T h e
B E H I N D O U R D O O R S
PUBLIC STORAGE, INC. 2003 ANNUAL REPORT
PROPERTIES (as of December 31, 2003)
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
310
50
13
4
139
62
6
95
18
22
6
11
43
17
15
6
38
895,000
1,003,000
19,074,000
3,145,000
710,000
230,000
8,199,000
3,626,000
322,000
5,829,000
1,050,000
1,316,000
331,000
852,000
2,458,000
1,056,000
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
30
8
25
20
2
24
23
163
6
38
43
9
46,000
1,409,000
131,000
2,449,000
2,127,000
1,266,000
1,863,000
429,000
1,171,000
1,360,000
64,000
1,082,000
1,311,000
10,989,000
324,000
2,294,000
2,736,000
703,000
(1) Storage and properties combining self-storage and commercial space.
Totals
1,410
85,199,000
Cover. This Annual Report honors our employees—an outstanding team of dedicated people
who are focused on providing exceptional service to Public Storage customers.
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(cid:3)(cid:28)(cid:29)(cid:27)(cid:2)(cid:2)(cid:25)
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(cid:4)(cid:5)(cid:26)(cid:27)(cid:2)(cid:2)(cid:26)(cid:6)
(cid:3)(cid:3)(cid:3)(cid:27)(cid:25)(cid:5)(cid:3)
(cid:5)(cid:27)(cid:25)(cid:3)(cid:3)
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(cid:1)(cid:25)(cid:26)(cid:27)(cid:1)(cid:2)(cid:28)
(cid:4)(cid:28)(cid:29)(cid:3)(cid:6)
(cid:1)(cid:27)(cid:5)(cid:30)(cid:28)
(cid:24) (cid:3)(cid:3)(cid:26)(cid:27)(cid:26)(cid:30)(cid:3) (cid:24) (cid:3)(cid:5)(cid:25)(cid:27)(cid:29)(cid:3)(cid:25) (cid:24) (cid:3)(cid:1)(cid:28)(cid:27)(cid:1)(cid:2)(cid:25) (cid:24) (cid:1)(cid:7)(cid:29)(cid:27)(cid:2)(cid:25)(cid:25) (cid:24) (cid:1)(cid:25)(cid:29)(cid:27)(cid:25)(cid:25)(cid:30)
(cid:3)(cid:3)(cid:1)(cid:27)(cid:25)(cid:2)(cid:7)
(cid:4)(cid:5)(cid:5)(cid:27)(cid:30)(cid:3)(cid:2)(cid:6)
(cid:4)(cid:1)(cid:27)(cid:30)(cid:28)(cid:5)(cid:6)
(cid:1)(cid:7)(cid:26)(cid:27)(cid:7)(cid:2)(cid:3)
(cid:4)(cid:3)(cid:7)(cid:5)(cid:6)
(cid:30)(cid:29)(cid:26)
(cid:3)(cid:1)(cid:2)(cid:27)(cid:26)(cid:3)(cid:25)
(cid:4)(cid:30)(cid:1)(cid:5)(cid:6)
(cid:28)(cid:27)(cid:2)(cid:7)(cid:5)
(cid:24)
(cid:24)
(cid:24)
(cid:5)0(cid:25)(cid:2) (cid:24)
(cid:5)0(cid:1)(cid:7) (cid:24)
(cid:5)0(cid:1)(cid:25) (cid:24)
(cid:5)0(cid:25)(cid:2) (cid:24)
(cid:5)0(cid:5)(cid:30) (cid:24)
(cid:5)0(cid:5)(cid:28) (cid:24)
(cid:5)0(cid:26)(cid:7) (cid:24)
(cid:5)0(cid:28)(cid:5) (cid:24)
(cid:5)0(cid:3)(cid:7) (cid:24)
(cid:5)0(cid:28)(cid:25) (cid:24)
(cid:5)0(cid:28)(cid:5) (cid:24)
(cid:5)0(cid:28)(cid:5) (cid:24)
(cid:5)(cid:1)(cid:30)(cid:27)(cid:5)(cid:25)(cid:5)
(cid:5)(cid:1)(cid:26)(cid:27)(cid:30)(cid:5)(cid:29)
(cid:5)(cid:1)(cid:3)(cid:27)(cid:2)(cid:2)(cid:30)
(cid:5)(cid:1)(cid:28)(cid:27)(cid:30)(cid:29)(cid:5)
(cid:5)(cid:1)(cid:1)(cid:27)(cid:3)(cid:5)(cid:2)
(cid:5)(cid:1)(cid:3)(cid:27)(cid:30)(cid:29)(cid:29)
(cid:5)(cid:3)(cid:5)(cid:27)(cid:30)(cid:26)(cid:26)
(cid:5)(cid:3)(cid:5)(cid:27)(cid:26)(cid:30)(cid:29)
(cid:5)0(cid:30)(cid:1)
(cid:5)0(cid:30)(cid:3)
(cid:5)0(cid:30)(cid:1)
(cid:5)(cid:1)(cid:26)(cid:27)(cid:3)(cid:2)(cid:25)
(cid:5)(cid:1)(cid:26)(cid:27)(cid:26)(cid:26)(cid:7)
(cid:24)(cid:28)(cid:27)(cid:7)(cid:26)(cid:25)(cid:27)(cid:2)(cid:26)(cid:7) (cid:24) (cid:28)(cid:27)(cid:25)(cid:28)(cid:3)(cid:27)(cid:26)(cid:26)(cid:1) (cid:24) (cid:28)(cid:27)(cid:26)(cid:1)(cid:30)(cid:27)(cid:25)(cid:29)(cid:7) (cid:24) (cid:28)(cid:27)(cid:30)(cid:5)(cid:3)(cid:27)(cid:7)(cid:28)(cid:5) (cid:24)(cid:28)(cid:27)(cid:1)(cid:5)(cid:28)(cid:27)(cid:3)(cid:25)(cid:30)
(cid:24)
(cid:29)(cid:26)(cid:27)(cid:2)(cid:3)(cid:2) (cid:24) (cid:5)(cid:5)(cid:30)(cid:27)(cid:25)(cid:26)(cid:29) (cid:24) (cid:5)(cid:26)(cid:25)(cid:27)(cid:30)(cid:30)(cid:1) (cid:24) (cid:5)(cid:30)(cid:26)(cid:27)(cid:2)(cid:2)(cid:3) (cid:24) (cid:5)(cid:26)(cid:29)(cid:27)(cid:3)(cid:3)(cid:25)
(cid:24) (cid:5)(cid:28)(cid:5)(cid:27)(cid:5)(cid:3)(cid:29) (cid:24) (cid:5)(cid:30)(cid:28)(cid:27)(cid:28)(cid:7)(cid:7) (cid:24) (cid:5)(cid:26)(cid:7)(cid:27)(cid:26)(cid:2)(cid:5) (cid:24) (cid:5)(cid:26)(cid:29)(cid:27)(cid:7)(cid:5)(cid:25) (cid:24) (cid:5)(cid:25)(cid:26)(cid:27)(cid:26)(cid:2)(cid:2)
(cid:24) (cid:1)(cid:25)(cid:30)(cid:27)(cid:2)(cid:2)(cid:2) (cid:24) (cid:1)(cid:25)(cid:30)(cid:27)(cid:2)(cid:2)(cid:2) (cid:24) (cid:1)(cid:25)(cid:30)(cid:27)(cid:2)(cid:2)(cid:2) (cid:24) (cid:3)(cid:26)(cid:30)(cid:27)(cid:2)(cid:2)(cid:2)
4
(cid:24)(cid:28)(cid:27)(cid:1)(cid:5)(cid:7)(cid:27)(cid:29)(cid:7)(cid:7) (cid:24) (cid:28)(cid:27)(cid:5)(cid:30)(cid:25)(cid:27)(cid:7)(cid:26)(cid:7) (cid:24) (cid:3)(cid:27)(cid:7)(cid:2)(cid:7)(cid:27)(cid:30)(cid:25)(cid:3) (cid:24) (cid:3)(cid:27)(cid:29)(cid:1)(cid:28)(cid:27)(cid:5)(cid:5)(cid:29) (cid:24)(cid:3)(cid:27)(cid:26)(cid:25)(cid:7)(cid:27)(cid:5)(cid:2)(cid:2)
(cid:24) (cid:30)(cid:7)(cid:28)(cid:27)(cid:28)(cid:3)(cid:2) (cid:24) (cid:30)(cid:25)(cid:25)(cid:27)(cid:7)(cid:26)(cid:5) (cid:24) (cid:30)(cid:3)(cid:25)(cid:27)(cid:30)(cid:3)(cid:28) (cid:24) (cid:30)(cid:1)(cid:30)(cid:27)(cid:29)(cid:29)(cid:30) (cid:24) (cid:28)(cid:26)(cid:3)(cid:27)(cid:1)(cid:7)(cid:1)
(cid:24) (cid:4)(cid:1)(cid:1)(cid:25)(cid:27)(cid:5)(cid:29)(cid:26)(cid:6) (cid:24) (cid:4)(cid:3)(cid:1)(cid:3)(cid:27)(cid:28)(cid:26)(cid:28)(cid:6) (cid:24) (cid:4)(cid:3)(cid:2)(cid:26)(cid:27)(cid:2)(cid:30)(cid:25)(cid:6) (cid:24) (cid:4)(cid:28)(cid:26)(cid:30)(cid:27)(cid:28)(cid:26)(cid:28)(cid:6) (cid:24) (cid:4)(cid:28)(cid:30)(cid:1)(cid:27)(cid:1)(cid:2)(cid:7)(cid:6)
(cid:4)(cid:29)(cid:27)(cid:5)(cid:25)(cid:3)(cid:6)
(cid:24) (cid:4)(cid:1)(cid:26)(cid:28)(cid:27)(cid:30)(cid:28)(cid:30)(cid:6) (cid:24) (cid:4)(cid:1)(cid:5)(cid:5)(cid:27)(cid:29)(cid:1)(cid:2)(cid:6) (cid:24) (cid:4)(cid:1)(cid:29)(cid:1)(cid:27)(cid:30)(cid:7)(cid:26)(cid:6) (cid:24)
(cid:4)(cid:1)(cid:30)(cid:27)(cid:7)(cid:26)(cid:7)(cid:6) (cid:24)
(cid:1)(cid:21)(cid:20) (cid:22)(cid:5)(cid:19)(cid:10)(cid:6)(cid:23)(cid:9)(cid:24)(cid:25)(cid:25)(cid:26)(cid:14)(cid:9)(cid:24)(cid:25)(cid:25)(cid:24)(cid:14)(cid:9)(cid:24)(cid:25)(cid:25)(cid:21)(cid:14)(cid:9)(cid:24)(cid:25)(cid:25)(cid:25)(cid:14)(cid:9)(cid:12)(cid:6)(cid:13)(cid:9)(cid:21)(cid:27)(cid:27)(cid:27)(cid:14)(cid:9)(cid:28)(cid:15)(cid:9)(cid:17)(cid:4)(cid:3)(cid:18)(cid:29)(cid:15)(cid:7)(cid:15)(cid:13)(cid:9)(cid:8)(cid:15)(cid:30)(cid:15)(cid:19)(cid:12)(cid:29)(cid:9)(cid:8)(cid:10)(cid:23)(cid:6)(cid:10)(cid:31)(cid:10)(cid:17)(cid:12)(cid:6)(cid:7)(cid:9) (cid:5)(cid:8)(cid:10)(cid:6)(cid:15)(cid:8)(cid:8)(cid:9)(cid:17)(cid:4)(cid:3) (cid:10)(cid:6)(cid:12)(cid:7)(cid:10)(cid:4)(cid:6)(cid:8)(cid:9)(cid:12)(cid:6)(cid:13)(cid:9)(cid:15)!(cid:5)(cid:10)(cid:7)"(cid:9)(cid:7)(cid:19)(cid:12)(cid:6)(cid:8)(cid:12)(cid:17)(cid:7)(cid:10)(cid:4)(cid:6)(cid:8)#(cid:9)(cid:9)$(cid:15)(cid:15)
%(cid:4)(cid:7)(cid:15)(cid:8)(cid:9)(cid:26)(cid:14)(cid:9)(cid:27)(cid:14)(cid:9)(cid:12)(cid:6)(cid:13)(cid:9)(cid:21)(cid:25)(cid:9)(cid:7)(cid:4)(cid:9)(cid:7)(cid:11)(cid:15)(cid:9)&(cid:4)(cid:3)(cid:18)(cid:12)(cid:6)"’(cid:8)(cid:9)(cid:17)(cid:4)(cid:6)(cid:8)(cid:4)(cid:29)(cid:10)(cid:13)(cid:12)(cid:7)(cid:15)(cid:13)(cid:9)(cid:31)(cid:10)(cid:6)(cid:12)(cid:6)(cid:17)(cid:10)(cid:12)(cid:29)(cid:9)(cid:8)(cid:7)(cid:12)(cid:7)(cid:15)(cid:3)(cid:15)(cid:6)(cid:7)(cid:8)#
(cid:1)(cid:24)(cid:20) (cid:22)(cid:5)(cid:19)(cid:10)(cid:6)(cid:23)(cid:9)(cid:7)(cid:11)(cid:15)(cid:9)"(cid:15)(cid:12)(cid:19)(cid:8)(cid:9)(cid:15)(cid:6)(cid:13)(cid:15)(cid:13)(cid:9)(cid:22)(cid:15)(cid:17)(cid:15)(cid:3) (cid:15)(cid:19)(cid:9)(cid:26)(cid:21)(cid:14)(cid:9)(cid:24)(cid:25)(cid:25)(cid:24)(cid:9)(cid:12)(cid:6)(cid:13)(cid:9)(cid:24)(cid:25)(cid:25)(cid:26)(cid:14)(cid:9)(cid:7)(cid:11)(cid:15)(cid:9)&(cid:4)(cid:3)(cid:18)(cid:12)(cid:6)"(cid:9)(cid:12)(cid:13)(cid:4)(cid:18)(cid:7)(cid:15)(cid:13)(cid:9)(cid:12)(cid:9) (cid:5)(cid:8)(cid:10)(cid:6)(cid:15)(cid:8)(cid:8)(cid:9)(cid:18)(cid:29)(cid:12)(cid:6)(cid:9)(cid:7)(cid:11)(cid:12)(cid:7)(cid:9)(cid:10)(cid:6)(cid:17)(cid:29)(cid:5)(cid:13)(cid:15)(cid:13)(cid:9)(cid:7)(cid:11)(cid:15)(cid:9)(cid:17)(cid:29)(cid:4)(cid:8)(cid:5)(cid:19)(cid:15)(cid:9)(cid:4)(cid:31)(cid:9)(cid:17)(cid:15)(cid:19)(cid:7)(cid:12)(cid:10)(cid:6)(cid:9)
(cid:6)(cid:4)(cid:6)((cid:8)(cid:7)(cid:19)(cid:12)(cid:7)(cid:15)(cid:23)(cid:10)(cid:17)(cid:9)(cid:17)(cid:4)(cid:6)(cid:7)(cid:12)(cid:10)(cid:6)(cid:15)(cid:19)(cid:10))(cid:15)(cid:13)(cid:9)(cid:8)(cid:7)(cid:4)(cid:19)(cid:12)(cid:23)(cid:15)(cid:9)(cid:31)(cid:12)(cid:17)(cid:10)(cid:29)(cid:10)(cid:7)(cid:10)(cid:15)(cid:8)#(cid:9)(cid:9)(cid:2)(cid:29)(cid:8)(cid:4)(cid:14)(cid:9)(cid:13)(cid:5)(cid:19)(cid:10)(cid:6)(cid:23)(cid:9)(cid:24)(cid:25)(cid:25)(cid:24)(cid:9)(cid:28)(cid:15)(cid:9)(cid:8)(cid:4)(cid:29)(cid:13)(cid:9)(cid:4)(cid:6)(cid:15)(cid:9)(cid:4)(cid:31)(cid:9)(cid:4)(cid:5)(cid:19)(cid:9)(cid:17)(cid:4)(cid:3)(cid:3)(cid:15)(cid:19)(cid:17)(cid:10)(cid:12)(cid:29)(cid:9)(cid:31)(cid:12)(cid:17)(cid:10)(cid:29)(cid:10)(cid:7)(cid:10)(cid:15)(cid:8)(cid:9)(cid:12)(cid:6)(cid:13)(cid:9)(cid:13)(cid:5)(cid:19)(cid:10)(cid:6)(cid:23)(cid:9)(cid:24)(cid:25)(cid:25)(cid:26)(cid:9)(cid:28)(cid:15)(cid:9)(cid:8)(cid:4)(cid:29)(cid:13)(cid:9)(cid:31)(cid:10)(cid:30)(cid:15)
(cid:3)(cid:10)(cid:6)(cid:10)(cid:28)(cid:12)(cid:19)(cid:15)(cid:11)(cid:4)(cid:5)(cid:8)(cid:15)(cid:9)(cid:31)(cid:12)(cid:17)(cid:10)(cid:29)(cid:10)(cid:7)(cid:10)(cid:15)(cid:8)#(cid:9)(cid:9)*(cid:11)(cid:15)(cid:9)(cid:11)(cid:10)(cid:8)(cid:7)(cid:4)(cid:19)(cid:10)(cid:17)(cid:12)(cid:29)(cid:9)(cid:4)(cid:18)(cid:15)(cid:19)(cid:12)(cid:7)(cid:10)(cid:4)(cid:6)(cid:8)(cid:9)(cid:4)(cid:31)(cid:9)(cid:7)(cid:11)(cid:15)(cid:8)(cid:15)(cid:9)(cid:31)(cid:12)(cid:17)(cid:10)(cid:29)(cid:10)(cid:7)(cid:10)(cid:15)(cid:8)(cid:9)(cid:12)(cid:19)(cid:15)(cid:9)(cid:17)(cid:29)(cid:12)(cid:8)(cid:8)(cid:10)(cid:31)(cid:10)(cid:15)(cid:13)(cid:9)(cid:12)(cid:8)(cid:9)(cid:13)(cid:10)(cid:8)(cid:17)(cid:4)(cid:6)(cid:7)(cid:10)(cid:6)(cid:5)(cid:15)(cid:13)(cid:9)(cid:4)(cid:18)(cid:15)(cid:19)(cid:12)(cid:7)(cid:10)(cid:4)(cid:6)(cid:8)(cid:14)(cid:9)(cid:28)(cid:10)(cid:7)(cid:11)(cid:9)(cid:7)(cid:11)(cid:15)(cid:9)(cid:19)(cid:15)(cid:6)(cid:7)(cid:12)(cid:29)(cid:9)(cid:10)(cid:6)(cid:17)(cid:4)(cid:3)(cid:15)(cid:14)
(cid:17)(cid:4)(cid:8)(cid:7)(cid:9)(cid:4)(cid:31)(cid:9)(cid:4)(cid:18)(cid:15)(cid:19)(cid:12)(cid:7)(cid:10)(cid:4)(cid:6)(cid:8)(cid:14)(cid:9)(cid:13)(cid:15)(cid:18)(cid:19)(cid:15)(cid:17)(cid:10)(cid:12)(cid:7)(cid:10)(cid:4)(cid:6)(cid:9)(cid:15)(cid:16)(cid:18)(cid:15)(cid:6)(cid:8)(cid:15)(cid:9)(cid:12)(cid:6)(cid:13)(cid:9)(cid:23)(cid:12)(cid:10)(cid:6)(cid:9)(cid:4)(cid:19)(cid:9)(cid:29)(cid:4)(cid:8)(cid:8)(cid:9)(cid:4)(cid:6)(cid:9)(cid:13)(cid:10)(cid:8)(cid:18)(cid:4)(cid:8)(cid:10)(cid:7)(cid:10)(cid:4)(cid:6)(cid:9)(cid:4)(cid:31)(cid:9)(cid:7)(cid:11)(cid:15)(cid:8)(cid:15)(cid:9)(cid:31)(cid:12)(cid:17)(cid:10)(cid:29)(cid:10)(cid:7)(cid:10)(cid:15)(cid:8)(cid:9)(cid:31)(cid:4)(cid:19)(cid:9)(cid:17)(cid:5)(cid:19)(cid:19)(cid:15)(cid:6)(cid:7)(cid:9)(cid:12)(cid:6)(cid:13)(cid:9)(cid:18)(cid:19)(cid:10)(cid:4)(cid:19)(cid:9)(cid:18)(cid:15)(cid:19)(cid:10)(cid:4)(cid:13)(cid:8)(cid:9)(cid:10)(cid:6)(cid:17)(cid:29)(cid:5)(cid:13)(cid:15)(cid:13)(cid:9)(cid:10)(cid:6)(cid:9)(cid:7)(cid:11)(cid:15)
(cid:29)(cid:10)(cid:6)(cid:15)((cid:10)(cid:7)(cid:15)(cid:3)(cid:9)+(cid:22)(cid:10)(cid:8)(cid:17)(cid:4)(cid:6)(cid:7)(cid:10)(cid:6)(cid:5)(cid:15)(cid:13)(cid:9),(cid:18)(cid:15)(cid:19)(cid:12)(cid:7)(cid:10)(cid:4)(cid:6)(cid:8)-(cid:9)(cid:4)(cid:6)(cid:9)(cid:7)(cid:11)(cid:15)(cid:9)(cid:17)(cid:4)(cid:6)(cid:8)(cid:4)(cid:29)(cid:10)(cid:13)(cid:12)(cid:7)(cid:15)(cid:13)(cid:9)(cid:10)(cid:6)(cid:17)(cid:4)(cid:3)(cid:15)(cid:9)(cid:8)(cid:7)(cid:12)(cid:7)(cid:15)(cid:3)(cid:15)(cid:6)(cid:7)#
(cid:24)( (>? @’(cid:1)?<’(=:(cid:29)(cid:2)(cid:13)(cid:3)(cid:6)(cid:4)9(cid:9)(cid:9)(cid:21)(cid:4)-(cid:9)(cid:8)(cid:4)(cid:11)(cid:21)(cid:9)(cid:3)(cid:13)(cid:19)(cid:6)(cid:4)(cid:11)(cid:16)(cid:13)(cid:10)(cid:6).(cid:30)
678,09(cid:4)(cid:8)(cid:9)(cid:3)(cid:4)(cid:21)(cid:25)(cid:6)(cid:4)(cid:7)(cid:6)(cid:13)(cid:3)(cid:4)(cid:3)(cid:9)(cid:11)(cid:6)(cid:4)’#(cid:30)%$(cid:4)(cid:16)(cid:6)(cid:3)(cid:4)(cid:11)(cid:29)(cid:2)(cid:13)(cid:3)(cid:6)(cid:4)(cid:8)(cid:9)(cid:9)(cid:21)(cid:26)(cid:4)(cid:13)(cid:18)(cid:4)(cid:14)(cid:18)(cid:10)(cid:3)(cid:6)(cid:13)(cid:11)(cid:6)(cid:4)(cid:9)(cid:8)(cid:4)%(cid:30)+;(cid:4)(cid:9)(cid:17)(cid:6)(cid:3)(cid:4)(cid:21)(cid:25)(cid:6)(cid:4)(cid:16)(cid:3)(cid:14)(cid:9)(cid:3)(cid:4)(cid:7)(cid:6)(cid:13)(cid:3)(cid:30)(cid:4)(cid:4)678,09(cid:4)(cid:14)(cid:11)(cid:4)(cid:21)(cid:25)(cid:6)
(cid:3)(cid:6)(cid:17)(cid:6)(cid:18)(cid:2)(cid:6)(cid:4)(cid:19)(cid:6)(cid:18)(cid:6)(cid:3)(cid:13)(cid:21)(cid:6)(cid:27)(cid:4)(cid:16)(cid:6)(cid:3)(cid:4)(cid:13)(cid:17)(cid:13)(cid:14)(cid:23)(cid:13)(cid:28)(cid:23)(cid:6)(cid:4)(cid:11)(cid:29)(cid:2)(cid:13)(cid:3)(cid:6)(cid:4)(cid:8)(cid:9)(cid:9)(cid:21)(cid:4)(cid:9)(cid:8)(cid:4)(cid:11)(cid:16)(cid:13)(cid:10)(cid:6)(cid:4)(cid:12)(cid:6)(cid:4)(cid:25)(cid:13)(cid:17)(cid:6)(cid:4)(cid:21)(cid:9)(cid:4)(cid:11)(cid:6)(cid:23)(cid:23)(cid:30)(cid:4)(cid:4)<(cid:21)(cid:4)(cid:10)(cid:13)(cid:16)(cid:21)(cid:2)(cid:3)(cid:6)(cid:11)(cid:4)(cid:10)(cid:25)(cid:13)(cid:18)(cid:19)(cid:6)(cid:11)(cid:4)(cid:14)(cid:18)(cid:4)(cid:17)(cid:9)(cid:23)(cid:2)(cid:15)(cid:6)(cid:4)-(cid:9)(cid:10)(cid:10)(cid:2)(cid:16)(cid:13)(cid:18)(cid:10)(cid:7).
(cid:13)(cid:18)(cid:27)(cid:4)(cid:16)(cid:3)(cid:9)(cid:15)(cid:9)(cid:21)(cid:14)(cid:9)(cid:18)(cid:13)(cid:23)(cid:4)(cid:27)(cid:14)(cid:11)(cid:10)(cid:9)(cid:2)(cid:18)(cid:21)(cid:11)(cid:4)(cid:13)(cid:18)(cid:27)(cid:4)(cid:10)(cid:25)(cid:13)(cid:18)(cid:19)(cid:6)(cid:11)(cid:4)(cid:14)(cid:18)(cid:4)(cid:3)(cid:13)(cid:21)(cid:6)(cid:11)(cid:4)(cid:21)(cid:9)(cid:4)(cid:18)(cid:6)(cid:12)(cid:4)(cid:13)(cid:18)(cid:27)(cid:4)(cid:6)?(cid:14)(cid:11)(cid:21)(cid:14)(cid:18)(cid:19)(cid:4)(cid:10)(cid:2)(cid:11)(cid:21)(cid:9)(cid:15)(cid:6)(cid:3)(cid:11)(cid:4)-(cid:3)(cid:13)(cid:21)(cid:6)(cid:11).(cid:30)(cid:4)(cid:4)<(cid:21)(cid:4)(cid:28)(cid:13)(cid:23)(cid:13)(cid:18)(cid:10)(cid:6)(cid:11)(cid:4)(cid:19)(cid:3)(cid:9)(cid:12)(cid:21)(cid:25)(cid:4)(cid:14)(cid:18)
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-(cid:19)(cid:6)(cid:10)(cid:11)(cid:5)(cid:4)$%%"’(cid:4)(cid:8)(cid:3)(cid:4)(cid:8)(cid:10)(cid:24)(cid:24)(cid:4)(cid:27)(cid:3)(cid:4)(cid:29)(cid:2)(cid:21)(cid:24)(cid:24)(cid:3)(cid:11)(cid:5)(cid:3)(cid:25)(cid:4)(cid:9)(cid:7)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:4)(cid:21)(cid:26)(cid:3)(cid:6)(cid:21)(cid:5)(cid:3)(cid:4)(cid:7)(cid:29)(cid:29)(cid:19)(cid:23)(cid:21)(cid:11)(cid:29)(cid:28)(cid:4)(cid:27)(cid:28)(cid:4)(cid:21)(cid:11)(cid:28)(cid:4)(cid:20)(cid:10)(cid:5)(cid:11)(cid:10)(cid:18)(cid:10)(cid:29)(cid:21)(cid:11)(cid:9)(cid:4)(cid:21)(cid:22)(cid:7)(cid:19)(cid:11)(cid:9)(cid:4)(cid:21)(cid:27)(cid:7)(cid:26)(cid:3)(cid:4)(cid:9)(cid:2)(cid:3)(cid:4)(;2
(cid:21)(cid:29)(cid:2)(cid:10)(cid:3)(cid:26)(cid:3)(cid:25)(cid:4)(cid:10)(cid:11)(cid:4)$%%& (cid:4)(cid:4)<(cid:19)(cid:6)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:9)(cid:2)(cid:4)(cid:8)(cid:10)(cid:24)(cid:24)(cid:4)(cid:11)(cid:3)(cid:3)(cid:25)(cid:4)(cid:9)(cid:7)(cid:4)(cid:29)(cid:7)(cid:22)(cid:3)(cid:4)(cid:23)(cid:6)(cid:10)(cid:11)(cid:29)(cid:10)(cid:23)(cid:21)(cid:24)(cid:24)(cid:28)(cid:4)(cid:18)(cid:6)(cid:7)(cid:22)(cid:4)(cid:2)(cid:10)(cid:5)(cid:2)(cid:3)(cid:6)(cid:4)(cid:6)(cid:21)(cid:9)(cid:3)(cid:20)(cid:4)(cid:9)(cid:7)(cid:4)(cid:27)(cid:7)(cid:9)(cid:2)(cid:4)(cid:3)/(cid:10)(cid:20)(cid:9)(cid:10)(cid:11)(cid:5)(cid:4)(cid:21)(cid:11)(cid:25)(cid:4)(cid:11)(cid:3)(cid:8)
(cid:29)(cid:19)(cid:20)(cid:9)(cid:7)(cid:22)(cid:3)(cid:6)(cid:20)(cid:4)(cid:29)(cid:7)(cid:22)(cid:27)(cid:10)(cid:11)(cid:3)(cid:25)(cid:4)(cid:8)(cid:10)(cid:9)(cid:2)(cid:4)(cid:20)(cid:7)(cid:22)(cid:3)(cid:4)(cid:29)(cid:2)(cid:21)(cid:11)(cid:5)(cid:3)(cid:4)(cid:10)(cid:11)(cid:4)(cid:9)(cid:2)(cid:3)(cid:4)(cid:24)(cid:3)(cid:26)(cid:3)(cid:24)(cid:4)(cid:7)(cid:18)(cid:4)(cid:23)(cid:6)(cid:7)(cid:22)(cid:7)(cid:9)(cid:10)(cid:7)(cid:11)(cid:21)(cid:24)(cid:4)(cid:25)(cid:10)(cid:20)(cid:29)(cid:7)(cid:19)(cid:11)(cid:9)(cid:20)
8(cid:19)(cid:20)(cid:9)(cid:7)(cid:22)(cid:3)(cid:6)(cid:4) (cid:21)(cid:29)6(cid:19)(cid:10)(cid:20)(cid:10)(cid:9)(cid:10)(cid:7)(cid:11)(cid:4) (cid:29)(cid:7)(cid:20)(cid:9)(cid:20)(cid:4) =(cid:22)(cid:3)(cid:25)(cid:10)(cid:21)’(cid:4) (cid:23)(cid:2)(cid:7)(cid:11)(cid:3)(cid:4) (cid:29)(cid:3)(cid:11)(cid:9)(cid:3)(cid:6)’(cid:4) (cid:28)(cid:3)(cid:24)(cid:24)(cid:7)(cid:8)(cid:4) (cid:23)(cid:21)(cid:5)(cid:3)(cid:20)(cid:4) (cid:21)(cid:11)(cid:25)(cid:4) (cid:23)(cid:6)(cid:7)(cid:22)(cid:7)(cid:9)(cid:10)(cid:7)(cid:11)(cid:21)(cid:24)(cid:4) (cid:25)(cid:10)(cid:20)(cid:29)(cid:7)(cid:19)(cid:11)(cid:9)(cid:20)>(cid:4) (cid:29)(cid:7)(cid:11)(cid:9)(cid:10)(cid:11)(cid:19)(cid:3)(cid:4) (cid:9)(cid:7)
(cid:10)(cid:11)(cid:29)(cid:6)(cid:3)(cid:21)(cid:20)(cid:3)(cid:4)(cid:21)(cid:11)(cid:25)(cid:4)(cid:8)(cid:3)(cid:6)(cid:3)(cid:4)(cid:9)(cid:2)(cid:3)(cid:4)(cid:2)(cid:10)(cid:5)(cid:2)(cid:3)(cid:20)(cid:9)(cid:4)(cid:10)(cid:11)(cid:4)(cid:7)(cid:19)(cid:6)(cid:4)(cid:2)(cid:10)(cid:20)(cid:9)(cid:7)(cid:6)(cid:28)(cid:4)(cid:10)(cid:11)(cid:4)$%%&’(cid:4)(cid:27)(cid:7)(cid:9)(cid:2)(cid:4)(cid:10)(cid:11)(cid:4)(cid:21)(cid:27)(cid:20)(cid:7)(cid:24)(cid:19)(cid:9)(cid:3)(cid:4)(cid:25)(cid:7)(cid:24)(cid:24)(cid:21)(cid:6)(cid:20)(cid:4)(cid:21)(cid:11)(cid:25)(cid:4)(cid:10)(cid:11)(cid:4)(cid:29)(cid:7)(cid:20)(cid:9)(cid:4)(cid:23)(cid:3)(cid:6)(cid:4)(cid:11)(cid:3)(cid:8)(cid:4)(cid:29)(cid:19)(cid:20)(cid:9)(cid:7)(cid:22)(cid:3)(cid:6)
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(cid:9)(cid:7)(cid:4)(cid:21)(cid:27)(cid:7)(cid:19)(cid:9)(cid:4)!(cid:31)$)(cid:4)(cid:10)(cid:11)(cid:4)$%%& (cid:4)(cid:4)(cid:1)(cid:2)(cid:10)(cid:20)(cid:4)(cid:10)(cid:11)(cid:29)(cid:6)(cid:3)(cid:21)(cid:20)(cid:3)(cid:4)(cid:10)(cid:20)(cid:4)(cid:23)(cid:6)(cid:10)(cid:22)(cid:21)(cid:6)(cid:10)(cid:24)(cid:28)(cid:4)(cid:25)(cid:19)(cid:3)(cid:4)(cid:9)(cid:7)(cid:4)(cid:9)(cid:2)(cid:3)(cid:4)(cid:3)/(cid:23)(cid:21)(cid:11)(cid:25)(cid:3)(cid:25)(cid:4)(cid:19)(cid:20)(cid:3)(cid:4)(cid:7)(cid:18)(cid:4)(cid:23)(cid:6)(cid:7)(cid:22)(cid:7)(cid:9)(cid:10)(cid:7)(cid:11)(cid:21)(cid:24)(cid:4)(cid:25)(cid:10)(cid:20)(cid:29)(cid:7)(cid:19)(cid:11)(cid:9)(cid:20) (cid:4)(cid:4)(cid:1)(cid:2)(cid:3)
(cid:25)(cid:6)(cid:21)(cid:22)(cid:21)(cid:9)(cid:10)(cid:29)(cid:4)(cid:10)(cid:11)(cid:29)(cid:6)(cid:3)(cid:21)(cid:20)(cid:3)(cid:4)(cid:10)(cid:20)(cid:4)(cid:21)(cid:4)(cid:6)(cid:3)(cid:18)(cid:24)(cid:3)(cid:29)(cid:9)(cid:10)(cid:7)(cid:11)(cid:4)(cid:7)(cid:18)(cid:4)(cid:27)(cid:7)(cid:9)(cid:2)(cid:4)(cid:9)(cid:2)(cid:3)(cid:4)(cid:29)(cid:7)(cid:22)(cid:23)(cid:3)(cid:9)(cid:10)(cid:9)(cid:10)(cid:26)(cid:3)(cid:4)(cid:24)(cid:21)(cid:11)(cid:25)(cid:20)(cid:29)(cid:21)(cid:23)(cid:3)(cid:4)(cid:21)(cid:11)(cid:25)(cid:4)(cid:7)(cid:19)(cid:6)(cid:4)(cid:25)(cid:3)(cid:20)(cid:10)(cid:6)(cid:3)(cid:4)(cid:9)(cid:7)(cid:4)(cid:6)(cid:3)(cid:20)(cid:9)(cid:7)(cid:6)(cid:3)(cid:4)(cid:7)(cid:29)(cid:29)(cid:19)(cid:23)(cid:21)(cid:11)(cid:29)(cid:28)(cid:4)(cid:9)(cid:7)
(cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:2)(cid:7)(cid:8)(cid:9)(cid:10) (cid:4)(cid:6)(cid:11)(cid:12)(cid:13)(cid:3)(cid:14)(cid:10) (cid:10) (cid:15)(cid:11)(cid:10) (cid:13)(cid:5)(cid:10) (cid:12)(cid:5)(cid:4)(cid:10) (cid:11)(cid:16)(cid:17)(cid:11)(cid:7)(cid:4)(cid:10) (cid:8)(cid:12)(cid:18)(cid:10) (cid:19)(cid:11)(cid:8)(cid:12)(cid:2)(cid:12)(cid:20)(cid:21)(cid:22)(cid:9)(cid:10) (cid:6)(cid:11)(cid:13)(cid:22)(cid:7)(cid:4)(cid:2)(cid:5)(cid:12)(cid:10) (cid:2)(cid:12)(cid:10) (cid:4)(cid:1)(cid:2)(cid:3)(cid:10) (cid:12)(cid:22)(cid:19)(cid:23)(cid:11)(cid:6)(cid:10) (cid:2)(cid:12)(cid:10) (cid:4)(cid:1)(cid:11)(cid:10) (cid:12)(cid:11)(cid:8)(cid:6)(cid:10) (cid:4)(cid:11)(cid:6)(cid:19)(cid:14)(cid:10) (cid:10) (cid:15)(cid:11)
(cid:6)(cid:11)(cid:7)(cid:5)(cid:20)(cid:12)(cid:2)(cid:24)(cid:11)(cid:10)(cid:8)(cid:10)(cid:3)(cid:2)(cid:20)(cid:12)(cid:2)(cid:21)(cid:2)(cid:7)(cid:8)(cid:12)(cid:4)(cid:10)(cid:5)(cid:17)(cid:17)(cid:5)(cid:6)(cid:4)(cid:22)(cid:12)(cid:2)(cid:4)(cid:18)(cid:10)(cid:4)(cid:5)(cid:10)(cid:2)(cid:19)(cid:17)(cid:6)(cid:5)(cid:25)(cid:11)(cid:10)(cid:17)(cid:6)(cid:5)(cid:21)(cid:2)(cid:4)(cid:8)(cid:23)(cid:2)(cid:9)(cid:2)(cid:4)(cid:18)(cid:10)(cid:23)(cid:18)(cid:10)(cid:6)(cid:11)(cid:13)(cid:22)(cid:7)(cid:2)(cid:12)(cid:20)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)(cid:7)(cid:22)(cid:3)(cid:4)(cid:5)(cid:19)(cid:11)(cid:6)(cid:10)(cid:8)(cid:7)(cid:26)(cid:22)(cid:2)(cid:3)(cid:2)(cid:4)(cid:2)(cid:5)(cid:12)(cid:10)(cid:7)(cid:5)(cid:3)(cid:4)(cid:3)(cid:14)
(cid:27)(cid:1)(cid:11)(cid:10) (cid:17)(cid:5)(cid:3)(cid:2)(cid:4)(cid:2)(cid:25)(cid:11)(cid:10) (cid:4)(cid:6)(cid:11)(cid:12)(cid:13)(cid:3)(cid:10) (cid:2)(cid:12)(cid:10) (cid:6)(cid:11)(cid:25)(cid:11)(cid:12)(cid:22)(cid:11)(cid:10) (cid:20)(cid:6)(cid:5)(cid:28)(cid:4)(cid:1)(cid:10) (cid:2)(cid:12)(cid:10) (cid:29)(cid:30)(cid:30)(cid:31)(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:2)(cid:12)(cid:4)(cid:5)(cid:10) (cid:29)(cid:30)(cid:30) (cid:10) (cid:1)(cid:8)(cid:25)(cid:11)(cid:10) (cid:23)(cid:11)(cid:11)(cid:12)!(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:28)(cid:2)(cid:9)(cid:9)(cid:10) (cid:7)(cid:5)(cid:12)(cid:4)(cid:2)(cid:12)(cid:22)(cid:11)(cid:10) (cid:4)(cid:5)(cid:10) (cid:23)(cid:11)!
(cid:19)(cid:5)(cid:13)(cid:11)(cid:6)(cid:8)(cid:4)(cid:11)(cid:13)(cid:10)(cid:23)(cid:18)(cid:10)(cid:11)(cid:16)(cid:17)(cid:11)(cid:12)(cid:3)(cid:11)(cid:10)(cid:20)(cid:6)(cid:5)(cid:28)(cid:4)(cid:1)(cid:14)(cid:10)(cid:10)"(cid:5)(cid:3)(cid:4)(cid:3)(cid:10)(cid:5)(cid:21)(cid:10)(cid:5)(cid:17)(cid:11)(cid:6)(cid:8)(cid:4)(cid:2)(cid:5)(cid:12)(cid:3)(cid:10)(cid:2)(cid:12)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)"(cid:5)(cid:12)(cid:3)(cid:2)(cid:3)(cid:4)(cid:11)(cid:12)(cid:4)(cid:10)#(cid:6)(cid:5)(cid:22)(cid:17)(cid:10)(cid:2)(cid:12)(cid:7)(cid:6)(cid:11)(cid:8)(cid:3)(cid:11)(cid:13)(cid:10)(cid:8)(cid:23)(cid:5)(cid:22)(cid:4)(cid:10)$$%(cid:10)(cid:21)(cid:5)(cid:6)(cid:10)(cid:4)(cid:1)(cid:11)
(cid:18)(cid:11)(cid:8)(cid:6)(cid:14)(cid:10) &(cid:16)(cid:17)(cid:11)(cid:12)(cid:3)(cid:11)(cid:10) (cid:2)(cid:12)(cid:7)(cid:6)(cid:11)(cid:8)(cid:3)(cid:11)(cid:3)(cid:10) (cid:28)(cid:11)(cid:6)(cid:11)(cid:10) (cid:8)(cid:7)(cid:6)(cid:5)(cid:3)(cid:3)(cid:10) (cid:4)(cid:1)(cid:11)(cid:10) (cid:23)(cid:5)(cid:8)(cid:6)(cid:13)!(cid:10) (cid:23)(cid:22)(cid:4)(cid:10) (cid:17)(cid:6)(cid:2)(cid:19)(cid:8)(cid:6)(cid:2)(cid:9)(cid:18)(cid:10) (cid:7)(cid:5)(cid:12)(cid:7)(cid:11)(cid:12)(cid:4)(cid:6)(cid:8)(cid:4)(cid:11)(cid:13)(cid:10) (cid:2)(cid:12)(cid:10) (cid:7)(cid:22)(cid:3)(cid:4)(cid:5)(cid:19)(cid:11)(cid:6)(cid:10) (cid:8)(cid:7)(cid:26)(cid:22)(cid:2)(cid:3)(cid:2)(cid:4)(cid:2)(cid:5)(cid:12)(cid:10) (cid:7)(cid:5)(cid:3)(cid:4)(cid:3)!
(cid:17)(cid:11)(cid:6)(cid:3)(cid:5)(cid:12)(cid:12)(cid:11)(cid:9)(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:6)(cid:11)(cid:17)(cid:8)(cid:2)(cid:6)(cid:3)(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:19)(cid:8)(cid:2)(cid:12)(cid:4)(cid:11)(cid:12)(cid:8)(cid:12)(cid:7)(cid:11)(cid:14)(cid:10) (cid:10) (cid:15)(cid:11)(cid:10) (cid:11)(cid:16)(cid:17)(cid:8)(cid:12)(cid:13)(cid:11)(cid:13)(cid:10) (cid:5)(cid:22)(cid:6)(cid:10) (cid:1)(cid:2)(cid:6)(cid:2)(cid:12)(cid:20)!(cid:10) (cid:4)(cid:6)(cid:8)(cid:2)(cid:12)(cid:2)(cid:12)(cid:20)(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:6)(cid:11)(cid:4)(cid:11)(cid:12)(cid:4)(cid:2)(cid:5)(cid:12)(cid:10) (cid:17)(cid:6)(cid:5)(cid:20)(cid:6)(cid:8)(cid:19)(cid:3)(cid:10) (cid:4)(cid:5)
(cid:2)(cid:19)(cid:17)(cid:6)(cid:5)(cid:25)(cid:11)(cid:10)(cid:4)(cid:1)(cid:11)(cid:10)(cid:7)(cid:8)(cid:9)(cid:2)(cid:23)(cid:11)(cid:6)(cid:10)(cid:5)(cid:21)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)(cid:5)(cid:17)(cid:11)(cid:6)(cid:8)(cid:4)(cid:2)(cid:12)(cid:20)(cid:10)(cid:17)(cid:11)(cid:6)(cid:3)(cid:5)(cid:12)(cid:12)(cid:11)(cid:9)!(cid:10)(cid:6)(cid:11)(cid:4)(cid:8)(cid:2)(cid:12)(cid:2)(cid:12)(cid:20)(cid:10)(cid:8)(cid:12)(cid:13)(cid:10)(cid:19)(cid:5)(cid:4)(cid:2)(cid:25)(cid:8)(cid:4)(cid:2)(cid:12)(cid:20)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)’(cid:23)(cid:11)(cid:3)(cid:4)(cid:10)(cid:8)(cid:12)(cid:13)(cid:10)(cid:23)(cid:6)(cid:2)(cid:20)(cid:1)(cid:4)(cid:11)(cid:3)(cid:4)((cid:10)(cid:8)(cid:12)(cid:13)(cid:10)(cid:4)(cid:5)
(cid:2)(cid:19)(cid:17)(cid:6)(cid:5)(cid:25)(cid:11)(cid:10)(cid:7)(cid:22)(cid:3)(cid:4)(cid:5)(cid:19)(cid:11)(cid:6)(cid:10)(cid:3)(cid:11)(cid:6)(cid:25)(cid:2)(cid:7)(cid:11)(cid:10)(cid:9)(cid:11)(cid:25)(cid:11)(cid:9)(cid:3)(cid:10)(cid:4)(cid:1)(cid:6)(cid:5)(cid:22)(cid:20)(cid:1)(cid:10)(cid:17)(cid:6)(cid:5)(cid:17)(cid:11)(cid:6)(cid:10)(cid:3)(cid:4)(cid:8)(cid:21)(cid:21)(cid:2)(cid:12)(cid:20)(cid:14)(cid:10)(cid:27)(cid:5)(cid:4)(cid:8)(cid:9)(cid:10)(cid:1)(cid:5)(cid:22)(cid:6)(cid:3)(cid:10)(cid:2)(cid:12)(cid:7)(cid:6)(cid:11)(cid:8)(cid:3)(cid:11)(cid:13)(cid:10)(cid:8)(cid:17)(cid:17)(cid:6)(cid:5)(cid:16)(cid:2)(cid:19)(cid:8)(cid:4)(cid:11)(cid:9)(cid:18)(cid:10))%(cid:14)(cid:10)(cid:10)(cid:15)(cid:11)(cid:10)(cid:8)(cid:9)(cid:3)(cid:5)
(cid:2)(cid:12)(cid:2)(cid:4)(cid:2)(cid:8)(cid:4)(cid:11)(cid:13)(cid:10) (cid:8)(cid:10) (cid:6)(cid:11)(cid:3)(cid:4)(cid:6)(cid:2)(cid:7)(cid:4)(cid:11)(cid:13)(cid:10) (cid:3)(cid:4)(cid:5)(cid:7)*(cid:10) (cid:2)(cid:12)(cid:7)(cid:11)(cid:12)(cid:4)(cid:2)(cid:25)(cid:11)(cid:10) (cid:17)(cid:6)(cid:5)(cid:20)(cid:6)(cid:8)(cid:19)(cid:10) (cid:21)(cid:5)(cid:6)(cid:10) (cid:21)(cid:2)(cid:11)(cid:9)(cid:13)(cid:10) (cid:19)(cid:8)(cid:12)(cid:8)(cid:20)(cid:11)(cid:19)(cid:11)(cid:12)(cid:4)(cid:10) (cid:17)(cid:11)(cid:6)(cid:3)(cid:5)(cid:12)(cid:12)(cid:11)(cid:9)(cid:14)(cid:10) (cid:10) +(cid:22)(cid:6)(cid:10) (cid:6)(cid:11)(cid:17)(cid:8)(cid:2)(cid:6)(cid:3)(cid:10) (cid:8)(cid:12)(cid:13)
(cid:19)(cid:8)(cid:2)(cid:12)(cid:4)(cid:11)(cid:12)(cid:8)(cid:12)(cid:7)(cid:11)!(cid:10)(cid:8)(cid:3)(cid:10)(cid:28)(cid:11)(cid:9)(cid:9)(cid:10)(cid:8)(cid:3)(cid:10)(cid:19)(cid:8)(cid:2)(cid:12)(cid:4)(cid:11)(cid:12)(cid:8)(cid:12)(cid:7)(cid:11)(cid:10)(cid:7)(cid:8)(cid:17)(cid:2)(cid:4)(cid:8)(cid:9)(cid:10)(cid:11)(cid:16)(cid:17)(cid:11)(cid:12)(cid:13)(cid:2)(cid:4)(cid:22)(cid:6)(cid:11)(cid:3)!(cid:10)(cid:2)(cid:12)(cid:7)(cid:6)(cid:11)(cid:8)(cid:3)(cid:11)(cid:13)(cid:10)(cid:2)(cid:12)(cid:10)(cid:29)(cid:30)(cid:30)(cid:31)(cid:10)(cid:8)(cid:12)(cid:13)(cid:10)(cid:28)(cid:2)(cid:9)(cid:9)(cid:10)(cid:7)(cid:5)(cid:12)(cid:4)(cid:2)(cid:12)(cid:22)(cid:11)(cid:10)(cid:4)(cid:5)(cid:10)(cid:2)(cid:12)(cid:7)(cid:6)(cid:11)(cid:8)(cid:3)(cid:11)
(cid:2)(cid:12)(cid:10)(cid:29)(cid:30)(cid:30) (cid:14)(cid:10)(cid:10)+(cid:12)(cid:10)(cid:8)(cid:25)(cid:11)(cid:6)(cid:8)(cid:20)(cid:11)!(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)(cid:17)(cid:5)(cid:6)(cid:4)(cid:21)(cid:5)(cid:9)(cid:2)(cid:5)(cid:10)(cid:2)(cid:3)(cid:10)(cid:8)(cid:23)(cid:5)(cid:22)(cid:4)(cid:10)(cid:29)(cid:30)(cid:10)(cid:18)(cid:11)(cid:8)(cid:6)(cid:3)(cid:10)(cid:5)(cid:9)(cid:13)(cid:10)(cid:8)(cid:12)(cid:13)(cid:10)(cid:2)(cid:3)(cid:10)(cid:2)(cid:12)(cid:10)(cid:12)(cid:11)(cid:11)(cid:13)(cid:10)(cid:5)(cid:21)(cid:10)(cid:3)(cid:5)(cid:19)(cid:11)(cid:10)(cid:7)(cid:5)(cid:3)(cid:19)(cid:11)(cid:4)(cid:2)(cid:7)(cid:10)(cid:2)(cid:19)(cid:17)(cid:6)(cid:5)(cid:25)(cid:11)(cid:19)(cid:11)(cid:12)(cid:4)(cid:3)(cid:14)
(cid:15)(cid:11)(cid:10)(cid:8)(cid:6)(cid:11)(cid:10)(cid:3)(cid:4)(cid:6)(cid:2)(cid:25)(cid:2)(cid:12)(cid:20)(cid:10)(cid:4)(cid:5)(cid:10)(cid:1)(cid:8)(cid:25)(cid:11)(cid:10)(cid:8)(cid:10)(cid:7)(cid:5)(cid:19)(cid:17)(cid:11)(cid:4)(cid:2)(cid:4)(cid:2)(cid:25)(cid:11)(cid:10)(cid:17)(cid:6)(cid:5)(cid:13)(cid:22)(cid:7)(cid:4)!(cid:10)(cid:2)(cid:12)(cid:10)’(cid:6)(cid:11)(cid:12)(cid:4)(cid:10)(cid:6)(cid:11)(cid:8)(cid:13)(cid:18)((cid:10)(cid:7)(cid:5)(cid:12)(cid:13)(cid:2)(cid:4)(cid:2)(cid:5)(cid:12)(cid:10)(cid:8)(cid:4)(cid:10)(cid:8)(cid:9)(cid:9)(cid:10)(cid:4)(cid:2)(cid:19)(cid:11)(cid:3)!(cid:10)(cid:28)(cid:1)(cid:2)(cid:7)(cid:1)(cid:10)(cid:17)(cid:6)(cid:5)(cid:25)(cid:2)(cid:13)(cid:11)(cid:3)(cid:10)(cid:20)(cid:5)(cid:5)(cid:13)
(cid:25)(cid:8)(cid:9)(cid:22)(cid:11)(cid:10)(cid:4)(cid:5)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)(cid:7)(cid:22)(cid:3)(cid:4)(cid:5)(cid:19)(cid:11)(cid:6)(cid:3)(cid:14)
(cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:5)(cid:6)(cid:7)(cid:8)(cid:9)(cid:10)(cid:11)(cid:12)(cid:4)(cid:2)(cid:13)(cid:12)(cid:12)(cid:9)(cid:14)(cid:15)(cid:13)(cid:7)(cid:6)(cid:16)(cid:4)(cid:17)(cid:2)(cid:12)
+(cid:22)(cid:6)(cid:10)(cid:8)(cid:12)(cid:7)(cid:2)(cid:9)(cid:9)(cid:8)(cid:6)(cid:18)(cid:10)(cid:23)(cid:22)(cid:3)(cid:2)(cid:12)(cid:11)(cid:3)(cid:3)(cid:11)(cid:3)(cid:10)(cid:7)(cid:5)(cid:12)(cid:4)(cid:2)(cid:12)(cid:22)(cid:11)(cid:10)(cid:4)(cid:5)(cid:10)(cid:19)(cid:8)*(cid:11)(cid:10)(cid:17)(cid:5)(cid:3)(cid:2)(cid:4)(cid:2)(cid:25)(cid:11)(cid:10)(cid:8)(cid:12)(cid:13)(cid:10)(cid:20)(cid:6)(cid:5)(cid:28)(cid:2)(cid:12)(cid:20)(cid:10)(cid:7)(cid:5)(cid:12)(cid:4)(cid:6)(cid:2)(cid:23)(cid:22)(cid:4)(cid:2)(cid:5)(cid:12)(cid:3)(cid:10)(cid:4)(cid:5)(cid:10)(cid:11)(cid:8)(cid:6)(cid:12)(cid:2)(cid:12)(cid:20)(cid:3)(cid:14)(cid:10)(cid:10)(cid:15)(cid:1)(cid:2)(cid:9)(cid:11)(cid:10)(cid:12)(cid:5)(cid:4)(cid:10)(cid:5)(cid:21)
(cid:20)(cid:6)(cid:11)(cid:8)(cid:4)(cid:10) (cid:19)(cid:8)(cid:20)(cid:12)(cid:2)(cid:4)(cid:22)(cid:13)(cid:11)(cid:10) (cid:2)(cid:12)(cid:13)(cid:2)(cid:25)(cid:2)(cid:13)(cid:22)(cid:8)(cid:9)(cid:9)(cid:18)!(cid:10) (cid:7)(cid:5)(cid:9)(cid:9)(cid:11)(cid:7)(cid:4)(cid:2)(cid:25)(cid:11)(cid:9)(cid:18)!(cid:10) (cid:4)(cid:1)(cid:11)(cid:10) (cid:7)(cid:5)(cid:12)(cid:4)(cid:8)(cid:2)(cid:12)(cid:11)(cid:6)(cid:2)(cid:24)(cid:11)(cid:13)(cid:10) (cid:19)(cid:5)(cid:25)(cid:2)(cid:12)(cid:20)(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:3)(cid:4)(cid:5)(cid:6)(cid:8)(cid:20)(cid:11)!(cid:10) (cid:19)(cid:11)(cid:6)(cid:7)(cid:1)(cid:8)(cid:12)(cid:13)(cid:2)(cid:3)(cid:11)(cid:10) (cid:3)(cid:8)(cid:9)(cid:11)(cid:3)!
