SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the fiscal year ended December 31, 2001
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to .
----------------- -----------------
Commission File Number: 1-8389
------
PUBLIC STORAGE, INC.
--------------------
(Exact name of registrant as specified in its charter)
California 95-3551121
---------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
701 Western Avenue, Glendale, California 91201-2349
---------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080.
--------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
--------------------------------------------------------------------------------- -------------------------------
10% Cumulative Preferred Stock, Series A, $.01 par value........................ New York Stock Exchange
9.20% Cumulative Preferred Stock, Series B, $.01 par value...................... New York Stock Exchange
Adjustable Rate Cumulative Preferred Stock, Series C, $.01 par value............ New York Stock Exchange
9.50% Cumulative Preferred Stock, Series D, $.01 par value...................... New York Stock Exchange
10% Cumulative Preferred Stock, Series E, $.01 par value........................ New York Stock Exchange
9.75% Cumulative Preferred Stock, Series F, $.01 par value...................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8% Cumulative
Preferred Stock, Series J, $.01 par value.................................. New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4% Cumulative
Preferred Stock, Series K, $.01 par value.................................. New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4% Cumulative
Preferred Stock, Series L, $.01 par value.................................. New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8.75% Cumulative
Preferred Stock, Series M, $.01 par value.................................. New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8.600% Cumulative
Preferred Stock, Series Q, $.01 par value.................................. New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 8.000% Cumulative
Preferred Stock, Series R, $.01 par value.................................. New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.875% Cumulative
Preferred Stock, Series S, $.01 par value.................................. New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative
Preferred Stock, Series T, $.01 par value.................................. New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.625% Cumulative
Preferred Stock, Series U, $.01 par value.................................. New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock,
Series A, $.01 par value................................................... New York Stock Exchange
Common Stock, $.10 par value.................................................... New York Stock Exchange,
Pacific Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
----
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ X ] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. [ ]
The aggregate market value of the voting stock held by non - affiliates of the
registrant as of March 14, 2002:
Common Stock, $0.10 Par Value - $2,821,619,000 (computed on the basis of $37.36
per share which was the reported closing sale price of the Company's Common
Stock on the New York Stock Exchange on March 14, 2002).
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series
A, $.01 Par Value - $178,121,000 (computed on the basis of $27.25 per share
which was the reported closing sale price of the Depositary Shares Each
Representing 1/1,000 of a Share of Equity Stock, Series A on the New York Stock
Exchange on March 14, 2002).
The number of shares outstanding of the registrant's classes of common stock as
of March 14, 2002:
Common Stock, $.10 Par Value - 115,244,143 shares
-------------------------------------------------
Class B Common Stock, $.10 Par Value - 7,000,000 shares
-------------------------------------------------------
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series
------------------------------------------------------------------------------
A, $.01 Par Value - 8,776,102 depositary shares (representing 8,776,102 shares
------------------------------------------------------------------------------
of Equity Stock, Series A)
--------------------------
Equity Stock, Series AA, $.01 Par Value - 225,000 shares
--------------------------------------------------------
Equity Stock, Series AAA, $.01 Par Value - 4,289,544 shares
-----------------------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement to be filed in connection with the
annual shareholders' meeting to be held in 2002 are incorporated by reference
into Part III.
2
PART I
ITEM 1. Business
Forward Looking Statements
--------------------------
When used within this document, the words "expects," "believes,"
"anticipates," "should," "estimates," and similar expressions are intended to
identify "forward-looking statements" within the meaning of that term in Section
27A of the Securities Exchange Act of 1933, as amended, and in Section 21F of
the Securities Exchange Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks, uncertainties, and other factors, which may
cause the actual results and performance of the Company to be materially
different from those expressed or implied in the forward looking statements.
Such factors are described in Item 1A, "Risk Factors" and include the impact of
competition from new and existing storage and commercial facilities, which could
impact rents and occupancy levels at the Company's facilities; the Company's
ability to evaluate, finance and integrate acquired and developed properties
into the Company's existing operations; the Company's ability to effectively
compete in the markets that it does business in; the impact of the regulatory
environment as well as national, state, and local laws and regulations
including, without limitation, those governing Real Estate Investment Trusts;
the acceptance by consumers of the containerized storage concept; the impact of
general economic conditions upon rental rates and occupancy levels at the
Company's facilities; and the availability of permanent capital at attractive
rates.
General
-------
Public Storage, Inc. (the "Company") is an equity real estate
investment trust ("REIT") organized as a corporation under the laws of
California on July 10, 1980. We are a fully integrated, self-administered and
self-managed real estate investment trust ("REIT") that acquires, develops, owns
and operates storage facilities. We are the largest owner and operator of
storage space in the United States with direct and indirect equity investments
in 1,384 storage facilities containing approximately 83.7 million square feet of
net rentable space at December 31, 2001. Our common stock is traded on the New
York Stock Exchange under the symbol "PSA". We also have a significant ownership
in PS Business Parks, Inc., which, as of December 31, 2001, owned and operated
commercial properties containing approximately 14.8 million net rentable square
feet of space. PS Business Parks, Inc. is a public REIT whose common stock
trades on the American Stock Exchange under the symbol "PSB."
We have elected to be taxed as a REIT under the Internal Revenue Code
of 1986, as amended. To the extent that the Company continues to qualify as a
REIT, it will not be subject to tax, with certain limited exceptions, on the
taxable income that is distributed to our shareholders.
The Company has reported annually to the Securities and Exchange
Commission on Form 10-K, which includes financial statements certified by
independent public accountants. The Company has also reported quarterly to the
Securities and Exchange Commission on Form 10-Q, and includes unaudited
financial statements with such filings. The Company expects to continue such
reporting.
Management
----------
Our senior management team is headed by B. Wayne Hughes (68), who is
Chairman and Chief Executive Officer. Mr. Hughes established the Public Storage
Organization in 1972 and has managed the Company through several market cycles.
Our executive management includes: Harvey Lenkin (65), President; John Reyes
(41), Senior Vice President and Chief Financial Officer; Carl B. Phelps (63),
Senior Vice President and General Counsel; and Marvin M. Lotz (59), Senior Vice
President - Operations.
Our senior management has a significant ownership position in the
Company with executive officers, directors and their families owning
approximately 39.7 million shares or 34.5% of the common stock as of March 14,
2002.
3
Investment Objective
--------------------
Our primary objective is to maximize shareholder value through internal
growth (by increasing funds from operations and cash available for distribution)
and acquisitions of additional real estate investments. We believe that our
access to capital, geographic diversification and operating efficiencies
resulting from our size will enhance our ability to achieve this objective.
Competition
-----------
Competition in the market areas in which we operate is significant and
affects the occupancy levels, rental rates and operating expenses of certain of
our facilities. Recent openings of newly developed storage facilities have
intensified the competition among storage operators in many market areas in
which we operate. Over the past year, however, we believe that the development
of new storage facilities in many of the markets in which we operate has
decreased.
In seeking investments, we compete with a wide variety of institutions
and other investors. An increase in the amount of funds available for real
estate investments may increase competition for ownership of interests in
facilities and may reduce yields.
We believe that the significant operating and financial experience of
our executive officers and directors, combined with the Company's capital
structure, national investment scope, geographic diversity, economies of scale
and the "Public Storage" name, should enable us to continue to compete
effectively with other entities.
In recent years consolidation has occurred in the fragmented storage
industry. In addition to the Company, there are three other publicly traded
REITs and numerous private regional and local operators operating in the storage
industry. We believe that we are well positioned to capitalize on this
consolidation trend due to our demonstrated access to capital and national
presence.
Business Attributes
-------------------
We believe that the Company possesses several primary business
attributes which permit us to compete effectively:
COMPREHENSIVE DISTRIBUTION SYSTEM AND NATIONAL TELEPHONE RESERVATION
SYSTEM: Our facilities are part of a comprehensive distribution system
encompassing standardized procedures, integrated reporting and information
networks and centralized marketing. This distribution system is designed to
maximize revenue through pricing and occupancy.
A significant component of our distribution system is our national
telephone reservation center, which was implemented in 1996 and 1997 in order to
provide added customer service and maximize utilization of available self -
storage space. Customers calling either the toll-free telephone referral system,
(800) 44-STORE, or a storage facility, are directed to the national reservation
system. A representative discusses with the customer space requirements, price
and location preferences and also informs the customer of other products and
services provided by the Company and its subsidiaries. We believe that the
national telephone reservation system has enhanced our ability to effectively
market storage space.
CONTAINERIZED STORAGE OPTION: Historically, we offered storage spaces
for rent through our traditional self-storage facilities whereby customers would
transport their goods to the facility and rent a space to store their goods. In
late 1996, we organized Public Storage Pickup and Delivery, Inc. as a separate
corporation and a related partnership (the corporation and partnership are
collectively referred to as "PSPUD") to operate storage facilities that rent
portable storage containers to customers for storage in central facilities.
4
The concept of PSPUD is to provide an alternative to a traditional
self-storage facility. PSPUD delivers a storage container(s) to the customer's
location where the customer, at his convenience, packs his goods into the
storage container. PSPUD will subsequently return to the customer's location to
retrieve the storage container(s) for storage in a central facility. At December
31, 2001, PSPUD had 55 facilities in operation.
RETAIL OPERATIONS: The Company has historically sold retail items
associated with the storage business and rented trucks at its storage
facilities. In order to further supplement and strengthen the existing
self-storage business by further meeting the needs of storage customers, the
Company has expanded its retail activities over the last few years.
In addition, full-service retail stores have been retrofitted to some
existing storage facility rental offices or "built-in" as part of the
development of new storage facilities, both in high traffic, high visibility
locations. The strategic objective of these retail stores is to provide a retail
environment to (i) rent spaces for the attached storage facility, (ii) rent
spaces for the other Public Storage facilities in adjacent neighborhoods, (iii)
sell locks, boxes and packing materials and (iv) rent trucks and other moving
equipment.
TENANT INSURANCE PROGRAM: On December 31, 2001, the Company purchased
all of the capital stock of PS Insurance Company, Ltd., from Mr. Hughes and
members of his family. This insurance company reinsures policies against losses
to goods stored by tenants in the Company's storage facilities. This subsidiary
receives the premiums and bears the risks associated with the re-insurance. The
Company believes that this insurance operation will continue to further
supplement and strengthen the existing self-storage business and provide an
additional source of earnings for the Company. Prior to December 31, 2001, PS
Insurance Company, Ltd., was owned by Mr. Hughes and members of his family.
ECONOMIES OF SCALE: We are the largest provider of storage space in the
industry. As of December 31, 2001, we operated 1,384 storage facilities in which
we had an interest and managed 30 storage facilities for third parties in 37
states. At December 31, 2001, we had over 659,000 spaces rented. The size and
scope of the operations have enabled us to achieve a high level of profit
margins and low level of administrative costs relative to revenues.
BRAND NAME RECOGNITION: Our operations are conducted under the "Public
Storage" brand name, which we believe is the most recognized and established
name in the storage industry. Our storage operations are conducted in 37 states,
giving us national recognition and prominence. We focus our operations within
those states in the major metropolitan markets. This concentration establishes
us as one of the largest providers of storage space in each market that we
operate in and enables us to use a variety of promotional activities, such as
television advertising as well as targeted discounting and referrals which are
generally not economically viable for most of our competitors.
Growth and Investment Strategies
--------------------------------
Our growth strategies consist of: (i) improving the operating
performance of our stabilized existing traditional self-storage properties, (ii)
acquiring additional interests in entities that own properties operated by the
Company, (iii) acquiring interests in properties that are owned or operated by
others, (iv) developing properties in selected markets, (v) improving the
operating performance of the containerized storage operations, and (vi)
participating in the growth of PS Business Parks, Inc. These strategies are
described as follows:
IMPROVE THE OPERATING PERFORMANCE OF EXISTING PROPERTIES: We seek to
increase the net cash flow generated by our existing stabilized traditional
self-storage properties by a) regularly evaluating our call volume, reservation
activity, and move-in/move-out rates for each of our markets relative to our
marketing activities, b) evaluating market supply and demand factors and based
upon these analyses adjusting our marketing activities and rental rates, c)
attempting to maximize revenues through evaluating the appropriate balance
between occupancy and rental rates, and d) controlling expense levels. We
believe that our property management personnel and systems combined with the
national telephone reservation system will continue to enhance our ability to
meet these goals.
5
ACQUIRE PROPERTIES OPERATED AND PARTIALLY OWNED BY THE COMPANY: In
addition to our wholly owned storage facilities, we operate storage facilities
on behalf of other entities in which we have partial equity interests. From time
to time, interests in these storage facilities are available for purchase,
providing us with a source of additional acquisition opportunities. We believe
these properties include some of the better-located and better-constructed
storage facilities in the industry. Because we manage these properties, we have
reliable operating information prior to acquisition and these properties are
easily integrated into our portfolio. The amount of such potential acquisition
opportunities has decreased over the last several years as we have continued to
acquire such interests. Such potential remaining acquisition opportunities
include the remaining equity interests that we do not own in the entities
described as "Other Equity Investments" in Note 5 to the Company's financial
statements, as well as the "Other Partnership Interests" in Note 8 to the
Company's financial statements for the year ended December 31, 2001.
ACQUIRE PROPERTIES OWNED OR OPERATED BY OTHERS: We believe our presence
in and knowledge of substantially all of the major markets in the United States
enhances our ability to identify attractive acquisition opportunities and
capitalize on the overall fragmentation in the storage industry. We maintain
local market information on rates, occupancy and competition in each of the
markets in which we operate.
With the exception of the March 1999 merger with Storage Trust, our
investments in additional facilities have primarily been through development,
rather than acquisitions of real estate facilities. We believe the development
of real estate facilities described below is more attractive under current
market conditions.
DEVELOP PROPERTIES IN SELECTED MARKETS: Since 1995, the Company and its
joint venture partnerships (described below) have opened a total of 104
facilities, including 19 facilities in 1998, 24 facilities in 1999, 27
facilities in 2000 and 23 facilities in 2001. As of December 31, 2001, the
Company and the second joint venture partnership have a development "pipeline"
of 46 self-storage facilities, combination facilities (described below), and
expansions to existing storage facilities with an aggregate estimated cost of
approximately $298.4 million. Development of these facilities is subject to
significant contingencies such as obtaining appropriate governmental agency
approvals. The Company continues to seek attractive sites for development of
additional storage facilities.
In April 1997, we formed PSAF Development Partners, L.P., a joint
venture partnership with a third party institutional investor to participate in
the development of approximately $220 million of storage facilities. At December
31, 2000, the joint venture had completed construction of 47 storage facilities
with a total cost of approximately $232 million and was fully committed. The
joint venture was funded solely with equity capital consisting of 30% from the
Company and 70% from the institutional investor. We acquired our joint venture
partner's interest in this entity in January, 2002.
In November 1999, we formed PSAC Development Partners, L.P., a second
joint venture partnership with a joint venture partner (PSAC Storage Investors,
LLC) whose partners include a third party institutional investor, owning
approximately 35% , and Mr. Hughes, owning approximately 65%, to develop
approximately $100 million of storage facilities. At December 31, 2001, PSAC
Development Partners, L.P had completed construction on 20 storage facilities
with a total cost of approximately $96.0 million, and had two facilities under
construction with an aggregate cost incurred of approximately $11.0 million and
total additional estimated cost to complete of approximately $0.7 million.
PSAC Development Partners, L.P is funded solely with equity capital
consisting of 51% from the Company and 49% from PSAC Storage Investors, LLC. The
term of the Consolidated Development Joint Venture is 15 years; however, during
the sixth year PSAC Storage Investors, LLC has the right to cause an early
termination of PSAC Development Partners, L.P. If PSAC Storage Investors, LLC
exercises this right, we then have the option, but not the obligation, to
acquire their interest for an amount that will allow them to receive an annual
return of 10.75%. If the Company does not exercise its option to acquire PSAC
Storage Investors, LLC's interest, PSAC Development Partners, L.P's assets will
be sold to third parties and the proceeds distributed to the Company and PSAC
Storage Investors, LLC in accordance with the partnership agreement. If PSAC
Storage Investors, LLC does not exercise its right to early termination during
the sixth year, the partnership will be liquidated 15 years after its formation
with the assets sold to third parties and the proceeds distributed to the
Company and PSAC Storage Investors, LLC in accordance with the partnership
agreement.
