego/54th & Euclid
4/1/98 Chicago / Pulaski Rd.
4/1/98 Artesia / Artesia
4/1/98 Arcadia / Lower Azusa
4/1/98 Manassas / Centreville
4/1/98
4/1/98 Bellevue / Northup
4/1/98 Hollywood/Cole & Wilshire
4/1/98 Atlanta/John Wesley
4/1/98 Montebello/S. Maple
4/1/98
Lake City/Forest Park
4/1/98 Baltimore / W. Patap
4/1/98
4/1/98 Vallejo / Mini Drive
4/1/98
4/1/98 Miami / 5th Street
4/1/98
4/1/98 Chicago/E. 95th St.
4/1/98 Chicago / S. Harlem
4/1/98
St. Charles /Highway
4/1/98 Chicago/Burr Ridge Rd.
4/1/98 Yonkers / Route 9a
4/1/98
Silverlake/Glendale
4/1/98 Chicago/Harlem Ave
4/1/98 Bethesda / Butler Rd
4/1/98 Dundalk / Wise Ave
St. Louis / Hwy. 141
4/1/98
4/1/98
Island Park / Austin
4/1/98 Dallas / Kingsly
5/1/98 Berkeley / 2nd St.
5/8/98 Cleveland / W. 117th
5/8/98
5/8/98 Aurora / Farnsworth
5/8/98
Santa Rosa / Hopper
5/8/98 Golden Valley / Winn
5/8/98
5/8/98 Chicago / S. Chicago
10/1/98 El Segundo / Sepulveda
10/1/98 Atlanta / Memorial Dr.
St. Louis / Benham
La /Venice Blvd
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,276,000
625,000
821,000
405,000
1,608,000
1,232,000
1,590,000
1,233,000
1,274,000
248,000
403,000
368,000
560,000
952,000
2,327,000
922,000
397,000
791,000
623,000
421,000
1,722,000
2,314,000
1,430,000
1,146,000
447,000
659,000
2,313,000
1,095,000
1,914,000
930,000
1,470,000
960,000
1,020,000
630,000
810,000
840,000
6,586,000
414,000
62,000
93,000
92,000
166,000
129,000
218,000
80,000
169,000
62,000
79,000
122,000
74,000
78,000
98,000
108,000
131,000
98,000
70,000
114,000
60,000
114,000
107,000
95,000
64,000
81,000
57,000
78,000
103,000
(130,000)
182,000
80,000
70,000
93,000
88,000
143,000
59,000
106,000
157,000
2,858,000
1,419,000
1,369,000
2,137,000
3,358,000
3,306,000
1,785,000
1,665,000
2,299,000
1,445,000
2,650,000
1,796,000
1,803,000
2,550,000
3,234,000
2,080,000
2,357,000
1,424,000
1,501,000
2,165,000
3,823,000
5,481,000
3,038,000
2,509,000
2,005,000
1,628,000
3,015,000
1,712,000
4,466,000
2,277,000
3,599,000
2,350,000
2,497,000
1,542,000
1,983,000
2,057,000
5,795,000
2,239,000
F-61
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,277,000
626,000
822,000
405,000
1,610,000
1,233,000
1,592,000
1,234,000
1,275,000
248,000
403,000
368,000
561,000
953,000
2,330,000
923,000
397,000
792,000
624,000
421,000
1,724,000
2,317,000
1,432,000
1,147,000
448,000
660,000
2,316,000
1,096,000
1,839,000
931,000
1,472,000
961,000
1,021,000
631,000
811,000
841,000
6,594,000
414,000
2,919,000
1,511,000
1,460,000
2,303,000
3,485,000
3,523,000
1,863,000
1,833,000
2,360,000
1,524,000
2,772,000
1,870,000
1,880,000
2,647,000
3,339,000
2,210,000
2,455,000
1,493,000
1,614,000
2,225,000
3,935,000
5,585,000
3,131,000
2,572,000
2,085,000
1,684,000
3,090,000
1,814,000
4,411,000
2,458,000
3,677,000
2,419,000
2,589,000
1,629,000
2,125,000
2,115,000
5,893,000
2,396,000
4,196,000
2,137,000
2,282,000
2,708,000
5,095,000
4,756,000
3,455,000
3,067,000
3,635,000
1,772,000
3,175,000
2,238,000
2,441,000
3,600,000
5,669,000
3,133,000
2,852,000
2,285,000
2,238,000
2,646,000
5,659,000
7,902,000
4,563,000
3,719,000
2,533,000
2,344,000
5,406,000
2,910,000
6,250,000
3,389,000
5,149,000
3,380,000
3,610,000
2,260,000
2,936,000
2,956,000
12,487,000
2,810,000
616,000
430,000
410,000
659,000
962,000
1,007,000
517,000
576,000
653,000
431,000
741,000
506,000
517,000
817,000
1,000,000
689,000
758,000
471,000
519,000
696,000
1,181,000
1,670,000
945,000
749,000
591,000
565,000
1,030,000
505,000
870,000
499,000
687,000
462,000
493,000
331,000
426,000
395,000
1,084,000
478,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
10/1/98 Chicago / W. 79th St
10/1/98 Chicago / N. Broadway
10/1/98 Dallas / Greenville
10/1/98 Tacoma / Orchard
10/1/98 St. Louis / Gravois
10/1/98 White Bear Lake
10/1/98 Santa Cruz / Soquel
10/1/98 Coon Rapids / Hwy 10
10/1/98 Oxnard / Hueneme Rd
10/1/98 Vancouver/ Millplain
10/1/98 Tigard / Mc Ewan
10/1/98 Griffith / Cline
10/1/98 Miami / Sunset Drive
10/1/98 Farmington / 9 Mile
10/1/98 Los Gatos / University
10/1/98 N. Hollywood
10/1/98 Petaluma / Transport
10/1/98 Chicago / 111th
10/1/98 Upper Darby / Market
10/1/98 San Jose / Santa
10/1/98 San Diego / Morena
10/1/98 Brooklyn /Rockaway Ave
10/1/98 Revere / Charger St
10/1/98 Las Vegas / E. Charles
10/1/98 Laurel / Baltimore Ave
10/1/98 East La/Figueroa & 4th
10/1/98 Oldsmar / Tampa Road
10/1/98 Ft. Lauderdale /S.W.
10/1/98 Miami / Nw 73rd St
1/1/99 New Orleans/St.Charles
1/6/99 Brandon / E. Brandon Blvd
3/12/99 St. Louis / N. Lindbergh Blvd.
3/12/99 St. Louis /Vandeventer Midtown
3/12/99 St. Ann / Maryland Heights
3/12/99 Florissant / N. Hwy 67
3/12/99 Ferguson Area-W.Florissant
3/12/99 Florissant / New Halls Ferry Rd
3/12/99 St. Louis / Airport
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
861,000
1,918,000
1,933,000
358,000
312,000
578,000
832,000
330,000
923,000
343,000
597,000
299,000
1,656,000
580,000
2,234,000
1,484,000
460,000
341,000
808,000
966,000
3,173,000
6,272,000
1,997,000
602,000
1,899,000
1,213,000
760,000
1,046,000
1,050,000
1,463,000
1,560,000
1,688,000
699,000
1,035,000
971,000
1,194,000
1,144,000
785,000
222,000
123,000
90,000
75,000
129,000
71,000
93,000
71,000
103,000
76,000
81,000
43,000
1,932,000
79,000
(258,000)
42,000
4,935,000
2,143,000
123,000
82,000
90,000
292,000
171,000
99,000
150,000
50,000
2,727,000
75,000
83,000
56,000
64,000
159,000
107,000
96,000
121,000
223,000
199,000
80,000
2,789,000
3,824,000
2,892,000
1,987,000
2,327,000
2,079,000
2,385,000
1,646,000
3,925,000
2,000,000
1,652,000
2,118,000
2,321,000
2,526,000
3,890,000
3,143,000
1,840,000
2,898,000
5,011,000
3,870,000
5,469,000
9,691,000
3,727,000
2,545,000
4,498,000
2,689,000
2,154,000
2,928,000
3,064,000
2,634,000
3,695,000
3,939,000
1,631,000
2,414,000
2,265,000
2,732,000
2,670,000
1,833,000
F-62
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
862,000
1,920,000
1,935,000
358,000
312,000
579,000
833,000
330,000
924,000
343,000
598,000
299,000
2,270,000
581,000
2,237,000
1,486,000
858,000
433,000
809,000
967,000
3,177,000
6,279,000
1,999,000
603,000
1,901,000
1,214,000
1,050,000
1,047,000
1,051,000
1,465,000
1,562,000
1,690,000
700,000
1,036,000
972,000
1,195,000
1,145,000
786,000
3,010,000
3,945,000
2,980,000
2,062,000
2,456,000
2,149,000
2,477,000
1,717,000
4,027,000
2,076,000
1,732,000
2,161,000
3,639,000
2,604,000
3,629,000
3,183,000
6,377,000
4,949,000
5,133,000
3,951,000
5,555,000
9,976,000
3,896,000
2,643,000
4,646,000
2,738,000
4,591,000
3,002,000
3,146,000
2,688,000
3,757,000
4,096,000
1,737,000
2,509,000
2,385,000
2,954,000
2,868,000
1,912,000
3,872,000
5,865,000
4,915,000
2,420,000
2,768,000
2,728,000
3,310,000
2,047,000
4,951,000
2,419,000
2,330,000
2,460,000
5,909,000
3,185,000
5,866,000
4,669,000
7,235,000
5,382,000
5,942,000
4,918,000
8,732,000
16,255,000
5,895,000
3,246,000
6,547,000
3,952,000
5,641,000
4,049,000
4,197,000
4,153,000
5,319,000
5,786,000
2,437,000
3,545,000
3,357,000
4,149,000
4,013,000
2,698,000
609,000
760,000
552,000
405,000
481,000
409,000
477,000
335,000
755,000
410,000
350,000
403,000
535,000
483,000
666,000
590,000
539,000
548,000
947,000
745,000
1,022,000
1,841,000
745,000
510,000
861,000
511,000
605,000
553,000
594,000
427,000
506,000
641,000
280,000
401,000
378,000
495,000
466,000
300,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
3/12/99 St. Louis/ S.Third St
3/12/99 Kansas City / E. 47th St.
3/12/99 Kansas City /E. 67th Terrace
3/12/99 Kansas City / James A. Reed Rd
3/12/99
Independence / 291
3/12/99 Raytown / Woodson Rd
3/12/99 Kansas City / 34th Main Street
3/12/99 Columbia / River Dr
3/12/99 Columbia / Buckner Rd
3/12/99 Columbia / Decker Park Rd
3/12/99 Columbia / Rosewood Dr
3/12/99 W. Columbia / Orchard Dr.
