Public Storage 2003 Annual Report Download - page 111

PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
F-32
11. Related Party Transactions
Relationships and transactions with the Hughes Family
B. Wayne Hughes, Chairman of the Board, and his family (the Hughes Family) have ownership
interests in, and operate, approximately 38 self-storage facilities in Canada under the name Public Storage.
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s original cost in these equity
interests. This amount is included in the acquisition of minority interests described as the Other consolidated
partnerships in Note 9.
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