6
PSAC Storage Investors, LLC provides Mr. Hughes with a fixed yield of
approximately 8.0% per annum on his preferred non-voting interest (representing
an investment of approximately $64.1 million at December 31, 2001). In addition,
Mr. Hughes can receive up to 1% of cash flow of the Partnership (estimated to be
less than $50,000 per year) if PSAC Storage Investors, LLC elects an early
termination. If PSAC Storage Investors, LLC does not elect to cause an early
termination, Mr. Hughes' 1% interest can increase to up to 10%.
IMPROVE THE OPERATING PERFORMANCE OF CONTAINERIZED STORAGE OPERATIONS:
PSPUD operates the containerized storage operations. At December 31, 2001, PSPUD
operated 55 facilities. 18 of the facilities are leased from third parties,
while 37 of the facilities are owned by the Company or PSPUD. Substantially all
of these 37 owned facilities are facilities that combine containerized storage
and traditional miniwarehouse space in the same location ("Combination
Facilities"). We believe that Combination Facilities may offer efficiencies and
a more effective method to meet customers' needs than a stand-alone
containerized storage facility; such Combination Facilities have primarily
replaced facilities which were previously leased from third parties. At December
31, 2001, the Company and PSPUD were developing three more Combination
Facilities which are anticipated to replace three leased facilities in 2002. The
Company currently has no plans to replace the leased facilities that will remain
after completion of the three remaining planned Combination Facilities.
The rate of fill-up varies from facility to facility. As with the
traditional self-storage facilities, PSPUD believes that the containerized
storage business experiences seasonal fluctuations in occupancy levels with
occupancies generally higher in the summer months than in winter months. There
can be no assurance as to the level of PSPUD's expansion, level of gross
rentals, level of move-outs or profitability.
PARTICIPATE IN THE GROWTH OF PS BUSINESS PARKS, INC.: On January 2,
1997, we reorganized our commercial property operations into a separate private
REIT. The private REIT contributed its assets to a newly created operating
partnership (the "Operating Partnership") in exchange for a general partnership
interest and limited partnership interests. During 1997, the Company and certain
partnerships in which the Company has a controlling interest contributed
substantially all of their commercial properties to the Operating Partnership in
exchange for limited partnership interests or to the private REIT in exchange
for common stock. On March 17, 1998, the private REIT merged into Public Storage
Properties XI, Inc., a publicly traded REIT and an affiliate of the Company and
the name of the surviving corporation was changed to PS Business Parks, Inc.
(the REIT and the related Operating Partnership are hereinafter referred to
collectively as "PSB").
The Company and certain partnerships that the Company controls have a
44% common equity interest in PSB as of December 31, 2001, comprised of its
ownership of 5,418,273 shares of common stock and 7,305,355 limited partnership
units in the Operating Partnership. The limited partnership units are
convertible at our option, subject to certain conditions, on a one-for-one basis
into PSB common stock.
At December 31, 2001, PSB owned and operated 14.8 million net rentable
square feet of commercial space located in nine states. PSB also manages the
commercial space owned by the Company and affiliated entities.
In addition to its investment in PSB, the Company and the Consolidated
Entities have direct interests in five commercial facilities with an aggregate
of 385,000 net rentable square feet. In addition, certain of the Company's
self-storage facilities rent commercial space at the same location.
OTHER INVESTING ACTIVITIES: Following are the Company's policies with
respect to certain other investing strategies, each of which may be entered into
without a vote of shareholders:
o Making loans to other entities: The Company has made loans in
connection with the sale of properties, has made short-term loans
to PS Business Parks, Inc. in the last three years and may make
loans to third parties as part of its investment objectives.
However, the Company doesn't expect such items to be a significant
part of its investing activities.
7
o Investing in the securities of other issuers for the purpose of
exercising control: There have been two instances in the past
three years where the Company has invested in the securities of
another publicly-held REIT, one which resulted in control of that
REIT (the merger with Storage Trust in 1999), and one that did
not. The Company may engage in these activities in the future as a
component of its real estate acquisition strategy.
o To underwrite securities of other issuers: The Company has not
engaged in this activity in the last three years, and does not
intend to in the future.
o Short-term investing: The Company has not engaged in investments
in real estate or real estate entities on a short-term basis in
the last three years with the exception of the aforementioned
investments in the securities of other REIT's. Instead,
historically, the Company has acquired real estate assets and held
them for an extended period of time. The Company does not
anticipate any such short-term investments.
o Repurchasing or reacquiring the Company's shares or other
securities: The Board of Directors has authorized the repurchase
from time to time of up to 25,000,000 shares of the Company's
common stock on the open market or in privately negotiated
transactions. Cumulatively through December 31, 2001, we
repurchased a total of 21,486,020 shares of common stock at an
aggregate cost of approximately $535,481,000. In addition, in
2001, we redeemed or repurchased $441,250,000 of our senior
preferred stock and $80,000,000 of our preferred partnership units
for cash, representing a refinancing of these securities into
lower-coupon preferred securities. Any future repurchases of the
Company's common stock will depend primarily upon the
attractiveness of repurchases compared to our other investment
alternatives. Future redemptions or repurchases of the Company's
preferred securities, which will become available for redemption
or repurchase on their respective call dates, will be dependent
upon the spread between market rates and the coupon rates of these
securities.
Financing of the Company's Growth Strategies
--------------------------------------------
Overview of Financing Strategy: Over the past three years we have
funded substantially all of our acquisitions with permanent capital (retained
cash flow as well as common and preferred securities). We have elected to use
preferred securities as a form of leverage despite the fact that the dividend
rates of our preferred securities exceed the prevailing market interest rates
on conventional debt, because of certain benefits described in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources." Our present intent is to continue
to finance our growth with substantially permanent capital.
BORROWINGS: We have in the past used our $200 million line of credit
described below under "Borrowings" as temporary "bridge" financing, and repaid
those amounts with permanent capital. In the last three years, the only
additional long-term debt we have incurred has been assumed in connection with
property acquisitions, most notably the merger with Storage Trust in 1999
wherein we assumed $100 million in senior unsecured notes. While it is not our
present intention to issue debt as a long-term financing strategy, we have
broad powers to borrow in furtherance of our objectives without a vote of the
our shareholders. These powers are subject to a limitation on unsecured
borrowings in the Company's Bylaws described in "Limitations on Borrowings"
below.
ISSUANCE OF SENIOR SECURITIES: The Company has in the last three
years, and expects to continue, to issue additional series of preferred stock
that are senior to the Company's Common Stock and Equity Stock. At December
31, 2001, we had approximately $1.54 billion of preferred stock outstanding.
The preferred stock, which was issued in series, has general preference rights
with respect to liquidation and quarterly distributions. We intend to continue
to issue preferred securities without a vote of our common shareholders.
ISSUANCE OF SECURITIES IN EXCHANGE FOR PROPERTY: The Company has
issued common equity in exchange for real estate and other investments in the
last three years. Future issuances will be dependent upon market conditions at
the time.
8
DEVELOPMENT JOINT VENTURE FINANCING: The Company has entered into two
separate development joint venture partnerships since 1997 in order to provide
development financing. As of December 31, 2001, these joint ventures have
substantially completed their development activities.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Liquidity and Capital Resources."
Investments in Real Estate and Real Estate Entities
---------------------------------------------------
INVESTMENT POLICIES AND PRACTICES WITH RESPECT TO OUR INVESTMENTS:
Following are our investment practices and policies which, though we do not
anticipate any significant alteration, can be changed by the Board of Directors
without a shareholder vote:
o Our investments primarily consist of direct ownership of
self-storage properties (the nature of our self-storage properties
is described in Item 2, "Properties"), as well as partial
interests in entities that own self-storage properties, which are
located in the United States.
o Our investments are acquired both for income and for capital gain.
o Our partial ownership interests primarily reflect general and
limited partnership interests in entities that own self-storage
facilities that are operated by the Company.
o Additional acquired interests in real estate (other than the
acquisition of wholly-owned properties) will be additional common
equity interests in entities in which we already have an interest.
o To a lesser extent, we have interests in existing commercial
properties (described in Item 2, "Properties"), containing
commercial and industrial rental space, primarily through our
investment in PS Business Parks.
o The Company is developing 46 storage facilities, which includes 7
expansions of real estate facilities, for a total cost of $298.4
million. See "Management's discussion and analysis of financial
condition and results of operations - Liquidity and Capital
Resources."
The following table outlines our ownership interest in storage
facilities at December 31, 2001:
Net Rentable Square
Number of Footage of Storage
Storage Facilities
Facilities (in thousands)
---------- -------------------
Consolidated facilities:
Wholly-owned by the company............. 721 44,927
Owned by Controlled Entities............ 549 31,992
---------- -------------------
1,270 76,919
---------- -------------------
Facilities owned by Unconsolidated Entities:
Institutional partnership............... 13 855
Development Joint Venture............... 47 2,879
Other................................... 54 2,998
---------- -------------------
114 6,732
---------- -------------------
Total facilities in which the Company has
an ownership interest................... 1,384 83,651
========== ===================
9
In addition to the Company's interest in storage facilities noted
above, the Company and the Consolidated Entities own five commercial facilities
with an aggregate of 385,000 net rentable square feet. The Company and the
entities it controls also have a 44% common interest in PSB, which at December
31, 2001 owned and operated 14.8 million net rentable square feet of commercial
space.
Facilities Owned by Controlled Entities
---------------------------------------
In addition to our direct ownership of 721 storage facilities, at
December 31, 2001, we had controlling ownership interests in 38 entities owning
in aggregate 549 storage facilities. Because of our controlling interest in each
of these entities, we consolidate the assets, liabilities, and results of
operations of these entities on the Company's financial statements.
Facilities Owned by Unconsolidated Entities
-------------------------------------------
At December 31, 2001, we had ownership interests in PSB and 10 limited
partnerships (collectively the "Unconsolidated Entities"). Our ownership
interest in these entities is less than 50%.
Due to the Company's limited ownership interest and limited control of
these entities, we do not consolidate the accounts of these entities for
financial reporting purposes and account for such investments using the equity
method. PSB, which files financial statements with the Securities and Exchange
Commission, has debt and other obligations that are not included on the
Company's financial statements. The 10 limited partnerships do not have any
significant amounts of debt or other obligations. See Note 5 to the Company's
financial statements for the year ended December 31, 2001 for further disclosure
regarding the assets and liabilities of the Unconsolidated Entities.
The following chart sets forth, as of December 31, 2001, the 38
entities in which the Company has a controlling interest and the 11 entities in
which the Company has a minority interest :
10
Subsidiaries (Controlled Entities) Entities in which the Company
of the Company has a Minority Interest (Unconsolidated Entities)
-----------------------------------------------------------------------------------------------------------
Carson Storage Ventures Public Storage Alameda, Ltd. (2)
Connecticut Storage Fund Public Storage Glendale Freeway, Ltd.
Del Amo Storage Partners, Ltd. Metropublic Storage Fund
Diversified Storage Venture Fund PS Business Parks, Inc. (3)
Downey Storage Partners, Ltd. PSAF Development Partners, Ltd.
Huntington Beach Storage Partners, Ltd. Public Storage Crescent Fund, Ltd. (4)
Monterey Park Properties, Ltd. Public Storage Partners, Ltd. (5)
PS Co-Investment Partners Public Storage Partners II, Ltd. (6)
PS Insurance Company, Ltd. Public Storage Properties, Ltd. (7)
PS Orangeco Holdings, Inc. Public Storage Properties IV, Ltd. (8)
PS Orangeco, Inc. Public Storage Properties V, Ltd. (9)
PS Partners, Ltd.
PS Partners IV, Ltd.
PS Partners V, Ltd.
PS Partners VI, Ltd.
PS Partners VIII, Ltd.
PSA Institutional Partners, L.P.
PSAC Development Partners, L.P. (1)
Public Storage Euro Fund III, Ltd. (2)
Public Storage Euro Fund IV, Ltd. (2)
Public Storage Euro Fund V, Ltd. (2)
Public Storage Euro Fund VI, Ltd. (2)
Public Storage Euro Fund VII, Ltd. (2)
Public Storage Euro Fund VIII, Ltd. (2)
Public Storage Euro Fund IX, Ltd. (2)
Public Storage Euro Fund X, Ltd. (2)
Public Storage Euro Fund XI, Ltd. (2)
Public Storage Euro Fund XII, Ltd. (2)
Public Storage Euro Fund XIII, Ltd. (2)
Public Storage German Fund II, Ltd. (2)
Public Storage Institutional Fund
Public Storage Institutional Fund II
Public Storage Institutional Fund III
Public Storage Institutional Fund IV
Public Storage Pickup & Delivery, L.P.
Storage Trust Properties, L.P.
Van Nuys Storage Partners, Ltd.
Whittier Storage Partners, Ltd.
(1) PSAC Storage Investors, LLC owns a direct 49% ownership interest in this
entity. The partners of PSAC Storage Investors, LLC are Mr. Hughes, having
an approximately 65% ownership interest, and a third party institutional
investor having an approximately 35% ownership interest.
(2) B. Wayne Hughes owns approximately 20% of the general partner interest of
these entities.
(3) B. Wayne Hughes owns approximately 0.5% of the common shares of PS Business
Parks, Inc.
(4) B. Wayne Hughes owns approximately 17.9% of the general partnership
interest of this entity.
(5) The Hughes Family owns approximately 24.3% of the limited partnership
interests of this entity.
(6) The Hughes Family owns approximately 11.9% of the limited partnership
interests of this entity.
11
(7) The Hughes Family owns 20% of the general partner interests and 30.5% of
the limited partnership interests of this entity.
(8) The Hughes Family owns 20% of the general partner interests and 15.5% of
the limited partnership interests of this entity.
(9) The Hughes Family owns 20% of the general partner interests and 11.4% of
the limited partnership interests of this entity.
Prohibited Investments and Activities
-------------------------------------
The Company's Bylaws prohibit the Company from purchasing properties in
which the Company's officers or directors have an interest, or from selling
properties to such persons, unless the transactions are approved by a majority
of the independent directors and are fair to the Company based on an independent
appraisal. This Bylaw provision may be changed with shareholder approval. See
"Limitations on Debt" below for other restrictions in the Bylaws.
Borrowings
----------
In November 2001, we entered into a new agreement for a $200 million
revolving line of credit (the "Credit Agreement") to replace our $150 million
line of credit which was due to expire on July 1, 2002. The Credit Agreement has
a maturity date of October 31, 2004 and bears an annual interest rate ranging
from the London Interbank Offered Rate ("LIBOR") plus 0.45% to LIBOR plus 1.50%
depending on our credit ratings (currently 0.45%). In addition, we are required
to pay a quarterly commitment fee ranging from 0.20% per annum to 0.30% per
annum depending on our credit ratings (currently the fee is 0.20% per annum). At
December 31, 2001, we had borrowings of $25 million on our line of credit, at an
interest rate of 2.45% per year. At March 25, 2002, there were no borrowings on
our line of credit.
The Credit Agreement includes various covenants, the more significant
of which requires us to (i) maintain a balance sheet leverage ratio of less than
0.50 to 1.00, (ii) maintain certain quarterly interest and fixed-charge coverage
ratios (as defined) of not less than 2.50 to 1.0 and 1.75 to 1.0, respectively,
and (iii) maintain a minimum total shareholders' equity (as defined). In
addition, we are limited in our ability to incur additional borrowings (we are
required to maintain unencumbered assets with an aggregate book value equal to
or greater than two times our unsecured recourse debt). We were in compliance
with all the covenants of the Credit Agreement at December 31, 2001.