3/12/99 W. Columbia / Airport Blvd
3/12/99 Greenville / Whitehorse Rd
3/12/99 Greenville / Woods Lake Rd
3/12/99 Mauldin / N. Main Street
3/12/99 Simpsonville / Grand View Dr
3/12/99 Taylors / Wade Hampton Blvd
3/12/99 Charleston/Ashley Phosphate
3/12/99 N. Charleston / Dorchester Rd
3/12/99 N. Charleston / Dorchester
3/12/99 Charleston / Sam Rittenberg Blvd
3/12/99 Hilton Head / Office Park Rd
3/12/99 Columbia / Plumbers Rd
3/12/99 Greenville / Pineknoll Rd
3/12/99 Hilton Head / Yacht Cove Dr
3/12/99 Spartanburg / Chesnee Hwy
3/12/99 Charleston / Ashley River Rd
3/12/99 Columbia / Broad River
3/12/99 Charlotte / East Wt Harris Blvd
3/12/99 Charlotte / North Tryon St.
3/12/99 Charlotte / South Blvd
3/12/99 Kannapolis / Oregon St
3/12/99 Durham / E. Club Blvd
3/12/99 Durham / N. Duke St.
3/12/99 Raleigh / Maitland Dr
3/12/99 Greensboro / O'henry Blvd
3/12/99 Gastonia / S. York Rd
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,096,000
610,000
1,136,000
749,000
871,000
915,000
114,000
671,000
714,000
605,000
777,000
272,000
493,000
882,000
364,000
571,000
582,000
650,000
839,000
380,000
487,000
555,000
1,279,000
368,000
927,000
1,182,000
533,000
1,114,000
1,463,000
736,000
708,000
641,000
463,000
947,000
769,000
679,000
577,000
467,000
64,000
123,000
77,000
73,000
89,000
86,000
546,000
144,000
246,000
102,000
94,000
112,000
96,000
75,000
107,000
103,000
112,000
125,000
173,000
101,000
117,000
96,000
87,000
117,000
139,000
145,000
212,000
112,000
192,000
86,000
178,000
105,000
84,000
89,000
109,000
95,000
180,000
113,000
2,557,000
1,424,000
2,643,000
1,748,000
2,032,000
2,134,000
2,599,000
1,566,000
1,665,000
1,412,000
1,814,000
634,000
1,151,000
2,058,000
849,000
1,333,000
1,358,000
1,517,000
1,950,000
886,000
1,137,000
1,296,000
2,985,000
858,000
2,163,000
2,753,000
1,244,000
2,581,000
3,413,000
1,718,000
1,653,000
1,496,000
1,081,000
2,209,000
1,794,000
1,585,000
1,345,000
1,089,000
F-63
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,097,000
611,000
1,137,000
750,000
872,000
916,000
114,000
672,000
715,000
606,000
778,000
272,000
494,000
883,000
364,000
572,000
583,000
651,000
840,000
380,000
488,000
556,000
1,281,000
368,000
928,000
1,183,000
534,000
1,115,000
1,465,000
737,000
709,000
642,000
464,000
948,000
770,000
680,000
578,000
468,000
2,620,000
1,546,000
2,719,000
1,820,000
2,120,000
2,219,000
3,145,000
1,709,000
1,910,000
1,513,000
1,907,000
746,000
1,246,000
2,132,000
956,000
1,435,000
1,469,000
1,641,000
2,122,000
987,000
1,253,000
1,391,000
3,070,000
975,000
2,301,000
2,897,000
1,455,000
2,692,000
3,603,000
1,803,000
1,830,000
1,600,000
1,164,000
2,297,000
1,902,000
1,679,000
1,524,000
1,201,000
3,717,000
2,157,000
3,856,000
2,570,000
2,992,000
3,135,000
3,259,000
2,381,000
2,625,000
2,119,000
2,685,000
1,018,000
1,740,000
3,015,000
1,320,000
2,007,000
2,052,000
2,292,000
2,962,000
1,367,000
1,741,000
1,947,000
4,351,000
1,343,000
3,229,000
4,080,000
1,989,000
3,807,000
5,068,000
2,540,000
2,539,000
2,242,000
1,628,000
3,245,000
2,672,000
2,359,000
2,102,000
1,669,000
416,000
247,000
433,000
299,000
335,000
353,000
545,000
301,000
380,000
264,000
318,000
150,000
207,000
351,000
173,000
258,000
250,000
281,000
370,000
168,000
221,000
244,000
486,000
174,000
389,000
471,000
260,000
428,000
609,000
307,000
317,000
276,000
207,000
378,000
310,000
288,000
281,000
222,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Jacksonville / Ft. Caroline Rd.
Jacksonville / Southside Blvd.
3/12/99 Durham / Kangaroo Dr.
3/12/99 Pensacola / Brent Lane
3/12/99 Pensacola / Creighton Road
Jacksonville / Park Avenue
3/12/99
3/12/99
Jacksonville / Phillips Hwy
3/12/99 Clearwater / Highland Ave
3/12/99 Tarpon Springs / Us Highway 19
3/12/99 Orlando /S. Orange Blossom Trail
3/12/99 Casselberry Ii
3/12/99 Miami / Nw 14th Street
3/12/99 Tarpon Springs / Highway 19
3/12/99 Ft. Myers / Tamiami Trail South
3/12/99
3/12/99 Orlando / South Semoran
3/12/99
3/12/99 Miami / Nw 7th Ave
3/12/99 Vero Beach / Us Hwy 1
3/12/99 Ponte Vedra / Palm Valley Rd.
3/12/99 Miami Lakes / Nw 153rd St.
3/12/99 Deerfield Beach / Sw 10th St.
3/12/99 Apopka / S. Orange Blossom
3/12/99 Davie / University
3/12/99 Arlington / Division
3/12/99 Duncanville/S.Cedar Ridge
3/12/99 Carrollton / Trinity Mills West
3/12/99 Houston / Wallisville Rd.
3/12/99 Houston / Fondren South
3/12/99 Houston / Addicks Satsuma
3/12/99 Addison / Inwood Road
3/12/99 Garland / Jackson Drive
3/12/99 Garland / Buckingham Road
3/12/99 Houston / South Main
3/12/99 Plano / Parker Road-Avenue K
3/12/99 Houston / Bingle Road
3/12/99 Houston / Mangum Road
3/12/99 Houston / Hayes Road
3/12/99 Katy / Dominion Drive
3/12/99 Houston / Fm 1960 West
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,102,000
402,000
454,000
905,000
665,000
724,000
892,000
1,229,000
1,160,000
1,739,000
1,179,000
834,000
1,037,000
565,000
1,278,000
783,000
678,000
745,000
425,000
1,844,000
307,000
313,000
998,000
1,477,000
530,000
744,000
647,000
409,000
1,204,000
755,000
492,000
1,461,000
1,517,000
576,000
737,000
916,000
995,000
513,000
213,000
92,000
209,000
124,000
162,000
105,000
142,000
145,000
87,000
110,000
88,000
74,000
160,000
50,000
162,000
147,000
68,000
433,000
65,000
64,000
97,000
194,000
79,000
157,000
88,000
68,000
50,000
89,000
52,000
68,000
102,000
83,000
113,000
100,000
93,000
48,000
52,000
75,000
2,572,000
938,000
1,060,000
2,113,000
1,545,000
1,690,000
2,081,000
2,867,000
2,708,000
4,058,000
2,751,000
1,945,000
2,420,000
1,319,000
2,982,000
1,827,000
1,583,000
2,749,000
992,000
4,302,000
717,000
4,379,000
2,328,000
3,447,000
1,237,000
1,736,000
1,510,000
954,000
2,808,000
1,761,000
1,149,000
3,409,000
3,539,000
1,345,000
1,719,000
2,138,000
2,321,000
1,198,000
F-64
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,103,000
402,000
455,000
906,000
666,000
725,000
893,000
1,230,000
1,161,000
1,741,000
1,180,000
835,000
1,038,000
566,000
1,280,000
784,000
679,000
746,000
425,000
1,846,000
307,000
313,000
999,000
1,479,000
531,000
745,000
648,000
409,000
1,205,000
756,000
493,000
1,463,000
1,519,000
577,000
738,000
917,000
996,000
514,000
2,784,000
1,030,000
1,268,000
2,236,000
1,706,000
1,794,000
2,222,000
3,011,000
2,794,000
4,166,000
2,838,000
2,018,000
2,579,000
1,368,000
3,142,000
1,973,000
1,650,000
3,181,000
1,057,000
4,364,000
814,000
4,573,000
2,406,000
3,602,000
1,324,000
1,803,000
1,559,000
1,043,000
2,859,000
1,828,000
1,250,000
3,490,000
3,650,000
1,444,000
1,811,000
2,185,000
2,372,000
1,272,000
3,887,000
1,432,000
1,723,000
3,142,000
2,372,000
2,519,000
3,115,000
4,241,000
3,955,000
5,907,000
4,018,000
2,853,000
3,617,000
1,934,000
4,422,000
2,757,000
2,329,000
3,927,000
1,482,000
6,210,000
1,121,000
4,886,000
3,405,000
5,081,000
1,855,000
2,548,000
2,207,000
1,452,000
4,064,000
2,584,000
1,743,000
4,953,000
5,169,000
2,021,000
2,549,000
3,102,000
3,368,000
1,786,000
468,000
179,000
210,000
376,000
303,000
303,000
377,000
491,000
456,000
668,000
460,000
333,000
427,000
227,000
525,000
343,000
276,000
571,000
186,000
686,000
153,000
698,000
379,000
584,000
226,000
299,000
257,000
180,000
449,000
300,000
227,000
557,000
589,000
246,000
313,000
349,000
377,000
223,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
3/12/99 Webster / Fm 528 Road
3/12/99 Houston / Loch Katrine Lane
3/12/99 Houston / Milwee St.
