Public Storage 2003 Annual Report Download - page 18

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estate acquisition strategy. The Company also owns partnership interests in various consolidated and
unconsolidated partnerships. See Investments in Real Estate and Real Estate Entities.
• 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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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s common stock will depend primarily upon the
attractiveness of repurchases compared to our other investment alternatives. Future redemptions or
repurchases of the Company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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
Managements Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital
Resources. 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
Borrowings as temporary bridge 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 Limitations on
Borrowings 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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.