As of December 31, 2001, we had notes payable of approximately $143.6
million and borrowings on our line of credit of $25,000,000. See Notes 6 and 7
to the consolidated financial statements for a summary of the Company's
borrowings at December 31, 2001.
Subject to a limitation on unsecured borrowings in the Company's Bylaws
(described below), we have broad powers to borrow in furtherance of the
Company's objectives. We have incurred in the past, and may incur in the future,
both short-term and long-term indebtedness to increase our funds available for
investment in real estate, capital expenditures and distributions.
Limitations on Debt
-------------------
The Bylaws provide that the Board of Directors shall not authorize or
permit the incurrence of any obligation by the Company which would cause our
"Asset Coverage" of our unsecured indebtedness to become less than 300%. Asset
Coverage is defined in the Bylaws as the ratio (expressed as a percentage) by
which the value of the total assets (as defined in the Bylaws) of the Company
less the Company's liabilities (except liabilities for unsecured borrowings)
bears to the aggregate amount of all unsecured borrowings of the Company. This
Bylaw provision may be changed only upon a shareholder vote.
12
The Company's Bylaws prohibit us from issuing debt securities in a
public offering unless the Company's "cash flow" (which for this purpose means
net income, exclusive of extraordinary items, plus depreciation) for the most
recent 12 months for which financial statements are available, adjusted to give
effect to the anticipated use of the proceeds from the proposed sale of debt
securities, would be sufficient to pay the interest on such securities. This
Bylaw provision may be changed only upon a shareholder vote.
Without the consent of holders of the various series of Senior
Preferred Stock, we may not take any action that would result in a ratio of
"Debt" to "Assets" (the "Debt Ratio") in excess of 50%. As of December 31, 2001,
the Debt Ratio was approximately 3.1%. "Debt" means the liabilities (other than
"accrued and other liabilities" and "minority interest") that should, in
accordance with generally accepted accounting principles, be reflected on the
Company's consolidated balance sheet at the time of determination. "Assets"
means the Company's total assets before a reduction for accumulated depreciation
and amortization that should, in accordance with generally accepted accounting
principles, be reflected on the consolidated balance sheet at the time of
determination.
Our bank and senior unsecured debt agreements contain various financial
covenants, including limitations on the level of indebtedness of 30% of total
capitalization (as defined) and the prohibition of the payment of dividends upon
the occurrence of an event of default (as defined).
Employees
---------
There are approximately 4,400 persons who render services on behalf of
the Company, primarily personnel engaged in property operation, substantially
all of whom are employed by a clearing company that provides certain
administrative and cost-sharing services to the Company and other owners of
properties operated by the Company.
Federal Income Tax
------------------
We believe that we have operated, and intend to continue to operate, in
such a manner as to qualify as a REIT under the Internal Revenue Code of 1986,
but no assurance can be given that it will at all times so qualify. To the
extent that we continue to qualify as a REIT, it will not be taxed, with certain
limited exceptions, on the taxable income (including gains from the sale of
securities and properties) that is distributed to our shareholders. For Federal
tax purposes, distributions to shareholders are treated by the shareholders as
ordinary income, capital gains, return of capital or a combination thereof.
Distributions in excess of taxable income (as defined) are treated as nontaxable
returns of capital.
On December 17, 1999, the Work Incentives Improvement Act of 1999 (the
"Act"), which included certain provisions affecting REITs, was enacted. The REIT
provisions of the Act generally are effective for taxable years beginning after
December 31, 2000. The Act was intended to ease the restrictions on a REIT's
ability to own the stock of taxable companies. The Act allows REITs to own up to
100% of the stock of companies that have made a joint election with the REIT to
be treated as "taxable REIT subsidiaries" ("TRS"). A TRS will be subject to
federal income tax on income as a regular corporation. Under prior law, a REIT
generally could not own more than 10% voting securities of other issuers. Under
the Act, the prior law 10% voting securities test was expanded so that REITs
also are prohibited from owing more than 10% of the value of outstanding
securities of any one corporate issuer, except for companies that elect to be
treated as TRSs or companies that qualify for certain grandfather provisions in
the Act.
An important effect of the Act is that TRSs are permitted to offer
noncustomary services to the tenants of the REIT (such services could be
provided under prior law only by "independent contractors" from which the REIT
could not earn any income). TRSs also are able to engage in other income
producing activities that typically had been undertaken by REITs only through
entities in which a REIT could have a substantial economic interest, but was
limited to a 10% or less voting interest. The Act includes certain limitations
that prevent income shifting between a REIT and its TRS, in a effort to ensure
that TRSs in fact are taxable on the income that they earn. In addition, under
prior law, a REIT could not own securities of any single issuer with a value in
excess of 5% of the value of all the assets of the REIT. The Act also relaxed
this limitation, so that a REIT may own a TRS (or TRSs), so long as (1) the
aggregate value of the TRSs, when combined with all other non-REIT assets, does
not exceed 25% of the value of all assets of the REIT. The Company and certain
affiliates have jointly made the TRS election.
13
Insurance
---------
We believe that our properties are adequately insured. Our facilities
have historically carried comprehensive insurance, including fire, earthquake,
liability and extended coverage from nationally recognized carriers.
ITEM 1A. Risk Factors
In addition to the other information in our Form 10-K, you should
consider the following factors in evaluating the Company:
THE HUGHES FAMILY COULD CONTROL US.
At March 14, 2002, the Hughes family owned approximately 34.1% of our
outstanding shares of common stock (approximately 37.9% upon conversion of our
class B common stock). Consequently, the Hughes family could control matters
submitted to a vote of our shareholders, including electing directors, amending
our organizational documents, dissolving and approving other extraordinary
transactions, such as a takeover attempt.
PROVISIONS IN OUR ORGANIZATIONAL DOCUMENTS MAY PREVENT CHANGES IN CONTROL.
Restrictions in our organizational documents may further limit changes
in control. Unless our board of directors waives these limitations, no
shareholder may own more than (1) 2.0% of our outstanding shares of our common
stock or (2) 9.9% of the outstanding shares of each class or series of our
preferred or equity stock. Our organizational documents in effect provide,
however, that the Hughes family may continue to own the shares of our common
stock held by them at the time of a 1995 reorganization. These limitations are
designed, to the extent possible, to avoid a concentration of ownership that
might jeopardize our ability to qualify as a real estate investment trust or
REIT. These limitations, however, also make a change of control significantly
more difficult (if not impossible) even if it would be favorable to the
interests of our public shareholders. These provisions will prevent future
takeover attempts not approved by our board of directors even if a majority of
our public shareholders deem it to be in their best interests because they would
receive a premium for their shares over the shares' then market value or for
other reasons.
WE WOULD INCUR ADVERSE TAX CONSEQUENCES IF WE FAIL TO QUALIFY AS A REIT.
You will be subject to the risk that we may not qualify as a REIT. As a
REIT, we must distribute at least 90% of our REIT taxable income to our
shareholders, which include not only holders of our common stock and equity
stock but also holders of our preferred stock. Failure to pay full dividends on
the preferred stock would prevent us from paying dividends on our common stock
and could jeopardize our qualification as a REIT.
For any taxable year that we fail to qualify as a REIT and the relief
provisions do not apply, we would be taxed at the regular corporate rates on all
of our taxable income, whether or not we make any distributions to our
shareholders. Those taxes would reduce the amount of cash available for
distribution to our shareholders or for reinvestment. As a result, our failure
to qualify as a REIT during any taxable year could have a material adverse
effect upon us and our shareholders. Furthermore, unless certain relief
provisions apply, we would not be eligible to elect REIT status again until the
fifth taxable year that begins after the first year for which we fail to
qualify.
WE MAY PAY SOME TAXES.
Even if we qualify as a REIT for federal income tax purposes, we are
required to pay some federal, state and local taxes on our income and property.
Several corporate subsidiaries of Public Storage have elected to be treated as
"taxable REIT subsidiaries" of Public Storage for federal income tax purposes
since January 1, 2001. A taxable REIT subsidiary is a fully taxable corporation
and is limited in its ability to deduct interest payments made to us. In
addition, we will be subject to a 100% penalty tax on some payments that we
receive if the economic arrangements among our tenants, our taxable REIT
subsidiaries and us are not comparable to similar arrangements among unrelated
14
parties. To the extent that Public Storage or any taxable REIT subsidiary is
required to pay federal, state or local taxes, we will have less cash available
for distribution to shareholders.
WE WOULD INCUR A CORPORATE LEVEL TAX IF WE SELL CERTAIN ASSETS.
We will generally be subject to a corporate level tax on any net
built-in gain if before November 2005 we sell any of the assets we acquired in a
November 1995 reorganization.
WE AND OUR SHAREHOLDERS ARE SUBJECT TO FINANCING RISKS.
Debt increases the risk of loss. In making real estate investments, we
may borrow money, which increases the risk of loss. At December 31, 2001, our
debt of $168.6 million was approximately 3.6% of our total assets.
Certain securities have a liquidation preference over our common stock
and Equity Stock, Series A. If we liquidated, holders of our preferred
securities would be entitled to receive liquidating distributions, plus any
accrued and unpaid distributions, before any distribution of assets to the
holders of our common stock and Equity Stock, Series A. Holders of preferred
securities are entitled to receive, when declared by our board of directors,
cash distributions in preference to holders of our common stock and Equity
Stock, Series A.
SINCE OUR BUSINESS CONSISTS PRIMARILY OF ACQUIRING AND OPERATING REAL ESTATE, WE
ARE SUBJECT TO REAL ESTATE OPERATING RISKS.
The value of our investments may be reduced by general risks of real
estate ownership. Since we derive substantially all of our income from real
estate operations, we are subject to the general risks of owning real
estate-related assets, including:
o lack of demand for rental spaces or units in a locale;
o changes in general economic or local conditions;
o changes in supply of or demand for similar or competing facilities
in an area;
o the impact of environmental protection laws;
o changes in interest rates and availability of permanent mortgage
funds which may render the sale or financing of a property
difficult or unattractive; and
o changes in tax, real estate and zoning laws.
There is significant competition among self-storage facilities. Most of
our properties are self-storage facilities, which generated 92% of our rental
revenue during 2001. Competition in the market areas in which many of our
properties are located is significant and has affected the occupancy levels,
rental rates and operating expenses of some of our properties. Any increase in
availability of funds for investment in real estate may accelerate competition.
Further development of self-storage facilities may intensify competition among
operators of self-storage facilities in the market areas in which we operate.
We may incur significant environmental costs and liabilities. As an
owner and operator of real properties, under various federal, state and local
environmental laws, we are required to clean up spills or other releases of
hazardous or toxic substances on or from our properties. Certain environmental
laws impose liability whether or not the owner knew of, or was responsible for,
the presence of the hazardous or toxic substances. In some cases, liability may
not be limited to the value of the property. The presence of these substances,
or the failure to properly remediate any resulting contamination, also may
adversely affect the owner's or operator's ability to sell, lease or operate its
property or to borrow using its property as collateral.
15
We have conducted preliminary environmental assessments of most of our
properties (and intend to conduct these assessments in connection with property
acquisitions) to evaluate the environmental condition of, and potential
environmental liabilities associated with, our properties. These assessments
generally consist of an investigation of environmental conditions at the
property (not including soil or groundwater sampling or analysis), as well as a
review of available information regarding the site and publicly available data
regarding conditions at other sites in the vicinity. In connection with these
property assessments, our operations and recent property acquisitions, we have
become aware that prior operations or activities at some facilities or from
nearby locations have or may have resulted in contamination to the soil or
groundwater at these facilities. In this regard, some of our facilities are or
may be the subject of federal or state environment investigations or remedial
actions. We have obtained, with respect to recent acquisitions, and intend to
obtain with respect to pending or future acquisitions, appropriate purchase
price adjustments or indemnifications that we believe are sufficient to cover
any related potential liability. Although we cannot provide any assurance, based
on the preliminary environmental assessments, we believe we have funds available
to cover any liability from environmental contamination or potential
contamination and we are not aware of any environmental contamination of our
facilities material to our overall business, financial condition or results of
operation.
WE HAVE NO INTEREST IN CANADIAN SELF-STORAGE FACILITIES OWNED BY THE HUGHES
FAMILY.
The Hughes family owns and operates self-storage facilities in Canada.
We have a right of first refusal to acquire the stock or assets of the
corporation engaged in these operations if the Hughes family or the corporation
agree to sell them. However, we have no interest in the operations of that
corporation and no right to acquire that stock or assets unless the Hughes
family decides to sell.
OUR PORTABLE SELF-STORAGE BUSINESS HAS INCURRED OPERATING LOSSES.
Public Storage Pickup & Delivery was organized in 1996 to operate a
portable self-storage business. We own all of the economic interest of Pickup &
Delivery. Since Pickup & Delivery will operate profitably only if it can succeed
in the relatively new field of portable self-storage, we cannot provide any
assurance as to its profitability. Pickup & Delivery incurred operating losses
of $7,396,000 in 1999, $5,135,000 in 2000 and $2,218,000 in 2001.
16
ITEM 2. Properties
At December 31, 2001, we had direct and indirect ownership interests in
1,384 storage facilities located in 37 states:
At December 31, 2001
------------------------------------------
Number of Storage Net Rentable Square
Facilities (a) Feet (in Thousands)
----------------- -------------------
California:
Northern 139 7,790
Southern 162 10,480
Texas 163 11,005
Florida 141 8,459
Illinois 94 5,816
Georgia 62 3,626
Colorado 51 3,199
New Jersey 40 2,369
Washington 39 2,533
Maryland 38 2,146
Missouri 37 2,128
Virginia 37 2,247
New York 36 2,127
Ohio 31 1,925
Oregon 25 1,171
Tennessee 25 1,494
North Carolina 24 1,266
South Carolina 24 1,082
Kansas 22 1,316
Nevada 22 1,409
Alabama 22 895
Other states (17 states) 150 9,168
----------------- -------------------
Totals 1,384 83,651
================= ===================
(a) Includes 1,270 facilities owned by the Company and entities controlled by
the Company. The remaining 114 facilities are owned by entities in which
the Company has an interest; however, the Company does not have a
controlling interest in such entities. See Schedule III: Real Estate and
Accumulated Depreciation in the Company's 2001 financials, for a complete
list of properties consolidated by the Company.
Our facilities are generally operated to maximize cash flow through the
regular review and, when warranted by market conditions, adjustment of scheduled
rents. For the year ended December 31, 2001, the weighted average occupancy
level and the weighted average annual realized rent per rentable square foot for
our storage facilities were approximately 86.4% and $11.59, respectively.
Included in the 1,384 storage facilities are 93 developed facilities opened
since January 1, 1998, substantially all of which were in the fill-up stage in
the year ended December 31, 2001.
At December 31, 2001, 24 of our facilities were encumbered by an
aggregate of $23.8 million in mortgage debt.
The Company has no specific policy as to the maximum size of any one
particular self-storage facility. However, none of our facilities involves, or
is expected to involve, 1% or more of the Company's total assets, gross revenues
or net income.
17
DESCRIPTION OF STORAGE FACILITIES: Storage facilities, which comprise
the majority of our investments (approximately 92% based on rental revenue), are
designed to offer accessible storage space for personal and business use at a
relatively low cost. A user rents a fully enclosed space which is for the user's
exclusive use and to which only the user has access on an unrestricted basis
during business hours. On-site operation is the responsibility of resident
managers who are supervised by district managers. Some storage facilities also
include rentable uncovered parking areas for vehicle storage, as well as space
for portable storage containers. Leases for storage facilities space may be on a
long-term or short-term basis, although typically spaces are rented on a
month-to-month basis. Rental rates vary according to the location of the
property and the size of the storage space. All of our storage facilities are
operated under the "Public Storage" name.