3/12/99 Lewisville / Highway 121
3/12/99 Richardson / Central Expressway
3/12/99 Houston / Hwy 6 South
3/12/99 Houston / Westheimer West
3/12/99 Ft. Worth / Granbury Road
3/12/99 Houston / New Castle
3/12/99 Dallas / Inwood Road
3/12/99 Fort Worth / Loop 820 North
3/12/99 Carrollton / Marsh Lane South
3/12/99 Dallas / Forest Central Dr
3/12/99 Arlington / Cooper St
3/12/99 Webster / Highway 3
3/12/99 Augusta / Peach Orchard Rd
3/12/99 Martinez / Old Petersburg Rd
3/12/99
Jonesboro / Tara Blvd
3/12/99 Atlanta / Briarcliff Rd
3/12/99 Decatur / N Decatur Rd
3/12/99 Douglasville / Westmoreland
3/12/99 Doraville / Mcelroy Rd
3/12/99 Roswell / Alpharetta
3/12/99 Douglasville / Duralee Lane
3/12/99 Douglasville / Highway 5
3/12/99 Forest Park / Jonesboro
3/12/99 Marietta / Whitlock
3/12/99 Marietta / Cobb
3/12/99 Norcross / Jones Mill Rd
3/12/99 Norcross / Dawson Blvd
3/12/99 Forest Park / Old Dixie Hwy
3/12/99 Decatur / Covington
3/12/99 Alpharetta / Maxwell Rd
3/12/99 Alpharetta / N. Main St
3/12/99 Atlanta / Bolton Rd
3/12/99 Riverdale / Georgia Hwy 85
3/12/99 Kennesaw / Rutledge Road
3/12/99 Lawrenceville / Buford Dr.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
756,000
580,000
779,000
688,000
465,000
569,000
1,075,000
763,000
2,346,000
1,478,000
729,000
1,353,000
859,000
779,000
677,000
860,000
407,000
785,000
2,171,000
933,000
453,000
827,000
1,772,000
533,000
804,000
659,000
1,016,000
727,000
1,142,000
1,232,000
895,000
1,764,000
1,075,000
1,240,000
866,000
1,075,000
803,000
256,000
78,000
73,000
86,000
94,000
103,000
47,000
45,000
50,000
1,207,000
45,000
77,000
17,000
35,000
48,000
72,000
280,000
108,000
184,000
196,000
136,000
170,000
185,000
91,000
86,000
377,000
141,000
116,000
187,000
130,000
157,000
168,000
103,000
72,000
54,000
135,000
72,000
159,000
72,000
1,764,000
1,352,000
1,815,000
1,605,000
1,085,000
1,328,000
2,508,000
1,781,000
5,473,000
3,448,000
1,702,000
3,156,000
2,004,000
1,818,000
1,580,000
2,007,000
950,000
1,827,000
5,066,000
2,177,000
1,056,000
1,931,000
4,135,000
1,244,000
1,875,000
1,537,000
2,370,000
1,696,000
2,670,000
2,874,000
2,070,000
4,116,000
2,509,000
2,893,000
2,019,000
2,508,000
1,874,000
597,000
F-65
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
757,000
581,000
780,000
689,000
466,000
570,000
1,076,000
764,000
2,242,000
1,480,000
730,000
1,355,000
860,000
780,000
678,000
861,000
407,000
786,000
2,174,000
934,000
454,000
828,000
1,774,000
534,000
805,000
660,000
1,017,000
728,000
1,143,000
1,233,000
896,000
1,766,000
1,076,000
1,241,000
867,000
1,076,000
804,000
256,000
1,841,000
1,424,000
1,900,000
1,698,000
1,187,000
1,374,000
2,552,000
1,830,000
6,784,000
3,491,000
1,778,000
3,171,000
2,038,000
1,865,000
1,651,000
2,286,000
1,058,000
2,010,000
5,259,000
2,312,000
1,225,000
2,115,000
4,224,000
1,329,000
2,251,000
1,677,000
2,485,000
1,882,000
2,799,000
3,030,000
2,237,000
4,217,000
2,580,000
2,946,000
2,153,000
2,579,000
2,032,000
669,000
2,598,000
2,005,000
2,680,000
2,387,000
1,653,000
1,944,000
3,628,000
2,594,000
9,026,000
4,971,000
2,508,000
4,526,000
2,898,000
2,645,000
2,329,000
3,147,000
1,465,000
2,796,000
7,433,000
3,246,000
1,679,000
2,943,000
5,998,000
1,863,000
3,056,000
2,337,000
3,502,000
2,610,000
3,942,000
4,263,000
3,133,000
5,983,000
3,656,000
4,187,000
3,020,000
3,655,000
2,836,000
925,000
302,000
241,000
322,000
281,000
195,000
228,000
405,000
299,000
926,000
546,000
293,000
295,000
198,000
300,000
272,000
437,000
186,000
336,000
829,000
395,000
231,000
370,000
664,000
230,000
419,000
300,000
406,000
340,000
463,000
497,000
394,000
670,000
414,000
468,000
345,000
418,000
344,000
128,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
3/12/99 Hanover Park / W. Lake Street
3/12/99 Chicago / W. Jarvis Ave
3/12/99 Chicago / N. Broadway St
3/12/99 Carol Stream / Phillips Court
3/12/99 Winfield / Roosevelt Road
3/12/99 Schaumburg / S. Roselle Road
3/12/99 Tinley Park / Brennan Hwy
3/12/99 Schaumburg / Palmer Drive
3/12/99 Mobile / Hillcrest Road
3/12/99 Mobile / Azalea Road
3/12/99 Mobile / Moffat Road
3/12/99 Mobile / Grelot Road
3/12/99 Mobile / Government Blvd
3/12/99 New Orleans / Tchoupitoulas
3/12/99 Louisville / Breckenridge Lane
3/12/99 Louisville
3/12/99 Louisville / Poplar Level
3/12/99 Chesapeake / Western Branch
3/12/99 Centreville / Lee Hwy
3/12/99 Sterling / S. Sterling Blvd
3/12/99 Manassas / Sudley Road
3/12/99 Longmont / Wedgewood Ave
3/12/99 Fort Collins / So.College Ave
3/12/99 Colo Sprngs / Parkmoor Village
3/12/99 Colo Sprngs / Van Teylingen
3/12/99 Denver / So. Clinton St.
3/12/99 Denver / Washington St.
3/12/99 Colo Sprngs / Centennial Blvd
3/12/99 Colo Sprngs / Astrozon Court
3/12/99 Arvada / 64th Ave
3/12/99 Golden / Simms Street
3/12/99 Lawrence / Haskell Ave
3/12/99 Overland Park / Hemlock St
3/12/99 Lenexa / Long St.
3/12/99 Shawnee / Hedge Lane Terrace
3/12/99 Mission / Foxridge Dr
3/12/99 Milwaukee / W. Dean Road
3/12/99 Columbus / Morse Road
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,320,000
313,000
535,000
829,000
1,109,000
659,000
771,000
1,333,000
554,000
517,000
537,000
804,000
407,000
1,092,000
581,000
554,000
463,000
1,274,000
1,650,000
1,282,000
776,000
717,000
745,000
620,000
1,216,000
462,000
795,000
1,352,000
810,000
671,000
918,000
636,000
1,168,000
720,000
570,000
1,657,000
1,362,000
1,415,000
93,000
77,000
212,000
39,000
106,000
74,000
110,000
93,000
130,000
114,000
107,000
108,000
68,000
205,000
82,000
128,000
123,000
116,000
120,000
109,000
113,000
55,000
105,000
80,000
120,000
67,000
263,000
55,000
132,000
73,000
217,000
96,000
63,000
41,000
79,000
111,000
268,000
233,000
3,081,000
731,000
1,249,000
1,780,000
2,587,000
1,537,000
1,799,000
3,111,000
1,293,000
1,206,000
1,254,000
1,877,000
950,000
2,548,000
1,356,000
1,292,000
1,080,000
2,973,000
3,851,000
2,992,000
1,810,000
1,673,000
1,739,000
1,446,000
2,837,000
1,609,000
1,846,000
3,155,000
1,889,000
1,566,000
2,143,000
1,484,000
2,725,000
1,644,000
1,331,000
3,864,000
3,163,000
3,302,000
F-66
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,322,000
313,000
536,000
830,000
1,110,000
660,000
772,000
1,335,000
555,000
518,000
538,000
805,000
407,000
1,093,000
582,000
555,000
464,000
1,275,000
1,652,000
1,284,000
777,000
718,000
746,000
621,000
1,217,000
463,000
796,000
1,354,000
811,000
672,000
919,000
637,000
1,169,000
721,000
571,000
1,659,000
1,364,000
1,417,000
3,172,000
808,000
1,460,000
1,818,000
2,692,000
1,610,000
1,908,000
3,202,000
1,422,000
1,319,000
1,360,000
1,984,000
1,018,000
2,752,000
1,437,000
1,419,000
1,202,000
3,088,000
3,969,000
3,099,000
1,922,000
1,727,000
1,843,000
1,525,000
2,956,000
1,675,000
2,108,000
3,208,000
2,020,000
1,638,000
2,359,000
1,579,000
2,787,000
1,684,000
1,409,000
3,973,000
3,429,000
3,533,000
4,494,000
1,121,000
1,996,000
2,648,000
3,802,000
2,270,000
2,680,000
4,537,000
1,977,000
1,837,000
1,898,000
2,789,000
1,425,000
3,845,000
2,019,000
1,974,000
1,666,000
4,363,000
5,621,000
4,383,000
2,699,000
2,445,000
2,589,000
2,146,000
4,173,000
2,138,000
2,904,000
4,562,000
2,831,000
2,310,000
3,278,000
2,216,000
3,956,000
2,405,000
1,980,000
5,632,000
4,793,000
4,950,000
509,000
156,000
257,000
292,000
428,000
271,000
319,000
514,000
240,000
228,000
238,000
328,000
179,000
456,000
241,000
236,000
207,000
499,000
634,000
497,000
320,000
279,000
296,000
246,000
467,000
258,000
331,000
495,000
333,000
270,000
386,000
252,000
443,000
268,000
238,000
627,000
599,000
586,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Jacksonville / Roosevelt Blvd.
3/12/99 Milford / Branch Hill
3/12/99 Fairfield / Dixie
3/12/99 Cincinnati / Western Hills
3/12/99 Austin / N. Mopac Expressway
3/12/99 Atlanta / Dunwoody Place
3/12/99 Kennedale/Bowman Sprgs
3/12/99 Colo Sprngs/N.Powers
3/12/99 St. Louis/S. Third St
3/12/99 Orlando / L.B. Mcleod Road
3/12/99
3/12/99 Miami-Kendall / Sw 84th Street
3/12/99 North Miami Beach / 69th St
3/12/99 Miami Beach / Dade Blvd
3/12/99 Chicago / N. Natchez Ave
3/12/99 Chicago / W. Cermak Road
3/12/99 Kansas City / State Ave
3/12/99 Lenexa / Santa Fe Trail Road
3/12/99 Waukesha / Foster Court
3/12/99 River Grove / N. 5th Ave.
3/12/99 St. Charles / E. Main St.
3/12/99 Chicago / West 47th St.
3/12/99 Carol Stream / S. Main Place
3/12/99 Carpentersville /N. Western Ave
3/12/99 Elgin / E. Chicago St.