(cid:7)(cid:5)(cid:12)(cid:3)(cid:22)(cid:19)(cid:11)(cid:6)(cid:10) (cid:4)(cid:6)(cid:22)(cid:7)*(cid:10) (cid:6)(cid:11)(cid:12)(cid:4)(cid:8)(cid:9)(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:4)(cid:11)(cid:12)(cid:8)(cid:12)(cid:4)(cid:10) (cid:2)(cid:12)(cid:3)(cid:22)(cid:6)(cid:8)(cid:12)(cid:7)(cid:11)(cid:10) (cid:23)(cid:22)(cid:3)(cid:2)(cid:12)(cid:11)(cid:3)(cid:3)(cid:11)(cid:3)(cid:10) (cid:19)(cid:8)(cid:13)(cid:11)(cid:10) (cid:8)(cid:10) (cid:17)(cid:5)(cid:3)(cid:2)(cid:4)(cid:2)(cid:25)(cid:11)(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:19)(cid:11)(cid:8)(cid:3)(cid:22)(cid:6)(cid:8)(cid:23)(cid:9)(cid:11)(cid:10) (cid:2)(cid:19)(cid:17)(cid:8)(cid:7)(cid:4)(cid:10) (cid:5)(cid:12)(cid:10) (cid:5)(cid:22)(cid:6)
(cid:5)(cid:17)(cid:11)(cid:6)(cid:8)(cid:4)(cid:2)(cid:12)(cid:20)(cid:10)(cid:6)(cid:11)(cid:3)(cid:22)(cid:9)(cid:4)(cid:3)(cid:10)(cid:13)(cid:22)(cid:6)(cid:2)(cid:12)(cid:20)(cid:10)(cid:4)(cid:1)(cid:11)(cid:10)(cid:18)(cid:11)(cid:8)(cid:6)(cid:14)(cid:10)(cid:10),(cid:5)(cid:3)(cid:4)(cid:10)(cid:5)(cid:21)(cid:10)(cid:4)(cid:1)(cid:11)(cid:3)(cid:11)(cid:10)(cid:17)(cid:5)(cid:3)(cid:2)(cid:4)(cid:2)(cid:25)(cid:11)(cid:10)(cid:6)(cid:11)(cid:3)(cid:22)(cid:9)(cid:4)(cid:3)(cid:10)(cid:28)(cid:11)(cid:6)(cid:11)(cid:10)(cid:13)(cid:6)(cid:2)(cid:25)(cid:11)(cid:12)(cid:10)(cid:23)(cid:18)(cid:10)(cid:2)(cid:12)(cid:7)(cid:6)(cid:11)(cid:8)(cid:3)(cid:11)(cid:13)(cid:10)(cid:7)(cid:22)(cid:3)(cid:4)(cid:5)(cid:19)(cid:11)(cid:6)(cid:10)(cid:4)(cid:6)(cid:8)(cid:21)(cid:21)(cid:2)(cid:7)
(cid:21)(cid:9)(cid:5)(cid:28)(cid:10)(cid:21)(cid:6)(cid:5)(cid:19)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)(cid:17)(cid:6)(cid:2)(cid:19)(cid:8)(cid:6)(cid:18)(cid:10)(cid:23)(cid:22)(cid:3)(cid:2)(cid:12)(cid:11)(cid:3)(cid:3)!(cid:10)(cid:3)(cid:11)(cid:9)(cid:21)-(cid:3)(cid:4)(cid:5)(cid:6)(cid:8)(cid:20)(cid:11)(cid:14)(cid:10)
(cid:15)(cid:2)(cid:4)(cid:1)(cid:10)(cid:6)(cid:11)(cid:3)(cid:17)(cid:11)(cid:7)(cid:4)(cid:10)(cid:4)(cid:5)(cid:10)(cid:4)(cid:1)(cid:11)(cid:10)(cid:7)(cid:5)(cid:12)(cid:4)(cid:2)(cid:12)(cid:22)(cid:2)(cid:12)(cid:20)(cid:10)(cid:5)(cid:17)(cid:11)(cid:6)(cid:8)(cid:4)(cid:2)(cid:5)(cid:12)(cid:3)(cid:10)(cid:5)(cid:21)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)(cid:7)(cid:5)(cid:12)(cid:4)(cid:8)(cid:2)(cid:12)(cid:11)(cid:6)(cid:2)(cid:24)(cid:11)(cid:13)(cid:10)(cid:3)(cid:4)(cid:5)(cid:6)(cid:8)(cid:20)(cid:11)(cid:10)(cid:23)(cid:22)(cid:3)(cid:2)(cid:12)(cid:11)(cid:3)(cid:3)!(cid:10)(cid:6)(cid:11)(cid:25)(cid:11)(cid:12)(cid:22)(cid:11)(cid:3)(cid:10)(cid:28)(cid:11)(cid:6)(cid:11)(cid:10)(cid:5)(cid:25)(cid:11)(cid:6)(cid:10)$ %
(cid:1)(cid:2)(cid:20)(cid:1)(cid:11)(cid:6)(cid:10) (cid:13)(cid:22)(cid:11)(cid:10) (cid:4)(cid:5)(cid:10) (cid:1)(cid:2)(cid:20)(cid:1)(cid:11)(cid:6)(cid:10) (cid:6)(cid:8)(cid:4)(cid:11)(cid:3)(cid:14)(cid:10) (cid:10) .(cid:22)(cid:6)(cid:2)(cid:12)(cid:20)(cid:10) (cid:4)(cid:1)(cid:11)(cid:10) (cid:18)(cid:11)(cid:8)(cid:6)!(cid:10) (cid:28)(cid:11)(cid:10) (cid:1)(cid:8)(cid:25)(cid:11)(cid:10) (cid:21)(cid:5)(cid:7)(cid:22)(cid:3)(cid:11)(cid:13)(cid:10) (cid:5)(cid:12)(cid:10) (cid:3)(cid:11)(cid:20)(cid:19)(cid:11)(cid:12)(cid:4)(cid:2)(cid:12)(cid:20)(cid:10) (cid:4)(cid:1)(cid:11)(cid:10) (cid:7)(cid:5)(cid:12)(cid:4)(cid:8)(cid:2)(cid:12)(cid:11)(cid:6)(cid:2)(cid:24)(cid:11)(cid:13)(cid:10) (cid:3)(cid:4)(cid:5)(cid:6)(cid:8)(cid:20)(cid:11)
(cid:23)(cid:22)(cid:3)(cid:2)(cid:12)(cid:11)(cid:3)(cid:3)(cid:10)(cid:8)(cid:28)(cid:8)(cid:18)(cid:10)(cid:21)(cid:6)(cid:5)(cid:19)(cid:10)(cid:4)(cid:1)(cid:11)(cid:10)(cid:3)(cid:11)(cid:9)(cid:21)-(cid:3)(cid:4)(cid:5)(cid:6)(cid:8)(cid:20)(cid:11)(cid:10)(cid:23)(cid:22)(cid:3)(cid:2)(cid:12)(cid:11)(cid:3)(cid:3)!(cid:10)(cid:4)(cid:6)(cid:18)(cid:2)(cid:12)(cid:20)(cid:10)(cid:4)(cid:5)(cid:10)(cid:8)(cid:4)(cid:4)(cid:6)(cid:8)(cid:7)(cid:4)(cid:10)(cid:13)(cid:2)(cid:21)(cid:21)(cid:11)(cid:6)(cid:11)(cid:12)(cid:4)(cid:10)(cid:7)(cid:22)(cid:3)(cid:4)(cid:5)(cid:19)(cid:11)(cid:6)(cid:3)(cid:10)(cid:8)(cid:12)(cid:13)(cid:10)(cid:17)(cid:6)(cid:2)(cid:7)(cid:2)(cid:12)(cid:20)(cid:10)(cid:4)(cid:1)(cid:11)(cid:10)(cid:17)(cid:6)(cid:5)(cid:13)(cid:22)(cid:7)(cid:4)
(cid:8)(cid:7)(cid:7)(cid:5)(cid:6)(cid:13)(cid:2)(cid:12)(cid:20)(cid:10)(cid:4)(cid:5)(cid:10)(cid:2)(cid:4)(cid:3)(cid:10)’(cid:3)(cid:11)(cid:6)(cid:25)(cid:2)(cid:7)(cid:11)(cid:10)(cid:8)(cid:12)(cid:13)(cid:10)(cid:25)(cid:8)(cid:9)(cid:22)(cid:11)(cid:14)((cid:10)(cid:10)+(cid:17)(cid:11)(cid:6)(cid:8)(cid:4)(cid:2)(cid:12)(cid:20)(cid:10)(cid:11)(cid:16)(cid:17)(cid:11)(cid:12)(cid:3)(cid:11)(cid:3)(cid:10)(cid:28)(cid:11)(cid:6)(cid:11)(cid:10)(cid:13)(cid:5)(cid:28)(cid:12)(cid:10)(cid:3)(cid:2)(cid:20)(cid:12)(cid:2)(cid:21)(cid:2)(cid:7)(cid:8)(cid:12)(cid:4)(cid:9)(cid:18)(cid:10)(cid:7)(cid:5)(cid:19)(cid:17)(cid:8)(cid:6)(cid:11)(cid:13)(cid:10)(cid:4)(cid:5)(cid:10)(cid:9)(cid:8)(cid:3)(cid:4)(cid:10)(cid:18)(cid:11)(cid:8)(cid:6)!
(cid:6)(cid:11)(cid:3)(cid:22)(cid:9)(cid:4)(cid:2)(cid:12)(cid:20)(cid:10)(cid:2)(cid:12)(cid:10)(cid:8)(cid:10)(cid:18)(cid:11)(cid:8)(cid:6)-(cid:5)(cid:25)(cid:11)(cid:6)-(cid:18)(cid:11)(cid:8)(cid:6)(cid:10)(cid:2)(cid:12)(cid:7)(cid:6)(cid:11)(cid:8)(cid:3)(cid:11)(cid:10)(cid:2)(cid:12)(cid:10)(cid:12)(cid:11)(cid:4)(cid:10)(cid:2)(cid:12)(cid:7)(cid:5)(cid:19)(cid:11)(cid:10)(cid:5)(cid:21)(cid:10)/)(cid:10)(cid:19)(cid:2)(cid:9)(cid:9)(cid:2)(cid:5)(cid:12)(cid:14)(cid:10)(cid:10)(cid:27)(cid:8)*(cid:2)(cid:12)(cid:20)(cid:10)(cid:4)(cid:1)(cid:11)(cid:10)(cid:6)(cid:11)(cid:3)(cid:22)(cid:9)(cid:4)(cid:3)(cid:10)(cid:5)(cid:21)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)(cid:13)(cid:2)(cid:3)(cid:7)(cid:5)(cid:12)(cid:4)(cid:2)(cid:12)(cid:22)(cid:11)(cid:13)
(cid:5)(cid:17)(cid:11)(cid:6)(cid:8)(cid:4)(cid:2)(cid:5)(cid:12)(cid:3)(cid:10)(cid:2)(cid:12)(cid:4)(cid:5)(cid:10)(cid:8)(cid:7)(cid:7)(cid:5)(cid:22)(cid:12)(cid:4)!(cid:10)(cid:12)(cid:11)(cid:4)(cid:10)(cid:2)(cid:12)(cid:7)(cid:5)(cid:19)(cid:11)(cid:10)(cid:28)(cid:8)(cid:3)(cid:10)(cid:5)(cid:25)(cid:11)(cid:6)(cid:10)/(cid:29)(cid:10)(cid:19)(cid:2)(cid:9)(cid:9)(cid:2)(cid:5)(cid:12)(cid:10)(cid:25)(cid:11)(cid:6)(cid:3)(cid:22)(cid:3)(cid:10)(cid:8)(cid:10)(cid:9)(cid:5)(cid:3)(cid:3)(cid:10)(cid:5)(cid:21)(cid:10)/$(cid:30)(cid:10)(cid:19)(cid:2)(cid:9)(cid:9)(cid:2)(cid:5)(cid:12)(cid:10)(cid:21)(cid:5)(cid:6)(cid:10)(cid:29)(cid:30)(cid:30)(cid:29)(cid:14)(cid:10)(cid:15)(cid:11)(cid:10)(cid:13)(cid:11)(cid:7)(cid:2)(cid:13)(cid:11)(cid:13)
(cid:4)(cid:5)(cid:10)(cid:7)(cid:9)(cid:5)(cid:3)(cid:11)(cid:10)(cid:8)(cid:12)(cid:10)(cid:8)(cid:13)(cid:13)(cid:2)(cid:4)(cid:2)(cid:5)(cid:12)(cid:8)(cid:9)(cid:10)(cid:12)(cid:2)(cid:12)(cid:11)(cid:10)(cid:21)(cid:8)(cid:7)(cid:2)(cid:9)(cid:2)(cid:4)(cid:2)(cid:11)(cid:3)(cid:10)(cid:13)(cid:22)(cid:6)(cid:2)(cid:12)(cid:20)(cid:10)(cid:29)(cid:30)(cid:30)(cid:31)!(cid:10)(cid:28)(cid:1)(cid:2)(cid:7)(cid:1)(cid:10)(cid:21)(cid:5)(cid:9)(cid:9)(cid:5)(cid:28)(cid:11)(cid:13)(cid:10)(cid:4)(cid:1)(cid:11)(cid:10)(cid:7)(cid:9)(cid:5)(cid:3)(cid:22)(cid:6)(cid:11)(cid:10)(cid:5)(cid:21)(cid:10)(cid:29)(cid:29)(cid:10)(cid:21)(cid:8)(cid:7)(cid:2)(cid:9)(cid:2)(cid:4)(cid:2)(cid:11)(cid:3)(cid:10)(cid:2)(cid:12)(cid:10)(cid:29)(cid:30)(cid:30)(cid:29)(cid:14)(cid:10)(cid:10)(cid:10)
+(cid:22)(cid:6)(cid:10) (cid:8)(cid:12)(cid:7)(cid:2)(cid:9)(cid:9)(cid:8)(cid:6)(cid:18)(cid:10) (cid:5)(cid:17)(cid:11)(cid:6)(cid:8)(cid:4)(cid:2)(cid:5)(cid:12)(cid:3)(cid:10) (cid:8)(cid:9)(cid:3)(cid:5)(cid:10) (cid:2)(cid:12)(cid:7)(cid:9)(cid:22)(cid:13)(cid:11)(cid:10) (cid:4)(cid:11)(cid:12)(cid:8)(cid:12)(cid:4)(cid:10) (cid:2)(cid:12)(cid:3)(cid:22)(cid:6)(cid:8)(cid:12)(cid:7)(cid:11)!(cid:10) (cid:4)(cid:6)(cid:22)(cid:7)*(cid:10) (cid:6)(cid:11)(cid:12)(cid:4)(cid:8)(cid:9)(cid:10) 0(cid:23)(cid:5)(cid:4)(cid:1)(cid:10) (cid:5)(cid:22)(cid:6)(cid:10) (cid:5)(cid:28)(cid:12)(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:8)(cid:3)(cid:10) (cid:8)(cid:12)(cid:10) (cid:8)(cid:20)(cid:11)(cid:12)(cid:4)(cid:10) (cid:5)(cid:21)
1(cid:11)(cid:12)(cid:3)*(cid:11)2(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:6)(cid:11)(cid:4)(cid:8)(cid:2)(cid:9)(cid:10) (cid:3)(cid:8)(cid:9)(cid:11)(cid:3)(cid:10) 0(cid:9)(cid:5)(cid:7)*(cid:3)(cid:10) (cid:8)(cid:12)(cid:13)(cid:10) (cid:23)(cid:5)(cid:16)(cid:11)(cid:3)2(cid:14)(cid:10) (cid:10) (cid:27)(cid:1)(cid:11)(cid:3)(cid:11)(cid:10) (cid:23)(cid:22)(cid:3)(cid:2)(cid:12)(cid:11)(cid:3)(cid:3)(cid:11)(cid:3)(cid:10) (cid:8)(cid:9)(cid:9)(cid:10) (cid:20)(cid:6)(cid:11)(cid:28)(cid:10) (cid:8)(cid:3)(cid:10) (cid:8)(cid:10) (cid:6)(cid:11)(cid:3)(cid:22)(cid:9)(cid:4)(cid:10) (cid:5)(cid:21)(cid:10) (cid:2)(cid:12)(cid:7)(cid:6)(cid:11)(cid:8)(cid:3)(cid:11)(cid:13)(cid:10) (cid:7)(cid:22)(cid:3)(cid:4)(cid:5)(cid:19)(cid:11)(cid:6)
(cid:25)(cid:5)(cid:9)(cid:22)(cid:19)(cid:11)!(cid:10)(cid:23)(cid:11)(cid:4)(cid:4)(cid:11)(cid:6)(cid:10)(cid:17)(cid:6)(cid:2)(cid:7)(cid:2)(cid:12)(cid:20)(cid:10)(cid:8)(cid:12)(cid:13)(cid:10)(cid:11)(cid:16)(cid:17)(cid:11)(cid:12)(cid:3)(cid:11)(cid:10)(cid:7)(cid:5)(cid:12)(cid:4)(cid:6)(cid:5)(cid:9)(cid:3)(cid:14)
3(cid:11)(cid:25)(cid:11)(cid:12)(cid:22)(cid:11)(cid:3)(cid:10)(cid:5)(cid:21)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)(cid:7)(cid:5)(cid:12)(cid:4)(cid:2)(cid:12)(cid:22)(cid:2)(cid:12)(cid:20)(cid:10)(cid:8)(cid:12)(cid:7)(cid:2)(cid:9)(cid:9)(cid:8)(cid:6)(cid:18)(cid:10)(cid:5)(cid:17)(cid:11)(cid:6)(cid:8)(cid:4)(cid:2)(cid:5)(cid:12)(cid:3)(cid:10)(cid:2)(cid:12)(cid:7)(cid:6)(cid:11)(cid:8)(cid:3)(cid:11)(cid:13)(cid:10)$(cid:31)%(cid:10)(cid:4)(cid:5)(cid:10)/4(cid:30)(cid:10)(cid:19)(cid:2)(cid:9)(cid:9)(cid:2)(cid:5)(cid:12)(cid:14)(cid:10)(cid:10)5(cid:11)(cid:4)(cid:10)(cid:2)(cid:12)(cid:7)(cid:5)(cid:19)(cid:11)(cid:10)(cid:21)(cid:6)(cid:5)(cid:19)(cid:10)(cid:4)(cid:1)(cid:11)(cid:3)(cid:11)
(cid:7)(cid:5)(cid:12)(cid:4)(cid:2)(cid:12)(cid:22)(cid:2)(cid:12)(cid:20)(cid:10)(cid:5)(cid:17)(cid:11)(cid:6)(cid:8)(cid:4)(cid:2)(cid:5)(cid:12)(cid:3)(cid:10)(cid:2)(cid:19)(cid:17)(cid:6)(cid:5)(cid:25)(cid:11)(cid:13)(cid:10)(cid:23)(cid:18)(cid:10)(cid:8)(cid:9)(cid:19)(cid:5)(cid:3)(cid:4)(cid:10)/6(cid:10)(cid:19)(cid:2)(cid:9)(cid:9)(cid:2)(cid:5)(cid:12)(cid:14)(cid:10)(cid:10)(cid:27)(cid:1)(cid:11)(cid:3)(cid:11)(cid:10)(cid:23)(cid:22)(cid:3)(cid:2)(cid:12)(cid:11)(cid:3)(cid:3)(cid:11)(cid:3)(cid:10)(cid:7)(cid:5)(cid:12)(cid:4)(cid:2)(cid:12)(cid:22)(cid:11)(cid:10)(cid:4)(cid:5)(cid:10)(cid:17)(cid:6)(cid:5)(cid:25)(cid:2)(cid:13)(cid:11)(cid:10)(cid:2)(cid:19)(cid:17)(cid:5)(cid:6)(cid:4)(cid:8)(cid:12)(cid:4)
(cid:7)(cid:5)(cid:19)(cid:17)(cid:9)(cid:2)(cid:19)(cid:11)(cid:12)(cid:4)(cid:8)(cid:6)(cid:18)(cid:10)(cid:17)(cid:6)(cid:5)(cid:13)(cid:22)(cid:7)(cid:4)(cid:3)(cid:10)(cid:4)(cid:5)(cid:10)(cid:5)(cid:22)(cid:6)(cid:10)(cid:3)(cid:11)(cid:9)(cid:21)-(cid:3)(cid:4)(cid:5)(cid:6)(cid:8)(cid:20)(cid:11)(cid:10)(cid:7)(cid:22)(cid:3)(cid:4)(cid:5)(cid:19)(cid:11)(cid:6)(cid:3)!(cid:10)(cid:11)(cid:12)(cid:8)(cid:23)(cid:9)(cid:2)(cid:12)(cid:20)(cid:10)(cid:4)(cid:1)(cid:11)(cid:19)(cid:10)(cid:4)(cid:5)(cid:10)’(cid:5)(cid:12)(cid:11)-(cid:3)(cid:4)(cid:5)(cid:17)(cid:10)(cid:3)(cid:1)(cid:5)(cid:17)((cid:10)(cid:21)(cid:5)(cid:6)(cid:10)(cid:4)(cid:1)(cid:11)(cid:2)(cid:6)(cid:10)(cid:19)(cid:5)(cid:25)(cid:2)(cid:12)(cid:20)
(cid:8)(cid:12)(cid:13)(cid:10)(cid:3)(cid:4)(cid:5)(cid:6)(cid:8)(cid:20)(cid:11)(cid:10)(cid:12)(cid:11)(cid:11)(cid:13)(cid:3)(cid:14)
3(cid:11)(cid:26)(cid:3)(cid:20)(cid:9)(cid:22)(cid:3)(cid:11)(cid:9)(cid:4)(cid:16)(cid:29)(cid:9)(cid:10)(cid:26)(cid:10)(cid:9)(cid:10)(cid:3)(cid:20)
(cid:1)(cid:2)(cid:3)(cid:4)(cid:2)(cid:5)(cid:2)(cid:3)(cid:6)(cid:7)(cid:8)(cid:9)(cid:3)(cid:10)(cid:11)(cid:11)(cid:12)(cid:13)(cid:10)(cid:14)(cid:15)(cid:16)(cid:17)(cid:3)(cid:10)(cid:16)(cid:18)(cid:3)(cid:17)(cid:2)(cid:16)(cid:2)(cid:5)(cid:10)(cid:14)(cid:15)(cid:16)(cid:17)(cid:3)(cid:13)(cid:10)(cid:19)(cid:15)(cid:14)(cid:10)(cid:11)(cid:3)(cid:15)(cid:16)(cid:3)(cid:20)(cid:21)(cid:21)(cid:22)(cid:23)(cid:3)(cid:3)(cid:24)(cid:7)(cid:5)(cid:3)(cid:10)(cid:13)(cid:14)(cid:15)(cid:25)(cid:15)(cid:14)(cid:15)(cid:2)(cid:8)(cid:3)(cid:15)(cid:16)(cid:13)(cid:11)(cid:7)(cid:18)(cid:2)(cid:18)(cid:26)
(cid:27) (cid:24)(cid:19)(cid:2)(cid:16)(cid:15)(cid:16)(cid:17)(cid:3)(cid:28)(cid:29)(cid:3)(cid:8)(cid:2)(cid:11)(cid:30)(cid:31)(cid:8)(cid:14)(cid:12)(cid:5)(cid:10)(cid:17)(cid:2)(cid:3)(cid:19)(cid:5)(cid:12)(cid:19)(cid:2)(cid:5)(cid:14)(cid:15)(cid:2)(cid:8)(cid:3)(cid:10)(cid:14)(cid:3)(cid:10)(cid:3)(cid:13)(cid:12)(cid:8)(cid:14)(cid:3)(cid:12)(cid:30)(cid:3) (cid:28)(cid:21)!(cid:3)"(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)(cid:23)(cid:3)(cid:3)#$(cid:2)(cid:8)(cid:2)(cid:3)(cid:19)(cid:5)(cid:12)(cid:19)(cid:2)(cid:5)(cid:14)(cid:15)(cid:2)(cid:8)(cid:3)(cid:5)(cid:2)(cid:19)(cid:5)(cid:2)(cid:8)(cid:2)(cid:16)(cid:14)(cid:3)(cid:16)(cid:2)(cid:10)(cid:5)(cid:11)(cid:9)(cid:3)(cid:12)(cid:16)(cid:2) "(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)
(cid:5)(cid:2)(cid:16)(cid:14)(cid:10)(cid:6)(cid:11)(cid:2)(cid:3) (cid:8)%(cid:7)(cid:10)(cid:5)(cid:2)(cid:3) (cid:30)(cid:2)(cid:2)(cid:14)(cid:3) (cid:12)(cid:5)(cid:3) (cid:10)(cid:6)(cid:12)(cid:7)(cid:14)(cid:3) (cid:28)(cid:21)&(cid:22)(cid:21)(cid:21)(cid:3) (cid:7)(cid:16)(cid:15)(cid:14)(cid:8)(cid:23)(cid:3) (cid:3) ’(cid:2)(cid:11)(cid:30)(cid:31)(cid:8)(cid:14)(cid:12)(cid:5)(cid:10)(cid:17)(cid:2)(cid:3) (cid:30)(cid:10)(cid:13)(cid:15)(cid:11)(cid:15)(cid:14)(cid:15)(cid:2)(cid:8)(cid:3) (cid:14)(cid:9)(cid:19)(cid:15)(cid:13)(cid:10)(cid:11)(cid:11)(cid:9)(cid:3) (cid:17)(cid:2)(cid:16)(cid:2)(cid:5)(cid:10)(cid:14)(cid:2)(cid:3) (cid:12)(cid:19)(cid:2)(cid:5)(cid:10)(cid:14)(cid:15)(cid:16)(cid:17)(cid:3) (cid:11)(cid:12)(cid:8)(cid:8)(cid:2)(cid:8)
(cid:18)(cid:7)(cid:5)(cid:15)(cid:16)(cid:17)(cid:3)(cid:14)$(cid:2)(cid:15)(cid:5)(cid:3)(cid:30)(cid:15)(cid:5)(cid:8)(cid:14)(cid:3)(cid:9)(cid:2)(cid:10)(cid:5)(cid:3)(cid:12)(cid:30)(cid:3)(cid:12)(cid:19)(cid:2)(cid:5)(cid:10)(cid:14)(cid:15)(cid:12)(cid:16)(cid:23)(cid:3)(cid:3)((cid:2)(cid:14)(cid:3)(cid:12)(cid:19)(cid:2)(cid:5)(cid:10)(cid:14)(cid:15)(cid:16)(cid:17)(cid:3)(cid:15)(cid:16)(cid:13)(cid:12)"(cid:2)(cid:3)(cid:30)(cid:5)(cid:12)"(cid:3)(cid:14)$(cid:2)(cid:8)(cid:2)(cid:3)(cid:30)(cid:10)(cid:13)(cid:15)(cid:11)(cid:15)(cid:14)(cid:15)(cid:2)(cid:8)(cid:3)(cid:4)(cid:10)(cid:8)(cid:3)(cid:12)(cid:16)(cid:11)(cid:9)(cid:3) (cid:20)(cid:28))&(cid:21)(cid:21)(cid:21)(cid:23)(cid:3)
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(cid:8)(cid:14)(cid:12)(cid:5)(cid:10)(cid:17)(cid:2)(cid:3)(cid:14)(cid:12)(cid:3)(cid:8)(cid:2)(cid:11)(cid:30)(cid:31)(cid:8)(cid:14)(cid:12)(cid:5)(cid:10)(cid:17)(cid:2)(cid:3)(cid:10)(cid:14)(cid:3)(cid:10)(cid:3)(cid:13)(cid:12)(cid:8)(cid:14)(cid:3)(cid:12)(cid:30)(cid:3) ,(cid:3)"(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)(cid:23)(cid:3)(cid:3)
(cid:27) ’(cid:2)(cid:11)(cid:11)(cid:15)(cid:16)(cid:17)(cid:3)(cid:30)(cid:15)(cid:25)(cid:2)(cid:3)(cid:30)(cid:10)(cid:13)(cid:15)(cid:11)(cid:15)(cid:14)(cid:15)(cid:2)(cid:8)(cid:3)(cid:30)(cid:12)(cid:5)(cid:3)(cid:16)(cid:2)(cid:14)(cid:3)(cid:19)(cid:5)(cid:12)(cid:13)(cid:2)(cid:2)(cid:18)(cid:8)(cid:3)(cid:12)(cid:30)(cid:3) (cid:28)(cid:22)(cid:3)"(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)(cid:3)(cid:10)(cid:16)(cid:18)(cid:3)(cid:19)(cid:5)(cid:12)(cid:18)(cid:7)(cid:13)(cid:15)(cid:16)(cid:17)(cid:3)(cid:30)(cid:15)(cid:16)(cid:10)(cid:16)(cid:13)(cid:15)(cid:10)(cid:11)(cid:3)(cid:8)(cid:14)(cid:10)(cid:14)(cid:2)"(cid:2)(cid:16)(cid:14)(cid:3)(cid:17)(cid:10)(cid:15)(cid:16)(cid:8)(cid:3)(cid:12)(cid:30)(cid:3)(cid:12)(cid:25)(cid:2)(cid:5)
-(cid:3) "(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)(cid:3) . (cid:21)(cid:23)(cid:21)(cid:29)(cid:3) (cid:19)(cid:2)(cid:5)(cid:3) (cid:8)$(cid:10)(cid:5)(cid:2)/(cid:23)(cid:3) (cid:3) (cid:1)(cid:2)(cid:3) (cid:10)(cid:11)(cid:8)(cid:12)(cid:3) (cid:18)(cid:15)(cid:8)(cid:19)(cid:12)(cid:8)(cid:2)(cid:18)(cid:3) (cid:12)(cid:30)(cid:3) (cid:10)(cid:19)(cid:19)(cid:5)(cid:12)0(cid:15)"(cid:10)(cid:14)(cid:2)(cid:11)(cid:9)(cid:3) ,(cid:3) "(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)(cid:3) (cid:12)(cid:30)(cid:3) (cid:2)0(cid:13)(cid:2)(cid:8)(cid:8)(cid:3) (cid:11)(cid:10)(cid:16)(cid:18)(cid:3) (cid:4)(cid:15)(cid:14)$(cid:3) (cid:10)
(cid:16)(cid:12)"(cid:15)(cid:16)(cid:10)(cid:11)(cid:3)(cid:17)(cid:10)(cid:15)(cid:16)(cid:23)
1(cid:7)(cid:5)(cid:15)(cid:16)(cid:17)(cid:3)(cid:20)(cid:21)(cid:21)(cid:22)&(cid:3)(cid:12)(cid:7)(cid:5)(cid:3)(cid:19)(cid:12)(cid:5)(cid:14)(cid:30)(cid:12)(cid:11)(cid:15)(cid:12)(cid:3)(cid:12)(cid:30)(cid:3)(cid:18)(cid:2)(cid:25)(cid:2)(cid:11)(cid:12)(cid:19)"(cid:2)(cid:16)(cid:14)(cid:3)(cid:19)(cid:5)(cid:12)(cid:19)(cid:2)(cid:5)(cid:14)(cid:15)(cid:2)(cid:8)(cid:3)(cid:4)$(cid:15)(cid:13)$(cid:3)$(cid:10)(cid:25)(cid:2)(cid:3)(cid:6)(cid:2)(cid:2)(cid:16)(cid:3)(cid:15)(cid:16)(cid:3)(cid:12)(cid:19)(cid:2)(cid:5)(cid:10)(cid:14)(cid:15)(cid:12)(cid:16)(cid:3)(cid:30)(cid:12)(cid:5)(cid:3)(cid:14)(cid:4)(cid:12)(cid:3)(cid:14)(cid:12)(cid:3)(cid:30)(cid:12)(cid:7)(cid:5)(cid:3)(cid:9)(cid:2)(cid:10)(cid:5)(cid:8)(cid:3)(cid:4)(cid:2)(cid:5)(cid:2)
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(cid:30)(cid:10)(cid:13)(cid:15)(cid:11)(cid:15)(cid:14)(cid:15)(cid:2)(cid:8)(cid:3) (cid:18)(cid:2)(cid:25)(cid:2)(cid:11)(cid:12)(cid:19)(cid:2)(cid:18)(cid:3) (cid:8)(cid:15)(cid:16)(cid:13)(cid:2)(cid:3) (cid:28))))(cid:3) (cid:15)(cid:16)(cid:13)(cid:5)(cid:2)(cid:10)(cid:8)(cid:2)(cid:18)(cid:3) (cid:12)(cid:25)(cid:2)(cid:5)(cid:3) -(cid:3) "(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)(cid:3) (cid:14)(cid:12)(cid:3) (cid:28)-(cid:3) "(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)(cid:23)(cid:3) (cid:3)#$(cid:2)(cid:3) (cid:15)(cid:16)(cid:25)(cid:2)(cid:8)(cid:14)"(cid:2)(cid:16)(cid:14)(cid:3) (cid:9)(cid:15)(cid:2)(cid:11)(cid:18)(cid:3) (cid:30)(cid:5)(cid:12)"(cid:3) (cid:14)$(cid:2)(cid:8)(cid:2)
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(cid:27) #$(cid:2)(cid:3)(cid:5)(cid:2)(cid:18)(cid:2)"(cid:19)(cid:14)(cid:15)(cid:12)(cid:16)(cid:3)(cid:12)(cid:30)(cid:3) 33(cid:3)"(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)(cid:3)(cid:12)(cid:30)(cid:3)3(cid:23)(cid:22),2(cid:3)(cid:19)(cid:5)(cid:2)(cid:30)(cid:2)(cid:5)(cid:5)(cid:2)(cid:18)(cid:3)(cid:8)(cid:14)(cid:12)(cid:13)6(cid:23)
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(cid:15)(cid:16)(cid:3)(cid:20)(cid:21)(cid:21)(cid:20)(cid:23)(cid:3)(cid:3)(cid:1)(cid:2)(cid:3)$(cid:10)(cid:25)(cid:2)(cid:3)(cid:10)(cid:16)(cid:3)(cid:10)(cid:18)(cid:18)(cid:15)(cid:14)(cid:15)(cid:12)(cid:16)(cid:10)(cid:11)(cid:3) 3,(cid:3)"(cid:15)(cid:11)(cid:11)(cid:15)(cid:12)(cid:16)(cid:3)(cid:12)(cid:30)(cid:3))2(cid:3)(cid:19)(cid:5)(cid:2)(cid:30)(cid:2)(cid:5)(cid:5)(cid:2)(cid:18)(cid:3)(cid:8)(cid:14)(cid:12)(cid:13)6(cid:3)(cid:14)(cid:12)(cid:3)(cid:5)(cid:2)(cid:18)(cid:2)(cid:2)"(cid:3)(cid:15)(cid:16)(cid:3)(cid:20)(cid:21)(cid:21)(cid:29)(cid:3)(cid:4)$(cid:15)(cid:13)$(cid:3)$(cid:10)(cid:8)(cid:3)(cid:10)(cid:11)(cid:5)(cid:2)(cid:10)(cid:18)(cid:9)
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(cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:9)(cid:9)(cid:10)(cid:7)(cid:11)(cid:5)(cid:12)(cid:7)(cid:13)(cid:14)(cid:15)(cid:7)(cid:15)(cid:11)(cid:3)(cid:16)(cid:17)(cid:7)(cid:18)(cid:11)(cid:3)(cid:13)(cid:7)(cid:19)(cid:20)(cid:7)(cid:8)(cid:9)(cid:9)(cid:21)(cid:22)(cid:7)(cid:23)(cid:15)(cid:7)(cid:24)(cid:11)(cid:12)(cid:15)(cid:7)(cid:25)(cid:15)(cid:26)(cid:15)(cid:3)(cid:11)(cid:16)(cid:7)(cid:27)(cid:15)(cid:17)(cid:7)(cid:25)(cid:15)(cid:5)(cid:4)(cid:19)(cid:3)(cid:7)(cid:24)(cid:11)(cid:5)(cid:11)(cid:6)(cid:15)(cid:24)(cid:15)(cid:5)(cid:13)(cid:7)(cid:28)(cid:14)(cid:11)(cid:5)(cid:6)(cid:15)(cid:25)(cid:29)(cid:7)(cid:7)(cid:30)(cid:11)(cid:28)(cid:27)(cid:7)(cid:31)(cid:11)(cid:2)(cid:24)(cid:11)(cid:5)(cid:5)
(cid:19)(cid:4)(cid:5)(cid:15)(cid:12)(cid:7) (cid:19)(cid:2)(cid:3)(cid:7) (cid:13)(cid:15)(cid:11)(cid:24)(cid:7) (cid:11)(cid:25)(cid:7) (cid:28)(cid:14)(cid:4)(cid:15)(cid:20)(cid:7) (cid:16)(cid:15)(cid:6)(cid:11)(cid:16)(cid:7) (cid:19)(cid:20)(cid:20)(cid:4)(cid:28)(cid:15)(cid:3)(cid:22)(cid:7) (cid:14)(cid:11)(cid:26)(cid:4)(cid:5)(cid:6)(cid:7) (cid:8)(cid:9)(cid:7) (cid:17)(cid:15)(cid:11)(cid:3)(cid:25)!(cid:7) (cid:15)"(cid:18)(cid:15)(cid:3)(cid:4)(cid:15)(cid:5)(cid:28)(cid:15)(cid:7) (cid:23)(cid:4)(cid:13)(cid:14)(cid:7) (cid:19)(cid:18)(cid:15)(cid:3)(cid:11)(cid:13)(cid:4)(cid:19)(cid:5)(cid:25)(cid:22)(cid:7) #$%(cid:7) (cid:28)(cid:19)(cid:24)(cid:18)(cid:16)(cid:4)(cid:11)(cid:5)(cid:28)(cid:15)(cid:7) (cid:11)(cid:5)(cid:12)
(cid:24)(cid:15)(cid:3)(cid:6)(cid:15)(cid:3)(cid:25)(cid:7) (cid:11)(cid:5)(cid:12)(cid:7) (cid:11)(cid:28)&(cid:2)(cid:4)(cid:25)(cid:4)(cid:13)(cid:4)(cid:19)(cid:5)(cid:25)(cid:29)(cid:7) (cid:7) ’(cid:5)(cid:7) (cid:11)(cid:12)(cid:12)(cid:4)(cid:13)(cid:4)(cid:19)(cid:5)(cid:22)(cid:7) (cid:30)(cid:19)(cid:14)(cid:5)(cid:7) ((cid:3)(cid:11)(cid:2)(cid:16)(cid:7) (cid:19)(cid:4)(cid:5)(cid:15)(cid:12)(cid:7) (cid:2)(cid:25)(cid:7) (cid:11)(cid:25)(cid:7) (cid:18)(cid:3)(cid:15)(cid:25)(cid:4)(cid:12)(cid:15)(cid:5)(cid:13)(cid:7) (cid:19)(cid:20)(cid:7) (cid:25)(cid:15)(cid:16)(cid:20))(cid:25)(cid:13)(cid:19)(cid:3)(cid:11)(cid:6)(cid:15)(cid:7) (cid:19)(cid:18)(cid:15)(cid:3)(cid:11)(cid:13)(cid:4)(cid:19)(cid:5)(cid:25)(cid:29)(cid:7) (cid:7) (cid:30)(cid:19)(cid:14)(cid:5)
(cid:28)(cid:19)(cid:24)(cid:15)(cid:25)(cid:7) (cid:13)(cid:19)(cid:7) (cid:2)(cid:25)(cid:7) (cid:11)(cid:20)(cid:13)(cid:15)(cid:3)(cid:7) (cid:11)(cid:7) (cid:8)(cid:8))(cid:17)(cid:15)(cid:11)(cid:3)(cid:7) (cid:28)(cid:11)(cid:3)(cid:15)(cid:15)(cid:3)(cid:7) (cid:23)(cid:4)(cid:13)(cid:14)(cid:7) *(cid:28)(cid:1)(cid:19)(cid:5)(cid:11)(cid:16)(cid:12)!(cid:25)(cid:22)(cid:7) (cid:14)(cid:11)(cid:26)(cid:4)(cid:5)(cid:6)(cid:7) (cid:25)(cid:13)(cid:11)(cid:3)(cid:13)(cid:15)(cid:12)(cid:7) (cid:11)(cid:25)(cid:7) (cid:11)(cid:7) (cid:25)(cid:13)(cid:19)(cid:3)(cid:15)(cid:7) (cid:24)(cid:11)(cid:5)(cid:11)(cid:6)(cid:15)(cid:3)(cid:7) (cid:11)(cid:5)(cid:12)(cid:7) (cid:3)(cid:4)(cid:25)(cid:4)(cid:5)(cid:6)(cid:7) (cid:13)(cid:19)
(cid:26)(cid:4)(cid:28)(cid:15))(cid:18)(cid:3)(cid:15)(cid:25)(cid:4)(cid:12)(cid:15)(cid:5)(cid:13)(cid:7) (cid:19)(cid:26)(cid:15)(cid:3)(cid:25)(cid:15)(cid:15)(cid:4)(cid:5)(cid:6)(cid:7) +,(cid:9)(cid:7) (cid:25)(cid:13)(cid:19)(cid:3)(cid:15)(cid:25)(cid:7) (cid:11)(cid:5)(cid:12)(cid:7) (cid:19)(cid:26)(cid:15)(cid:3)(cid:7) (cid:19)(cid:5)(cid:15)(cid:7) -(cid:4)(cid:16)(cid:16)(cid:4)(cid:19)(cid:5)(cid:7) (cid:12)(cid:19)(cid:16)(cid:16)(cid:11)(cid:3)(cid:25)(cid:7) (cid:19)(cid:20)(cid:7) (cid:25)(cid:11)(cid:16)(cid:15)(cid:25)(cid:22)(cid:7) (cid:11)(cid:25)(cid:7) (cid:23)(cid:15)(cid:16)(cid:16)(cid:7) (cid:11)(cid:25)(cid:7) (cid:3)(cid:15)(cid:11)(cid:16)(cid:7) (cid:15)(cid:25)(cid:13)(cid:11)(cid:13)(cid:15)(cid:7) (cid:11)(cid:28)&(cid:2)(cid:4)(cid:25)(cid:4)(cid:13)(cid:4)(cid:19)(cid:5)(cid:25)(cid:22)
(cid:12)(cid:15)(cid:26)(cid:15)(cid:16)(cid:19)(cid:18)(cid:24)(cid:15)(cid:5)(cid:13)(cid:25)(cid:7)(cid:11)(cid:5)(cid:12)(cid:7)(cid:12)(cid:4)(cid:25)(cid:18)(cid:19)(cid:25)(cid:4)(cid:13)(cid:4)(cid:19)(cid:5)(cid:25)(cid:7)(cid:4)(cid:5)(cid:7)(cid:14)(cid:4)(cid:25)(cid:7)(cid:24)(cid:11)(cid:3)(cid:27)(cid:15)(cid:13)(cid:25)(cid:29)(cid:7)(cid:7).(cid:14)(cid:15)(cid:7)(cid:25)(cid:4)(cid:24)(cid:4)(cid:16)(cid:11)(cid:3)(cid:4)(cid:13)(cid:4)(cid:15)(cid:25)(cid:7)-(cid:15)(cid:13)(cid:23)(cid:15)(cid:15)(cid:5)(cid:7)*(cid:28)(cid:1)(cid:19)(cid:5)(cid:11)(cid:16)(cid:12)!(cid:25)(cid:7)(cid:11)(cid:5)(cid:12)(cid:7)/(cid:2)-(cid:16)(cid:4)(cid:28)(cid:7)#(cid:13)(cid:19)(cid:3)(cid:11)(cid:6)(cid:15)(cid:7)(cid:11)(cid:3)(cid:15)
(cid:11)(cid:25)(cid:13)(cid:19)(cid:2)(cid:5)(cid:12)(cid:4)(cid:5)(cid:6)(cid:29)(cid:7) (cid:7) ’(cid:5)(cid:7) (cid:20)(cid:11)(cid:28)(cid:13)(cid:22)(cid:7) (cid:4)(cid:5)(cid:7) 012+(cid:22)(cid:7) 3(cid:11)(cid:3)(cid:26)(cid:15)(cid:17)(cid:7) (cid:23)(cid:3)(cid:19)(cid:13)(cid:15)(cid:7) (cid:11)(cid:5)(cid:7) (cid:11)(cid:3)(cid:13)(cid:4)(cid:28)(cid:16)(cid:15)(cid:7) (cid:20)(cid:19)(cid:3)(cid:7) (cid:13)(cid:14)(cid:15)(cid:7) (cid:25)(cid:15)(cid:16)(cid:20))(cid:25)(cid:13)(cid:19)(cid:3)(cid:11)(cid:6)(cid:15)(cid:7) (cid:4)(cid:5)(cid:12)(cid:2)(cid:25)(cid:13)(cid:3)(cid:4)(cid:15)(cid:25)(cid:7) (cid:16)(cid:15)(cid:11)(cid:12)(cid:4)(cid:5)(cid:6)(cid:7) (cid:13)(cid:3)(cid:11)(cid:12)(cid:15)(cid:7) (cid:19)(cid:2)(cid:3)(cid:5)(cid:11)(cid:16)
(cid:28)(cid:19)(cid:24)(cid:18)(cid:11)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7) (cid:13)(cid:14)(cid:15)(cid:7) (cid:13)(cid:23)(cid:19)(cid:7) (cid:28)(cid:19)(cid:24)(cid:18)(cid:11)(cid:5)(cid:4)(cid:15)(cid:25)(cid:22)(cid:7) (cid:28)(cid:19)(cid:24)(cid:24)(cid:15)(cid:5)(cid:13)(cid:4)(cid:5)(cid:6)(cid:7) (cid:13)(cid:14)(cid:11)(cid:13)(cid:7) (cid:23)(cid:15)(cid:7) (cid:11)(cid:3)(cid:15)(cid:7) (cid:4)(cid:5)(cid:7) (cid:13)(cid:14)(cid:15)(cid:7) (cid:28)(cid:19)(cid:5)(cid:25)(cid:2)(cid:24)(cid:15)(cid:3)(cid:7) (cid:25)(cid:15)(cid:3)(cid:26)(cid:4)(cid:28)(cid:15)(cid:7) -(cid:2)(cid:25)(cid:4)(cid:5)(cid:15)(cid:25)(cid:25)(cid:7) (cid:25)(cid:15)(cid:16)(cid:16)(cid:4)(cid:5)(cid:6)(cid:7) 4(cid:25)(cid:13)(cid:19)(cid:3)(cid:11)(cid:6)(cid:15)
-(cid:2)(cid:3)(cid:6)(cid:15)(cid:3)(cid:25)(cid:29)5(cid:7)(cid:7)’(cid:13)(cid:7)(cid:19)(cid:5)(cid:16)(cid:17)(cid:7)(cid:13)(cid:19)(cid:19)(cid:27)(cid:7)(cid:2)(cid:25)(cid:7)02(cid:7)(cid:17)(cid:15)(cid:11)(cid:3)(cid:25)(cid:7)(cid:13)(cid:19)(cid:7)(cid:14)(cid:4)(cid:3)(cid:15)(cid:7)(cid:11)(cid:7)*(cid:28)(cid:1)(cid:19)(cid:5)(cid:11)(cid:16)(cid:12)!(cid:25)(cid:7)(cid:15)"(cid:15)(cid:28)(cid:2)(cid:13)(cid:4)(cid:26)(cid:15)(cid:29)
(cid:12)(cid:13)(cid:7)(cid:14)(cid:15)(cid:15)(cid:16)
6(cid:11)(cid:25)(cid:13)(cid:7)(cid:17)(cid:15)(cid:11)(cid:3)(cid:7)(cid:23)(cid:15)(cid:7)(cid:25)(cid:13)(cid:11)(cid:13)(cid:15)(cid:12)(cid:7)(cid:13)(cid:14)(cid:11)(cid:13)(cid:7)(cid:13)(cid:19)(cid:7)(cid:28)(cid:19)(cid:24)(cid:18)(cid:15)(cid:13)(cid:15)(cid:7)(cid:15)(cid:20)(cid:20)(cid:15)(cid:28)(cid:13)(cid:4)(cid:26)(cid:15)(cid:16)(cid:17)(cid:7)(cid:4)(cid:5)(cid:7)(cid:19)(cid:2)(cid:3)(cid:7)-(cid:2)(cid:25)(cid:4)(cid:5)(cid:15)(cid:25)(cid:25)(cid:7)(cid:11)(cid:5)(cid:12)(cid:7)(cid:18)(cid:3)(cid:19)(cid:25)(cid:18)(cid:15)(cid:3)(cid:22)(cid:7)(cid:23)(cid:15)(cid:7)(cid:5)(cid:15)(cid:15)(cid:12)(cid:15)(cid:12)(cid:7)(cid:13)(cid:19)(cid:7)(cid:11)(cid:28)(cid:14)(cid:4)(cid:15)(cid:26)(cid:15)(cid:7)(cid:19)(cid:18)(cid:15)(cid:3)(cid:11)(cid:13)(cid:4)(cid:19)(cid:5)(cid:11)(cid:16)
(cid:15)"(cid:28)(cid:15)(cid:16)(cid:16)(cid:15)(cid:5)(cid:28)(cid:15)(cid:7)(cid:23)(cid:4)(cid:13)(cid:14)(cid:7)(cid:11)(cid:7)(cid:28)(cid:2)(cid:25)(cid:13)(cid:19)(cid:24)(cid:15)(cid:3)(cid:7)(cid:28)(cid:15)(cid:5)(cid:13)(cid:3)(cid:4)(cid:28)(cid:7)(cid:20)(cid:19)(cid:28)(cid:2)(cid:25)(cid:7)7(cid:7)(cid:11)(cid:7)-(cid:2)(cid:25)(cid:4)(cid:5)(cid:15)(cid:25)(cid:25)(cid:7)(cid:19)(cid:18)(cid:15)(cid:3)(cid:11)(cid:13)(cid:4)(cid:19)(cid:5)(cid:7)(cid:13)(cid:14)(cid:11)(cid:13)(cid:7)(cid:20)(cid:19)(cid:28)(cid:2)(cid:25)(cid:15)(cid:25)(cid:7)(cid:19)(cid:5)(cid:7)(cid:28)(cid:2)(cid:25)(cid:13)(cid:19)(cid:24)(cid:15)(cid:3)(cid:7)(cid:18)(cid:3)(cid:15)(cid:20)(cid:15)(cid:3)(cid:15)(cid:5)(cid:28)(cid:15)(cid:25)(cid:22)(cid:7)(cid:25)(cid:15)(cid:3)(cid:26)(cid:4)(cid:28)(cid:15)(cid:25)
(cid:11)(cid:5)(cid:12)(cid:7)(cid:26)(cid:11)(cid:16)(cid:2)(cid:15)(cid:25)(cid:29)(cid:7)(cid:7)8(cid:15)(cid:7)(cid:4)(cid:12)(cid:15)(cid:5)(cid:13)(cid:4)(cid:20)(cid:4)(cid:15)(cid:12)(cid:7)(cid:23)(cid:14)(cid:11)(cid:13)(cid:7)(cid:14)(cid:11)(cid:25)(cid:7)-(cid:15)(cid:28)(cid:19)(cid:24)(cid:15)(cid:7)(cid:27)(cid:5)(cid:19)(cid:23)(cid:5)(cid:7)(cid:11)(cid:25)(cid:7)(cid:13)(cid:14)(cid:15)(cid:7)(cid:13)(cid:14)(cid:3)(cid:15)(cid:15)(cid:7)/!(cid:25)9
: /(cid:15)(cid:19)(cid:18)(cid:16)(cid:15)9(cid:7) (cid:7) 3(cid:4)(cid:3)(cid:15)(cid:22)(cid:7) (cid:13)(cid:3)(cid:11)(cid:4)(cid:5)(cid:7) (cid:11)(cid:5)(cid:12)(cid:7) (cid:3)(cid:15)(cid:13)(cid:11)(cid:4)(cid:5)(cid:7) (cid:19)(cid:2)(cid:13)(cid:25)(cid:13)(cid:11)(cid:5)(cid:12)(cid:4)(cid:5)(cid:6)(cid:7) (cid:18)(cid:15)(cid:19)(cid:18)(cid:16)(cid:15)(cid:29)(cid:7) (cid:7) ;(cid:16)(cid:16)(cid:7) (cid:19)(cid:20)(cid:7) (cid:19)(cid:2)(cid:3)(cid:7) (cid:18)(cid:15)(cid:3)(cid:25)(cid:19)(cid:5)(cid:5)(cid:15)(cid:16)(cid:7) (cid:24)(cid:2)(cid:25)(cid:13)(cid:7) -(cid:15)(cid:7) (cid:28)(cid:2)(cid:25)(cid:13)(cid:19)(cid:24)(cid:15)(cid:3)(cid:7) (cid:20)(cid:19)(cid:28)(cid:2)(cid:25)(cid:15)(cid:12)(cid:22)
(cid:27)(cid:5)(cid:19)(cid:23)(cid:16)(cid:15)(cid:12)(cid:6)(cid:15)(cid:11)-(cid:16)(cid:15)(cid:7)(cid:19)(cid:20)(cid:7)(cid:19)(cid:2)(cid:3)(cid:7)(cid:18)(cid:3)(cid:19)(cid:12)(cid:2)(cid:28)(cid:13)(cid:25)(cid:7)(cid:11)(cid:5)(cid:12)(cid:7)(cid:14)(cid:11)(cid:26)(cid:15)(cid:7)(cid:13)(cid:14)(cid:15)(cid:7)(cid:12)(cid:15)(cid:25)(cid:4)(cid:3)(cid:15)(cid:7)(cid:11)(cid:5)(cid:12)(cid:7)(cid:11)-(cid:4)(cid:16)(cid:4)(cid:13)(cid:17)(cid:7)(cid:13)(cid:19)(cid:7)(cid:18)(cid:3)(cid:19)(cid:26)(cid:4)(cid:12)(cid:15)(cid:7)(cid:15)"(cid:28)(cid:15)(cid:18)(cid:13)(cid:4)(cid:19)(cid:5)(cid:11)(cid:16)(cid:7)(cid:25)(cid:15)(cid:3)(cid:26)(cid:4)(cid:28)(cid:15)(cid:29)
: /(cid:3)(cid:19)(cid:12)(cid:2)(cid:28)(cid:13)9(cid:7) (cid:7) ;(cid:28)&(cid:2)(cid:4)(cid:3)(cid:15)(cid:22)(cid:7) (cid:12)(cid:15)(cid:26)(cid:15)(cid:16)(cid:19)(cid:18)(cid:22)(cid:7) (cid:3)(cid:15)(cid:14)(cid:11)-(cid:4)(cid:16)(cid:4)(cid:13)(cid:11)(cid:13)(cid:15)(cid:7) (cid:11)(cid:5)(cid:12)(cid:7) (cid:24)(cid:11)(cid:4)(cid:5)(cid:13)(cid:11)(cid:4)(cid:5)(cid:7) &(cid:2)(cid:11)(cid:16)(cid:4)(cid:13)(cid:17)(cid:7) (cid:20)(cid:11)(cid:28)(cid:4)(cid:16)(cid:4)(cid:13)(cid:4)(cid:15)(cid:25)(cid:7) (cid:13)(cid:14)(cid:11)(cid:13)(cid:7) -(cid:2)(cid:4)(cid:16)(cid:12)(cid:7) (cid:2)(cid:18)(cid:19)(cid:5)(cid:7) (cid:19)(cid:2)(cid:3)(cid:7) (cid:20)(cid:3)(cid:11)(cid:5)(cid:28)(cid:14)(cid:4)(cid:25)(cid:15)(cid:29)
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(cid:24)(cid:11)(cid:4)(cid:5)(cid:13)(cid:11)(cid:4)(cid:5)(cid:15)(cid:12)(cid:7)(cid:11)(cid:5)(cid:12)(cid:7)(cid:28)(cid:19)(cid:5)(cid:26)(cid:15)(cid:17)(cid:7)(cid:11)(cid:7)(cid:25)(cid:15)(cid:5)(cid:25)(cid:15)(cid:7)(cid:19)(cid:20)(cid:7)(cid:25)(cid:15)(cid:28)(cid:2)(cid:3)(cid:4)(cid:13)(cid:17)(cid:29)
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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, 2003 or
[ ] 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
9.500% Cumulative Preferred Stock, Series D, $.01 par value............................................
10.000% Cumulative Preferred Stock, Series E, $.01 par value ..........................................
9.750% Cumulative Preferred Stock, Series F, $.01 par value ............................................
Depositary Shares Each Representing 1/1,000 of a Share of 8.750% 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 6.500% Cumulative Preferred
Stock, Series W $.01 par value ....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 6.450% Cumulative Preferred
Stock, Series X $.01 par value .....................................................................................
Depositary Shares Each Representing 1/1,000 of a Share of 6.250% Cumulative Preferred
Stock, Series Z $.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,
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 and non-voting common stock held by non-affiliates of the Registrant as
of June 30, 2003:
Common Stock, $0.10 Par Value - $2,616,897,000 (computed on the basis of $33.87 per share which was the
reported closing sale price of the Company’s Common Stock on the New York Stock Exchange on June 30, 2003).
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series A, $.01 Par Value - $211,681,000
(computed on the basis of $28.40 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, 2003).
The number of shares outstanding of the registrant’s classes of common stock as of March 5, 2004:
Common Stock, $.10 Par Value (cid:150) 127,898,544 shares
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series A, $.01 Par Value (cid:150) 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(cid:146) meeting to be held
in 2004 are incorporated by reference into Part III.
2
ITEM 1.
Business
Forward Looking Statements
PART I
When used within this document, the words (cid:147)expects,(cid:148) (cid:147)believes,(cid:148) (cid:147)anticipates,(cid:148) (cid:147)should,(cid:148) (cid:147)estimates,(cid:148) and
similar expressions are intended to identify (cid:147)forward-looking statements(cid:148) 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, (cid:147)Risk Factors(cid:148) 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(cid:146)s facilities; difficulties in the Company(cid:146)s ability to evaluate,
finance and integrate acquired and developed properties into the Company(cid:146)s existing operations and to fill up those
properties, which could adversely affect the Company(cid:146)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(cid:146)s expense and reduce the Company(cid:146)s cash available for
distribution; consumers(cid:146) failure to accept the containerized storage concept which would reduce the Company(cid:146)s
profitability; difficulties in raising capital at reasonable rates, which would impede the Company(cid:146)s ability to grow;
delays in the development process, which could adversely affect the Company(cid:146)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 ((cid:147)REIT(cid:148)) 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
1,410 storage facilities containing approximately 85.2 million square feet of net rentable space at December 31,
2003. Our common stock is traded on the New York Stock Exchange under the symbol (cid:147)PSA(cid:148). We also have a
44% ownership interest in PS Business Parks, Inc., which, as of December 31, 2003, owned and operated
commercial properties containing approximately 18.3 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 (cid:147)PSB.(cid:148)
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 ((cid:147)SEC(cid:148))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(cid:146)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.
3
Management
Ronald L. Havner, Jr. (46) 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., ((cid:147)PSB(cid:148)) an affiliate of the Company. Mr. Havner continues as chairman of PSB.
B. Wayne Hughes (70) is chairman of the board of directors, a position he has held since 1991. Mr.
Hughes plans to remain active in the Company(cid:146)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 (67), President and Chief Operating Officer, 26 years; John Reyes (43), Senior Vice President -
Chief Financial Officer, 13 years; and John S. Baumann (43), Senior Vice President (cid:150) Chief Legal Officer, who
joined the Company in June 2003.
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 11,
2004.
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 and
development of real estate facilities. 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 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 self
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.
4
Business Attributes
We believe that the Company possesses several primary business attributes that permit us to compete
effectively:
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
provides added customer service and helps to 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 enhances 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 (cid:147)PSPUD(cid:148)) to operate storage facilities
that rent portable storage containers to customers for storage in central facilities.
Management adopted a business plan in 2002 that included the closure of 22 non-strategic containerized
storage facilities of the then 55 facilities. During 2003, an additional nine facilities were identified as non-strategic
and scheduled for closure. As of December 31, 2003, six of the 31 facilities scheduled for closure were still in
operation - however, these facilities are in the process of closing which may take until the end of the second quarter
of 2004 to close.
The concept of PSPUD is to provide an alternative to a traditional self-storage facility. PSPUD delivers a
storage container(s) to the customer(cid:146)s location where the customer, at his convenience, packs his goods into the
storage container. PSPUD will subsequently return to the customer(cid:146)s location to retrieve the storage container(s) for
storage in a central facility. At December 31, 2003, PSPUD had 24 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 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 five
years.
In addition, full-service retail stores have been retrofitted to some existing storage facility rental offices or
(cid:147)built-in(cid:148) 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 tenants against lost or damaged goods stored by tenants in the Company(cid:146)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.
5
Economies of scale: We are the largest provider of storage space in the industry. As of December 31,
2003, we operated 1,410 storage facilities in which we had an interest and managed 29 storage facilities for third
parties. These facilities are in markets within 37 states. At December 31, 2003, we had over 714,000 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.
Brand name recognition: Our operations are conducted under the (cid:147)Public Storage(cid:148) 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 repurpose
real estate previously used for 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 (cid:147)Other Investments(cid:148) in Note 6 to the Company(cid:146)s consolidated financial statements
for the year ended December 31, 2003, as well as the (cid:147)Other Partnership Interests(cid:148) in Note 9 to the Company(cid:146)s
consolidated financial statements for the year ended December 31, 2003.
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.
Develop properties in selected markets: Since 1995, the Company and its joint venture partnerships
(described below in (cid:147)Financing of the Company(cid:146)s Growth Strategies(cid:148)) have opened a total of 133 facilities,
including 24 facilities in 1999, 27 facilities in 2000, 22 facilities in 2001, 16 facilities in 2002 and 14 facilities in
2003. As of December 31, 2003, the Company has a development (cid:147)pipeline(cid:148) of 38 self-storage facilities and
expansions to existing storage facilities with an aggregate estimated cost of approximately $156.3 million.
Development of these facilities is subject to significant contingencies such as obtaining appropriate governmental
6
agency approvals. The Company continues to seek attractive sites for development of additional storage facilities
and evaluates existing sites for expansion or enhancement opportunities.
Improve the operating performance of containerized storage operations and repurpose real estate space
previously used by the containerized storage operations: During 2002 and 2003, management closed certain non-
strategic containerized storage facilities (the (cid:147)Closed Facilities(cid:148)), with the number of PSPUD(cid:146)s facilities decreasing
from 55 at December 31, 2001 to 24 at December 31, 2003.
Certain of the Closed Facilities were operated in real estate facilities owned by the Company. Through
December 31, 2003, the Company had converted 208,000 net rentable square feet of industrial space previously used
by the Closed Facilities into self-storage space, and was in the process of converting another 779,000 net rentable
square feet of such space.
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(cid:146)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.
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 (cid:147)Operating Partnership(cid:148)) 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 (cid:147)PSB(cid:148)).
The Company has a 44% common equity interest in PSB as of December 31, 2003, comprised 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, 2003, PSB owned and operated approximately 18.3 million net rentable square feet of
commercial space located in eight states.
In addition to our investment in PSB, we have direct interests in three commercial facilities with an
aggregate of 204,000 net rentable square feet. In addition, certain of the Company(cid:146)s self-storage facilities rent a
total of 1,187,000 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(cid:146)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 does not expect such items to
be a significant part of its investing activities.
•
Investing in the securities of other issuers for the purpose of exercising control: There have been two
instances in the past four 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
7
estate acquisition strategy. The Company also owns partnership interests in various consolidated and
unconsolidated partnerships. See (cid:147)Investments in Real Estate and Real Estate Entities.(cid:148)
• Underwriting 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 REITs. 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(cid:146)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(cid:146)s common
stock on the open market or in privately negotiated transactions. Cumulatively through March 10,
2004, we repurchased a total of 21,672,020 shares of common stock at an aggregate cost of
approximately $541,863,000. Cumulatively through March 10, 2004, we have called for redemption
or repurchased $954.5 million of our senior preferred stock and $80.0 million of our preferred
partnership units for cash, representing a refinancing of these securities into lower-coupon preferred
securities. Any future repurchases of the Company(cid:146)s common stock will depend primarily upon the
attractiveness of repurchases compared to our other investment alternatives. Future redemptions or
repurchases of the Company(cid:146)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(cid:146)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
(cid:147)Management(cid:146)s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital
Resources.(cid:146)(cid:146) Our present intent is to continue to finance substantially all our growth with permanent capital.