Users of space in storage facilities include both individuals and large
and small businesses. Individuals usually employ this space for storage of
furniture, household appliances, personal belongings, motor vehicles, boats,
campers, motorcycles and other household goods. Businesses normally employ this
space for storage of excess inventory, business records, seasonal goods,
equipment and fixtures.
Storage facilities in which we have invested generally consist of three
to seven buildings containing an aggregate of between 350 to 750 storage spaces,
most of which have between 25 and 400 square feet and an interior height of
approximately 8 to 12 feet.
We experience minor seasonal fluctuations in the occupancy levels of
storage facilities with occupancies generally higher in the summer months than
in the winter months. We believe that these fluctuations result in part from
increased moving activity during the summer.
Our storage facilities are geographically diversified and are located
primarily in or near major metropolitan markets in 37 states in the United
States. Generally our storage facilities are located in heavily populated areas
and close to concentrations of apartment complexes, single family residences and
commercial developments. However, there may be circumstances in which it may be
appropriate to own a property in a less populated area, for example, in an area
that is highly visible from a major thoroughfare and close to, although not in,
a heavily populated area. Moreover, in certain population centers, land costs
and zoning restrictions may create a demand for space in nearby less populated
areas.
Competition from other self-storage facilities in the market areas in
which many of our properties are located is significant and has affected the
occupancy levels, rental rates, and operating expenses of some of our
properties.
Since our investments are primarily storage facilities, our ability to
preserve our investments and achieve our objectives is dependent in large part
upon success in this field. Historically, upon stabilization after an initial
fill-up period, our storage facility interests have generally shown a high
degree of consistency in generating cash flows, despite changing economic
conditions. We believe that our storage facilities, upon stabilization, have
attractive characteristics consisting of high profit margins, a broad tenant
base and low levels of capital expenditures to maintain their condition and
appearance.
COMMERCIAL PROPERTIES: In addition to our interest in 1,384 storage
facilities, we have an interest in PSB, which, as of December 31, 2001, owns and
operates 14.8 million net rentable square feet in nine states. At December 31,
2001, our investment in PS Business Parks represents less than 6% of our total
assets. We also own, either directly or through entities we control, an interest
in five commercial properties with 385,000 net rentable square feet. Most of our
non-storage facilities investments are interests in business parks and low-rise
office buildings, primarily through our investment in PSB. A commercial property
may include both industrial and office space. Industrial space may be used for,
among other things, light manufacturing and assembly, storage and warehousing,
distribution and research and development activities. We believe that most of
the office space is occupied by tenants who are also renting industrial space.
The remaining office space is used for general office purposes. A commercial
property may also include facilities for commercial uses such as banks, travel
agencies, restaurants, office supply shops, professionals or other tenants
providing services to the public. The amount of retail space in a commercial
property is not expected to be significant.
18
ENVIRONMENTAL MATTERS: Our practice is to conduct environmental
investigations in connection with property acquisitions. As a result of
environmental investigations of our properties, which commenced in 1995, we
recorded an amount, which in management's best estimate, will be sufficient to
satisfy anticipated costs of known investigation and remediation requirements.
Although there can be no assurance, we are not aware of any environmental
contamination of any of our facilities which individually or in the aggregate
would be material to the Company's overall business, financial condition, or
results of operations.
ITEM 3. Legal Proceedings
Salaam, et. al. V. Public Storage, Inc. (filed February 2000)
-------------------------------------------------------------
The plaintiffs in this case are suing the Company on behalf of a
purported class of California resident property managers who claim that they
were not compensated for all the hours they worked. The named plaintiffs have
indicated that their claims total less than $20,000 in aggregate. This maximum
potential liability can only be increased if a class is certified or if claims
are permitted to be brought on behalf of the others under the California Unfair
Business Practices Act.
The Company is continuing to vigorously contest the claims in this case
and intends to resist any expansion beyond the named plaintiffs on the grounds
of lack of commonality of claims. The Company does not believe that this case
will have any material adverse effect.
The Company is a party to various claims, complaints and other legal
actions that have arisen in the normal course of business from time to time. The
Company believes that that outcome of these other pending legal proceedings, in
the aggregate, will not have a material adverse effect upon the operations or
financial position of the Company.
ITEM 4. Submission of Matters to a Vote of Security Holders
The Company did not submit any matter to a vote of security holders in
the fourth quarter of the fiscal year ended December 31, 2001.
ITEM 4A. Executive Officers of the Company
The following is a biographical summary of the executive officers of
the Company:
B. Wayne Hughes, age 68, has been a director of the Company since its
organization in 1980 and was President and Co-Chief Executive Officer from 1980
until November 1991 when he became Chairman of the Board and sole Chief
Executive Officer. Mr. Hughes was Chairman of the Board and Chief Executive
Officer from 1990 until March 1998 of Public Storage Properties XI, Inc., which
was renamed PS Business Parks, Inc. ("PSB"), an affiliated REIT. From 1989-90
until the respective dates of merger, he was Chairman of the Board and Chief
Executive Officer of 18 affiliated REITs that were merged into the Company
between September 1994 and May 1998 (collectively, the "Merged Public Storage
REITs"). Mr. Hughes has been active in the real estate investment field for over
30 years. He is the father of B. Wayne Hughes, Jr., a director of the Company.
Harvey Lenkin, age 65, became President and a director of the Company
in November 1991. Mr. Lenkin has been employed by the Company for 24 years. He
has been a director of PSB since March 1998 and was President of PSB from 1990
until March 1998. Mr. Lenkin was President of the Merged Public Storage REITs
from 1989-90 until the respective dates of merger and was also a director of one
of those REITs, Storage Properties, Inc. ("SPI"), from 1989 until June 1996. He
is a member of the Board of Governors of the National Association of Real Estate
Investment Trusts, Inc. (NAREIT).
19
Marvin M. Lotz, age 59, became a director of the Company in May 1999.
Mr. Lotz has been a Senior Vice President of the Company since November 1995 and
President of the Property Management Division since 1988 with overall
responsibility for Public Storage's mini-warehouse operations. He had overall
responsibility for the Company's property acquisitions from 1983 until 1988.
B. Waynes Hughes Jr., age 42, became a director of PSI in January 1998.
He has been employed by the Company since 1989 and has been a Vice President -
Acquisitions of PSI since 1992. Mr. Hughes, Jr. is involved in the coordination
and direction of PSI's acquisition and development activities and is also the
President of a firm that manufactures and distributes sweets. He is the son of
B. Wayne Hughes.
John Reyes, age 41, a certified public accountant, joined the Company
in 1990 and was Controller of the Company from 1992 until December 1996 when he
became Chief Financial Officer. He became a Vice President of the Company in
November 1995 and a Senior Vice President of the Company in December 1996. From
1983 to 1990, Mr. Reyes was employed by Ernst & Young.
Carl B. Phelps, age 63, became a Senior Vice President of PSI in
January 1998 with overall responsibility for property acquisition and
development until April 2001 when he became General Counsel. From June 1991
until joining PSI, he was a partner in the law firm of Andrews & Kurth, L.L.P.,
which performed legal services for PSI. From December 1982 through May 1991, his
professional corporation was a partner in the law firm of Sachs & Phelps, then
counsel to PSI.
Bahman Abtahi, age 58, joined the Company in July 1996 and was Senior
Vice-President - Construction and Development of the Real Estate Division and a
Vice President of the Company until May 2000 when he became a Senior Vice
President of the Company. Mr. Abtahi had responsibility for all of Public
Storage's construction and maintenance activities until April 2001 when he was
made responsible for special projects. Prior to joining the Company, he was a
management consultant.
W. David Ristig, age 53, rejoined the Company in August 1995 and was a
Vice President of the Company until May 2000 when he became a Senior Vice
President of the Company. Mr. Ristig is responsible for the Company's land
acquisition and construction program. He was previously employed by the Company
from 1980 until 1984 and from 1986 until 1990 and was involved in property
acquisition and development. From 1990 until August 1995, Mr. Ristig held
positions as a loan officer with three companies in the mortgage banking
industry.
Anthony Grillo, age 46, became a Senior Vice President of the Company
in November 2001. Mr. Grillo has been employed by the Company or a predecessor
since 1981, and is currently Executive Vice President of the Property Management
Division. Previously, Mr. Grillo held various other management positions in the
Company's property management operations.
A. Timothy Scott, age 50, became Senior Vice President and Tax Counsel
of the Company in November 1996. From June 1991 until joining the Company, he
practiced tax law as a shareholder of the law firm of Heller, Ehrman, White and
McAuliffe, counsel to the Company. Prior to June 1991, his professional
corporation was a partner in the law firm of Sachs & Phelps, then counsel to the
Company.
David P. Singelyn, age 40, a certified public accountant, has been
employed by the Company since 1989 and became Vice President and Treasurer of
the Company in November 1995. Mr. Singelyn was Vice President and Controller of
SPI from 1991 until June 1996. From 1987 to 1989, he was Controller of
Winchell's Donut Houses, L.P.
20
PART II
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
a. Market Price of the Registrant's Common Equity:
The Common Stock (NYSE:PSA) has been listed on the New York
Stock Exchange since October 19, 1984 and on the Pacific Exchange since
December 26, 1996. The Depositary Shares Each Representing 1/1,000 of a
Share of Equity Stock, Series A (NYSE:PSAA) (see section d. below) have
been listed on the New York Stock Exchange since February 14, 2000.
The following table sets forth the high and low sales prices
of the Common Stock on the New York Stock Exchange composite tapes for
the applicable periods.
Range
--------------------------------
Year Quarter High Low
------ ------- ----------- -----------
2000 1st $ 24.813 $ 20.875
2nd 24.875 21.250
3rd 26.938 23.188
4th 24.875 21.125
2001 1st 26.750 24.125
2nd 30.200 26.060
3rd 34.850 29.150
4th 35.150 32.480
The following table sets forth the high and low sales prices
of the Depositary Shares Each Representing 1/1,000 of a Share of Equity
Stock, Series A on the New York Stock Exchange composite tapes for the
applicable periods.
Range
--------------------------------
Year Quarter High Low
------ ------- ----------- -----------
2000 1st (a) $ 20.125 $ 18.938
2nd 22.750 19.250
3rd 24.625 20.375
4th 24.000 22.063
2001 1st 25.250 22.563
2nd 25.050 23.250
3rd 26.550 24.360
4th 27.480 25.900
(a) Commencing February 14, 2000.
As of March 8, 2002, there were approximately 20,022 holders
of record of the Common Stock and approximately 15,147 holders of the
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock,
Series A.
b. Class B Common Stock
The Class B Common Stock issued in connection with the PSMI
Merger (as defined under Item 7 below) has the following
characteristics:
21
o The Class B Common Stock (i) beginning on January 1, 2000,
participates in distributions (other than liquidating
distributions) at the rate of 97% of the per share
distributions on the Common Stock, provided that cumulative
distributions of at least $.22 per quarter (beginning with the
4th quarter of 1995) per share have been paid on the Common
Stock, (ii) does not participate in liquidating distributions,
(iii) is not entitled to vote (except as expressly required by
California law) and (iv) automatically converts into Common
Stock, on a share for share basis, upon the later to occur of
FFO per Common Share aggregating $3.00 during any period of
four consecutive calendar quarters or January 1, 2003.
For these purposes:
1. "FFO" means net income (loss) (computed in accordance with
GAAP) before (i) gain (loss) on early extinguishment of debt,
(ii) minority interest in income and (iii) gain (loss) on
disposition of real estate, adjusted as follows: (A) plus
depreciation and amortization (including the Company's
pro-rata share of depreciation and amortization of
unconsolidated equity interests and amortization of assets
acquired in a merger, including property management agreements
and goodwill), and (B) less FFO attributable to minority
interest. FFO is a supplemental performance measure for equity
REITs as defined by the National Association of Real Estate
Investment Trusts, Inc. ("NAREIT"). The NAREIT definition does
not specifically address the treatment of minority interest in
the determination of FFO or the treatment of the amortization
of property management agreements and goodwill. In the case of
the Company, FFO represents amounts attributable to its
shareholders after deducting amounts attributable to the
minority interests and before deductions for the amortization
of property management agreements and goodwill. FFO is
presented because management, as well as many industry
analysts, consider FFO to be one measure of the performance of
the Company and it is used in establishing the terms of the
Class B Common Stock. FFO does not take into consideration
scheduled principal payments on debt, capital improvements,
distributions and other obligations of the Company.
Accordingly, FFO is not a substitute for the Company's cash
flow or net income as a measure of the Company's liquidity or
operating performance or ability to pay distributions. FFO is
not comparable to similarly entitled items reported by other
REITs that do not define it exactly as the Company defines it.
2. "FFO per Common Share" means FFO less dividends on the
preferred stock and the Equity Stock, Series A divided by the
outstanding weighted average shares of Common Stock assuming
conversion of all outstanding convertible securities and the
Class B Common Stock.
For these purposes, FFO per share of Common Stock (as defined)
was $2.93 for the year ended December 31, 2001.
c. Dividends
We have paid quarterly distributions to our shareholders since
1981, our first full year of operations. Overall distributions on
Common Stock and Class B Common Stock for 2001 amounted to $193.1
million and $11.5 million, respectively, which includes a special
distribution declared on August 9, 2001 to common shareholders of
record as of September 15, 2001. The special distribution was paid in
cash.
22
Holders of Common Stock are entitled to receive distributions
when and if declared by the Company's Board of Directors out of any
funds legally available for that purpose. We are required to distribute
at least 90% of our net taxable ordinary income prior to the filing of
the Company's tax return and 85%, subject to certain adjustments,
during the calendar year, to maintain our REIT status for federal
income tax purposes. It is our intention to pay distributions of not
less than this required amount.
For Federal tax purposes, distributions to shareholders are
treated as ordinary income, capital gains, return of capital or a
combination thereof. For 2001, the dividends paid to the common
shareholders ($1.69 per share), on all the various classes of preferred
stock, and on Equity Stock, Series A were characterized as ordinary
income and long-term capital gain. The quarterly breakdown is as
follows:
TREATMENT OF DIVIDENDS PAID FOR 2001
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
----------- ----------- ----------- -----------
Ordinary Income 96.60% 99.67% 100.00% 100.00%
Long-term Capital Gain 3.40% 0.33% 0.00% 0.00%
----------- ----------- ----------- -----------
Total 100.00% 100.00% 100.00% 100.00%
=========== =========== =========== ===========
For 2000, the dividends paid to the common shareholders ($1.48
per share), on all the various classes of preferred stock and on Equity
Stock, Series A were characterized as ordinary income and long-term
capital gain. The quarterly breakdown is as follows:
TREATMENT OF DIVIDENDS PAID FOR 2000
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
----------- ----------- ----------- -----------
Ordinary Income 96.10% 95.79% 99.04% 99.96%
Long-term Capital Gain 3.90% 4.21% 0.96% 0.04%
----------- ----------- ----------- -----------
Total 100.00% 100.00% 100.00% 100.00%
=========== =========== =========== ===========
In 1999, distributions to common shareholders were $1.53 for
common shareholders who elected stock in a special dividend declared in
2000 and $1.50 for common shareholders who elected cash in the special
dividend, and were all ordinary income.
d. Equity Stock
The Company is authorized to issue 200,000,000 shares of
Equity Stock. The Articles of Incorporation provide that the Equity
Stock may be issued from time to time in one or more series and gives
the Board of Directors broad authority to fix the dividend and
distribution rights, conversion and voting rights, redemption
provisions and liquidation rights of each series of Equity Stock.