3/12/99 Elgin / Big Timber Road
3/12/99 Chicago / S. Pulaski Road
3/12/99 Aurora / Business 30
3/12/99 Streamwood / Old Church Road
3/12/99 Mt. Prospect / Central Road
3/12/99 Geneva / Gary Ave
3/12/99 Naperville / Lasalle Ave
3/31/99 Forest Park
Fresno
4/1/99
Stockton
5/1/99
6/30/99 Winter Park/N. Semor
6/30/99 N. Richland Hills
6/30/99 Rolling Meadows/Lois
6/30/99 Gresham/Burnside
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27,000
98,000
-
-
-
-
527,000
519,000
758,000
865,000
1,410,000
425,000
1,124,000
206,000
521,000
851,000
935,000
1,594,000
962,000
1,684,000
1,294,000
645,000
713,000
765,000
1,094,000
951,000
705,000
1,320,000
911,000
570,000
1,347,000
458,000
900,000
855,000
802,000
1,072,000
1,501,000
270,000
44,000
151,000
342,000
455,000
441,000
354,000
2,206,000
74,000
144,000
66,000
199,000
66,000
141,000
22,000
60,000
270,000
145,000
151,000
103,000
115,000
474,000
152,000
83,000
102,000
(20,000)
(323,000)
42,000
151,000
99,000
67,000
215,000
251,000
98,000
41,000
164,000
67,000
88,000
988,000
(302,000)
(268,000)
370,000
248,000
295,000
199,000
1,229,000
1,211,000
1,769,000
2,791,000
3,296,000
991,000
2,622,000
480,000
1,217,000
1,986,000
2,180,000
3,720,000
2,245,000
3,930,000
3,019,000
1,505,000
1,663,000
1,785,000
2,552,000
2,220,000
1,645,000
3,079,000
2,120,000
2,163,000
3,253,000
2,118,000
2,097,000
1,991,000
1,847,000
2,501,000
3,502,000
3,378,000
206,000
402,000
638,000
769,000
849,000
544,000
F-67
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
804,000
2,017,000
728,000
832,000
898,000
627,000
528,000
520,000
759,000
866,000
1,412,000
425,000
1,125,000
206,000
522,000
852,000
936,000
1,596,000
963,000
1,686,000
1,296,000
646,000
714,000
766,000
1,035,000
803,000
706,000
1,322,000
912,000
571,000
1,349,000
459,000
901,000
856,000
803,000
1,073,000
1,503,000
270,000
193,000
591,000
427,000
569,000
551,000
442,000
3,434,000
1,284,000
1,912,000
2,856,000
3,493,000
1,057,000
2,762,000
502,000
1,276,000
2,255,000
2,324,000
3,869,000
2,347,000
4,043,000
3,491,000
1,656,000
1,745,000
1,886,000
2,591,000
2,045,000
1,686,000
3,228,000
2,218,000
2,229,000
3,466,000
2,368,000
2,194,000
2,031,000
2,010,000
2,567,000
3,588,000
4,366,000
559,000
1,711,000
1,651,000
1,735,000
1,932,000
1,282,000
3,962,000
1,804,000
2,671,000
3,722,000
4,905,000
1,482,000
3,887,000
708,000
1,798,000
3,107,000
3,260,000
5,465,000
3,310,000
5,729,000
4,787,000
2,302,000
2,459,000
2,652,000
3,626,000
2,848,000
2,392,000
4,550,000
3,130,000
2,800,000
4,815,000
2,827,000
3,095,000
2,887,000
2,813,000
3,640,000
5,091,000
4,636,000
752,000
2,302,000
2,078,000
2,304,000
2,483,000
1,724,000
331,000
215,000
321,000
400,000
537,000
177,000
456,000
86,000
212,000
393,000
384,000
623,000
378,000
645,000
653,000
274,000
286,000
298,000
635,000
548,000
273,000
531,000
363,000
347,000
590,000
341,000
362,000
326,000
342,000
411,000
585,000
1,529,000
89,000
266,000
304,000
284,000
325,000
218,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Jacksonville/University
Irving/W. Airport
6/30/99
6/30/99
6/30/99 Houston/Highway 6 So.
6/30/99 Concord/Arnold
6/30/99 Rockville/Gude Drive
6/30/99 Bradenton/Cortez Road
6/30/99 San Antonio/Nw Loop
6/30/99 Anaheim / La Palma
6/30/99 Spring Valley/Sweetwater
6/30/99 Ft. Myers/Tamiami
6/30/99 Littleton/Centennial
6/30/99 Newark/Cedar Blvd
6/30/99 Falls Church/Columbia
6/30/99 Fairfax / Lee Highway
6/30/99 Wheat Ridge / W. 44th
6/30/99 Huntington Bch/Gotham
6/30/99 Fort Worth/McCart
6/30/99 San Diego/Clairemont
6/30/99 Houston/Millridge N.
6/30/99 Woodbridge/Jefferson
6/30/99 Mountainside
6/30/99 Woodbridge / Davis
6/30/99 Huntington Beach
6/30/99 Edison / Old Post Rd
6/30/99 Northridge/Parthenia
6/30/99 Brick Township/Brick
6/30/99 Stone Mountain/Rock
6/30/99 Hyattsville
6/30/99 Union City / Alvarado
6/30/99 Oak Park / Greenfield
6/30/99 Tujunga/Foothill Blvd
7/1/99
7/1/99 Nashville/Lafayette St
7/1/99 Nashville/Metroplex Dr
7/1/99 Madison / Myatt Dr
7/1/99 Hixson / Highway 153
7/1/99 Hixson / Gadd Rd
7/1/99 Red Bank / Harding Rd
Pantego/W. Pioneer Pkwy
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
211,000
419,000
751,000
827,000
602,000
476,000
511,000
1,378,000
271,000
948,000
421,000
729,000
901,000
586,000
480,000
952,000
372,000
1,601,000
1,160,000
840,000
1,260,000
1,796,000
1,026,000
498,000
1,848,000
590,000
1,233,000
768,000
992,000
621,000
1,746,000
432,000
486,000
380,000
441,000
488,000
207,000
452,000
219,000
196,000
312,000
391,000
335,000
243,000
198,000
196,000
86,000
288,000
230,000
218,000
264,000
268,000
237,000
267,000
162,000
329,000
219,000
242,000
324,000
403,000
115,000
242,000
159,000
279,000
309,000
252,000
204,000
185,000
129,000
60,000
149,000
127,000
85,000
169,000
228,000
165,000
741,000
960,000
1,006,000
1,553,000
768,000
885,000
786,000
851,000
380,000
962,000
804,000
971,000
975,000
1,078,000
789,000
890,000
942,000
2,035,000
1,983,000
1,689,000
1,237,000
1,623,000
1,437,000
1,267,000
1,486,000
1,431,000
288,000
2,186,000
1,776,000
1,735,000
2,383,000
1,228,000
1,135,000
886,000
1,028,000
1,138,000
484,000
1,056,000
F-68
700,000
857,000
1,057,000
1,874,000
880,000
906,000
855,000
1,221,000
416,000
1,208,000
812,000
1,067,000
1,141,000
1,106,000
831,000
1,130,000
703,000
2,034,000
2,433,000
1,446,000
1,523,000
1,996,000
1,450,000
1,175,000
1,839,000
1,364,000
852,000
1,919,000
1,690,000
1,490,000
2,370,000
-
-
-
-
-
-
-
263,000
524,000
937,000
1,032,000
751,000
594,000
638,000
1,720,000
338,000
1,183,000
526,000
910,000
1,125,000
732,000
599,000
1,188,000
464,000
1,998,000
1,448,000
1,048,000
1,573,000
2,242,000
1,281,000
622,000
2,307,000
736,000
1,539,000
959,000
1,238,000
775,000
2,179,000
433,000
487,000
380,000
442,000
489,000
207,000
453,000
1,608,000
1,908,000
2,189,000
3,613,000
1,834,000
1,916,000
1,712,000
1,926,000
815,000
2,223,000
1,741,000
2,075,000
2,156,000
2,306,000
1,738,000
2,051,000
1,715,000
4,001,000
4,347,000
3,169,000
2,771,000
3,576,000
2,747,000
2,560,000
3,025,000
2,928,000
1,143,000
4,166,000
3,424,000
3,256,000
4,449,000
1,287,000
1,283,000
1,013,000
1,112,000
1,306,000
712,000
1,220,000
1,871,000
2,432,000
3,126,000
4,645,000
2,585,000
2,510,000
2,350,000
3,646,000
1,153,000
3,406,000
2,267,000
2,985,000
3,281,000
3,038,000
2,337,000
3,239,000
2,179,000
5,999,000
5,795,000
4,217,000
4,344,000
5,818,000
4,028,000
3,182,000
5,332,000
3,664,000
2,682,000
5,125,000
4,662,000
4,031,000
6,628,000
1,720,000
1,770,000
1,393,000
1,554,000
1,795,000
919,000
1,673,000
275,000
319,000
356,000
595,000
298,000
319,000
270,000
293,000
129,000
350,000
270,000
315,000
319,000
356,000
270,000
314,000
247,000
610,000
653,000
470,000
404,000
501,000
386,000
376,000
397,000
382,000
153,000
532,000
456,000
422,000
518,000
128,000
240,000
184,000
199,000
231,000
160,000
221,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
7/1/99 Nashville/Welshwood Dr
7/1/99 Madison/Williams Ave
7/1/99 Nashville/Mcnally Dr
7/1/99 Hermitage/Central Ct
7/1/99 Antioch/Cane Ridge Rd
9/1/99 Charlotte / Ashley Road
9/1/99 Raleigh / Capital Blvd
9/1/99 Charlotte / South Blvd.
9/1/99 Greensboro/W.Market St.