Borrowings: We have in the past used our $200 million line of credit described below under
(cid:147)Borrowings(cid:148) as temporary (cid:147)bridge(cid:148) 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 (cid:147)Limitations on
Borrowings(cid:148) 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(cid:146)s Common Stock and Equity Stock. At
December 31, 2003, we had approximately $1.9 billion of preferred stock outstanding, excluding one series that
was called for redemption on December 5, 2003 and subsequently repurchased on January 19, 2004. 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.
8
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.
In November 1999, we formed PSAC Development Partners, L.P., (the (cid:147)Consolidated Development Joint
Venture(cid:148)) 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, 2003, PSAC Development Partners, L.P. had
completed construction on 22 storage facilities with a total cost of approximately $108.6 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(cid:146)s
interest, PSAC Development Partners, L.P.(cid:146)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,
2003). 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(cid:146) 1% interest can increase to up to 10%.
Disposition of properties: During 2003, the Company sold certain self-storage facilities, which were
located in non-strategic markets and locations, for an aggregate of approximately $21.0 million. The Company
used the proceeds from these sales as a source of funding for developments and third-party acquisitions. The
Company continually reviews its portfolio for facilities that are not strategically located and determines the proper
method of disposition of these facilities.
See (cid:147)Management(cid:146)s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity
and Capital Resources.(cid:146)(cid:146)
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, (cid:147)Properties(cid:148)), 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.
9
• 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,
(cid:147)Properties(cid:148)), containing commercial and industrial rental space, primarily through our investment in
PS Business Parks.
• The Company has a pipeline of 38 development projects, including 25 expansions of real estate
facilities, for a total cost of $156.3 million. See (cid:147)Management(cid:146)s Discussion and Analysis of Financial
Condition and Results of Operations (cid:150) Liquidity and Capital Resources.(cid:148)
The following table outlines our ownership interest in self-storage facilities at December 31, 2003:
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 ..............................
889
485
1,374
36
1,410
54,896
28,117
83,013
2,186
85,199
(a) Square footage for the consolidated facilities includes 1,535,000 net rentable square feet of
industrial space for use in containerized storage activities.
In addition to the Company(cid:146)s interest in self-storage facilities noted above, the Company owns three stand-
alone commercial facilities with an aggregate of 204,000 net rentable square feet, owns five industrial facilities with
an aggregate of 404,000 net rentable square feet used by the continuing containerized storage operations, and has
1,187,000 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, 2003 owned and operated 18.3
million net rentable square feet of commercial space.
Facilities Owned by Controlled Entities
In addition to our direct ownership of 889 storage facilities, at December 31, 2003, we had controlling
ownership interests in 38 entities owning in aggregate 485 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(cid:146)s financial statements.
Facilities Owned by Unconsolidated Entities
At December 31, 2003, we had ownership interests in PSB and seven limited partnerships (collectively the
(cid:147)Unconsolidated Entities(cid:148)). Our ownership interest in these entities is less than 50%.
Due to the Company(cid:146)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 in the Company(cid:146)s consolidated financial statements. The seven limited
10
partnerships do not have any significant amounts of debt or other obligations. See Note 6 to the Company(cid:146)s
financial statements for the year ended December 31, 2003 for further disclosure regarding the assets and liabilities
of the Unconsolidated Entities.
The following chart sets forth, as of December 31, 2003, 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 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.
(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.
11
(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.
12
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 (cid:147)Credit Agreement(cid:148)) that has a maturity date of
October 31, 2004 and bears an annual interest rate ranging from the London Interbank Offered Rate ((cid:147)LIBOR(cid:148)) 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, 2003 and March 11, 2004, we had 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(cid:146) 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,
2003.
As of December 31, 2003, we had notes payable of approximately $76 million. See Notes 7 and 8 to the
consolidated financial statements for a summary of the Company(cid:146)s borrowings at December 31, 2003.
Subject to a limitation on unsecured borrowings in the Company’s Bylaws (described below), we have
broad powers to borrow in support 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.
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, 2003, the
Debt Ratio was approximately 1.2%. ’’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
13
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 approximately 4,500 employees at December 31, 2003 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 we 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 we distribute to our shareholders.
Our taxable REIT subsidiaries will be taxed on their taxable income.
For Federal tax purposes, our distributions to our 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) may be treated as nontaxable returns of capital or as capital gain to the extent the distributions exceed a
shareholder(cid:146)s adjusted basis in the shares.
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. ((cid:147)STOR-Re(cid:148)), one of the Consolidated Entities. The Company also 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(cid:146) maximum aggregate annual exposure for losses that are below
the deductibles set forth in the third-party insurance contracts, assuming multiple significant insurable events occur,
is approximately $30 million. In addition, if losses exhaust the third-party insurers(cid:146) limit of coverage of $125
million for property coverage and $101 million 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 11, 2004, the Hughes family owned approximately 36% 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.
14
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(cid:146) then market value or for other reasons.
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. REITs are subject to a range of complex
organizational and operational requirements. As a REIT, we must distribute at least 90% of our REIT taxable
income to our shareholders. Other restrictions apply to our income and assets. Our REIT status is also dependent
upon the ongoing qualification of PS Business Parks, Inc. as a REIT, as a result of our substantial ownership interest
in that company.
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 (cid:147)taxable REIT subsidiaries(cid:148) 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, 2003, our debt of $76 million was approximately 1.5% 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,
15
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;
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 95% of our rental revenue during 2003. 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(cid:146)s Discussion and Analysis of Financial Condition and Results of Operations
(cid:150) Self-Storage Operations, the net operating income prior to depreciation of the Consistent Group of facilities
declined 1.8% in the year ended December 31, 2003 as compared to 2002. 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, whether from environmental or microbial issues, also may adversely affect
the owner(cid:146)s or operator(cid:146)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
16
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.
There has been an increasing number of claims and litigation against owners and managers of rental
properties relating to moisture infiltration, which can result in mold or other property damage. When we receive a
complaint concerning moisture infiltration, condensation or mold problems and/or become aware that an air quality
concern exists, we implement corrective measures in accordance with guidelines and protocols we have developed
with the assistance of outside experts. We seek to work proactively with our tenants to resolve moisture infiltration
and mold-related issues, subject to our contractual limitations on liability for such claims. However, we can make
no assurance that material legal claims relating to moisture infiltration and the presence of, or exposure to, mold will
not arise in the future.
Delays in development and fill-up of our properties would reduce our profitability. Since January 1, 1999,
we have opened 63 newly developed self storage facilities and 17 facilities that combine self storage and
containerized storage space at the same location, with aggregate development costs of $534.6 million. At December
31, 2003 the Company had 38 projects in development that have total estimated costs of $156.3 million.
Construction delays due to weather, unforeseen site conditions, personnel problems, and other factors, as well as
cost overruns, would adversely affect the Company(cid:146)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(cid:146)s profitability.
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(cid:146)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 (cid:147)ADA(cid:148)). The ADA has separate compliance requirements for (cid:147)public accommodations(cid:148) and
(cid:147)commercial facilities,(cid:148) 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
B. Wayne Hughes, Chairman of the Board, and his family (the (cid:147)Hughes Family(cid:148)) have ownership interests
in, and operate, approximately 38 self-storage facilities in Canada under the name (cid:147)Public Storage.(cid:148) We currently do
not own any interests in these facilities nor do we own any facilities in Canada. The Hughes Family owns
approximately 36% of our common stock outstanding at December 31, 2003. We have a right of first refusal to
acquire the stock or assets of the corporation engaged in the operation of the 38 self-storage facilities in Canada if
the Hughes Family or the corporation agrees to sell them. However, we have no interest in the operations of this
corporation, 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 self-storage facilities.
Company personnel have been engaged in the supervision and the operation of these 38 properties and have
provided certain administrative services for the Canadian owners, and certain other services, primarily tax services,
with respect to certain other Hughes Family interests. The Hughes Family and the Canadian owners have
reimbursed us at cost for these services (U.S. $542,499 with respect to the Canadian operations and U.S. $151,063
17
for other services during 2003). There have been conflicts of interest in allocating time of our personnel between
Company properties, the Canadian properties, and certain other Hughes Family interests. The sharing of Company
personnel with the Canadian entities was substantially eliminated by December 31, 2003.
Our containerized storage business has incurred operating losses.
Public Storage Pickup & Delivery ((cid:147)PSPUD(cid:148)) was organized in 1996 to operate a portable self-storage
business. We own all of the economic interest of PSPUD. We cannot provide any assurance as to its ultimate
profitability, because this is a relatively new business segment. PSPUD incurred operating losses amounting to
$5,135,000 in 2000, $2,218,000 in 2001, $10,058,000 in 2002 and operating income of $2,543,000 in 2003. PSPUD
closed 31 facilities that were deemed not strategic to the Company(cid:146)s business plan during 2002 and 2003.
The operating loss for 2002 includes a write-down for impaired assets totaling $6,924,000 and lease
termination charges of $2,447,000. The operating income for 2003 was reduced by impairment charges and losses
on sale of $3,584,000 related to the fixed assets used in operations.
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.
Recently enacted tax legislation could adversely affect the price of our stock.
Tax legislation enacted in 2003 generally reduces the maximum tax rate for dividends payable to
individuals to 15% through 2008. Dividends payable by REITs, however, generally continue to be taxed at the
normal rate applicable to the individual recipient, rather than the preferential rates applicable to other dividends.
Although this legislation does not adversely affect the taxation of REITs or dividends paid by REITs, the more
favorable rates applicable to regular corporate dividends could cause investors who are individuals to perceive
investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that
pay dividends, which could adversely affect the value of the stock of REITs, including our common stock.
Developments in California may have an adverse impact on our business.
We are headquartered in, and approximately one-quarter of our properties are located in, California.
California is facing serious budgetary problems. Action that may be taken in response to these problems, such as an
increase in property taxes on commercial properties, could adversely impact our business and results of operations.
In addition, we could be adversely impacted by the recently enacted legislation mandating, beginning in 2006,
medical insurance for employees of California businesses and members of their families.
18
ITEM 2.
Properties
At December 31, 2003, we had direct and indirect ownership interests in 1,410 storage facilities located in
37 states:
At December 31, 2003
Number of Storage
Facilities (a)
Net Rentable Square Feet
(in thousands)
California:
Northern...........................
Southern...........................
Texas .......................................
Florida .....................................
Illinois .....................................
Georgia ....................................
Colorado ..................................
Washington..............................
Maryland .................................
New Jersey ..............................
Missouri...................................
Virginia....................................
New York ................................
Ohio.........................................
Oregon.....................................
North Carolina.........................
South Carolina.........................
Tennessee ................................
Kansas .....................................
Nevada.....................................
Alabama ..................................
Other states (17 states).............
Totals ...............................
143
167
163
139
95
62
50
43
43
42
38
38
36
30
25
24
24
23
22
22
22
159
1,410
8,222
10,852
10,989
8,199
5,829
3,626
3,145
2,736
2,458
2,449
2,172
2,294
2,127
1,863
1,171
1,266
1,082
1,311
1,316
1,409
895
9,788
85,199
(a) Includes 1,374 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(cid:146)s
2003 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, 2003, the
weighted average occupancy level and the average total rental income per rentable square foot for our self-storage
facilities were approximately 87.9% and $11.37, respectively. Included in the 1,410 storage facilities are 80 newly
developed facilities opened since January 1, 1999, substantially all of which were in the fill-up stage in the year
ended December 31, 2003.
At December 31, 2003, 21 of our facilities were encumbered by an aggregate of $16.6 million in mortgage
debt.
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 95% 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
19
uncovered parking areas for vehicle storage, as well as space for portable storage containers. Leases for storage
facility 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, the size of the storage space and length of stay.
All of our storage facilities are operated under the "Public Storage" name.
Users of space in storage facilities include individuals and large and small businesses. Individuals usually
obtain 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.
Our storage facilities 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 1,410 storage facilities, we have an interest in PSB,
which, as of December 31, 2003, owns and operates 18.3 million net rentable square feet in eight states. At
December 31, 2003, our investment in PS Business Parks represents less than 6% of our total assets based upon cost
of $282.4 million. The market value of our investment in PSB at December 31, 2003 of $525.0 million represents
10.5% of the book value of our total assets at December 31, 2003 of approximately $5.0 billion. We also directly
own three commercial properties with 204,000 net rentable square feet, have 1,187,000 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 404,000 net rentable square feet that are being used by the continuing containerized storage operations.
The commercial properties owned by PSB consist of flex space, office space and industrial space. Flex
space 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 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. PSB also owns industrial
space that has characteristics similar to the warehouse component of the flex space.
20
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(cid:146)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(cid:146)s overall business, financial condition, or results of operations.
ITEM 3.
Legal Proceedings
Serrao v. Public Storage, Inc. (filed April 2003) (Superior Court (cid:150) Orange County)
The plaintiff in this case filed a suit against the Company on behalf of a putative class of renters who rented
self-storage units from the Company. Plaintiff alleges that the Company misrepresented the size of its storage units,
has brought claims under California statutory and common law relating to consumer protection, fraud, unfair
competition, and negligent misrepresentation, and is seeking monetary damages, restitution, and declaratory and
injunctive relief.
The claim in this case is substantially similar to those in Henriquez v. Public Storage, Inc., which was
disclosed in prior reports. In January 2003, the plaintiff caused the Henriquez action to be dismissed. Based upon
the uncertainty inherent in any putative class action, the Company cannot presently determine the potential damages,
if any, or the ultimate outcome of this litigation. On November 3, 2003, the court granted the Company(cid:146)s motion to
strike the plaintiff(cid:146)s nationwide class allegations and to limit any putative class to California residents only. The
Company is vigorously contesting the claims upon which this lawsuit is based including class certification efforts.
Salaam, et al v. Public Storage, Inc. (filed February 2000) (Superior Court (cid:150) Los Angeles County)
The plaintiffs in this case are suing the Company on behalf of a putative 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. On December 1, 2003, the California Court of
Appeals affirmed the Supreme Court(cid:146)s 2002 denial of plaintiff(cid:146)s motion for class certification. The maximum
potential liability cannot be estimated, but can only be increased if claims are permitted to be brought on behalf of
others under the California Unfair Business Practices Act. The affirmation of denial of class certification does not
address 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, including by opposing claims on behalf of others under the California Unfair Business
Practices Act. The Company cannot presently determine the potential damages, if any, or the ultimate outcome of
this litigation.
Gustavson et al. v. Public Storage, Inc. (filed June 2003) (Superior Court-Los Angeles County)
In November 2002, a shareholder of the Company made a demand on the Board of Directors that
challenged the fairness of the Company(cid:146)s acquisition of PS Insurance Company, Ltd. ((cid:147)PSIC(cid:148)) and demanded that
the Board recover the profits earned by PSIC from November 1995 through December 2001 and that the entire
purchase price paid by the Company for PSIC in excess of PSIC(cid:146)s net assets be returned to the Company.
The contract to acquire PSIC was approved by the independent directors of the Company in March 2001,
and the transaction was closed in December 2001. PSIC was formerly owned by B. Wayne Hughes, currently the
Chairman of the Board (and in 2001 also the Chief Executive Officer) of the Company, B. Wayne Hughes, Jr.,
currently a director (and in 2001 also an officer) of the Company and Tamara H. Gustavson, who in 2001 was an
officer of the Company. In exchange for the Hughes family(cid:146)s shares in PSIC, the Company issued to them
1,439,765 shares of common stock (or a net of 1,138,733 shares, after taking into account 301,032 shares held by
PSIC).
21
The shareholder has threatened litigation against the Hughes family and the directors of the Company
arising out of this transaction and alleged a pattern of deceptive disclosures with respect to PSIC since 1995. In
December 2002, the Board held a special meeting to authorize an inquiry by its independent directors to review the
fairness to the Company(cid:146)s shareholders of its acquisition of PSIC and the ability of the Company to have started its
own tenant reinsurance business in 1995. The Company believes that, prior to the effectiveness in 2001 of the
federal REIT Modernization Act and corresponding California legislation that authorized the creation and ownership
of (cid:147)taxable REIT subsidiaries,(cid:148) the ownership by the Company of a reinsurance business relating to its tenants
would have jeopardized the Company(cid:146)s status as a REIT and that other REITs faced similar concerns about tenant
insurance programs.
In June 2003, the Hughes family filed a complaint for declaratory relief relating to the Company(cid:146)s
acquisition of PSIC naming the Company as defendant. The Hughes family is seeking that the court make (i) a
binding declaration that the Company either is not entitled to recover profits or other moneys earned by PSIC from
November 1995 through December 2001; or alternatively the amounts that the Hughes family should be ordered to
surrender to the Company if the court determines that the Company is entitled to recover any such profits or
moneys; and (ii) a binding declaration either that the Company cannot establish that the acquisition agreement was
not just and reasonable as to the Company at the time it was authorized, approved or ratified; or alternatively the
amounts that the Hughes family should surrender to the Company, if the court determines that the agreement was
not just and reasonable to the Company at that time. The Hughes family is not seeking any payments from the
Company. In the event of a determination that the Hughes family is obligated to pay certain amounts to the
Company, the complaint states that they have agreed to be bound by that determination to pay such amounts to the
Company.
In July 2003 the Company filed an answer to the Hughes family(cid:146)s complaint requesting a final judicial
determination of the Company(cid:146)s rights of recovery against the Hughes family in respect of PSIC. In September
2003, by order of the Superior Court, Malcolm Lucas, a former chief justice of the California Supreme Court, was
appointed to try the case. Discovery is proceeding and it is expected that in mid-2004, Mr. Lucas will set a trial date
for the matter. The Company believes that the lawsuit by the Hughes family will ultimately resolve matters relating
to PSIC and will not have any financially adverse effect on the Company (other than the costs and other expenses
relating to the lawsuit).
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(cid:146)s motion for summary judgment as to its claim for breach of the settlement agreement and granted
the Company(cid:146)s motion for summary judgment to dismiss plaintiff(cid:146)s claim for unfair and deceptive trade practices.
In March 2003, the court granted plaintiff(cid:146)s motion to compel the sale of the units to the plaintiff. On
December 31, 2003, the Company sold the units to the plaintiff for a total of $1,000,000. This amount reflects the
$1,523,000 original agreement with a credit to the plaintiff of a portion of the partnership(cid:146)s distributions received by
the Company with respect to the units.
22
Other Items
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 including employment and tenant claims, in the aggregate, will
have a material adverse effect upon the operations or financial position 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, 2003.
ITEM 4A.
Executive Officers of the Company
The following is a biographical summary of the current executive officers of the Company:
Ronald L. Havner, Jr., age 46, 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 67, became President and a director of the Company in November 1991. Mr. Lenkin
has been employed by the Company for 26 years. He has been a director of PSB since March 1998 and was
President of PSB from 1990 until March 1998. He is a director of Paladin Realty Income Properties I, Inc. and a
member of the Board of Governors of the National Association of Real Estate Investment Trusts, Inc. (NAREIT).
John Reyes, age 43, 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.
John S. Baumann, age 43, became Senior Vice President and Chief Legal Officer of the Company in June
2003. From 1998 to 2002, Mr. Baumann was Senior Vice President and General Counsel of Syncor International
Corporation, an international high technology health care services company. From 1995 to 1998, he was Associate
General Counsel of KPMG LLP, an international accounting, tax and consulting firm.
PART II
ITEM 5.
Purchases of Equity Securities
Market for the Registrant(cid:146)s Common Equity, Related Stockholder Matters and Issuer
a.
Market Price of the Registrant(cid:146)s Common Equity:
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.
23
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
2002
2003
Quarter
1st
2nd
3rd
4th
1st
2nd
3rd
4th
High
$ 38.400
39.290
37.900
32.530
$ 33.600
36.200
39.250
45.810
Range
Low
$ 33.190
34.950
29.000
27.980
$ 28.250
28.250
33.710
39.150
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.
Year
2002
2003
Quarter
1st
2nd
3rd
4th
1st
2nd
3rd
4th
High
$ 28.250
28.400
28.180
27.700
$ 28.100
28.900
29.120
29.950
Range
Low
$ 26.650
27.160
25.700
26.050
$ 26.480
26.870
27.300
28.000
As of March 8, 2004, there were approximately 19,581 holders of record of the Common Stock
and approximately 12,304 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 2003 amounted to $225.9 million or $1.80 per
share.
Holders of Common Stock are entitled to receive distributions when and if declared by the
Company(cid:146)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(cid:146)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.
24
For Federal income tax purposes, distributions to shareholders are treated as ordinary income,
capital gains, return of capital or a combination thereof. For 2003, 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 classified as follows:
Ordinary Income ................
Pre-May 6th Long-term
Capital Gain .......................
Total...................................
1st Quarter
99.72%
0.28%
100.00%
2nd Quarter
99.26%
3rd Quarter
99.98%
0.74%
100.00%
0.02%
100.00%
4th Quarter
100.00%
0.00%
100.00%
A percentage of the long-term capital gain is unrecaptured Section 1250 gain for the first, second
and third quarters of 2003 as follows:
Unrecaptured §1250 Gain ..
1st Quarter
57.33%
2nd Quarter
96.36%
3rd Quarter
100.00%
4th Quarter
0.00%
For the corporate shareholders a portion of the long-term capital gain is required to be recaptured
as ordinary income. For the first, second and third quarters for 2003 the percentages are as follows:
IRC §291 Recapture...........
1st Quarter
11.47%
2nd Quarter
19.27%
3rd Quarter
20.00%
4th Quarter
0.00%
The Jobs and Growth Tax Relief Reconciliation Act of 2003 introduced a new rule that reduces
the tax rate for (cid:147)qualified dividend income.(cid:148) Generally, qualified dividend income is dividend income
received from a corporation that has been taxed on the dividends distributed to its shareholders. Public
Storage, Inc, as a real estate investment trust ((cid:147)REIT(cid:148)), is generally not taxed on dividends it distributes
annually to its shareholders, and therefore the dividends shareholders receive are not qualified dividend
income subject to the new lower rates.
During 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:
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%
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, ((cid:147)Equity Stock A(cid:148)) raising net proceeds of
approximately $51,836,000. In May 2001, the Company completed a direct placement of 830,000
25
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, the Company 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, the Company issued 52,547 depositary shares to a
related party in connection with the acquisition of real estate facilities. In December 2000, the Company
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, 2003, 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(cid:146)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 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 ((cid:147)Equity Stock AA(cid:148)) 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
((cid:147)Equity Stock AAA(cid:148)) 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.
26
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 (cid:150) Basic.....................................................
Net income (cid:150) Diluted..................................................
2003(1)
$866,443
8,628
875,071
318,498
185,775
17,127
1,121
522,521
352,550
24,966
(43,703)
333,813
1,833
1,007
$336,653
For the year ended December 31,
2002(1)
2000 (1)
2001(1)
(Amounts in thousands, except per share data)
$822,897
8,661
831,558
287,144
177,978
15,619
3,809
484,550
347,008
29,888
(44,087)
332,809
(11,530)
(2,541)
$318,738
$760,309
14,225
774,534
257,244
164,914
21,038
3,227
446,423
328,111
38,542
(46,015)
320,638
(521)
4,091
$324,208
$690,845
18,836
709,681
241,669
147,473
21,306
3,293
413,741
295,940
39,319
(38,356)
296,903
(391)
576
$297,088
1999 (1)
$622,299
16,700
638,999
211,847
136,663
12,491
7,971
368,972
270,027
32,183
(16,006)
286,204
(473)
2,154
$287,885
$1.80
$1.29
$1.28
$1.80
$1.15
$1.14
$1.69
$1.41
$1.39
$1.48
$1.41
$1.41
$1.52
$1.53
$1.52
Weighted average common shares (cid:150) Basic.................
Weighted average common shares (cid:150) Diluted..............
125,181
126,517
123,005
124,571
122,310
123,577
131,566
131,657
126,308
126,669
Balance Sheet Data:
Total assets .................................................................
Total debt....................................................................
Minority interest (other partnership interests) ............
Minority interest (preferred partnership interests) ......
Shareholders(cid:146) equity...................................................
$4,968,069
$76,030
$141,137
$285,000
$4,219,799
$4,843,662
$115,867
$154,499
$285,000
$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
Other Data:
Net cash provided by operating activities...................
Net cash used in investing activities ...........................
Net cash provided used in financing activities............
$594,430
$(228,176)
$(264,545)
$588,961
$(323,464)
$(211,720)
$538,534
$(306,058)
$(272,596)
$525,775
$(465,464)
$(25,969)
$463,292
$(452,209)
$(7,183)
(1) During 2003, 2002, 2001, 2000, and 1999, we completed several significant business combinations and equity transactions.
See Notes 3, 9, and 10 to the Company(cid:146)s consolidated financial statements.
(2) During the years ended December 31, 2002 and 2003, the Company adopted a business plan that included the closure of
certain non-strategic containerized storage facilities. Also, during 2002 we sold one of our commercial facilities and during
2003 we sold five miniwarehouse facilities. The historical operations of these facilities are classified as discontinued
operations, with the rental income, cost of operations, depreciation expense and gain or loss on disposition of these facilities
for current and prior periods included in the line-item (cid:147)Discontinued Operations(cid:148) on the consolidated income statement.
27
ITEM 7.
Management(cid:146)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 (cid:147)expects,(cid:148) (cid:147)believes,(cid:148)
(cid:147)anticipates,(cid:148) (cid:147)should,(cid:148) (cid:147)estimates,(cid:148) and similar expressions are intended to identify (cid:147)forward-looking statements(cid:148)
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, (cid:147)Risk Factors(cid:148) 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(cid:146)s facilities;
difficulties in the Company(cid:146)s ability to evaluate, finance and integrate acquired and developed properties into the
Company(cid:146)s existing operations and to fill up those properties, which could adversely affect the Company(cid:146)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(cid:146)s
expense and reduce the Company(cid:146)s cash available for distribution; consumers(cid:146) failure to accept the containerized
storage concept which would reduce the Company(cid:146)s profitability; difficulties in raising capital at reasonable rates,
which would impede the Company(cid:146)s ability to grow; delays in the development process, which could adversely
affect the Company(cid:146)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 (cid:150) Income Tax Expense: We believe that we have been organized and operated,
and we intend to continue to operate, as a qualifying Real Estate Investment Trust ((cid:147)REIT(cid:148)) 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.
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
evaluate our goodwill for impairment on an annual basis, and on a quarterly basis evaluate other 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 and 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 cash flows, which also involves significant
judgment. We identified one such impairment to our real estate facilities during 2003, and recorded impairment
charges with respect to the containerized storage facilities (see Note 4). No additional impairments were noted at
28
December 31, 2003. Future events, or facts and circumstances that currently exist that we have not yet identified,
could cause us to conclude in the future that other long-lived assets are impaired. Any resulting impairment charge
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 Notes 2 and 16 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 direct and indirect
ownership interests as of December 31, 2003 in 1,410 self-storage facilities containing approximately 85.2 million
net rentable square feet. All of our facilities are operated under the (cid:147)Public Storage(cid:148) 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.
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 through development and acquisitions,
(iii) improving the operating performance of our containerized storage business, and (iv) participating in the growth
of PS Business Parks, Inc. ((cid:147)PSB(cid:148)). 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
29
marketing efforts. During 2002, the Consistent Group of facilities exhibited reductions in rental
income and net operating income before depreciation of 3.3% and 5.7%, respectively. During 2003,
while revenues increased 2.1%, net operating income before depreciation decreased 1.8% due to a
10.6% increase in operating expenses. We believe that these trends in 2003 and 2002 were attributable
to the impact of changes in our marketing strategy as well as to general economic conditions. See
(cid:147)Self-Storage Operations (cid:150) Consistent Group of Facilities(cid:148) 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 will continue to develop new self-storage locations, though at a lower level than occurred in
previous years. During the five years ending December 31, 2003, the Company and the Consolidated
Development Joint Venture developed and opened a total of 80 storage facilities at a cost of
approximately $534.6 million. In 2003, we opened 14 facilities with an aggregate cost of
$107,126,000. At December 31, 2003, we have a development pipeline which includes 13 self-storage
facilities that are expected to cost an aggregate of $95.5 million, which we expect will open over the
next 12-24 months.
• We will look to expand and further invest into our existing self-storage locations. During 2002 and
2003, we closed 31 containerized storage facilities of which 19 were facilities that combine industrial
space previously used by the containerized storage operations with traditional self-storage space.
These facilities offer the opportunity to build out additional traditional self-storage space at a low cost.
We have added 208,000 net rentable square feet of traditional self-storage space in connection with
converting 5 of these facilities for an aggregate cost of $5,569,000 in 2003, and at December 31, 2003
have 13 additional conversions in process with 779,000 net rentable square feet of self-storage space at
a cost of $25,515,000. In addition to these conversions of space, we have 12 expansions of existing
self-storage facilities in our pipeline, with an estimated cost of $35,354,000.
• 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 10 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 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 and 2003, we closed a total of 31 facilities which were deemed to be non-
strategic to the Company(cid:146)s business plan. We continue to evaluate the optimum level of containerized
facility operations in each market in which we operate and may close additional facilities during 2004.
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(cid:146)s
investment in approximately 18.3 million net rentable square feet of commercial space at December
31, 2003.
30
Results of Operations
Net income: Net income for 2003 was $336,653,000 compared to $318,738,000 for 2002, representing an
increase of $17,915,000 or 5.6%. This increase in net income is primarily a result of an increase in the operations of
our newly developed and expansion self-storage facilities, reduced losses from discontinued containerized storage
operations, improved operations of our continuing containerized storage business, a net gain from the sale of real
estate assets versus a net loss recorded in 2002 and lower interest expense resulting primarily from lower average
debt balances. The effect of these increases were partially offset by a reduction in our Consistent Group operating
results (as discussed below), increased depreciation expense resulting primarily from new property additions, and a
decrease in equity in earnings of real estate entities. The decrease in equity in earnings of real estate entities is
primarily due to a reduction in our pro-rata share of the earnings of PS Business Parks, Inc. ((cid:147)PSB(cid:148)) caused by the
impact of gains on sale of real estate and asset impairment charges during 2003 and 2002.
Net income was $318,738,000 for 2002 compared to $324,208,000 for 2001, representing a decrease of
$5,470,000 or 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 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.
Allocations of Income among Shareholders: In computing the net income allocable to common
shareholders for each period, we have deducted from net income i) distributions paid to the holders of the Equity
Stock, Series A totaling $21,501,000 in 2003, $21,501,000 in 2002, and $19,455,000 in 2001, ii) distributions paid
to our preferred shareholders totaling $146,196,000 in 2003, $148,926,000 in 2002, and $117,979,000 in 2001, and
iii) amounts allocated to preferred shareholders in connection with preferred stock redemption activities as described
below, totaling $7,120,000 in 2003, $6,888,000 in 2002 and $14,835,000 in 2001.
In July, 2003, the Securities and Exchange Commission clarified an accounting standard ((cid:147)EITF Topic D-
42(cid:148)), which we implemented in 2003, with restatements for 2002 and 2001 to conform to the 2003 presentation.
EITF Topic D-42 requires that the original issuance costs of redeemed preferred stock (in the case of the Company,
approximately 3.2% of the liquidation preference, representing the underwriting discount and other issuance costs)
as an additional allocation of income to the preferred shareholders, in determining the allocation of income to the
common shareholders and earnings per share. For the years ended December 31, 2003, 2002, and 2001, such
original issuance costs and resultant allocations of income to the preferred shareholders total $7,120,000,
$6,888,000, and $14,835,000, respectively.
In the first quarter of 2004, we called for redemption our Series L Cumulative Preferred stock and,
accordingly, an additional allocation of income to the preferred shareholders will be recorded of approximately
$3,723,000 in the first quarter of 2004. Future allocations of income pursuant to EITF Topic D-42 will depend upon
how much preferred stock we redeem and the original issuance costs.
Net income per share: Net income was $1.28 per common share, on a diluted basis, for 2003 compared to
$1.14 per common share for 2002. This increase was attributable to the factors denoted above with respect to net
income and a reduction in income allocated to preferred shareholders described above, partially offset by an increase
in diluted shares outstanding from 124,571,000 in 2002 to 126,517,000 in 2003. The increase in shares outstanding
was due to the exercise of employee stock options and the issuance of common shares in connection with the
acquisition of partnership interests.
Net income was $1.14 per common share, on a diluted basis, for 2002 compared to $1.39 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 an increase in net income allocated to holders of the Equity
Stock, Series A, an increase in net income allocated to preferred shareholders with respect to distributions paid as
described above, and an increase in weighted average diluted common shares outstanding. These factors were offset
partially by a decrease in income allocated to preferred shareholders, in accordance with the SEC Observer(cid:146)s
31
clarification of EITF Topic D-42 (described above), from $14,835,000 in 2001 to $6,888,000 in 2002, which was
due to a lower level of preferred stock redemptions in 2002 as compared to 2001. Diluted weighted average
common equivalent shares outstanding totaled 124,571,000 for 2002 compared to 123,577,000 for 2001.
Included in the distributions paid to our preferred shareholders during the year ended December 31, 2003,
is approximately $3,087,000 paid to our Series W and Series X Preferred shareholders. These two series of
preferred stock were issued during the fourth quarter of 2003, raising aggregate gross proceeds of approximately
$252.5 million. Our intended use of the net proceeds from these issuances is to fund the redemption of two series of
preferred stock (our Series K and Series L) that occurred during the first quarter of 2004. In the interim, the net
proceeds from these issuances earned nominal interest income relative to the corresponding dividend requirement.
This difference resulted in an estimated reduction to earnings per common share of approximately $0.02 per share
(on a diluted basis) during the year ended December 31, 2003.
During the first quarter 2004, we issued approximately $152.5 million of additional preferred stock in two
separate transactions. The net proceeds from these issuances will be used primarily to redeem approximately $86.0
million of higher rate preferred stock during the third quarter of 2004. In the interim, the net proceeds from these
issuances are expected to earn nominal interest income relative to the corresponding divided requirement. This
difference will result in an estimated reduction to earnings per common share. In addition, we may issued up to
$400 million of additional preferred stock during 2004, raising the necessary funds to redeem additional high rate
preferred stock during the first quarter of 2005. These issuances similarly will have a negative impact on earnings
per share until the proceeds are utilized.
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 2003. Rental income with respect to
our self-storage operations has grown from $719,765,000 in 2001 to $761,446,000 in 2002, representing an increase
of 5.8%. In 2003, rental income grew to $798,584,000, representing an increase of 4.9% over 2002. 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 2000, we had a total of 1,240 self-storage facilities included in our consolidated financial
statements. Since that time we have increased the net number of self-storage facilities by 134 facilities (2001 - 22
facilities, 2002 - 103 facilities and 2003 - 9 facilities). We sold five facilities in 2003, and their revenues, cost of
operations, depreciation expense and net gain on sales for all periods presented are reported as (cid:147)Discontinued
Operations(cid:148) on the consolidated income statement. To enhance year-over-year comparisons, the following table
summarizes, and the ensuing discussion describes, the self-storage operating results.
32
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) ........................................
Total rental income ...........................................
Cost of operations:
Consistent Group...................................................
Acquired Facilities ................................................
Expansion Facilities ..............................................
Developed Facilities..............................................
Total cost of operations.........................................
Net operating income before depreciation:
Consistent Group...................................................
Acquired Facilities ................................................
Expansion Facilities ..............................................
Developed Facilities..............................................
Total net operating income before depreciation ....
Depreciation..............................................................
Operating income..................................................
2003
2002
Percentage
Change
2002
2001
Percentage
Change
(Dollar amounts in thousands)
$672,125
65,289
21,729
39,441
798,584
232,788
20,668
8,623
18,826
280,905
439,337
44,621
13,106
20,615
517,679
(176,929)
$340,750
$658,140
57,704
20,479
25,123
761,446
210,526
17,390
8,342
13,957
250,215
447,614
40,314
12,137
11,166
511,231
(170,887)
$340,344
2.1%
13.1%
6.1%
57.0%
4.9%
10.6%
18.8%
3.4%
34.9%
12.3%
(1.8)%
10.7%
8.0%
84.6%
1.3%
3.5%
0.1%
$658,140
57,704
20,479
25,123
761,446
210,526
17,390
8,342
13,957
250,215
447,614
40,314
12,137
11,166
511,231
(170,887)
$340,344
$680,683
3,518
20,694
14,870
719,765
(3.3)%
1540.3%
(1.0)%
69.0%
5.8%
206,032
3,221
9,537
9,652
228,442
2.2%
439.9%
(12.5)%
44.6%
9.5%
474,651
297
11,157
5,218
491,323
(157,953)
$333,370
(5.7)%
13473.7%
8.8%
114.0%
4.1%
8.2%
2.1%
Number of self-storage facilities (at end of period)...
1,374
1,362
0.9%
1,362
1,259
8.2%
Net rentable square feet (in thousands, at end of
period):......................................................................
83,013
82,019
1.2%
82,019
76,115
7.8%
(a) Rental income includes late charges, administrative fees and lien 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 1,164 facilities containing 67,666,000 net rentable square feet that were owned throughout
the three years ended December 31, 2003, and operated at a mature, stabilized occupancy level throughout the periods
presented.
(c) The Acquired Facilities includes 95 facilities containing 5,642,000 net rentable square feet. These facilities 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.
(d) The Expansion Facilities include 35 facilities containing 3,807,000 net rentable square feet (of which 823,000 square feet is
industrial space developed for containerized storage activities). These facilities were owned for the entire three year period
ending December 31, 2003, however, year over year operating results are not comparable throughout the periods presented
due primarily to expansions in their net rentable square footage or their conversion into facilities used by our containerized
storage operations. Such construction activities can cause a decline in revenue levels, as existing capacity is made
unavailable in order to accommodate construction activities. During the four years ended December 31, 2003, we
completed construction with respect to these facilities totaling $129.5 million.
(e) The Developed Facilities includes 80 facilities containing 5,898,000 net rentable square feet (of which 712,000 square feet is
industrial space for use in containerized storage activities, see (cid:147)Containerized Storage(cid:148) and (cid:147)Discontinued Operations(cid:148)).
These facilities were developed and opened since January 1, 1999 at a total cost of $534.6 million.
33
Self-Storage Operations - Consistent Group of Facilities
At December 31, 2003, we owned 1,164 self-storage facilities that have operated at a stabilized level of
operations throughout the three-year period. The Consistent Group of facilities contains approximately 67,666,000
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, (cid:147)Consistent Group.(cid:148) The following table sets forth additional operating
data with respect to the Consistent Group of facilities:
CONSISTENT GROUP
Year Ended December 31,
Year Ended December 31,
2003
2002
Percentage
Change
2002
2001
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 ...............................................
$691,606
(46,562)
645,044
27,081
672,125
$654,693
(18,423)
636,270
21,870
658,140
5.6%
152.7%
1.4%
23.8%
2.1%
$654,693
(18,423)
636,270
21,870
658,140
$662,565
(4,998)
657,567
23,116
680,683
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.........................................
63,627
57,604
21,186
19,544
16,110
19,331
9,987
7,990
17,409
232,788
60,630
51,085
19,542
18,208
15,497
15,340
9,172
5,649
15,403
210,526
Net operating income before depreciation.................
Depreciation ..............................................................
Operating income ......................................................
439,337
(145,457)
$293,880
447,614
(142,710)
$304,904
4.9%
12.8%
8.4%
7.3%
4.0%
26.0%
8.9%
41.4%
13.0%
10.6%
(1.8)%
1.9%
(3.6)%
60,630
51,085
19,542
18,208
15,497
15,340
9,172
5,649
15,403
210,526
58,604
47,717
18,053
19,100
15,773
17,192
9,914
5,542
14,137
206,032
447,614
(142,710)
$304,904
474,651
(142,773)
$331,878
(1.2)%
268.6%
(3.2)%
(5.4)%
(3.3)%
3.5%
7.1%
8.2%
(4.7)%
(1.7)%
(10.8)%
(7.5)%
1.9%
9.0%
2.2%
(5.7)%
-
(8.1)%
Gross margin (before depreciation) ...........................
65.4%
68.0%
(3.8)%
68.0%
69.7%
(2.4)%
Weighted average for the fiscal year:
Square foot occupancy (a).....................................
Realized annual rent per occupied square foot (b).
REVPAR (c). ........................................................
Weighted average at December 31:
Square foot occupancy ..........................................
In place annual rent per occupied square foot (d)..
Posted annual rent per square foot (e) ...................
Total net rentable square feet (in thousands) .............
89.1%
$10.70
$9.53
89.5%
$11.69
$12.34
67,666
85.2%
$11.04
$9.40
84.3%
$11.64
$11.65
67,666
4.6%
(3.1)%
1.4%
6.2%
0.4%
5.9%
-
85.2%
$11.04
$9.40
84.3%
$11.64
$11.65
67,666
88.9%
$10.93
$9.72
85.2%
$11.76
$13.33
67,666
(4.2)%
1.0%
(3.3)%
(1.1)%
(1.0)%
(12.6)%
-
(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 ((cid:147)REVPAR(cid:148)) 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.
34
As indicated in the table above, rental income for our Consistent Group decreased 3.3% in 2002 as
compared to 2001. This decrease was primarily due to a 4.2% reduction in the weighted average occupancy in 2002
compared to 2001 partially offset by an increase in realized annualized rent per square foot of 1.0%. We believe
that the reduction in occupancy during 2002 was primarily due to a change in our marketing strategy during 2001.
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(cid:146)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. 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 that 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. .
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 and continued
into fiscal 2002. During the first quarter of 2002, we reversed this strategy, and 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 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. 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 again
began to decline relative to the occupancies experienced in 2001.
Beginning in mid-August 2002, 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. As a result, occupancy
levels began to improve over the remainder of 2002. At December 31, 2002, our average occupancy was 84.3% as
compared to 85.2% at December 31, 2001, and although the reduction was only 1.1% the occupancy level was still
well below our expectations.
The programs that we implemented in 2002 to increase the occupancy level came with significant costs.
Promotional discounts increased from approximately $4,998,000 in 2001 to $18,423,000 in 2002, resulting in a
negative impact to our rental income. While occupancy was improving in the year, our average occupancy levels
for 2002 were still 4.2% lower than the average occupancy levels for 2001 and as a result our revenues decreased
3.3% in 2002 as compared to 2001.
During 2003, we continued advertising on television and expanded promotional discounts to new incoming
tenants. In addition, during the first half of 2003 we reduced rental rates charged to new incoming tenants in many
of our markets to stimulate move-in activity. These actions had a positive impact as our average occupancy level for
the Consistent Group was 89.1% for 2003 as compared to 85.2% for 2002, representing an increase of 4.6%.
35
The increase in the occupancy level during 2003 also came at a significant cost. Promotional discounts
totaled $46,562,000 for 2003 as compared to $18,423,000 for 2002, resulting in a significant negative impact to our
rental income. In addition, television advertising cost for 2003 was $8,343,000 as compared to $7,788,000 in 2002.
As indicated in the table above, rental income for our Consistent Group increased 2.1% in 2003 as
compared to 2002. This increase was primarily due to a 4.6% increase in the weighted average occupancy in 2003
compared to 2002 combined with increased late charge and administrative fees, partially offset by a decrease in
realized annualized rent per square foot of 3.1%.
By the end of 2003, we had attained our goal of reestablishing our occupancy levels to historical levels. In
addition, the improvement in occupancy levels enabled us to begin to increase rent rates that we charge to new
tenants, which as of December 31, 2003 were 5.9% higher than at the same time in 2002. More importantly,
throughout 2003 we experienced positive year-over-year trends in the growth of our quarterly REVPAR, resulting in
improvements in the growth trends of our rental income. For the Consistent Group during 2003, rental income for
the first quarter decreased 2.6%, for the second quarter - increased 2.0%, for the third quarter - increased 3.0% and
for the fourth quarter -increased 6.1%, all compared to the same periods in 2002.
The growth in rental income during 2004 will depend on various factors, among which are our ability to
stabilize and maintain high occupancy levels, rental rates charged to new and existing tenants, and the level of
promotional discounts given to new tenants.
Despite our occupancy gains, our expectations are significantly moderated by our experience that on
average approximately 25% to 30% of our new customers will move out within the first 60 to 90 days. Our current
occupancy levels have been achieved in large part by the elevated move-in activity experienced over the past three
quarters. Our elevated level of move-outs has made it more important to continue to generate a high level of move-
ins in order to maintain occupancy levels. We have not been able to demonstrate that we can generate the high level
of move-ins necessary to sustain high occupancy levels without the use of media and/or promotional discounts.
Accordingly, we expect to remain aggressive with promotional and media programs at least through the first half of
2004 and, as a result, the up front costs of these marketing activities, and the increases in promotional discounts, are
expected to continue to adversely impact our rental income .
We are working towards a goal of a high level of sustainable occupancy, characterized by a less volatile
tenant base that is not as heavily weighted towards recent move-ins, thereby mitigating the level of move-outs. If
we can achieve this goal, it will allow for fewer promotional discounts and a reduction in advertising and other
customer acquisition costs. In furtherance of these goals, 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. There can be no assurance that we will achieve our goals.
Total operating expenses for the Consistent Group increased 10.6% for the year ended December 31, 2003
as compared to the same period in 2002. This increase was primarily due to increases in payroll, advertising and
promotion, property tax, repairs and maintenance costs and property insurance. Direct property payroll increased
12.8% due primarily to increased incentives paid to and hours worked by property operating personnel. Advertising
and promotion increased 7.3% primarily due to an increase in television advertising from $7.8 million during 2002
to $8.3 million in 2003. Repairs and maintenance have increased 17.6% during 2003 as compared to 2002 due to
costs to remedy mold issues in several facilities in Southern states, increased snow removal expenses, as well as a
general increase in costs to address deferred maintenance at our facilities. Property insurance increased due to an
increase in the Company(cid:146)s self-insured portion of its risk.
With respect to our Consistent Group, we expect that the increase in repairs and maintenance expense
experienced in 2003 will continue in 2004, as we continue to address maintenance at our facilities and improve their
(cid:147)rent ready(cid:148) condition and curb appeal. Payroll and property management costs will also continue to increase in
2004, though not at the same growth rate experienced in 2003 due to higher staffing levels and higher compensation.
We also expect that property taxes will increase approximately 4%-5% in 2004 as compared to 2003.
36
The following table sets forth our rental income, cost of television advertising, promotional discounts
given, and average occupancies for each of the quarters in 2003, 2002 and 2001:
For the Quarter Ended
March 31
June 30
September 30
December 31
Entire Year
(amounts in thousands)
Total rental income:
2003
2002
2001
$ 161,133
$ 165,371
$ 163,421
$ 166,584
$ 163,279
$ 169,588
$ 173,242
$ 168,176
$ 175,344
$ 171,166
$ 161,314
$ 172,330
$ 672,125
$ 658,140
$ 680,683
Promotional discounts given:
2003
2002
2001
$
$
$
9,970
1,024
2,673
$ 12,965
5,378
$
1,868
$
$ 11,844
4,720
$
322
$
$ 11,783
$ 7,301
135
$
$ 46,562
$ 18,423
4,998
$
Total cost of operations:
2003
2002
2001
$ 54,274
$ 50,062
$ 50,887
$ 58,010
$ 50,416
$ 48,337
$ 58,867
$ 52,338
$ 52,912
$ 61,637
$ 57,710
$ 53,896
$ 232,788
$ 210,526
$ 206,032
Television advertising:
2003
2002
2001
$
$
$
1,503
540
0
$
$
$
2,719
1,403
908
$
$
$
3,079
1,933
4,309
$ 1,042
$ 3,912
$ 2,687
REVPAR:
2003
2002
2001
$
$
$
9.15
9.47
9.31
$
$
$
9.45
9.34
9.68
9.83
$
$
9.61
$ 10.00
$
$
$
9.69
9.19
9.88
$
$
$
$
$
$
8,343
7,788
7,904
9.53
9.40
9.72
Weighted average realized annual rent per occupied square foot:
2003
2002
2001
$ 10.79
$ 11.34
$ 10.58
$ 10.61
$ 10.83
$ 10.77
$ 10.70
$ 11.21
$ 11.03
$ 10.70
$ 10.81
$ 11.37
$ 10.70
$ 11.04
$ 10.93
Weighted average occupancy levels for the period
89.1%
86.3%
89.9%
84.8%
83.5%
88.0%
2003
2002
2001
91.9%
85.7%
90.7%
90.6%
85.0%
86.9%
89.1%
85.2%
88.9%
Outlook
With respect to our Consistent Group, we expect that the increase in repairs and maintenance expense
experienced in 2003 will continue in 2004, as we continue to address maintenance at our facilities and improve their
(cid:147)rent ready(cid:148) condition and curb appeal. Payroll and property management costs will also continue to increase in
2004, though not at the same growth rate experienced in 2003 due to higher staffing levels and higher compensation.
We also expect that property taxes will increase approximately 4%-5% in 2004 as compared to 2003.
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.
37
Consistent Group Operating Trends by Region
Year Ended December 31,
2002
Change
2003
Year Ended December 31,
2001
2002
Change
Rental income:
Southern California (120 facilities) ...
Northern California (108 facilities) ...
Texas (140 facilities) .........................
Florida (108 facilities) .......................
Illinois (82 facilities) .........................
Georgia (56 facilities)........................
All other states (550 facilities)...........
Total rental income .................................
$ 113,155
78,193
62,389
56,842
50,824
23,723
286,999
672,125
(Dollar amounts in thousands, except rents per square foot)
$ 105,972
76,814
61,996
54,423
52,850
23,177
282,908
658,140
$ 106,623
81,190
64,771
56,347
55,599
24,317
291,836
680,683
$ 105,972
76,814
61,996
54,423
52,850
23,177
282,908
658,140
6.8%
1.8%
0.6%
4.4%
(3.8)%
2.4%
1.4%
2.1%
Cost of operations:
Southern California ............................
Northern California ............................
Texas ..................................................
Florida ................................................
Illinois ................................................
Georgia...............................................
All other states....................................
Total cost of operations...........................
Net operating income before depreciation:
Southern California ............................
Northern California ............................
Texas ..................................................
Florida ................................................
Illinois ................................................
Georgia...............................................
All other states....................................
Total net operating income .....................
Weighted average occupancy:
Southern California ............................
Northern California ............................
Texas..................................................
Florida................................................
Illinois ................................................
Georgia...............................................
All other states ...................................
Total weighted average occupancy.........
26,693
21,021
28,960
22,334
22,114
8,774
102,892
232,788
25,358
19,287
26,083
19,493
20,707
7,556
92,042
210,526
86,462
57,172
33,429
34,508
28,710
14,949
184,107
$ 439,337
80,614
57,527
35,913
34,930
32,143
15,621
190,866
$ 447,614
90.6%
89.0%
89.2%
90.5%
88.1%
90.1%
88.5%
89.1%
REVPAR:
Southern California ............................
Northern California ............................
Texas..................................................
Florida................................................
Illinois ................................................
Georgia...............................................
All other states ...................................
Total REVPAR:......................................
$ 14.54
12.91
6.91
8.73
9.90
6.97
8.78
9.53
$
Realized annual rent per occupied square foot:
Southern California ............................
Northern California ............................
Texas..................................................
Florida................................................
Illinois ................................................
Georgia...............................................
All other states ...................................
Total realized rent per square foot: .........
$ 16.05
14.50
7.75
9.64
11.24
7.74
9.92
$ 10.70
86.8%
84.8%
84.6%
85.2%
84.3%
84.3%
85.2%
85.2%
$ 13.66
12.72
6.92
8.41
10.37
6.96
8.73
9.40
$
$ 15.73
15.00
8.18
9.87
12.31
8.25
10.25
$ 11.04
38
5.3%
9.0%
11.0%
14.6%
6.8%
16.1%
11.8%
10.6%
7.3%
(0.6)%
(6.9)%
(1.2)%
(10.7)%
(4.3)%
(3.5)%
(1.8)%
4.4%
5.0%
5.4%
6.2%
4.5%
6.9%
3.9%
4.6%
6.4%
1.5%
(0.1)%
3.8%
(4.5)%
0.1%
0.6%
1.4%
2.0%
(3.3)%
(5.3)%
(2.3)%
(8.7)%
(6.2)%
(3.2)%
(3.1)%
25,358
19,287
26,083
19,493
20,707
7,556
92,042
210,526
22,672
18,754
25,812
20,313
19,685
8,210
90,586
206,032
80,614
57,527
35,913
34,930
32,143
15,621
190,866
$ 447,614
83,951
62,436
38,959
36,034
35,914
16,107
201,250
$ 474,651
86.8%
84.8%
84.6%
85.2%
84.3%
84.3%
85.2%
85.2%
$ 13.66
12.72
6.92
8.41
10.37
6.96
8.73
9.40
$
$ 15.73
15.00
8.18
9.87
12.31
8.25
10.25
$ 11.04
90.7%
90.3%
89.3%
88.1%
90.8%
86.4%
88.2%
88.9%
$ 13.79
13.47
7.21
8.69
11.03
7.32
8.97
9.72
$
$ 15.20
14.91
8.08
9.86
12.15
8.48
10.17
$ 10.93
(0.6)%
(5.4)%
(4.3)%
(3.4)%
(4.9)%
(4.7)%
(3.1)%
(3.3)%
11.8%
2.8%
1.0%
(4.0)%
5.2%
(8.0)%
1.6%
2.2%
(4.0)%
(7.9)%
(7.8)%
(3.1)%
(10.5)%
(3.0)%
(5.2)%
(5.7)%
(4.3)%
(6.1)%
(5.3)%
(3.3)%
(7.2)%
(2.4)%
(3.4)%
(4.2)%
(0.9)%
(5.6)%
(4.0)%
(3.2)%
(6.0)%
(4.9)%
(2.7)%
(3.3)%
3.5%
0.6%
1.2%
0.1%
1.3%
(2.7)%
0.8%
1.0%
Self-Storage Operations - Acquired Facilities
Over the past three years, we acquired 95 self-storage facilities containing 5,642,000 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,
2003
2002
Change
2002
2001
Change
(Dollar amounts in thousands)
Rental income:
Self-storage facilities acquired in 2002 .................
Self-storage facilities acquired in 2001 .................
Self-storage facilities acquired in 2000 .................
Total rental income ...........................................
$ 60,044
560
4,685
65,289
$ 53,497
445
3,762
57,704
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 .....................................
$ 18,448
200
2,020
20,668
$ 15,822
191
1,377
17,390
Net operating income before depreciation:
$ 6,547
115
923
7,585
$ 2,626
9
643
3,278
$ 53,497
445
3,762
57,704
$ 15,822
191
1,377
17,390
$
$
-
143
3,375
3,518
-
66
3,155
3,221
Self-storage facilities acquired in 2002 .................
Self-storage facilities acquired in 2001 .................
Self-storage facilities acquired in 2000 .................
Net operating income ........................................
Depreciation..............................................................
Operating income (loss) ........................................
$ 41,596
360
2,665
44,621
(11,946)
$ 32,675
$ 37,675
254
2,385
40,314
(11,366)
$ 28,948
$ 3,921
106
280
4,307
(580)
$ 3,727
$ 37,675
254
2,385
40,314
(11,366)
$ 28,948
$
-
77
220
297
(2,948)
$ (2,651)
$ 53,497
302
387
54,186
$ 15,822
125
(1,778)
14,169
$ 37,675
177
2,165
40,017
(8,418)
$ 31,599
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.................
90.0%
92.2%
84.5%
89.5%
85.4%
67.4%
79.1%
84.5%
5.4%
36.8%
6.8%
5.9%
85.4%
67.4%
79.1%
84.5%
-
55.8%
77.1%
74.8%
-
20.8%
2.6%
13.0%
Number of self-storage facilities (at end of period)...
95
95
Net rentable square feet (in thousands, at end of
period)...................................................................
Cumulative acquisition cost (at end of period)..........
5,642
$ 405,684
5,642
$ 405,684
$
-
-
-
95
8
87
5,642
$ 405,684
565
$ 45,141
5,077
$360,543
Rental income and cost of operations for the Acquired Facilities have increased significantly in 2002 as
compared to 2001, due to the acquisition of 87 additional properties.
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 2002 acquisition also included nine self-storage facilities acquired from third parties for
an aggregate of $30,117,000 in cash. The 2001 acquisition includes one facility acquired from a third party for an
aggregate cost of $3,503,000.
Similar to our Consistent Group of facilities, the Acquired Facilities have experienced operating difficulties
over the last two years. Marketing and promotional strategies, as described above with respect to our Consistent
39
Group, were employed in 2002, and enhanced marketing strategies were employed in 2003, which affected the
operations of these facilities in the same manner they affected the Consistent Group facilities.
Self-Storage Operations - Expansion Facilities
Throughout the three-year period ended December 31, 2003, we expanded 35 self-storage facilities or
converted them to facilities that combine both traditional self-storage and containerized storage at the same location.
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, 2003. At December 31, 2003, the weighted average occupancy level was approximately 78.9% as
compared to 68.7% one year earlier. The operating results for these facilities are presented in the Self-Storage
Operations table above under the caption, (cid:147)Expansion Facilities.(cid:148)
Depreciation expense with respect to the expansion facilities was $6,031,000 in 2003, $6,188,000 in 2002,
and $4,986,000 in 2001. The increases in depreciation expense are due to the opening of the expanded facilities.
These 35 facilities contain approximately 3,807,000 net rentable square feet at December 31, 2002 (which
includes the expanded space, and 823,000 square feet of industrial space developed for containerized storage
activities (cid:150) see (cid:147)Containerized Storage(cid:148) and (cid:147)Discontinued Operations(cid:148)). The aggregate construction costs to
complete these expansions totaled approximately $129,543,000 during the four years ended December 31, 2003.
Self-Storage Operations (cid:150)Developed Facilities
Since January 1, 1999, we have opened 63 newly developed self-storage facilities and 17 facilities that
contain both self-storage and containerized storage at the same location ((cid:147)Combination Facilities(cid:148)). These newly
developed facilities have an aggregate of 5,898,000 net rentable square feet (of which 712,000 net rentable square
feet is industrial space developed for containerized storage activities (cid:150) see (cid:147)Containerized Storage(cid:148) and
(cid:147)Discontinued Operations(cid:148)). Aggregate development cost for these 80 facilities was approximately $534.6 million.
The operating results of the self-storage facilities and Combination facilities are reflected in the Self-Storage
Operations table under the caption, (cid:147)Developed Facilities.(cid:148)
40
The following chart sets forth the operations of the Developed Facilities:
Year ended December 31,
Year ended December 31,
2003
2002
(Amounts in thousands, except No. of facilities)
Change
2002
2001
Change
Rental income:
Self-storage facilities .............................
Combination facilities............................
Total rental income ............................
$ 28,796
10,645
39,441
$ 18,360
6,763
25,123
$ 10,436
3,882
14,318
$ 18,360
6,763
25,123
$ 11,580
3,290
14,870
$ 6,780
3,473
10,253
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 ..............................................
13,950
4,876
18,826
8,921
5,036
13,957
5,029
(160)
4,869
8,921
5,036
13,957
6,590
3,062
9,652
2,331
1,974
4,305
14,846
5,769
20,615
(13,495)
9,439
1,727
11,166
(10,623)
5,407
4,042
9,449
(2,872)
9,439
1,727
11,166
(10,623)
4,990
228
5,218
(7,246)
4,449
1,499
5,948
(3,377)
Operating income (loss) ........................
$ 7,120
$
543
$ 6,577
$
543
$
(2,028)
$ 2,571
Self-storage facilities, at end of period:
Number of facilities...............................
Net rentable square feet.........................
63
4,055
49
3,061
14
994
49
3,061
35
2,154
14
907
Total development cost .........................
$ 375,908
$ 267,004
$ 108,904
$ 267,004
$ 174,895
$ 92,109
Combination facilities, at end of period:
Number of facilities...............................
Net rentable square feet (a) ...................