In April 2001, the Company completed a public offering of
2,210,500 depositary shares each representing 1/1,000 of a share of
Equity Stock, Series A, ("Equity Stock A") raising net proceeds of
approximately $51,836,000. In May 2001, the Company completed a direct
placement of 830,000 depositary shares, raising net proceeds of
approximately $20,294,000. In November 2001, the Company completed a
direct placement of 100,000 depositary shares, raising net proceeds of
approximately $2,690,000. In January 2000, we issued 4,300,555
depositary shares (2,200,555 shares as part of a special distribution
declared on November 15, 1999 and 2,100,000 shares in a separate public
offering). In addition, in the second quarter of 2000, we issued 52,547
depositary shares to a related party in connection with the acquisition
of real estate facilities. In December 2000, we issued 1,282,500
depositary shares in a public offering. All of the issuances of the
depositary shares described in this paragraph were registered under the
Securities Act at the time of issuance.
23
At December 31, 2001, we had 8,776,102 depositary shares
outstanding, each representing 1/1,000 of a share of Equity Stock A.
The Equity Stock A ranks on a parity with common stock and junior to
the Senior Preferred Stock with respect to distributions and
liquidation and has a liquidation amount which cannot exceed $24.50 per
share. Distributions with respect to each depositary share shall be the
lesser of: a) five times the per share dividend on the Common Stock or
b) $2.45 per annum. Except in order to preserve the Company's federal
income tax status as a REIT, we may not redeem the depositary shares
before March 31, 2010. On or after March 31, 2010, we may, at our
option, redeem the depositary shares at $24.50 per depositary share. If
the Company fails to preserve its federal income tax status as a REIT,
each depositary shares will be convertible into .956 shares of our
common stock. The depositary shares are otherwise not convertible into
common stock. Holders of depositary shares vote as a single class with
our holders of common stock on shareholder matters, but the depositary
shares have the equivalent of one-tenth of a vote per depositary share.
We have no obligation to pay distributions on the depositary shares if
no distributions are paid to common shareholders.
In June 1997, we contributed $22,500,000 (225,000 shares) of
equity stock, now designated as Equity Stock, Series AA ("Equity Stock
AA") to a partnership in which we are the general partner. As a result
of this contribution, we obtained a controlling interest in the
partnership and began to consolidate the accounts of the partnership
and therefore the equity stock is eliminated in consolidation. The
Equity Stock AA ranks on a parity with Common Stock and junior to the
Senior Preferred Stock with respect to general preference rights and
has a liquidation amount of ten times the amount paid to each Common
Share up to a maximum of $100 per share. Quarterly distributions per
share on the Equity Stock AA are equal to the lesser of (i) 10 times
the amount paid per Common Stock or (ii) $2.20. We have no obligation
to pay distributions if no distributions are paid to common
shareholders.
In November 1999, we sold $100,000,000 (4,289,544 shares) of
Equity Stock, Series AAA ("Equity Stock AAA") to a newly formed joint
venture. We control the joint venture and consolidate the accounts of
the joint venture, and accordingly the Equity Stock AAA is eliminated
in consolidation. The Equity Stock AAA ranks on a parity with common
stock and junior to the Senior Preferred Stock (as defined below) with
respect to general preference rights, and has a liquidation amount
equal to 120% of the amount distributed to each common share. Annual
distributions per share are equal to the lesser of (i) five times the
amount paid per common share or (ii) $2.1564. We have no obligation to
pay distributions if no distributions are paid to common shareholders.
e. Registrant's Preferred Equity
On October 26, 1992, we completed a public offering of
1,825,000 shares ($25 stated value per share) of 10% Cumulative
Preferred Stock, Series A ("Series A Preferred Stock"). The Series A
Preferred Stock has general preference rights over the Common Stock
with respect to distributions and liquidation proceeds. During 2001, we
paid dividends totaling $4,563,000 ($2.50 per preferred share).
On March 25, 1993, we completed a public offering of 2,386,000
shares ($25 stated value per share) of 9.20% Cumulative Preferred
Stock, Series B ("Series B Preferred Stock"). The Series B Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $5,488,000 ($2.300 per preferred share).
On June 30, 1994, we completed a public offering of 1,200,000
shares ($25 stated value per share) of Adjustable Rate Cumulative
Preferred Stock, Series C ("Series C Preferred Stock"). The Series C
Preferred Stock has general preference rights over the Common Stock
with respect to distributions and liquidation proceeds. During 2001, we
paid dividends totaling $2,024,000 ($1.688 per preferred share).
On September 1, 1994, we completed a public offering of
1,200,000 shares ($25 stated value per share) of 9.50% Cumulative
Preferred Stock, Series D ("Series D Preferred Stock"). The Series D
Preferred Stock has general preference rights over the Common Stock
with respect to distributions and liquidation proceeds. During 2001, we
paid dividends totaling $2,850,000 ($2.375 per preferred share).
24
On February 1, 1995, we completed a public offering of
2,195,000 shares ($25 stated value per share) of 10% Cumulative
Preferred Stock, Series E ("Series E Preferred Stock"). The Series E
Preferred Stock has general preference rights over the Common Stock
with respect to distributions and liquidation proceeds. During 2001, we
paid dividends totaling $5,488,000 ($2.50 per preferred share).
On May 3, 1995, we completed a public offering of 2,300,000
shares ($25 stated value per share) of 9.75% Cumulative Preferred
Stock, Series F ("Series F Preferred Stock"). The Series F Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $5,606,000 ($2.437 per preferred share).
On December 13, 1995, we completed a public offering of
6,900,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 8-7/8% Cumulative Preferred
Stock, Series G ("Series G Preferred Stock"). The Series G Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $11,482,000 ($1.664 per preferred depositary share).
This series was redeemed during 2001.
On January 25, 1996, we completed a public offering of
6,750,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 8.45% Cumulative Preferred
Stock, Series H ("Series H Preferred Stock"). The Series H Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $10,853,000 ($1.608 per preferred share). This
series was redeemed during 2001.
On November 1, 1996, we completed a public offering of
4,000,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 8-5/8% Cumulative Preferred
Stock, Series I ("Series I Preferred Stock"). The Series I Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $7,475,000 ($1.869 per preferred share). This series
was redeemed during 2001.
On August 25, 1997, we completed a public offering of
6,000,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 8% Cumulative Preferred Stock,
Series J ("Series J Preferred Stock"). The Series J Preferred Stock has
general preference rights over the Common Stock with respect to
distributions and liquidation proceeds. During 2001, we paid dividends
totaling $12,000,000 ($2.00 per preferred share).
On January 19, 1999, we completed a public offering of
4,600,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 8-1/4% Cumulative Preferred
Stock, Series K ("Series K Preferred Stock"). The Series K Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $9,488,000 ($2.063 per preferred share).
On March 10, 1999, we completed a public offering of 4,600,000
depositary shares ($25 stated value per depositary share) each
representing 1/1,000 of a share of 8-1/4% Cumulative Preferred Stock,
Series L ("Series L Preferred Stock"). The Series L Preferred Stock has
general preference rights over the Common Stock with respect to
distributions and liquidation proceeds. During 2001, we paid dividends
totaling $9,488,000 ($2.063 per preferred share).
On August 17, 1999, we completed a public offering of
2,250,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 8.75% Cumulative Preferred
Stock, Series M ("Series M Preferred Stock"). The Series M Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $4,922,000 ($2.188 per preferred share).
25
On January 19, 2001, we completed a public offering of
6,900,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 8.600% Cumulative Preferred
Stock, Series Q ("Series Q Preferred Stock"). The Series Q Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $14,134,000 ($2.048 per preferred share).
On September 28, 2001, we completed a public offering of
20,400,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 8.00% Cumulative Preferred
Stock, Series R ("Series R Preferred Stock"). The Series R Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $10,200,000 ($0.500 per preferred share).
On October 31, 2001, we completed a public offering of
5,750,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 7.875% Cumulative Preferred
Stock, Series S ("Series S Preferred Stock"). The Series S Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, we paid
dividends totaling $1,918,000 ($0.334 per preferred share).
On January 18, 2002, we completed a public offering of
6,000,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 7.625% Cumulative Preferred
Stock, Series T ("Series T Preferred Stock"). The Series T Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, no dividends
were paid.
On February 19, 2002, we completed a public offering of
6,000,000 depositary shares ($25 stated value per depositary share)
each representing 1/1,000 of a share of 7.625% Cumulative Preferred
Stock, Series U ("Series U Preferred Stock"). The Series U Preferred
Stock has general preference rights over the Common Stock with respect
to distributions and liquidation proceeds. During 2001, no dividends
were paid.
The Series A through Series U Preferred Stock are collectively
referred to as the "Senior Preferred Stock".
26
ITEM 6. Selected Financial Data
For the year ended December 31,
-----------------------------------------------------------------------
2001(1) 2000(1) 1999 (1) 1998 (1) 1997 (1)
-------- -------- -------- -------- --------
(In thousands, except per share data)
Revenues:
Rental income $781,878 $702,365 $627,851 $535,869 $434,008
Equity in earnings of real estate entities 38,542 36,109 32,183 26,602 17,569
Interest and other income 14,225 18,836 16,700 18,614 17,474
-------- -------- -------- -------- --------
834,645 757,310 676,734 581,085 469,051
-------- -------- -------- -------- --------
Expenses:
Cost of operations 276,187 252,086 216,816 205,835 165,714
Depreciation and amortization 168,061 148,967 137,719 111,799 92,750
General and administrative 21,038 21,306 12,491 11,635 13,462
Interest expense 3,227 3,293 7,971 4,507 6,792
-------- -------- -------- -------- --------
468,513 425,652 374,997 333,776 278,718
-------- -------- -------- -------- --------
Income before minority interest and disposition
gain 366,132 331,658 301,737 247,309 190,333
Minority interest in income (preferred) (31,737) (24,859) - - -
Minority interest in income (common) (14,278) (13,497) (16,006) (20,290) (11,684)
-------- -------- -------- -------- --------
Net income before gain on disposition of real
estate 320,117 293,302 285,731 227,019 178,649
Gain on disposition of real estate investments 4,091 3,786 2,154 - -
-------- -------- -------- -------- --------
Net income $324,208 $297,088 $287,885 $227,019 $178,649
======== ======== ======== ======== ========
--------------------------------------------------- --------------- -------------- --------------- --------------- --------------
Per Common Share:
-----------------
Distributions $1.69 $1.48 $1.52 $0.88 $0.88
Net income - Basic $1.53 $1.41 $1.53 $1.30 $0.92
Net income - Diluted $1.51 $1.41 $1.52 $1.30 $0.91
Weighted average common shares - Basic 122,310 131,566 126,308 113,929 98,446
Weighted average common shares - Diluted 123,577 131,657 126,669 114,357 98,961
--------------------------------------------------- --------------- -------------- --------------- --------------- --------------
Balance Sheet Data:
-------------------
Total assets $4,625,879 $4,513,941 $4,214,385 $3,403,904 $3,311,645
Total debt $168,552 $156,003 $167,338 $81,426 $103,558
Minority interest (common equity) $169,601 $167,918 $186,600 $139,325 $288,479
Minority interest (preferred OP Units) $285,000 $365,000 - - -
Shareholders' equity $3,909,583 $3,724,117 $3,689,100 $3,119,340 $2,848,960
--------------------------------------------------- --------------- -------------- --------------- --------------- --------------
Other Data:
-----------
Net cash provided by operating activities $538,534 $522,565 $463,292 $388,407 $292,325
Net cash used in investing activities $(306,058) $(462,254) $(452,209) $(365,506) $(408,313)
Net cash provided by (used in) financing
activities $(272,596) $(25,969) $(7,183) $(13,131) $130,587
Funds from operations (2) $499,576 $452,155 $428,962 $336,363 $272,234
(1) During 2001, 2000, 1999, 1998 and 1997, we completed several significant
business combinations and equity transactions. See Notes 3 and 9 to the
Company's consolidated financial statements.
(2) Funds from operations ("FFO"), means net income (loss) (computed in
accordance with GAAP) before (i) gain (loss) on early extinguishment of
debt, (ii) minority interest in income and (iii) gain (loss) on disposition
of real estate, adjusted as follows: (i) plus depreciation and amortization
(including the Company's pro-rata share of depreciation and amortization of
unconsolidated equity interests and amortization of assets acquired in a
merger, including property management agreements and excess purchase cost
over net assets acquired), and (ii) less FFO attributable to minority
interest. FFO is a supplemental performance measure for equity REITs as
defined by the National Association of Real Estate Investment Trusts, Inc.
("NAREIT"). The NAREIT definition does not specifically address the
treatment of minority interest in the determination of FFO or the treatment
of the amortization of property management agreements and excess purchase
cost over net assets acquired. In the case of the Company, FFO represents
amounts attributable to its shareholders after deducting amounts
attributable to the minority interests and before deductions for the
amortization of property management agreements and excess purchase cost
over net assets acquired. FFO is presented because management, as well as
many analysts, consider FFO to be one measure of the performance of the
Company and it is used in certain aspects of the terms of the Class B
Common Stock. FFO does not take into consideration scheduled principal
payments on debt, capital improvements, distributions and other obligations
of the Company. Accordingly, FFO is not a substitute for the Company's cash
flow or net income as a measure of the Company's liquidity or operating
performance or ability to pay distributions. FFO is not comparable to
similarly entitled items reported by other REITs that do not define it
exactly as the Company defines it.
27
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis should be read in conjunction
with the Company's consolidated financial statements and notes thereto.
FORWARD LOOKING STATEMENTS: When used within this document, the words
"expects," "believes," "anticipates," "should," "estimates," and similar
expressions are intended to identify "forward-looking statements" within the
meaning of that term in Section 27A of the Securities Exchange Act of 1933, as
amended, and in Section 21F of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements involve known and unknown risks, uncertainties,
and other factors, which may cause the actual results and performance of the
Company to be materially different from those expressed or implied in the
forward looking statements. Such factors described in Item 1A, "Risk Factors",
include the impact of competition from new and existing storage and commercial
facilities which could impact rents and occupancy levels at the Company's
facilities; the Company's ability to evaluate, finance, and integrate acquired
and developed properties into the Company's existing operations; the Company's
ability to effectively compete in the markets in which it does business; the
impact of the regulatory environment as well as national, state, and local laws
and regulations including, without limitation, those governing real estate
investment trusts; the acceptance by consumers of the containerized storage
concept; the impact of general economic conditions upon rental rates and
occupancy levels at the Company's facilities; and the availability of permanent
capital at attractive rates.
CRITICAL ACCOUNTING POLICY - IMPAIRMENT OF LONG LIVED ASSETS:
Substantially all of the Company's assets consist of long-lived assets,
including real estate, the assets associated with the containerized storage
business, goodwill, and other intangible assets. We annually evaluate our
long-lived assets for impairment. This evaluation includes identifying
indicators of impairment. When indicators of impairment are present and the
undiscounted future cash flows of the assets are less than the carrying amount,
an impairment charge is recorded. The Company has determined at December 31,
2001 that no such impairments existed and, accordingly, no impairment charges
have been recorded.
The Financial Accounting Standards Board ("FASB") has recently issued
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("SFAS 142"), and Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment and Disposal of Long-Lived Assets"
("SFAS 144"). Each of these Statements addresses the procedures to be followed
in evaluating and recording impairment losses with respect to long-lived assets.
The Company will adopt each of these Statements in the beginning of its fiscal
year ended December 31, 2002, and expects that there will be no material impact
from these statements with respect to impairment losses.
However, future events could cause us to conclude that our long-lived
assets are impaired. Any resulting impairment loss could have a material adverse
impact on our financial condition and results of operations.
OVERVIEW: The self-storage industry is highly fragmented and is
composed predominantly of numerous local and regional operators. Competition in
the markets in which we operate is significant and is increasing from additional
development of storage facilities in many markets which may negatively impact
occupancy levels and rental rates at the storage facilities. However, we believe
that we possess several distinguishing characteristics which enable us to
compete effectively with other owners and operators.
We are the largest owner and operator of self-storage facilities in the
United States with ownership interests as of December 31, 2001 in 1,384 storage
facilities containing approximately 83.7 million net rentable square feet. All
of our facilities are operated under the "Public Storage" brand name, which we
believe is the most recognized and established name in the storage industry.
