Public Storage 2003 Annual Report Download - page 86

Download and view the complete annual report

Please find page 86 of the 2003 Public Storage annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 169

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169

PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
F-7
1. Description of the business
Public Storage, Inc. (the Company) is a California corporation, which was organized in 1980. We
are a fully integrated, self-administered and self-managed real estate investment trust (REIT) whose principal
business activities include the acquisition, development, ownership and operation of self-storage facilities which
offer storage spaces for lease, usually on a month-to-month basis, for personal and business use. In addition, to
a much lesser extent, we have interests in commercial properties, containing commercial and industrial rental
space, and interests in facilities that lease storage containers.
We invest in real estate facilities by acquiring wholly owned facilities or by acquiring interests in real
estate entities which own facilities. At December 31, 2003, we had direct and indirect equity interests in 1,410
storage facilities located in 37 states and operating under the Public Storage name. We also have direct and
indirect equity interests in approximately 20.1 million net rentable square feet of commercial space located in
10 states.
2. Summary of significant accounting policies
Basis of presentation
The consolidated financial statements include the accounts of the Company and 38 controlled entities
(the Consolidated Entities). Collectively, the Company and the Consolidated Entities own a total of 1,382
real estate facilities, consisting of 1,374 self-storage facilities, five industrial facilities used by the containerized
storage operations and three commercial properties.
At December 31, 2003, we had equity investments in seven limited partnerships in which we do not
have a controlling interest. These limited partnerships collectively own 36 self-storage facilities, which are
managed by the Company. In addition, we own approximately 44% of the common equity of PS Business
Parks, Inc. (PSB), which owns and operates 18.3 million net rentable square feet of commercial space as of
December 31, 2003. We do not control these entities, accordingly, our investments in these limited partnerships
and PSB (these entities are referred to collectively as the Unconsolidated Entities) are accounted for using the
equity method.
Use of estimates
The preparation of the consolidated financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ
from those estimates.
Income taxes
For all taxable years subsequent to 1980, the Company qualified and intends to continue to qualify as a
REIT, as defined in Section 856 of the Internal Revenue Code. As a REIT, we are not taxed on that portion of
our taxable income which is distributed to our shareholders provided that we meet certain tests. We believe we
have met these tests during 2003, 2002 and 2001; accordingly, no provision for income taxes has been made in
the accompanying financial statements.