17
1,844
17
1,844
-
-
17
1,844
15
1,605
2
239
Total development cost (a)....................
$ 158,677
$ 154,177
$ 4,500
$ 154,177
$ 139,325
$ 14,852
(a) Net rentable square feet includes both square feet related to traditional self-storage and the containerized storage operations.
In 2003, we converted 166,000 net rentable square feet of containerized storage space previously used by the discontinued
containerized storage operations into traditional self-storage space for an aggregate cost of $4,500,000.
41
The following table summarizes operating data for the 63 newly developed self-storage facilities included
in the table above:
DEVELOPED SELF-STORAGE FACILITIES
Year Ended December 31,
Year Ended December 31,
2003
2002
Change
2002
2001
Change
(Dollar amounts in thousands)
Rental income (a):
Self-storage facilities opened in 2003......................
Self-storage facilities opened in 2002......................
Self-storage facilities opened in 2001......................
Self-storage facilities opened in 2000 and 1999 ......
Total rental income............................................
Cost of operations:
Self-storage facilities opened in 2003......................
Self-storage facilities opened in 2002......................
Self-storage facilities opened in 2001......................
Self-storage facilities opened in 2000 and 1999 ......
Total cost of operations .....................................
Net operating income before depreciation:
Self-storage facilities opened in 2003......................
Self-storage facilities opened in 2002......................
Self-storage facilities opened in 2001......................
Self-storage facilities opened in 2000 and 1999 ......
Net operating income ............................................
Depreciation ..............................................................
Operating income ..................................................
$
$
$
$
1,566
6,737
6,579
13,914
28,796
1,347
3,660
3,389
5,554
13,950
219
3,077
3,190
8,360
14,846
(9,061)
5,785
$
$
$
$
-
1,435
4,474
12,451
18,360
-
1,399
2,667
4,855
8,921
$
$
1,566
5,302
2,105
1,463
10,436
1,347
2,261
722
699
5,029
-
36
1,807
7,596
9,439
(7,032)
2,407
$
$
219
3,041
1,383
764
5,407
(2,029)
3,378
$
$
$
$
-
1,435
4,474
12,451
18,360
-
1,399
2,667
4,855
8,921
-
36
1,807
7,596
9,439
(7,032)
2,407
$
$
$
$
$
$
-
-
1,608
9,972
11,580
-
-
1,368
5,222
6,590
-
-
240
4,750
4,990
(4,522)
$
468 $
-
1,435
2,866
2,479
6,780
-
1,399
1,299
(367)
2,331
-
36
1,567
2,846
4,449
(2,510)
1,939
Weighted average square foot occupancy during the
period:
Self-storage facilities opened in 2003 .....................
Self-storage facilities opened in 2002 .....................
Self-storage facilities opened in 2001 .....................
Self-storage facilities opened in 2000 and 1999......
Number of facilities:
Self-storage facilities opened in 2003......................
Self-storage facilities opened in 2002......................
Self-storage facilities opened in 2001......................
Self-storage facilities opened in 2000 and 1999 ......
Cumulative development cost:
Self-storage facilities opened in 2003......................
Self-storage facilities opened in 2002......................
Self-storage facilities opened in 2001......................
Self-storage facilities opened in 2000 and 1999 ......
24.4%
61.3%
74.3%
89.3%
64.2%
14
14
12
23
63
-
20.6%
44.0%
78.5%
52.3%
-
197.6%
68.9%
13.8%
22.8%
-
14
12
23
49
14
-
-
-
14
-
20.6%
44.0%
78.5%
52.3%
-
14
12
23
49
-
-
22.2%
61.1%
46.7%
-
-
98.2%
28.5%
12.0%
-
-
12
23
35
-
14
-
-
14
$ 107,126
93,887
66,905
107,990
$ 375,908
$
-
92,109
66,905
107,990
$ 267,004
$ 107,126
1,778
-
-
$ 108,904
$
-
92,109
66,905
107,990
$ 267,004
$
-
-
66,905
107,990
$ 174,895
$
-
92,109
-
-
$ 92,109
42
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 takes approximately 36
months for a newly developed facility to fill up and reach a targeted occupancy level of approximately 90%.
We believe that the newly developed self-storage facilities have been affected by the operating trends in
occupancy and realized rents noted above with respect to the Consistent Group of facilities. In addition, move-in
discounts, which increased significantly in 2002 and 2003, have had a more pronounced effect upon realized rates
for the newly developed facilities, because such facilities tend to have a higher ratio of newer tenants. During 2003,
the Developed Self-Storage Facilities had a weighted average occupancy level of approximately 64.2%, as
compared to 52.3% in 2002 and 46.7% in 2001.
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(cid:146)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.
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. The yield on
cost for these facilities for the year ended December 31, 2003, based on net operating income before depreciation,
was approximately 3.9%, which is lower than our ultimate yield expectations. We expect these yields to increase as
these facilities fill up. This yield increase on fill-up will be a source of earnings growth in future years. 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 resulting increased critical mass, with
facilities that will improve our portfolio(cid:146)s overall average construction and location quality.
We expect that over at least the next 12 months, the Developed Self-Storage Facilities will continue to have
a negative impact to our earnings. Furthermore, the 38 expansion and newly developed facilities in our development
pipeline described in (cid:147)Liquidity and Capital Resources (cid:150) Acquisition and Development of Facilities(cid:148) that will be
opened for operation over the next 12 (cid:150) 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(cid:146)s earnings is reflected as
(cid:147)Equity in earnings of real estate entities(cid:148), see below.
Our commercial operations are comprised of 1,187,000 net rentable commercial space operated at certain
of the self-storage facilities and three stand-alone commercial facilities having a total of 204,000 net rentable square
feet.
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,
Year Ended December 31,
2003
2002
Change
2002
2001
Change
(Amounts in thousands)
Rental income ...........................
Cost of operations .......................
$11,442
4,688
$11,781
4,462
$(339)
226
$11,781
4,462
$12,070
3,861
$(289)
601
43
Net operating income .............
6,754
7,319
(565)
7,319
8,209
(890)
Depreciation expense ..................
Operating income ...................
2,535
$4,219
2,544
$4,775
(9)
$(556)
2,544
$4,775
2,569
$5,640
(25)
$(865)
The decrease in rental income in 2003 as compared to 2002 is due primarily to a vacancy in one of the three
stand-alone commercial facilities, which caused a reduction in rental income of approximately $250,000 during
2003 as compared to 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 (cid:147)Discontinued Operations(cid:148) in our income
statement and are not included in the above table.
Containerized Storage Operations: In August 1996, Public Storage Pickup & Delivery ((cid:147)PSPUD(cid:148)), 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 22 facilities. In 2003 we closed an additional nine non-strategic facilities.
Collectively the 31 discontinued facilities are referred to as the (cid:147)Closed Facilities.(cid:148) At December 31, 2003, PSPUD
operated 24 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
(cid:147)Discontinued Operations (cid:150) containerized storage(cid:148) on our income statement. PSPUD(cid:146)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 .......................
Facility lease expense .......................
Total cost of operations .................
Operating income prior to
depreciation..................................
Depreciation expense (a) ........................
Operating income (loss) .........................
Year Ended December 31,
Year Ended December 31,
2003
2002
Change
2002
2001
Change
$33,953
$29,723
$4,230
$29,723
$28,474
$1,249
(Dollar amounts in thousands)
19,239
1,679
20,918
13,035
(6,311)
$6,724
21,373
1,683
23,056
6,667
(4,547)
$2,120
(2,134)
(4)
(2,138)
6,368
(1,764)
$4,604
21,373
1,683
23,056
6,667
(4,547)
$2,120
20,888
4,053
24,941
3,533
(4,392)
$(859)
485
(2,370)
(1,885)
3,134
(155)
$2,979
(a) Depreciation expense principally relates to the depreciation related to the containers, however, depreciation expense for
2003, 2002 and 2001 includes $1,566,000, $1,012,000, and $786,000, respectively, related 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(cid:146) homes. Rental income increased to
$33,953,000 in 2003 as compared to $29,723,000 in 2002 as a result of higher per container rents. At December 31,
2003, there were approximately 33,780 occupied containers in the 24 facilities that are reflected in (cid:147)ongoing(cid:148)
operations. We continue to evaluate the business operations and additional facilities may be closed.
Direct operating costs principally includes payroll, equipment lease expense, property taxes, utilities and
vehicle expenses (fuel and insurance). During 2002, an asset impairment charge was recorded in the amount of
$420,000 with respect to machinery and equipment of the containerized storage facilities because such equipment
was no longer required.
44
Facility lease expense decreased from $4,053,000 in 2001 to $1,683,000 in 2002, principally due to moving
operations from leased facilities to wholly-owned facilities, and thus eliminating the lease expense paid to third
parties as well as discontinuing operations at leased facilities. This process was completed in 2002.
At December 31, 2003, six of the 24 containerized storage facilities are leased from third parties. The
remaining 18 facilities were operated in facilities owned by the Company, comprised of 13 combination facilities
with an aggregate of 805,000 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 404,000 net rentable square feet.
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(cid:146)s expansion, level of gross rentals,
level of move-outs or profitability.
See (cid:147)Discontinued Operations(cid:148) below for a discussion of operating results of the Closed Facilities.
Tenant Reinsurance Operations: On December 31, 2001, we acquired PS Insurance Company, Ltd. ((cid:147)PS
Insurance(cid:148)) 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 (cid:147)Revenues (cid:150) tenant reinsurance premiums(cid:148) and (cid:147)Cost of operations (cid:150) tenant reinsurance.(cid:148) The
tenant reinsurance business earned $22,464,000 and $19,947,000 in revenues for the years ended December 31,
2003 and 2002, respectively, and incurred $11,987,000 and $9,411,000 in operating expenses, with respect to the
same period. PS Insurance generated net operating profits of $10,477,000 and $10,536,000 for the years ended
December 31, 2003 and 2002, respectively.
The level of tenant reinsurance revenues is largely dependent upon our occupancy level and move-in
activity. As of December 31, 2003 and 2002, approximately 37% of our self-storage tenant base had 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, 2003 (PSB and the limited
partnerships are collectively referred to as the (cid:147)Unconsolidated Entities(cid:148)). 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.
45
Equity in earnings of real estate entities for the year ended December 31, 2003 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,
2003
2002
Year Ended December 31,
Dollar
Change
2002
(Amounts in thousands)
Property operations:
PSB...............................................................
Disposed Investments (1) .............................
Other Investments (2) ...................................
Depreciation:
PSB...............................................................
Disposed Investments (1) .............................
Other Investments (2) ...................................
Other: (3)
PSB (4) .........................................................
Disposed Investments (1) .............................
Other Investments (2) ...................................
$64,242
10
6,278
70,530
(26,048)
-
(1,705)
(27,753)
(18,507)
-
696
(17,811)
$65,212
325
5,667
71,204
(25,459)
(65)
(1,554)
(27,078)
(15,292)
-
1,054
(14,238)
$(970)
(315)
611
(674)
(589)
65
(151)
(675)
(3,215)
-
(358)
(3,573)
$65,212
325
5,667
71,204
(25,459)
(65)
(1,554)
(27,078)
(15,292)
-
1,054
(14,238)
2001
$52,200
16,278
5,769
74,247
(17,534)
(5,843)
(1,719)
(25,096)
(11,440)
(296)
1,127
(10,609)
Dollar
Change
$13,012
(15,953)
(102)
(3,043)
(7,925)
5,778
165
(1,982)
(3,852)
296
(73)
(3,629)
Total equity in earnings of real estate entities ..
$24,966
$29,888
$(4,922)
$29,888
$38,542
$(8,654)
(1) Amounts include our pro-rata share of the earnings for the Development Joint Venture, which we began to consolidate
effective January 16, 2002 and two partnerships that we began to consolidate effective January 1, 2002. On the respective
dates of consolidation, we had obtained a controlling interest in these partnerships and began to consolidate the operations of
these partnerships, and no longer account for our interest in these partnerships using the equity method (see Note 3 to the
consolidated financial statements). Amounts also include income with respect to an investment that was disposed of in the
second quarter of 2003.
(2) Amounts include equity in earnings recorded for investments that have been held consistently throughout the three years
ended December 31, 2003.
(3) (cid:147)Other(cid:148) reflects our share of general and administrative expense, interest expense, interest income, and other non-property,
non-depreciation related operating results of these entities.
(4) Our equity in earnings includes our pro-rata share of gain on disposition of real estate investments totaling $187,000 and
$3,737,000, respectively, during 2003 and 2002 (none in 2001).
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(cid:146)s gain on sale of real estate
investments totaling $3,737,000 for 2002.
The decrease in equity in earnings of real estate entities when comparing 2003 to 2002, is caused by the net
impact of PSB(cid:146)s gains, losses, and impairment charges recorded in these periods.
Equity in earnings of PSB represents our pro-rata share (approximately 44% at December 31, 2003 and
2002) of the earnings of PS Business Parks, Inc., a publicly traded real estate investment trust (American Stock
Exchange symbol (cid:147)PSB(cid:148)) organized by the Company on January 2, 1997. As of December 31, 2003, 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, 2003, PSB owned and operated 18.3 million net rentable
square feet of commercial space located in eight states. PSB also manages approximately 960,000 net rentable
square feet of commercial space owned by the Company and affiliated entities at December 31, 2003 pursuant to
property management agreements.
46
Accordingly, our future equity income from PSB will be dependent entirely upon PSB(cid:146)s operating results.
PSB(cid:146)s filings and selected financial information can be accessed through the Securities and Exchange Commission,
and on its website, www.psbusinessparks.com.
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(cid:146)s earnings with respect to
our investments in these partnerships. Our earnings with respect our interests in these entities are included in the
table above in the line (cid:147)Disposed Investments.(cid:148) No further equity in earnings will be recorded with respect to these
entities for periods after their respective dates of consolidation or disposal.
The (cid:147)Other Investments(cid:148) 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(cid:146)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 (cid:147)interest and other income.(cid:148) The limited partners consist of numerous individual
investors, including the Company, which throughout the 1990(cid:146)s acquired units of limited partnership interests in
these limited partnerships in various transactions.
Our future earnings with respect to the (cid:147)Other investments(cid:148) 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(cid:146)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, 2003 and 2002.
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 remained constant in 2003 as compared to 2002, reflecting the impact of
improved operating results from our merchandise sales and consumer truck rentals, offset by lower interest income
attributable to lower average interest rates on short-term cash investments and principal payments received on notes
receivable.
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.
Depreciation and amortization: Depreciation and amortization expense was $185,775,000 in 2003,
$177,978,000 in 2002, and $164,914,000 in 2001. Included in depreciation expense with respect to our real estate
facilities was $171,561,000 in 2003, $166,871,000 in 2002, and $151,999,000 in 2001; the increases are due to the
acquisition and development of additional real estate facilities in 1999 through 2003. Depreciation expense with
respect to other assets, primarily depreciation of equipment and containers associated with the containerized storage
operations, was $7,610,000 in 2003, $4,503,000 in 2002, and $3,606,000 in 2001. Amortization expense with
respect to intangible assets totaled $6,604,000 for the years ended December 31, 2003 and 2002, respectively, and
$9,309,000 for the year ended December 31, 2001.
Depreciation and amortization during 2003 with respect to real estate facilities acquired or developed
during 2003 amounted to $971,000 which was for a partial period for the time they were acquired until December
47
31, 2003, and we expect the annual depreciation expense with respect to these facilities for 2003 and forward will
approximate $2,705,000.
General and administrative expense: General and administrative expense was $17,127,000 in 2003,
$15,619,000 in 2002, and $21,038,000 in 2001. 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(cid:146)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.
The increase in general and administrative expense from 2002 to 2003 is primarily due to higher stock-
based compensation expense. Included in general and administrative expense for 2003 is $2,685,000 with respect to
stock-based compensation expense, including $530,000 in stock option expense, $970,000 in restricted stock
expense, and $1,185,000 in payroll taxes and other costs associated with employees(cid:146) exercise of 2,743,000 stock
options in 2003. Stock-based compensation expense totaled $543,000 for 2002, which is comprised of $163,000 in
stock option expense and $380,000 in payroll taxes and other costs associated with employees(cid:146) exercise of 949,000
stock options during 2002.
Restricted stock expense, based upon restricted stock units outstanding and the market price of our
common stock at December 31, 2003, should approximate $2,592,000 in 2004, while stock option expense should
approximate $600,000 in 2004, exclusive of payroll taxes on exercises of options. Future grants of restricted stock
units and stock options could further increase our future stock-based compensation expense. The future level of
payroll taxes and other costs associated with employees(cid:146) exercise of stock options will depend upon the timing of
employees(cid:146) exercise of approximately 3,088,618 remaining stock options outstanding at December 31, 2003, the
Company(cid:146)s stock price at the time of exercise, and the level of future grants of stock options.
General and administrative expense decreased in 2002 as compared to 2001, due primarily to a reduction in
expenditures for product research, development overhead, consulting fees, lease termination costs relating to our
PSPUD business, and employee severance costs, all of which totaled $5,630,000 in 2001.
Interest expense: Interest expense was $1,121,000 in 2003, $3,809,000 in 2002, and $3,227,000 in 2001.
Debt and related interest expense remain relatively low compared to our overall asset base. The decrease in interest
expense in 2003 compared to 2002 and 2001 is principally the result of lower average debt balances, offset partially
by decreased capitalized interest due to lower average in-process development balances. Capitalized interest
expense totaled $6,010,000 in 2003, $6,513,000 in 2002, and $8,992,000 in 2001 in connection with our
development activities.
Interest paid, including capitalized interest, was $7,131,000 in 2003, $10,322,000 in 2002, and $12,219,000
in 2001.
We expect that our aggregate interest cost (interest expensed and capitalized interest combined) during
fiscal 2004 will continue to decline as a result of principal amortization. During fiscal 2004, scheduled principal
amortization approximates $40.0 million, of which approximately $28.0 million should be paid in the first half of
2004.
In 2004, we expect that our average in-process development balances will exceed our average debt
balances, and therefore we believe that virtually all of our interest will be capitalized in 2004. Accordingly, we
expect that interest expense, net of capitalization, will be nominal.
48
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, 2003:
Description
Minority interest in income for the year ended
December 31,
2002
December 31,
2003
December 31,
2001
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
2,905
3,649
305
415
9,523
(in thousands)
26,906
$
2,399
3,357
283
3,003
8,139
$
31,737
1,074
-
359
4,611
8,234
Total minority interests in income ...........................
$
43,703
$
44,087
$
46,015
(a) These amounts reflect income allocated to the minority interests in the Consolidated Development Joint Venture.
Included in minority interest in income is $3,362,000, $3,227,000, and $2,386,000 in depreciation expense for the
years ended December 31, 2003, 2002, and 2001, 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(cid:146)s consolidated financial statements. Included in minority interest in
income is $647,000 and $721,000 in depreciation expense for the years ended December 31, 2003 and 2002.
(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 $342,000, $354,000, and $308,000 in
depreciation expense for the years ended December 31, 2003, 2002, and 2001, respectively.
(d) These amounts reflect income allocated to minority interests that the Company acquired as of December 31, 2003,
and are therefore no longer outstanding at December 31, 2003. Included in minority interest in income is
$216,000, $2,286,000, and $3,000,000 in depreciation expense for the years ended December 31, 2003, 2002, and
2001, respectively.
(e) These amounts reflect income allocated to minority interests that were outstanding consistently throughout the
three years ended December 31, 2003. Included in minority interest in income is $1,761,000, $1,499,000, and
$2,153,000 in depreciation expense for the years ended December 31, 2003, 2002, and 2001, respectively.
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, 2001, 2002, and 2003, the holders of our preferred partnership units were paid in aggregate
approximately $31,737,000, $26,906,000 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 2004 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 (cid:147)Consolidated Development Joint
Venture(cid:148)) with a joint venture partner whose partners include an institutional investor and the Company(cid:146)s Chairman
and former CEO, B. Wayne Hughes ((cid:147)Mr. Hughes(cid:148)). 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, 2001, 2002, and 2003 is $1,074,000, $2,399,000, and
$2,905,000, respectively, representing our joint venture partner(cid:146)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 2003 and 2002 as compared to the preceding years with
49
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 2004 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 as of
December 31, 2003 and are therefore no longer outstanding. There will be no further income allocated to these
interests in 2004 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, 2003, comprised of investments in the Consolidated
Entities and the Operating Partnership Units described in Note 9 to the Company(cid:146)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.
Discontinued Operations: As described more fully in the Note 4 to the consolidated financial statements,
during 2002 and 2003 we implemented a business plan which included the closure of 31 of the 55 containerized
storage facilities that were open at December 31, 2001 (these 31 facilities are referred to hereinafter as the (cid:147)Closed
Facilities(cid:148)). Also, in 2003, we sold five self-storage facilities (the (cid:147)Sold Self-Storage Facilities(cid:148)), and in 2002 we
sold one of our commercial facilities (the (cid:147)Sold Commercial Property(cid:148)) to a third party for an aggregate $3.9 million
in cash.
During 2002, in connection primarily with the closure or planned closure of 22 of the Closed Facilities, we
recorded asset impairment losses with respect to the containers and equipment utilized by these facilities totaling
$6,504,000. In 2003, we recorded impairment charges on assets for nine Closed Facilities of $2,479,000 and a
$750,000 impairment charge on a real estate facility previously used by the containerized storage business, as well
as an additional $355,000 loss upon sale of this real estate facility.
During 2002, lease termination costs, representing the expected remaining lease liability following closure
of the facilities, were accrued in the amount of $2,447,000 for 2002. In accordance with the provisions of Statement
of Financial Accounting Standards No. 146, (cid:147)Accounting for Costs Associated with Exit or Disposal Activities(cid:148)
which we adopted on January 1, 2003, we no longer accrue for such lease termination or other liabilities and instead
recognize such expenses as they are incurred. Such lease termination accruals would have been approximately
$610,000 in the year ended December 31, 2003.
The historical operations of the aforementioned 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
(cid:147)Discontinued Operations(cid:148) on the consolidated income statement. These amounts are set forth below:
50
Discontinued Operations:
Rental income (a):
Sold self-storage facilities...............
Closed facilities ..............................
Sold commercial property...............
Total rental income ...................
Cost of operations (a):
Sold self-storage facilities...............
Closed facilities ..............................
Sold commercial property...............
Total cost of operations.............
Depreciation and amortization (a):
Sold self-storage facilities...............
Closed facilities ..............................
Sold commercial property...............
Total depreciation and
Year Ended December 31,
Year Ended December 31,
2003
2002
Change
2002
2001
Change
(Dollar amounts in thousand)
$1,579
9,385
-
10,964
617
8,178
-
8,795
424
1,804
-
$1,841
22,396
268
24,505
742
22,588
84
23,414
$(262)
(13,011)
(268)
(13,541)
(125)
(14,410)
(84)
(14,619)
528
3,035
107
(104)
(1,231)
(107)
$1,841
22,396
268
24,505
742
22,588
84
23,414
528
3,035
107
3,670
$1,897
19,212
460
21,569
769
18,063
111
18,943
523
2,508
116
$(56)
3,184
(192)
2,936
(27)
4,525
(27)
4,471
5
527
(9)
3,147
523
amortization ...........................................
2,228
3,670
(1,442)
Loss before other items ..........................
(59)
(2,579)
2,520
(2,579)
(521)
(2,058)
Other items:
Sold self-storage facilities (b) .........
Closed facilities (c) .........................
Sold commercial property...............
Total other items ........................
5,476
(3,584)
-
1,892
-
(8,951)
-
(8,951)
5,476
5,367
-
10,843
-
(8,951)
-
(8,951)
-
-
-
-
-
(8,951)
-
(8,951)
Net discontinued operations (d)..............
$1,833
($11,530)
$13,363
($11,530)
$521
($11,009)
(a) These amounts represent the historical operations of the Closed Facilities and the Sold Facilities. Amounts with respect to
these facilities for periods prior to 2002 were previously classified as rental income, cost of operations, and depreciation
expense and gain/(loss) on sales in the financial statements.
(b) This represents the gain on sale recorded upon the completion of the sale of the Sold Self-storage facilities.
(c) Other charges include asset impairment charges with respect to the furniture, fixtures, and other assets of the Closed
Facilities totaling $2,479,000 and $6,504,000 for the years ended December 31, 2003 and 2002, respectively. Amounts for
2003 also include a $750,000 impairment charge and a $355,000 loss on sale with respect to a real estate facility previously
used by one of the Closed Facilities, which was sold in December 2003. Amounts for 2002 also include lease termination
accruals.
(d) The net discontinued operations have resulted in an increase in our earnings per share of $0.01 per diluted common share for
2003 and reductions to our earnings per share of $0.09 and $0.00 per diluted common share for each of the two years ended
December 31, 2002 and 2001, respectively.
Six 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.
51
Gain (loss) in disposition of real estate: In the year ended December 31, 2003, we recorded a net gain on
disposition of real estate assets of $1,007,000, as compared to a loss of $2,541,000 in 2002 and a gain of $4,091,000
in 2001. The gain in 2003 is composed of a gain on sale of investments of $316,000, and a gain on sale of seven
parcels of land and two self-storage facilities aggregating $691,000. 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.
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 ((cid:147)REIT(cid:148)), 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 (cid:147)Requirement to Pay Distributions(cid:148) 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)
2002
$588,961
2003
$594,430
2001
$538,534
Allocable to minority interests (Preferred Units)................................................
Allocable to minority interests (common equity) ...............................................
(26,906)
(23,125)
(26,906)
(25,268)
(31,737)
(22,125)
Cash from operations allocable to our shareholders ...........................................
544,399
536,787
484,672
Capital improvements to maintain our facilities:
Self-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).....................
(29,287)
(888)
505
514,729
(146,196)
(21,501)
(225,864)
-
(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)
Cash available for principal payments on debt and reinvestment .......................
$121,168
$118,994
$108,431
(a) The special distribution in 2001 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, 2003, 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
of credit as temporary (cid:147)bridge(cid:148) financing, and repaid those amounts with internally generated cash flows and
52
proceeds from the placement of permanent capital. As of December 31, 2003, we had no outstanding borrowings
under our $200 million bank line of credit which matures on October 31, 2004. We are currently in the process of
amending this credit facility to provide for, among other items, an extension of the maturity date and enhancement
to certain covenants.
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 2003, 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 (cid:147)Baa2(cid:148) by Moody(cid:146)s and (cid:147)BBB+(cid:148) by both Standard & Poor(cid:146)s and Fitch IBCA.
Our portfolio of real estate facilities remains substantially unencumbered. At December 31, 2003, we had
mortgage debt outstanding of $16.6 million (which encumbers 21 facilities with a book value of $55.5 million) and
unsecured debt in the amount of $59.4 million.
We believe that our size and financial flexibility enables us to access capital when appropriate. Since 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
8.600% 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
6.500% Cumulative Preferred Stock, Series W
6.500% Cumulative Preferred Stock, Series X
6.850% Cumulative Preferred Stock, Series Y
6.250% Cumulative Preferred Stock, Series Z
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
October 6, 2003
November 13, 2003
January 2, 2004
March 5, 2004
(in thousands)
$
$ 166,966
-
-
493,085
139,022
-
145,075
145,075
166,866
128,126
116,020
40,000
112,500
-
51,836
20,294
-
-
2,690
-
-
-
-
-
-
-
$ 1,652,735
$ 74,820
On January 2, 2004, in a private transaction, we sold 1,600,000 shares (par value of $40,000,000) of our
Preferred Stock, Series Y, priced at 6.850% and on March 5, 2004, 4,500,000 depositary shares, with each
depositary share representing 1/1,000 of a share of 6.250% Cumulative Preferred Stock, Series Z (par value
$112,500,000).
53
We used approximately $1,034,521,000 of these net proceeds in order to redeem higher-coupon preferred
securities, as follows:
Security Redeemed or Repurchased
Date Redeemed or
Repurchased
Cumulative
Preferred Stock
Preferred
Partnership
Units
(in thousands)
9.125% Cumulative Preferred Units, Series O
8.875% Cumulative Preferred Stock, Series G
8.450% Cumulative Preferred Stock, Series H
8.750% Cumulative Preferred Units, Series P
8.625% Cumulative Preferred Stock, Series I
10.00% Cumulative Preferred Units, Series A
8.000% Cumulative Preferred Stock, Series J
Cumulative Preferred Stock, Series C
9.200% Cumulative Preferred Stock, Series B
8.250% Cumulative Preferred Stock, Series K
8.250% Cumulative Preferred Stock, Series L
August 31, 2001
September 28, 2001
October 5, 2001
October 15, 2001
November 13, 2001
September 30, 2002
October 7, 2002
October 7, 2002
March 31, 2003
January 19, 2004
March 10, 2004
$
-
172,525
168,775
-
100,025
45,643
150,018
30,018
57,517
115,000
115,000
$ 30,000
-
-
50,000
-
-
-
-
-
-
-
$ 954,521
$ 80,000
The Cumulative Preferred Stock amounts listed above include redemption costs.
During 2005, approximately $398 million of preferred securities become redeemable, at our option, having
a weighted average rate of 9.6%. It is our intent to redeem these securities with lower rate preferred securities. As
indicated above, we recently issued preferred securities with a rate of 6.25%. There is no assurance that rates will
continue at these historical low levels. We may, during the course of 2004, issued preferred stock in anticipation of
the aforementioned 2005 redemptions.
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(cid:146)s tax return. We have satisfied
the REIT distribution requirement since 1980.
Aggregate dividends paid during 2003 totaled $146.2 million to the holders of our Cumulative Preferred
Stock, $225.9 million to the holders of our Common Stock and $21.5 million to the holders of our Equity Stock,
Series A. Although we have not finalized the calculation of our 2003 taxable income, we believe that the aggregate
dividends paid in 2003 to our shareholders enabled us to continue to qualify as a REIT.
We estimate that the distribution requirements for fiscal 2004 with respect to our Cumulative Preferred
Stock outstanding, and assuming the redemption of Cumulative Preferred Stock, Series K, will be approximately
$147.6 million.
During 2003, 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, 2003 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. For the first quarter of 2004, a quarterly distribution of $0.45 per common share has been declared
by our Board of Directors.
54
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
share dividend on the common stock or (ii) $2.45. The depositary shares are non-cumulative, and have no
preference over our Common Stock either as to dividends or in liquidation.
Capital Improvement Requirements: During 2004, we have budgeted approximately $53.0 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, 2003, we had total outstanding notes payable of
approximately $76.0 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: No facilities were acquired from third parties during 2003.
During 2002, we acquired nine self-storage facilities for approximately $30.1 million. Our low level of third party
acquisitions over the past two 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 2004, 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.
During 2003, we acquired through a merger 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. The
acquisition cost was approximately $23,377,000, consisting of the issuance of 426,859 shares of our common stock
($13,510,000) valued at the closing trading price of the shares at the date of the acquisition, and cash of
approximately $9,867,000; this acquisition had the effect of reducing minority interest by $6,690,000, with the
excess of cost over underlying book value ($16,687,000) allocated to real estate.
In June 2004, we anticipate that we will acquire a limited partnership interest in one of our Consolidated
Entities. Our estimate of the acquisition cost is approximately $25 million.
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(cid:146)s interest for an amount necessary to
provide them with a maximum return of 10.75% or less in certain circumstances. Our estimate of the purchase price
of this interest is approximately $105.0 million.
On January 1, 2004, we entered into a joint venture with an institutional investor for the purpose of
acquiring up to $125.0 million of existing self-storage properties in the United States from third parties. The venture
will be funded entirely with equity consisting of 30% from the Company and 70% from the institutional investor.
The venture has a nine month investment period (through September 2004) to identify and acquire facilities. To
date no facilities have been acquired by the venture.
We currently have a development (cid:147)pipeline(cid:148) of 38 self-storage facilities and expansions to existing self-
storage facilities with an aggregate estimated cost of approximately $156.3 million (unaudited). Approximately
$69.6 million of development cost has been incurred as of December 31, 2003. We have acquired the land for 33 of
these projects, which have an aggregate estimated cost of approximately $121.4 million (unaudited), and costs
incurred as of December 31, 2003 of approximately $67.8 million. The remaining five 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.
55
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 $86.7
million will be incurred over the next 18 (cid:150) 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
12/31/03
(Amounts in thousands)
Costs to
complete
Facilities currently under construction:
Self-storage facilities
Expansions to existing self-storage facilities
Facilities awaiting construction, where land is
acquired:
Self-storage facilities
Expansions to existing self-storage facilities
Self-storage facilities awaiting construction,
where land has not yet been acquired
Total Development Pipeline
6
14
20
2
11
13
5
38
435
613
1,048
$
50,186
34,094
84,280
$
44,749
17,837
62,586
$
5,437
16,257
21,694
123
433
556
326
10,361
26,775
37,136
4,432
808
5,240
5,929
25,967
31,896
34,920
1,794
33,126
1,930
$ 156,336
$
69,620
$
86,716
In addition to the above projects, we have five parcels of land held for development with total costs of
approximately $12,236,000 at December 31, 2003. These parcels will either be developed or sold.
Stock Repurchase Program: The Company(cid:146)s Board of Directors has authorized the repurchase from time
to time of up to 25,000,000 shares of the Company(cid:146)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. During 2003, we repurchased 175,000 shares for approximately $6.0 million. From
the inception of the repurchase program through December 31, 2003, we have repurchased a total of 21,672,020
shares of common stock at an aggregate cost of approximately $541.9 million.
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, 2003, the Company(cid:146)s debt as a
percentage of total shareholders(cid:146) equity (based on book values) was 1.8%.
Our preferred stock is not redeemable at the option of the holders. Except under certain conditions relating
to the Company(cid:146)s qualification as a REIT, the Senior Preferred Stock is not redeemable by the Company prior to the
following dates: Series D (cid:150) September 30, 2004, Series E (cid:150) January 31, 2005, Series F (cid:150) April 30, 2005, Series K (cid:150)
January 19, 2004, Series L (cid:150) March 10, 2004, Series M (cid:150) August 17, 2004, Series Q (cid:150) January 19, 2006, Series R (cid:150)
September 28, 2006, Series S (cid:150) October 31, 2006, Series T (cid:150) January 18, 2007, Series U (cid:150) February 19, 2007, Series
V (cid:150) September 30, 2007, Series W (cid:150) October 6, 2008, Series X (cid:150) November 13, 2008, Series Y (cid:150) January 2, 2009
and Series Z (cid:150) March 5, 2009. 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 X, and Series Z), plus accrued and unpaid dividends.
Our market risk sensitive instruments include notes payable, which totaled $76,030,000 at December 31,
2003. 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, 2003.
56
ITEM 8.
Financial Statements and Supplementary Data
The financial statements of the Company at December 31, 2003 and December 31, 2002 and for each of the
three years in the period ended December 31, 2003 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.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
ITEM 9A.
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-15(e) 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.
At the end of the period covered by 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, Chief Operating Officer and Chief Financial Officer, of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e). Based upon that
evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s
disclosure controls and procedures were effective. During the fourth quarter of 2003, there were no changes in the
Company’s internal control over financial reporting that have materially affected, or are reasonably likely to
materially affect, the Company(cid:146)s internal control over financial reporting.
57
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(cid:146)s definitive proxy statement filed in connection with the annual shareholders(cid:146)
meeting to be held on May 6, 2004 (the (cid:147)Proxy Statement(cid:148)) under the caption (cid:147)Election of Directors.(cid:148) Information
required by this item with respect to executive officers is provided in Item 4A of this report. See (cid:147)Executive
Officers of the Company.(cid:148)
The information required by this item with respect to audit committee financial expert is hereby
incorporated by reference to the material appearing in the Company(cid:146)s definitive proxy statement filed in connection
with the annual shareholders(cid:146) meeting to be held on May 6, 2004 (the (cid:147)Proxy Statement(cid:148)) under the caption
(cid:147)Election of Directors (cid:150) Directors and Committee Meetings.(cid:148)
The information required by this item with respect to the adoption of a code of ethics is hereby
incorporated by reference to the material appearing in the Company(cid:146)s definitive proxy statement filed in connection
with the annual shareholders(cid:146) meeting to be held on May 6, 2004 (the (cid:147)Proxy Statement(cid:148)) under the caption
(cid:147)Election of Directors (cid:150) Directors and Committee Meetings.(cid:148) The code of ethics adopted by senior management is
filed herewith as Exhibit 14.
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 (cid:147)Compensation(cid:148) and (cid:147)Compensation Committee Interlocks and Insider
Participation.(cid:148)
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Shareholder Matters
The information required by this item is hereby incorporated by reference to the material appearing in the
Proxy Statement under the captions (cid:147)Election of Directors (cid:150) Security Ownership of Certain Beneficial Owners(cid:148) and
(cid:147)Security Ownership of Management.(cid:148)
The following table sets forth information as of December 31, 2003 on the Company(cid:146)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
3,054,450
$27.15
4,223,207
34,168
$26.35
236,669
Equity compensation plans approved
by security holders
Equity
approved by security holders
compensation plans not
The outstanding options granted under plans not approved by the Company(cid:146)s shareholders were granted
under the Company(cid:146)s 2001 Non-Executive/Non-Director Plan, which does not allow participation by the Company(cid:146)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
58
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 (cid:147)Certain Relationships and Related Transactions and Legal Proceedings.(cid:148)
ITEM 14.
Principal Accountant Fees and Services
Fees billed to the Company by Ernst & Young LLP for 2002 and 2003 as are follows:
Audit Fees: Audit fees billed (or expected to be billed) to the Company by Ernst & Young LLP for the
audit of the Company(cid:146)s annual financial statements, reviews of the quarterly financial statements included
in the Company(cid:146)s quarterly reports on Form 10-Q and services in connection with the Company(cid:146)s
registration statements and securities offerings totaled $360,400 for 2002 and $369,400 in 2003.
Tax Fees: Tax fees billed (or expected to be billed) to the Company by Ernst & Young LLP for tax
services (primarily federal and state income tax preparation) totaled $590,200 in 2002 and $615,700 in
2003.
Audit Related Fees and Other Fees: During 2002 and 2003 Ernst & Young LLP did not bill the Company
for audit related services or any other services, except audit services and tax services denoted above.
The Audit Committee of the Company pre-approves all services performed by Ernst & Young LLP,
including those listed above. At this time, the Audit Committee has not delegated pre-approval authority to any
member or members of the Audit Committee.
59
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
The Company furnished a Current Report on Form 8-K dated and filed November 6, 2003, pursuant to Item
7 with its press release announcing its results for the quarter ended September 30, 2003.
The Company filed a Current Report on Form 8-K, dated November 6, 2003 (filed November 7, 2003),
pursuant to Item 5, in connection with the Company(cid:146)s public offering in November 2003 of depositary
shares, each representing 1/1,000 of a share of the Company(cid:146)s 6.450% Cumulative Preferred Stock, Series
X.
c.
Exhibits:
See Index to Exhibits contained herein.
d.
Financial Statement Schedules
Not applicable.
60
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(cid:146)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(cid:146)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(cid:146)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(cid:146)s Registration Statement No. 33-56925 and incorporated herein by reference.
Certificate of Determination for the 8.25% Convertible Preferred Stock. Filed with Registrant(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)s
Registration Statement No. 33-63947 and incorporated herein by reference.
Certificate of Amendment of Articles of Incorporation. Filed with Registrant(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)s Registration Statement No. 333-08791 and incorporated herein by reference.
61
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(cid:146)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(cid:146)s Registration Statement No.
333-18395 and incorporated herein by reference.
Certificate of Determination for Equity Stock, Series A. Filed with Registrant(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)s Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2001 and incorporated herein by reference.
62
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
3.47
3.48
3.49
Certificate of Determination for 8.000% Cumulative Preferred Stock, Series R. Filed with Registrant(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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.
Certificate of Determination for 6.500% Cumulative Preferred Stock, Series W. Filed with Registrant(cid:146)s
Form 8-A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of
6.500% Cumulative Preferred Stock, Series W and incorporated herein by reference.
Certificate of Determination for 6.450% Cumulative Preferred Stock, Series X. Filed with Registrant(cid:146)s
Form 8-A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of
6.450% Cumulative Preferred Stock, Series W and incorporated herein by reference.
Certificate of Determination for 6.850% Cumulative Preferred Stock, Series Y. Filed herewith relating to
the Shares of 6.850% Cumulative Preferred Stock, Series Y and incorporated as Exhibit 3.41.
Certificate of Determination for 6.250% Cumulative Preferred Stock, Series Z. Filed with Registrant(cid:146)s
Form 8-A Registration Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of
6.250% Cumulative Preferred Stock, Series Z and incorporated herein by reference.
Bylaws, as amended. Filed with Registrant(cid:146)s Registration Statement No. 33-64971 and incorporated herein
by reference.
Amendment to Bylaws adopted on May 9, 1996. Filed with Registrant(cid:146)s Registration Statement No. 333-
03749 and incorporated herein by reference.
Amendment to Bylaws adopted on June 26, 1997. Filed with Registrant(cid:146)s Registration Statement No. 333-
41123 and incorporated herein by reference.
Amendment to Bylaws adopted on January 6, 1998. Filed with Registrant(cid:146)s Registration Statement No.
333-41123 and incorporated herein by reference.
Amendment to Bylaws adopted on February 10, 1998. Filed with Registrant(cid:146)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(cid:146)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(cid:146) Form 10-Q for the quarterly period
ended March 31, 1999 and incorporated herein by reference.
63
3.50
Amendment to Bylaws adopted on November 7, 2002. Filed with Registrant(cid:146)s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2002 and incorporated herein by reference.
3.51 Amendment to Bylaws adopted on March 11, 2004. Filed herewith.
10.1
10.2
10.3
10.4
10.5
10.6
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.(cid:146)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(cid:146)s Annual Report on Form 10-K for the year
ended December 31, 1994 and incorporated herein by reference.
Loan Agreement between Registrant and Aetna Life Insurance Company dated as of July 11, 1988. Filed
with Registrant(cid:146)s Current Report on Form 8-K dated July 14, 1988 and incorporated herein by reference.
Amendment to Loan Agreement between Registrant and Aetna Life Insurance Company dated as of
September 1, 1993. Filed with Registrant(cid:146)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(cid:146)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(cid:146)s Registration Statement No. 33-64971 and incorporated herein by reference.
10.7
Registrant(cid:146)s 1990 Stock Option Plan. Filed with Registrant(cid:146)s Annual Report on Form 10-K for the year
ended December 31, 1994 and incorporated herein by reference.
10.8* Registrant(cid:146)s 1994 Stock Option Plan. Filed with Registrant(cid:146)s Annual Report on Form 10-K for the year
ended December 31, 1997 and incorporated herein by reference.
10.9* Registrant(cid:146)s 1996 Stock Option and Incentive Plan. Filed with Registrant(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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.
64
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(cid:146)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(cid:146)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.(cid:146)s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998 and
incorporated herein by reference.
10.17
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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)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(cid:146)s Current Report on Form 8-K dated November 15, 1999 and incorporated herein by reference.
65
10.27 Agreement of Limited Liability Company of PSAC Storage Investors, L.L.C. dated as of November 15,
1999. Filed with Registrant(cid:146)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(cid:146)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(cid:146)s Annual
Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference.
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(cid:146)s
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 and incorporated herein by
reference.
10.31* Registrant(cid:146)s 2000 Non-Executive/Non-Director Stock Option and Incentive Plan. Filed with Registrant(cid:146)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(cid:146)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(cid:146)s 2001 Non-Executive/Non-Director Stock Option and Incentive Plan. Filed with Registrant(cid:146)s
Registration Statement No. 333-59218 and incorporated herein by reference.
10.34* Registrant(cid:146)s 2001 Stock Option and Incentive Plan. Filed with Registrant(cid:146)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(cid:146)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(cid:146)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(cid:146)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
66
7.625% Cumulative Preferred Stock, Series U. Filed with Registrant(cid:146)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(cid:146)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.
10.41 Deposit Agreement dated as of October 6, 2003 among Registrant, EquiServe Trust Company, N.A. and
the holders of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a
Share of 6.500% Cumulative Preferred Stock, Series W. Filed with Registrant(cid:146)s Form 8-A Registration
Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of 5.500% Cumulative
Preferred Stock, Series W and incorporated herein by reference.
10.42 Deposit Agreement dated as of November 13, 2003 among Registrant, EquiServe Trust Company, N.A.
and the holders of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a
Share of 6.450% Cumulative Preferred Stock, Series X. Filed with Registrant(cid:146)s Form 8-A Registration
Statement relating to the Depositary Shares Each Representing 1/1,000 of a Share of 6.450% Cumulative
Preferred Stock, Series X and incorporated herein by reference.
10.43 Deposit Agreement dated as of March 5, 2004 among Registrant, EquiServe Trust Company, N.A. and the
holders of the depositary receipts evidencing the Depositary Shares Each Representing 1/1,000 of a Share
of 6.250% Cumulative Preferred Stock, Series Z. Filed with Registrant(cid:146)s Form 8-A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share of 6.250% Cumulative Preferred
Stock, Series Z and incorporated herein by reference.
10.44 Limited Partnership Agreement of PSAF Acquisition Partners, L.P. between PS Texas Holdings, Ltd. and
the Limited Partner dated as of December 18, 2003. Filed herewith.
11
12
14
21
23
31.1
31.2
31.3
32
Statement Re: Computation of Ratio of Earnings per Share. Filed herewith.
Statement Re: Computation of Ratio of Earnings to Fixed Charges. Filed herewith.
Code of Ethics for Senior Financial Officers. Filed herewith.
Subsidiaries of the Registrant. File herewith.
Consent of Independent Auditors. Filed herewith.
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed and dated by Ronald L.
Havner. Filed herewith.
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed and dated by Harvey
Lenkin. Filed herewith.
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed and dated by John Reyes.
Filed herewith.
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed and dated by Ronald L.
Havner, Harvey Lenkin and John Reyes. Furnished herewith.
*
**
Compensatory benefit plan.
Management contract.
67
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 12, 2004
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/ John Reyes
John Reyes
/s/ B. Wayne Hughes
B. Wayne Hughes
/s/ B. Wayne Hughes, Jr.
B. Wayne Hughes, Jr.
/s/ Robert J. Abernethy
Robert J. Abernethy
/s/ Dann V. Angeloff
Dann V. Angeloff
/s/ William C. Baker
William C. Baker
/s/ John T. Evans
John T. Evans
/s/ Uri P. Harkham
Uri P. Harkham
/s/ Daniel C. Staton
Daniel C. Staton
Date
March 12, 2004
March 12, 2004
March 12, 2004
March 12, 2004
March 12, 2004
March 12, 2004
March 12, 2004
March 12, 2004
March 12, 2004
March 12, 2004
March 12, 2004
Title
Vice-Chairman of the Board, Chief
Executive Officer and Director
(principal executive officer)
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
Director
68
PUBLIC STORAGE, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND SCHEDULES
(Item 15 (a))
Report of Independent Auditors .........................................................................................................
Consolidated balance sheets as of December 31, 2003 and 2002.......................................................
For each of the three years in the period ended December 31, 2003:
Consolidated statements of income ....................................................................................................
Consolidated statements of shareholders(cid:146) equity ..............................................................................
Page
References
F-1
F-2
F-3
F-4
Consolidated statements of cash flows...............................................................................................
F-5 (cid:150) F-6
Notes to consolidated financial statements.........................................................................................
F-7 (cid:150) F- 42
Schedule:
III (cid:150) Real estate and accumulated depreciation ..................................................................................
F-43 (cid:150) F-80
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.
69
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, 2003 and
2002, and the related consolidated statements of income, shareholders(cid:146) equity, and cash flows for each of the three
years in the period ended December 31, 2003. 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(cid:146)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, 2003 and 2002, and the consolidated results
of their operations and their cash flows for each of the three years in the period ended December 31, 2003, 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 20, 2004
ERNST & YOUNG LLP
F-1
PUBLIC STORAGE, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2003 and 2002
(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, primarily due from related parties .......................................................
Other assets......................................................................................................................
Total assets...............................................................................................
LIABILITIES AND SHAREHOLDERS(cid:146) EQUITY
Notes payable...................................................................................................................
Preferred stock called for redemption ..............................................................................
Accrued and other liabilities ............................................................................................
Total liabilities .................................................................................................
Minority interest:
Preferred partnership interests......................................................................................
Other partnership interests ...........................................................................................
Commitments and contingencies
Shareholders(cid:146) equity:
Cumulative Preferred Stock, $0.01 par value, 50,000,000 shares authorized,
5,763,986 shares issued (in series) and outstanding, (9,258,486 at December 31,
2002) at liquidation preference ................................................................................
Common Stock, $0.10 par value, 200,000,000 shares authorized, 126,986,734 shares
issued and outstanding (116,991,455 at December 31, 2002) ..................................
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, no shares issued
and outstanding (7,000,000 at December 31, 2002) ................................................
Paid-in capital ..............................................................................................................
Cumulative net income ................................................................................................
Cumulative distributions paid ......................................................................................
Total shareholders(cid:146) equity................................................................................
Total liabilities and shareholders(cid:146) equity..................................................
December 31,
2003
December 31,
2002
$
204,833
$
103,124
1,332,882
3,792,616
5,125,498
(1,153,059)
3,972,439
69,620
12,236
4,054,295
336,696
78,204
111,289
100,510
82,242
4,968,069
76,030
115,000
131,103
322,133
285,000
141,137
$
$
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
$
$
1,867,025
1,817,025
12,699
-
-
2,438,632
2,366,660
(2,465,217)
4,219,799
4,968,069
$
11,699
-
700
2,371,194
2,030,007
(2,071,656)
4,158,969
4,843,662
$
See accompanying notes.
F-2
PUBLIC STORAGE, INC.
CONSOLIDATED STATEMENTS OF INCOME
For each of the three years in the period ended December 31, 2003
(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 .................................................
Minority interest in income:
Preferred partnership interests..............................................................
Other partnership interests ...................................................................
Discontinued operations ..........................................................................
Gain (loss) on disposition of real estate and real estate investments ......
2003
2002
2001
798,584
11,442
33,953
22,464
8,628
875,071
280,905
4,688
20,918
11,987
185,775
17,127
1,121
522,521
352,550
24,966
(26,906)
(16,797)
1,833
1,007
$
761,446
11,781
29,723
19,947
8,661
831,558
250,215
4,462
23,056
9,411
177,978
15,619
3,809
484,550
347,008
29,888
(26,906)
(17,181)
(11,530)
(2,541)
$
719,765
12,070
28,474
-
14,225
774,534
228,442
3,861
24,941
-
164,914
21,038
3,227
446,423
328,111
38,542
(31,737)
(14,278)
(521)
4,091
Net income ..............................................................................................
$
336,653
$
318,738
$
324,208
Net income allocation:
Allocable to preferred shareholders:
Based on distributions paid..............................................................
Based on redemptions of preferred stock (Note 2) ..........................
Allocable to Equity Stock, Series A ....................................................
Allocable to common shareholders......................................................
Net income per common share (cid:150) basic
Continuing operations.........................................................................
Discontinued operations .....................................................................
Net income per common share (cid:150) diluted
Continuing operations.........................................................................
Discontinued operations .....................................................................
Net income per depositary share of Equity Stock, Series A (basic and
diluted) ...............................................................................................
Basic weighted average common shares outstanding ..............................
Diluted weighted average common shares outstanding ...........................
Weighted average shares of Equity Stock, Series A (basic and diluted) .
$
$
146,196
7,120
21,501
161,836
336,653
$
$
148,926
6,888
21,501
141,423
318,738
$
$
117,979
14,835
19,455
171,939
324,208
$1.28
0.01
$1.29
$1.27
0.01
$1.28
$2.45
125,181
126,517
8,776
$1.24
(0.09)
$1.15
$1.23
(0.09)
$1.14
$2.45
123,005
124,571
8,776
$1.41
-
$1.41
$1.39
-
$1.39
$2.45
122,310
123,577
7,940
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, 2003
(Amounts in thousands, except share and per share amounts)
Balances at December 31, 2000 .................................................................................... $ 1,155,150
Issuance of Cumulative Preferred Stock; Series Q (6,900 shares), Series R
Cumulative
Preferred
Stock
Common
Stock
$ 12,370
Class B
Common
Stock
$ 700
Paid-in
Capital
$ 2,506,736
Cumulative
Net Income
$ 1,387,061
Cumulative
Distributions
$ (1,337,900)
Total
Shareholders(cid:146)
Equity
$ 3,724,117
(20,400 shares) and Series S (5,750 shares)...........................................................
826,250
-
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 10) ..............................................................................
Net income ..................................................................................................................
Distributions to shareholders:
Cumulative Preferred Stock ...................................................................................
Equity Stock, Series A............................................................................................
Common Stock ($1.69 per common share and common share equivalent) ..........
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:
Cumulative Preferred Stock ...................................................................................
Equity Stock, Series A............................................................................................
Common Stock ($1.80 per common share and common share equivalent) ..........
Balances at December 31, 2002 ....................................................................................
Issuance of Cumulative Preferred Stock; Series W (5,300 shares) and Series X
(441,250)
-
-
-
-
-
-
-
-
1,540,150
472,500
(195,625)
-
-
-
-
-
-
-
1,817,025
(4,800 shares)..........................................................................................................
252,500
Redemption of Cumulative Preferred Stock; Series B (2,300,000 shares), Series
C (1,200,000 shares) and Series K (4,600 shares) .................................................
Conversion of Class B Common Stock (7,000,000 shares) (Note 10)
Issuance of Common Stock (3,170,279 shares) (Note 10).........................................
Repurchase of Common Stock (175,000 shares) (Note 10) .......................................
Stock option expense (Note 12)..................................................................................
Net income ..................................................................................................................
Distributions to shareholders:
Cumulative Preferred Stock ...................................................................................
Equity Stock, Series A............................................................................................
Common Stock ($1.80 per share)...........................................................................
Balances at December 31, 2003 .................................................................................... $
(202,500)
-
-
-
-
-
-
-
-
1,867,025
-
-
-
-
-
-
-
-
-
-
700
-
-
-
-
-
-
(27,177)
(75)
74,820
46,487
(275,803)
910
-
-
-
-
2,325,898
(15,484)
(36)
61,033
(380)
163
-
-
-
-
-
(700)
-
-
-
-
(35)
-
81,281
(5,984)
530
-
-
-
-
-
-
184
(1,058)
-
-
-
-
-
11,496
-
-
204
(1)
-
-
- -
- -
- -
-
-
700
317
(17)
-
-
- -
- -
- -
-
-
-
-
-
-
324,208
-
-
-
1,711,269
-
-
-
-
-
318,738
-
-
-
2,030,007
-
-
-
-
-
336,653
11,699
700
2,371,194
-
(8,354)
-
-
-
-
-
-
-
-
(117,979)
(19,455)
(204,596)
(1,679,930)
-
-
-
-
-
-
(148,926)
(21,501)
(221,299)
(2,071,656)
-
-
-
-
-
-
-
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)
(221,299)
4,158,969
244,146
(202,535)
-
81,598
(6,001)
530
336,653
$
12,699
$
-
$
2,438,632
-
-
-
$ 2,366,660
(146,196)
(21,501)
(225,864)
(2,465,217)
$
(146,196)
(21,501)
(225,864)
4,219,799
$
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, 2003
(amounts in thousands)
Cash flows from operating activities:
Net income................................................................................................................. $ 336,653
Adjustments to reconcile net income to net cash provided by operating
$ 318,738
$ 324,208
2003
2002
2001
activities:
Gain, loss and impairment charges (net) included in equity in earnings of
real estate investments...........................................................................................
(Gain)/loss 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...........................................................................................
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 ..................................................................
(187)
(1,007)
185,775
27,753
336
43,703
1,404
257,777
594,430
23,814
(100,000)
-
(30,175)
(102,428)
(9,867)
-
(35,118)
34,883
(9,285)
(228,176)
Cash flows from financing activities:
-
Net borrowings on line of credit ............................................................................
(39,837)
Principal payments on notes payable .....................................................................
68,618
Net proceeds from the issuance of Common Stock ...............................................
244,146
Net proceeds from the issuance of Cumulative Preferred Stock ............................
-
Net proceeds from the issuance of Equity Stock, Series A ....................................
-
Issuance of Put Option...........................................................................................
(6,001)
Repurchase of Common Stock...............................................................................
-
Repurchase of preferred partnership units .............................................................
(87,535)
Redemption of Cumulative Preferred Stock ..........................................................
(393,561)
Distributions paid to shareholders..........................................................................
(50,031)
Distributions paid to minority interests..................................................................
Investment by minority interests............................................................................
(344)
Net cash used in financing activities..................................................................
(264,545)
101,709
Net increase (decrease) in cash and cash equivalents ....................................................
Cash and cash equivalents at the beginning of the year .................................................
103,124
Cash and cash equivalents at the end of the year ........................................................... $ 204,833
(3,737)
2,541
177,978
27,078
10,174
44,087
12,102
270,223
588,961
35,513
-
(139,680)
(26,993)
(101,110)
(27,544)
(30,117)
(33,956)
15,209
(14,786)
(323,464)
(25,000)
(27,685)
23,333
457,016
-
-
(381)
-
(195,661)
(391,726)
(52,174)
558
(211,720)
53,777
49,347
$ 103,124
-
(4,091)
164,914
25,096
3,147
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
$
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, 2003
(amounts in thousands)
(Continued)
2003
2002
2001
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 ..............................................................................................
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 (Note 9):
Real estate facilities .............................................................................
Minority interest...................................................................................
Exchange of Cumulative Preferred Stock, Series B for Cumulative
Preferred Stock, Series T:
$(330,426)
160,236
(8,187)
23,891
14,806
-
$
-
-
(4,538)
6,993
-
(26,993)
$
-
-
-
-
-
-
-
-
-
-
493
(493)
(1,450)
3,289
(16,687)
(6,690)
(39,780)
(25,668)
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 ...............................................................
-
13,510
Exchange of Common Stock for Common Stock, Series B:
Reduction in Common Stock, Series B (7,000,000 shares) .................
Increase in Common Stock (7,000,000 shares)....................................
(700)
700
(2,150)
2,150
-
37,904
-
-
See accompanying notes.
F-6
16,150
(305)
-
-
-
-
-
-
30,814
-
-
-
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
1.
Description of the business
Public Storage, Inc. (the (cid:147)Company(cid:148)) is a California corporation, which was organized in 1980. We
are a fully integrated, self-administered and self-managed real estate investment trust ((cid:147)REIT(cid:148)) 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, 2003, we had direct and indirect equity interests in 1,410
storage facilities located in 37 states and operating under the (cid:147)Public Storage(cid:148) name. We also have direct and
indirect equity interests in approximately 20.1 million net rentable square feet of commercial space located in
10 states.
2.
Summary of significant accounting policies
Basis of presentation
The consolidated financial statements include the accounts of the Company and 38 controlled entities
(the (cid:147)Consolidated Entities(cid:148)). Collectively, the Company and the Consolidated Entities own a total of 1,382
real estate facilities, consisting of 1,374 self-storage facilities, five industrial facilities used by the containerized
storage operations and three commercial properties.
At December 31, 2003, 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. ((cid:147)PSB(cid:148)), which owns and operates 18.3 million net rentable square feet of commercial space as of
December 31, 2003. We do not control these entities, accordingly, our investments in these limited partnerships
and PSB (these entities are referred to collectively as the (cid:147)Unconsolidated Entities(cid:148)) are accounted for using the
equity method.
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 2003, 2002 and 2001; 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, 2003
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, 2003. A comparison of the carrying amount of notes payable to
their estimated fair value is included in Note 8, (cid:147)Notes Payable.(cid:148)
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 consist
primarily of $100.0 million due from Public Storage Business Parks ((cid:147)PSB(cid:148)) that was repaid entirely by March
11, 2004. 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, 2003 is $1,835,000 ($11,423,000 at December
31, 2002) held by STOR-Re Mutual Insurance Company, Inc. ((cid:147)STOR-Re(cid:148)). Insurance and other regulations
place significant restrictions on our ability to withdraw these funds for purposes other than insurance activities
(see Note 3). Other assets at December 31, 2003 includes investments totaling $27,995,000 ($13,801,000 at
December 31, 2002) in held to maturity debt securities owned by STOR-Re stated at amortized cost which
approximates fair value.