10/8/99 Belmont / O'neill Ave
10/11/99 Matthews
11/15/99 Poplar, Memphis
12/17/99 Dallas / Swiss Ave
12/30/99 Oak Park/Greenfield Rd
12/30/99 Santa Anna
1/21/00 Hanover Park
1/25/00 Memphis / N.Germantwn Pkwy
1/31/00 Rowland Heights/Walnut
2/8/00
2/28/00 Plano / Avenue K
4/1/00 Hyattsville/Edmonson
4/29/00 St.Louis/Ellisville Twn Centre
5/2/00 Mill Valley
5/2/00 Culver City
5/26/00 Phoenix/N. 35th Ave
6/5/00 Mount Sinai / Route 25a
6/15/00 Pinellas Park
6/30/00 San Antonio/Broadway St
7/13/00 Lincolnwood
7/17/00 La Palco/New Orleans
7/29/00 Tracy/1615& 1650 W.11th S
8/1/00
8/23/00 Morris Plains
8/31/00 Florissant/New Halls Fry
8/31/00 Orange, CA
9/1/00 Bayshore, NY
9/1/00
9/13/00 Merrillville
Lewisville / Justin Rd
Los Angeles, CA
Pineville
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
934,000
1,318,000
884,000
646,000
353,000
664,000
927,000
734,000
603,000
869,000
937,000
1,631,000
1,862,000
1,184,000
2,657,000
262,000
884,000
681,000
529,000
2,064,000
1,036,000
765,000
1,412,000
2,439,000
868,000
950,000
526,000
1,131,000
1,598,000
1,023,000
1,745,000
2,197,000
1,501,000
800,000
661,000
1,277,000
590,000
343,000
154,000
229,000
318,000
129,000
117,000
19,000
(27,000)
15,000
7,000
94,000
242,000
279,000
140,000
(107,000)
359,000
28,000
224,000
120,000
204,000
386,000
36,000
314,000
(387,000)
(696,000)
23,000
245,000
270,000
22,000
135,000
127,000
276,000
354,000
318,000
70,000
53,000
959,000
433,000
164,000
2,179,000
3,076,000
2,062,000
1,508,000
823,000
1,551,000
2,166,000
1,715,000
1,409,000
4,659,000
3,165,000
3,093,000
4,344,000
3,685,000
3,293,000
3,104,000
3,024,000
1,589,000
2,919,000
10,407,000
2,657,000
4,377,000
3,294,000
5,689,000
2,967,000
3,338,000
2,247,000
4,558,000
3,727,000
3,204,000
4,530,000
3,417,000
4,300,000
4,225,000
1,542,000
2,980,000
1,376,000
2,474,000
F-69
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
935,000
1,320,000
885,000
647,000
353,000
652,000
910,000
720,000
592,000
879,000
995,000
1,733,000
1,880,000
1,197,000
2,823,000
256,000
938,000
689,000
563,000
2,090,000
1,037,000
813,000
1,285,000
2,220,000
869,000
1,009,000
548,000
1,132,000
1,615,000
1,095,000
1,764,000
2,335,000
1,596,000
808,000
668,000
1,535,000
709,000
364,000
2,332,000
3,303,000
2,379,000
1,636,000
940,000
1,582,000
2,156,000
1,744,000
1,427,000
4,743,000
3,349,000
3,270,000
4,466,000
3,565,000
3,486,000
3,138,000
3,194,000
1,701,000
3,089,000
10,767,000
2,692,000
4,643,000
3,034,000
5,212,000
2,989,000
3,524,000
2,495,000
4,579,000
3,845,000
3,259,000
4,787,000
3,633,000
4,523,000
4,287,000
1,588,000
3,681,000
1,690,000
2,617,000
3,267,000
4,623,000
3,264,000
2,283,000
1,293,000
2,234,000
3,066,000
2,464,000
2,019,000
5,622,000
4,344,000
5,003,000
6,346,000
4,762,000
6,309,000
3,394,000
4,132,000
2,390,000
3,652,000
12,857,000
3,729,000
5,456,000
4,319,000
7,432,000
3,858,000
4,533,000
3,043,000
5,711,000
5,460,000
4,354,000
6,551,000
5,968,000
6,119,000
5,095,000
2,256,000
5,216,000
2,399,000
2,981,000
396,000
557,000
456,000
281,000
177,000
250,000
340,000
278,000
237,000
734,000
373,000
384,000
698,000
501,000
388,000
310,000
369,000
268,000
355,000
3,751,000
328,000
476,000
359,000
614,000
387,000
350,000
150,000
510,000
528,000
309,000
610,000
372,000
401,000
545,000
198,000
524,000
244,000
228,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
9/15/00 Gardena / W. El Segundo
9/15/00 Chicago / Ashland Avenue
9/15/00 Oakland / Macarthur
9/15/00 Alexandria / Pickett Ii
9/15/00 Royal Oak / Coolidge Highway
9/15/00 Hawthorne / Crenshaw Blvd.
9/15/00 Rockaway / U.S. Route 46
9/15/00 Evanston / Greenbay
9/15/00 Los Angeles / Coliseum
9/15/00 Bethpage / Hempstead Turnpike
9/15/00 Northport / Fort Salonga Road
9/15/00 Brooklyn / St. Johns Place
9/15/00 Lake Ronkonkoma / Portion Rd.
9/15/00 Tampa/Gunn Hwy
9/18/00 Tampa/N. Del Mabry
9/30/00 Marietta/Kennestone& Hwy5
9/30/00 Lilburn/Indian Trail
11/15/00 Largo/Missouri
11/21/00 St. Louis/Wilson
12/21/00 Houston/7715 Katy Frwy
12/21/00 Houston/10801 Katy Frwy
12/21/00 Houston/Main St
12/21/00 Houston/W. Loop/S. Frwy
12/29/00 Chicago
12/30/00 Raleigh/Glenwood
12/30/00 Frazier
Troy/E. Big Beaver Rd
1/5/01
1/11/01 Ft Lauderdale
1/16/01 No Hollywood/Sherman Way
1/18/01 Tuscon/E. Speedway
1/25/01 Lombard/Finley
3/15/01 Los Angeles/West Pico
3/31/01 Long Island
4/1/01
4/7/01
4/17/01 Philadelphia/Aramingo
4/18/01 Largo/Walsingham Road
6/17/01 Port Washington/Seaview &W.Sh
Lakewood/Cedar Dr.
Farmingdale/Rte 110
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,532,000
850,000
678,000
2,743,000
1,062,000
1,079,000
2,424,000
846,000
3,109,000
2,899,000
2,999,000
3,492,000
937,000
1,843,000
2,204,000
622,000
1,695,000
1,092,000
1,608,000
2,274,000
1,664,000
1,681,000
2,036,000
1,946,000
1,545,000
800,000
2,195,000
954,000
2,173,000
735,000
851,000
8,579,000
2,630,000
1,329,000
2,364,000
968,000
1,000,000
2,381,000
106,000
174,000
135,000
276,000
134,000
117,000
249,000
153,000
113,000
229,000
234,000
238,000
154,000
54,000
7,424,000
142,000
144,000
241,000
661,000
104,000
80,000
71,000
87,000
19,000
77,000
15,000
358,000
330,000
32,000
190,000
256,000
477,000
199,000
64,000
(86,000)
13,000
17,000
112,000
3,424,000
4,880,000
2,751,000
6,198,000
2,576,000
2,913,000
4,945,000
4,436,000
4,013,000
5,457,000
5,698,000
6,026,000
4,199,000
4,300,000
2,447,000
3,388,000
5,170,000
4,270,000
3,913,000
5,307,000
3,884,000
3,924,000
4,749,000
6,002,000
3,628,000
3,324,000
4,221,000
3,972,000
5,442,000
2,895,000
3,806,000
8,630,000
7,196,000
9,356,000
5,807,000
4,539,000
3,545,000
4,608,000
F-70
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,534,000
851,000
679,000
2,746,000
1,063,000
1,080,000
2,427,000
847,000
3,113,000
2,902,000
3,003,000
3,496,000
938,000
1,845,000
2,228,000
629,000
1,714,000
1,158,000
1,630,000
2,280,000
1,669,000
1,686,000
2,040,000
1,940,000
1,562,000
801,000
2,332,000
1,071,000
2,177,000
781,000
904,000
8,605,000
2,776,000
1,334,000
2,345,000
969,000
1,002,000
2,361,000
3,528,000
5,053,000
2,885,000
6,471,000
2,709,000
3,029,000
5,191,000
4,588,000
4,122,000
5,683,000
5,928,000
6,260,000
4,352,000
4,352,000
9,847,000
3,523,000
5,295,000
4,445,000
4,552,000
5,405,000
3,959,000
3,990,000
4,832,000
6,027,000
3,688,000
3,338,000
4,442,000
4,185,000
5,470,000
3,039,000
4,009,000
9,081,000
7,249,000
9,415,000
5,740,000
4,551,000
3,560,000
4,740,000
5,062,000
5,904,000
3,564,000
9,217,000
3,772,000
4,109,000
7,618,000
5,435,000
7,235,000
8,585,000
8,931,000
9,756,000
5,290,000
6,197,000
12,075,000
4,152,000
7,009,000
5,603,000
6,182,000
7,685,000
5,628,000
5,676,000
6,872,000
7,967,000
5,250,000
4,139,000
6,774,000
5,256,000
7,647,000
3,820,000
4,913,000
17,686,000
10,025,000
10,749,000
8,085,000
5,520,000
4,562,000
7,101,000
320,000
482,000
265,000
529,000
238,000
266,000
445,000
385,000
336,000
461,000
479,000
499,000
342,000
405,000
2,295,000
462,000
553,000
352,000
507,000
246,000
182,000
181,000
219,000
468,000
382,000
151,000
327,000
317,000
545,000
226,000
296,000
957,000
351,000
985,000
454,000
308,000
243,000
267,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
6/18/01 Silver Springs/Prosperity
6/19/01 Tampa/W. Waters Ave & Wilsky
6/26/01 Middletown
7/29/01 Miami/Sw 85th Ave
8/28/01 Hoover/John Hawkins Pkwy
9/30/01 Syosset
12/27/01 Los Angeles/W.Jefferson
12/27/01 Howell/Hgwy 9
12/29/01 Catonsville/Kent
12/29/01 Old Bridge/Rte 9
12/29/01 Sacremento/Roseville
12/31/01 Santa Ana/E.Mcfadden
Tustin
Pasadena/Sierra Madre
1/1/02 Concord
1/1/02
1/1/02
1/1/02 Azusa
1/1/02 Redlands
1/1/02 Airport I
1/1/02 Miami / Marlin Road
1/1/02 Riverside
