Public Storage 1996 Annual Report Download - page 25

P UBLIC S TORAGE , I NC . 1996 A NNUAL R EPORT
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Class B Common Stock
The Class B Common Stock was issued in connection with the PSMI Merger. Under the terms of the merger agreement, the issuance of the Class B
Common Stock was subject to certain conditions which were satisfied in December 1995 and the Class B Common Stock was issued on January 2,
1996. The Company has reflected the Class B Common Stock as outstanding as of December 31, 1995.
The Class B Common Stock will (i) not participate in distributions until the later to occur of funds from operations (“FFO”) per Common Share
as defined below, aggregating $1.80 during any period of four consecutive calendar quarters, or January 1, 2000; thereafter, the Class B Common
Stock will participate in distributions (other than liquidating distributions), at the rate of 97% of the per share distributions on the Common Stock,
provided that cumulative distributions of at least $0.22 per quarter per share have been paid on the Common Stock, (ii) not participate in liquidat-
ing distributions, (iii) not be entitled to vote (except as expressly required by California law) and (iv) automatically convert into Common Stock,
on a share for share basis, upon the later to occur of FFO per Common Share aggregating $3.00 during any period of four consecutive calendar
quarters or January 1, 2003.
For these purposes FFO means net income (loss) (computed in accordance with generally accepted accounting principles) before (i) gain (loss)
on early extinguishment of debt, (ii) minority interest in income and (iii) gain (loss) on disposition of real estate, adjusted as follows: (i) plus depre-
ciation and amortization (including the Company’s pro-rata share of depreciation and amortization of unconsolidated equity interests and amorti-
zation of assets acquired in the Merger, including property management agreements and goodwill), and (ii) less FFO attributable to minority
interest. For these purposes, FFO per Common Share means FFO less preferred stock dividends (other than dividends on convertible preferred
stock) divided by the outstanding weighted average shares of Common Stock assuming conversion of all outstanding convertible securities and
the Class B Common Stock.
For these purposes, FFO per share of Common Stock (as defined) was $1.86 for the year ended December 31, 1996.
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. At December 31, 1996, the Company had no outstanding
shares of Equity Stock.
Dividends
The 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 1996, 1995
and 1994 were characterized as ordinary income.
The following summarizes dividends paid during 1996, 1995 and 1994 (with the exception of the Series G Preferred Stock distributions which were
accrued and unpaid at December 31, 1995):
1996 1995 1994
(In thousands, except per share data) Per share Total Per share Total Per share Total
Series A $ 2.500 $ 4,563 $ 2.500 $ 4,563 $ 2.500 $ 4,563
Series B 2.300 5,488 2.300 5,488 2.300 5,340
Series C 1.840 2,212 1.970 2,364 1.042 1,250
Series D 2.375 2,850 2.375 2,850 0.792 950
Series E 2.500 5,488 2.292 5,030 – –
Series F 2.437 5,606 1.618 3,721 – –
Series G 2.219 15,479 0.092 638 – –
Series H 1.978 13,348 – – – –
Series I .359 1,438 – – – –
Convertible 2.063 4,679 2.063 4,744 2.063 4,743
Series CC 97.500 5,748 – – – –
Mandatory Convertible Participating $54.487 1,700 $55.322 1,726 – –
68,599 31,124 16,846
Common $ 0.880 67,709 $ 0.880 38,586 $ 0.850 21,249
$136,308 $69,710 $38,095
The dividend rate on the Series C Preferred Stock is adjusted quarterly and is equal to the highest of one of three U.S. Treasury indices (Treasury
Bill Rate, Ten-Year Constant Maturity Rate, and Thirty-Year Constant Maturity Rate) multiplied by 110%. However, the dividend rate for any