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 ((cid:147)FASB(cid:148)) issued Statement of Financial
Accounting Standards No. 144, (cid:147)Accounting for the Impairment or Disposal of Long-Lived Assets(cid:148) ((cid:147)SFAS
No. 144(cid:148)). In June 2001, the FASB issued Statement of Financial Accounting Standards No. 142, (cid:147)Goodwill
and Other Intangible Assets(cid:148) ((cid:147)SFAS No. 142(cid:148)). We adopted both of these statements effective January 1,
2002.
F-8
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
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 fair value of the reporting unit is less than the carrying amount, 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(cid:146)s carrying amount.
No impairments of our goodwill were identified in our annual evaluations at December 31, 2003 and December
31, 2002.
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(cid:146)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(cid:146)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 (less cost to sell) or their carrying value.
Impairments were identified with respect to our long-lived assets associated with our Discontinued
Operations as described further in Note 4. In addition, an impairment charge in the amount of $420,000 was
recorded in the year ended December 31, 2002 relating to trucks and other equipment of the continuing
containerized storage business. No other impairments were identified.
Accounting for Stock-Based Compensation
We utilize the Fair Value Method of accounting for our employee stock options issued after December
31, 2001, and utilize the APB 25 Method for employee stock options issued prior to January 1, 2002. Restricted
Stock Unit expense is recorded over the relevant vesting period. See Note 12 for a full discussion of our
accounting with respect to employee stock options and restricted stock units.
Other assets
Other assets primarily consist of containers and equipment associated with the containerized storage
operations, 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.
Containers and equipment utilized in our containerized storage business totaled $10,895,000 and
$20,275,000 at December 31, 2003 and 2002, respectively. The carrying amounts are net of accumulated
depreciation and asset impairment charges. As discussed in Note 4, during 2003 and 2002 impairment charges
amounting to $2,479,000 and $6,504,000, respectively, were recorded with respect to containers and equipment
utilized in the discontinued containerized storage operations. In addition, during 2002, an impairment charge of
$420,000 was recorded with respect to assets used in the continuing containerized storage operations.
F-9
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
Included in depreciation and amortization expense for 2003, 2002 and 2001 is $7,610,000, $4,503,000,
and $3,606,000 respectively, related to depreciation of other assets. Included in discontinued operations for
2003, 2002, and 2001, respectively, is depreciation expense of $1,461,000, $2,518,000, and $2,245,000
respectively, related to depreciation of containers and equipment of the discontinued operations of the
containerized storage business.
Other assets at December 31, 2003 also includes investments totaling $27,995,000 ($13,801,000 at
December 31, 2002) 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, 2003 totaled $28,741,000 ($22,911,000 at December 31, 2002). 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, 2003 totaled
$2,486,000 ($2,135,000 at December 31, 2002).
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 loss
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(cid:146) 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(cid:146) limit of coverage of
$125,000,000 for property coverage and $101,000,000 for general liability, our exposure could be greater.
These limits, however, 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(cid:146)
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 (cid:147)goodwill(cid:148) ($94,719,000)
acquired in business combinations.
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 have a defined life and continue to be amortized over 25 years. Had we continued to amortize
goodwill in 2002 and 2003 as we did in 2001, net income would have been reduced by $2,705,000 in each year
F-10
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
and basic and diluted earnings per share would have been reduced $0.02 per share in each of 2003 and 2002,
respectively.
Goodwill is net of accumulated amortization of $16,515,000 at December 31, 2003 and 2002. At
December 31, 2003, property management contracts are net of accumulated amortization of $53,711,000
($47,107,000 at December 31, 2002). Included in depreciation and amortization expense for 2003, 2002, and
2001 is $6,604,000 with respect to the amortization of property management contracts. We expect amortization
expense with respect to property management contracts will be $6,604,000 per year in each of the five years
ended through December, 2008. Included in depreciation and amortization expense for 2001 is $2,705,000
relating to the amortization of goodwill (none for 2002 and 2003).
Revenue and expense recognition
Rental income, which is generally earned pursuant to month-to-month leases for storage space, is
recognized as earned. Promotional discounts are recognized as a reduction to rental income over the
promotional period, which is generally during the first month of occupancy. Late charges and administrative
fees are recognized as rental income when collected. 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.
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.
Cost of operations, general and administrative expense, interest expense, as well as television, yellow
page, and other advertising expenditures are expensed as incurred. Television, yellow page, and other
advertising expense totaled $25,231,000, $25,610,000, and $21,897,000 for the years ended December 31,
2003, 2002, and 2001, respectively.
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 $146,196,000, $148,926,000, and $117,979,000 for the
years ended December 31, 2003, 2002 and 2001, respectively, have been deducted from net income to arrive at
net income allocable to our common shareholders.
In addition, during 2003, we implemented the Security and Exchange Commission(cid:146)s (the (cid:147)SEC(cid:148))
clarification of Emerging Issues Task Force ((cid:147)EITF(cid:148)) Topic D-42.. EITF Topic D-42, "The Effect on the
Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock" provides,
among other things, that any excess of (1) the fair value of the consideration transferred to the holders of
preferred stock redeemed over (2) the carrying amount of the preferred stock should be subtracted from net
earnings to determine net earnings available to common stockholders in the calculation of earnings per share.
During 2001, 2002, and 2003, we called for redemption various series of our cumulative perpetual
preferred stock. Our interpretation of EITF Topic D-42, prior to the clarification, was that the carrying amount
F-11
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
of our preferred stock was equivalent to the liquidation preference as recorded on our balance sheet. Each of
the series of preferred stock that was called for redemption was redeemed at the liquidation preference.
Accordingly, based upon our interpretation, the fair value of the consideration given at redemption was
equivalent to the carrying amount on our balance sheet, resulting in no impact to net earnings available to
common stockholders in the calculation of earnings per share.
At the July 31, 2003 meeting of the EITF, the Securities and Exchange Commission Observer clarified
that for the purposes of applying EITF Topic D-42, the carrying amount of the preferred stock should be
reduced by the issuance costs of the preferred stock, regardless of where in the stockholders’ equity section
those costs were initially classified on issuance. We therefore revised our accounting treatment in 2003 to
conform to the SEC Observer(cid:146)s clarification, and have reflected adjustments to amounts previously reported in
2001 and 2002 to conform such presentations to the SEC Observer(cid:146)s clarification.
As a result of this implementation, we allocated an additional $7,120,000 ($0.06 per diluted share) for
the year ended December 31, 2003 for the excess of the redemption amount over the carrying amount of our
Cumulative Preferred Stock. In addition, the 2002 and 2001 allocations of net income and earnings per share
have been restated to reflect the allocation of $6,888,000 ($0.06 per diluted share) and $14,835,000 ($0.12 per
diluted share), respectively, for such excess with respect to redemptions of our Cumulative Preferred Stock. It
is our policy to record such allocation at the time the securities are called for redemption. This implementation
had no impact upon our reported net income; however, the implementation did result in a reallocation of such
net income between our preferred and 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, 2003, 2002 and 2001 were allocated approximately $21,501,000, $21,501,000 and $19,455,000,
respectively, of net income. The remaining $161,836,000, $141,423,000, and $171,939,000, for the years
ended December 31, 2003, 2002, and 2001, respectively, was allocated to our common stock.
Basic net income per share is computed using the weighted average common shares outstanding (prior
to the dilutive impact of stock options and restricted stock outstanding). Diluted net income per common share
is computed using the weighted average common shares outstanding (adjusted for the dilutive impact of stock
options and restricted stock outstanding that totaled 1,336,000 in 2003, 1,566,000 in 2002 and 1,267,000 shares
in 2001).
Commencing January 1, 2000, the 7,000,000 Class B common shares outstanding began to participate
in distributions of the Company(cid:146)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 included 6,790,000 (7,000,000 x 97%) Class B common shares in the
weighted average common equivalent shares for the year ended December 31, 2001.
As of March 31, 2002, the remaining contingency for the conversion of the Class B common stock into
regular common stock was satisfied. 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.
F-12
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
Reclassifications
Certain amounts previously reported have been reclassified to conform to the December 31, 2003
presentation, including Discontinued Operations (see Note 4) and the application of the SEC Observer(cid:146)s
clarification of EITF Topic D-42 (see (cid:147)Net Income per Common Share(cid:148) above).
3.
Business combinations
Development Joint Venture
On January 16, 2002, we acquired the remaining 70% interest we did not own in a partnership (the
(cid:147)Development Joint Venture(cid:148)). 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(cid:146)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(cid:146)s income statement.
The net operating results of STOR-Re with respect to its insurance services provided to the Unconsolidated
Entities are included in (cid:147)Interest and other income.(cid:148)
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.
F-13
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
PS Insurance Company, Ltd.
On December 31, 2001, we acquired all of the capital stock of PS Insurance Company, Ltd. ((cid:147)PS
Insurance Company(cid:148)), 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(cid:146)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, (cid:147)Hughes(cid:148)).
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 and 2001 (none in 2003) are summarized as follows:
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 .
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
F-14
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
The historical operating results of the above acquisitions prior to each respective acquisition date have
not been included in the Company(cid:146)s historical operating results. Pro-forma data (unaudited) for the year ended
December 31, 2002 (there were no pro-forma adjustments required for the year ended December 31, 2003 as all
the transactions denoted above had occurred by December 31, 2002) as though the business combinations above
had been effective at the beginning of fiscal 2002 are as follows:
Revenues ...........................................................
Net income ........................................................
For the Year
Ended December 31, 2002
(in thousands except
per share data)
$832,905
$318,503
Net income per common share (Basic) ..............
Net income per common share (Diluted)...........
$1.15
$1.13
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 expenses, (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
Statement of Financial Accounting Standards No. 144 ((cid:147)SFAS No. 144(cid:148)) 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.
During 2002, we adopted a business plan that included the closure of 22 non-strategic containerized
storage facilities. During 2003, we identified an additional 9 facilities for closure. Each of these 31
containerized storage facilities (collectively, the (cid:147)Closed Facilities(cid:148)) represented components of our
Containerized Storage business segment. The related assets of the Closed Facilities (consisting primarily of
storage containers) were deemed not recoverable from future operations, and as a result asset impairment
charges for the excess of these assets(cid:146) net book value over their fair value, determined based upon the values of
similar assets, was recorded during 2002 and 2003 totaling $6,504,000 and $2,479,000, respectively.
In 2003, we decided to sell an industrial facility that was previously used by one of the closed
facilities. We determined in the quarter ended June 30, 2003 that the net proceeds from this sale would be
$750,000 less than the book value and, accordingly, we recorded an impairment charge of $750,000. The sale
of the facility was completed in December 2003, and a loss on sale, representing the difference between the net
proceeds received and the book value (net of the $750,000 impairment charge) of $355,000 was recorded. The
impairment charge and loss on sale is included in discontinued operations.
During 2002, lease termination costs, representing the expected remaining lease liability following
closure of the facilities, were accrued in the amount of $2,447,000 for 2002. In accordance with the provisions
of Statement of Financial Accounting Standards No. 146, (cid:147)Accounting for Costs Associated with Exit or
Disposal Activities(cid:148) which we adopted on January 1, 2003, we no longer accrue for such lease termination or
other liabilities and instead recognize such expenses as they are incurred. If recorded, such lease termination
accruals would have decreased net income by $610,000 for the year ended December 31, 2003.
F-15
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
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 (cid:147)Discontinued
Operations(cid:148) on the income statement.
During 2003, we sold four self storage facilities that we owned in the Knoxville, Tennessee, and one
self-storage facility located in Perrysburg, Ohio. The operations of these facilities and the Knoxville Facilities
(collectively, the (cid:147)Sold Self-Storage Facilities(cid:148)), including the gain on sale of $5,476,000, are reported as
discontinued operations.
During 2002, we sold one of our commercial properties (the (cid:147)Sold Commercial Property(cid:148)) to a third
party. The historical operations of this property for 2002 and 2001 are included in Discontinued Operations.
The following table summarizes the historical operations of the Sold Self-Storage Facilities, the Closed
Facilities and the Sold Commercial Property:
Discontinued Operations:
2003
Year ended December 31,
2002
(Amounts in thousands)
2001
Rental income (a):
Sold self-storage facilities ...............
Closed facilities...............................
Sold commercial property ...............
Total rental income..................
$
1,579
9,385
-
10,964
$ 1,841
22,396
268
24,505
$ 1,897
19,212
460
21,569
Cost of operations (a):
Sold self-storage facilities ...............
Closed facilities...............................
Sold commercial property ...............
Total cost of operations ...........
Depreciation and amortization (a):
Sold self-storage facilities ...............
Closed facilities...............................
Sold commercial property ...............
Total expenses .........................
617
8,178
-
8,795
424
1,804
-
2,228
742
22,588
84
23,414
769
18,063
111
18,943
528
3,035
107
3,670
523
2,508
116
3,147
Loss before other items.......................
(59)
(2,579)
(521)
Other items:
Sold self-storage facilities (b)..........
Closed facilities (c)..........................
Commercial properties ....................
Total other items......................
5,476
(3,584)
-
1,892
-
(8,951)
-
(8,951)
-
-
-
-
Total discontinued operations.............
$
1,833
$ (11,530)
$
(521)
(a) These amounts represent the historical operations of the Sold Self-Storage Facilities, the Closed Facilities, and the Sold
Commercial Property, and include amounts previously classified as rental income, cost of operations, and depreciation
expense in the financial statements of prior periods.
(b) Represents the net gain on sale.
F-16
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(c) Other items include asset impairment charges with respect to the containers and equipment of the Closed Facilities totaling
$2,479,000 and $6,504,000 for the years ended December 31, 2003 and 2002, respectively. Amounts for 2003 also include
a $750,000 impairment charge and a $355,000 loss on sale with respect to a facility previously used by one of the Closed
Facilities, which was sold in December 2003. Amounts for 2002 also include $2,447,000 in lease termination accruals.
There are no significant assets or liabilities of discontinued operations at December 31, 2003 or 2002.
5.
Real estate facilities
Activity in real estate facilities during 2003, 2002 and 2001 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 9)..................................
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:
2003
2002
2001
(Amounts in thousands)
$ 4,988,526
$ 4,431,054
$ 4,134,417
-
-
(31,327)
121,437
16,687
30,175
5,125,498
(987,546)
(172,328)
6,815
(1,153,059)
87,516
102,428
1,113
(121,437)
69,620
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
Beginning balance ....................................................................
Acquisitions ..............................................................................
Transfers to land held for development ....................................
Dispositions ..............................................................................
Ending balance .........................................................................
Total real estate facilities..............................................................
17,807
-
(1,113)
(4,458)
12,236
$ 4,054,295
30,001
-
-
(12,194)
17,807
$ 4,106,303
21,447
12,425
3,663
(7,534)
30,001
$ 3,762,304
(a) Included in additions for the years ended December 31, 2003, 2002, and 2001, respectively, is $767,000, $635,000, and
$902,000 in real estate depreciation expense with respect to discontinued operations. See Note 4.
Operating Facilities
During 2003, we opened 14 newly developed self-storage facilities with an aggregate cost of
$107,126,000. We also completed expansions to eight existing self-storage facilities with a total cost of
$12,533,000 and incurred additional costs with respect to facilities opened in prior years of $1,778,000.
During 2003 we sold five self-storage facilities and an industrial facility previously used by the
containerized storage operations for aggregate net proceeds of $20,950,000 of cash. An aggregate net gain on
F-17
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
sale of $5,121,000 was recorded for these sales, combined with an impairment charge in the amount of
$750,000 which was recorded when it was determined that the industrial facility would be sold for less than its
book value. The gain and impairment charge are included in Discontinued Operations.
In addition, during 2003 we sold excess land and completed the sale of two additional self-storage
facilities for aggregate net proceeds of $13,082,000, recognizing a net gain on sale of $691,000. The two self-
storage facilities had been operated by the buyer pursuant to a lease arrangement, with the lease income with
respect to these two facilities included in (cid:147)Interest and Other Income.(cid:148)
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 ((cid:147)Combination Facilities(cid:148)) 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
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.
At December 31, 2003, the unaudited adjusted basis of real estate facilities for federal 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, 2003, construction in process consists primarily of 13 facilities that will be
developed on newly acquired land and the expansion and remodeling of 25 existing self-storage facilities. In
addition, at December 31, 2003 we have five parcels of land held for development with total costs of
approximately $12,236,000.
6.
Investments in real estate entities
At December 31, 2003, 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(cid:146)s.
During 2003, 2002 and 2001, we recognized earnings from our investments of $24,966,000,
$29,888,000, and $38,542,000, respectively, and received cash distributions totaling $17,754,000, $19,496,000,
F-18
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
and $24,124,000, respectively. In addition, during 2003 and 2002, we recognized gains of $187,000 and
$3,737,000, respectively, representing our share of PSB(cid:146)s gains on sale of investments in real estate; these gains
are presented in (cid:147)Equity in earnings from real estate entities(cid:148) in our consolidated income statement.
During 2003, 2002, and 2001, we invested a total of $340,000, $223,000, and $15,954,000 in the real
estate entities.
The following table sets forth our investments in the Unconsolidated Entities at December 31, 2003
and 2002 and our equity in earnings of real estate investments for each of the three years ended December 31,
2003:
PSB (a) ....................................
Other investments....................
Disposed investments (b) ........
Total ..................................
Investments in Real Estate Entities at
December 31,
2003
$ 282,428
54,268
-
$ 336,696
2002
$ 273,790
55,364
525
$ 329,679
Equity in Earnings of Real Estate Entities for the
year ended December 31,
2002
$ 24,461
5,167
260
$ 29,888
2003
$ 19,687
5,269
10
$ 24,966
2001
$ 23,226
5,177
10,139
$ 38,542
(a)
Included in equity in earnings for 2003 and 2002 is our pro-rata share of PSB(cid:146)s gain on sale of investments in real
estate in the amount of $187,000 and $3,737,000, respectively.
(b) Represents amounts associated with investments no longer held as of December 31, 2003. 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. In addition, we disposed of a real
estate investment during 2003, receiving net proceeds of $851,000, and recognizing a gain of $316,000 - representing
the excess of the net proceeds over the book value of this investment.
Investment in PS Business Parks, Inc. ((cid:147)PSB(cid:148))
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
(cid:147)PSB(cid:148)). 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, 2003. 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(cid:146)s trading price at December 31, 2003 ($41.26), the
shares and units had a market value of approximately $524,977,000 as compared to a book value of
$282,428,000.
At December 31, 2003, PSB owned and operated approximately 18.3 million net rentable square feet
of commercial space. In addition, PSB manages 960,000 net rentable square feet of commercial space owned
by the Company and the Consolidated Entities pursuant to property management agreements.
The following table sets forth the condensed statements of operations for each of the two years ended
December 31, 2003 and 2002, and the condensed balance sheets of PSB at December 31, 2003 and 2002. The
amounts below represent 100% of PSB(cid:146)s balances and not our pro-rata share.
F-19
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
For the year ended December 31,
Total revenue (a) ...................................................................
Cost of operations and other expenses ..................................
Depreciation and amortization ..............................................
Discontinued operations (b) ..................................................
Minority interest....................................................................
Net income ........................................................................
At December 31,
Total assets (primarily real estate).........................................
Total debt (c).........................................................................
Other liabilities......................................................................
Preferred equity and preferred minority interests..................
Common equity.....................................................................
For the Year Ended December 31,
2003
(Amount in thousands)
2002
$
$
$
$
$
$
198,035
(62,761)
(58,927)
3,334
(30,585)
49,096
1,358,861
264,694
35,701
386,423
672,043
192,363
(61,621)
(55,183)
14,041
(32,170)
57,430
1,156,802
70,279
36,902
388,563
661,058
(a) Included in total revenue are gains on sale of marketable securities totaling $2,043,000 and $41,000 for the
years ended December 31, 2003 and 2002, respectively.
(b) Included in discontinued operations is an impairment charge recorded on impending real estate sales totaling
$5,907,000 and $900,000 for the years ended December 31, 2003 and 2002, respectively; net gains on sale of
real estate facilities totaling $2,897,000 and $9,023,000 for the years ended December 31, 2003 and 2002,
respectively; and equity income in discontinued property operations totaling $6,344,000 and $5,918,000 for
the years ended December 31, 2003 and 2002, respectively.
(c) Total debt at December 31, 2003 includes $100,000,000 due to the Company pursuant to a loan agreement.
See Note 11, Related Party Transactions, below.
Other Investments
The Other Investments consist primarily of an average 41% common equity ownership, which we
owned throughout the three-year period ending December 31, 2003, in seven limited partnerships (collectively,
the (cid:147)Other Investments(cid:148)) owning an aggregate of 36 storage facilities. During 2003 and 2002, we acquired
additional equity interests in these entities for a total of $340,000 and $223,000, respectively.
The following table sets forth certain condensed financial information (representing 100% of these
entities(cid:146) 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(cid:146) equity .......................................
$
$
$
2003
(Amount in thousands)
2002
26,763
(9,109)
(2,573)
15,081
$
$
$
56,592
1,930
1,618
53,044
25,884
(8,605)
(2,535)
14,744
56,731
5,450
1,121
50,160
F-20
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
7.
Revolving line of credit
We have a $200 million revolving line of credit (the (cid:147)Credit Agreement(cid:148)) that has a maturity date of
October 31, 2004 and bears an annual interest rate ranging from the London Interbank Offered Rate ((cid:147)LIBOR(cid:148))
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, 2003, we had no borrowings on our
line of credit.
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(cid:146) 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, 2003.
8.
Notes payable
Notes payable at December 31, 2003 and 2002 consist of the following:
2003
2002
Carrying
amount
Carrying
Fair value
amount
(Amounts in thousands)
Fair value
Unsecured senior notes:
7.47% note due January 2004 .....................................................
7.66% note due January 2007 .....................................................
7.08% note due November 2003.................................................
$ 14,600
44,800
-
$ 14,600
44,800
-
$ 29,300
56,000
10,000
$ 29,300
56,000
10,000
Mortgage notes payable:
10.55% mortgage notes secured by real estate facilities,
principal and interest payable monthly, due August 2004 ....
14,863
15,266
18,167
19,409
7.134% to 8.75% 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 .........................................................
1,767
$ 76,030
1,767
$ 76,433
2,400
$ 115,867
2,400
$ 117,109
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, 2003.
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 21 real estate facilities having an aggregate net book value of
approximately $55.5 million at December 31, 2003.
F-21
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
At December 31, 2003, approximate principal maturities of notes payable are as follows:
Unsecured
Senior Notes
Mortgage debt
Total
(dollar amounts in thousands)
2004..........................................
2005..........................................
2006..........................................
2007..........................................
2008..........................................
Thereafter .................................
Weighted average rate ..............
$
$
25,800
11,200
11,200
11,200
-
-
59,400
7.6%
$
$
15,010
156
170
185
202
907
16,630
10.3%
$ 40,810
11,356
11,370
11,385
202
907
$ 76,030
8.2%
Interest paid (including interest related to the borrowings under the Credit Agreement) during 2003,
2002 and 2001 was $7,131,000, $10,322,000, and $12,219,000, respectively. In addition, in 2003, 2002 and
2001, capitalized interest totaled $6,010,000, $6,513,000, and $8,992,000, 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(cid:146) 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 each of the years ended December 31, 2003, 2002, and
2001, the holders of these preferred units were paid in aggregate approximately $26,906,000, $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 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.
F-22
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
The following table summarizes the preferred partnership units outstanding:
Series
Distribution
Rate
Units
Outstanding
Carrying Amount
At December 31, 2003 and 2002
Series N ....................
Series O ....................
9.500%
9.125%
Total .........................
(Units and dollar amounts in thousands)
9,600
1,800
11,400
$240,000
45,000
$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, 2003 and 2002, and minority interest in income for the three years
ended December 31, 2003 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,
2003
December 31,
2002
December 31,
2003
December 31,
2002
December 31,
2001
(Amounts in thousands)
Consolidated Development Joint
Venture ........................................
Convertible Partnership Units .........
Newly consolidated partnerships ....
Other consolidated partnerships ......
$ 68,490
6,259
-
66,388
$ 75,432
6,274
18,215
54,578
$
$
2,905
305
3,649
9,938
$
2,399
283
3,357
11,142
1,074
359
-
12,845
Total other partnership interests ......
$ 141,137
$ 154,499
$
16,797
$
17,181
$
14,278
The partnership agreements of the Other Consolidated Partnerships, the Consolidated Development
Joint Venture, and the Newly Consolidated Partnerships included in the table above have termination dates that
cannot be unilaterally extended by the Company and, upon termination of each partnership, the net assets of
these entities would be liquidated and paid to the minority interests and the Company based upon their relative
ownership interests. See Note 15, (cid:147)Recent Accounting Pronouncements (cid:150) Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity(cid:148) for further discussion of the impact of recent
accounting pronouncements on the accounting for these interests.
Consolidated Development Joint Venture
In November 1999, we formed a development joint venture (the (cid:147)Consolidated Development Joint
Venture(cid:148)) 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 self-storage facilities and to
purchase $100 million of the Company(cid:146)s Equity Stock, Series AAA (see Note 10). At December 31, 2003, the
Consolidated Development Joint Venture was fully committed, having completed construction on 22 storage
facilities with a total cost of $108.6 million.
F-23
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
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(cid:146)s consolidated financial statements. The accounts of PSAC Storage
Investors are not included in the Company(cid:146)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(cid:146) interest, the partnership(cid:146)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, 2003 and 2002). 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(cid:146) 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, 2003, one of our Consolidated Entities had approximately 237,935 operating
partnership units ((cid:147)Convertible Units(cid:148)) 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(cid:146) 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, 2003, ,2002, and
2001, no units were converted.
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-24
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
Other Consolidated Partnerships
At December 31, 2003, the Other Consolidated Partnerships reflect common equity interests that the
Company does not own in 25 entities owning an aggregate of 123 self-storage facilities.
During 2003, we acquired through a merger 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. The acquisition cost was approximately $23,377,000, consisting of the issuance of 426,859 shares of
our common stock ($13,510,000) valued at the closing trading price of the shares at the date of the acquisition,
and cash of approximately $9,867,000; this acquisition had the effect of reducing minority interest by
$6,690,000, with the excess of cost over underlying book value ($16,687,000) allocated to real estate.
During 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 valued at the
closing trading price of the shares at the date of the acquisition; 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 was completed in 2003,
with no additional gain or loss on sale recorded. See Note 16 (cid:147)Commitments and Contingencies.(cid:148)
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.
F-25
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
10.
Shareholders(cid:146) equity
Cumulative Preferred Stock
At December 31, 2003 and 2002, we had the following series of Cumulative Preferred Stock
outstanding:
Series
Series B
Series C
Series D
Series E
Series F
Series K (b)
Series L
Series M
Series Q
Series R
Series S
Series T
Series U
Series V
Series W
Series X
Earliest
Redemption
Date
3/31/03 (a)
6/30/03 (a)
9/30/04
1/31/05
4/30/05
1/19/04(a)
3/10/04(a)
8/17/04
1/19/06
9/28/06
10/31/06
1/18/07
2/19/07
9/30/07
10/6/08
11/13/08
Dividend
Rate
9.200%
Adjustable
9.500%
10.000%
9.750%
8.250%
8.250%
8.750%
8.600%
8.000%
7.875%
7.625%
7.625%
7.500%
6.500%
6.450%
At December 31, 2003
At December 31, 2002
$
Carrying
Shares
Outstanding
Amount
(Dollar amount in thousands)
-
-
30,000
54,875
57,500
-
115,000
56,250
172,500
510,000
143,750
152,150
150,000
172,500
132,500
120,000
-
-
1,200,000
2,195,000
2,300,000
-
4,600
2,250
6,900
20,400
5,750
6,086
6,000
6,900
5,300
4,800
$
Carrying
Shares
Outstanding
Amount
(Dollar amount in thousands)
57,500
2,300,000
30,000
1,200,000
30,000
1,200,000
54,875
2,195,000
57,500
2,300,000
115,000
4,600
115,000
4,600
56,250
2,250
172,500
6,900
510,000
20,400
143,750
5,750
152,150
6,086
150,000
6,000
172,500
6,900
-
-
-
-
Total Cumulative Preferred Stock
5,763,986
$ 1,867,025
9,258,486
$ 1,817,025
(a) Series was redeemed on the date indicated.
(b) The Series K Cumulative Preferred Stock was called for redemption in December 2003, and was redeemed in
January 2004 along with the unpaid distributions from December 31, 2003 through the redemption date.
Accordingly, the redemption value of $115,000,000 was classified as a liability at December 31, 2003.
During 2003, we issued our Series W and Series X Cumulative Preferred Stock: Series W (cid:150) issued on
October 6, 2003, net proceeds of $128,126,000 and Series X (cid:150) issued November 13, 2003, net proceeds of
$116,020,000.
During 2003, we redeemed our Series B and Series C Cumulative Preferred Stock, at par, at a total cost
of $57,517,000 and $30,018,000 (including related redemption expenses), respectively. In December 2003, we
called for redemption our Series K Cumulative Preferred Stock, at par. The total cost of redemption of the
Series K was approximately $115,000,000, plus accrued dividends, on the redemption date, January 20, 2004.
Accordingly, the $115,000,000 Series K Preferred Stock was classified as a liability at December 31, 2003.
F-26
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
During 2002, we issued our Series T, Series U and Series V Cumulative Preferred Stock: Series T (cid:150)
issued on January 18, 2002, net proceeds of $145,075,000, Series U (cid:150) issued on February 19, 2002, net
proceeds of $145,075,000 and Series V (cid:150) 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 2004 (unaudited), we issued Series Y and Series Z Cumulative Preferred Stock: On January 2,
2004, in a private transaction, we sold 1,600,000 shares (par value of $40,000,000) of our Preferred Stock,
Series Y, priced at 6.850%; and on March 5, 2004, 4,500,000 depositary shares, with each depositary share
representing 1/1,000 of a share of 6.250% Cumulative Preferred Stock, Series Z (par value $112,500,000). We
also called for redemption all outstanding shares of our 8.25% Cumulative Preferred Stock, Series L at a
redemption price of $25 per share for a total of $57,500,000, plus accrued dividends as of March 10, 2004.
The Series B through Series Z (collectively the (cid:147)Cumulative Senior Preferred Stock(cid:148)) 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(cid:146)s Board of Directors until events of
default have been cured. At December 31, 2003, there were no dividends in arrears and the Debt Ratio was
1.2%.
Upon issuance of our Preferred Stock, we classify the liquidation value as preferred stock, with any
issuance costs recorded as a reduction in Paid-in capital.
Except under certain conditions relating to the Company(cid:146)s qualification as a REIT, the Senior
Preferred Stock is not redeemable prior to the following dates: Series D (cid:150) September 30, 2004, Series E (cid:150)
January 31, 2005, Series F (cid:150) April 30, 2005, Series L (cid:150) March 10, 2004, Series M (cid:150) August 17, 2004, Series Q
(cid:150) January 19, 2006, Series R (cid:150) September 28, 2006 , Series S (cid:150) October 31, 2006, Series T (cid:150) January 18, 2007,
Series U (cid:150) February 19, 2007, Series V (cid:150) September 30, 2007, Series W (cid:150) October 6, 2008, Series X (cid:150)
November 13, 2008, Series Y (cid:150) January 2, 2009, Series Z (cid:150) March 5, 2009. 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 L through Series X and Series Z),
plus accrued and unpaid dividends.
F-27
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
Common Stock
During 2003, 2002 and 2001, we issued and repurchased shares of our common stock as follows:
Exercise of stock options ......................
Acquisition of minority interests .......
Business Combinations (Note 3) .......
Conversion of Class B Common
Stock ..............................................
Repurchases of common stock (a) .....
Shares
2,743,420
426,859
-
7,000,000
(175,000)
9,995,279
2003
Amount
$
68,088
13,510
-
2002
(Dollar amount in thousands)
Shares
948,932
1,091,608
-
Amount
$
23,333
37,904
-
2001
Shares
704,901
-
1,138,733
Amount
$
15,857
-
30,814
700
(6,001)
$ 76,297
-
(11,000)
2,029,540
$
-
(381)
60,856
-
-
(276,861)
(10,585,593)
(8,741,959) $ (230,190)
(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.
At December 31, 2003, entities consolidated with the Company owned 723,732 common shares of the
Company. These shares continue to be legally issued and outstanding. In the consolidation process, these
shares and the related balance sheet amounts have been eliminated. In addition, these shares are not included in
the computation of weighted average shares outstanding.
The following chart reconciles the Company(cid:146)s legally issued and outstanding shares of common stock
and the reported outstanding shares of common stock at December 31, 2003 and December 31, 2002:
Reconciliation of Common Shares Outstanding
Legally issued and outstanding shares..................
Less (cid:150) Shares owned by the Consolidated Entities
that are eliminated in consolidation ................
Reported issued and outstanding shares ...............
At December 31,
2003
At December 31,
2002
127,710,466
117,540,187
(723,732)
126,986,734
(548,732)
116,991,455
As previously announced, the Board of Directors authorized the repurchase from time to time of up to
10,000,000 shares of the Company(cid:146)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, 2003, we repurchased a total of 21,672,020 shares of common stock at an aggregate cost of approximately
$541,863,000.
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
F-28
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
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, 2003, we had 7,548,494 shares of common stock reserved in connection with the
Company(cid:146)s stock option plans Note 12 and 237,935 shares reserved for the conversion of Convertible Units.
Class B Common Stock
The 7,000,000 shares of Class B Common Stock was converted into 7,000,000 shares of Common
Stock on January 1, 2003. During 2002 and 2001, the Class B Common Stock participated in distributions at
97% of the per share distributions on the Common Stock, which were subject to the condition (which was met)
that cumulative distributions of at least $0.22 per quarter per share had been paid on the Common Stock. The
Class B Common Stock could not participate in liquidating distributions, and Class B shareholders were not
entitled to vote (except as expressly required by California law).
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, 2003, 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:
2003
2002
2001
Depositary
Shares
Issuance
Amount
Depositary
Shares
Issuance
Amount
Depositary
Shares
Issuance
Amount
(Dollar amounts in thousands)
8,776,102
-
-
$ 188,174
-
-
8,776,102
-
-
$ 188,174
-
-
5,635,602
2,210,500
930,000
$ 113,354
51,836
22,984
Amount at beginning
of year .......................
Public offerings ............
Direct placements .........
Amount at end of year ..
8,776,102
$ 188,174
8,776,102 $ 188,174
8,776,102
$ 188,174
The issuance amounts have been recorded as part of paid-in capital on the consolidated balance sheet.
The Equity Stock, Series A ranks on 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(cid:146)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.
F-29
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
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(cid:148)) 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(cid:146)s capital stock. Other than as required by law, the Equity Stock, Series AA has no voting
rights.
Equity Stock, Series AAA
In November 1999, we sold $100,000,000 (4,289,544 shares) of Equity Stock, Series AAA ((cid:147)Equity
Stock AAA(cid:148)) 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(cid:146)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(cid:146)s capital stock.
Other than as required by law, the Equity Stock, Series AAA has no voting rights.
Dividends
The unaudited characterization of dividends for Federal income tax purposes is made based upon
earnings and profits of the Company, as defined by the Internal Revenue Code. For the tax year ended
December 31, 2003, distributions for the common stock, Equity Stock, Series A, and all the various series of
preferred stocks were classified as follows:
Ordinary Income
Pre-May 6th Long-Term Gain
Total
2003 (unaudited)
1st Quarter
99.72%
0.28%
2nd Quarter
99.26%
0.74%
3rd Quarter
99.98%
0.02%
4th Quarter
100.00%
0.00%
100.00%
100.00%
100.00%
100.00%
F-30
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
A percentage of the long-term capital gain is unrecaptured section 1250 gain for the first, second and third
quarters of 2003 as follows:
Unrecaptured Section 1250 Gain
2003 Percentage of Total Long-Term Capital Gain Distribution
4th Quarter
0.00%
2nd Quarter
96.36%
3rd Quarter
100.00%
1st Quarter
57.33%
For corporate shareholders a portion of the total long-term capital gain is required to be recaptured as ordinary
income. For the first, second and third quarters of 2003 the percentages are as follows:
IRC §291 Recapture
2003 Percentage of Total Long-Term Capital Gain Distribution
4th Quarter
0.00%
2nd Quarter
19.27%
3rd Quarter
20.00%
1st Quarter
11.47%
The following table summarizes dividends for the years ended December 31, 2003, 2002 and 2001:
Cumulative Preferred Stock
2003
2002
2001
Per share
Total
Per share
Total
Per share
Total
(in thousands, except per share data)
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
Series W
Series X
Common Stock
Common Stock
Equity Stock, Series A
Class B Common Stock
Total Distributions
$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
$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
-
-
-
-
-
$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
209,077
21,501
12,222
$391,726
$1.690
$2.450
$1.639
193,121
19,455
11,475
$342,030
$ -
$0.575
$0.844
$2.375
$2.500
$2.437
-
-
-
-
$2.063
$2.063
$2.188
$2.150
$2.000
$1.969
$1.906
$1.906
$1.875
$0.388
$0.215
$1.800
$2.450
-
$ -
1,322
1,013
2,850
5,488
5,606
-
-
-
-
9,488
9,488
4,922
14,835
40,800
11,320
11,601
11,438
12,938
2,057
1,030
146,196
225,864
21,501
-
$393,561
F-31
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
11.
Related Party Transactions
Relationships and transactions with the Hughes Family
B. Wayne Hughes, Chairman of the Board, and his family (the (cid:147)Hughes Family(cid:148)) have ownership
interests in, and operate, approximately 38 self-storage facilities in Canada under the name (cid:147)Public Storage.(cid:148)
We currently do not own any interests in these facilities nor do we own any facilities in Canada. The Hughes
Family owns approximately 37% of our common stock outstanding at December 31, 2003. We have a right of
first refusal to acquire the stock or assets of the corporation engaged in the operation of the 38 self-storage
facilities in Canada if the Hughes family or the corporation agrees to sell them. However, we have no interest
in the operations of this corporation, 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 self-storage
facilities.
Our personnel have been engaged in the supervision and the operation of these 38 self-storage facilities
and currently provide certain administrative services for the Canadian owners, and certain other services,
primarily tax services, with respect to certain other Hughes Family interests. The Hughes Family and the
Canadian owners reimbursed us at cost for these services (U.S. $542,499 and $638,000 in respect of the
Canadian operations for 2003 and 2002, respectively, and U.S. $151,063 and $167,930 for other services during
2003 and 2002, respectively). There may be conflicts of interest in allocating the time of our personnel
between our properties, the Canadian properties, and certain other Hughes Family interests. The sharing of
personnel and systems with the Canadian entities was substantially discontinued by December 31, 2003.
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 9.
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(cid:146)s original cost in these equity
interests. This amount is included in the acquisition of minority interests described as the (cid:147)Other consolidated
partnerships(cid:148) in Note 9.
Other Related Party Transactions
Ronald L. Havner, Jr. is our vice-chairman and chief executive officer, and he is chairman of the board
of PSB. Until August 2003, Mr. Havner was also the Chief Executive Officer of PSB. For 2003 services, Mr.
Havner was compensated by PSB, as well as by the Company.
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 was at the time of the transaction 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 2003, the Company loaned $100,000,000 to PSB. This loan bore interest at the rate of
1.45% per year. This loan, which was fully repaid on March 8, 2004, was included in Notes Receivable at
F-32
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
December 31, 2003. Also, 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 was repaid in full on January 28, 2002.
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 $581,000, $578,000,
and $642,000, respectively, in 2003, 2002 and 2001 in management fees with respect to PSB(cid:146)s property
management services.
12.
Stock-based compensation
Stock Options
The Company has a 1990 Stock Option Plan (the (cid:147)1990 Plan(cid:148)) which provides for the grant of non-
qualified stock options. The Company has a 1994 Stock Option Plan (the (cid:147)1994 Plan(cid:148)), a 1996 Stock Option
and Incentive Plan (the (cid:147)1996 Plan(cid:148)) and a 2000 Non-Executive/Non-Director Stock Option and Incentive Plan
(the (cid:147)2000 Plan(cid:148)), 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 (cid:147)PSI Plans(cid:148)).
Under the PSI Plans, the Company has granted non-qualified options to certain directors, officers and key
employees to purchase shares of the Company(cid:146)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 (cid:147)Storage
Trust Plan(cid:148)), 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 (cid:147)Plans.(cid:148))
Information with respect to the Plans during 2003, 2002 and 2001 is as follows:
2003
2002
2001
Options outstanding January 1
Granted
Exercised
Canceled
Options outstanding December 31
Number
of
Options
5,939,224
272,500
(2,743,420)
(379,686)
3,088,618
Option price range at December 31 (a)
Options exercisable at December 31
Options available for grant at December 31
2,305,868
4,459,876
Average
Price per
Share
$25.79
34.50
24.85
28.33
$27.14
$14.88
to $39.23
$25.24
Number
of
Options
6,677,334
792,000
(948,932)
(581,178)
5,939,224
3,666,641
4,352,690
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
(a) Approximately 2,159,944, 5,059,000, and 6,532,334 of options outstanding at December 31, 2003, 2002 and 2001, had
exercise prices less than $30.
F-33
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
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 (cid:147)Fair Value Method(cid:148)). 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 (cid:147)APB 25 Method(cid:148)).
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, 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 such
method. 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:
Selected information with respect to employee stock options
For the years ended December 31,
2002
2003
2001
Average estimated value per option granted, utilizing the Black-
Scholes method ................................................................................
$1.95
$1.86
$1.48
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
5
3.0%
0.180
7.0%
5
3.2%
0.170
7.0%
5
4.1%
0.155
7.0%
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.....
$336,653
$318,738
$324,208
530
163
-
(3,311)
(3,595)
(4,176)
Net income, assuming consistent application of the fair value
method .........................................................................................
$333,872
$315,306
$320,032
Earnings per share, as reported:
Basic ...........................................................................................
Diluted .........................................................................................
$1.29
$1.28
Earnings per share, assuming consistent application of the fair
value method
Basic ...........................................................................................
Diluted .........................................................................................
$1.27
$1.26
$1.15
$1.14
$1.12
$1.11
$1.41
$1.39
$1.37
$1.36
F-34
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
Restricted Stock Units
Restricted stock units vest over a five-year period from the date of grant at the rate of one-fifth per
year. The employee is entitled to receive per-unit dividends on the outstanding restricted stock units equal to
the per-share dividends received by the common shares. Upon vesting, the employee receives either regular
common shares equal to the number of vested restricted stock units in exchange for the units or, at the
employee(cid:146)s option, the equivalent in cash. The total value of each restricted stock unit grant, based upon the
market price of the Company(cid:146)s common stock at the date of grant, combined with the estimated payroll taxes
and other payroll burden costs to be incurred upon vesting, is amortized over the vesting period as
compensation expense and accrued as a liability. Any changes in the market price of the Company(cid:146)s common
stock price are reflected prospectively as adjustments to compensation expense with respect to unvested
restricted stock units over the applicable remaining service period. Dividends paid on restricted stock units are
accounted for as dividends on common stock. Outstanding restricted stock units are included on a one-for-one
basis in the Company(cid:146)s diluted weighted average shares, less a reduction for the treasury stock method applied
to the average cumulative measured but unrecognized compensation expense during the period.
Throughout 2003, the Company granted a total of 249,000 restricted stock units to employees of the
Company. The fair market value of the grant was approximately $10,804,000 based upon a closing price of
$43.39 per common share on December 31, 2003. A total of $970,000 in restricted stock expense was recorded
in the year ended December 31, 2003, representing the applicable amortization of the 249,000 unit grant.
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.
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, minority
interest in income and gain s and losses are not allocated to segments because management does not utilize
them to evaluate the results of operations of each segment.
F-35
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
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(cid:146)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(cid:146)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, (cid:147)Equity in earnings of real estate
entities.(cid:148)
The following table reconciles revenue by segment to the Company(cid:146)s consolidated revenues:
Reconciliation of Revenues by Segment
Self-storage facility rentals ....................
Commercial property rentals..................
Containerized storage rentals.................
Tenant re-insurance premiums...............
Interest and other income (not allocated
to segments)........................................
Total revenues ................................
2003
Years Ended December 31,
2002
Change
2002
(amounts in thousands)
Years Ended December 31,
2001
Change
$ 798,584
11,442
33,953
22,464
$ 761,446
11,781
29,723
19,947
$
37,138
(339)
4,230
2,517
$ 761,446
11,781
29,723
19,947
$ 719,765
12,070
28,474
-
$
8,628
$ 875,071
8,661
$ 831,558
$
(33)
43,513
8,661
$ 831,558
14,225
$ 774,534
$
41,681
(289)
1,249
19,947
(5,564)
57,024
F-36
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
The following table sets forth a reconciliation of each segment(cid:146)s net income to the Company(cid:146)s
consolidated net income:
Reconciliation of Net Income by Segment:
Self-storage
Self-storage net operating income ....................
Self-storage depreciation ..................................
Equity in earnings (cid:150) storage property
Year Ended December 31,
Year Ended December 31,
2003
2002
Change
2002
2001
Change
(Dollar amounts in thousands)
$517,679
(176,929)
$511,231
(170,887)
$6,448
(6,042)
$511,231
(170,887)
$491,323
(157,953)
$19,908
(12,934)
operations .....................................................
6,288
5,992
296
5,992
22,047
(16,055)
Equity in earnings (cid:150) depreciation (self-
storage) ........................................................
Discontinued self-storage operations................
Total self-storage segment net income .......
Commercial properties
Commercial properties .....................................
Depreciation and amortization (cid:150) commercial
(1,705)
6,014
351,347
(1,619)
571
345,288
(86)
5,443
6,059
(1,619)
571
345,288
(7,562)
605
348,460
5,943
(34)
(3,172)
6,754
7,319
(565)
7,319
8,209
(890)
properties......................................................
(2,535)
(2,544)
9
(2,544)
(2,569)
25
Equity in earnings (cid:150) commercial property
operations .....................................................
64,242
65,212
(970)
65,212
52,200
13,012
Equity in earnings (cid:150) depreciation
(commercial properties) ...............................
Discontinued operations (Note 4) ....................
Total commercial property segment net
income .....................................................
Containerized storage
(26,048)
-
(25,459)
77
(589)
(77)
(25,459)
77
(17,534)
233
(7,925)
(156)
42,413
44,605
(2,192)
44,605
40,539
4,066
Containerized storage net operating income .....
Containerized storage depreciation...................
Discontinued operations (Note 4) ....................
13,035
(6,311)
(4,181)
6,667
(4,547)
(12,178)
6,368
(1,764)
7,997
6,667
(4,547)
(12,178)
3,533
(4,392)
(1,359)
3,134
(155)
(10,819)
Total containerized storage segment net
income/(loss) ........................................
2,543
(10,058)
12,601
(10,058)
(2,218)
(7,840)
Tenant Reinsurance
Tenant reinsurance operating income...........
10,477
10,536
(59)
10,536
-
10,536
Other items not allocated to segments
Equity in earnings (cid:150) 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
(17,811)
8,628
(17,127)
(1,121)
(43,703)
1,007
(70,127)
(14,238)
8,661
(15,619)
(3,809)
(44,087)
(2,541)
(71,633)
(3,573)
(33)
(1,508)
2,688
384
3,548
1,506
(14,238)
8,661
(15,619)
(3,809)
(44,087)
(2,541)
(71,633)
(10,609)
14,225
(21,038)
(3,227)
(46,015)
4,091
(62,573)
(3,629)
(5,564)
5,419
(582)
1,928
(6,632)
(9,060)
Total consolidated company net income ..
$336,653
$318,738
$17,915
$318,738
$324,208
$ (5,470)
F-37
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
14.
Events subsequent to December 31, 2003 (unaudited)
On January 30, 2004, we called for redemption all of the outstanding shares of our 8.25% Cumulative
Preferred Stock, Series L, at $25 per share plus accrued dividends. The redemption will be completed on March
10, 2004.
On January 2, 2004, we issued in a private transaction 1,600,000 shares of our 6.850% Cumulative
Preferred Stock, Series Y (par value $40,000,000) and on March 5, 2004, 4,500,000 depositary shares, with
each representing 1/1,000 of a share of our 6.250% Cumulative Preferred Stock, Series Z (par value
($112,500,000).
On January 1, 2004, we entered into a joint venture with an institutional investor for the purpose of
acquiring up to $125.0 million of existing self-storage properties in the United States from third parties. The
venture will be funded entirely with equity consisting of 30% from the Company and 70% from the institutional
investor. The venture has a nine month investment period (through September 2004) to identify and acquire
facilities. To date no facilities have been acquired by the venture.
15.
Recent accounting pronouncements and guidance
Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity
In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150 (cid:150) (cid:147)Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and Equity(cid:148) ((cid:147)SFAS 150(cid:148)). This
statement prescribes reporting standards for financial instruments that have characteristics of both liabilities and
equity. This standard generally indicates that certain financial instruments that give the issuer a choice of
settling an obligation with a variable number of securities or settling an obligation with a transfer of assets, any
mandatorily redeemable security, and certain put options and forward purchase contracts, should be classified as
a liability on the balance sheet. With the exception of minority interests, described below, we implemented this
Statement on July 1, 2003, and the adoption had no impact on our financial statements.
The provisions of SFAS 150 indicate certain minority interests in consolidated entities are to be
classified as liabilities at fair value. However, on October 29, 2003, the FASB decided to defer indefinitely the
implementation of SFAS 150 as it relates to these minority interests.
Assuming the FASB had not deferred the implementation of SFAS 150 as it relates to minority
interests, the impact on the Company(cid:146)s balance sheet at December 31, 2003 would have been to reclassify the
Company(cid:146)s minority interests described in Note 9 as the (cid:147)Consolidated Development Joint Venture and the
(cid:147)Other Consolidated Partnerships(cid:148), as liabilities at their estimated fair value. Such adoption would reduce the
Company(cid:146)s common minority interest by $134,878,000, and increase liabilities by $317,763,000, representing
the estimated settlement value of these minority interests at December 31, 2003.
FASB Interpretation No. 46 (cid:150) Consolidation of Variable Interest Entities
In January 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46 (cid:150)
(cid:147)Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51.(cid:148) This
interpretation explains how to identify variable interest entities and how an enterprise assesses its interests in a
variable interest entity to decide whether to consolidate that entity. In general, a variable interest entity is a
corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not
have equity investors with voting rights, or (b) has equity investors that do not provide sufficient financial
F-38
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
resources for the entity to support its activities. This statement is applicable at the beginning of the Company(cid:146)s
quarter ended March 31, 2004. We do not believe that adoption of this accounting standard will have an impact
on our financial statements.
16.
Commitments and Contingencies
Legal proceedings
Serrao v. Public Storage, Inc. (filed April 2003) (Superior Court (cid:150) Orange County)
The plaintiff in this case filed a suit against the Company on behalf of a putative class of renters who
rented self-storage units from the Company. Plaintiff alleges that the Company misrepresented the size of its
storage units, has brought claims under California statutory and common law relating to consumer protection,
fraud, unfair competition, and negligent misrepresentation, and is seeking monetary damages, restitution, and
declaratory and injunctive relief.
The claim in this case is substantially similar to those in Henriquez v. Public Storage, Inc., which was
disclosed in prior reports. In January 2003, the plaintiff caused the Henriquez action to be dismissed. Based
upon the uncertainty inherent in any putative class action, the Company cannot presently determine the potential
damages, if any, or the ultimate outcome of this litigation. On November 3, 2003, the court granted the
Company(cid:146)s motion to strike the plaintiff(cid:146)s nationwide class allegations and to limit any putative class to
California residents only. The Company is vigorously contesting the claims upon which this lawsuit is based
including class certification efforts.
Salaam, et al v. Public Storage, Inc. (filed February 2000) (Superior Court (cid:150) Los Angeles County)
The plaintiffs in this case are suing the Company on behalf of a putative 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. On December 1, 2003, the
California Court of Appeals affirmed the Supreme Court(cid:146)s 2002 denial of plaintiff(cid:146)s motion for class
certification. The maximum potential liability cannot be estimated, but can only be increased if claims are
permitted to be brought on behalf of others under the California Unfair Business Practices Act. The affirmation
of denial of class certification does not address 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, including by opposing claims on behalf of others under the California
Unfair Business Practices Act. The Company cannot presently determine the potential damages, if any, or the
ultimate outcome of this litigation.
Gustavson et al. v. Public Storage, Inc. (filed June 2003) (Superior Court-Los Angeles County)
In November 2002, a shareholder of the Company made a demand on the Board of Directors that
challenged the fairness of the Company(cid:146)s acquisition of PS Insurance Company, Ltd. ((cid:147)PSIC(cid:148)) and demanded
that the Board recover the profits earned by PSIC from November 1995 through December 2001 and that the
entire purchase price paid by the Company for PSIC in excess of PSIC(cid:146)s net assets be returned to the Company.
The contract to acquire PSIC was approved by the independent directors of the Company in March
2001, and the transaction was closed in December 2001. PSIC was formerly owned by B. Wayne Hughes,
currently the Chairman of the Board (and in 2001 also the Chief Executive Officer) of the Company, B. Wayne
Hughes, Jr., currently a director (and in 2001 also an officer) of the Company and Tamara H. Gustavson, who in
2001 was an officer of the Company. In exchange for the Hughes family(cid:146)s shares in PSIC, the Company issued
F-39
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
to them 1,439,765 shares of common stock (or a net of 1,138,733 shares, after taking into account 301,032
shares held by PSIC).
The shareholder has threatened litigation against the Hughes family and the directors of the Company
arising out of this transaction and alleged a pattern of deceptive disclosures with respect to PSIC since 1995. In
December 2002, the Board held a special meeting to authorize an inquiry by its independent directors to review
the fairness to the Company(cid:146)s shareholders of its acquisition of PSIC and the ability of the Company to have
started its own tenant reinsurance business in 1995. The Company believes that, prior to the effectiveness in
2001 of the federal REIT Modernization Act and corresponding California legislation that authorized the
creation and ownership of (cid:147)taxable REIT subsidiaries,(cid:148) the ownership by the Company of a reinsurance
business relating to its tenants would have jeopardized the Company(cid:146)s status as a REIT and that other REITs
faced similar concerns about tenant insurance programs.
In June 2003, the Hughes family filed a complaint for declaratory relief relating to the Company(cid:146)s
acquisition of PSIC naming the Company as defendant. The Hughes family is seeking that the court make (i) a
binding declaration that the Company either is not entitled to recover profits or other moneys earned by PSIC
from November 1995 through December 2001; or alternatively the amounts that the Hughes family should be
ordered to surrender to the Company if the court determines that the Company is entitled to recover any such
profits or moneys; and (ii) a binding declaration either that the Company cannot establish that the acquisition
agreement was not just and reasonable as to the Company at the time it was authorized, approved or ratified; or
alternatively the amounts that the Hughes family should surrender to the Company, if the court determines that
the agreement was not just and reasonable to the Company at that time. The Hughes family is not seeking any
payments from the Company. In the event of a determination that the Hughes family is obligated to pay certain
amounts to the Company, the complaint states that they have agreed to be bound by that determination to pay
such amounts to the Company.
In July 2003 the Company filed an answer to the Hughes family(cid:146)s complaint requesting a final judicial
determination of the Company(cid:146)s rights of recovery against the Hughes family in respect of PSIC. In September
2003, by order of the Superior Court, Malcolm Lucas, a former chief justice of the California Supreme Court,
was appointed to try the case. Discover is proceeding and it is expected that in mid-2004, Mr. Lucas will set a
trial date for the matter. The Company believes that the lawsuit by the Hughes family will ultimately resolve
matters relating to PSIC and will not have any financially adverse effect on the Company (other than the costs
and other expenses relating to the lawsuit).
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(cid:146)s motion for summary judgment as to its claim for breach of the settlement agreement
and granted the Company(cid:146)s motion for summary judgment to dismiss plaintiff(cid:146)s claim for unfair and deceptive
trade practices.
F-40
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
In March 2003, the court granted plaintiff(cid:146)s motion to compel the sale of the units to the plaintiff. On
December 31, 2003, the Company sold the units to the plaintiff for a total of $1,000,000. This amount reflects
the $1,523,000 original agreement with a credit to the plaintiff of a portion of the partnership(cid:146)s distributions
received by the Company with respect to the units.
Other Items
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 including employment and tenant claims, in the aggregate,
will have a material adverse impact upon the operations or financial position of the Company.
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 insure portions of these risks
through nationally recognized insurance carriers. STOR-Re also insures affiliates of the Company.
The Company, STOR-Re, and its affiliates(cid:146) 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(cid:146) 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 insurers from any individual event
that exceeds a loss of $500,000 up to the policy limit of $10,000,000.
Development of Real Estate Facilities
We currently have 38 projects in our development pipeline, including 13 newly developed self-storage
facilities, with total estimated development costs of $156,336,000 (unaudited), of which $69,620,000 has been
spent at December 31, 2003. Development of these facilities is subject to contingencies.
F-41
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
17.
Supplementary quarterly financial data (unaudited)
Three months ended
March 31,
2003
June 30,
2003
September 30,
2003
December 31,
2003
Revenues (a) .....................................
$ 206,866
Cost of operations (a)........................
Net income........................................
Per Common Share (Note 2):
Net income - Basic.......................
Net income - Diluted....................
$
$
$
$
74,041
76,639
0.25
0.26
(in thousands, except per share data)
$ 217,114
$ 227,955
$
$
$
$
79,912
84,297
$ 80,890
$ 89,747
0.34
0.33
$
$
0.39
0.39
Three months ended
$ 223,136
$
$
$
$
83,655
85,970
0.31
0.30
March 31,
2002
June 30,
2002
September 30,
2002
December 31,
2002
Revenues (a) .....................................
$ 203,992
Cost of operations (a)........................
Net income........................................
Per Common Share (Note 2):
Net income (cid:150) Basic .......................
Net income (cid:150) Diluted ....................
$
$
$
$
65,302
87,455
0.38
0.37
(in thousands, except per share data)
$ 206,391
$ 214,484
$
$
$
$
69,156
80,718
$ 72,610
$ 83,351
0.30
0.30
$
$
0.27
0.27
$ 206,691
$
$
$
$
80,076
67,214
0.20
0.20
(a) Revenues and cost of operations as presented in this table differ from the revenue and cost of operations as presented
in the Company(cid:146)s quarterly reports due primarily to the impact of discontinued operations accounting with respect to
certain containerized storage facilities that were closed in 2003, as described in Note 4 and from the impact of the
application EITF Topic D-42 in September 2003.