Located in the major metropolitan markets of 37 states, our storage facilities
are geographically diverse, giving us national recognition and prominence. This
concentration establishes us as one of the dominant providers of storage space
in most markets in which we operate and enables us to use a variety of
promotional activities, such as television advertising as well as targeted
discounting and referrals, which are generally not economically viable to most
of our competitors. In addition, we believe that the geographic diversity of the
portfolio reduces the impact from regional economic downturns and provides a
greater degree of revenue stability.
28
We will continue to focus our growth strategies on: (i) improving the
operating performance of our existing traditional self-storage properties, (ii)
increasing our ownership of storage facilities through additional investments,
(iii) improving the operating performance of the containerized storage business
and (iv) participating in the growth of PS Business Parks, Inc. Major elements
of these strategies are as follows:
o We will continue to focus upon enhancing the operating performance
of our existing traditional self-storage properties, primarily
through increases in revenues achieved through the telephone
reservation center and associated marketing efforts. These
increases in revenue levels for 2002 are expected to result
primarily from improvements in occupancy levels rather than
significant increases in realized rent per occupied square foot.
During 2001, the Consistent Group of facilities (defined below)
exhibited growth in rental income and net operating income of 7.2%
and 9.5%, respectively, over the prior year. We do not expect to
maintain this high level of growth in 2002.
o We expect to continue our development program. Over the past three
years, the Company and related development joint ventures opened a
total of 74 storage facilities at a cost of approximately $439.6
million, containing approximately 4,813,000 net rentable square
feet. The Company has a total of 46 projects identified for
openings after December 31, 2001 at an estimated total cost of
$298.4 million. These 46 projects (which include two facilities
being developed by our second development joint venture) are
comprised of 25 storage facilities for which we have acquired the
land at December 31, 2001 (total estimated costs upon completion
of $171.4 million), 14 storage facilities identified for which we
have not acquired the land (estimated costs upon completion of
approximately $98.0 million) and seven expansions of existing
self-storage facilities (total estimated costs upon completion of
$29.0 million). In addition, we have 12 parcels of land held for
development totaling $30.0 million for which currently we have no
specific development plans. Generally, the construction period
takes nine to 12 months, followed by an estimated 24 month fill-up
process. Throughout the fill-up period, we experience earnings
dilution to the extent of our interest in the developed
properties.
o We will acquire facilities from third parties. During 2000, we
acquired 12 self-storage facilities from third parties. During
2001, we acquired one storage facility from a third party. We
believe that our national telephone reservation system and
marketing organization present an opportunity for increased
revenues through higher occupancies of the properties acquired
from third parties, as well as cost efficiencies through greater
critical mass. With the exception of the acquisition of Storage
Trust in 1999, we have not acquired a significant number of
facilities from third parties.
o We will acquire equity interests in entities owning storage
facilities that we manage and already have an equity interest in,
as they become available from time to time. The pool of such
available acquisitions has continued to decrease as we have
acquired such remaining interests over the last several years.
Such potential remaining acquisition opportunities at December 31,
2001 include the remaining equity interests that we do not own in
the entities described as "Other Equity Investments" as described
in Note 5 to the Company's financial statements, as well as the
"Other Partnership Interests" as described in Note 8 to the
Company's financial statements for the year ended December 31,
2001.
o We will continue to focus on improving the operations of the
containerized storage operations. At December 31, 2001, 37 of the
55 facilities operated by PSPUD are operated in owned facilities,
substantially all of which are facilities that combine
containerized storage and traditional self-storage. These owned
facilities have replaced facilities which were previously leased
from third parties reducing third party lease expense. We believe
that these facilities may offer efficiencies and a more effective
method to meet customers' needs than a stand-alone containerized
storage facility. The Company and PSPUD at December 31, 2001 are
developing three additional facilities which will replace three of
the 18 existing leased facilities. The Company currently has no
plans to replace the 15 leased facilities that will remain after
completion of the three remaining planned combination facilities.
29
o Through our investment in PS Business Parks, Inc., we will
continue to participate in the growth of this company's investment
in approximately 14.8 million net rentable square feet of
commercial space at December 31, 2001.
Results of Operations
--------------------------------------------------------------------------------
NET INCOME AND EARNINGS PER COMMON SHARE: Net income for 2001, 2000 and
1999 was $324,208,000, $297,088,000 and $287,885,000, respectively. The increase
in net income was primarily the result of improved property operations, reduced
operating losses from the containerized storage business, and the acquisition of
additional real estate investments during 1999, 2000 and 2001. The impact of
these items was offset partially by an increased allocation of income to
minority interests (as a result of the issuance of preferred operating
partnership units, referred to below) combined with an increase in depreciation
and general and administration expense during 2000 and 2001 when compared to
1999.
During 2000, our capital raising activities included the issuance of
approximately $365 million in preferred operating partnership units in one of
our controlled partnerships ($80 million of which was repurchased in 2001).
Unlike distributions to preferred shareholders, distributions to preferred
unitholders are presented as minority interest in income and a reduction in
computing the Company's net income. Primarily as a result of these preferred
distributions, minority interest in income increased to $46,015,000 and
$38,356,000 for 2001 and 2000, respectively, as compared to $16,006,000 for
1999.
Net income allocable to common shareholders for 2001, 2000 and 1999 was
$186,774,000, $185,908,000 and $193,092,000, respectively. On a diluted basis,
net income was $1.51 per common share (based on diluted weighted average common
equivalent shares outstanding of 123,577,000) for 2001, $1.41 per common share
(based on diluted weighted average common equivalent shares outstanding of
131,657,000) for 2000 and $1.52 per common share (based on diluted weighted
average common equivalent shares outstanding of 126,669,000) for 1999. The
increase in net income per common share in 2001 as compared to 2000 is primarily
due to a reduction in our weighted average shares outstanding due to our share
repurchase activities. The decrease in net income per common share in 2000 as
compared to 1999 reflects the inclusion of 6,790,000 common equivalent shares
related to the Company's Class B common shares in 2000, but not in 1999, as
described more fully below.
In computing net income allocable to common shareholders for each
period, aggregate dividends paid to the holders of the Equity Stock, Series A
and preferred equity securities have been deducted in determining net income
allocable to the common shareholders. Distributions paid to the holders of the
Equity Stock, Series A totaled $19,455,000 in 2001, $11,042,000 in 2000 and none
in 1999. Distributions paid to preferred shareholders totaled $117,979,000 in
2001, $100,138,000 in 2000 and $94,793,000 in 1999.
Commencing January 1, 2000, the Company's 7,000,000 Class B common
shares outstanding began to participate in distributions of the Company's
earnings. Distributions per share of Class B common stock are equal to 97% of
the per share distribution paid to the Company's regular common shares. As a
result of this participation in distributions of earnings, for purposes of
computing net income per common share, the Company began to include 6,790,000
(7,000,000 x 97%) Class B common shares in the weighted average common
equivalent shares effective January 1, 2000. Weighted average diluted shares for
the year ended December 31, 1999 does not include any shares with respect to the
Class B common stock as these shares did not participate in distributions of the
Company's earnings prior to January 1, 2000.
30
Real Estate Operations
--------------------------------------------------------------------------------
SELF - STORAGE OPERATIONS: Our self-storage operations are by far the
largest component of our operations, representing approximately 92% of rental
revenues generated during 2001. At the end of 1998, we had a total of 951
self-storage facilities included in our consolidated financial statements. Since
that time we have increased the number of self-storage facilities by 319 (1999 -
255 facilities, 2000 - 41 facilities and 2001 - 23 facilities). As a result of
significant acquisitions and development of self-storage facilities over the
past three years, year over year comparisons as presented on the consolidated
statements of income with respect to our self-storage operations are not
meaningful.
To enhance year over year comparisons, the following table summarizes,
and the ensuing discussion describes, the operating results of (i) 909
self-storage facilities that are reflected in the financial statements for the
entire three years ended December 31, 2001 (the "Consistent Group"), (ii) 53
development facilities that were opened during the three years ended December
31, 2001 (the "Developed Facilities"), (iii) 267 facilities that were acquired
in the three years ended December 31, 2001 and continued to be owned at December
31, 2001 (the "Acquired Facilities"), (iv) 41 facilities that were owned
throughout the three years ended December 31, 2001 but were not stabilized, (the
"Expansion Facilities") and (v) 18 facilities that were disposed of during the
three years ended December 31, 2001 (the "Disposed Facilities"):
Self - storage operations summary: Year Ended December 31, Year Ended December 31,
---------------------------------- --------------------------------- ----------------------------------
Percentage Percentage
2001 2000 Change 2000 1999 Change
--------- --------- ---------- --------- --------- -----------
(Dollar amounts in thousands)
Rental income (a):
------------------
Consistent Group (b)........................ $557,576 $520,177 7.2% $520,177 $498,737 4.3%
Acquired Facilities (c)..................... 125,145 105,076 19.1% 105,076 70,446 49.2%
Expansion Facilities (d).................... 22,872 21,527 6.2% 21,527 20,381 5.6%
Developed Facilities (e).................... 14,870 3,715 300.3% 3,715 38 9676.3%
Disposed Facilities (f)..................... 1,199 2,615 (54.1)% 2,615 3,017 (13.3)%
--------- --------- ---------- --------- --------- -----------
Total rental income....................... $721,662 $653,110 10.5% $653,110 $592,619 10.2%
--------- --------- ---------- --------- --------- -----------
Cost of operations:
-------------------
Consistent Group............................ $162,416 $159,219 2.0% $159,219 $150,855 5.5%
Acquired Facilities......................... 48,457 40,200 20.5% 40,200 26,378 52.4%
Expansion Facilities........................ 8,167 7,198 13.5% 7,198 6,034 19.3%
Developed Facilities........................ 9,652 2,908 231.9% 2,908 72 3938.9%
Disposed Facilities......................... 519 937 (44.6)% 937 1,142 (18.0)%
--------- --------- ---------- --------- --------- -----------
Total cost of operations.................... $229,211 $210,462 8.9% $210,462 $184,481 14.1%
--------- --------- ---------- --------- --------- -----------
Net operating income:
---------------------
Consistent Group............................ $395,160 $360,958 9.5% $360,958 $347,882 3.8%
Acquired Facilities......................... 76,688 64,876 18.2% 64,876 44,068 47.2%
Expansion Facilities........................ 14,705 14,329 2.6% 14,329 14,347 (0.1)%
Developed Facilities........................ 5,218 807 546.6% 807 (34) (2473.5)%
Disposed Facilities......................... 680 1,678 (59.5)% 1,678 1,875 (10.5)%
--------- --------- ---------- --------- --------- -----------
Total net operating income.................. $492,451 $442,648 11.3% $442,648 $408,138 8.5%
Depreciation.................................. 158,476 141,425 12.1% 141,425 131,118 7.9%
--------- --------- ---------- --------- --------- -----------
Operating Income............................ $333,975 $301,223 10.9% $301,223 $277,020 8.7%
========= ========= ========== ========= ========= ===========
Number of self-storage facilities (at end of period): 1,270 1,247 1.8% 1,247 1,206 3.4%
Net rentable square feet (at end of period): 76,919 74,570 3.2% 74,570 71,469 4.3%
(a) Rental income includes late charges and administrative fees. Rental income
does not include retail sales or truck rental income generated at the
facilities.
(b) The Consistent Group includes 909 facilities with 54,148,000 net rentable
square feet that were owned throughout the three-years ended December 31,
2001, and operated at a mature, stabilized occupancy level throughout the
periods presented. See below for discussion of Consistent Group operating
results.
31
(c) The Acquired Facilities includes 267 facilities with 14,897,000 net
rentable square feet that were acquired in the three year period ending
December 31, 2001 and still owned as of December 31, 2001. Substantially
all of these facilities were mature, stabilized facilities at the time of
their acquisition.
(d) The Expansion Facilities includes 41 facilities with 4,056,000 net rentable
square feet that, while owned for the entire three year period ending
December 31, 2001, had operating results that were not comparable
throughout the periods presented due to expansions in their net rentable
square or their conversion into Combination Facilities. Such construction
activities can cause a drop in revenue levels, as existing capacity is made
unavailable in order to accommodate construction activities. The Company
has completed construction on projects with a total cost of $34,535,000 in
1999, $12,206,000 in 2000, and $84,948,000 in 2001 with respect to such
expansion and conversion efforts.
(e) The Developed Facilities includes 53 facilities with 3,818,000 net rentable
square feet that were developed and opened in the three year period ending
December 31, 2001 at a total cost of $330.4 million. These facilities were
all still owned as of December 31, 2001.
(f) The Disposed Facilities include 18 facilities that were disposed of in the
three year period ending December 31, 2001, primarily properties condemned
by governmental agencies or acquired in the Storage Trust merger that were
not deemed compatible with the Company's operations.
Self Storage Operations - Consistent Group of Facilities
At December 31, 2001, we owned 909 self-storage facilities with
approximately 54,148,000 net rentable square feet that operated at a stabilized
level of operations throughout the three-year period. Revenues and expenses with
respect to these properties are set forth in the above Self-Storage Operations
table under the caption, "Consistent Group." The following table sets forth
certain additional operating data with respect to the Consistent Group of
facilities:
Selected Operating Data for the Consistent Group
-------------------------------------------------
of Facilities (909 Facilities): Year Ended December 31, Year Ended December 31,
------------------------------- --------------------------------- ----------------------------------
Percentage Percentage
2001 2000 Change 2000 1999 Change
------- ------- ---------- ------- ------- ----------
(Dollar amounts in thousands, except rents per square foot)
Weighted average:
Occupancy (a)............................... 89.6% 92.0% (2.4)% 92.0% 92.1% (0.1)%
Realized annual rent per square foot (b).... $11.60 $10.54 10.1% $10.54 $10.10 4.4%
Late charges and administrative fees........... $18,884 $19,180 (1.5%) $19,180 $19,182 0.0%
Promotional Discounts.......................... $3,992 $13,635 (70.7%) $13,635 $14,570 (6.4%)
Gross margin................................... 70.9% 69.4% 1.5% 69.4% 69.7% (0.3%)
(a) Occupancies in the above table represent weighted average occupancy levels
over the entire fiscal year. The average occupancy level at February 28,
2002 was 83.4% as compared to 88.9% at February 28, 2001.
(b) Realized annual rent per square foot is computed by dividing rental income,
including late charges and administrative fees, by the weighted average
occupied square footage for the period.
As indicated on the "Self-storage operations" table above, the
Consistent Group's net operating income increased 9.5% in 2001 as compared to
2000 and 3.8% in 2000 as compared to 1999. Rental income increased 7.2% in 2001
as compared to 2000 and 4.3% in 2000 as compared to 1999. Cost of operations
increased 2.0% in 2001 as compared to 2000 and 5.5% in 2000 as compared to 1999.
We do not expect to maintain this level of growth in 2002 either as to net
operating income or rental income.
32
The increase in rental income is attributable to a 10.1% increase in
realized rent per occupied square foot for 2001 as compared to 2000 and 4.4% for
2000 as compared to 1999. Increases in rental income were partially offset by
reductions in weighted average occupancy levels. Higher realized rent per
occupied square foot was achieved through more aggressive pricing of our
self-storage space offset by a reduction in occupancy levels. During 2001, we
increased rents charged to new tenants and significantly reduced the level of
discounts offered to new tenants. Promotional discounts for 2001, 2000 and 1999
totaled $3,992,000, $13,635,000 and $14,570,000, respectively. In addition,
during 2001, we increased the level of rent charged to our existing tenant base
in many markets.
We believe that our ability to raise rents and reduce promotional
discounts and thereby increase rental income during 2001 was facilitated by 1)
more aggressive marketing efforts, including an increase in consistent group
television advertising expenditures for 2001 totaling $6,072,000 as well as an
increase in the intensity of our yellow page advertising, and 2) the continuing
impact of our efforts over the last several years to improve the value of the
Public Storage brand, most significantly through the completion of our program
to enhance our visual icon and to modernize the appearance of our self-storage
facilities.
