Public Storage 1997 Annual Report Download - page 23

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Public Storage, Inc. 1997 Annual Report
The property management contracts generally provide for compensation equal to 6%, in the case of the self-storage facilities, and 5%, in
the case of the commercial properties, of gross revenues of the facilities managed. Under the supervision of the property owners, the Company
coordinates rental policies, rent collections, marketing activities, the purchase of equipment and supplies, maintenance activity, and the
selection and engagement of vendors, suppliers and independent contractors. In addition, the Company assists and advises the property
owners in establishing policies for the hire, discharge and supervision of employees for the operation of these facilities, including resident
managers, assistant managers, relief managers and billing and maintenance personnel.
Note 10. Shareholders’ Equity
Preferred stock
At December 31, 1997 and 1996, the Company had the following series of Preferred Stock outstanding:
At December 31, 1997 At December 31, 1996
Dividend Shares Carrying Shares Carrying
Series Rate Outstanding Amount Outstanding Amount
Series A 10.000% 1,825,000 $ 45,625,000 1,825,000 $ 45,625,000
Series B 9.200% 2,386,000 59,650,000 2,386,000 59,650,000
Series C Adjustable 1,200,000 30,000,000 1,200,000 30,000,000
Series D 9.500% 1,200,000 30,000,000 1,200,000 30,000,000
Series E 10.000% 2,195,000 54,875,000 2,195,000 54,875,000
Series F 9.750% 2,300,000 57,500,000 2,300,000 57,500,000
Series G 8.875% 6,900 172,500,000 6,900 172,500,000
Series H 8.450% 6,750 168,750,000 6,750 168,750,000
Series I 8.625% 4,000 100,000,000 4,000 100,000,000
Series J 8.000% 6,000 150,000,000 — —
Total Senior Preferred Stock 11,129,650 868,900,000 11,123,650 718,900,000
Convertible 8.25% 2,132,334 53,308,000 2,238,975 55,974,000
Mandatory Convertible
— Series CC 13.00% — — 58,955 58,955,000
Total Convertible Preferred Stock 2,132,334 53,308,000 2,297,930 114,929,000
13,261,984 $922,208,000 13,421,580 $833,829,000
During 1997, the Company issued 6,000,000 depositary shares (each representing 1/1,000 of a share) of its 8.00% Series J Preferred Stock
(August 25, 1997) raising net proceeds of approximately $144.9 million.
During 1996, the Company issued 6,750,000 depositary shares (each representing 1/1,000 of a share) of its 8.45% Series H Preferred
Stock (January 25, 1996) raising net proceeds of approximately $163.1 million and 4,000,000 depositary shares (each representing 1/1,000
of a share) of its 8
5
/ 8 % Series I Preferred Stock (November 1, 1996) raising net proceeds of approximately $96.7 million.
In April 1996, in connection with the acquisition of limited partnership interests (Note 3), the Company issued $58,955,000 (58,955 shares)
of its Mandatory Convertible Preferred Stock, Series CC (the “Series CC Preferred Stock”). During the second quarter of 1997, all the Series CC
Convertible Preferred Stock was converted into 2,184,250 shares of common stock.
The Series A through Series J (collectively the “Cumulative Senior Preferred Stock”) have general preference rights with respect to
liquidation and quarterly distributions. With respect to the payment of dividends and amounts upon liquidation, all of the Company’s
Convertible Preferred Stock ranks junior to the Cumulative Senior Preferred Stock and any other shares of preferred stock of the Company
ranking on a parity with or senior to the Cumulative Senior Preferred Stock. The Convertible Preferred Stock ranks senior to the common
stock, any additional class of common stock and any series of preferred stock expressly made junior to the Convertible Preferred Stock.
Holders of the Company’s preferred stock, except under certain conditions and as noted above, will not be entitled to vote on most
matters. In the event of a cumulative arrearage equal to six quarterly dividends or failure to maintain a Debt Ratio (as defined) of 50% or less,
holders of all outstanding series of preferred stock (voting as a single class without regard to series) will have the right to elect two additional
members to serve on the Company’s Board of Directors until events of default have been cured. At December 31, 1997, there were no
dividends in arrears and the Debt Ratio was 3.1%.
Except under certain conditions relating to the Company’s qualification as a REIT, the Senior Preferred Stock are not redeemable prior to
the following dates: Series A – September 30, 2002, Series B – March 31, 2003, Series C – June 30, 1999, Series D – September 30, 2004,
Series E – January 31, 2005, Series F – April 30, 2005, Series G – December 31, 2000, Series H – January 31, 2001, Series I – October 31, 2001,
Series J – August 31, 2002. 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 H, Series I and Series J), plus accrued and
unpaid dividends.