F-42
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Miniwarehouses
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
1/1/81
1/1/81
8/1/81
10/1/81
6/1/82
6/1/82
6/1/82
6/1/82
10/1/82
10/1/82
12/1/82
12/1/82
1/1/83
1/1/83
1/1/83
3/1/83
4/1/83
5/1/83
6/1/83
9/1/83
9/1/83
9/1/83
9/1/83
9/1/83
9/1/83
9/1/83
9/1/83
9/1/83
9/1/83
10/1/83
11/1/83
11/1/83
11/1/83
11/1/83
11/1/83
VirginiaBeach/DiamondSprings
NewportNews/JeffersonAvenue
SanJose/Snell
Tampa/LazyLane
MountainView
Cupertino/Storage
SanCarlos/Storage
SanJose/Tully
Northwood
SorrentoValley
Port/Halsey
Sacto/Folsom
Platte
Raleigh/Yonkers
Semoran
Blackwood
Vailsgate
DeltaDrive
Ventura
Dover
Ft.Wayne/Bluffton
Ft.Wayne/W.Coliseum
Hobart
Langhorne
Newark
Newcastle
Southhampton
Southington
Webster/Keystone
OrlandoJ.Y.Parkway
Aurora
Campbell
ColSprings/Ed
ColSprings/Mv
OklahomaCity
$384,000
330,000
-
-
837,000
659,000
580,000
484,000
899,000
593,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$186,000
108,000
312,000
282,000
1,180,000
572,000
780,000
645,000
1,034,000
1,002,000
357,000
396,000
409,000
203,000
442,000
213,000
103,000
67,000
658,000
107,000
88,000
160,000
215,000
263,000
208,000
227,000
331,000
124,000
449,000
383,000
505,000
1,379,000
471,000
320,000
454,000
$1,094,000
1,071,000
1,815,000
1,899,000
1,182,000
1,270,000
1,387,000
1,579,000
1,522,000
1,343,000
1,150,000
329,000
953,000
914,000
1,882,000
1,559,000
990,000
481,000
1,734,000
1,462,000
675,000
1,395,000
1,491,000
3,549,000
2,031,000
2,163,000
1,738,000
1,233,000
1,688,000
1,512,000
758,000
1,849,000
1,640,000
1,036,000
1,030,000
F-43
$679,000
613,000
404,000
652,000
566,000
514,000
593,000
12,131,000
358,000
(805,000)
(393,000)
672,000
473,000
462,000
6,156,000
312,000
453,000
233,000
231,000
482,000
205,000
334,000
656,000
530,000
354,000
452,000
677,000
355,000
733,000
424,000
348,000
(483,000)
206,000
270,000
885,000
$-
-
-
-
-
-
-
-
-
-
326,000
323,000
428,000
425,000
720,000
595,000
505,000
241,000
583,000
627,000
285,000
535,000
838,000
1,445,000
746,000
817,000
806,000
546,000
813,000
622,000
341,000
474,000
554,000
441,000
620,000
$186,000
108,000
312,000
282,000
1,181,000
572,000
780,000
4,525,000
1,034,000
651,000
357,000
396,000
409,000
203,000
442,000
213,000
103,000
68,000
658,000
107,000
88,000
160,000
215,000
263,000
208,000
227,000
331,000
123,000
449,000
383,000
505,000
1,380,000
471,000
320,000
454,000
$1,773,000
1,684,000
2,219,000
2,551,000
1,747,000
1,784,000
1,980,000
9,830,000
1,880,000
889,000
1,083,000
1,324,000
1,854,000
1,801,000
8,758,000
2,466,000
1,948,000
954,000
2,548,000
2,571,000
1,165,000
2,264,000
2,985,000
5,524,000
3,131,000
3,432,000
3,221,000
2,135,000
3,234,000
2,558,000
1,447,000
1,839,000
2,400,000
1,747,000
2,535,000
$1,959,000
1,792,000
2,531,000
2,833,000
2,928,000
2,356,000
2,760,000
14,355,000
2,914,000
1,540,000
1,440,000
1,720,000
2,263,000
2,004,000
9,200,000
2,679,000
2,051,000
1,022,000
3,206,000
2,678,000
1,253,000
2,424,000
3,200,000
5,787,000
3,339,000
3,659,000
3,552,000
2,258,000
3,683,000
2,941,000
1,952,000
3,219,000
2,871,000
2,067,000
2,989,000
$1,547,000
1,476,000
1,958,000
2,202,000
1,507,000
1,447,000
1,662,000
2,466,000
1,513,000
742,000
725,000
906,000
1,180,000
1,253,000
2,424,000
1,597,000
1,299,000
630,000
1,636,000
1,651,000
742,000
1,422,000
1,927,000
3,559,000
1,995,000
2,204,000
2,112,000
1,349,000
2,162,000
1,622,000
910,000
1,176,000
1,551,000
1,129,000
1,616,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
11/1/83
11/1/83
11/1/83
12/1/83
12/1/83
12/1/83
12/1/83
12/1/83
12/1/83
12/1/83
1/1/84
1/1/84
1/1/84
1/1/84
1/1/84
1/1/84
1/1/84
1/1/84
1/1/84
1/1/84
3/1/84
3/1/84
3/1/84
4/1/84
4/1/84
5/1/84
5/1/84
5/1/84
5/1/84
6/1/84
6/1/84
6/1/84
6/1/84
6/1/84
6/1/84
6/1/84
7/1/84
Thorton
Tucson
Webster/Nasa
Augusta
Charlotte
Columbia
Greensboro/Electra
Greensboro/Market
Richmond
Tacoma
Belton
Fremont/Albrae
Gladstone
Hickman/112
Holmes
Independence
Merriam
Olathe
Shawnee
Topeka
Manassas
Marrietta/Cobb
PicoRivera
Milwaukie/Oregon
Providence
Garland
Philadelphia/Grant
Raleigh/Departure
VirginiaBeach
Baltimore
Cincinnati
Delran
Florence
Laurel
Lorton
OrangeBlossom
Trevose/OldLincoln
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
418,000
343,000
1,570,000
97,000
165,000
171,000
112,000
214,000
176,000
553,000
175,000
636,000
275,000
257,000
289,000
221,000
255,000
107,000
205,000
75,000
320,000
73,000
743,000
289,000
92,000
356,000
1,041,000
302,000
509,000
382,000
402,000
279,000
185,000
501,000
435,000
226,000
421,000
1,400,000
778,000
2,457,000
747,000
1,274,000
1,318,000
869,000
1,653,000
1,360,000
1,173,000
858,000
1,659,000
1,799,000
1,848,000
1,333,000
1,848,000
1,469,000
992,000
1,420,000
1,049,000
1,556,000
542,000
807,000
584,000
1,087,000
844,000
3,262,000
2,484,000
2,121,000
1,793,000
1,573,000
1,472,000
740,000
2,349,000
2,040,000
924,000
1,749,000
F-44
153,000
651,000
1,110,000
365,000
486,000
520,000
388,000
700,000
478,000
480,000
713,000
502,000
560,000
484,000
415,000
391,000
440,000
371,000
487,000
295,000
432,000
350,000
370,000
289,000
439,000
248,000
592,000
548,000
747,000
892,000
649,000
363,000
492,000
739,000
571,000
268,000
451,000
536,000
420,000
1,372,000
324,000
442,000
492,000
382,000
794,000
468,000
487,000
378,000
532,000
640,000
618,000
455,000
609,000
480,000
361,000
502,000
356,000
553,000
259,000
321,000
311,000
423,000
360,000
971,000
788,000
776,000
634,000
672,000
573,000
376,000
824,000
682,000
398,000
582,000
418,000
343,000
1,572,000
97,000
165,000
171,000
112,000
214,000
176,000
553,000
175,000
636,000
275,000
257,000
289,000
221,000
255,000
107,000
205,000
75,000
320,000
73,000
743,000
289,000
92,000
356,000
1,040,000
302,000
499,000
382,000
402,000
279,000
185,000
501,000
435,000
226,000
421,000
2,089,000
1,849,000
4,937,000
1,436,000
2,202,000
2,330,000
1,639,000
3,147,000
2,306,000
2,140,000
1,949,000
2,693,000
2,999,000
2,950,000
2,203,000
2,848,000
2,389,000
1,724,000
2,409,000
1,700,000
2,541,000
1,151,000
1,498,000
1,184,000
1,949,000
1,452,000
4,826,000
3,820,000
3,654,000
3,319,000
2,894,000
2,408,000
1,608,000
3,912,000
3,293,000
1,590,000
2,782,000
2,507,000
2,192,000
6,509,000
1,533,000
2,367,000
2,501,000
1,751,000
3,361,000
2,482,000
2,693,000
2,124,000
3,329,000
3,274,000
3,207,000
2,492,000
3,069,000
2,644,000
1,831,000
2,614,000
1,775,000
2,861,000
1,224,000
2,241,000
1,473,000
2,041,000
1,808,000
5,866,000
4,122,000
4,153,000
3,701,000
3,296,000
2,687,000
1,793,000
4,413,000
3,728,000
1,816,000
3,203,000
1,353,000
1,149,000
3,256,000
966,000
1,477,000
1,597,000
1,105,000
2,145,000
1,518,000
1,423,000
1,286,000
1,848,000
1,986,000
1,999,000
1,467,000
1,920,000
1,608,000
1,155,000
1,606,000
1,127,000
1,690,000
765,000
1,032,000
806,000
1,308,000
942,000
3,175,000
2,550,000
2,408,000
2,132,000
1,819,000
1,506,000
1,001,000
2,603,000
2,187,000
1,008,000
1,842,000
Date
Acquired
8/1/84
8/1/84
8/1/84
8/1/84
8/1/84
9/1/84
11/1/84
11/1/84
12/1/84
12/1/84
12/1/84
12/1/84
1/1/85
1/1/85
2/1/85
2/1/85
3/1/85
3/1/85
3/1/85
3/1/85
3/1/85
4/1/85
4/1/85
4/1/85
4/1/85
4/1/85
5/1/85
5/1/85
5/1/85
5/1/85
5/1/85
5/1/85
5/1/85
5/1/85
6/1/85
6/1/85
6/1/85
Description
Kaplan/Irving
Kaplan/WalnutHill
Medley
NewportNews
OklahomaCity
CockrellHill
Hialeah
Omaha
Austin/Lamar
FortWorth
Montgomeryville
Pompano
BossierCity
Cranston
Hurst
SimiValley
Houston/Westheimer
Chattanooga
Fairfield
FernPark
Portland
Austin/S.First
Cincinnati/Colerain
Cincinnati/E.Kemper
Florence/TannerLane
LagunaHills
Arlington
Columbus/BuschBlvd.
Columbus/KinnearRd.
Longwood
Manchester/S.Willow
Milwaukie/Mcloughlin
Tacoma/PhillipsRd.
Worthington
GroveCity/MarlaneDrive
N.Hollywood/Raymer
Reynoldsburg
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
286,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
677,000
971,000
584,000
356,000
340,000
380,000
886,000
109,000
643,000
122,000
215,000
399,000
184,000
175,000
231,000
737,000
850,000
202,000
338,000
144,000
285,000
778,000
253,000
232,000
218,000
1,224,000
201,000
202,000
241,000
355,000
371,000
458,000
396,000
221,000
150,000
967,000
204,000
1,592,000
2,359,000
1,016,000
2,395,000
1,310,000
913,000
1,784,000
806,000
947,000
928,000
2,085,000
1,386,000
1,542,000
722,000
1,220,000
1,389,000
1,179,000
1,573,000
1,187,000
1,107,000
941,000
1,282,000
1,717,000
1,573,000
1,477,000
3,303,000
1,497,000
1,559,000
1,865,000
1,645,000
2,129,000
742,000
1,204,000
1,824,000
1,157,000
848,000
1,568,000
F-45
4,646,000
896,000
412,000
731,000
611,000
1,132,000
389,000
528,000
550,000
44,000
420,000
679,000
558,000
347,000
249,000
360,000
791,000
520,000
522,000
273,000
335,000
379,000
423,000
331,000
416,000
445,000
480,000
448,000
416,000
323,000
(112,000)
421,000
319,000
424,000
419,000
269,000
482,000
639,000
1,041,000
464,000
1,013,000
652,000
675,000
672,000
399,000
443,000
303,000
776,000
698,000
656,000
267,000
480,000
520,000
-
683,000
527,000
432,000
438,000
711,000
932,000
853,000
835,000
1,213,000
618,000
592,000
771,000
669,000
854,000
620,000
669,000
709,000
471,000
515,000
598,000
678,000
971,000
584,000
356,000
340,000
380,000
886,000
109,000
643,000
122,000
215,000
399,000
184,000
175,000
231,000
737,000
850,000
202,000
338,000
144,000
285,000
778,000
253,000
232,000
218,000
1,225,000
201,000
202,000
241,000
355,000
371,000
458,000
396,000
221,000
150,000
967,000
204,000
6,876,000
4,296,000
1,892,000
4,139,000
2,573,000
2,720,000
2,845,000
1,733,000
1,940,000
1,275,000
3,281,000
2,763,000
2,756,000
1,336,000
1,949,000
2,269,000
1,970,000
2,776,000
2,236,000
1,812,000
1,714,000
2,372,000
3,072,000
2,757,000
2,728,000
4,960,000
2,595,000
2,599,000
3,052,000
2,637,000
2,871,000
1,783,000
2,192,000
2,957,000
2,047,000
1,632,000
2,648,000
7,554,000
5,267,000
2,476,000
4,495,000
2,913,000
3,100,000
3,731,000
1,842,000
2,583,000
1,397,000
3,496,000
3,162,000
2,940,000
1,511,000
2,180,000
3,006,000
2,820,000
2,978,000
2,574,000
1,956,000
1,999,000
3,150,000
3,325,000
2,989,000
2,946,000
6,185,000
2,796,000
2,801,000
3,293,000
2,992,000
3,242,000
2,241,000
2,588,000
3,178,000
2,197,000
2,599,000
2,852,000
2,054,000
2,719,000
1,192,000
2,623,000
1,607,000
1,737,000
1,781,000
1,103,000
1,171,000
811,000
2,011,000
1,730,000
1,694,000
871,000
1,218,000
1,401,000
1,461,000
1,691,000
1,331,000
1,106,000
1,044,000
1,322,000
1,658,000
1,498,000
1,477,000
3,070,000
1,569,000
1,541,000
1,838,000
1,625,000
1,567,000
977,000
1,187,000
1,773,000
1,224,000
916,000
1,573,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
7/1/85
7/1/85
7/1/85
7/1/85
7/1/85
7/1/85
7/1/85
7/1/85
7/1/85
7/1/85
9/1/85
9/1/85
9/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
10/1/85
Columbus/KenneyRd.
Columbus/MorseRd.
Concord/Hwy29
Dayton/ExecutiveBlvd.
Dayton/NeedmoreRoad
Lilburn
SanDiego/KearnyMesaRd
Scottsdale/70thSt
Springfield
Westerville
Columbus/Sinclair
Madison/CoppsAve.
Philadelphia/TaconySt
Columbus/Ambleside
Dallas/AlvinSt.
Dallas/S.Westmoreland
FortWorth/CockrellSt.
FortWorth/E.Seminary
FortWorth/W.BeachSt.
Hartford/Roberts
Indianapolis/BeachGrove
Indianapolis/PikePlace
Joplin/S.RangeLine
N.Hollywood/Whitsett
Portland/SE82ndSt
SanAntonio/Callaghan
SanAntonio/Fredericksburg
SanAntonio/Hackberry
SanAntonio/WetmoreRd.
SanAntonio/Zarzamora
Wichita/CareyLane
Wichita/E.Harry
Wichita/E.Kellogg
Wichita/E.Macarthur
Wichita/S.RockRd.
Wichita/S.Tyler
Wichita/S.Woodlawn
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
199,000
195,000
150,000
160,000
144,000
331,000
783,000
632,000
90,000
199,000
307,000
450,000
118,000
124,000
359,000
474,000
323,000
382,000
356,000
219,000
198,000
229,000
264,000
1,524,000
354,000
288,000
287,000
388,000
306,000
364,000
192,000
313,000
185,000
220,000
501,000
294,000
263,000
1,531,000
1,510,000
750,000
1,207,000
1,108,000
969,000
1,750,000
1,368,000
699,000
1,517,000
893,000
1,150,000
1,782,000
1,526,000
1,266,000
1,670,000
1,136,000
1,346,000
1,252,000
1,481,000
1,342,000
1,531,000
904,000
2,576,000
496,000
1,016,000
1,009,000
1,367,000
1,079,000
1,281,000
674,000
1,050,000
658,000
775,000
1,478,000
1,004,000
905,000
F-46
457,000
439,000
405,000
459,000
446,000
252,000
349,000
366,000
376,000
619,000
369,000
437,000
300,000
39,000
181,000
207,000
181,000
213,000
212,000
386,000
276,000
378,000
229,000
383,000
356,000
470,000
595,000
2,521,000
611,000
644,000
45,000
157,000
(21,000)
(92,000)
260,000
116,000
158,000
598,000
670,000
587,000
569,000
460,000
424,000
962,000
742,000
332,000
620,000
519,000
665,000
856,000
644,000
559,000
734,000
515,000
552,000
531,000
966,000
709,000
856,000
465,000
1,302,000
380,000
543,000
597,000
1,001,000
638,000
674,000
296,000
468,000
261,000
323,000
657,000
530,000
437,000
199,000
195,000
150,000
159,000
144,000
330,000
783,000
632,000
90,000
199,000
307,000
450,000
118,000
124,000
359,000
474,000
323,000
382,000
356,000
219,000
198,000
229,000
264,000
1,525,000
354,000
288,000
287,000
389,000
306,000
364,000
192,000
285,000
185,000
220,000
642,000
294,000
263,000
2,586,000
2,619,000
1,742,000
2,236,000
2,014,000
1,646,000
3,061,000
2,476,000
1,407,000
2,756,000
1,781,000
2,252,000
2,938,000
2,209,000
2,006,000
2,611,000
1,832,000
2,111,000
1,995,000
2,833,000
2,327,000
2,765,000
1,598,000
4,260,000
1,232,000
2,029,000
2,201,000
4,888,000
2,328,000
2,599,000
1,015,000
1,703,000
898,000
1,006,000
2,254,000
1,650,000
1,500,000
2,785,000
2,814,000
1,892,000
2,395,000
2,158,000
1,976,000
3,844,000
3,108,000
1,497,000
2,955,000
2,088,000
2,702,000
3,056,000
2,333,000
2,365,000
3,085,000
2,155,000
2,493,000
2,351,000
3,052,000
2,525,000
2,994,000
1,862,000
5,785,000
1,586,000
2,317,000
2,488,000
5,277,000
2,634,000
2,963,000
1,207,000
1,988,000
1,083,000
1,226,000
2,896,000
1,944,000
1,763,000
1,561,000
1,577,000
987,000
1,367,000
1,197,000
1,006,000
1,704,000
1,306,000
833,000
1,591,000
943,000
1,209,000
1,595,000
1,161,000
1,157,000
1,478,000
1,058,000
1,211,000
1,129,000
1,500,000
1,249,000
1,406,000
847,000
2,329,000
678,000
1,096,000
1,152,000
1,562,000
1,210,000
1,372,000
564,000
929,000
506,000
562,000
1,198,000
949,000
797,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
10/1/85
11/1/85
11/1/85
12/1/85
12/1/85
12/1/85
12/1/85
12/1/85
12/1/85
12/1/85
12/1/85
1/1/86
1/1/86
1/1/86
1/1/86
2/1/86
2/1/86
2/1/86
2/1/86
2/1/86
2/1/86
3/1/86
3/1/86
3/3/86
4/1/86
4/1/86
4/1/86
4/1/86
5/1/86
5/1/86
6/1/86
6/1/86
7/1/86
7/1/86
7/1/86
7/1/86
7/1/86
Wichita/W.Maple
Everett/Evergreen
Seattle/EmpireWay
Amherst/NiagraFalls
Brockton/Main
Denver/Leetsdale
Eatontown/Hwy35
MacArthurRd.
Milpitas
Pleasanton/SantaRita
WestSamsBlvd.
Bordentown/Groveville
LasVegas/Highland
Mapleshade/Rudderow
SunValley/Sheldon
Brea/ImperialHwy
ColoradoSprings/Sinton
CostaMesa/Pomona
OklahomaCity/39th
OklahomaCity/Penn
Skokie/McCormick
Jacksonville/Wiley
St.Louis/Forder
Tampa/56th
FortWorth/EastLoop
Reno/Telegraph
St.Louis/Kirkham
St.Louis/Reavis
Sacramento/FranklinBlvd.
WestlakeVillage
RichlandHills
WestValley/So.3600
CapitalHeights/CentralAve.
ColoradoSprings/HollowTree
Pontiac/DixieHwy.
Portland/JohnsLandingArea
WestLA/PurdueAve.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
262,000
-
-
-
-
-
-
-
-
-
-
-
-
-
234,000
706,000
1,652,000
132,000
153,000
603,000
308,000
204,000
1,623,000
1,226,000
164,000
196,000
432,000
362,000
544,000
1,069,000
535,000
1,405,000
238,000
146,000
638,000
140,000
517,000
450,000
196,000
649,000
199,000
192,000
872,000
1,205,000
543,000
208,000
649,000
574,000
259,000
663,000
2,415,000
805,000
2,294,000
5,348,000
701,000
2,020,000
847,000
4,067,000
1,628,000
1,577,000
2,078,000
1,159,000
981,000
848,000
1,811,000
1,836,000
2,165,000
1,115,000
1,520,000
812,000
829,000
1,912,000
510,000
1,133,000
1,360,000
804,000
1,051,000
1,001,000
958,000
978,000
995,000
857,000
1,552,000
3,851,000
726,000
2,091,000
1,637,000
3,585,000
F-47
(46,000)
624,000
695,000
264,000
(184,000)
265,000
498,000
203,000
300,000
402,000
(240,000)
187,000
288,000
360,000
375,000
384,000
393,000
387,000
356,000
165,000
288,000
297,000
348,000
564,000
270,000
540,000
238,000
216,000
492,000
251,000
448,000
450,000
414,000
319,000
171,000
(16,000)
256,000
313,000
1,076,000
2,198,000
400,000
678,000
408,000
1,648,000
638,000
913,000
1,160,000
383,000
471,000
420,000
825,000
793,000
954,000
631,000
693,000
477,000
406,000
779,000
331,000
534,000
-
369,000
682,000
401,000
384,000
389,000
429,000
404,000
413,000
1,277,000
426,000
756,000
538,000
1,212,000
234,000
706,000
1,653,000
132,000
153,000
603,000
308,000
204,000
1,624,000
1,227,000
164,000
196,000
432,000
362,000
544,000
1,069,000
535,000
1,406,000
238,000
146,000
638,000
140,000
517,000
450,000
196,000
649,000
199,000
192,000
872,000
1,206,000
543,000
208,000
649,000
574,000
259,000
663,000
2,417,000
1,072,000
3,994,000
8,240,000
1,365,000
2,514,000
1,520,000
6,213,000
2,469,000
2,789,000
3,639,000
1,302,000
1,639,000
1,556,000
2,996,000
3,004,000
3,503,000
2,139,000
2,599,000
1,645,000
1,400,000
2,979,000
1,138,000
2,015,000
1,924,000
1,443,000
2,273,000
1,640,000
1,558,000
1,859,000
1,674,000
1,709,000
2,415,000
5,542,000
1,471,000
3,018,000
2,159,000
5,051,000
1,306,000
4,700,000
9,893,000
1,497,000
2,667,000
2,123,000
6,521,000
2,673,000
4,413,000
4,866,000
1,466,000
1,835,000
1,988,000
3,358,000
3,548,000
4,572,000
2,674,000
4,005,000
1,883,000
1,546,000
3,617,000
1,278,000
2,532,000
2,374,000
1,639,000
2,922,000
1,839,000
1,750,000
2,731,000
2,880,000
2,252,000
2,623,000
6,191,000
2,045,000
3,277,000
2,822,000
7,468,000
602,000
2,260,000
4,682,000
787,000
1,421,000
840,000
3,518,000
1,393,000
1,492,000
1,926,000
751,000
912,000
873,000
1,649,000
1,712,000
1,985,000
1,108,000
1,479,000
925,000
792,000
1,656,000
643,000
1,106,000
1,343,000
833,000
1,289,000
953,000
918,000
1,113,000
940,000
1,027,000
1,356,000
3,116,000
786,000
1,669,000
1,263,000
2,866,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
8/1/86
8/1/86
9/1/86
9/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
10/1/86
11/1/86
12/1/86
12/1/86
12/1/86
12/1/86
12/1/86
Hammond/Calumet
Laurel/Ft.MeadeRd.
KansasCity/S.44th.
Lakewood/Wadsworth-6th
Anniston/Whiteside
Austin/ResearchBlvd.
Birmingham/Centerpoint
Birmingham/Eastwood
Birmingham/Forestdale
Birmingham/Greensprings
Birmingham/Highland
Birmingham/Hoover-Lorna
Birmingham/Riverchase
Birmingham/RoebuckPlaza
Houston/LongPoint
Houston/NorthFreeway
Houston/OldKatyRoad
Houston/PlainfieldRoad
Houston/SouthLoopWest
Houston/Gessner
Houston/Glenvista
Houston/Gulfton
Houston/I-45
Houston/Richmond-Fairdale
Houston/Rogerdale
Houston/Westpark
Huntsville/Drake
Huntsville/LeemanFerryRd.
Jonesboro
Midfield/Bessemer
Peralta/Fremont
Arleta/OsborneStreet
Denver/SheridanBoulevard
Gresham/Burnside&202nd
Hillsboro/T.V.Highway
Lynnwood/196thStreet
Marietta/CobbParkway
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
97,000
475,000
509,000
1,070,000
59,000
1,390,000
265,000
166,000
152,000
347,000
89,000
372,000
262,000
101,000
451,000
719,000
1,365,000
904,000
1,299,000
1,032,000
595,000
1,732,000
704,000
1,502,000
1,631,000
503,000
253,000
158,000
157,000
170,000
851,000
987,000
1,033,000
351,000
461,000
1,063,000
536,000
751,000
1,475,000
1,906,000
3,155,000
566,000
1,710,000
1,305,000
1,184,000
948,000
1,173,000
786,000
1,128,000
1,338,000
399,000
1,187,000
1,987,000
3,431,000
2,319,000
3,491,000
1,693,000
1,043,000
3,036,000
1,146,000
2,506,000
2,792,000
854,000
1,172,000
992,000
718,000
355,000
1,074,000
663,000
2,792,000
1,056,000
574,000
1,602,000
2,764,000
F-48
541,000
317,000
574,000
684,000
206,000
567,000
351,000
327,000
277,000
366,000
244,000
406,000
464,000
310,000
626,000
83,000
1,064,000
789,000
1,259,000
976,000
673,000
1,099,000
804,000
1,125,000
666,000
223,000
301,000
307,000
252,000
358,000
321,000
275,000
941,000
407,000
271,000
5,865,000
773,000
366,000
630,000
737,000
1,027,000
329,000
672,000
525,000
612,000
519,000
281,000
398,000
431,000
645,000
425,000
563,000
609,000
1,274,000
920,000
1,366,000
746,000
494,000
1,398,000
604,000
1,160,000
1,232,000
435,000
538,000
558,000
370,000
112,000
456,000
290,000
1,007,000
482,000
414,000
571,000
1,016,000
97,000
475,000
509,000
1,070,000
107,000
1,391,000
273,000
232,000
190,000
16,000
150,000
266,000
278,000
340,000
451,000
661,000
1,366,000
904,000
1,300,000
1,032,000
595,000
1,733,000
704,000
1,503,000
1,632,000
503,000
248,000
198,000
157,000
95,000
851,000
987,000
1,033,000
351,000
461,000
1,307,000
536,000
1,658,000
2,422,000
3,217,000
4,866,000
1,053,000
2,948,000
2,173,000
2,057,000
1,706,000
2,151,000
1,367,000
2,071,000
2,431,000
895,000
2,376,000
2,737,000
5,768,000
4,028,000
6,115,000
3,415,000
2,210,000
5,532,000
2,554,000
4,790,000
4,689,000
1,512,000
2,016,000
1,817,000
1,340,000
900,000
1,851,000
1,228,000
4,740,000
1,945,000
1,259,000
7,794,000
4,553,000
1,755,000
2,897,000
3,726,000
5,936,000
1,160,000
4,339,000
2,446,000
2,289,000
1,896,000
2,167,000
1,517,000
2,337,000
2,709,000
1,235,000
2,827,000
3,398,000
7,134,000
4,932,000
7,415,000
4,447,000
2,805,000
7,265,000
3,258,000
6,293,000
6,321,000
2,015,000
2,264,000
2,015,000
1,497,000
995,000
2,702,000
2,215,000
5,773,000
2,296,000
1,720,000
9,101,000
5,089,000
951,000
1,345,000
1,821,000
2,898,000
627,000
1,769,000
1,196,000
1,156,000
948,000
1,197,000
815,000
1,145,000
1,391,000
511,000
1,504,000
1,684,000
3,539,000
2,430,000
3,685,000
2,019,000
1,228,000
3,145,000
1,579,000
2,738,000
2,593,000
843,000
1,113,000
1,048,000
771,000
493,000
1,043,000
743,000
2,736,000
1,167,000
852,000
2,059,000
2,691,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
12/1/86
12/1/86
12/31/86
12/31/86
12/31/86
12/31/86
12/31/86
12/31/86
12/31/86
3/1/87
4/1/87
5/1/87
7/1/87
8/1/87
10/1/87
10/1/87
2/1/88
6/7/88
7/1/88
1/1/92
3/1/92
5/1/92
9/1/92
9/1/92
10/1/92
11/18/92
1/1/93
1/1/93
1/1/93
1/1/93
3/19/93
4/26/93
5/13/93
5/28/93
5/28/93
6/9/93
6/9/93
N.Auburn/AuburnWayN.
SanAntonio/WestSunsetRoad
Northridge
Monrovia/MyrtleAvenue
Chatsworth/Topanga
SantaClara/Duane
Houston/Larkwood
OysterPoint
Walnut
Annandale/Ravensworth
CityOfIndustry/Amar
OklahomaCity/W.Hefner
OakbrookTerrace
SanAntonio/AustinHwy.
Plantation/S.StateRd.
Rockville/FredrickRd.
Anaheim/Lakeview
Mesquite/SorrentoDrive
FortWayne
CostaMesa
Dallas/WalnutSt.
CampCreek
Jacksonville/Arlington
Orlando/W.Colonial
Stockton/Mariners
VirginiaBeach/GeneralBoothBlvd
BaldwinPark/GarveyAve
CityOfIndustry
RedwoodCity/Storage
SanJose/Felipe
Westminister/W.80th
CostaMesa/Newport
Austin/N.Lamar
Jacksonville/PhillipsHwy.
Tampa/NebraskaAvenue
Calabasas/VenturaBlvd.
Carmichael/FairOaks
-
-
991,000
660,000
447,000
386,000
168,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
897,000
-
-
-
-
-
606,000
1,206,000
3,624,000
1,149,000
1,447,000
1,950,000
247,000
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
554,000
368,000
381,000
599,000
840,000
1,611,000
907,000
1,124,000
840,000
2,141,000
919,000
406,000
550,000
1,762,000
573,000
1,144,000
1,594,000
1,922,000
2,446,000
1,243,000
1,004,000
602,000
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
1,065,000
713,000
730,000
1,119,000
1,561,000
2,991,000
1,684,000
2,088,000
1,586,000
3,989,000
1,695,000
771,000
1,043,000
3,269,000
1,052,000
F-49
438,000
565,000
2,496,000
203,000
251,000
406,000
396,000
439,000
3,599,000
280,000
510,000
317,000
172,000
(5,000)
(200,000)
(206,000)
28,000
3,467,000
87,000
708,000
306,000
322,000
231,000
188,000
225,000
415,000
406,000
333,000
253,000
381,000
299,000
5,174,000
6,700,000
228,000
177,000
206,000
248,000
533,000
649,000
-
-
-
-
-
-
-
596,000
702,000
417,000
399,000
164,000
298,000
519,000
256,000
-
663,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
606,000
1,208,000
3,626,000
1,150,000
1,448,000
1,951,000
247,000
1,570,000
769,000
679,000
748,000
459,000
912,000
400,000
924,000
1,696,000
995,000
1,045,000
101,000
535,000
537,000
576,000
554,000
368,000
381,000
599,000
840,000
1,612,000
907,000
1,125,000
840,000
3,732,000
1,422,000
406,000
550,000
1,763,000
573,000
2,115,000
2,806,000
4,416,000
2,648,000
1,493,000
1,409,000
998,000
1,928,000
4,210,000
2,497,000
3,264,000
1,675,000
3,259,000
1,009,000
1,899,000
3,617,000
1,789,000
4,361,000
2,274,000
1,686,000
1,314,000
1,397,000
1,296,000
901,000
955,000
1,534,000
1,967,000
3,323,000
1,937,000
2,468,000
1,885,000
7,572,000
7,892,000
999,000
1,220,000
3,474,000
1,300,000
2,721,000
4,014,000
8,042,000
3,798,000
2,941,000
3,360,000
1,245,000
3,498,000
4,979,000
3,176,000
4,012,000
2,134,000
4,171,000
1,409,000
2,823,000
5,313,000
2,784,000
5,406,000
2,375,000
2,221,000
1,851,000
1,973,000
1,850,000
1,269,000
1,336,000
2,133,000
2,807,000
4,935,000
2,844,000
3,593,000
2,725,000
11,304,000
9,314,000
1,405,000
1,770,000
5,237,000
1,873,000
1,280,000
1,673,000
1,867,000
1,799,000
1,149,000
930,000
625,000
1,223,000
1,030,000
1,479,000
1,176,000
958,000
2,480,000
791,000
1,461,000
2,776,000
1,340,000
1,519,000
1,051,000
1,219,000
1,261,000
736,000
673,000
463,000
479,000
769,000
953,000
1,489,000
923,000
1,150,000
881,000
1,956,000
1,767,000
499,000
580,000
1,561,000
651,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
6/9/93
6/10/93
6/25/93
6/30/93
7/16/93
8/1/93
8/11/93
8/11/93
8/13/93
10/1/93
10/1/93
10/1/93
10/27/93
11/3/93
11/16/93
11/16/93
12/9/93
12/16/93
12/21/93
12/28/93
12/29/93
12/29/93
12/29/93
12/29/93
12/29/93
12/29/93
12/29/93
12/29/93
12/29/93
12/29/93
12/29/93
12/29/93
12/29/93
1/10/94
1/12/94
1/12/94
1/12/94
SantaClara/Duane
CitrusHeights/SylvanRoad
Trenton/AllenRoad
LosAngeles/W.JeffersonBlvd
Austin/So.CongressAve
Gaithersburg/E.Diamond
Atlanta/Northside
Smyrna/RosswillRd
So.Brunswick/Highway
CitrusHeights
Denver/FederalBlvd
Lakewood/6thAve
Houston/SShaverSt
Upland/S.EuclidAve.
Norcross/JimmyCarter
Seattle/13th
SaltLakeCity
WestValleyCity
PinellasPark/34thSt.W
NewOrleans/S.CarrolltonAve
ElCajon/Magnolia
Frederick/ProspectBlvd.
Fullerton/W.Commonwealth
Gardena/WesternAve.
Indianapolis/E.Washington
Irving/WestLoop12
LosAlimitos/Cerritos
N.Lauderdale/McnabRd
Orange/Main
Orlando/S.SemoranBlvd.
PalmBay/BobcockStreet
Sunnyvale/Wedell
Tampa/W.HillsboroughAve
Hialeah/W.20ThAve.
Honolulu/Iwaena
Miami/GoldenGlades
Sunnyvale/N.FairOaksAve
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
454,000
438,000
623,000
1,085,000
777,000
602,000
1,150,000
446,000
1,076,000
527,000
875,000
798,000
481,000
431,000
627,000
1,085,000
765,000
683,000
607,000
1,575,000
421,000
573,000
904,000
552,000
403,000
341,000
695,000
628,000
1,238,000
462,000
409,000
554,000
352,000
1,855,000
-
579,000
689,000
834,000
822,000
1,166,000
2,017,000
1,445,000
1,139,000
2,149,000
842,000
2,033,000
987,000
1,633,000
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
791,000
1,082,000
1,687,000
1,035,000
775,000
643,000
1,299,000
1,182,000
2,317,000
872,000
775,000
1,037,000
665,000
3,497,000
3,382,000
1,081,000
1,285,000
F-50
112,000
212,000
253,000
218,000
365,000
181,000
361,000
239,000
334,000
118,000
212,000
15,000
213,000
429,000
204,000
634,000
6,000
235,000
251,000
573,000
555,000
599,000
1,042,000
613,000
536,000
213,000
704,000
729,000
1,427,000
678,000
536,000
784,000
451,000
267,000
709,000
431,000
335,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
454,000
438,000
623,000
1,085,000
777,000
602,000
1,151,000
446,000
1,076,000
527,000
875,000
685,000
481,000
508,000
627,000
1,085,000
633,000
683,000
607,000
1,576,000
542,000
692,000
1,161,000
695,000
505,000
355,000
874,000
798,000
1,594,000
601,000
525,000
725,000
436,000
1,591,000
-
557,000
657,000
946,000
1,034,000
1,419,000
2,235,000
1,810,000
1,320,000
2,509,000
1,081,000
2,367,000
1,105,000
1,845,000
1,617,000
1,109,000
1,159,000
1,371,000
2,649,000
1,560,000
1,511,000
1,385,000
3,513,000
1,225,000
1,562,000
2,472,000
1,505,000
1,209,000
842,000
1,824,000
1,741,000
3,388,000
1,411,000
1,195,000
1,650,000
1,032,000
4,028,000
4,091,000
1,534,000
1,652,000
1,400,000
1,472,000
2,042,000
3,320,000
2,587,000
1,922,000
3,660,000
1,527,000
3,443,000
1,632,000
2,720,000
2,302,000
1,590,000
1,667,000
1,998,000
3,734,000
2,193,000
2,194,000
1,992,000
5,089,000
1,767,000
2,254,000
3,633,000
2,200,000
1,714,000
1,197,000
2,698,000
2,539,000
4,982,000
2,012,000
1,720,000
2,375,000
1,468,000
5,619,000
4,091,000
2,091,000
2,309,000
450,000
513,000
629,000
993,000
900,000
592,000
1,154,000
539,000
1,084,000
510,000
818,000
708,000
525,000
525,000
631,000
1,315,000
321,000
670,000
643,000
1,486,000
532,000
664,000
1,037,000
619,000
515,000
398,000
747,000
725,000
1,407,000
625,000
520,000
710,000
450,000
1,674,000
1,667,000
674,000
688,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
1/21/94
2/8/94
2/28/94
3/8/94
3/21/94
3/25/94
3/25/94
3/25/94
3/31/94
4/26/94
5/12/94
5/24/94
5/24/94
6/9/94
6/9/94
6/18/94
6/23/94
6/23/94
6/24/94
6/30/94
7/20/94
8/17/94
8/17/94
8/17/94
8/17/94
8/17/94
8/17/94
8/17/94
9/15/94
9/27/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
Herndon/CentrevilleRoad
LasVegas/S.MartinLutherKingBlvd.
Arlingtn/OldJeffersnDavishwy
Beaverton/SwBarnesRoad
Austin/Arboretum
EastBrunswick/MilltownRoad
Mercerville/QuakerbridgeRoad
TintonFalls/ShrewsburyAve
Hypoluxo
No.Highlands/RosevilleRoad
FortPierce/OkeechobeeRoad
Hempstead/PeninsulaBlvd.
La/Huntington
Chattanooga/BrainerdRoad
Chattanooga/RinggoldRoad
LasVegas/S.ValleyViewBlvd
Henderson/GreenValleyPkwy
LasVegas/Tropicana
LasVegas/N.LambBlvd.
Birmingham/W.OxmoorRoad
Milpitas/DempseyRoad
Alsip/27th
Beaverton/S.W.DennyRoad
Irwindale/CentralAve.
Lombard/64th
NewOrleans/I-10
NorthBrunswick/HowLane
Suitland/St.BarnabasRd
Huntsville/OldMonroviaRoad
WestHaven/BullHillLane
Alexandria/S.Pickett
Aloha/S.W.Shaw
Arlington/Collins
Austin/LamarBlvd
Baltimore/HillenStreet
Blackwood/ErialRoad
Concord/Monument
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,584,000
1,383,000
735,000
942,000
473,000
1,282,000
1,109,000
1,074,000
735,000
980,000
438,000
2,053,000
483,000
613,000
761,000
837,000
1,047,000
750,000
869,000
532,000
1,260,000
406,000
663,000
674,000
847,000
784,000
1,238,000
1,530,000
613,000
455,000
1,550,000
805,000
228,000
781,000
580,000
774,000
1,092,000
2,981,000
2,592,000
1,399,000
1,810,000
897,000
2,411,000
2,111,000
2,033,000
1,404,000
1,835,000
842,000
3,832,000
905,000
1,170,000
1,433,000
1,571,000
1,960,000
1,408,000
1,629,000
1,004,000
2,358,000
765,000
1,245,000
1,263,000
1,583,000
1,470,000
2,323,000
2,913,000
1,157,000
873,000
2,879,000
1,495,000
435,000
1,452,000
1,095,000
1,437,000
2,027,000
F-51
488,000
1,077,000
313,000
201,000
2,775,000
365,000
276,000
236,000
1,913,000
367,000
298,000
309,000
162,000
269,000
440,000
171,000
191,000
242,000
71,000
389,000
238,000
116,000
127,000
101,000
169,000
219,000
130,000
349,000
252,000
5,308,000
250,000
144,000
265,000
161,000
277,000
130,000
396,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,359,000
1,437,000
630,000
807,000
1,555,000
1,099,000
950,000
921,000
630,000
840,000
375,000
1,764,000
414,000
525,000
653,000
718,000
898,000
643,000
669,000
461,000
1,080,000
348,000
568,000
578,000
726,000
672,000
1,062,000
1,313,000
525,000
1,965,000
1,330,000
690,000
195,000
669,000
497,000
663,000
936,000
3,694,000
3,615,000
1,817,000
2,146,000
2,590,000
2,959,000
2,546,000
2,422,000
3,422,000
2,342,000
1,203,000
4,430,000
1,136,000
1,527,000
1,981,000
1,861,000
2,300,000
1,757,000
1,900,000
1,464,000
2,776,000
939,000
1,467,000
1,460,000
1,873,000
1,801,000
2,629,000
3,479,000
1,497,000
4,671,000
3,349,000
1,754,000
733,000
1,725,000
1,455,000
1,678,000
2,579,000
5,053,000
5,052,000
2,447,000
2,953,000
4,145,000
4,058,000
3,496,000
3,343,000
4,052,000
3,182,000
1,578,000
6,194,000
1,550,000
2,052,000
2,634,000
2,579,000
3,198,000
2,400,000
2,569,000
1,925,000
3,856,000
1,287,000
2,035,000
2,038,000
2,599,000
2,473,000
3,691,000
4,792,000
2,022,000
6,636,000
4,679,000
2,444,000
928,000
2,394,000
1,952,000
2,341,000
3,515,000
1,339,000
1,500,000
805,000
957,000
810,000
1,271,000
1,118,000
1,062,000
2,440,000
1,033,000
578,000
1,816,000
509,000
675,000
908,000
778,000
963,000
759,000
485,000
772,000
1,135,000
408,000
611,000
594,000
760,000
759,000
1,035,000
1,415,000
666,000
1,052,000
1,322,000
721,000
408,000
707,000
631,000
668,000
1,089,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
9/30/94
10/13/94
10/13/94
10/31/94
12/19/94
12/28/94
12/28/94
12/28/94
12/30/94
1/4/95
1/5/95
1/12/95
1/23/95
1/23/95
1/24/95
2/3/95
2/15/95
2/15/95
DaytonBch/N.NovaRoad
Houston/Bellaire
Houston/Highway6North
LongBeach/SouthStreet
MapleShade/Route38
Marlton/Route73N.
Miami/S.W.119thAve
Milwaukee/LoversLaneRd
Montebello/E.Whittier
Monterey/DelReyOaks
Naperville/E.OgdenAve
Rochester/LeeRoad
SanAntonio/AustinHwy
SanAntonio/NacogdochesRd
SanFrancisco/MarinSt.
SanFrancisco/10th&Howard
SanRafael/MerrydaleRd
SanRamon/SanRamonValley
Sharonville/E.Kemper
St.Petersburg/66ThSt.
Carrollton/MarshLane
Davie/StateRoad84
ShermanOaks/VanNuysBlvd
SaltLakeCity/WestNorthTemple
LasVegas/JonesBlvd
Milpitas/Watson
Venice/Guthrie
AppleValley/FoliageAve
ChulaVista/MainStreet
Pantego/WestPark
Roswell/Alpharetta
NorthBergen/Tonne
SanLeandro/Hesperian
Nashville/ElmHill
Reno/S.MccarronBlvd
LA/Sepulveda
Lansing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
396,000
623,000
1,120,000
1,778,000
994,000
938,000
656,000
469,000
383,000
1,093,000
683,000
469,000
592,000
571,000
1,227,000
1,423,000
1,705,000
1,530,000
574,000
427,000
770,000
744,000
1,278,000
490,000
1,208,000
1,575,000
578,000
910,000
735,000
315,000
423,000
1,564,000
734,000
338,000
1,080,000
1,453,000
1,514,000
735,000
1,157,000
2,083,000
3,307,000
1,846,000
1,742,000
1,221,000
871,000
732,000
1,897,000
1,268,000
871,000
1,098,000
1,060,000
2,339,000
2,668,000
3,165,000
2,840,000
1,070,000
793,000
1,437,000
1,467,000
2,461,000
917,000
2,243,000
2,925,000
1,073,000
1,695,000
1,802,000
735,000
993,000
3,772,000
1,726,000
791,000
2,537,000
3,390,000
3,534,000
F-52
158,000
250,000
250,000
356,000
217,000
86,000
73,000
149,000
170,000
129,000
157,000
246,000
203,000
248,000
1,230,000
268,000
220,000
439,000
271,000
198,000
1,417,000
890,000
943,000
(47,000)
186,000
267,000
144,000
249,000
191,000
161,000
386,000
364,000
145,000
384,000
194,000
124,000
170,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
339,000
534,000
960,000
1,525,000
852,000
804,000
563,000
402,000
329,000
903,000
585,000
402,000
507,000
489,000
1,372,000
1,222,000
1,462,000
1,312,000
492,000
366,000
1,022,000
638,000
1,424,000
385,000
1,035,000
1,351,000
495,000
780,000
735,000
315,000
423,000
1,552,000
734,000
338,000
1,080,000
1,454,000
1,515,000
950,000
1,496,000
2,493,000
3,916,000
2,205,000
1,962,000
1,387,000
1,087,000
956,000
2,216,000
1,523,000
1,184,000
1,386,000
1,390,000
3,424,000
3,137,000
3,628,000
3,497,000
1,423,000
1,052,000
2,602,000
2,463,000
3,258,000
975,000
2,602,000
3,416,000
1,300,000
2,074,000
1,993,000
896,000
1,379,000
4,148,000
1,871,000
1,175,000
2,731,000
3,513,000
3,703,000
1,289,000
2,030,000
3,453,000
5,441,000
3,057,000
2,766,000
1,950,000
1,489,000
1,285,000
3,119,000
2,108,000
1,586,000
1,893,000
1,879,000
4,796,000
4,359,000
5,090,000
4,809,000
1,915,000
1,418,000
3,624,000
3,101,000
4,682,000
1,360,000
3,637,000
4,767,000
1,795,000
2,854,000
2,728,000
1,211,000
1,802,000
5,700,000
2,605,000
1,513,000
3,811,000
4,967,000
5,218,000
418,000
619,000
1,036,000
1,523,000
877,000
773,000
548,000
466,000
413,000
917,000
604,000
525,000
603,000
573,000
1,358,000
1,263,000
1,451,000
1,424,000
585,000
463,000
998,000
951,000
1,313,000
206,000
1,007,000
1,318,000
522,000
830,000
866,000
409,000
580,000
1,570,000
713,000
609,000
1,052,000
1,127,000
1,199,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
2/15/95
2/15/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
2/28/95
3/2/95
3/2/95
3/2/95
3/31/95
5/1/95
5/3/95
5/8/95
5/8/95
5/8/95
6/12/95
6/12/95
6/12/95
Pleasanton
SchillerPark
Amherst/Sheridan
Burlingame/AdrianRd
Chicago/ClarkStreet
Decatur/FlatShoal
Downey/Bellflower
FederalWay/Pacific
Kent/PacificHwy
Kirkland
LaPuente/ValleyBlvd
Lynnwood/180thSt
Miami/Biscayne
Miami/Cloverleaf
Milwaukie/40thStreet
Palatine/Dundee
Pinole/SanPablo
Portland/N.Lombard
SanJose/CapitolE
SanJose/Mabury
Smyrna/S.Cobb
SouthGate/Firesto
Tampa/S.Dale
Vallejo/Lincoln
Williamsville/Transit
Burien/1StAveSouth
Everett/Highway99
Kent/South238thStreet
Cheverly/CentralAve
Sandy/S.StateStreet
Largo/UlmertonRoa
Dallas/W.Mockingbird
EastPoint/Lakewood
Fairfield/WesternStreet
Baltimore/OldWaterloo
MountainView/OldMiddlefield
PleasantHill/Hookston
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,257,000
1,688,000
484,000
2,280,000
442,000
970,000
916,000
785,000
728,000
1,254,000
591,000
516,000
1,313,000
606,000
576,000
698,000
639,000
812,000
1,215,000
892,000
663,000
1,442,000
791,000
445,000
284,000
763,000
859,000
763,000
911,000
1,043,000
263,000
1,440,000
884,000
439,000
769,000
2,095,000
766,000
2,932,000
3,939,000
1,151,000
5,349,000
1,031,000
2,288,000
2,158,000
1,832,000
1,711,000
2,932,000
1,390,000
1,205,000
3,076,000
1,426,000
1,388,000
1,643,000
1,502,000
1,900,000
2,852,000
2,088,000
1,559,000
3,449,000
1,852,000
1,052,000
670,000
1,783,000
2,022,000
1,783,000
2,164,000
2,442,000
654,000
3,371,000
2,071,000
1,030,000
1,850,000
4,913,000
1,848,000
F-53
93,000
313,000
186,000
330,000
348,000
454,000
156,000
281,000
151,000
225,000
233,000
225,000
138,000
291,000
132,000
294,000
261,000
220,000
154,000
158,000
274,000
394,000
245,000
220,000
231,000
303,000
237,000
279,000
191,000
(272,000)
146,000
173,000
359,000
93,000
154,000
119,000
115,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,258,000
1,689,000
484,000
2,281,000
442,000
970,000
916,000
785,000
728,000
1,255,000
591,000
516,000
1,314,000
606,000
579,000
698,000
639,000
812,000
1,216,000
892,000
663,000
1,443,000
791,000
445,000
284,000
763,000
859,000
763,000
911,000
923,000
263,000
1,441,000
884,000
439,000
769,000
2,096,000
742,000
3,024,000
4,251,000
1,337,000
5,678,000
1,379,000
2,742,000
2,314,000
2,113,000
1,862,000
3,156,000
1,623,000
1,430,000
3,213,000
1,717,000
1,517,000
1,937,000
1,763,000
2,120,000
3,005,000
2,246,000
1,833,000
3,842,000
2,097,000
1,272,000
901,000
2,086,000
2,259,000
2,062,000
2,355,000
2,290,000
800,000
3,543,000
2,430,000
1,123,000
2,004,000
5,031,000
1,987,000
4,282,000
5,940,000
1,821,000
7,959,000
1,821,000
3,712,000
3,230,000
2,898,000
2,590,000
4,411,000
2,214,000
1,946,000
4,527,000
2,323,000
2,096,000
2,635,000
2,402,000
2,932,000
4,221,000
3,138,000
2,496,000
5,285,000
2,888,000
1,717,000
1,185,000
2,849,000
3,118,000
2,825,000
3,266,000
3,213,000
1,063,000
4,984,000
3,314,000
1,562,000
2,773,000
7,127,000
2,729,000
959,000
1,402,000
553,000
2,160,000
609,000
1,169,000
877,000
895,000
735,000
1,211,000
702,000
601,000
1,203,000
693,000
611,000
746,000
744,000
843,000
1,144,000
835,000
762,000
1,552,000
862,000
533,000
381,000
870,000
927,000
869,000
888,000
461,000
373,000
1,302,000
997,000
432,000
743,000
1,776,000
744,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
6/30/95
Pacoima/PaxtonStreet
AltamonteSprings
Beaverton/S.W.110
Bridgeton/Pennridge
CherryHill/DobbsLane
Dallas/AudeliaRoad
EdgewaterPark/Route130
Elmhurst/LakeFrontageRd
Fairfield/KingsHighway
FortWorth/Hwy80
GrandPrairie/19th
Greenfield/S.108th
Houston/N.W.Freeway
Houston/S.W.Freeway
Independence/E.42nd
Joliet/JeffersonStreet
Lauderhill/StateRoad
Lawrenceville/Brunswick
Liverpool/OswegoRoad
LosAngeles/BeverlyBlvd
Markham/W.159ThPlace
MiamiGardens
Milwaukee/Brown
OrangePark/BlandingBlvd
Orlando/W.OakRidge
Pasadena/E.Beltway
Portland/Gantenbein
Portland/Prescott
Portland/S.E.92nd
Richmond/Carlson
Rochester/EastAve
SanJose/BlossomHill
Seattle/DelridgeWay
St.Louis/PageServiceDrive
St.Petersburg
St.Petersburg/Joe’SCreek
UpperChichester/MarketSt.
875,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
840,000
566,000
572,000
283,000
716,000
1,166,000
683,000
748,000
1,811,000
379,000
566,000
728,000
447,000
537,000
438,000
501,000
644,000
841,000
545,000
787,000
230,000
823,000
358,000
394,000
698,000
757,000
537,000
647,000
638,000
865,000
578,000
1,467,000
760,000
531,000
352,000
704,000
569,000
1,976,000
1,326,000
1,342,000
661,000
1,676,000
2,725,000
1,593,000
1,758,000
4,273,000
891,000
1,329,000
1,707,000
1,066,000
1,254,000
1,023,000
1,181,000
1,508,000
1,961,000
1,279,000
1,886,000
539,000
1,929,000
849,000
918,000
1,642,000
1,767,000
1,262,000
1,509,000
1,497,000
2,025,000
1,375,000
3,444,000
1,779,000
1,241,000
827,000
1,642,000
1,329,000
F-54
157,000
154,000
173,000
203,000
154,000
863,000
135,000
165,000
232,000
137,000
157,000
258,000
153,000
5,377,000
183,000
189,000
184,000
132,000
254,000
357,000
164,000
216,000
209,000
239,000
247,000
161,000
180,000
188,000
210,000
303,000
225,000
199,000
240,000
192,000
222,000
206,000
135,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
840,000
566,000
572,000
283,000
715,000
1,167,000
683,000
748,000
1,812,000
379,000
566,000
728,000
447,000
1,607,000
438,000
501,000
644,000
841,000
545,000
787,000
229,000
823,000
358,000
394,000
698,000
757,000
537,000
647,000
638,000
865,000
578,000
1,468,000
760,000
531,000
352,000
704,000
569,000
2,133,000
1,480,000
1,515,000
864,000
1,831,000
3,587,000
1,728,000
1,923,000
4,504,000
1,028,000
1,486,000
1,965,000
1,219,000
5,561,000
1,206,000
1,370,000
1,692,000
2,093,000
1,533,000
2,243,000
704,000
2,145,000
1,058,000
1,157,000
1,889,000
1,928,000
1,442,000
1,697,000
1,707,000
2,328,000
1,600,000
3,642,000
2,019,000
1,433,000
1,049,000
1,848,000
1,464,000
2,973,000
2,046,000
2,087,000
1,147,000
2,546,000
4,754,000
2,411,000
2,671,000
6,316,000
1,407,000
2,052,000
2,693,000
1,666,000
7,168,000
1,644,000
1,871,000
2,336,000
2,934,000
2,078,000
3,030,000
933,000
2,968,000
1,416,000
1,551,000
2,587,000
2,685,000
1,979,000
2,344,000
2,345,000
3,193,000
2,178,000
5,110,000
2,779,000
1,964,000
1,401,000
2,552,000
2,033,000
782,000
556,000
587,000
373,000
660,000
1,586,000
627,000
727,000
1,667,000
422,000
580,000
754,000
496,000
872,000
496,000
547,000
637,000
758,000
615,000
946,000
299,000
799,000
429,000
481,000
747,000
718,000
562,000
667,000
663,000
905,000
606,000
1,330,000
751,000
564,000
445,000
705,000
551,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
7/13/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
7/31/95
8/1/95
8/1/95
8/1/95
8/11/95
8/12/95
9/1/95
9/1/95
9/1/95
9/1/95
9/1/95
9/1/95
9/1/95
9/1/95
9/6/95
9/30/95
9/30/95
9/30/95
9/30/95
9/30/95
9/30/95
9/30/95
9/30/95
Tarzana/BurbankBlvd
MissionBay
SanJose/Tully
Livermore/Portola
Orlando/Lakehurst
CastroValley/Grove
Chicago/WabashAve
Honolulu/Kaneohe
HuntingtonBch/Gotham
LasVegas/Decatur
Marietta/CantonRoad
Pleasanton/Stanley
Springfield/Parker
Tucker/Lawrenceville
Wheeling/Hintz
Decatur/Covington
Gresham/Division
Tucker/Lawrenceville
StudioCity/Ventura
Smyrna/HargroveRoad
Hayward/MissionBlvd
LasVegas/Rainbow
MountainView/Reng
NewCastle/DupontParkway
ParkCity/Belvider
SimiValley/LosAngeles
SpringValley/Foreman
Venice/Cadillac
Darien/FrontageRoad
Carson
DelAmo
Downey
HuntingtonBeach
MontereyPark
VanNuys/Balboa
VanNuys/BalboaBlvd
Whittier
-
3,495,000
1,408,000
1,140,000
849,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,895,000
1,617,000
912,000
921,000
450,000
757,000
645,000
1,215,000
765,000
1,147,000
600,000
1,624,000
765,000
630,000
450,000
720,000
607,000
600,000
1,285,000
1,020,000
1,020,000
1,050,000
945,000
990,000
600,000
1,590,000
1,095,000
930,000
975,000
375,000
474,000
191,000
176,000
124,000
295,000
1,920,000
215,000
6,823,000
3,785,000
2,137,000
2,157,000
1,063,000
1,772,000
1,535,000
2,846,000
1,808,000
2,697,000
1,423,000
3,811,000
1,834,000
1,480,000
1,054,000
1,694,000
1,428,000
1,405,000
3,015,000
3,038,000
2,383,000
2,459,000
2,216,000
2,369,000
1,405,000
3,724,000
2,572,000
2,182,000
2,321,000
735,000
742,000
317,000
321,000
346,000
657,000
4,504,000
384,000
F-55
387,000
491,000
318,000
204,000
176,000
106,000
682,000
2,057,000
176,000
356,000
252,000
210,000
155,000
204,000
147,000
214,000
116,000
271,000
160,000
377,000
179,000
122,000
159,000
176,000
111,000
219,000
170,000
238,000
108,000
160,000
166,000
192,000
215,000
147,000
149,000
376,000
247,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
428,000
922,000
825,000
738,000
782,000
1,148,000
-
781,000
2,896,000
1,618,000
912,000
921,000
450,000
757,000
645,000
2,134,000
765,000
1,148,000
600,000
1,625,000
765,000
630,000
450,000
720,000
607,000
600,000
1,286,000
1,020,000
1,020,000
1,050,000
945,000
990,000
600,000
1,591,000
1,095,000
930,000
975,000
375,000
474,000
191,000
176,000
124,000
295,000
1,921,000
215,000
7,209,000
4,275,000
2,455,000
2,361,000
1,239,000
1,878,000
2,217,000
3,984,000
1,984,000
3,052,000
1,675,000
4,020,000
1,989,000
1,684,000
1,201,000
1,908,000
1,544,000
1,676,000
3,174,000
3,415,000
2,562,000
2,581,000
2,375,000
2,545,000
1,516,000
3,942,000
2,742,000
2,420,000
2,429,000
1,323,000
1,830,000
1,334,000
1,274,000
1,275,000
1,954,000
4,879,000
1,412,000
10,105,000
5,893,000
3,367,000
3,282,000
1,689,000
2,635,000
2,862,000
6,118,000
2,749,000
4,200,000
2,275,000
5,645,000
2,754,000
2,314,000
1,651,000
2,628,000
2,151,000
2,276,000
4,460,000
4,435,000
3,582,000
3,631,000
3,320,000
3,535,000
2,116,000
5,533,000
3,837,000
3,350,000
3,404,000
1,698,000
2,304,000
1,525,000
1,450,000
1,399,000
2,249,000
6,800,000
1,627,000
2,711,000
1,657,000
933,000
879,000
479,000
677,000
1,092,000
1,288,000
763,000
1,128,000
677,000
1,452,000
746,000
668,000
466,000
750,000
578,000
698,000
1,140,000
1,194,000
919,000
922,000
846,000
916,000
553,000
1,403,000
985,000
915,000
893,000
434,000
864,000
492,000
461,000
504,000
760,000
1,511,000
493,000
Date
Acquired
10/31/95
10/31/95
10/31/95
11/15/95
11/15/95
11/15/95
11/15/95
11/15/95
11/15/95
11/16/95
11/16/95
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
1/1/96
Description
Chicago/W.47thStreet
LosAngeles/Eastern
SanLorenzo/Hesperian
CitrusHeights/Sunrise
CostaMesa
Modesto/BriggsmoreAve
Pacheco/BuchananCircle
Plano/E.14th
SoSanFrancisco/Spruce
DelrayBeach
PalmBeachGardens
BedfordHts/Miles
Bensenville/YorkRd
Bowie/Woodcliff
Clinton/MalcolmRoad
Coram/MiddleCount
Denver/SQuebec
DesMoines
Englewood/Federal
Houston/FM1960
Houston/Westheimer
Hyattsville/Kenilworth
Kent/MilitaryTrail
Livonia/Newburgh
Louisville/Preston
MapleShade/Fellowship
MerrionettePark
Milwaukee/S.84th
OrlandHills/W.159th
Oxonhill/Indianhead
Sacramento/N.16th
SanJose/AbornRoad
SanPablo/SanPablo
Sewell/Rts.553
Sunland/SunlandBlvd.