1/1/02 Oakland / San Leandro
1/1/02 Richmond / Jacuzzi
Santa Clara / Laurel
1/1/02
Pembroke Park
1/1/02
Ft. Lauderdale / Sun
1/1/02
San Carlos / Shorewa
1/1/02
Ft. Lauderdale / Sun
1/1/02
Sacramento / Howe
1/1/02
1/1/02
Sacramento / Capitol
1/1/02 Miami / Airport
1/1/02 Marietta / Cobb Park
1/1/02
1/1/02 Belmont / Dairy Lane
So. San Francisco
1/1/02
Palmdale / P Street
1/1/02
Tucker / Montreal Rd
1/1/02
1/1/02
Pasadena / S Fair Oaks
1/1/02 Carmichael/Fair Oaks
Sacramento / Florin
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,065,000
953,000
1,535,000
2,755,000
1,050,000
2,461,000
8,285,000
941,000
1,378,000
1,244,000
876,000
7,587,000
650,000
962,000
706,000
933,000
423,000
346,000
562,000
95,000
330,000
419,000
1,178,000
475,000
452,000
737,000
532,000
361,000
186,000
517,000
419,000
624,000
915,000
1,018,000
218,000
760,000
1,313,000
584,000
(6,000)
17,000
310,000
15,000
36,000
387,000
809,000
267,000
638,000
2,000
477,000
918,000
22,000
12,000
33,000
9,000
41,000
27,000
17,000
21,000
28,000
20,000
15,000
11,000
26,000
14,000
47,000
15,000
11,000
19,000
15,000
31,000
34,000
34,000
7,000
28,000
34,000
13,000
5,391,000
3,785,000
4,258,000
4,951,000
2,453,000
5,312,000
9,429,000
4,070,000
5,289,000
4,960,000
5,344,000
8,612,000
1,332,000
1,465,000
872,000
1,659,000
1,202,000
861,000
1,345,000
1,106,000
1,116,000
1,224,000
1,789,000
1,259,000
1,254,000
1,360,000
1,444,000
1,181,000
1,284,000
915,000
1,571,000
1,710,000
1,252,000
2,464,000
1,287,000
1,485,000
1,905,000
1,431,000
F-71
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,066,000
955,000
1,631,000
2,760,000
1,052,000
2,615,000
8,311,000
999,000
1,380,000
1,245,000
877,000
7,611,000
651,000
963,000
707,000
934,000
423,000
346,000
563,000
95,000
330,000
419,000
1,179,000
476,000
453,000
738,000
533,000
361,000
186,000
518,000
419,000
625,000
916,000
1,019,000
218,000
761,000
1,315,000
585,000
5,384,000
3,800,000
4,472,000
4,961,000
2,487,000
5,545,000
10,212,000
4,279,000
5,925,000
4,961,000
5,820,000
9,506,000
1,353,000
1,476,000
904,000
1,667,000
1,243,000
888,000
1,361,000
1,127,000
1,144,000
1,244,000
1,803,000
1,269,000
1,279,000
1,373,000
1,490,000
1,196,000
1,295,000
933,000
1,586,000
1,740,000
1,285,000
2,497,000
1,294,000
1,512,000
1,937,000
1,443,000
6,450,000
4,755,000
6,103,000
7,721,000
3,539,000
8,160,000
18,523,000
5,278,000
7,305,000
6,206,000
6,697,000
17,117,000
2,004,000
2,439,000
1,611,000
2,601,000
1,666,000
1,234,000
1,924,000
1,222,000
1,474,000
1,663,000
2,982,000
1,745,000
1,732,000
2,111,000
2,023,000
1,557,000
1,481,000
1,451,000
2,005,000
2,365,000
2,201,000
3,516,000
1,512,000
2,273,000
3,252,000
2,028,000
380,000
233,000
261,000
285,000
138,000
245,000
405,000
191,000
267,000
199,000
267,000
384,000
137,000
160,000
89,000
187,000
128,000
97,000
148,000
118,000
122,000
128,000
187,000
139,000
133,000
146,000
156,000
128,000
141,000
113,000
180,000
199,000
153,000
275,000
157,000
170,000
229,000
170,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
San Jose / Felipe Ave
1/1/02 Carson / Carson St
1/1/02
1/1/02 Miami / 27th Ave
San Jose / Capitol
1/1/02
Tucker / Mountain
1/1/02
1/3/02
St Charles/Veterans Memorial Pkwy
1/7/02 Bothell/ N. Bothell Way
1/15/02 Houston / N.Loop
1/16/02 Orlando / S. Kirkman
1/16/02 Austin / Us Hwy 183
1/16/02 Rochelle Park / 168
1/16/02 Honolulu / Waialae
1/16/02 Sunny Isles Bch
1/16/02 San Ramon / San Ramo
1/16/02 Austin / W. 6th St
1/16/02 Schaumburg / W. Wise
1/16/02 Laguna Hills / Moulton
1/16/02 Annapolis / West St
1/16/02 Birmingham / Commons
1/16/02 Crestwood / Watson Rd
1/16/02 Northglenn /Huron St
1/16/02 Skokie / Skokie Blvd
1/16/02 Garden City / Stewart
1/16/02 Millersville / Veterans
1/16/02 W. Babylon / Sunrise
1/16/02 Memphis / Summer Ave
1/16/02 Santa Clara/Lafayette
1/16/02 Naperville / Washington
1/16/02 Phoenix/W Union Hills
1/16/02 Woodlawn / Whitehead
1/16/02
1/16/02 West La /W Olympic
1/16/02 New Orleans/I-10
1/16/02 Pasadena / E. Colorado
1/16/02 Memphis / Covington
1/16/02 Hiawassee / N.Hiawassee
1/16/02 Longwood / State Rd
1/16/02 Casselberry / State
Issaquah / Pickering
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
507,000
517,000
272,000
400,000
519,000
687,000
1,063,000
2,045,000
889,000
608,000
744,000
10,631,000
931,000
1,522,000
2,399,000
1,158,000
2,319,000
955,000
1,125,000
1,232,000
688,000
716,000
1,489,000
1,036,000
1,609,000
1,103,000
1,393,000
2,712,000
1,071,000
2,682,000
1,138,000
6,532,000
1,286,000
1,125,000
620,000
1,622,000
2,123,000
1,628,000
26,000
39,000
27,000
13,000
53,000
117,000
146,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
877,000
1,482,000
1,572,000
1,183,000
1,385,000
1,602,000
4,995,000
6,178,000
3,180,000
3,856,000
4,430,000
10,783,000
2,845,000
3,510,000
4,493,000
2,598,000
5,200,000
3,669,000
3,938,000
3,093,000
2,075,000
5,285,000
4,039,000
4,229,000
3,959,000
2,772,000
4,626,000
2,225,000
2,934,000
3,355,000
3,704,000
5,975,000
3,380,000
5,160,000
3,076,000
1,892,000
3,083,000
3,308,000
F-72
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
508,000
518,000
272,000
400,000
520,000
687,000
1,063,000
2,045,000
889,000
608,000
744,000
10,631,000
931,000
1,522,000
2,399,000
1,158,000
2,319,000
955,000
1,125,000
1,232,000
688,000
716,000
1,489,000
1,036,000
1,609,000
1,103,000
1,393,000
2,712,000
1,071,000
2,682,000
1,138,000
6,532,000
1,286,000
1,125,000
620,000
1,622,000
2,123,000
1,628,000
902,000
1,520,000
1,599,000
1,196,000
1,437,000
1,719,000
5,141,000
6,178,000
3,180,000
3,856,000
4,430,000
10,783,000
2,845,000
3,510,000
4,493,000
2,598,000
5,200,000
3,669,000
3,938,000
3,093,000
2,075,000
5,285,000
4,039,000
4,229,000
3,959,000
2,772,000
4,626,000
2,225,000
2,934,000
3,355,000
3,704,000
5,975,000
3,380,000
5,160,000
3,076,000
1,892,000
3,083,000
3,308,000
1,410,000
2,038,000
1,871,000
1,596,000
1,957,000
2,406,000
6,204,000
8,223,000
4,069,000
4,464,000
5,174,000
21,414,000
3,776,000
5,032,000
6,892,000
3,756,000
7,519,000
4,624,000
5,063,000
4,325,000
2,763,000
6,001,000
5,528,000
5,265,000
5,568,000
3,875,000
6,019,000
4,937,000
4,005,000
6,037,000
4,842,000
12,507,000
4,666,000
6,285,000
3,696,000
3,514,000
5,206,000
4,936,000
104,000
171,000
181,000
138,000
156,000
66,000
191,000
216,000
116,000
140,000
161,000
389,000
106,000
136,000
181,000
97,000
214,000
138,000
149,000
117,000
83,000
208,000
152,000
171,000
153,000
107,000
182,000
87,000
116,000
140,000
142,000
234,000
131,000
203,000
122,000
77,000
127,000
128,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Date
Acquired
Description
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
Indianapolis / W.86th
Indianapolis / Madison
Indianapolis / Rockville
1/16/02 Honolulu/Kahala
1/16/02 Waukegan / Greenbay
1/16/02 Southfield / Telegraph
1/16/02 San Mateo / S. Delaware
1/16/02 Scottsdale/N.Hayden
1/16/02 Gilbert/W Park Ave
1/16/02 W.Palm Beach/Okeechobee
1/16/02
1/16/02
1/16/02
1/16/02 Santa Cruz / River
1/16/02 Novato / Rush Landing
1/16/02 Martinez / Arnold Dr
1/16/02 Charlotte/Cambridge
1/16/02 Rancho Cucamonga
1/16/02 Renton / Kent
1/16/02 Hawthorne / Goffle Rd
2/2/02 Nashua / Southwood Dr
2/15/02 Houston/Fm 1960 East
3/7/02 Baltimore / Russell Street
3/11/02 Weymouth / Main St
3/28/02 Clinton / Branch Ave & Schultz
4/17/02 La Mirada/Alondra
5/1/02 N.Richlnd Hls/Rufe Snow Dr
Parkville/E.Joppa
5/2/02
6/17/02 Waltham / Lexington St
6/30/02 Nashville / Charlotte
7/2/02 Mt Juliet / Lebonan Rd
7/14/02 Yorktown / George Washington
7/22/02 Brea/E. Lambert & Clifwood Pk
8/1/02 Bricktown/Route 70
8/1/02 Danvers / Newbury St.
8/15/02 Montclair / Holt Blvd.
