Public Storage 1999 Annual Report Download - page 50

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Despite difficult capital markets, we were able to publicly issue $286.3 million of preferred stock during 1999. In addition, on March 17,
2000, we issued $240.0 million of our 9.5% Series N Cumulative Redeemable Perpetual Preferred Units in one of our operating partnerships
in a private placement. Further, on March 29, 2000, we issued $75.0 million of our 9.125% Series O Cumulative Redeemable Perpetual
Preferred Units in one of our operating partnerships in a private placement. Under certain conditions, the preferred partnership units are
convertible into preferred stock of the Company.
Like many other R EITs, we are both unwilling and unable to issue shares of our Common Stock publicly under the current market
conditions. Concurrent with the special distribution, discussed below, we publicly issued 2,100,000 depositary shares of Equity Stock, Series A,
raising net proceeds of approximately $40.0 million. The proceeds were used, in part, to pay for the cash elections of the special distribution.
Distribution requirements: Our conservative distribution policy has been the principal reason for the Company’s ability to retain significant
operating cash flows which have been used to make additional investments and reduce debt. During 1997, 1998 and 1999, we paid regular
cash distributions to common shareholders of approximately 44%, 39% and 34% of our cash available from operations allocable to common
shareholders, respectively. For 1999, when factoring in the total special distribution, we distributed approximately 58% of our cash available
from operations allocable to common shareholders.
On November 4, 1999, the Board of Directors declared a special distribution payable on January 14, 2000 to common shareholders of
record on November 15, 1999. At the election of each shareholder, the distribution was payable in either (1) $0.65 per share in depositary
shares, each representing 1/ 1,000 of a share of Equity Stock, Series A or (2) $0.62 per share in cash. O n January 14, 2000, approximately
$38.1 million was paid in cash and $44.0 million of depositary shares were issued to our common shareholders in connection with this
special distribution.
During 1999, we paid dividends totaling $94,793,000 to the holders of our Senior Preferred Stock, $113,297,000 in regular distributions to
the holders of Common Stock and a special cash distribution to the holders of Common Stock totaling $82,086,000 that was accrued but not
paid at December 31, 1999.We estimate that the distribution requirements for fiscal 2000 with respect to Senior Preferred Stock outstanding
at December 31, 1999 to be approximately $100.1 million.With respect to the preferred operating partnership units issued on March 17, 2000,
the Company estimates the annual distribution requirement to be approximately $22.8 million.
Distributions with respect to the Common Stock and Equity Stock, Series A will be determined based upon our R EIT distribution
requirements after taking into consideration distributions to the preferred shareholders.With respect to the depositary shares of Equity Stock,
Series A, we have no obligation to pay distributions if no distributions are paid to the common shareholders. To the extent that we do pay
common distributions in any year, the holders of the depositary shares receive the lesser of (i) five times the per share dividend on the common
stock or (ii) $2.45. The depositary shares are noncumulative, and have no preference over our Common Stock either as to dividends or in
liquidation. Assuming that we pay at least $0.49 in common dividends in any year, we will pay a total of $10.5 million in distributions to the
holders of the 4,300,555 shares of Equity Stock, Series A during 2000.
Including the special distribution declared on November 4, 1999, we distributed a total of approximately $195.4 million to common
shareholders, or approximately $1.52 per common share, in 1999. Assuming a continuation of increasing level of taxable income, we expect
that we will have similar distribution requirements in the year 2000.
Capital improvement requirements: During 2000, we have budgeted approximately $26.2 million for capital improvements. The minority
interests’ share of the budgeted capital improvements is approximately $0.7 million.
Debt service requirements: We do not believe we have any significant refinancing risks with respect to our mortgage debt, all of which is
fixed rate. At December 31, 1999, we had total outstanding notes payable of approximately $167.3 million. See Note 7 to the consolidated
financial statements for approximate principal maturities of such borrowings. In connection with the March 1999 merger with Storage Trust,
we assumed $100 million of notes payable. Approximately $14.7 million, $25.9 million and $25.8 million in principal payments with respect
to these notes are due in 2002, 2003 and 2004, respectively, with the remainder due after 2004.
U B L I C T O R A G E ,N C . 1999 N N U A L RE P O R T