Tigard/S.W.Pacific
Turnersville/Black
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
300,000
455,000
1,590,000
520,000
522,000
470,000
1,681,000
705,000
1,905,000
600,000
657,000
835,000
667,000
718,000
593,000
507,000
1,849,000
448,000
481,000
635,000
1,508,000
509,000
409,000
635,000
211,000
331,000
818,000
444,000
917,000
772,000
582,000
615,000
565,000
323,000
631,000
633,000
165,000
708,000
1,070,000
3,716,000
1,213,000
1,218,000
1,097,000
3,951,000
1,646,000
4,444,000
1,407,000
1,540,000
1,577,000
1,602,000
2,336,000
2,123,000
1,421,000
1,941,000
1,350,000
1,395,000
1,294,000
2,274,000
1,757,000
1,670,000
1,407,000
1,060,000
1,421,000
2,020,000
1,868,000
2,392,000
2,017,000
2,610,000
1,342,000
1,232,000
1,138,000
1,965,000
1,206,000
1,360,000
F-56
220,000
153,000
390,000
147,000
72,000
120,000
273,000
104,000
347,000
172,000
154,000
301,000
213,000
111,000
239,000
124,000
195,000
112,000
133,000
223,000
265,000
155,000
195,000
126,000
88,000
143,000
120,000
302,000
260,000
282,000
172,000
100,000
154,000
137,000
103,000
136,000
138,000
-
-
-
-
-
-
-
-
-
-
-
929,000
895,000
1,292,000
1,187,000
792,000
1,086,000
768,000
777,000
783,000
1,304,000
1,000,000
956,000
783,000
594,000
803,000
1,122,000
1,091,000
1,342,000
1,141,000
1,466,000
759,000
713,000
658,000
1,090,000
705,000
758,000
300,000
455,000
1,591,000
520,000
522,000
470,000
1,682,000
705,000
1,906,000
600,000
657,000
835,000
667,000
718,000
593,000
507,000
1,850,000
448,000
481,000
635,000
1,509,000
509,000
409,000
635,000
211,000
331,000
818,000
444,000
917,000
772,000
582,000
615,000
565,000
323,000
631,000
633,000
165,000
928,000
1,223,000
4,105,000
1,360,000
1,290,000
1,217,000
4,223,000
1,750,000
4,790,000
1,579,000
1,694,000
2,807,000
2,710,000
3,739,000
3,549,000
2,337,000
3,221,000
2,230,000
2,305,000
2,300,000
3,842,000
2,912,000
2,821,000
2,316,000
1,742,000
2,367,000
3,262,000
3,261,000
3,994,000
3,440,000
4,248,000
2,201,000
2,099,000
1,933,000
3,158,000
2,047,000
2,256,000
1,228,000
1,678,000
5,696,000
1,880,000
1,812,000
1,687,000
5,905,000
2,455,000
6,696,000
2,179,000
2,351,000
3,642,000
3,377,000
4,457,000
4,142,000
2,844,000
5,071,000
2,678,000
2,786,000
2,935,000
5,351,000
3,421,000
3,230,000
2,951,000
1,953,000
2,698,000
4,080,000
3,705,000
4,911,000
4,212,000
4,830,000
2,816,000
2,664,000
2,256,000
3,789,000
2,680,000
2,421,000
342,000
415,000
1,244,000
499,000
444,000
436,000
1,401,000
587,000
1,620,000
603,000
625,000
838,000
827,000
980,000
923,000
673,000
964,000
674,000
725,000
741,000
1,134,000
833,000
822,000
664,000
525,000
677,000
973,000
892,000
1,207,000
967,000
1,020,000
681,000
609,000
586,000
864,000
628,000
666,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
1/1/96
1/1/96
1/3/96
1/5/96
1/12/96
2/29/96
2/29/96
2/29/96
2/29/96
2/29/96
2/29/96
2/29/96
2/29/96
2/29/96
3/8/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
3/31/96
4/1/96
4/1/96
4/1/96
4/1/96
4/1/96
4/1/96
4/1/96
4/1/96
W.Hollywood/SantaMonica
Waterbury/Captain
SanGabriel
SanFrancisco,SecondSt.
SanAntonio,TX
Brandon,FL/WBrandonBlvd.
CoralSpringsFL/WSampleRd.
DelrayBeachFL/SMilitaryTr.
JupiterFL/MilitaryTrail
LakeWorth,FL/S.MilitaryTr.
LakeworthFL/LakeWorthRd
Naples,FL/OldUS41
NewPortRichey/StateRd54
SanfordFL/SOrlandoDr
Atlanta/Roswell
Baltimore
Carrollton
Dallas
Houston
Houston
Irvine
Jacksonville
Milwaukee
NewHaven
Oakland
Plano
Randallstown
Saratoga
Torrance
Chicago/Pulaski
Houston/Westheimer
LasVegas/DesertInn
Rockville/Randolph
SimiValley/EastStreet
St.Louis/BarrettStationRoad
Torrance/Crenshaw
Weymouth
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,415,000
434,000
1,005,000
2,880,000
912,000
1,928,000
3,480,000
941,000
2,280,000
1,782,000
737,000
849,000
857,000
734,000
898,000
842,000
578,000
315,000
543,000
669,000
1,920,000
713,000
542,000
740,000
1,065,000
650,000
1,359,000
2,339,000
1,415,000
764,000
1,390,000
1,115,000
1,153,000
970,000
630,000
916,000
485,000
4,577,000
2,089,000
2,345,000
6,814,000
2,170,000
4,523,000
8,148,000
2,222,000
5,347,000
4,723,000
1,742,000
2,016,000
2,025,000
1,749,000
3,649,000
2,180,000
1,495,000
810,000
1,402,000
1,724,000
4,975,000
1,845,000
1,402,000
1,907,000
2,764,000
1,682,000
3,527,000
6,081,000
3,675,000
1,869,000
3,402,000
2,729,000
2,823,000
2,374,000
1,542,000
2,243,000
1,187,000
F-57
250,000
151,000
232,000
201,000
96,000
913,000
244,000
191,000
323,000
177,000
170,000
171,000
192,000
1,965,000
112,000
208,000
110,000
1,733,000
125,000
472,000
576,000
218,000
118,000
(202,000)
283,000
132,000
261,000
150,000
175,000
164,000
4,226,000
119,000
166,000
70,000
115,000
122,000
169,000
2,552,000
1,162,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,417,000
434,000
1,005,000
2,881,000
912,000
1,929,000
3,482,000
941,000
2,281,000
1,783,000
737,000
849,000
857,000
975,000
898,000
842,000
578,000
315,000
543,000
669,000
1,921,000
713,000
542,000
668,000
1,065,000
650,000
1,360,000
2,340,000
1,416,000
764,000
1,391,000
1,116,000
1,154,000
970,000
630,000
916,000
485,000
7,377,000
3,402,000
2,577,000
7,014,000
2,266,000
5,435,000
8,390,000
2,413,000
5,669,000
4,899,000
1,912,000
2,187,000
2,217,000
3,473,000
3,761,000
2,388,000
1,605,000
2,543,000
1,527,000
2,196,000
5,550,000
2,063,000
1,520,000
1,777,000
3,047,000
1,814,000
3,787,000
6,230,000
3,849,000
2,033,000
7,627,000
2,847,000
2,988,000
2,444,000
1,657,000
2,365,000
1,356,000
10,794,000
3,836,000
3,582,000
9,895,000
3,178,000
7,364,000
11,872,000
3,354,000
7,950,000
6,682,000
2,649,000
3,036,000
3,074,000
4,448,000
4,659,000
3,230,000
2,183,000
2,858,000
2,070,000
2,865,000
7,471,000
2,776,000
2,062,000
2,445,000
4,112,000
2,464,000
5,147,000
8,570,000
5,265,000
2,797,000
9,018,000
3,963,000
4,142,000
3,414,000
2,287,000
3,281,000
1,841,000
2,151,000
865,000
960,000
2,321,000
761,000
2,280,000
2,703,000
855,000
1,840,000
1,605,000
685,000
747,000
755,000
1,149,000
1,211,000
798,000
552,000
518,000
531,000
797,000
1,804,000
717,000
530,000
617,000
1,051,000
631,000
1,257,000
1,976,000
1,249,000
626,000
2,237,000
877,000
879,000
715,000
497,000
691,000
379,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
4/3/96
6/26/96
6/28/96
6/30/96
6/30/96
6/30/96
6/30/96
6/30/96
6/30/96
7/2/96
7/22/96
8/13/96
9/5/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
9/16/96
Naples
BocaRaton
Venice
BedfordPark
Brooklyn
LasVegas
LosAngeles
Newark
SilverSpring
GlenBurnie/FurnaceBrRd
Lakewood/WHampton
Norcross/HolcombBridgeRd
SpringValley/SPascackrd
CanogaPark/ShermanWay
ColoradoSprings/TomahDrive
Dallas/RoyalLane
Denver/W.Hampden
Fairfield/DixieHighway
FortWorth/Brentwood
Glendale/SanFernandoRoad
Greenbrook/Route22
Houston/GulfFreeway
Houston/Harwin
Houston/W.MontgomeryRd.
Irvine/CowanStreet
Jacksonville/SouthLaneAve.
LasVegas/BoulderHwy.
LasVegas/S.DecaturBlvd.
Lewisville/S.Stemmons
Littleton/SouthparkWay
Mesa/CountryClubDrive
Monsey/Route59
NewportNews/WarwickBlvd.
Petaluma/BaywoodDrive
RichlandHills/AirportFwy.
SanFrancisco/GearyBlvd.
SantaRosa/SantaRosaAve.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,187,000
3,180,000
669,000
606,000
783,000
921,000
692,000
1,051,000
1,513,000
1,755,000
717,000
955,000
1,260,000
1,543,000
731,000
1,008,000
1,084,000
427,000
823,000
2,500,000
1,227,000
701,000
549,000
524,000
1,890,000
554,000
947,000
1,037,000
603,000
922,000
701,000
1,068,000
575,000
861,000
473,000
2,957,000
575,000
2,809,000
7,468,000
1,575,000
1,419,000
1,830,000
2,155,000
1,616,000
2,458,000
3,535,000
4,150,000
2,092,000
3,117,000
2,966,000
3,716,000
1,759,000
2,426,000
2,609,000
1,046,000
2,016,000
6,124,000
2,954,000
1,718,000
1,344,000
1,261,000
4,631,000
1,334,000
2,279,000
2,539,000
1,451,000
2,221,000
1,718,000
2,572,000
1,385,000
2,074,000
1,158,000
7,244,000
1,385,000
F-58
227,000
1,227,000
163,000
211,000
467,000
193,000
106,000
119,000
259,000
185,000
80,000
126,000
308,000
558,000
114,000
211,000
164,000
122,000
140,000
171,000
278,000
3,304,000
165,000
203,000
229,000
228,000
303,000
153,000
141,000
278,000
205,000
145,000
166,000
167,000
208,000
307,000
113,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,188,000
3,181,000
669,000
606,000
783,000
921,000
692,000
1,051,000
1,514,000
1,756,000
716,000
955,000
1,261,000
1,544,000
731,000
1,008,000
1,084,000
427,000
823,000
2,501,000
1,228,000
701,000
549,000
524,000
1,891,000
554,000
947,000
1,037,000
603,000
922,000
701,000
1,068,000
575,000
861,000
473,000
2,958,000
575,000
3,035,000
8,694,000
1,738,000
1,630,000
2,297,000
2,348,000
1,722,000
2,577,000
3,793,000
4,334,000
2,173,000
3,243,000
3,273,000
4,273,000
1,873,000
2,637,000
2,773,000
1,168,000
2,156,000
6,294,000
3,231,000
5,022,000
1,509,000
1,464,000
4,859,000
1,562,000
2,582,000
2,692,000
1,592,000
2,499,000
1,923,000
2,717,000
1,551,000
2,241,000
1,366,000
7,550,000
1,498,000
4,223,000
11,875,000
2,407,000
2,236,000
3,080,000
3,269,000
2,414,000
3,628,000
5,307,000
6,090,000
2,889,000
4,198,000
4,534,000
5,817,000
2,604,000
3,645,000
3,857,000
1,595,000
2,979,000
8,795,000
4,459,000
5,723,000
2,058,000
1,988,000
6,750,000
2,116,000
3,529,000
3,729,000
2,195,000
3,421,000
2,624,000
3,785,000
2,126,000
3,102,000
1,839,000
10,508,000
2,073,000
1,059,000
2,786,000
613,000
581,000
864,000
791,000
573,000
820,000
1,251,000
1,356,000
672,000
1,005,000
1,094,000
1,285,000
590,000
839,000
843,000
367,000
690,000
1,835,000
1,008,000
922,000
498,000
491,000
1,474,000
530,000
798,000
827,000
530,000
787,000
605,000
817,000
507,000
698,000
464,000
2,229,000
469,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
9/16/96
9/16/96
9/16/96
10/11/96
10/11/96
10/11/96
10/11/96
10/11/96
10/11/96
10/11/96
10/11/96
10/11/96
10/25/96
10/25/96
10/25/96
10/25/96
10/25/96
10/25/96
10/31/96
10/31/96
11/13/96
11/14/96
12/5/96
12/16/96
12/16/96
12/16/96
12/16/96
12/16/96
12/16/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
Sarasota/S.TamiamiTrail
Tempe/McKellipsRoad
WillowGrove/MarylandRoad
Chesapeake/MilitaryHwy
Hampton/PembrokeRoad
Norfolk/WidgeonRoad
Orlando/EOakridgeRd
Orlando/SouthHwy17-92
Richmond/BloomLane
Richmond/MidlothianPark
Roanoke/PetersCreekRoad
VirginiaBeach/SouthernBlvd
Austin/Renelli
Austin/Santiago
Dallas/DentonDrive
Dallas/EastN.W.Highway
Houston/Hempstead
Pasadena/So.Shaver
Houston/JoelWheatonRd
MtHolly/541Bypass
TownEast/Mesquite
BossierCityLA
LakeForest/BakeParkway
Arlington/S.WatsonRd.
CherryHill/OldCuthbert
OklahomaCity/SSantaFe
OklahomaCity/S.May
OklahomaCity/SW74th
Richardson/E.Arapaho
Alsip/115thStreet
Arlington/Algonquin
Auburn/RStreet
BedfordPark/Cicero
Broadview/S.25thAvenue
Carmichael/FairOaks
Clifton/BroadStreet
Dallas/LemmonAve.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
584,000
823,000
673,000
912,000
1,080,000
1,110,000
927,000
1,170,000
1,188,000
762,000
819,000
282,000
1,710,000
900,000
900,000
698,000
518,000
420,000
465,000
360,000
330,000
633,000
971,000
930,000
645,000
360,000
360,000
375,000
1,290,000
750,000
991,000
690,000
1,321,000
1,289,000
809,000
1,411,000
1,710,000
1,407,000
1,972,000
1,620,000
1,974,000
2,346,000
2,405,000
2,020,000
2,549,000
2,512,000
1,588,000
1,776,000
610,000
3,990,000
2,100,000
2,100,000
1,628,000
1,207,000
980,000
1,085,000
840,000
770,000
1,488,000
2,173,000
2,170,000
1,505,000
840,000
840,000
875,000
3,010,000
1,848,000
2,569,000
1,700,000
3,426,000
3,257,000
2,045,000
3,659,000
4,214,000
F-59
3,169,000
244,000
110,000
401,000
(203,000)
(329,000)
242,000
189,000
(177,000)
487,000
262,000
246,000
252,000
209,000
135,000
175,000
257,000
224,000
207,000
221,000
133,000
(134,000)
576,000
448,000
410,000
171,000
153,000
115,000
299,000
1,919,000
384,000
199,000
298,000
303,000
215,000
155,000
150,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
584,000
823,000
673,000
912,000
914,000
908,000
927,000
1,171,000
995,000
762,000
819,000
282,000
1,711,000
900,000
900,000
698,000
518,000
420,000
465,000
360,000
330,000
557,000
973,000
930,000
645,000
360,000
360,000
375,000
1,291,000
750,000
991,000
690,000
1,322,000
1,290,000
809,000
1,412,000
1,711,000
4,576,000
2,216,000
1,730,000
2,375,000
2,309,000
2,278,000
2,262,000
2,737,000
2,528,000
2,075,000
2,038,000
856,000
4,241,000
2,309,000
2,235,000
1,803,000
1,464,000
1,204,000
1,292,000
1,061,000
903,000
1,430,000
2,747,000
2,618,000
1,915,000
1,011,000
993,000
990,000
3,308,000
3,767,000
2,953,000
1,899,000
3,723,000
3,559,000
2,260,000
3,813,000
4,363,000
5,160,000
3,039,000
2,403,000
3,287,000
3,223,000
3,186,000
3,189,000
3,908,000
3,523,000
2,837,000
2,857,000
1,138,000
5,952,000
3,209,000
3,135,000
2,501,000
1,982,000
1,624,000
1,757,000
1,421,000
1,233,000
1,987,000
3,720,000
3,548,000
2,560,000
1,371,000
1,353,000
1,365,000
4,599,000
4,517,000
3,944,000
2,589,000
5,045,000
4,849,000
3,069,000
5,225,000
6,074,000
475,000
704,000
532,000
857,000
469,000
479,000
730,000
879,000
541,000
834,000
696,000
367,000
1,324,000
758,000
722,000
593,000
532,000
415,000
447,000
360,000
313,000
316,000
719,000
943,000
635,000
354,000
351,000
342,000
1,008,000
849,000
938,000
617,000
1,135,000
1,062,000
706,000
1,130,000
1,305,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
Decatur/Covington
DenverEastEvans
EagleRock/Colorado
Englewood/Costilla
FederalHeights/W.48thAve.
ForestPark/JonesboroRd.
Ft.Lauderdale/Powerline
Ft.Lauderdale/StateRoad
GreenAcres/JogRoad
Hillside/Glenwood
Kent/PacificHwySouth
LakeWorth/LkWorth
LasVegas/Charleston
LasVegas/SouthArvill
Lilburn/BeaverRuinRoad
LosAngeles/SantaMonica
Madison/GallatinRoad
MangoniaPark/AustralianAve.
Napa/Industrial
Nashville/DickersonPike
OverlandPark/Mastin
Philadelphia/Byberry
Philadelphia/Oxford
Phoenix/19thAvenue
Pittsburgh/CaliforniaAve.
PlymouthMeeting/Chemical
PompanoBeach/S.DixieHwy.
PompanoBeach/SampleRoad
Portland/DivisionStreet
Portland/N.E.71stAvenue
Renton174thSt.
Sacramento/Northgate
Seattle/15thAvenue
Seattle/PacificHwy.South
Southington/Spring
Tampa/15thStreet
Topeka/8thStreet
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
930,000
1,740,000
330,000
1,739,000
720,000
540,000
660,000
1,199,000
600,000
563,000
930,000
1,111,000
1,049,000
929,000
600,000
3,328,000
780,000
840,000
660,000
990,000
990,000
1,019,000
900,000
991,000
630,000
1,109,000
930,000
1,320,000
989,000
869,000
960,000
1,021,000
781,000
689,000
811,000
420,000
150,000
2,292,000
4,288,000
813,000
4,393,000
1,774,000
1,331,000
1,626,000
3,030,000
1,479,000
4,051,000
2,292,000
2,880,000
2,651,000
2,348,000
1,515,000
8,407,000
1,922,000
2,070,000
1,666,000
2,440,000
2,440,000
2,575,000
2,218,000
2,569,000
1,552,000
2,802,000
2,292,000
3,253,000
2,499,000
2,196,000
2,366,000
2,647,000
2,024,000
1,742,000
2,102,000
1,060,000
370,000
F-60
201,000
197,000
383,000
129,000
120,000
159,000
292,000
223,000
137,000
300,000
154,000
222,000
142,000
132,000
170,000
231,000
243,000
182,000
137,000
183,000
3,218,000
167,000
173,000
224,000
119,000
155,000
341,000
162,000
152,000
238,000
229,000
146,000
170,000
201,000
147,000
256,000
161,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
930,000
1,741,000
444,000
1,740,000
720,000
540,000
660,000
1,200,000
600,000
563,000
930,000
1,112,000
1,049,000
929,000
600,000
3,329,000
780,000
840,000
660,000
990,000
1,307,000
1,019,000
900,000
991,000
630,000
1,109,000
930,000
1,321,000
989,000
869,000
960,000
1,021,000
781,000
689,000
811,000
420,000
150,000
2,493,000
4,484,000
1,082,000
4,521,000
1,894,000
1,490,000
1,918,000
3,252,000
1,616,000
4,351,000
2,446,000
3,101,000
2,793,000
2,480,000
1,685,000
8,637,000
2,165,000
2,252,000
1,803,000
2,623,000
5,341,000
2,742,000
2,391,000
2,793,000
1,671,000
2,957,000
2,633,000
3,414,000
2,651,000
2,434,000
2,595,000
2,793,000
2,194,000
1,943,000
2,249,000
1,316,000
531,000
3,423,000
6,225,000
1,526,000
6,261,000
2,614,000
2,030,000
2,578,000
4,452,000
2,216,000
4,914,000
3,376,000
4,213,000
3,842,000
3,409,000
2,285,000
11,966,000
2,945,000
3,092,000
2,463,000
3,613,000
6,648,000
3,761,000
3,291,000
3,784,000
2,301,000
4,066,000
3,563,000
4,735,000
3,640,000
3,303,000
3,555,000
3,814,000
2,975,000
2,632,000
3,060,000
1,736,000
681,000
765,000
1,338,000
223,000
1,328,000
561,000
498,000
663,000
980,000
520,000
1,353,000
769,000
946,000
832,000
747,000
536,000
2,510,000
713,000
702,000
579,000
841,000
1,002,000
838,000
723,000
843,000
534,000
509,000
849,000
1,036,000
811,000
773,000
814,000
855,000
693,000
641,000
698,000
461,000
213,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/23/96
12/30/96
12/30/96
12/30/96
1/22/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
UpperDarby/Lansdowne
W.PalmBeach/Belvedere
Warren/SchoenherrRd.
Wheatridge/W.44thAvenue
Whittier/Colima
WinterSprings/W.St.Rte434
Wyndmoor/IvyHill
Concorde/Treat
SanMateo
VirginiaBeach
Austin,1033E.41Street
Annandale/Backlick
Antioch/SunsetDrive
Aurora/Abilene
Aurora/S.Idalia
Berlin/WilburCross
Burien/FirstAve.So.
Campbell/S.Curtner
Columbia/BroadRiverRd.
Columbus/EastlandDrive
Dallas/Winsted
Denver/Blake
Evansville/GreenRiverRoad
Farmingdale/BroadHollowRd.
FountainValley/Newhope
Ft.Worth/WestFreeway
Gaithersburg/ChristopherAve.
Garland/Plano
Indianapolis/LafayetteRoad
Indianapolis/Route31
Livermore/S.FrontRoad
Manchester/TollandTurnpike
Peabody/NewburyStreet
RanchoCordova/MatherField
RanchoCordova/Sunrise
SanJose/StoryRoad
SantaCruz/Capitola
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
899,000
960,000
749,000
1,439,000
540,000
689,000
2,160,000
1,396,000
2,408,000
535,000
257,000
955,000
1,035,000
1,406,000
1,002,000
756,000
792,000
2,550,000
121,000
602,000
1,375,000
602,000
470,000
1,568,000
1,137,000
667,000
972,000
889,000
682,000
619,000
876,000
807,000
1,159,000
494,000
1,048,000
1,352,000
1,037,000
2,272,000
2,366,000
1,894,000
3,636,000
1,331,000
1,742,000
5,323,000
3,258,000
5,619,000
1,248,000
3,633,000
2,229,000
2,416,000
3,280,000
2,338,000
1,764,000
1,847,000
5,950,000
282,000
1,405,000
3,209,000
1,405,000
1,096,000
3,658,000
2,653,000
1,556,000
2,268,000
2,073,000
1,590,000
1,444,000
2,044,000
1,883,000
2,704,000
1,153,000
2,445,000
3,156,000
2,420,000
F-61
206,000
208,000
184,000
139,000
87,000
127,000
233,000
133,000
202,000
141,000
79,000
348,000
222,000
383,000
488,000
260,000
258,000
684,000
167,000
236,000
455,000
193,000
161,000
555,000
334,000
253,000
280,000
243,000
299,000
315,000
197,000
212,000
461,000
175,000
375,000
337,000
318,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
899,000
960,000
749,000
1,440,000
540,000
689,000
2,161,000
1,397,000
2,409,000
535,000
257,000
955,000
1,035,000
1,407,000
1,002,000
756,000
792,000
2,551,000
121,000
602,000
1,376,000
602,000
470,000
1,569,000
1,138,000
667,000
972,000
889,000
682,000
619,000
876,000
807,000
1,160,000
494,000
1,048,000
1,353,000
1,037,000
2,478,000
2,574,000
2,078,000
3,774,000
1,418,000
1,869,000
5,555,000
3,390,000
5,820,000
1,389,000
3,712,000
2,577,000
2,638,000
3,662,000
2,826,000
2,024,000
2,105,000
6,633,000
449,000
1,641,000
3,663,000
1,598,000
1,257,000
4,212,000
2,986,000
1,809,000
2,548,000
2,316,000
1,889,000
1,759,000
2,241,000
2,095,000
3,164,000
1,328,000
2,820,000
3,492,000
2,738,000
3,377,000
3,534,000
2,827,000
5,214,000
1,958,000
2,558,000
7,716,000
4,787,000
8,229,000
1,924,000
3,969,000
3,532,000
3,673,000
5,069,000
3,828,000
2,780,000
2,897,000
9,184,000
570,000
2,243,000
5,039,000
2,200,000
1,727,000
5,781,000
4,124,000
2,476,000
3,520,000
3,205,000
2,571,000
2,378,000
3,117,000
2,902,000
4,324,000
1,822,000
3,868,000
4,845,000
3,775,000
758,000
803,000
648,000
1,119,000
450,000
582,000
1,631,000
1,013,000
1,672,000
443,000
1,033,000
741,000
749,000
1,048,000
790,000
618,000
621,000
1,831,000
194,000
503,000
1,071,000
472,000
387,000
1,235,000
831,000
543,000
751,000
677,000
575,000
530,000
638,000
615,000
915,000
411,000
841,000
1,014,000
776,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
4/12/97
4/12/97
4/12/97
4/12/97
4/12/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
Seattle/Aurora
Slickerville/BlackHorsePike
SugarLand/Eldridge
Tyson’sCorner/SpringhillRd.
Whittier/WhittierBlvd.
Alexandria
AllenPark
Atlanta
Aurora
Austin
Bellevue
Bensalem
Berlin
Birmingham
Carrollton
Carrollton
Chicago
Chicoppe
CitrusHeights
Dallas
Dallas
Dallas/VilbigRd.
Davie
Davis
Decatur
Denver
EastHazelCrest
EastL.A./BoyleHeights
Edmonds
ElkGrove
Evansville
Fairfield
FosterCity
Garland
Gretna
HarborCity
Houston/SouthDairyashford
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,145,000
539,000
705,000
3,861,000
648,000
1,533,000
953,000
1,183,000
808,000
813,000
1,653,000
1,159,000
825,000
539,000
441,000
1,158,000
1,160,000
663,000
642,000
699,000
1,627,000
508,000
1,086,000
628,000
951,000
1,316,000
753,000
957,000
1,187,000
642,000
429,000
740,000
1,064,000
486,000
1,069,000
1,244,000
856,000
2,671,000
1,258,000
1,644,000
9,010,000
1,513,000
3,576,000
2,223,000
2,761,000
1,886,000
1,897,000
3,858,000
2,705,000
1,925,000
1,258,000
1,029,000
2,702,000
2,708,000
1,546,000
1,244,000
1,631,000
3,797,000
1,184,000
2,533,000
1,465,000
2,220,000
3,071,000
1,757,000
2,232,000
2,770,000
1,497,000
1,000,000
1,727,000
2,483,000
1,135,000
2,494,000
2,904,000
1,997,000
F-62
270,000
214,000
224,000
1,238,000
162,000
489,000
536,000
103,000
436,000
83,000
78,000
88,000
296,000
110,000
45,000
495,000
428,000
316,000
509,000
74,000
658,000
230,000
638,000
231,000
404,000
490,000
2,079,000
492,000
414,000
264,000
54,000
53,000
329,000
64,000
438,000
240,000
314,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,146,000
539,000
705,000
3,863,000
648,000
1,534,000
953,000
1,184,000
808,000
813,000
1,654,000
1,160,000
825,000
539,000
441,000
1,159,000
1,161,000
663,000
642,000
699,000
1,628,000
508,000
1,086,000
628,000
951,000
1,317,000
1,237,000
957,000
1,188,000
642,000
401,000
740,000
1,064,000
486,000
1,069,000
1,245,000
856,000
2,940,000
1,472,000
1,868,000
10,246,000
1,675,000
4,064,000
2,759,000
2,863,000
2,322,000
1,980,000
3,935,000
2,792,000
2,221,000
1,368,000
1,074,000
3,196,000
3,135,000
1,862,000
1,753,000
1,705,000
4,454,000
1,414,000
3,171,000
1,696,000
2,624,000
3,560,000
3,352,000
2,724,000
3,183,000
1,761,000
1,082,000
1,780,000
2,812,000
1,199,000
2,932,000
3,143,000
2,311,000
4,086,000
2,011,000
2,573,000
14,109,000
2,323,000
5,598,000
3,712,000
4,047,000
3,130,000
2,793,000
5,589,000
3,952,000
3,046,000
1,907,000
1,515,000
4,355,000
4,296,000
2,525,000
2,395,000
2,404,000
6,082,000
1,922,000
4,257,000
2,324,000
3,575,000
4,877,000
4,589,000
3,681,000
4,371,000
2,403,000
1,483,000
2,520,000
3,876,000
1,685,000
4,001,000
4,388,000
3,167,000
840,000
470,000
564,000
2,891,000
475,000
1,109,000
765,000
821,000
631,000
562,000
1,119,000
780,000
600,000
408,000
316,000
907,000
886,000
566,000
561,000
505,000
1,262,000
421,000
897,000
487,000
745,000
994,000
1,116,000
756,000
893,000
500,000
321,000
499,000
766,000
356,000
868,000
940,000
648,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
6/25/97
8/13/97
Houston/VeteransMemorialDr.
Idianapolis
Irving
Jacksonville
Kirkland-Totem
L.A./VeniceBlvd.
LaHabra
LAX
Lilburn
Littleton
Littleton
Lombard
LosAngeles/Olympic
Louisville
Lynnwood
Metairie
Miami
Naperville
Parma
PelhamManor
Philadelphia
Plano
Sacramento
Sacramento
Sacramento/57thStreet
SanDiego/16thStreet
SanJose
Seattle
Spring
Springfield/AlbanStation
Stanton
StatenIsland
SterlingHeights
Waipahu
Westford
WheatRidge
SantaMonica/WilshireBlvd.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
458,000
471,000
469,000
653,000
2,131,000
523,000
822,000
1,312,000
507,000
1,340,000
868,000
1,527,000
4,392,000
717,000
839,000
1,229,000
1,762,000
1,108,000
881,000
1,209,000
924,000
1,369,000
489,000
592,000
869,000
932,000
1,273,000
1,498,000
461,000
1,317,000
948,000
1,676,000
766,000
1,620,000
857,000
1,054,000
2,040,000
1,070,000
1,098,000
1,093,000
1,525,000
4,972,000
1,221,000
1,918,000
3,062,000
1,182,000
3,126,000
2,026,000
3,564,000
10,247,000
1,672,000
1,959,000
2,868,000
4,111,000
2,585,000
2,055,000
2,820,000
2,155,000
3,193,000
1,396,000
1,380,000
2,029,000
2,175,000
2,971,000
3,494,000
1,077,000
3,074,000
2,212,000
3,910,000
1,787,000
3,780,000
1,999,000
2,459,000
4,760,000
F-63
188,000
116,000
217,000
297,000
181,000
1,786,000
61,000
529,000
343,000
491,000
462,000
1,740,000
1,218,000
312,000
365,000
460,000
846,000
373,000
507,000
672,000
339,000
438,000
(195,000)
898,000
475,000
608,000
27,000
254,000
214,000
658,000
64,000
563,000
454,000
533,000
95,000
354,000
266,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
458,000
471,000
469,000
653,000
2,132,000
1,044,000
822,000
1,313,000
507,000
1,341,000
868,000
2,048,000
4,394,000
717,000
839,000
1,230,000
1,763,000
1,108,000
881,000
1,210,000
924,000
1,370,000
489,000
720,000
869,000
932,000
1,274,000
1,499,000
461,000
1,318,000
948,000
1,677,000
766,000
1,621,000
857,000
1,054,000
2,041,000
1,258,000
1,214,000
1,310,000
1,822,000
5,152,000
2,486,000
1,979,000
3,590,000
1,525,000
3,616,000
2,488,000
4,783,000
11,463,000
1,984,000
2,324,000
3,327,000
4,956,000
2,958,000
2,562,000
3,491,000
2,494,000
3,630,000
1,201,000
2,150,000
2,504,000
2,783,000
2,997,000
3,747,000
1,291,000
3,731,000
2,276,000
4,472,000
2,241,000
4,312,000
2,094,000
2,813,000
5,025,000
1,716,000
1,685,000
1,779,000
2,475,000
7,284,000
3,530,000
2,801,000
4,903,000
2,032,000
4,957,000
3,356,000
6,831,000
15,857,000
2,701,000
3,163,000
4,557,000
6,719,000
4,066,000
3,443,000
4,701,000
3,418,000
5,000,000
1,690,000
2,870,000
3,373,000
3,715,000
4,271,000
5,246,000
1,752,000
5,049,000
3,224,000
6,149,000
3,007,000
5,933,000
2,951,000
3,867,000
7,066,000
368,000
369,000
393,000
544,000
1,494,000
501,000
571,000
1,014,000
458,000
1,000,000
683,000
1,238,000
3,089,000
563,000
671,000
943,000
1,351,000
812,000
712,000
949,000
691,000
982,000
351,000
570,000
714,000
830,000
823,000
1,192,000
375,000
1,031,000
632,000
1,235,000
630,000
1,195,000
599,000
766,000
1,453,000
Date
Acquired
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
Description
Baltimore/YorkRoad
BocaRaton/N.W.20
Bolingbrook
BridgeWater/Main
Bridgeport
Burbank/SanFernando
CarolStream/St.Charles
DalyCity/Mission
Denver/Leetsdale
Denver/Sheridan
Denver/TamaracPark
DesPlaines/GolfRd
Dublin/SanRamonRd
Emeryville/BaySt
Enfield/ElmStreet
Forrestville/Penn.
Fremont/WarmSprings
Geneva/Roosevelt
Gresham/Powell
HydePark/RiverSt
Justice/Industrial
Kent/Central
LakeOswego/N.State
Lax/Imperial
LosAngeles/Jefferson
LosAngeles/Martin
Lynn/Lynnway
MadisonHeights
Marietta/CobbPark
Marietta/AustellRd
Mercer/ParksideAve
Milwaukee/Appleton
Monterey/DelRey
MortonGrove/Wauke
MountlakeTerrace
NorthHollywood/Vine
Norwalk/HoytStreet
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,538,000
1,140,000
737,000
445,000
4,877,000
1,825,000
185,000
389,000
1,407,000
429,000
2,545,000
1,363,000
942,000
1,602,000
399,000
1,056,000
848,000
355,000
322,000
626,000
233,000
483,000
465,000
1,662,000
1,090,000
869,000
463,000
428,000
420,000
398,000
359,000
324,000
257,000
2,658,000
1,017,000
906,000
2,369,000
1,952,000
2,256,000
1,776,000
2,054,000
2,739,000
2,210,000
1,187,000
2,921,000
1,682,000
1,105,000
1,692,000
3,093,000
1,999,000
1,830,000
1,900,000
2,347,000
2,885,000
1,302,000
1,298,000
1,748,000
1,181,000
1,321,000
1,956,000
2,079,000
1,580,000
1,152,000
3,059,000
1,686,000
1,131,000
1,326,000
1,763,000
1,385,000
1,048,000
3,232,000
1,783,000
2,379,000
3,049,000
F-64
363,000
401,000
254,000
265,000
601,000
222,000
186,000
276,000
214,000
184,000
417,000
223,000
162,000
190,000
289,000
293,000
247,000
203,000
207,000
279,000
169,000
211,000
270,000
217,000
253,000
118,000
394,000
2,055,000
302,000
265,000
224,000
240,000
220,000
3,635,000
240,000
184,000
540,000
708,000
774,000
617,000
161,000
231,000
745,000
418,000
980,000
588,000
401,000
662,000
238,000
155,000
627,000
645,000
192,000
227,000
461,000
439,000
142,000
412,000
463,000
660,000
715,000
127,000
93,000
1,067,000
565,000
426,000
462,000
142,000
488,000
360,000
(412,000)
605,000
185,000
255,000
1,539,000
1,141,000
737,000
445,000
4,879,000
1,826,000
185,000
389,000
1,408,000
429,000
2,546,000
1,364,000
942,000
1,603,000
399,000
1,056,000
848,000
355,000
322,000
626,000
233,000
483,000
465,000
1,663,000
1,090,000
869,000
463,000
428,000
420,000
398,000
359,000
324,000
257,000
2,659,000
1,017,000
906,000
2,370,000
3,022,000
3,430,000
2,647,000
2,480,000
3,569,000
3,176,000
1,791,000
4,177,000
2,483,000
1,690,000
2,770,000
3,553,000
2,316,000
2,646,000
2,834,000
2,832,000
3,359,000
1,966,000
1,944,000
2,169,000
1,762,000
1,995,000
2,886,000
3,010,000
1,960,000
1,363,000
4,520,000
4,306,000
1,859,000
2,053,000
2,129,000
2,113,000
1,628,000
6,454,000
2,628,000
2,748,000
3,843,000
4,561,000
4,571,000
3,384,000
2,925,000
8,448,000
5,002,000
1,976,000
4,566,000
3,891,000
2,119,000
5,316,000
4,917,000
3,258,000
4,249,000
3,233,000
3,888,000
4,207,000
2,321,000
2,266,000
2,795,000
1,995,000
2,478,000
3,351,000
4,673,000
3,050,000
2,232,000
4,983,000
4,734,000
2,279,000
2,451,000
2,488,000
2,437,000
1,885,000
9,113,000
3,645,000
3,654,000
6,213,000
899,000
946,000
789,000
705,000
1,119,000
934,000
533,000
1,126,000
772,000
521,000
887,000
1,186,000
782,000
767,000
777,000
899,000
976,000
602,000
567,000
630,000
530,000
605,000
787,000
901,000
615,000
445,000
1,238,000
686,000
564,000
619,000
622,000
587,000
442,000
1,675,000
765,000
820,000
1,078,000
Date
Acquired
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
10/1/97
11/2/97
11/7/97
11/13/97
3/17/98
3/17/98
3/17/98
3/17/98
3/17/98
3/17/98
3/17/98
3/17/98
3/17/98
3/17/98
3/17/98
3/17/98
Description
Novato/Landing
Oakland/International
Odenton/Route175
Pinole/AppianWay
PompanoBeach
Randolph/WarrenSt
Roselle/LakeStreet
SanLeandro/E.14th
SanLeandro/Washington
SantaCruz/Portola
Seattle/StoneWay
St.Louis/Lindberg
Stockton/MarchLane
StudioCity/Ventura
Tucson/TanqueVerde
Vallejo/Humboldt
Venice/Rose
Ventura/VenturaBlvd
W.Olympia
Warren/MoundRoad
WashingtonDc/SoCapital
Woodside/Brooklyn
Lansing
Phoenix
TinleyPark
Arlington/E.Pioneer
Austin/BenWhite
Branford/SummitPlace
Houston/EastFreeway
Houston/DeSotoDr.
LasVegas/Charleston
LasVegas/Tropicana
Nesconset/Southern
Pasadena/ArroyoPrkwy
Phoenix/BlackCanyon
Phoenix/N.43rdAve
Phoenix/BlackCanyon
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,416,000
358,000
456,000
728,000
1,077,000
2,330,000
312,000
627,000
660,000
535,000
829,000
584,000
663,000
2,421,000
345,000
473,000
5,468,000
911,000
149,000
268,000
1,437,000
5,016,000
758,000
1,197,000
1,422,000
922,000
692,000
728,000
593,000
659,000
791,000
1,285,000
1,423,000
3,005,000
380,000
443,000
136,000
3,496,000
1,568,000
2,104,000
1,827,000
1,527,000
1,914,000
1,411,000
1,289,000
1,142,000
1,526,000
2,180,000
1,508,000
1,398,000
1,610,000
1,709,000
1,651,000
5,478,000
2,227,000
1,096,000
1,025,000
4,489,000
3,950,000
1,768,000
2,793,000
3,319,000
2,152,000
1,614,000
1,698,000
1,384,000
1,537,000
1,845,000
2,998,000
3,321,000
7,012,000
886,000
1,033,000
317,000
F-65
242,000
249,000
264,000
211,000
548,000
483,000
218,000
119,000
180,000
160,000
286,000
265,000
132,000
165,000
170,000
164,000
649,000
250,000
283,000
210,000
510,000
406,000
140,000
133,000
55,000
202,000
74,000
130,000
166,000
131,000
112,000
156,000
107,000
214,000
147,000
153,000
188,000
308,000
129,000
724,000
624,000
534,000
156,000
493,000
103,000
395,000
123,000
175,000
127,000
111,000
537,000
136,000
132,000
1,814,000
762,000
92,000
363,000
1,528,000
2,107,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,417,000
358,000
456,000
728,000
1,077,000
2,331,000
312,000
627,000
660,000
535,000
829,000
584,000
663,000
2,422,000
345,000
473,000
5,470,000
911,000
149,000
268,000
1,438,000
5,018,000
758,000
1,198,000
1,423,000
922,000
682,000
728,000
593,000
659,000
791,000
1,286,000
1,424,000
3,006,000
380,000
443,000
136,000
4,045,000
1,946,000
3,092,000
2,662,000
2,609,000
2,552,000
2,122,000
1,511,000
1,717,000
1,809,000
2,641,000
1,900,000
1,641,000
2,311,000
2,015,000
1,947,000
7,939,000
3,239,000
1,471,000
1,598,000
6,526,000
6,461,000
1,908,000
2,925,000
3,373,000
2,354,000
1,698,000
1,828,000
1,550,000
1,668,000
1,957,000
3,153,000
3,427,000
7,225,000
1,033,000
1,186,000
505,000
6,462,000
2,304,000
3,548,000
3,390,000
3,686,000
4,883,000
2,434,000
2,138,000
2,377,000
2,344,000
3,470,000
2,484,000
2,304,000
4,733,000
2,360,000
2,420,000
13,409,000
4,150,000
1,620,000
1,866,000
7,964,000
11,479,000
2,666,000
4,123,000
4,796,000
3,276,000
2,380,000
2,556,000
2,143,000
2,327,000
2,748,000
4,439,000
4,851,000
10,231,000
1,413,000
1,629,000
641,000
1,352,000
625,000
750,000
789,000
666,000
709,000
618,000
490,000
497,000
562,000
740,000
617,000
538,000
692,000
606,000
593,000
2,173,000
960,000
411,000
449,000
1,564,000
1,492,000
556,000
798,000
848,000
587,000
433,000
474,000
422,000
421,000
495,000
774,000
831,000
1,699,000
294,000
334,000
169,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
3/17/98
3/17/98
3/17/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
Phoenix/No.43rd
So.SanFrancisco
Tempe/E.Broadway
Akron/BrittainRd.
Arcadia/LowerAzusa
ArlingtonHts/University
Artesia/Artesia
Atlanta/JohnWesley
Baltimore/W.Patap
Bellevue/Northup
Bethesda/ButlerRd
Chicago/Cuyler
Chicago/PulaskiRd.
Chicago/S.Harlem
ChicagoHeights/West
Chicago/BurrRidgeRd.
Chicago/E.95thSt.
Chicago/HarlemAve
Chicago/N.WellsSt.
Chicago/N.WesternAve
Chicago/NorthwestHwy
Chicago/W.HowardSt.
Cicero/Ogden
Dallas/Kingsly
Dundalk/WiseAve
Fraser/GroesbeckHwy
Havertown/WestChester
Hollywood/Cole&Wilshire
IslandPark/Austin
IslandPark/Austin
LaDowntwn/10Fwy
LakeCity/ForestPark
Manassas/Centreville
Miami/5thStreet
Montebello/S.Maple
Patchogue/W.Sunrise
SanDiego/54th&Euclid
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
380,000
1,550,000
633,000
275,000
821,000
670,000
625,000
1,233,000
403,000
1,232,000
1,146,000
1,400,000
1,276,000
791,000
468,000
421,000
397,000
1,430,000
1,446,000
1,453,000
925,000
974,000
1,678,000
1,095,000
447,000
368,000
1,254,000
1,590,000
2,313,000
2,313,000
1,608,000
248,000
405,000
2,327,000
1,274,000
936,000
952,000
886,000
3,617,000
1,476,000
2,248,000
1,369,000
3,004,000
1,419,000
1,665,000
2,650,000
3,306,000
2,509,000
2,695,000
2,858,000
1,424,000
1,804,000
2,165,000
2,357,000
3,038,000
2,828,000
3,205,000
2,412,000
2,875,000
2,266,000
1,712,000
2,005,000
1,796,000
2,926,000
1,785,000
3,015,000
3,015,000
3,358,000
1,445,000
2,137,000
3,234,000
2,299,000
2,184,000
2,550,000
F-66
416,000
95,000
151,000
(194,000)
144,000
88,000
100,000
206,000
136,000
239,000
74,000
93,000
80,000
90,000
118,000
82,000
125,000
122,000
94,000
111,000
68,000
137,000
278,000
109,000
93,000
87,000
114,000
85,000
(600,000)
89,000
165,000
94,000
208,000
111,000
92,000
142,000
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
380,000
1,551,000
633,000
669,000
821,000
670,000
625,000
1,234,000
403,000
1,233,000
1,147,000
1,401,000
1,277,000
791,000
468,000
421,000
397,000
1,431,000
1,447,000
1,454,000
925,000
974,000
1,679,000
1,095,000
447,000
368,000
1,250,000
1,591,000
1,375,000
2,314,000
1,609,000
248,000
405,000
2,328,000
1,275,000
936,000
952,000
1,302,000
3,711,000
1,627,000
1,660,000
1,513,000
3,092,000
1,519,000
1,870,000
2,786,000
3,544,000
2,582,000
2,787,000
2,937,000
1,514,000
1,922,000
2,247,000
2,482,000
3,159,000
2,921,000
3,315,000
2,480,000
3,012,000
2,543,000
1,821,000
2,098,000
1,883,000
3,044,000
1,869,000
3,353,000
3,103,000
3,522,000
1,539,000
2,345,000
3,344,000
2,390,000
2,326,000
2,650,000
1,682,000
5,262,000
2,260,000
2,329,000
2,334,000
3,762,000
2,144,000
3,104,000
3,189,000
4,777,000
3,729,000
4,188,000
4,214,000
2,305,000
2,390,000
2,668,000
2,879,000
4,590,000
4,368,000
4,769,000
3,405,000
3,986,000
4,222,000
2,916,000
2,545,000
2,251,000
4,294,000
3,460,000
4,728,000
5,417,000
5,131,000
1,787,000
2,750,000
5,672,000
3,665,000
3,262,000
3,602,000
274,000
896,000
420,000
345,000
487,000
808,000
507,000
683,000
877,000
1,184,000
865,000
744,000
749,000
545,000
509,000
796,000
874,000
1,090,000
773,000
881,000
651,000
818,000
728,000
599,000
690,000
597,000
753,000
608,000
786,000
1,172,000
1,130,000
510,000
782,000
1,152,000
763,000
594,000
940,000
Date
Acquired
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
4/1/98
5/1/98
5/8/98
5/8/98
5/8/98
5/8/98
5/8/98
5/8/98
5/8/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
Description
SchillerPark/River
SilverSpring/Hill
Silverlake/Glendale
St.Charles/Highway
St.Louis/Hwy.141
St.Louis/Hwy.141
Vallejo/MiniDrive
Yonkers/Route9a
Berkeley/2ndSt.
Aurora/Farnsworth
Chicago/S.Chicago
Cleveland/W.117th
GoldenValley/Winn
La/VeniceBlvd
SantaRosa/Hopper
St.Louis/Benham
Atlanta/MemorialDr.
Brooklyn/RockawayAve
Chicago/111th
Chicago/N.Broadway
Chicago/W.79thSt
CoonRapids/Hwy10
Dallas/Greenville
EastLa/Figueroa&4th
ElSegundo/Sepulveda
Farmington/9Mile
Ft.Lauderdale/S.W.
Griffith/Cline
LasVegas/E.Charles
Laurel/BaltimoreAve
LosGatos/University
Miami/Nw73rdSt
Miami/SunsetDrive
N.Hollywood
Oldsmar/TampaRoad
Oxnard/HuenemeRd
Petaluma/Transport
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
568,000
922,000
2,314,000
623,000
659,000
659,000
560,000
1,722,000
1,914,000
960,000
840,000
930,000
630,000
1,470,000
1,020,000
810,000
414,000
6,272,000
341,000
1,918,000
861,000
330,000
1,933,000
1,213,000
6,586,000
580,000
1,046,000
299,000
602,000
1,899,000
2,234,000
1,050,000
1,656,000
1,484,000
760,000
923,000
460,000
1,390,000
2,080,000
5,481,000
1,501,000
1,628,000
1,628,000
1,803,000
3,823,000
4,466,000
2,350,000
2,057,000
2,277,000
1,542,000
3,599,000
2,497,000
1,983,000
2,239,000
9,691,000
2,898,000
3,824,000
2,789,000
1,646,000
2,892,000
2,689,000
5,795,000
2,526,000
2,928,000
2,118,000
2,545,000
4,498,000
3,890,000
3,064,000
2,321,000
3,143,000
2,154,000
3,925,000
1,840,000
F-67
99,000
149,000
158,000
124,000
4,706,000
69,000
84,000
137,000
(121,000)
75,000
72,000
210,000
122,000
100,000
102,000
145,000
167,000
370,000
2,246,000
152,000
266,000
86,000
110,000
58,000
126,000
99,000
92,000
48,000
194,000
163,000
(239,000)
125,000
1,972,000
56,000
2,729,000
114,000
4,878,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
568,000
922,000
2,315,000
623,000
1,345,000
659,000
560,000
1,723,000
1,838,000
960,000
840,000
930,000
630,000
1,471,000
1,020,000
810,000
414,000
6,275,000
432,000
1,919,000
861,000
330,000
1,934,000
1,214,000
6,589,000
580,000
1,046,000
299,000
602,000
1,900,000
2,235,000
1,050,000
2,268,000
1,485,000
1,049,000
923,000
857,000
1,489,000
2,229,000
5,638,000
1,625,000
5,648,000
1,697,000
1,887,000
3,959,000
4,421,000
2,425,000
2,129,000
2,487,000
1,664,000
3,698,000
2,599,000
2,128,000
2,406,000
10,058,000
5,053,000
3,975,000
3,055,000
1,732,000
3,001,000
2,746,000
5,918,000
2,625,000
3,020,000
2,166,000
2,739,000
4,660,000
3,650,000
3,189,000
3,681,000
3,198,000
4,594,000
4,039,000
6,321,000
2,057,000
3,151,000
7,953,000
2,248,000
6,993,000
2,356,000
2,447,000
5,682,000
6,259,000
3,385,000
2,969,000
3,417,000
2,294,000
5,169,000
3,619,000
2,938,000
2,820,000
16,333,000
5,485,000
5,894,000
3,916,000
2,062,000
4,935,000
3,960,000
12,507,000
3,205,000
4,066,000
2,465,000
3,341,000
6,560,000
5,885,000
4,239,000
5,949,000
4,683,000
5,643,000
4,962,000
7,178,000
385,000
799,000
1,908,000
603,000
838,000
648,000
608,000
1,357,000
1,079,000
574,000
494,000
631,000
415,000
851,000
615,000
539,000
603,000
2,298,000
763,000
945,000
772,000
420,000
691,000
633,000
1,343,000
605,000
688,000
501,000
642,000
1,079,000
834,000
740,000
693,000
729,000
804,000
937,000
810,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
10/1/98
1/1/99
1/6/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
Revere/ChargerSt
SanDiego/Morena
SanJose/Santa
SantaCruz/Soquel
St.Louis/Gravois
Tacoma/Orchard
Tigard/McEwan
UpperDarby/Market
Vancouver/Millplain
WhiteBearLake
NewOrleans/St.Charles
Brandon/E.BrandonBlvd
Addison/InwoodRoad
Alpharetta/MaxwellRd
Alpharetta/N.MainSt
Apopka/S.OrangeBlossom
Arlington/CooperSt
Arlington/Division
Arvada/64thAve
Atlanta/BoltonRd
Atlanta/BriarcliffRd
Atlanta/DunwoodyPlace
Augusta/PeachOrchardRd
Aurora/Business30
Austin/N.MopacExpressway
CarolStream/PhillipsCourt
CarolStream/S.MainPlace
Carpentersville/N.WesternAve
Carrollton/TrinityMillsWest
CasselberryIi
Centreville/LeeHwy
Charleston/AshleyRiverRd
Charleston/SamRittenbergBlvd
Charleston/AshleyPhosphate
Charlotte/EastWtHarrisBlvd
Charlotte/NorthTryonSt.
Charlotte/SouthBlvd
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,997,000
3,173,000
966,000
832,000
312,000
358,000
597,000
808,000
343,000
578,000
1,463,000
1,560,000
1,204,000
1,075,000
1,240,000
307,000
779,000
998,000
671,000
866,000
2,171,000
1,410,000
860,000
900,000
865,000
829,000
1,320,000
911,000
530,000
1,160,000
1,650,000
1,114,000
555,000
839,000
736,000
708,000
641,000
3,727,000
5,469,000
3,870,000
2,385,000
2,327,000
1,987,000
1,652,000
5,011,000
2,000,000
2,079,000
2,634,000
3,695,000
2,808,000
2,509,000
2,893,000
717,000
1,818,000
2,328,000
1,566,000
2,019,000
5,066,000
3,296,000
2,007,000
2,097,000
2,791,000
1,780,000
3,079,000
2,120,000
1,237,000
2,708,000
3,851,000
2,581,000
1,296,000
1,950,000
1,718,000
1,653,000
1,496,000
F-68
207,000
96,000
86,000
96,000
134,000
91,000
87,000
142,000
81,000
131,000
(347,000)
65,000
61,000
74,000
82,000
113,000
55,000
86,000
89,000
175,000
241,000
230,000
290,000
129,000
74,000
59,000
177,000
116,000
98,000
142,000
123,000
132,000
110,000
178,000
107,000
205,000
122,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,998,000
3,174,000
966,000
832,000
312,000
358,000
597,000
808,000
343,000
578,000
1,039,000
1,561,000
1,205,000
1,075,000
1,241,000
307,000
779,000
998,000
671,000
866,000
2,172,000
1,411,000
860,000
900,000
865,000
829,000
1,321,000
911,000
530,000
1,161,000
1,637,000
1,115,000
555,000
825,000
736,000
708,000
641,000
3,933,000
5,564,000
3,956,000
2,481,000
2,461,000
2,078,000
1,739,000
5,153,000
2,081,000
2,210,000
2,711,000
3,759,000
2,868,000
2,583,000
2,974,000
830,000
1,873,000
2,414,000
1,655,000
2,194,000
5,306,000
3,525,000
2,297,000
2,226,000
2,865,000
1,839,000
3,255,000
2,236,000
1,335,000
2,849,000
3,987,000
2,712,000
1,406,000
2,142,000
1,825,000
1,858,000
1,618,000
5,931,000
8,738,000
4,922,000
3,313,000
2,773,000
2,436,000
2,336,000
5,961,000
2,424,000
2,788,000
3,750,000
5,320,000
4,073,000
3,658,000
4,215,000
1,137,000
2,652,000
3,412,000
2,326,000
3,060,000
7,478,000
4,936,000
3,157,000
3,126,000
3,730,000
2,668,000
4,576,000
3,147,000
1,865,000
4,010,000
5,624,000
3,827,000
1,961,000
2,967,000
2,561,000
2,566,000
2,259,000
937,000
1,264,000
921,000
594,000
605,000
504,000
436,000
1,178,000
509,000
514,000
550,000
671,000
576,000
534,000
602,000
205,000
387,000
488,000
353,000
459,000
1,077,000
715,000
579,000
473,000
525,000
377,000
691,000
473,000
297,000
589,000
817,000
558,000
321,000
488,000
399,000
421,000
363,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
Chesapeake/WesternBranch
Chicago/N.BroadwaySt
Chicago/N.NatchezAve
Chicago/S.PulaskiRoad
Chicago/W.CermakRoad
Chicago/W.JarvisAve
Chicago/West47thSt.
Cincinnati/WesternHills
Clearwater/HighlandAve
ColoSprngs/AstrozonCourt
ColoSprngs/CentennialBlvd
ColoSprngs/ParkmoorVillage
ColoSprngs/VanTeylingen
ColoSprngs/N.Powers
Columbia/BroadRiver
Columbia/BucknerRd
Columbia/DeckerParkRd
Columbia/PlumbersRd
Columbia/RiverDr
Columbia/RosewoodDr
Columbus/MorseRoad
Dallas/InwoodRoad
Davie/University
Decatur/Covington
Decatur/NDecaturRd
DeerfieldBeach/Sw10thSt.
Denver/So.ClintonSt.
Denver/WashingtonSt.
Doraville/McelroyRd
Douglasville/DuraleeLane
Douglasville/Highway5
Douglasville/Westmoreland
Duncanville/S.CedarRidge
Durham/E.ClubBlvd
Durham/KangarooDr.
Durham/N.DukeSt.