8/21/02 Rockville Centre/Merrick Rd
9/13/02 Lacey / Martin Way
9/13/02 Lakewood / Bridgeport
9/13/02 Kent / Pacific Highway
11/4/02 Scotch Plains /Route 22
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,722,000
933,000
2,869,000
1,921,000
2,111,000
497,000
2,149,000
812,000
716,000
704,000
2,148,000
1,858,000
847,000
836,000
579,000
768,000
2,414,000
2,493,000
859,000
1,763,000
1,440,000
1,257,000
1,749,000
632,000
898,000
3,183,000
876,000
516,000
707,000
2,114,000
1,292,000
1,311,000
889,000
3,693,000
1,379,000
1,286,000
1,839,000
2,124,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
155,000
42,000
175,000
137,000
285,000
361,000
-
117,000
198,000
28,000
19,000
(25,000)
123,000
109,000
120,000
81,000
221,000
4,000
5,000
6,000
5,000
8,525,000
3,826,000
5,507,000
4,602,000
3,564,000
3,534,000
4,650,000
2,421,000
2,655,000
2,704,000
6,584,000
2,574,000
5,422,000
3,908,000
3,222,000
4,078,000
4,918,000
4,326,000
2,004,000
5,821,000
4,433,000
4,108,000
5,044,000
6,337,000
4,306,000
5,733,000
2,004,000
1,203,000
1,684,000
3,555,000
3,690,000
4,140,000
2,074,000
6,990,000
3,217,000
3,000,000
4,291,000
5,072,000
F-73
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,722,000
933,000
2,869,000
1,921,000
2,111,000
497,000
2,149,000
812,000
716,000
704,000
2,148,000
1,858,000
847,000
836,000
579,000
768,000
2,414,000
2,493,000
860,000
1,763,000
1,440,000
1,336,000
1,858,000
632,000
898,000
3,183,000
876,000
516,000
708,000
2,114,000
1,292,000
1,311,000
890,000
3,693,000
1,379,000
1,286,000
1,839,000
2,124,000
8,525,000
3,826,000
5,507,000
4,602,000
3,564,000
3,534,000
4,650,000
2,421,000
2,655,000
2,704,000
6,584,000
2,574,000
5,422,000
3,908,000
3,222,000
4,078,000
4,918,000
4,481,000
2,045,000
5,996,000
4,570,000
4,314,000
5,296,000
6,337,000
4,423,000
5,931,000
2,032,000
1,222,000
1,658,000
3,678,000
3,799,000
4,260,000
2,154,000
7,211,000
3,221,000
3,005,000
4,297,000
5,077,000
12,247,000
4,759,000
8,376,000
6,523,000
5,675,000
4,031,000
6,799,000
3,233,000
3,371,000
3,408,000
8,732,000
4,432,000
6,269,000
4,744,000
3,801,000
4,846,000
7,332,000
6,974,000
2,905,000
7,759,000
6,010,000
5,650,000
7,154,000
6,969,000
5,321,000
9,114,000
2,908,000
1,738,000
2,366,000
5,792,000
5,091,000
5,571,000
3,044,000
10,904,000
4,600,000
4,291,000
6,136,000
7,201,000
325,000
151,000
218,000
179,000
144,000
141,000
186,000
97,000
106,000
108,000
264,000
104,000
219,000
155,000
130,000
162,000
193,000
156,000
64,000
195,000
150,000
136,000
131,000
228,000
114,000
128,000
42,000
26,000
34,000
69,000
73,000
80,000
37,000
108,000
32,000
30,000
43,000
43,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Initial Cost
Encum-
brances
Land
Buildings &
Improvements
Adjustments
Resulting from
the Acquisition
of Minority
Interests
Costs
Subsequent
to Acquisition
-
-
-
-
-
-
-
-
-
-
-
-
2,508,000
3,008,000
-
1,622,000
725,000
795,000
1,095,000
4,043,000
984,000
1,902,000
1,282,000
1,737,000
887,000
3,771,000
2,196,000
2,312,000
2,349,000
9,434,000
2,358,000
4,467,000
3,016,000
5,456,000
6,251,000
12,224,000
958,000
1,348,000
1,427,000
1,161,000
40,000
1,916,000
(13,000)
42,000
-
-
-
105,323,000
-
-
-
-
-
-
-
-
-
-
-
-
Date
Acquired
Description
12/23/02 Snta Clarita/Viaprincssa
Other Properties
Glendale/Western Avenue
6/1/98 Renton / Sw 39th St.
6/29/98 Pompano Bch/Center Port Circle
12/9/98 Miami / Nw 115th Ave
12/13/99 Burlingame (Commercial & PUD)
12/30/99 West Palm Beach
12/30/99 Tamarac Parkway
4/28/00 San Diego/Sorrento
12/29/00 Gardena
4/2/02
Long Beach
Construction in Progress
Gross Carrying Amount
At December 31, 2002
Building
Total
Land
Accumulated
Depreciation
2,508,000
3,008,000
5,516,000
-
1,616,000
725,000
795,000
1,102,000
4,043,000
913,000
1,890,000
1,024,000
1,737,000
887,000
16,001,000
3,154,000
3,660,000
3,769,000
10,595,000
2,469,000
6,395,000
3,261,000
5,498,000
6,251,000
17,617,000
3,879,000
4,455,000
4,871,000
14,638,000
3,382,000
8,285,000
4,285,000
7,235,000
7,138,000
11,395,000
906,000
1,038,000
1,040,000
1,671,000
295,000
818,000
424,000
1,143,000
905,000
17,807,000
87,516,000
105,323,000
-
$20,567,000
$1,288,797,000
$3,049,409,000
$527,490,000
$228,153,000
$1,322,688,000
$3,771,161,000
$5,093,849,000
$987,546,000
F-74
PUBLIC STORAGE, INC.
EXHIBIT 11 - EARNINGS PER SHARE
Earnings Per Share:
Net income .....................................................................................
$ 318,738
$ 324,208
$ 297,088
For the Year Ended December 31,
2001
1999
2000
(amounts in thousands, except per share data)
Less: Cumulative Preferred Stock Dividends:
10% Cumulative Preferred Stock, Series A................................
9.20% Cumulative Preferred Stock, Series B .............................
Adjustable Rate Preferred Stock, Series C .................................
9.50% Cumulative Preferred Stock, Series D.............................
10.00% Cumulative Preferred Stock, Series E ...........................
9.75% Cumulative Preferred Stock, Series F .............................
8-7/8% Cumulative Preferred Stock, Series G ...........................
8.45% Cumulative Preferred Stock, Series H.............................
8-5/8% Cumulative Preferred Stock, Series I.............................
8% Cumulative Preferred Stock, Series J ...................................
8.25% Cumulative Preferred Stock, Series K.............................
8.25% Cumulative Preferred Stock, Series L ............................
8.75% Cumulative Preferred Stock, Series M ............................
8.60% Cumulative Preferred Stock, Series Q.............................
8.00% Cumulative Preferred Stock, Series R .............................
7.875% Cumulative Preferred Stock, Series S ...........................
7.625% Cumulative Preferred Stock, Series T ...........................
7.625% Cumulative Preferred Stock, Series U...........................
7.50% Cumulative Preferred Stock, Series V.............................
Total preferred dividends ...............................................................
Allocation of net income allocable to common shareholders to
classes:
Net income allocable to shareholders of the Equity Stock,
Series A................................................................................
Net income allocable to shareholders of common stock........
Weighted average common and common equivalent shares
outstanding:
(3,422)
(5,389)
(2,024)
(2,850)
(5,488)
(5,606)
-
-
-
(9,200)
(9,488)
(9,488)
(4,922)
(14,835)
(40,800)
(11,320)
(11,011)
(9,849)
(3,234)
(148,926)
$ 169,812
(4,563)
(5,488)
(2,024)
(2,850)
(5,488)
(5,606)
(11,482)
(10,853)
(7,475)
(12,000)
(9,488)
(9,488)
(4,922)
(14,134)
(10,200)
(1,918)
-
-
-
(117,979)
$ 206,229
(4,563)
(5,488)
(2,052)
(2,850)
(5,488)
(5,606)
(15,309)
(14,259)
(8,625)
(12,000)
(9,488)
(9,488)
(4,922)
-
-
-
-
-
-
(100,138)
$ 196,950
$ 21,501
148,311
$ 19,455
186,774
$ 11,042
185,908
$ 169,812
$ 206,229
$ 196,950
Basic weighted average common shares outstanding.................
123,005
122,310
131,566
Net effect of dilutive stock options - based on treasury stock
method using average market price ........................................
1,566
1,267
91
Diluted weighted average common shares outstanding..............
124,571
123,577
131,657
Basic earnings per common and common equivalent share...........
Diluted earnings per common and common equivalent share........
$
$
1.21
1.19
$
$
1.53
1.51
$
$
1.41
1.41
Note- There are no securities outstanding which would have an anti-dilutive effect upon earnings per common share
in each of the three years ended December 31, 2002.
Exhibit-11
PUBLIC STORGAGE, INC.
EXHIBIT 12 – STATEMENT RE: COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
2002
2001
For the Year Ended December 31,
2000
(Amounts in thousands)
1999
1998
Net income.............................................................
Add: Minority interest in income.......................
Less: Minority interests in income which do not
have fixed charges .........................................
Income from continuing operations .......................
Interest expense .................................................
Total Earnings Available to Cover Fixed Charges.
$ 318,738
44,087
$ 324,208
46,015
$ 297,088
38,356
$ 287,885
16,006
$ 227,019
20,290
(14,307)
348,518
3,809
$ 352,327
(11,243)
358,980
3,227
$ 362,207
(10,549)
324,895
3,293
$ 328,188
(13,362)
290,529
7,971
$ 298,500
(15,853)
231,456
4,507
$ 235,963
Total Fixed Charges - interest expense (a).............
$ 10,322
$ 12,219
$ 13,071
$ 12,480
$ 7,988
Cumulative Preferred Stock dividends...................
Preferred Partnership Unit distributions.................
Total Preferred distributions ..................................
148,926
26,906
$ 175,832
117,979
31,737
$ 149,716
100,138
24,859
$ 124,997
94,793
-
$ 94,793
78,375
-
$ 78,375
Total Combined Fixed Charges and Preferred
Stock dividends...................................................
$ 186,154
$ 161,935
$ 138,068
$ 107,273
$ 86,363
Ratio of Earnings to Fixed Charges .......................
34.13x
29.64x
25.11x
23.92x
29.54x
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock dividends...................................
1.89x
2.24x
2.38x
2.78x
2.73x
Supplemental disclosure of Ratio of Earnings before Interest, Taxes,
Depreciation and Amortization (“EBITDA”) to fixed charges:
$ 318,738
Net Income ............................................................
2,541
Less – Loss/(Gain) on sale of real estate................
179,634
Add - Depreciation and Amortization....................
Less - Depreciation allocated to minority interests
(8,087)
Add - Depreciation included in equity in earnings
of real estate entities ...........................................
27,078
$ 324,208
(4,091)
166,178
(7,847)
$ 297,088
(3,786)
148,195
(7,138)
$ 287,885
(2,154)
137,400
(9,294)
$ 227,019
-
111,799
(12,022)
25,096
21,825
19,721
13,884
Add – Depreciation and amortization included in
discontinued operations ......................................
Add - Minority interest - Preferred ......................
Add - Interest expense .........................................
2,014
26,906
3,809
1,883
31,737
3,227
772
24,859
3,293
319
-
7,971
-
-
4,507
EBITDA available to cover fixed charges (a) ........
$ 552,633
$ 540,391
$ 485,108
$ 441,848
$ 345,187
Total Fixed Charges - interest expense (b).............
$ 10,322
$ 12,219
$ 13,071
$ 12,480
$ 7,988
Preferred Stock dividends......................................
Preferred Partnership Unit distributions.................
Total Preferred distributions ..................................
148,926
26,906
$ 175,832
117,979
31,737
$ 149,716
100,138
24,859
$ 124,997
94,793
-
$ 94,793
78,375
-
$ 78,375
Total Combined Fixed Charges and Preferred
Stock dividends...................................................
$ 186,154
$ 161,935
$ 138,068
$ 107,273
$ 86,363
Ratio of EBITDA to Fixed Charges.......................
53.54x
44.23x
37.11x
35.40x
43.21x
Ratio of EBITDA to Combined Fixed Charges
and Preferred Stock dividends ............................
2.97x
3.34x
3.51x
4.12x
4.00x
(a) EBITDA represents earnings prior to interest, taxes, depreciation, amortization, and gains on sale of real estate assets. This
supplemental disclosure of EBITDA is included because financial analysts and other members of the investment community
consider coverage ratios for real estate companies on a pre-depreciation basis.