We believe that principally as a result of our more aggressive rental
rates and reductions in the amount of promotional discounts, and partially as a
result of the national economic contraction (discussed below), our weighted
average occupancy levels decreased during 2001 as compared to 2000. Our
occupancy levels through the first two months of fiscal 2002 continued to trend
downward, with the Consistent Group's average occupancy level at 83.4% at
February 28, 2002 as compared to 88.9% at February 28, 2001. While the occupancy
level at February 28, 2002 is significantly lower than the average occupancy
levels experienced during the year, some decreases in occupancy are expected due
to minor seasonal fluctuations in occupancies. Occupancies are generally higher
in the summer months than in the winter months. We therefore believe that the
comparison of occupancies at February 28, 2001 versus that at February 28, 2002
provides a more meaningful measure of occupancy trends.
We believe that the national economic contraction has also contributed
to our decreasing occupancies; however, it is difficult to isolate the impact of
the downturn from our aforementioned pricing decisions. While there can be no
assurance, we believe that the potential impact of regional downturns are
partially mitigated by the geographic diversification and quality locations of
our facilities. Our storage facilities are geographically diversified and are
located primarily in or near major metropolitan markets in 37 states.
We are continuously evaluating our call volume, reservation activity,
and move-in/move-out rates for each of our markets relative to our marketing
activities and rental rates. In addition, we are evaluating market supply and
demand factors and based upon these analyses we are continuing to adjust our
marketing activities, and are currently reducing rental rates charged to new
incoming tenants in an effort to increase our occupancy levels.
Cost of operations includes all direct and indirect costs of operating,
marketing and managing the facilities. The following table summarizes major
operating expenses with respect to the Consistent Group (in thousands):
2001 2000 1999
-------- -------- --------
Property payroll expense......................... $44,114 $44,705 $43,502
Property taxes................................... 45,566 45,403 45,546
Repairs and maintenance.......................... 12,560 15,191 12,597
Advertising ..................................... 15,233 8,317 7,317
Telephone reservation center costs............... 7,967 9,338 7,668
Utilities........................................ 12,182 11,616 11,356
Management, office, insurance, and other expenses 24,794 24,649 22,869
-------- -------- --------
Total cost of operations ...................... $162,416 $159,219 $150,855
======== ======== ========
33
Increases in advertising cost include the impact of expanded yellow
page advertising in telephone directories. The increase in advertising cost in
2001 as compared to 2000 also includes the impact of a $6,072,000 increase in
Consistent Group television advertising expenditures. Promotional advertising is
an important part of our operational strategy. Our advertising activities have
increased customer call volume into our national reservation system, where one
of our representatives discusses with the customer space requirements, price and
location preferences and also informs the customer of other products and
services provided by the Company and its subsidiaries.
Self-Storage Operations - Acquired Facilities
As of December 31, 2001, we had 267 facilities with 14,897,000 net
rentable square feet that we acquired in 1999 (242) and 2000 (25) in connection
with business combinations described more fully in Note 3 to the Company's
financial statements, as well as certain third-party acquisitions of facilities.
Substantially all of these facilities were mature, stabilized facilities at the
time of their acquisition. The operations of these facilities are included in
the above table under the caption "Acquired Facilities."
During 2001, the Company acquired one operating self-storage facility
for an aggregate cost of $3.5 million. Included in the above table for 2001,
under the caption "Acquired Facilities", are revenues of $144,000 and cost of
operations of $58,000 with respect to this facility.
Rental income and cost of operations increased significantly in 2000
compared to 1999, as the 1999 operations only reflect a partial year's operating
results for the facilities acquired in 1999 while the 2000 operations reflect a
full year's operations with respect to those facilities. In addition, the 2000
operations include the incremental operating results for those additional
facilities acquired in 2000. Similarly, rental income and cost of operations
increased significantly in 2001 as compared to 2000 due to the improvement in
operations for those properties owned throughout the two periods (the 1999
acquisitions), a full year's operations with respect to the 2000 property
acquisition are reflected in 2001 as opposed to a partial year in 2000 and to a
lesser extent, the incremental operations from the aformentioned acquisition of
a property in 2001.
Self-Storage Operations - Expansion Facilities
Throughout the three-year period ended December 31, 2001, the Company
has expanded certain real estate facilities that it previously owned or
converted them to Combination Facilities. Such construction activities can cause
a drop in revenue levels, as existing capacity is made unavailable in order to
accommodate construction activities. Primarily as a result of these expansion
activities, 41 of these facilities with 4,056,000 net rentable square feet
(which includes the expanded space) had results that were not comparable in each
of the three years ended December 31, 2001. The operating results for these
facilities are presented in the Self-Storage Operations table above under the
caption, "Expansion Facilities." We completed construction on projects with a
total cost of $84,948,000 in 2001, $12,206,000 in 2000, and $34,535,000 in 1999
with respect to these expansions.
Self-Storage Operations - Developed Facilities
During the past three years, we have opened 53 newly developed
self-storage facilities (23 in 2001, 24 in 2000, 6 in 1999) with 3,818,000 net
rentable square feet and a total cost of approximately $330.4 million, whose
operating results are reflected in the Self Storage Operations table under the
caption, "Developed Facilities."
Unlike many other forms of real estate, we are unable to pre-lease our
newly developed facilities due to the nature of our tenants. Accordingly, at the
time a newly developed facility first opens for operation the facility is
entirely vacant generating no rental income. It takes approximately 24 months
for a newly developed facility to fill up and reach a targeted occupancy level
of approximately 90%. At December 31, 2001, the Developed Facilities had an
average occupancy level of approximately 53.4%.
34
Property operating expenses are substantially fixed. The rental revenue
of a newly developed facility will generally not cover its property operating
expenses (excluding depreciation) until the facility has reach an occupancy
level of approximately 30%. However, at that occupancy level, the rental
revenues from the facility are still not sufficient to cover related
depreciation expense and cost of capital with respect to the facility's
development cost (our blended cost of capital is approximately 9.0%). During
construction of the facility, we capitalize interest costs and include such cost
as part of the overall development cost of the facility. Once the facility is
opened for operations interest is no longer capitalized. Due to the relationship
between the generation of rental income and immediate recognition of expenses
upon opening of a facility, our development activities have had a negative
impact on our net income.
We estimate that our net income for 2001 has been impacted negatively
as a result of our development activities by approximately $29,011,000,
$17,869,000, and $10,828,000 in the years ended December 31, 2001, 2000, and
1999, respectively, primarily representing the difference between the revenues
of the Developed Facilities and the related costs denoted above. These amounts
include approximately $8,670,000, $4,232,000, and $1,366,000 for the years ended
December 31, 2001, 2000, and 1999, respectively, in depreciation expense.
We continue to develop facilities, despite the short-term earnings
dilution experienced during the Stabilization Period, because we believe that
the ultimate returns on developed facilities are favorable. In addition, we
believe that it is advantageous for us to continue to expand our asset base and
benefit from the resultant increased critical mass, with facilities that will
improve our portfolio's overall average construction and location quality.
We expect that over at least the next 24 months, the Developed
Facilities will continue to have a negative impact to our earnings. Furthermore,
the 46 facilities in our development pipeline described in "Liquidity and
Capital Resources - Acquisition and Development of Facilities" that will be
opened for operation over the next 12 - 24 months will also negatively impact
our earnings until they reach a stabilized occupancy level.
Self-Storage Operations - Disposed Facilities
During the three-year period ended December 31, 2001, we disposed of 18
facilities. No further operations will be reflected on the Company's financial
statements after December 31, 2001 with respect to these facilities. These
properties consisted primarily of facilities condemned by governmental agencies
or acquired in the Storage Trust merger that were not deemed compatible with the
Company's operations.
COMMERCIAL PROPERTY OPERATIONS: Commercial property operations included
in the consolidated financial statements include commercial space owned by the
Company and Consolidated Entities. We have a much larger interest in commercial
properties through ownership interest in PSB. Our investment in PSB is accounted
for on the equity method of accounting, and accordingly our share of PSB's
earnings is reflected as "Equity in earnings of real estate entities", see
below.
During 2000, we acquired two commercial facilities (which were
anticipated to be converted to storage facilities) for an aggregate cost of
$5,930,000. Included within commercial property operations for 2000 with respect
to these facilities was revenues of $475,000 and cost of operations of $131,000;
included within commercial properties operations for 2001 with respect to these
facilities were revenues of $670,000 and cost of operations of $243,000.
35
The following table sets forth the historical commercial property
amounts included in the financial statements:
Commercial Property Operations:
-------------------------------
Year Ended December 31, Year Ended December 31,
--------------------- ---------------------
2001 2000 Change 2000 1999 Change
------- ------- -------- ------- ------- --------
(Amounts in thousands)
Rental income ............... $12,530 $11,341 10.5% $11,341 $ 8,204 38.2%
Cost of operations............ 3,972 3,826 3.8% 3,826 2,826 35.4%
------- ------- -------- ------- ------- --------
Net operating income....... 8,558 7,515 13.9% 7,515 5,378 39.7%
Depreciation expense.......... 2,685 2,291 17.2% 2,291 1,686 35.9%
------- ------- -------- ------- ------- --------
Operating income........... $5,873 $5,224 12.4% $5,224 $3,692 41.5%
======= ======= ======== ======= ======= ========
CONTAINERIZED STORAGE OPERATIONS: In August 1996, Public Storage Pickup
& Delivery ("PSPUD"), a subsidiary of the Company, made its initial entry into
the containerized storage business through its acquisition of a single facility
operator located in Irvine, California. At December 31, 2001, PSPUD operated 55
facilities in 14 states. The facilities are located in major markets in which we
have significant market presence with respect to our traditional self-storage
facilities.
PSPUD incurred operating losses totaling approximately $2.2 million,
$5.1 million and $7.4 million for the years ended December 31, 2001, 2000 and
1999, respectively, summarized as follows:
Containerized storage:
----------------------
Year Ended December 31, Year Ended December 31,
--------------------- ---------------------
Dollar Dollar
2001 2000 Change 2000 1999 Change
-------- -------- -------- -------- -------- --------
(Dollar amounts in thousand)
Rental and other income ............ $47,686 $37,914 $9,772 $37,914 $27,028 $10,886
-------- -------- -------- -------- -------- --------
Cost of operations:
Direct operating costs.......... 34,296 27,849 6,447 27,849 18,397 9,452
Marketing and advertising....... 2,176 1,283 893 1,283 1,333 (50)
Facility lease expense.......... 6,532 8,666 (2,134) 8,666 9,779 (1,113)
-------- -------- -------- -------- -------- --------
Total cost of operations..... 43,004 37,798 5,206 37,798 29,509 8,289
-------- -------- -------- -------- -------- --------
Operating income (loss) prior to
depreciation.................. 4,682 116 4,566 116 (2,481) 2,597
Depreciation expense (a)............ 6,900 5,251 1,649 5,251 4,915 336
-------- -------- -------- -------- -------- --------
Operating losses.................... $(2,218) $(5,135) $2,917 $(5,135) $(7,396) $2,261
======== ======== ======== ======== ======== ========
(a) Depreciation expense principally relates to the depreciation related to the
containers, however, depreciation expense for 2001 and 2000 includes
$1,049,000 and $450,000, respectively, (none in 1999) with respect to real
estate facilities.
Rental and other income includes monthly rental charges to customers
for storage of the containers and service fees charged for pickup and delivery
of containers to customers' homes. Rental income increased to $47,686,000 in
2001 as compared to $37,914,000 in 2000 as a result of higher per container
rents and an increase in the number of occupied containers. Rental income
increased to $37,914,000 in 2000 compared to $27,028,000 in 1999 principally as
a result in increases in the number of occupied containers. At December 31,
2001, there were approximately 67,797 occupied containers compared to 59,443 at
December 31, 2000 and 57,405 at December 31, 1999.
Direct operating costs principally includes payroll, equipment lease
expense, utilities and vehicle expenses (fuel and insurance). In addition,
during 2001 and 2000, included in direct operating costs was $925,000 and
$1,853,000, respectively, expensed due to the obsolescence of containers.
36
Over the past three years, facility lease expense has continued to
decrease ($6,532,000 in 2001, $8,666,000 in 2000 and $9,779,000 in 1999). The
reduction over the past two years is principally the result of moving the
operations from leased facilities to wholly-owned facilities, and thus
eliminating the lease expense paid to third parties. Lease expense for 2001 was
approximately $1.5 million for those leased facilities that were replaced by
wholly-owned facilities during 2001. Accordingly, we expect that facility lease
expense will continue to decline during 2002 as compared to 2001, as this $1.5
million will not be incurred in 2002.
At December 31, 2001, 18 of the 55 containerized storage facilities are
leased from third parties. We anticipate developing three facilities (which
includes one self-storage facility that is being converted to a combination
facility) that combine self-storage and containerized storage space in the same
location ("Combination Facilities"). These facilities are expected to replace
three of the leased facilities during fiscal 2002. The Company has no plans
currently to develop or acquire additional facilities to replace the 15 leased
facilities that will remain after completion of our Combination Facility
development program.
The containerized storage operations may continue to adversely impact
the Company's future earnings and cash flows. There can be no assurance as to
the level of the containerized storage business's expansion, level of gross
rentals, level of move-outs or profitability.
EQUITY IN EARNINGS OF REAL ESTATE ENTITIES: In addition to our
ownership of equity interests in PSB, we had general and limited partnership
interests in 11 limited partnerships at December 31, 2001 (PSB and the limited
partnerships are collectively referred to as the "Unconsolidated Entities"). Due
to our limited ownership interest and limited control of these entities, we do
not consolidate the accounts of these entities for financial reporting purposes,
and account for such investments using the equity method.
Equity in earnings of real estate entities for the year ended December
31, 2001 consists of our pro rata share of the Unconsolidated Entities based
upon our ownership interest for the period. Similar to the Company, the
Unconsolidated Entities (other than PSB) generate substantially all of their
income from their ownership of self-storage facilities, which we manage. As of
December 31, 2001, the 11 limited partnerships own a total of 114 self-storage
facilities, all of which we manage, and PSB owns and operates 14.8 million net
rentable square feet of commercial space. The following table sets forth the
significant components of equity in earnings of real estate entities:
Historical summary: Year Ended December 31, Year Ended December 31,
------------------- ----------------------- -----------------------
Dollar Dollar
2001 2000 Change 2000 1999 Change
--------- --------- --------- --------- --------- ---------
(Amounts in thousands)
Property operations:
PSB.................................... $51,335 $42,562 $8,773 $42,562 $35,623 $6,939
Development Joint Venture.............. 6,146 4,541 1,605 4,541 2,346 2,195
Other investments...................... 16,766 16,724 42 16,724 18,036 (1,312)
--------- --------- --------- --------- --------- ---------
74,247 63,827 10,420 63,827 56,005 7,822
--------- --------- --------- --------- --------- ---------
Depreciation:
PSB.................................... (17,534) (14,672) (2,862) (14,672) (12,130) (2,542)
Development Joint Venture.............. (2,064) (1,887) (177) (1,887) (1,320) (567)
Other investments...................... (5,498) (5,266) (232) (5,266) (6,271) 1,005
--------- --------- --------- --------- --------- ---------
(25,096) (21,825) (3,271) (21,825) (19,721) (2,104)
--------- --------- --------- --------- --------- ---------
Other: (1)
PSB (2)............................... (11,440) (7,150) (4,290) (7,150) (4,505) (2,645)
Development Joint Venture.............. 145 40 105 40 153 (113)
Other investments...................... 686 1,217 (531) 1,217 251 966
--------- --------- --------- --------- --------- ---------
(10,609) (5,893) (4,716) (5,893) (4,101) (1,792)
--------- --------- --------- --------- --------- ---------
Total equity in earnings of real estate
entities.................................. $38,542 $36,109 $2,433 $36,109 $32,183 $3,926
========= ========= ========= ========= ========= =========
(1) "Other" reflects our share of general and administrative expense, interest
expense, interest income, and other non-property, non-depreciation related
operating results of these entities.
