Public Storage 2003 Annual Report Download - page 109

PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
F-30
Equity Stock, Series AA
In June 1997, we contributed $22,500,000 (225,000 shares) of equity stock, now designated as Equity
Stock, Series AA (Equity Stock AA) to a partnership in which we are the general partner. The Company has a
controlling interest in the partnership and therefore consolidates the accounts of the partnership. As a result, the
Equity Stock AA is eliminated in consolidation. The Equity Stock AA ranks on a parity with our common
stock and junior to the Cumulative Preferred Stock with respect to general preference rights and has a
liquidation amount of ten times the amount paid to each common share up to a maximum of $100 per share.
Quarterly distributions per share on the Equity Stock AA are equal to the lesser of (i) 10 times the amount paid
per share of Common Stock or (ii) $2.20. We have no obligation to pay distributions on these shares if no
distributions are paid to common shareholders.
If the Company determines that it is necessary to maintain its status as a Real Estate Investment Trust,
subject to certain limitations it may cause the redemption of shares of Equity Stock, Series AA at a price of
$100 per share. The shares are not otherwise redeemable or convertible into shares of any other class or series
of the Companys capital stock. Other than as required by law, the Equity Stock, Series AA has no voting
rights.
Equity Stock, Series AAA
In November 1999, we sold $100,000,000 (4,289,544 shares) of Equity Stock, Series AAA (Equity
Stock AAA) to a newly formed joint venture. We control the joint venture and consolidate the accounts of the
joint venture, and accordingly the Equity Stock AAA is eliminated in consolidation. The Equity Stock AAA
ranks on a parity with our common stock and junior to the Cumulative Preferred Stock (as defined below) with
respect to general preference rights, and has a liquidation amount equal to 120% of the amount distributed to
each common share. Annual distributions per share are equal to the lesser of (i) five times the amount paid per
common share or (ii) $2.1564. We have no obligation to pay distributions on these shares if no distributions are
paid to common stockholders.
Upon liquidation of the Consolidated Development Joint Venture, at the Companys option either a)
each share of Equity Stock, Series AAA shall convert into 1.2 shares of our common stock or b) the Company
can redeem the Equity Stock, Series AAA at a per share amount equal to 120% of the market price of our
common stock. In addition, if the Company determines that it is necessary to maintain its status as a Real Estate
Investment Trust, subject to certain limitations it may cause the redemption of shares of Equity Stock, Series
AAA at a per share amount equal to 120% of the market price of our common stock. The shares are not
otherwise redeemable or convertible into shares of any other class or series of the Companys capital stock.
Other than as required by law, the Equity Stock, Series AAA has no voting rights.
Dividends
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:
2003 (unaudited)
1
st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Ordinary Income 99.72% 99.26% 99.98% 100.00%
Pre-May 6th Long-Term Gain 0.28% 0.74% 0.02% 0.00%
Total 100.00% 100.00% 100.00% 100.00%