Public Storage 1999 Annual Report Download - page 27

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U B LI C T O RAG E,N C . 1999 N N UAL RE P O RT
The 10.55% mortgage notes consist of five notes, which are cross-collateralized by 19 properties and are due to a life insurance company.
Although there is a negative spread between the carrying value and the estimated fair value of the notes, the notes provide for the prepayment
of principal subject to the payment of penalties, which exceed this negative spread. Accordingly, prepayment of the notes at this time would not
be economically practicable.
Mortgage notes payable are secured by 24 real estate facilities having an aggregate net book value of approximately $50.1 million at
December 31, 1999.
At December 31, 1999, approximate principal maturities of notes payable are as follows:
Unsecured
(In thousands) Senior Notes Mortgage debt Total
2000 $ 8,750 $ 2,622 $ 11,372
2001 9,500 2,910 12,410
2002 24,450 3,530 27,980
2003 35,900 3,585 39,485
2004 25,800 15,063 40,863
Thereafter 33,600 1,628 35,228
$138,000 $29,338 $167,338
Weighted average rate 7.4% 10.3% 7.9%
Interest paid (including interest related to the borrowings on the Credit Facility) during 1999, 1998 and 1997 was $12,528,000, $7,690,000
and $8,884,000, respectively. In addition, in 1999, 1998 and 1997, the Company capitalized interest totaling $4,509,000, $3,481,000 and
$2,428,000, respectively, related to construction of real estate facilities.
OTE 8. Minority Interest
In consolidation, we classify ownership interests in the net assets of each of the Consolidated Entities, other than our own, as minority interest
on the consolidated financial statements. Minority interest in income consists of the minority interests’share of the operating results of the
Company relating to the consolidated operations of the Consolidated Entities.
In connection with the merger with Storage Trust, minority interest increased by approximately $27,009,000, reflecting the fair value of
1,011,963 operating partnership units (“OP Units”) in Storage Trust’s operating partnership owned by minority interests. As of December 31,
1999, 770,892 of such units are outstanding. OP Units are convertible on a one-for-one basis (subject to certain limitations) into common
shares of the Company at the option of the unitholder. Minority interest in income with respect to OP Units reflects the OP Units’ share of
the net income of the Company, with net income allocated to minority interests with respect to weighted average outstanding OP Units on a
per unit basis equal to diluted earnings per common share. During the year ended December 31, 1999, 241,071 OP units were exchanged for
an equal number of shares of the Company’s common stock, for a total cost of approximately $6,434,000. These transactions had the effect of
reducing minority interest by approximately $6,434,000.
In addition to the above, during 1999, we acquired limited partnership interests in certain of the Consolidated Entities in several transactions
for an aggregate cost of $76,873,000, consisting of approximately $36,846,000 in cash and $40,027,000 in the issuance of common stock.
These transactions had the effect of reducing minority interest by approximately $31,126,000.The excess of the cost over the underlying book
value ($45,747,000) has been allocated to real estate facilities in consolidation. In 1998 and 1997, the Company acquired interests in the
Consolidated Entities at an aggregate cost of $48,753,000 and $21,559,000, respectively, reducing minority interest by approximately
$25,640,000 and $12,655,000, respectively. The excess of cost over underlying book values ($23,293,000, and $8,904,000 in 1998 and 1997,
respectively) was allocated to real estate facilities in consolidation.
During 1999, 1998 and 1997, in connection with certain business combinations (Note 3) minority interest was increased by $32,201,000,
$35,210,000 and $74,068,000, respectively, representing the remaining partners’equity interests in the aggregate net assets of the
Consolidated Entities.