Public Storage 2002 Annual Report Download - page 63

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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.
Capital Improvement Requirements: During 2003, we have budgeted approximately $25.0 million for
capital improvements. Capital improvements include major repairs or replacements to the facilities which keep the
facilities in good operation condition and maintain their visual appeal. Capital improvements do not include costs
relating to the development or expansion of facilities.
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, 2002, we had total outstanding notes payable of
approximately $115.9 million. See Note 7 to the consolidated financial statements for approximate principal
maturities of such borrowings. We anticipate that our retained operating cash flow will continue to be sufficient to
enable us to make scheduled principal payments. It is our current intent to fully amortize our debt as opposed to
refinance debt maturities with additional debt.
Acquisition and Development of Facilities: During 2002, we acquired nine self-storage facilities for
approximately $30.1 million. During 2001, we acquired one self-storage facility for approximately $3.5 million.
During 2000, we acquired a commercial facility and 12 storage facilities at an aggregate cost of approximately $67.1
million. Our low level of third party acquisitions over the past three years is not indicative of either the supply of
facilities offered for sale or our ability to finance the acquisitions, but is primarily due to prices sought by sellers and
our lack of desire to pay such prices. During fiscal 2003, we will continue to seek to acquire additional self-storage
facilities from third parties, however, it is difficult to estimate the amount of third party acquisitions we will
undertake.
On January 16, 2002, we acquired the remaining 70% interest in the Development Joint Venture for
approximately $153,078,000 in cash. The Development Joint Venture was formed in April 1997 with equity capital
consisting of 30% from the Company and 70% from an institutional investor, which owns 47 storage facilities
opened since 1997. This transaction was principally financed with the capital raised through the issuance of our
7.625% Cumulative Preferred Stock, Series T. On April 19, 2002, we acquired through a merger all of the
remaining limited partnership interest not currently owned by the Company in PS Partners V, Ltd., a partnership
which is consolidated with the Company. The acquisition cost consisted of approximately 533,796 shares
($20,054,000) of our common stock and approximately $12,815,000 in cash. On September 19, 2002, we acquired
through a merger all of the remaining limited partnership interest not currently owned by the Company in PS
Partners VI, Ltd., a partnership which is consolidated with the Company. The acquisition cost consisted of
approximately 557,812 shares ($17,850,000) of our common stock and approximately $12,347,000 in cash.
On September 15, 2000, we acquired the remaining ownership interests in an affiliated partnership, of
which we were the general partner, for an aggregate acquisition cost of $81.2 million. This partnership owned 13
self-storage facilities.
We recently mailed an information statement relating to the April 28, 2003 acquisition by the Company of
all of the 52,851 limited partnership units that it did not own in PS Partners IV, Ltd., a partnership which is
consolidated with the Company. The acquisition of the 52,851 units will be accomplished through a merger of a
subsidiary of the Company into the partnership and the conversion of the 52,851 units into either cash or common
stock of the Company. Each unit will be converted into the right to receive a value of $442 in our common stock or,
at the election of the unitholder, in cash. We expect that the cash portion of the transaction will be funded by
available cash on hand or, if necessary, borrowings on our line of credit.
In November 1999, we formed a second joint venture partnership for the development of approximately
$100 million of self-storage facilities. The venture is funded solely with equity capital consisting of 51% from us
and 49% from the joint venture partner. The term of the joint venture is 15 years. After six years, the joint venture
partner has the right to cause the Company to purchase the joint venture partner’s interest for an amount necessary to
provide them with a maximum return of 10.75% or less in certain circumstances. At December 31, 2002, this
development joint venture was fully committed having developed 22 facilities (approximately 1,413,000 net rentable
sq. ft.) for $108 million.