Elgin/BigTimberRoad
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,274,000
535,000
1,684,000
458,000
1,294,000
313,000
705,000
758,000
724,000
810,000
1,352,000
620,000
1,216,000
1,124,000
1,463,000
714,000
605,000
368,000
671,000
777,000
1,415,000
1,478,000
313,000
1,764,000
933,000
1,844,000
462,000
795,000
827,000
533,000
804,000
453,000
1,477,000
947,000
1,102,000
769,000
1,347,000
2,973,000
1,249,000
3,930,000
2,118,000
3,019,000
731,000
1,645,000
1,769,000
1,690,000
1,889,000
3,155,000
1,446,000
2,837,000
2,622,000
3,413,000
1,665,000
1,412,000
858,000
1,566,000
1,814,000
3,302,000
3,448,000
4,379,000
4,116,000
2,177,000
4,302,000
1,609,000
1,846,000
1,931,000
1,244,000
1,875,000
1,056,000
3,447,000
2,209,000
2,572,000
1,794,000
3,253,000
F-69
137,000
229,000
130,000
262,000
490,000
85,000
65,000
201,000
153,000
134,000
94,000
102,000
152,000
165,000
235,000
274,000
124,000
150,000
178,000
98,000
296,000
51,000
195,000
115,000
139,000
77,000
97,000
322,000
220,000
135,000
452,000
188,000
211,000
107,000
243,000
130,000
217,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,275,000
535,000
1,685,000
458,000
1,295,000
313,000
705,000
758,000
724,000
810,000
1,353,000
620,000
1,217,000
1,125,000
1,464,000
714,000
605,000
368,000
671,000
777,000
1,416,000
1,479,000
313,000
1,765,000
933,000
1,845,000
462,000
795,000
827,000
533,000
804,000
453,000
1,478,000
947,000
1,102,000
769,000
1,348,000
3,109,000
1,478,000
4,059,000
2,380,000
3,508,000
816,000
1,710,000
1,970,000
1,843,000
2,023,000
3,248,000
1,548,000
2,988,000
2,786,000
3,647,000
1,939,000
1,536,000
1,008,000
1,744,000
1,912,000
3,597,000
3,498,000
4,574,000
4,230,000
2,316,000
4,378,000
1,706,000
2,168,000
2,151,000
1,379,000
2,327,000
1,244,000
3,657,000
2,316,000
2,815,000
1,924,000
3,469,000
4,384,000
2,013,000
5,744,000
2,838,000
4,803,000
1,129,000
2,415,000
2,728,000
2,567,000
2,833,000
4,601,000
2,168,000
4,205,000
3,911,000
5,111,000
2,653,000
2,141,000
1,376,000
2,415,000
2,689,000
5,013,000
4,977,000
4,887,000
5,995,000
3,249,000
6,223,000
2,168,000
2,963,000
2,978,000
1,912,000
3,131,000
1,697,000
5,135,000
3,263,000
3,917,000
2,693,000
4,817,000
645,000
355,000
830,000
453,000
871,000
206,000
354,000
430,000
396,000
440,000
638,000
326,000
609,000
596,000
798,000
504,000
348,000
233,000
400,000
416,000
769,000
697,000
913,000
862,000
514,000
874,000
342,000
440,000
492,000
303,000
577,000
313,000
761,000
490,000
620,000
408,000
768,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
Elgin/E.ChicagoSt.
Fairfield/Dixie
FergusonArea-W.Florissant
Florissant/N.Hwy67
Florissant/NewHallsFerryRd
ForestPark/Jonesboro
ForestPark/OldDixieHwy
FortCollins/So.CollegeAve
FortWorth/Loop820North
Ft.Myers/TamiamiTrailSouth
Ft.Worth/GranburyRoad
Garland/BuckinghamRoad
Garland/JacksonDrive
Gastonia/S.YorkRd
Geneva/GaryAve
Golden/SimmsStreet
Greensboro/O’henryBlvd
Greenville/PineknollRd
Greenville/WhitehorseRd
Greenville/WoodsLakeRd
HanoverPark/W.LakeStreet
HiltonHead/OfficeParkRd
HiltonHead/YachtCoveDr
Houston/AddicksSatsuma
Houston/BingleRoad
Houston/Fm1960West
Houston/FondrenSouth
Houston/HayesRoad
Houston/Hwy6South
Houston/LochKatrineLane
Houston/MangumRoad
Houston/MilweeSt.
Houston/NewCastle
Houston/SouthMain
Houston/WallisvilleRd.
Houston/WestheimerWest
Independence/291
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
570,000
519,000
1,194,000
971,000
1,144,000
659,000
895,000
745,000
729,000
834,000
763,000
492,000
755,000
467,000
1,072,000
918,000
577,000
927,000
882,000
364,000
1,320,000
1,279,000
1,182,000
409,000
576,000
513,000
647,000
916,000
569,000
580,000
737,000
779,000
2,346,000
1,461,000
744,000
1,075,000
871,000
2,163,000
1,211,000
2,732,000
2,265,000
2,670,000
1,537,000
2,070,000
1,739,000
1,702,000
1,945,000
1,781,000
1,149,000
1,761,000
1,089,000
2,501,000
2,143,000
1,345,000
2,163,000
2,058,000
849,000
3,081,000
2,985,000
2,753,000
954,000
1,345,000
1,198,000
1,510,000
2,138,000
1,328,000
1,352,000
1,719,000
1,815,000
5,473,000
3,409,000
1,736,000
2,508,000
2,032,000
F-70
71,000
91,000
279,000
193,000
233,000
181,000
201,000
136,000
106,000
87,000
57,000
112,000
77,000
125,000
78,000
274,000
204,000
198,000
101,000
121,000
107,000
109,000
154,000
106,000
127,000
100,000
85,000
95,000
55,000
78,000
128,000
170,000
1,250,000
91,000
70,000
47,000
117,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
570,000
519,000
1,195,000
971,000
1,145,000
659,000
895,000
745,000
729,000
834,000
763,000
492,000
755,000
467,000
1,072,000
918,000
577,000
927,000
882,000
364,000
1,321,000
1,280,000
1,183,000
409,000
576,000
513,000
647,000
916,000
569,000
580,000
737,000
779,000
2,240,000
1,462,000
744,000
1,075,000
871,000
2,234,000
1,302,000
3,010,000
2,458,000
2,902,000
1,718,000
2,271,000
1,875,000
1,808,000
2,032,000
1,838,000
1,261,000
1,838,000
1,214,000
2,579,000
2,417,000
1,549,000
2,361,000
2,159,000
970,000
3,187,000
3,093,000
2,906,000
1,060,000
1,472,000
1,298,000
1,595,000
2,233,000
1,383,000
1,430,000
1,847,000
1,985,000
6,829,000
3,499,000
1,806,000
2,555,000
2,149,000
2,804,000
1,821,000
4,205,000
3,429,000
4,047,000
2,377,000
3,166,000
2,620,000
2,537,000
2,866,000
2,601,000
1,753,000
2,593,000
1,681,000
3,651,000
3,335,000
2,126,000
3,288,000
3,041,000
1,334,000
4,508,000
4,373,000
4,089,000
1,469,000
2,048,000
1,811,000
2,242,000
3,149,000
1,952,000
2,010,000
2,584,000
2,764,000
9,069,000
4,961,000
2,550,000
3,630,000
3,020,000
449,000
284,000
656,000
502,000
621,000
397,000
517,000
392,000
382,000
430,000
384,000
298,000
387,000
293,000
529,000
514,000
377,000
512,000
456,000
232,000
656,000
629,000
615,000
241,000
325,000
292,000
334,000
453,000
295,000
313,000
406,000
426,000
1,205,000
714,000
386,000
519,000
442,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
Jacksonville/Ft.CarolineRd.
Jacksonville/ParkAvenue
Jacksonville/PhillipsHwy
Jacksonville/RooseveltBlvd.
Jacksonville/SouthsideBlvd.
Jonesboro/TaraBlvd
Kannapolis/OregonSt
KansasCity/34thMainStreet
KansasCity/E.47thSt.
KansasCity/JamesA.ReedRd
KansasCity/StateAve
KansasCity/E.67thTerrace
Katy/DominionDrive
Kennedale/BowmanSprgs
Kennesaw/RutledgeRoad
Lawrence/HaskellAve
Lawrenceville/BufordDr.
Lenexa/LongSt.
Lenexa/SantaFeTrailRoad
Lewisville/Highway121
Longmont/WedgewoodAve
Louisville
Louisville/BreckenridgeLane
Louisville/PoplarLevel
Manassas/SudleyRoad
Marietta/Cobb
Marietta/Whitlock
Martinez/OldPetersburgRd
Mauldin/N.MainStreet
Miami/Nw14thStreet
Miami/Nw7thAve
MiamiBeach/DadeBlvd
MiamiLakes/Nw153rdSt.
Miami-Kendall/Sw84thStreet
Milford/BranchHill
Milwaukee/W.DeanRoad
Mission/FoxridgeDr
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,037,000
905,000
665,000
851,000
1,278,000
785,000
463,000
114,000
610,000
749,000
645,000
1,136,000
995,000
425,000
803,000
636,000
256,000
720,000
713,000
688,000
717,000
554,000
581,000
463,000
776,000
727,000
1,016,000
407,000
571,000
1,739,000
783,000
962,000
425,000
935,000
527,000
1,362,000
1,657,000
2,420,000
2,113,000
1,545,000
1,986,000
2,982,000
1,827,000
1,081,000
2,599,000
1,424,000
1,748,000
1,505,000
2,643,000
2,321,000
991,000
1,874,000
1,484,000
597,000
1,644,000
1,663,000
1,605,000
1,673,000
1,292,000
1,356,000
1,080,000
1,810,000
1,696,000
2,370,000
950,000
1,333,000
4,058,000
1,827,000
2,245,000
992,000
2,180,000
1,229,000
3,163,000
3,864,000
F-71
169,000
134,000
174,000
295,000
174,000
255,000
102,000
575,000
151,000
80,000
185,000
88,000
57,000
76,000
208,000
144,000
80,000
44,000
117,000
96,000
59,000
138,000
87,000
149,000
160,000
236,000
152,000
133,000
143,000
114,000
158,000
276,000
71,000
155,000
2,232,000
346,000
127,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,037,000
905,000
665,000
851,000
1,279,000
785,000
463,000
114,000
610,000
749,000
645,000
1,137,000
995,000
425,000
803,000
636,000
256,000
720,000
713,000
688,000
717,000
554,000
581,000
463,000
776,000
727,000
1,016,000
407,000
571,000
1,740,000
783,000
962,000
425,000
935,000
527,000
1,363,000
1,658,000
2,589,000
2,247,000
1,719,000
2,281,000
3,155,000
2,082,000
1,183,000
3,174,000
1,575,000
1,828,000
1,690,000
2,730,000
2,378,000
1,067,000
2,082,000
1,628,000
677,000
1,688,000
1,780,000
1,701,000
1,732,000
1,430,000
1,443,000
1,229,000
1,970,000
1,932,000
2,522,000
1,083,000
1,476,000
4,171,000
1,985,000
2,521,000
1,063,000
2,335,000
3,461,000
3,508,000
3,990,000
3,626,000
3,152,000
2,384,000
3,132,000
4,434,000
2,867,000
1,646,000
3,288,000
2,185,000
2,577,000
2,335,000
3,867,000
3,373,000
1,492,000
2,885,000
2,264,000
933,000
2,408,000
2,493,000
2,389,000
2,449,000
1,984,000
2,024,000
1,692,000
2,746,000
2,659,000
3,538,000
1,490,000
2,047,000
5,911,000
2,768,000
3,483,000
1,488,000
3,270,000
3,988,000
4,871,000
5,648,000
561,000
489,000
400,000
530,000
680,000
456,000
273,000
747,000
335,000
390,000
373,000
560,000
484,000
234,000
462,000
338,000
171,000
347,000
377,000
367,000
362,000
320,000
317,000
280,000
421,000
452,000
530,000
253,000
341,000
856,000
449,000
516,000
242,000
504,000
491,000
788,000
811,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
Mobile/AzaleaRoad
Mobile/GovernmentBlvd
Mobile/GrelotRoad
Mobile/HillcrestRoad
Mobile/MoffatRoad
Mt.Prospect/CentralRoad
N.Charleston/Dorchester
N.Charleston/DorchesterRd
Naperville/LasalleAve
NewOrleans/Tchoupitoulas
Norcross/DawsonBlvd
Norcross/JonesMillRd
NorthMiamiBeach/69thSt
Orlando/L.B.McleodRoad
Orlando/SouthSemoran
Orlando/S.OrangeBlossomTrail
OverlandPark/HemlockSt
Pensacola/BrentLane
Pensacola/CreightonRoad
Plano/ParkerRoad-AvenueK
PonteVedra/PalmValleyRd.
Raleigh/MaitlandDr
Raytown/WoodsonRd
Richardson/CentralExpressway
RiverGrove/N.5thAve.
Riverdale/GeorgiaHwy85
Roswell/Alpharetta
Schaumburg/PalmerDrive
Schaumburg/S.RoselleRoad
Shawnee/HedgeLaneTerrace
Simpsonville/GrandViewDr
Spartanburg/ChesneeHwy
St.Ann/MarylandHeights
St.Charles/E.MainSt.
St.Louis/Airport
St.Louis/N.LindberghBlvd.
St.Louis/VandeventerMidtown
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
517,000
407,000
804,000
554,000
537,000
802,000
487,000
380,000
1,501,000
1,092,000
1,232,000
1,142,000
1,594,000
521,000
565,000
1,229,000
1,168,000
402,000
454,000
1,517,000
745,000
679,000
915,000
465,000
1,094,000
1,075,000
1,772,000
1,333,000
659,000
570,000
582,000
533,000
1,035,000
951,000
785,000
1,688,000
699,000
1,206,000
950,000
1,877,000
1,293,000
1,254,000
1,847,000
1,137,000
886,000
3,502,000
2,548,000
2,874,000
2,670,000
3,720,000
1,217,000
1,319,000
2,867,000
2,725,000
938,000
1,060,000
3,539,000
2,749,000
1,585,000
2,134,000
1,085,000
2,552,000
2,508,000
4,135,000
3,111,000
1,537,000
1,331,000
1,358,000
1,244,000
2,414,000
2,220,000
1,833,000
3,939,000
1,631,000
F-72
134,000
110,000
131,000
139,000
128,000
184,000
154,000
107,000
99,000
233,000
207,000
157,000
159,000
78,000
70,000
165,000
114,000
104,000
216,000
129,000
436,000
112,000
96,000
109,000
9,000
99,000
135,000
122,000
93,000
85,000
130,000
273,000
173,000
(303,000)
157,000
224,000
120,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
517,000
407,000
804,000
554,000
537,000
802,000
487,000
380,000
1,502,000
1,092,000
1,233,000
1,143,000
1,595,000
521,000
565,000
1,230,000
1,169,000
402,000
454,000
1,518,000
745,000
679,000
915,000
465,000
1,034,000
1,075,000
1,773,000
1,334,000
659,000
570,000
574,000
533,000
1,035,000
802,000
785,000
1,689,000
699,000
1,340,000
1,060,000
2,008,000
1,432,000
1,382,000
2,031,000
1,291,000
993,000
3,600,000
2,781,000
3,080,000
2,826,000
3,878,000
1,295,000
1,389,000
3,031,000
2,838,000
1,042,000
1,276,000
3,667,000
3,185,000
1,697,000
2,230,000
1,194,000
2,621,000
2,607,000
4,269,000
3,232,000
1,630,000
1,416,000
1,496,000
1,517,000
2,587,000
2,066,000
1,990,000
4,162,000
1,751,000
1,857,000
1,467,000
2,812,000
1,986,000
1,919,000
2,833,000
1,778,000
1,373,000
5,102,000
3,873,000
4,313,000
3,969,000
5,473,000
1,816,000
1,954,000
4,261,000
4,007,000
1,444,000
1,730,000
5,185,000
3,930,000
2,376,000
3,145,000
1,659,000
3,655,000
3,682,000
6,042,000
4,566,000
2,289,000
1,986,000
2,070,000
2,050,000
3,622,000
2,868,000
2,775,000
5,851,000
2,450,000
305,000
239,000
429,000
324,000
315,000
454,000
296,000
228,000
748,000
606,000
652,000
602,000
807,000
277,000
294,000
639,000
572,000
241,000
300,000
758,000
746,000
376,000
462,000
263,000
761,000
539,000
857,000
660,000
353,000
312,000
332,000
363,000
526,000
654,000
398,000
838,000
372,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/12/99
3/31/99
4/1/99
5/1/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
St.Louis/S.ThirdSt
St.Louis/S.ThirdSt
Sterling/S.SterlingBlvd
Streamwood/OldChurchRoad
TarponSprings/Highway19
TarponSprings/UsHighway19
Taylors/WadeHamptonBlvd
TinleyPark/BrennanHwy
VeroBeach/UsHwy1
W.Columbia/AirportBlvd
W.Columbia/OrchardDr.
Waukesha/FosterCourt
Webster/Fm528Road
Webster/Highway3
Winfield/RooseveltRoad
ForestPark
Fresno
Stockton
Anaheim/LaPalma
Bradenton/CortezRoad
BrickTownship/Brick
Concord/Arnold
Edison/OldPostRd
Fairfax/LeeHighway
FallsChurch/Columbia
FortWorth/McCart
Ft.Myers/Tamiami
Gresham/Burnside
Houston/Highway6So.
Houston/MillridgeN.
HuntingtonBch/Gotham
HuntingtonBeach
Hyattsville
Irving/W.Airport
Jacksonville/University
Littleton/Centennial
Mountainside
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,096,000
206,000
1,282,000
855,000
1,179,000
892,000
650,000
771,000
678,000
493,000
272,000
765,000
756,000
677,000
1,109,000
270,000
44,000
151,000
1,378,000
476,000
590,000
827,000
498,000
586,000
901,000
372,000
948,000
354,000
751,000
1,160,000
952,000
1,026,000
768,000
419,000
211,000
421,000
1,260,000
2,557,000
480,000
2,992,000
1,991,000
2,751,000
2,081,000
1,517,000
1,799,000
1,583,000
1,151,000
634,000
1,785,000
1,764,000
1,580,000
2,587,000
3,378,000
206,000
402,000
851,000
885,000
1,431,000
1,553,000
1,267,000
1,078,000
975,000
942,000
962,000
544,000
1,006,000
1,983,000
890,000
1,437,000
2,186,000
960,000
741,000
804,000
1,237,000
F-73
76,000
28,000
134,000
56,000
125,000
187,000
128,000
132,000
77,000
121,000
144,000
163,000
84,000
78,000
119,000
1,036,000
(297,000)
(254,000)
200,000
316,000
281,000
411,000
260,000
304,000
301,000
188,000
298,000
204,000
473,000
255,000
302,000
120,000
273,000
203,000
231,000
256,000
341,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
804,000
2,017,000
1,221,000
906,000
1,364,000
1,874,000
1,175,000
1,106,000
1,141,000
703,000
1,208,000
627,000
1,057,000
2,433,000
1,130,000
1,450,000
1,919,000
857,000
700,000
812,000
1,523,000
1,096,000
206,000
1,283,000
855,000
1,180,000
892,000
650,000
771,000
678,000
493,000
272,000
765,000
756,000
677,000
1,109,000
270,000
193,000
590,000
1,721,000
594,000
736,000
1,032,000
622,000
732,000
1,126,000
464,000
1,184,000
442,000
937,000
1,449,000
1,189,000
1,282,000
959,000
524,000
263,000
526,000
1,574,000
2,633,000
508,000
3,125,000
2,047,000
2,875,000
2,268,000
1,645,000
1,931,000
1,660,000
1,272,000
778,000
1,948,000
1,848,000
1,658,000
2,706,000
4,414,000
564,000
1,726,000
1,929,000
1,989,000
2,930,000
3,633,000
2,578,000
2,342,000
2,192,000
1,741,000
2,232,000
1,287,000
2,350,000
4,382,000
2,085,000
2,751,000
4,187,000
1,915,000
1,620,000
1,767,000
2,787,000
3,729,000
714,000
4,408,000
2,902,000
4,055,000
3,160,000
2,295,000
2,702,000
2,338,000
1,765,000
1,050,000
2,713,000
2,604,000
2,335,000
3,815,000
4,684,000
757,000
2,316,000
3,650,000
2,583,000
3,666,000
4,665,000
3,200,000
3,074,000
3,318,000
2,205,000
3,416,000
1,729,000
3,287,000
5,831,000
3,274,000
4,033,000
5,146,000
2,439,000
1,883,000
2,293,000
4,361,000
537,000
115,000
644,000
420,000
593,000
495,000
369,000
419,000
357,000
277,000
203,000
393,000
393,000
354,000
556,000
1,876,000
121,000
350,000
376,000
412,000
508,000
793,000
498,000
476,000
423,000
317,000
445,000
278,000
468,000
842,000
415,000
500,000
723,000
403,000
353,000
358,000
518,000
Date
Acquired
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
6/30/99
7/1/99
7/1/99
7/1/99
7/1/99
7/1/99
7/1/99
7/1/99
7/1/99
7/1/99
7/1/99
7/1/99
7/1/99
9/1/99
9/1/99
9/1/99
9/1/99
10/8/99
10/11/99
11/15/99
12/17/99
12/30/99
Description
N.RichlandHills
Newark/CedarBlvd
Northridge/Parthenia
OakPark/Greenfield
Rockville/GudeDrive
RollingMeadows/Lois
SanAntonio/NwLoop
SanDiego/Clairemont
SpringValley/Sweetwater
StoneMountain/Rock
Tujunga/FoothillBlvd
UnionCity/Alvarado
WheatRidge/W.44th
WinterPark/N.Semor
Woodbridge/Davis
Woodbridge/Jefferson
Antioch/CaneRidgeRd
Hermitage/CentralCt
Hixson/GaddRd
Hixson/Highway153
Madison/MyattDr
Madison/WilliamsAve
Nashville/LafayetteSt
Nashville/McnallyDr
Nashville/MetroplexDr
Nashville/WelshwoodDr
Pantego/W.PioneerPkwy
RedBank/HardingRd
Charlotte/AshleyRoad
Charlotte/SouthBlvd.
Greensboro/W.MarketSt.
Raleigh/CapitalBlvd
Belmont/O’neillAve
Matthews
Poplar,Memphis
Dallas/SwissAve
OakPark/GreenfieldRd
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
455,000
729,000
1,848,000
621,000
602,000
441,000
511,000
1,601,000
271,000
1,233,000
1,746,000
992,000
480,000
342,000
1,796,000
840,000
353,000
646,000
207,000
488,000
441,000
1,318,000
486,000
884,000
380,000
934,000
432,000
452,000
664,000
734,000
603,000
927,000
869,000
937,000
1,631,000
1,862,000
1,184,000
769,000
971,000
1,486,000
1,735,000
768,000
849,000
786,000
2,035,000
380,000
288,000
2,383,000
1,776,000
789,000
638,000
1,623,000
1,689,000
823,000
1,508,000
484,000
1,138,000
1,028,000
3,076,000
1,135,000
2,062,000
886,000
2,179,000
1,228,000
1,056,000
1,551,000
1,715,000
1,409,000
2,166,000
4,659,000
3,165,000
3,093,000
4,344,000
3,685,000
F-74
252,000
244,000
186,000
198,000
364,000
356,000
206,000
337,000
4,719,000
330,000
170,000
211,000
249,000
376,000
419,000
261,000
168,000
150,000
260,000
195,000
93,000
259,000
156,000
348,000
155,000
178,000
70,000
185,000
30,000
44,000
23,000
(10,000)
95,000
247,000
279,000
138,000
(98,000)
832,000
1,067,000
1,839,000
1,490,000
880,000
898,000
855,000
2,034,000
416,000
852,000
2,370,000
1,690,000
831,000
728,000
1,996,000
1,446,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
569,000
910,000
2,308,000
775,000
751,000
551,000
638,000
1,999,000
338,000
1,540,000
2,180,000
1,239,000
599,000
427,000
2,243,000
1,048,000
353,000
646,000
207,000
488,000
441,000
1,319,000
486,000
884,000
380,000
934,000
432,000
452,000
651,000
719,000
591,000
909,000
878,000
994,000
1,732,000
1,879,000
1,197,000
1,739,000
2,101,000
3,051,000
3,269,000
1,863,000
1,993,000
1,720,000
4,008,000
5,448,000
1,163,000
4,489,000
3,430,000
1,750,000
1,657,000
3,591,000
3,188,000
991,000
1,658,000
744,000
1,333,000
1,121,000
3,334,000
1,291,000
2,410,000
1,041,000
2,357,000
1,298,000
1,241,000
1,594,000
1,774,000
1,444,000
2,174,000
4,745,000
3,355,000
3,271,000
4,465,000
3,574,000
2,308,000
3,011,000
5,359,000
4,044,000
2,614,000
2,544,000
2,358,000
6,007,000
5,786,000
2,703,000
6,669,000
4,669,000
2,349,000
2,084,000
5,834,000
4,236,000
1,344,000
2,304,000
951,000
1,821,000
1,562,000
4,653,000
1,777,000
3,294,000
1,421,000
3,291,000
1,730,000
1,693,000
2,245,000
2,493,000
2,035,000
3,083,000
5,623,000
4,349,000
5,003,000
6,344,000
4,771,000
366,000
406,000
523,000
572,000
394,000
418,000
344,000
785,000
148,000
217,000
696,000
603,000
364,000
388,000
680,000
565,000
240,000
373,000
231,000
316,000
263,000
734,000
320,000
611,000
252,000
521,000
129,000
303,000
328,000
364,000
307,000
437,000
933,000
507,000
516,000
891,000
647,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
12/30/99
1/21/00
1/25/00
1/31/00
2/8/00
2/28/00
4/1/00
4/29/00
5/2/00
5/2/00
5/26/00
6/5/00
6/15/00
6/30/00
7/13/00
7/17/00
7/29/00
8/1/00
8/23/00
8/31/00
8/31/00
9/1/00
9/1/00
9/13/00
9/15/00
9/15/00
9/15/00
9/15/00
9/15/00
9/15/00
9/15/00
9/15/00
9/15/00
9/15/00
9/15/00
9/15/00
9/15/00
SantaAnna
HanoverPark
Memphis/N.GermantwnPkwy
RowlandHeights/Walnut
Lewisville/JustinRd
Plano/AvenueK
Hyattsville/Edmonson
St.Louis/EllisvilleTwnCentre
CulverCity
MillValley
Phoenix/N.35thAve
MountSinai/Route25a
PinellasPark
SanAntonio/BroadwaySt
Lincolnwood
LaPalco/NewOrleans
Tracy/1615&1650W.11thS
Pineville
MorrisPlains
Florissant/NewHallsFry
Orange,CA
Bayshore,NY
LosAngeles,CA
Merrillville
Alexandria/PickettIi
Bethpage/HempsteadTurnpike
Brooklyn/St.JohnsPlace
Chicago/AshlandAvenue
Evanston/Greenbay
Gardena/W.ElSegundo
Hawthorne/CrenshawBlvd.
LakeRonkonkoma/PortionRd.
LosAngeles/Coliseum
Northport/FortSalongaRoad
Oakland/Macarthur
Rockaway/U.S.Route46
RoyalOak/CoolidgeHighway
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,657,000
262,000
884,000
681,000
529,000
2,064,000
1,036,000
765,000
2,439,000
1,412,000
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
2,743,000
2,899,000
3,492,000
850,000
846,000
1,532,000
1,079,000
937,000
3,109,000
2,999,000
678,000
2,424,000
1,062,000
3,293,000
3,104,000
3,024,000
1,589,000
2,919,000
10,407,000
2,657,000
4,377,000
5,689,000
3,294,000
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
6,198,000
5,457,000
6,026,000
4,880,000
4,436,000
3,424,000
2,913,000
4,199,000
4,013,000
5,698,000
2,751,000
4,945,000
2,576,000
F-75
364,000
40,000
225,000
122,000
210,000
438,000
46,000
337,000
(689,000)
(371,000)
57,000
255,000
271,000
22,000
165,000
129,000
293,000
357,000
317,000
79,000
56,000
966,000
461,000
169,000
282,000
244,000
248,000
221,000
163,000
116,000
131,000
156,000
151,000
243,000
149,000
246,000
159,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,821,000
256,000
937,000
688,000
562,000
2,089,000
1,036,000
812,000
2,218,000
1,284,000
868,000
1,008,000
547,000
1,132,000
1,614,000
1,094,000
1,763,000
2,333,000
1,595,000
807,000
667,000
1,534,000
708,000
364,000
2,744,000
2,900,000
3,494,000
850,000
846,000
1,533,000
1,079,000
937,000
3,110,000
3,000,000
678,000
2,425,000
1,062,000
3,493,000
3,150,000
3,196,000
1,704,000
3,096,000
10,820,000
2,703,000
4,667,000
5,221,000
3,051,000
3,024,000
3,535,000
2,497,000
4,579,000
3,876,000
3,262,000
4,805,000
3,638,000
4,523,000
4,297,000
1,592,000
3,689,000
1,719,000
2,622,000
6,479,000
5,700,000
6,272,000
5,101,000
4,599,000
3,539,000
3,044,000
4,355,000
4,163,000
5,940,000
2,900,000
5,190,000
2,735,000
6,314,000
3,406,000
4,133,000
2,392,000
3,658,000
12,909,000
3,739,000
5,479,000
7,439,000
4,335,000
3,892,000
4,543,000
3,044,000
5,711,000
5,490,000
4,356,000
6,568,000
5,971,000
6,118,000
5,104,000
2,259,000
5,223,000
2,427,000
2,986,000
9,223,000
8,600,000
9,766,000
5,951,000
5,445,000
5,072,000
4,123,000
5,292,000
7,273,000
8,940,000
3,578,000
7,615,000
3,797,000
527,000
450,000
497,000
341,000
480,000
4,106,000
448,000
660,000
866,000
511,000
517,000
490,000
251,000
702,000
700,000
439,000
805,000
517,000
578,000
721,000
270,000
708,000
333,000
333,000
801,000
705,000
743,000
695,000
575,000
468,000
396,000
525,000
501,000
727,000
391,000
666,000
358,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
9/15/00
9/18/00
9/30/00
9/30/00
11/15/00
11/21/00
12/21/00
12/21/00
12/21/00
12/21/00
12/29/00
12/30/00
12/30/00
1/5/01
1/11/01
1/16/01
1/18/01
1/25/01
3/15/01
4/1/01
4/7/01
4/17/01
4/18/01
6/17/01
6/18/01
6/19/01
6/26/01
7/29/01
8/28/01
9/30/01
12/27/01
12/27/01
12/29/01
12/29/01
12/29/01
12/31/01
1/1/02
Tampa/GunnHwy
Tampa/N.DelMabry
Lilburn/IndianTrail
Marietta/Kennestone&Hwy5
Largo/Missouri
St.Louis/Wilson
Houston/10801KatyFrwy
Houston/7715KatyFrwy
Houston/MainSt
Houston/W.Loop/S.Frwy
Chicago
Frazier
Raleigh/Glenwood
Troy/E.BigBeaverRd
FtLauderdale
NoHollywood/ShermanWay
Tuscon/E.Speedway
Lombard/Finley
LosAngeles/WestPico
Lakewood/CedarDr.
Farmingdale/Rte110
Philadelphia/Aramingo
Largo/WalsinghamRoad
PortWashington/Seaview&W.Sh
SilverSprings/Prosperity
Tampa/W.WatersAve&Wilsky
Middletown
Miami/Sw85thAve
Hoover/JohnHawkinsPkwy
Syosset
Howell/Hgwy9
LosAngeles/W.Jefferson
Catonsville/Kent
OldBridge/Rte9
Sacremento/Roseville
SantaAna/E.Mcfadden
AirportI
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,843,000
2,204,000
1,695,000
622,000
1,092,000
1,608,000
1,664,000
2,274,000
1,681,000
2,036,000
1,946,000
800,000
1,545,000
2,195,000
954,000
2,173,000
735,000
851,000
8,579,000
1,329,000
2,364,000
968,000
1,000,000
2,381,000
1,065,000
953,000
1,535,000
2,755,000
1,050,000
2,461,000
941,000
8,285,000
1,378,000
1,244,000
876,000
7,587,000
346,000
4,300,000
2,447,000
5,170,000
3,388,000
4,270,000
3,913,000
3,884,000
5,307,000
3,924,000
4,749,000
6,002,000
3,324,000
3,628,000
4,221,000
3,972,000
5,442,000
2,895,000
3,806,000
8,630,000
9,356,000
5,807,000
4,539,000
3,545,000
4,608,000
5,391,000
3,785,000
4,258,000
4,951,000
2,453,000
5,312,000
4,070,000
9,429,000
5,289,000
4,960,000
5,344,000
8,612,000
861,000
F-76
92,000
7,476,000
1,365,000
1,511,000
240,000
1,818,000
83,000
103,000
102,000
112,000
18,000
17,000
83,000
355,000
342,000
37,000
189,000
359,000
803,000
121,000
(52,000)
15,000
(237,000)
122,000
18,000
16,000
335,000
18,000
43,000
382,000
235,000
811,000
640,000
(31,000)
133,000
905,000
41,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(32,000)
1,844,000
2,226,000
1,713,000
628,000
1,158,000
1,629,000
1,668,000
2,278,000
1,685,000
2,039,000
1,939,000
800,000
1,561,000
2,330,000
1,070,000
2,176,000
780,000
903,000
8,599,000
1,333,000
2,343,000
968,000
800,000
2,359,000
1,065,000
954,000
1,630,000
2,758,000
1,051,000
2,613,000
998,000
8,305,000
1,379,000
1,245,000
526,000
7,605,000
346,000
4,391,000
9,901,000
6,517,000
4,893,000
4,444,000
5,710,000
3,963,000
5,406,000
4,022,000
4,858,000
6,027,000
3,341,000
3,695,000
4,441,000
4,198,000
5,476,000
3,039,000
4,113,000
9,413,000
9,473,000
5,776,000
4,554,000
3,508,000
4,752,000
5,409,000
3,800,000
4,498,000
4,966,000
2,495,000
5,542,000
4,248,000
10,220,000
5,928,000
4,928,000
5,827,000
9,499,000
870,000
6,235,000
12,127,000
8,230,000
5,521,000
5,602,000
7,339,000
5,631,000
7,684,000
5,707,000
6,897,000
7,966,000
4,141,000
5,256,000
6,771,000
5,268,000
7,652,000
3,819,000
5,016,000
18,012,000
10,806,000
8,119,000
5,522,000
4,308,000
7,111,000
6,474,000
4,754,000
6,128,000
7,724,000
3,546,000
8,155,000
5,246,000
18,525,000
7,307,000
6,173,000
6,353,000
17,104,000
1,216,000
594,000
2,732,000
771,000
633,000
527,000
695,000
365,000
484,000
367,000
442,000
717,000
294,000
538,000
501,000
482,000
771,000
348,000
454,000
1,326,000
1,365,000
693,000
498,000
392,000
464,000
604,000
392,000
436,000
491,000
250,000
460,000
357,000
814,000
509,000
401,000
507,000
765,000
177,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/1/02
1/3/02
1/7/02
1/15/02
1/16/02
1/16/02
1/16/02
1/16/02
Azusa
Belmont/DairyLane
Carmichael/FairOaks
Carson/CarsonSt
Concord
Ft.Lauderdale/Sun
Ft.Lauderdale/Sun
Marietta/CobbPark
Miami/27thAve
Miami/Airport
Miami/MarlinRoad
Oakland/SanLeandro
Palmdale/PStreet
Pasadena/SFairOaks
Pasadena/SierraMadre
PembrokePark
Redlands
Richmond/Jacuzzi
Riverside
Sacramento/Capitol
Sacramento/Florin
Sacramento/Howe
SanCarlos/Shorewa
SanJose/Capitol
SanJose/FelipeAve
SantaClara/Laurel
So.SanFrancisco
Tucker/MontrealRd
Tucker/Mountain
Tustin
StCharles/VeteransMemorialPkwy
Bothell/N.BothellWay
Houston/N.Loop
Annapolis/WestSt
Austin/UsHwy183
Austin/W.6thSt
Birmingham/Commons
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
933,000
915,000
584,000
507,000
650,000
452,000
532,000
419,000
272,000
517,000
562,000
330,000
218,000
1,313,000
706,000
475,000
423,000
419,000
95,000
186,000
624,000
361,000
737,000
400,000
517,000
1,178,000
1,018,000
760,000
519,000
962,000
687,000
1,063,000
2,045,000
955,000
608,000
2,399,000
1,125,000
1,659,000
1,252,000
1,431,000
877,000
1,332,000
1,254,000
1,444,000
1,571,000
1,572,000
915,000
1,345,000
1,116,000
1,287,000
1,905,000
872,000
1,259,000
1,202,000
1,224,000
1,106,000
1,284,000
1,710,000
1,181,000
1,360,000
1,183,000
1,482,000
1,789,000
2,464,000
1,485,000
1,385,000
1,465,000
1,602,000
4,995,000
6,178,000
3,669,000
3,856,000
4,493,000
3,938,000
F-77
18,000
48,000
23,000
46,000
66,000
34,000
59,000
23,000
48,000
44,000
37,000
82,000
40,000
51,000
72,000
17,000
119,000
44,000
30,000
19,000
70,000
21,000
17,000
29,000
46,000
53,000
43,000
33,000
66,000
33,000
134,000
144,000
(1,000)
13,000
16,000
90,000
32,000
4,926,000
-
(2,000)
1,000
(44,000)
(48,000)
(56,000)
(2,000)
1,000
2,000
(49,000)
(34,000)
3,000
(2,000)
(28,000)
(47,000)
(34,000)
(44,000)
(41,000)
(49,000)
3,000
(45,000)
(52,000)
1,000
(3,000)
(62,000)
39,000
(3,000)
-
(53,000)
-
-
-
-
-
-
-
933,000
915,000
584,000
507,000
650,000
452,000
532,000
419,000
272,000
517,000
562,000
330,000
218,000
1,314,000
706,000
475,000
423,000
419,000
95,000
186,000
624,000
361,000
737,000
400,000
517,000
1,179,000
1,018,000
760,000
519,000
962,000
687,000
1,063,000
2,046,000
955,000
608,000
2,400,000
1,126,000
6,603,000
1,300,000
1,452,000
924,000
1,354,000
1,240,000
1,447,000
1,592,000
1,621,000
961,000
1,333,000
1,164,000
1,330,000
1,953,000
916,000
1,229,000
1,287,000
1,224,000
1,095,000
1,254,000
1,783,000
1,157,000
1,325,000
1,213,000
1,525,000
1,779,000
2,546,000
1,515,000
1,451,000
1,445,000
1,736,000
5,139,000
6,176,000
3,682,000
3,872,000
4,582,000
3,969,000
7,536,000
2,215,000
2,036,000
1,431,000
2,004,000
1,692,000
1,979,000
2,011,000
1,893,000
1,478,000
1,895,000
1,494,000
1,548,000
3,267,000
1,622,000
1,704,000
1,710,000
1,643,000
1,190,000
1,440,000
2,407,000
1,518,000
2,062,000
1,613,000
2,042,000
2,958,000
3,564,000
2,275,000
1,970,000
2,407,000
2,423,000
6,202,000
8,222,000
4,637,000
4,480,000
6,982,000
5,095,000
461,000
263,000
289,000
179,000
253,000
244,000
285,000
314,000
315,000
196,000
267,000
227,000
273,000
396,000
166,000
252,000
234,000
239,000
219,000
255,000
344,000
236,000
265,000
238,000
296,000
342,000
470,000
297,000
275,000
295,000
159,000
402,000
463,000
299,000
309,000
380,000
321,000
Date
Acquired
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
Description
Casselberry/State
Charlotte/Cambridge
Crestwood/WatsonRd
GardenCity/Stewart
Gilbert/WParkAve
Hawthorne/GoffleRd
Hiawassee/N.Hiawassee
Honolulu/Waialae
Honolulu/Kahala
Indianapolis/Madison
Indianapolis/Rockville
Indianapolis/W.86th
Issaquah/Pickering
LagunaHills/Moulton
Longwood/StateRd
Martinez/ArnoldDr
Memphis/Covington
Memphis/SummerAve
Millersville/Veterans
Naperville/Washington
NewOrleans/I-10
Northglenn/HuronSt
Novato/RushLanding
Orlando/S.Kirkman
Pasadena/E.Colorado
Phoenix/WUnionHills
RanchoCucamonga
Renton/Kent
RochellePark/168
SanMateo/S.Delaware
SanRamon/SanRamo
SantaClara/Lafayette
SantaCruz/River
Schaumburg/W.Wise
Scottsdale/N.Hayden
Skokie/SkokieBlvd
Southfield/Telegraph
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,628,000
836,000
1,232,000
1,489,000
497,000
2,414,000
1,622,000
10,631,000
3,722,000
716,000
704,000
812,000
1,138,000
2,319,000
2,123,000
847,000
620,000
1,103,000
1,036,000
2,712,000
1,286,000
688,000
1,858,000
889,000
1,125,000
1,071,000
579,000
768,000
744,000
1,921,000
1,522,000
1,393,000
2,148,000
1,158,000
2,111,000
716,000
2,869,000
3,308,000
3,908,000
3,093,000
4,039,000
3,534,000
4,918,000
1,892,000
10,783,000
8,525,000
2,655,000
2,704,000
2,421,000
3,704,000
5,200,000
3,083,000
5,422,000
3,076,000
2,772,000
4,229,000
2,225,000
3,380,000
2,075,000
2,574,000
3,180,000
5,160,000
2,934,000
3,222,000
4,078,000
4,430,000
4,602,000
3,510,000
4,626,000
6,584,000
2,598,000
3,564,000
5,285,000
5,507,000
F-78
5,000
3,000
3,000
5,000
2,000
-
5,000
2,000
9,000
11,000
6,000
6,000
6,000
13,000
46,000
-
1,000
4,000
13,000
415,000
18,000
8,000
6,000
2,000
10,000
21,000
3,000
16,000
18,000
13,000
6,000
5,000
(2,000)
8,000
18,000
4,000
1,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,629,000
836,000
1,233,000
1,490,000
497,000
2,415,000
1,623,000
10,636,000
3,724,000
716,000
704,000
812,000
1,139,000
2,320,000
2,124,000
847,000
620,000
1,103,000
1,036,000
2,713,000
1,293,000
688,000
1,859,000
889,000
1,126,000
1,066,000
579,000
768,000
744,000
1,922,000
1,523,000
1,394,000
2,149,000
1,159,000
2,114,000
716,000
2,870,000
3,312,000
3,911,000
3,095,000
4,043,000
3,536,000
4,917,000
1,896,000
10,780,000
8,532,000
2,666,000
2,710,000
2,427,000
3,709,000
5,212,000
3,128,000
5,422,000
3,077,000
2,776,000
4,242,000
2,639,000
3,391,000
2,083,000
2,579,000
3,182,000
5,169,000
2,960,000
3,225,000
4,094,000
4,448,000
4,614,000
3,515,000
4,630,000
6,581,000
2,605,000
3,579,000
5,289,000
5,507,000
4,941,000
4,747,000
4,328,000
5,533,000
4,033,000
7,332,000
3,519,000
21,416,000
12,256,000
3,382,000
3,414,000
3,239,000
4,848,000
7,532,000
5,252,000
6,269,000
3,697,000
3,879,000
5,278,000
5,352,000
4,684,000
2,771,000
4,438,000
4,071,000
6,295,000
4,026,000
3,804,000
4,862,000
5,192,000
6,536,000
5,038,000
6,024,000
8,730,000
3,764,000
5,693,000
6,005,000
8,377,000
273,000
325,000
255,000
327,000
297,000
403,000
168,000
831,000
678,000
225,000
229,000
207,000
303,000
446,000
269,000
448,000
261,000
232,000
361,000
193,000
281,000
181,000
220,000
255,000
423,000
250,000
274,000
338,000
350,000
376,000
291,000
381,000
537,000
214,000
302,000
439,000
451,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
1/16/02
2/2/02
2/15/02
3/7/02
3/11/02
3/28/02
4/17/02
5/1/02
5/2/02
6/17/02
6/30/02
7/2/02
7/14/02
7/22/02
8/1/02
8/1/02
8/15/02
8/21/02
9/13/02
9/13/02
9/13/02
11/4/02
12/23/02
2/13/03
2/13/03
2/24/03
3/3/03
3/6/03
5/27/03
8/2/03
8/13/03
8/21/03
SunnyIslesBch
W.Babylon/Sunrise
W.PalmBeach/Okeechobee
Waukegan/Greenbay
WestLa/WOlympic
Woodlawn/Whitehead
Nashua/SouthwoodDr
Houston/Fm1960East
Baltimore/RussellStreet
Weymouth/MainSt
Clinton/BranchAve&Schultz
LaMirada/Alondra
N.RichlndHls/RufeSnowDr
Parkville/E.Joppa
Waltham/LexingtonSt
Nashville/Charlotte
MtJuliet/LebonanRd
Yorktown/GeorgeWashington
Brea/E.Lambert&ClifwoodPk
Bricktown/Route70
Danvers/NewburySt.
Montclair/HoltBlvd.
RockvilleCentre/MerrickRd
Kent/PacificHighway
Lacey/MartinWay
Lakewood/Bridgeport
ScotchPlains/Route22
SntaClarita/Viaprincssa
Malden/EasternAve
Pasadena/RitchieHwy
Miami/SW137thAve
Chantilly/DullesSouthCourt
Medford/MysticAve
CastroValley/GroveWay
Sacramento/E.StocktonBlvd
Timonium/W.PadoniaRoad
VanNuys/Sepulveda-B
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
931,000
1,609,000
2,149,000
933,000
6,532,000
2,682,000
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
1,839,000
1,379,000
1,286,000
2,124,000
2,508,000
3,212,000
2,253,000
1,600,000
2,190,000
3,886,000
2,247,000
554,000
1,932,000
1,698,000
2,845,000
3,959,000
4,650,000
3,826,000
5,975,000
3,355,000
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
4,291,000
3,217,000
3,000,000
5,072,000
3,008,000
2,739,000
4,218,000
4,684,000
4,314,000
4,982,000
5,881,000
4,175,000
3,681,000
3,886,000
F-79
14,000
7,000
30,000
2,000
37,000
21,000
159,000
51,000
175,000
141,000
294,000
360,000
(3,000)
127,000
132,000
62,000
52,000
24,000
145,000
123,000
240,000
157,000
273,000
87,000
53,000
79,000
50,000
448,000
7,000
8,000
-
7,000
8,000
5,000
4,000
4,000
1,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
931,000
1,610,000
2,150,000
933,000
6,535,000
2,683,000
2,494,000
859,000
1,764,000
1,441,000
1,335,000
1,857,000
632,000
898,000
3,184,000
876,000
516,000
707,000
2,115,000
1,294,000
1,312,000
889,000
3,695,000
1,840,000
1,380,000
1,287,000
2,125,000
2,503,000
3,212,000
2,253,000
1,600,000
2,190,000
3,886,000
2,247,000
554,000
1,932,000
1,698,000
2,859,000
3,965,000
4,679,000
3,828,000
6,009,000
3,375,000
4,484,000
2,055,000
5,995,000
4,573,000
4,324,000
5,296,000
6,334,000
4,433,000
5,864,000
2,066,000
1,255,000
1,708,000
3,699,000
3,811,000
4,379,000
2,231,000
7,261,000
4,377,000
3,269,000
3,078,000
5,121,000
3,461,000
2,746,000
4,226,000
4,684,000
4,321,000
4,990,000
5,886,000
4,179,000
3,685,000
3,887,000
3,790,000
5,575,000
6,829,000
4,761,000
12,544,000
6,058,000
6,978,000
2,914,000
7,759,000
6,014,000
5,659,000
7,153,000
6,966,000
5,331,000
9,048,000
2,942,000
1,771,000
2,415,000
5,814,000
5,105,000
5,691,000
3,120,000
10,956,000
6,217,000
4,649,000
4,365,000
7,246,000
5,964,000
5,958,000
6,479,000
6,284,000
6,511,000
8,876,000
8,133,000
4,733,000
5,617,000
5,585,000
233,000
325,000
387,000
317,000
489,000
293,000
340,000
158,000
441,000
338,000
303,000
336,000
481,000
297,000
368,000
138,000
88,000
110,000
222,000
231,000
256,000
146,000
401,000
44,000
33,000
31,000
273,000
161,000
87,000
152,000
148,000
114,000
129,000
139,000
82,000
38,000
39,000
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting from
Date
Acquired
9/9/03
10/21/03
11/3/03
11/6/03
12/23/03
Other
Properties
12/13/99
12/30/99
4/28/00
6/1/98
6/29/98
12/9/98
12/30/99
12/29/00
4/2/02
Description
Encum-
brances
Initial Cost
Costs
the Acquisition
Buildings &
Subsequent
of Minority
Gross Carrying Amount
At December 31, 2003
Land
Improvements
to Acquisition
Interest
Land
Building
Total
Accumulated
Depreciation
Westwood/EastSt
SanDiego/MiramarRoad
ElSobrante/SanPabloDamRoad
PearlCity/KamehamehaHwy
Boston/SouthamptonStreet
Glendale/WesternAvenue
Burlingame(Commercial&PUD)
WestPalmBeach
SanDiego/Sorrento
Renton/Sw39thSt.
PompanoBch/CenterPortCircle
Miami/Nw115thAve
TamaracParkway
Gardena
LongBeach
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,267,000
2,244,000
1,255,000
4,428,000
5,334,000
5,013,000
6,653,000
4,990,000
4,839,000
7,511,000
4,000
1,000
-
-
2,000
1,622,000
4,043,000
984,000
1,282,000
725,000
795,000
1,095,000
1,902,000
1,737,000
887,000
3,771,000
9,434,000
2,358,000
3,016,000
2,196,000
2,312,000
2,349,000
4,467,000
5,456,000
6,251,000
12,799,000
172,000
40,000
10,000
92,000
180,000
212,000
1,350,000
17,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,267,000
2,244,000
1,255,000
4,428,000
5,334,000
5,017,000
6,654,000
4,990,000
4,839,000
7,513,000
8,284,000
8,898,000
6,245,000
9,267,000
12,847,000
51,000
66,000
33,000
32,000
-
1,615,000
4,043,000
913,000
1,024,000
725,000
795,000
1,102,000
1,890,000
1,737,000
887,000
16,577,000
9,606,000
2,469,000
3,284,000
2,288,000
2,492,000
2,554,000
5,829,000
5,473,000
6,251,000
18,192,000
13,649,000
3,382,000
4,308,000
3,013,000
3,287,000
3,656,000
7,719,000
7,210,000
7,138,000
15,543,000
1,657,000
394,000
607,000
637,000
670,000
548,000
766,000
791,000
1,286,000
Construction in Progress
-
-
81,856,000
12,236,000
69,620,000
81,856,000
-
$16,630,000
$1,316,705,000
$3,095,471,000
$547,978,000
$247,200,000
$1,345,118,000
$3,862,236,000
$5,207,354,000
$1,153,059,000
F-80
PUBLIC STORAGE, INC.
EXHIBIT 11 - EARNINGS PER SHARE
For the Year Ended December 31,
2001
2002
2003
(amounts in thousands, except per share data)
Earnings Per Share:
Net income .....................................................................................
$ 336,653
$ 318,738
$ 324,208
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.............................
6.50% Cumulative Preferred Stock, Series W............................
6.45% Cumulative Preferred Stock, Series X.............................
Total preferred dividends ...............................................................
Allocation of income to preferred shareholders based on
redemptions of preferred stock ...................................................
Total net income allocated to preferred shareholders ....................
-
(1,322)
(1,013)
(2,850)
(5,488)
(5,606)
-
-
-
-
(9,488)
(9,488)
(4,922)
(14,835)
(40,800)
(11,320)
(11,601)
(11,438)
(12,938)
(2,057)
(1,030)
(146,196)
(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)
(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)
(7,120)
$ (153,316)
(6,888)
$ (155,814)
(14,835)
$ (132,814)
Total net income allocable to common shareholders .....................
$ 183,337
$ 162,924
$ 191,394
Allocation of net income to common shareholders by class:
Net income allocable to shareholders of the Equity Stock,
Series A................................................................................
Net income allocable to shareholders of common stock........
$ 21,501
161,836
$ 21,501
141,423
$ 19,455
171,939
$ 183,337
$ 162,924
$ 191,394
Weighted average common shares and equivalents outstanding:
Basic weighted average common shares outstanding.................
125,181
123,005
122,310
Net effect of dilutive stock options - based on treasury stock
method using average market price ........................................
Diluted weighted average common shares outstanding..............
Basic earnings per common and common equivalent share...........
Diluted earnings per common and common equivalent share........
1,336
126,517
$
$
1.29
1.28
1,566
124,571
$
$
1.15
1.14
1,267
123,577
$
$
1.41
1.39
Note- There were no securities outstanding which would have had an anti-dilutive effect upon earnings per common
share in each of the three years ended December 31, 2003.
Exhibit-11
PUBLIC STORAGE, INC.
EXHIBIT 12 (cid:150) STATEMENT RE: COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
2003
2002
For the Year Ended December 31,
2001
(Amounts in thousands)
2000
1999
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.
$ 336,653
43,703
$ 318,738
44,087
$ 324,208
46,015
$ 297,088
38,356
$ 287,885
16,006
(13,610)
366,746
1,121
$ 367,867
(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
Total Fixed Charges - interest expense (b).............
$ 7,131
$ 10,322
$ 12,219
$ 13,071
$ 12,480
Cumulative Preferred Stock dividends...................
Preferred Partnership Unit distributions.................
Total Preferred distributions ..................................
146,196
26,906
$ 173,102
148,926
26,906
$ 175,832
117,979
31,737
$ 149,716
100,138
24,859
$ 124,997
94,793
-
$ 94,793
Total Combined Fixed Charges and Preferred
Stock dividends...................................................
$ 180,233
$ 186,154
$ 161,935
$ 138,068
$ 107,273
Ratio of Earnings to Fixed Charges .......................
51.59x
34.13x
29.64x
25.11x
23.92x
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock dividends...................................
2.04x
1.89x
2.24x
2.38x
2.78x
Supplemental disclosure of Ratio of Earnings before Interest, Taxes,
Depreciation and Amortization ((cid:147)EBITDA(cid:148)) to fixed charges:
$ 336,653
Net Income ............................................................
(5,378)
Less (cid:150) Loss/(Gain) on sale of real estate................
185,775
Add - Depreciation and Amortization....................
Less - Depreciation allocated to minority interests
(6,328)
Add - Depreciation included in equity in earnings
of real estate entities ...........................................
27,753
$ 318,738
2,541
177,978
(8,087)
$ 324,208
(4,091)
164,914
(7,847)
$ 297,088
(3,786)
147,743
(7,138)
$ 287,885
(2,154)
136,663
(9,294)
27,078
25,096
21,825
19,721
Add (cid:150) Depreciation and amortization included in
discontinued operations ......................................
Add - Minority interest - Preferred ......................
Add - Interest expense .........................................
2,228
26,906
1,121
3,670
26,906
3,809
3,147
31,737
3,227
1,494
24,859
3,293
1,056
-
7,971
EBITDA available to cover fixed charges (a) ........
$ 568,730
$ 552,633
$ 540,391
$ 485,108
$ 441,848
Total Fixed Charges - interest expense (b).............
$ 7,131
$ 10,322
$ 12,219
$ 13,071
$ 12,480
Preferred Stock dividends......................................
Preferred Partnership Unit distributions.................
Total Preferred distributions ..................................
146,196
26,906
$ 173,102
148,926
26,906
$ 175,832
117,979
31,737
$ 149,716
100,138
24,859
$ 124,997
94,793
-
$ 94,793
Total Combined Fixed Charges and Preferred
Stock dividends...................................................
$ 180,233
$ 186,154
$ 161,935
$ 138,068
$ 107,273
Ratio of EBITDA to Fixed Charges.......................
79.75x
53.54x
44.23x
37.11x
35.40x
Ratio of EBITDA to Combined Fixed Charges
and Preferred Stock dividends ............................
3.16x
2.97x
3.34x
3.51x
4.12x
(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) (cid:147)Total fixed charges (cid:150) interest expense(cid:148) 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 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
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 (cid:147)Public Storage(cid:148).
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
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 20,
2004 with respect to the consolidated financial statements and schedule of Public Storage, Inc. included in
the Annual Report (Form 10-K) for 2003 filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
March 12, 2004
Los Angeles, California
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 am responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this year-end report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures as of
the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant(cid:146)s internal control over financial reporting that
occurred during the registrant(cid:146)s most recent fiscal quarter (the registrant(cid:146)s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is likely to materially affect, the
registrant(cid:146)s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of
internal controls over financial reporting, to the registrant’s auditors and the audit committee of
registrant’s board of directors:
a) all significant deficiencies and material weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal controls over financial reporting.
/s/ Ronald L. Havner, Jr.
Name: Ronald L. Havner, Jr.
Title: Chief Executive Officer
Date: March 12, 2004
Exhibit 31.1
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 am responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this year-end report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures as of
the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant(cid:146)s internal control over financial reporting that
occurred during the registrant(cid:146)s most recent fiscal quarter (the registrant(cid:146)s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is likely to materially affect, the
registrant(cid:146)s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of
internal controls over financial reporting, to the registrant’s auditors and the audit committee of
registrant’s board of directors:
a) all significant deficiencies and material weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal controls over financial reporting.
/s/ Harvey Lenkin
Name: Harvey Lenkin
President
Title:
Date: March 12, 2004
Exhibit 31.2
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 am responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this year-end report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures as of
the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant(cid:146)s internal control over financial reporting that
occurred during the registrant(cid:146)s most recent fiscal quarter (the registrant(cid:146)s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is likely to materially affect, the
registrant(cid:146)s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of
internal controls over financial reporting, to the registrant’s auditors and the audit committee of
registrant’s board of directors:
a) all significant deficiencies and material weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal controls over financial reporting.
/s/ John Reyes
Name: John Reyes
Title: Chief Financial Officer
Date: March 12, 2004
Exhibit 31.3
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 (cid:147)Company(cid:148)) for the year
ended December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the
(cid:147)Report(cid:148)), Ronald L. Havner, Jr., as Chief Executive Officer of the Company, 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, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ Ronald L. Havner, Jr.
Name: Ronald L. Havner, Jr.
Title: Chief Executive Officer
Date: March 12, 2004
/s/ Harvey Lenkin
Name: Harvey Lenkin
Title:
President
Date: March 12, 2004
/s/ John Reyes
Name: John Reyes
Title: Chief Financial Officer
Date: March 12, 2004
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 32
CORPORATE DATA (as of March 15, 2004)
Directors
B. Wayne Hughes (1980)
Chairman of the Board
Ronald L. Havner, Jr. (2002)
Vice-Chairman of the Board and
Chief Executive Officer
Harvey Lenkin (1991)
President and Chief Operating
Officer
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)
Private Investor
John T. Evans (2003)
Partner, Osler, Hoskin & Harcourt LLP
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 director was elected to the Board
Executive Officers
Self-Storage Operations
Ronald L. Havner, Jr.
Vice-Chairman of the Board and
Chief Executive Officer
Harvey Lenkin
President and Chief Operating Officer
John Reyes
Senior Vice President and
Chief Financial Officer
John E. Graul
Senior Vice President
John S. Baumann
Senior Vice President and
Chief Legal Officer
Corporate Officers
Todd Andrews
Vice President and Controller
Obren B. Gerich
Vice President
David Goldberg
Vice President, Senior Counsel
and Secretary
Brent C. Peterson
Vice President and Chief
Information Officer
A. Timothy Scott
Vice President and Tax Counsel
Drew J. Adams
Vice President and Director of Taxes
J. Alan Herd
Vice President and Director
of Human Resources
John E. Graul
President
Kelly M. Barnes
Senior Vice President and
Divisional Manager
Jeffrey A. Biesz
Senior Vice President and
Divisional Manager
Peter G. Panos
Senior Vice President and
Divisional Manager
John M. Sambuco
Senior Vice President and
Divisional Manager
David D. Young
Senior Vice President and
Divisional Manager
Noel J. Evans
Senior Vice President—Marketing
Alan Grossman
Vice President and Chief Financial Officer
Ancillary Businesses
Thomas Miller
Senior Vice President—Retail Products
Stephanie Tovar
Senior Vice President—Containerized Storage
Obren B. Gerich
President—PS Insurance
Real Estate Division
W. David Ristig
Senior Vice President—Land Acquisitions
Michael F. Roach
Senior Vice President—Development and
Construction
Michael K. McGowan
Senior Vice President—Acquisitions
Louis Klichan
Vice President and Controller
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.
Mike
Real Estate
Development
Cheryl
Self-Storage
Manager
Jamie
Human Resources
Tony
Self-Storage Field
Manager
Seema
Marketing
George
Call Center
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3
Bea
Customer Relations
Ed
Financial Reporting
Peggy
Investor Services
Dan
Trucks
Serves all demographics
Larry
Containerized Storage
Lui
Retail Store
Manager
Sean
Management
Information Systems
PUBLIC STORAGE, INC.
701 Western Avenue, Glendale, California 91201-2349 • (818) 244-8080 • www.publicstorage.com
(513-AR-04)