Public Storage 2004 Annual Report Download - page 9
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Financing
During the first quarter of 2005, we completed the major planned refinancing of our high
coupon preferreds, which we started last year about this time. Upon completion, our $2.4 billion
of outstanding preferred equities will have a blended cost of about 7 percent. We will see
the benefits of this program in 2005, which will be partially offset by some possible pre-
funding for potential 2006 redemptions. In 2006, we have an opportunity to redeem three
large preferred stock issues totaling approximately $825 million at a blended rate of 8.1 percent,
assuming a favorable rate environment.
With respect to our financial reporting, internal controls and Sarbanes-Oxley, we are happy to
report that our financial team, lead by John Reyes, did an absolutely superb job. We hired no
consultants or special advisors. Existing personnel under the direction of Todd Andrews, our
exceptional Controller, performed all compliance work and testing and we received a “clean
opinion” from our auditors.
Conclusion
During 2004, two long-time competitors went “public” via IPO’s. The self-storage industry
is gaining broader investor acceptance along with the Real Estate Investment Trust (REIT)
industry. This is positive for our owners and management. Good competition will hopefully
better enable us to generate growing returns on invested capital.
In 2005, we will continue to differentiate ourselves from the competition and continue our
focus on People, Product and Pricing, with the objective of long-term, sustained growth in
earnings and cash flow per share. With our focus on the three P's, we believe we are well
positioned to maintain our leadership role in the self-storage industry.
Ronald L. Havner, Jr.
Vice-Chairman and Chief Executive Officer
Harvey Lenkin
President and Chief Operating Officer
March 22, 2005