(b) “Total fixed charges - interest” includes interest expense plus capitalized interest.
Exhibit - 12
SUBSIDIARIES OF THE REGISTRANT
Exhibit 21
Name
State of Formation
Connecticut Storage Fund....................................
Diversified Storage Venture Fund .......................
PS Co-Investment Partners ..................................
PS Insurance Company, Ltd. ...............................
PS Orangeco Holdings, Inc..................................
PS Orangeco, Inc. ................................................
PS Partners IV, Ltd. .............................................
PS Partners VIII, Ltd. ..........................................
PS Partners, Ltd. ..................................................
PSA Institutional Partners, L.P. ...........................
PSAC Development Partners, L.P. ......................
Public Storage Properties IV, Ltd. .......................
Public Storage Properties V, Ltd. ........................
Public Storage Institutional Fund.........................
Public Storage Institutional Fund II .....................
Public Storage Institutional Fund III....................
Public Storage Institutional Fund IV ...................
Public Storage Pickup & Delivery, L.P. ..............
Stor-RE Mutual Insurance Corporation ...............
Storage Trust Properties, L.P. .............................
California
California
California
Bermuda
California
California
California
California
California
California
California
California
California
California
California
California
California
California
Hawaii
Delaware
Note: This schedule excludes 15 other wholly-owned subsidiaries which were excluded in accordance with
Reg. S-K, Item 601. All of the entities above conduct substantially all of their business activities under the
name “Public Storage”.
CONSENT OF INDEPENDENT AUDITORS
Exhibit 23
We consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-
36004) of Public Storage, Inc., formerly Storage Equities, Inc., pertaining to the 1990 Stock Option Plan,
the Registration Statement on Form S-8 (No. 33-55541) pertaining to the 1994 Stock Option Plan, the
Registration Statement on Form S-8 (No. 333-13463) pertaining to the 1996 Stock Option and Incentive
Plan, the Registration Statement on Form S-8 (No. 333-75327) pertaining to the 1994 Share Incentive Plan,
the Registration Statement on Form S-8 (No. 333-50270) pertaining to the PS 401(k)/Profit Sharing Plan,
the Registration Statement on Form S-8 (No. 333-52400) pertaining to the 2000 Non-Executive/Non-
Director Stock Option and Incentive Plan, the Registration Statement on Form S-3 (No. 333-81041) and in
the related prospectus, the Registration Statement on Form S-4 (No. 333-86899) and in the related
prospectus, the Registration Statement on Form S-4 (No. 333-84126) and in the related prospectus, in the
Registration Statement on Form S-3 (No. 333-101425) and in the related Prospectus and the Registration
Statement on Form S-4 (No. 333-103190), and in the related prospectus of our report dated February 21,
2003 with respect to the consolidated financial statements and schedule of Public Storage, Inc. included in
the Annual Report (Form 10-K) for 2002 filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
March 28, 2003
Los Angeles, California
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Year-end Report on Form 10-K of Public Storage, Inc. (the “Company”) for the year ended
December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), B.
Wayne Hughes, as Chief Executive Officer of the Company through November 7, 2002, Ronald L. Havner, Jr., as
Chief Executive Officer of the Company after November 7, 2002, Harvey Lenkin, as President of the Company, and
John Reyes, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. §1350, as
adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
/s/ B. Wayne Hughes
Name: B. Wayne Hughes
Title: Chief Executive Officer (through November 7, 2002)
Date: March 28, 2003
/s/ Ronald L. Havner, Jr.
Name: Ronald L. Havner, Jr.
Title: Chief Executive Officer (after November 7, 2002)
Date: March 28, 2003
/s/ Harvey Lenkin
Name: Harvey Lenkin
Title:
President
Date: March 28, 2003
/s/ John Reyes
Name: John Reyes
Title: Chief Financial Officer
Date: March 28, 2003
This certification accompanies the Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except
to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of
the Securities Exchange Act of 134, as amended.
A signed original of this written statement required by Section 906 has been provided to the Company, and will be
retained and furnished to the SEC or its staff upon request.
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, B. Wayne Hughes, certify that:
1.
I have reviewed this annual report on Form 10-K of Public Storage, Inc.;
2. Based on my knowledge, this annual 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 year-end
report;
3. Based on my knowledge, the financial statements, and other financial information included in this
year-end 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 annual 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-14 and 15d-14) for the
registrant and we have:
a) designed such disclosure controls and procedures 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 year-end report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date
within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
c) presented in this year-end report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal controls which could adversely
affect the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this year-end report whether or not
there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
/s/ B. Wayne Hughes
Name: B. Wayne Hughes
Title: Chief Executive Officer (through November 7, 2002)
Date: March 28, 2003
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Ronald L. Havner, Jr., certify that:
1.
I have reviewed this annual report on Form 10-K of Public Storage, Inc.;
2. Based on my knowledge, this annual 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 year-end
report;
3. Based on my knowledge, the financial statements, and other financial information included in this
year-end 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 annual 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-14 and 15d-14) for the
registrant and we have:
a) designed such disclosure controls and procedures 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 year-end report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date
within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
c) presented in this year-end report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal controls which could adversely
affect the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal controls; and
7. The registrant's other certifying officers and I have indicated in this year-end report whether or not
there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
/s/ Ronald L. Havner, Jr.
Name: Ronald L. Havner, Jr.
Title: Chief Executive Officer (after November 7, 2002)
Date: March 28, 2003
Exhibit 99.3
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Harvey Lenkin, certify that:
1.
I have reviewed this annual report on Form 10-K of Public Storage, Inc.;
2. Based on my knowledge, this annual 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 year-end
report;
3. Based on my knowledge, the financial statements, and other financial information included in this
year-end 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 annual 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-14 and 15d-14) for the
registrant and we have:
a) designed such disclosure controls and procedures 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 year-end report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date
within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
c) presented in this year-end report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal controls which could adversely
affect the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal controls; and
8. The registrant's other certifying officers and I have indicated in this year-end report whether or not
there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
/s/ Harvey Lenkin
Name: Harvey Lenkin
Title:
President
Date: March 28, 2003
Exhibit 99.4
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John Reyes, certify that:
1.
I have reviewed this annual report on Form 10-K of Public Storage, Inc.;
2. Based on my knowledge, this annual 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 year-end
report;
3. Based on my knowledge, the financial statements, and other financial information included in this
year-end 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 annual 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-14 and 15d-14) for the
registrant and we have:
a) designed such disclosure controls and procedures 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 year-end report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date
within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
c) presented in this year-end report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal controls which could adversely
affect the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal controls; and
9. The registrant's other certifying officers and I have indicated in this year-end report whether or not
there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
/s/ John Reyes
Name: John Reyes
Title: Chief Financial Officer
Date: March 28, 2003
Exhibit 99.5
Corporate Data (as of March 15, 2003)
Directors
Executive Officers
Corporate Officers
Management Division
Ronald L. Havner, Jr.
Vice-Chairman and
Chief Executive Officer
Harvey Lenkin
President and Chief Operating
Officer
John Reyes
Senior Vice President and
Chief Financial Officer
Marvin M. Lotz
Senior Vice President
Todd Andrews
Vice President and Controller
Obren B. Gerich
Vice President
David Goldberg
Vice President, Senior Counsel
and Secretary
Louis Klichan
Vice President
Brent C. Peterson
Vice President and Chief
Information Officer
Ronald L. Havner, Jr.
President
Anthony Grillo
Executive Vice President
Samuel I. Ballard SVP, DM
Kelly M. Barnes SVP, DM
Pete G. Panos SVP, DM
Ray Huddleston SVP, DM
John M. Sambuco SVP, DM
Brent C. Peterson SVP
Noel Evans SVP-Marketing
Joanne A. Halliday
General Counsel
Containerized Storage
and Moving Services
Thomas Miller
Senior Vice President
Stephanie Tovar
Senior Vice President
Carl B. Phelps
Vice President and
Senior Counsel
A. Timothy Scott
Vice President and
Tax Counsel
David P. Singelyn
Vice President and Treasurer
Real Estate Division
Marvin M. Lotz President
W. David Ristig SVP-Real Estate
Michael F. Roach SVP-Development and Construction
DM Divisional Manager
SVP Senior Vice President
B. Wayne Hughes (1980)
Chairman of the Board
Ronald L. Havner, Jr. (2002)
Vice-Chairman and
Chief Executive Officer
Harvey Lenkin (1991)
President and Chief Operating
Officer
Marvin M. Lotz (1999)
Senior Vice President –
Public Storage, Inc.
President – Public Storage
Real Estate Division
Robert J. Abernethy (1980)
President of American
Standard Development
Company and Self-Storage
Management Company
Dann V. Angeloff (1980)
President of The Angeloff
Company
William C. Baker (1991)
Partner, Baker & Simpson
Thomas J. Barrack, Jr. (1998)
Chairman and Chief
Executive Officer of Colony
Capital, Inc.
Uri P. Harkham (1993)
President and
Chief Executive Officer
of the Jonathan Martin
Fashion Group
B. Wayne Hughes, Jr. (1998)
President of Sweet Blessings LLC
Daniel C. Staton (1999)
President of Walnut Capital
Partners
Date in parentheses indicates year
director was elected to
the board.
Professional Services
Financial Information
Stock Exchange Listing
Additional Information Sources
Transfer Agent
EquiServe Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-3010
(781) 575-3120
www.equiserve.com
Independent Auditors
Ernst & Young LLP
Los Angeles, California
Shareholders may obtain,
without charge, a copy
of Form 10-K, as filed
with the Securities and
Exchange Commissions
by addressing a written
request to the Investor
Services Department at
the Corporate
Headquarters.
The Company’s common
stock trades under ticker
symbol PSA on the New York
Stock Exchange and Pacific
Exchange.
PSA
The Company’s website, www.publicstorage.com,
contains financial information of interest to
shareholders, brokers, etc.
Public Storage, Inc. is a member and active supporter of
the National Association of Real Estate Investment Trusts.
What does Public Storage mean to America?
What does Public Storage mean to America?
What does Public Storage mean to America?
What does Public Storage mean to America?
Commitment to communities
Supports active lifestyles
Business storage
Storage solutions
Family formation
Serves all demographics
Website reservations
Assists relocation
701 Western Avenue • Glendale, California 91201 • (818) 244-8080 • www.publicstorage.com
701 Western Avenue • Glendale, California 91201 • (818) 244-8080 • www.publicstorage.com
701 Western Avenue • Glendale, California 91201 • (818) 244-8080 • www.publicstorage.com
701 Western Avenue • Glendale, California 91201 • (818) 244-8080 • www.publicstorage.com
513-AR-03
Public Storage, Inc.
Public Storage, Inc.
Public Storage, Inc.
Public Storage, Inc.