Public Storage 2002 Annual Report Download - page 58

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On March 17, 2000, one of our consolidated operating partnerships issued $240.0 million of 9.5% Series N
Cumulative Redeemable Perpetual Preferred Units. On March 29, 2000 the partnership issued $75.0 million of
9.125% Series O Cumulative Redeemable Perpetual Preferred Units and on August 11, 2000, issued $50.0 million
of 8.75% Series P Cumulative Redeemable Perpetual Preferred Units. In August 2001, we repurchased, at par, $30
million of 9.125% Series O Cumulative Redeemable Perpetual Preferred Units. In October 2001, we repurchased, at
par, $50 million of 8.75% Series P Cumulative Redeemable Perpetual Preferred Units. For the years ended
December 31, 2000, 2001, and 2002, the holders of our preferred partnership units were paid in aggregate
approximately $24,859,000, $31,737,000 and $26,906,000, respectively, in distributions and received a
corresponding allocation of minority interest in earnings for the respective period. We estimate that during 2003 we
will pay aggregate distributions totaling $26.9 million to these units with a corresponding allocation of income to
minority interest in earnings.
In November 1999, we formed a development joint venture (the “Consolidated Development Joint
Venture”) with a joint venture partner whose partners include an institutional investor and the Company’s Chairman
and former CEO, B. Wayne Hughes (“Mr. Hughes”). The Consolidated Development Joint Venture is funded solely
with equity capital consisting of 51% from the Company and 49% from the joint venture partner. Included in
minority interest in income for the years ended December 31, 2000, 2001, and 2002 is $325,000, $1,074,000, and
$2,399,000, respectively, representing our joint venture partner’s pro rata interest in the operations of the
Consolidated Development Joint Venture. The facilities in the entity are newly developed facilities that are all in the
fill-up phase. The increase in minority interest in income in 2002 and 2001 as compared to the preceding years with
respect to the Consolidated Development Joint Venture is due to the opening and fill-up of the facilities owned by
this entity. We expect that such minority interest in income will continue to increase during 2003 as the facilities
continue to fill-up and increase the earnings of this entity.
Newly Consolidated Partnerships reflect the minority interests in two partnerships that we began
consolidating effective January 1, 2002, as described in Note 3 to the consolidated financial statements. In addition,
as described in Note 8, during 2002 we recorded the pending sale of a partnership interest in the Newly
Consolidated Partnerships, and for all periods following the sale of this interest, income will be allocated to these
interests.
The acquired minority interests reflect interests in the consolidated entities that the Company acquired in
the three years ended December 31, 2002 and are therefore no longer outstanding. There will be no further income
allocated to these interests in 2003 and beyond.
Other minority interests reflect income allocated to minority interests that have maintained a consistent
level of interest throughout the three years ended December 31, 2002, comprised of investments in the Consolidated
Entities and the Operating Partnership Units described in Note 9 to the Company’s financial statements. The level
of income allocated to these interests in the future is dependent upon the operating results of the storage facilities
that these entities own, as well as any acquisitions of minority interests that the Company does in the future. We
recently mailed an information statement relating to the April 28, 2003 acquisition by the Company of all of the
remaining limited partnership interest not currently owned by the Company in PS Partners IV, Ltd., a partnership
which is consolidated with the Company, for an aggregate of $23,360,000. Included in minority interest in income
for the year ended December 31, 2002, with respect to these interests was approximately $1,412,000 including
$685,000 in depreciation expense. If completed, the transaction would have the effect of reducing minority interest
in income on a go forward basis. See Acquisition and Development of Facilities below.
Discontinued Operations: As described more fully in the Note 4 to the consolidated financial statements,
we implemented a business plan which included the closure of certain non-strategic containerized storage facilities
(the “Closed Facilities”). Also, we sold one of our commercial facilities to a third party for an aggregate $3.9
million in cash.