Public Storage 2000 Annual Report Download - page 25

23
P
UBLIC S TORAGE , I NC . 2000 A NNUAL R EPORT
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.
During fiscal 2000 we issued shares of Equity Stock as follows:
• In January 2000, we issued 4,300,555 depositary shares (2,200,555 shares with a value of $44,011,000 as part of a special
distribution declared on November 15, 1999 and 2,100,000 shares with net proceeds of $39,800,000 in a separate public
offering) each representing 1/1,000 of a share of Equity Stock, Series A (“Equity Stock A”).
• In the first half of 2000, we issued 52,547 depositary shares of Equity Stock A with an aggregate value of $1,025,000 to a related
party in connection with the acquisition of real estate facilities.
• In December 2000, we issued publicly 1,282,500 depositary shares ($28,518,000) 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 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 (prorated for the year 2000).
Except in order to preserve the Company’s federal income tax status as a REIT, we may not redeem the depositary shares before
March 31, 2005. On or after March 31, 2005, 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, the depositary shares will be convertible into common stock on a
one for one basis. 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.
In November 1999, we sold $100,000,000 (4,289,544 shares) of Equity Stock, Series AAA (“Equity Stock AAA”) to a newly formed
joint venture. We control the joint venture and consolidate the accounts of the joint venture, and accordingly the Equity Stock AAA is
eliminated in consolidation. The Equity Stock AAA ranks on a parity with Common Stock and junior to the Senior Preferred Stock (as
defined below) with respect to general preference rights, and has a liquidation amount equal to 120% of the amount distributed to
each common share. Annual distributions per share are equal to the lesser of (i) five times the amount paid per common share or (ii)
$2.1564. We have no obligation to pay distributions if no distributions are paid to common shareholders.
In June 1997, we contributed $22,500,000 (225,000 shares) of equity stock, designated as Equity Stock, Series AA (“Equity Stock
AA”) to a partnership in which the Company is the general partner. As a result of this contribution, the Company 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.
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. Distributions declared by the Board of Directors (including distributions to the holders of
preferred stock) in 2000 were characterized as follows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Ordinary income 96.10% 95.79% 99.04% 99.96%
Long-term Capital Gain 3.90% 4.21% 0.96% 0.04%
Total 100.00% 100.00% 100.00% 100.00%