37
(2) During 2000, we also recorded our pro-rata share of gain on disposition of
real estate investments totaling $3,210,000. This gain is included in the
line item "Gain on disposition of real estate and real estate investments"
on our consolidated statements of income.
As a result of improved operations of PSB and the continued fill-up of
the self-storage facilities owned by the Development Joint Venture, equity in
earnings has increased in the years ended December 31, 2001 and 2000 as compared
to the previous years. In addition, equity in earnings for the year ended
December 31, 2000 includes an increase as compared to the previous year, with
respect to certain temporary investments which were acquired in 1999 and 2000
and disposed of in 2000.
During 2000 and 1999, we acquired controlling interests in certain
entities. As a result of these acquisitions of controlling interests, we began
to consolidate the accounts of these entities into our financial statements and
no longer account for these investments on the equity method. Equity in earnings
of real estate entities includes income of $2,293,000 and $4,477,000 for 2000
and 1999, respectively, (none for 2001) with respect to investments that were no
longer held at December 31, 2001.
Equity in earnings of PSB represents our pro rata share (approximately
44% at December 31, 2001) of the earnings of PS Business Parks, Inc., a publicly
traded real estate investment trust (American Stock Exchange symbol "PSB")
organized by the Company on January 2, 1997. As of December 31, 2001, we owned
5,418,273 common shares and 7,305,355 operating partnership units (units which
are convertible into common shares on a one-for-one basis) in PSB. At December
31, 2001, PSB owned and operated 14.8 million net rentable square feet of
commercial space located in nine states. PSB also manages the commercial
properties owned by the Company and affiliated entities.
In April 1997, we formed a joint venture partnership (the "Development
Joint Venture") with an institutional investor to participate in the development
of approximately $220 million of self-storage facilities. The venture is funded
solely with equity capital consisting of 30% from the Company and 70% from the
institutional investor. Equity in earnings from the Development Joint Venture
reflects our pro rata share, based upon our ownership interest, of the
operations of the Development Joint Venture. Since inception through December
31, 2000, the Development Joint Venture has developed and opened 47 self-storage
facilities with an aggregate cost of approximately $232 million. Generally the
construction period takes nine to 12 months followed by an estimated 24 month
fill-up process until the newly constructed facility reaches a stabilized
occupancy level of approximately 90%. For fiscal 2001, 2000 and 1999, many of
the completed facilities were in the fill-up process and had not reached a
stabilized occupancy level.
On January 16, 2002, we purchased the 70% interest from the
institutional investor for cash totaling approximately $155,358,000. As a result
of this purchase, effective January 16, 2002, we will no longer account for our
ownership of this entity using the equity method, and accordingly, equity in
earnings of real estate investments will be eliminated with respect to this
investment on a go forward basis. Correspondingly, effective January 16, 2002,
the rental income, cost of operations and depreciation expense with respect to
these 47 facilities will be reflected in our consolidated statements of income.
Operating results with respect to the "Other investments" includes our
pro rata share of earnings with respect to 10 limited partnerships. These
limited partnerships were formed by the Company during the 1980's. The Company
is the general partner in each limited partnership. The limited partners consist
of numerous individual investors, including the Company, which throughout the
1990's acquired units of limited partnership interests in these limited
partnerships in various transactions.
38
These 10 limited partnerships own 67 self-storage facilities which are
managed by the Company under the "Public Storage" name. The operating
characteristics of these facilities are similar to those of the Company's
self-storage facilities. All 67 of these self-storage facilities are included in
the "Same Store" group of facilities - see Supplemental Property Data and Trends
below. See Note 5 to the consolidated financial statements for further financial
information on these partnerships.
Other Income and Expense Items
--------------------------------------------------------------------------------
INTEREST AND OTHER INCOME: Interest in other income includes (i) the
net operating results from our third party property management operations, (ii)
the net operating results from our merchandise sales and consumer truck rentals
and (iii) interest income.
Interest and other income has decreased in 2001 as compared to 2000
principally as a result of lower cash balances invested in interest bearing
accounts, as well as lower interest rates. Interest and other income has
increased in 2000 as compared to 1999 principally as a result of higher average
cash balances invested in interest bearing accounts. The changes in average cash
balances are primarily due to the timing of investing proceeds from the issuance
of equity securities into real estate assets.
DEPRECIATION AND AMORTIZATION: Depreciation and amortization expense
was $168,061,000 in 2001, $148,967,000 in 2000 and $137,719,000 in 1999.
Depreciation expense with respect to our real estate facilities was $152,901,000
in 2001, $134,857,000 in 2000 and $123,495,000 in 1999; the increases are due to
the acquisition and development of additional real estate facilities in 1999
through 2001. Depreciation expense with respect to non real estate assets,
primarily depreciation of equipment and containers associated with the
containerized storage operations, was $5,851,000 in 2001, $4,801,000 in 2000 and
$4,915,000 in 1999. Amortization expense with respect to intangible assets
totaled $9,309,000 for each of the three years ended December 31, 2001.
In accordance with the provisions of Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets,"("SFAS 142") and as
discussed in Note 14 to the consolidated financial statements, amortization
expense with respect to intangible assets is expected to be reduced by
$2,709,000 in 2002 and beyond as a result of certain provisions of SFAS 142
which preclude amortization of goodwill and intangible assets with
indeterminable lives.
GENERAL AND ADMINISTRATIVE EXPENSE: General and administrative expense
was $21,038,000 in 2001, $21,306,000 in 2000 and $12,491,000 in 1999. General
and administrative costs for each year principally consists of state income
taxes, investor relation expenses, certain overhead cost associated with the
acquisition and development of real estate facilities, and overhead cost
associated with the containerized storage business.
The increase in 2000 as compared to 1999 is primarily due to increases
in our product research and development efforts, costs associated with lease
terminations on leased storage facilities used by PSPUD which were replaced by
newly-developed facilities, and increased consulting fees. The total amount of
such expenses was approximately $5,963,000 in 2000 as compared to $1,291,000 in
1999. In addition during 2000, when compared to 1999, we experienced an increase
in overhead costs associated with the acquisition and development of real estate
facilities amounting to $1,447,000.
In 2001, we continued to experience product research and development
costs, lease termination expense as well as an increase in employee severance
costs which in aggregate totaled $5,630,000. During 2001, when compared to 2000,
we experienced an increase in overhead cost associated with the acquisition and
development of real estate facilities amounting to $2,159,000.
Although we expect that our general and administrative expense for
fiscal 2002 will be less than what we experienced in 2001 and 2000, we expect to
continue to exceed the level of general and administrative expense experienced
in 1999 because the Company has continued to expand the size and scope of its
operations.
39
INTEREST EXPENSE: Interest expense was $3,227,000 in 2001, $3,293,000
in 2000 and $7,971,000 in 1999. Debt and related interest expense remain
relatively low compared to our overall asset base. The decrease in interest
expense in 2001 and 2000 compared to 1999 is principally the result of increased
capitalized interest, as well as a reduction in average outstanding debt
balances. Capitalized interest expense totaled $8,992,000 in 2001, $9,778,000 in
2000 and $4,509,000 in 1999 in connection with our development activities.
The combined interest expense and capitalized interest was $12,219,000
in 2001, $13,071,000 in 2000 and $12,480,000 in 1999. The increase in 2000 as
compared to 1999 is due to the addition of $100 million of notes payable assumed
in a merger during 1999, partially offset by regular principal amortization.
We expect that our aggregate interest cost (interest expensed and
capitalized interest combined) during fiscal 2002 will continue to decline as a
result of principal amortization. During fiscal 2002, scheduled principal
amortization approximates $28.0 million. The amount of interest which will be
capitalized during fiscal 2002 will be dependent on our development activities
which we believe will approximate the levels in fiscal 2001.
MINORITY INTEREST IN INCOME: Minority interest in income represents the
income allocable to equity interests in Consolidated Entities, which are not
owned by the Company. The following table summarizes minority interest in income
for each of the three years ended December 31, 2001:
Minority interest in income for the year ended
----------------------------------------------
December 31, December 31, December 31,
Description 2001 2000 1999
---------------------------------------------- ------------ ------------ ------------
(in thousands)
Preferred partnership interests............... $ 31,737 $ 24,859 $ -
Consolidated Development Joint Venture ....... 1,074 325 8
Convertible OP Units ......................... 359 577 1,175
Other consolidated partnerships............... 12,845 12,595 14,823
------------ ------------ ------------
Total minority interests in income............ $ 46,015 $ 38,356 $ 16,006
============ ============ ============
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 2001 and 2000, the holders of our preferred
partnership units were paid in aggregate approximately $31,737,000 and
$24,859,000, respectively, in distributions and received a corresponding
allocation of minority interest in earnings for the respective period. We
estimate that during 2002 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 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, 1999,
2000, and 2001 is $8,000, $325,000, and $1,074,000, 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 2001 and 2000 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 2002 as the facilities
continue to fill-up and increase the earnings of this entity.
40
We recently mailed an information statement relating to the April 19,
2002 acquisition by the Company of 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. Minority interest in income
for the year ended December 31, 2001, with respect to these interests, was
approximately $2.0 million and is included in the "Other consolidated
partnerships" category in the table above. 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.
In determining income allocable to the minority interest for 2001, 2000
and 1999 consolidated depreciation and amortization expense of approximately
$7,847,000, $7,138,000 and $9,294,000, respectively, was allocated to the
minority interests. Of these amounts, $2,373,000, $365,000, and $15,000,
respectively, was allocated to the minority interests in the Consolidated
Development Joint Venture, with the remainder allocated to the minority
interests in the Other Consolidated Partnerships and the Convertible OP Units.
Supplemental Property Data and Trends
--------------------------------------------------------------------------------
At December 31, 2001, there were approximately 46 ownership entities
owning in aggregate 1,384 storage facilities, including the facilities which we
own and/or operate. At December 31, 2001, 114 of these facilities were owned by
Unconsolidated Entities, entities in which we have an ownership interest and use
the equity method for financial statement presentation. The remaining 1,270
facilities are owned by the Company and Consolidated Entities.
The following table summarizes our investment in real estate facilities
as of December 31, 2001:
Net Rentable Square
Number of Footage of Storage
Storage Facilities
Facilities (in thousands)
---------- -------------------
Consolidated facilities:
Wholly-owned by the Company............. 721 44,927
Owned by Consolidated Entities.......... 549 31,992
---------- -------------------
1,270 76,919
---------- -------------------
Facilities owned by Unconsolidated Entities:
Institutional partnerships.............. 13 855
Development Joint Venture (a)........... 47 2,879
Other................................... 54 2,998
---------- -------------------
114 6,732
---------- -------------------
Total facilities in which the Company has
an ownership interest................... 1,384 83,651
========== ===================
(a) In January 2002, we acquired the remaining 70% interest in this partnership
in which we previously owned only a 30% interest for an aggregate of
$155,358,000.
In addition to the Company's interest in storage facilities noted
above, the Company and the Consolidated Entities own five commercial facilities
with an aggregate of 385,000 net rentable square feet. We also have a 44% common
interest in PSB, which owns and operates 14.8 million net rentable square feet
of commercial space.
In order to evaluate how our overall self-storage portfolio has
performed, as management we analyze the operating performance of a consistent
group of storage facilities representing 945 (54.9 million net rentable square
feet) of the 1,384 storage facilities (herein referred to as "Same Store"
storage facilities). The 945 facilities represent a consistent pool of
properties which have been operated under the "Public Storage" name, at a
stabilized level, by the Company since January 1, 1994. From time to time, we
remove facilities from the "Same Store" pool as a result of expansions,
dispositions or other activities which make such facilities' results not
comparable to previous periods.
41
The Same Store group of properties includes 82 facilities that are not
consolidated in the financial statements. Accordingly, rental income and cost of
operations with respect to these 82 facilities are not reflected on the
consolidated statements of income. As of December 31, 2001, the remaining 863
facilities are included in the consolidated financial statements, however, many
of them were not included in the consolidated financial statements throughout
each of the three years presented. The following table summarizes the
pre-depreciation historical operating results of the Same Store storage
facilities:
Same Store storage facilities:
------------------------------
(historical property operations)
Year Ended December 31, Year Ended December 31,
------------------------ ------------------------
Percentage Percentage
2001 2000 Change 2000 1999 Change
----------- ----------- ----------- ----------- ----------- -----------
(Dollar amounts in thousands except rent per square foot)
Rental income (1)................... $583,899 $544,202 7.3% $544,202 $521,256 4.4%
Cost of operations (2).............. 167,019 163,390 2.2% 163,390 154,310 5.9%
----------- ----------- ----------- ----------- ----------- -----------
Net operating income................ $416,880 $380,812 9.5% $380,812 $366,946 3.8%
=========== =========== =========== =========== =========== ===========
Gross profit margin (3)............. 71.4% 70.0% 1.4% 70.0% 70.4% (0.4)%
Weighted Average:
Occupancy......................... 89.7% 92.3% (2.6)% 92.3% 92.5% (0.2)%
Realized annual rent per sq. ft (4) $11.85 $10.73 10.4% $10.73 $10.26 4.6%
1. Rental income includes late charges and administrative fees that in
aggregate totaled $19,581,000 in 2001, $19,837,000 in 2000 and $19,807,000
in 1999. Rental income does not include retail sales or truck rental income
generated at the facilities.
2. Cost of operations consists of the following:
2001 2000 1999
-------- -------- --------
Payroll expense........................ $45,341 $46,252 $45,060
Property taxes......................... 46,729 45,983 46,142
Repairs and maintenance................ 13,046 15,740 13,094
Advertising............................ 15,694 8,592 7,470
Telephone reservation center costs..... 8,148 9,509 7,844
Utilities.............................. 12,415 11,878 11,594
Other.................................. 25,646 25,436 23,106
-------- -------- --------
$167,019 $163,390 $154,310
======== ======== ========
3. Gross profit margin is computed by dividing property net operating income
(before depreciation expense) by rental revenues.
4. Realized annual rent per square foot is computed by annualizing rental
income including late charges and administrative fees divided by weighted
average occupied square footage for the year.
As indicated above, the Same Store Facilities net operating income
increased 9.5% in 2001 as compared to 2000 and 3.8% in 2000 as compared to 1999.
Rental income increased 7.3% in 2001 as compared to 2000 and 4.4% in 2000 as
compared to 1999. Cost of operations increased 2.2% in 2001 as compared to 2000
and 5.9% in 2000 as compared to 1999. We do not expect to maintain this level of
growth in 2002 either as to net operating income or rental income.
The increase in rental income for 2001 as compared to 2000 is
attributable to a 10.4% increase in realized rent per occupied square foot
partially offset by a reduction in weighted average occupancy levels during the
period. Higher realized rent per occupied square foot was achieved through more
aggressive pricing of our self-storage space, partially offset by a reduction in
occupancy levels. During 2001, we increased rents charged to new tenants and
significantly reduced the level of discounts offered to new tenants. Promotional
discounts totaled approximately $4.1 million in 2001, $13.9 million in 2000 and
$14.7 in 1999. In addition, during 2001, we increased the level of rent charged
to our existing tenant base in many markets.
42
We believe that our ability to raise rents and reduce promotional
discounts and thereby increase rental income during 2001 was facilitated by 1)
more aggressive marketing efforts, including an increase in television
advertising expenditures for 2001 of $6.2 million as compared to 2000, as well
as an increase in the intensity of our yellow page advertising, and 2) the
continuing impact of our efforts over the last several years to improve the
value of the Public Storage brand, most significantly through the completion of
our program to enhance our visual icon and to modernize the appearance of our
self-storage facilities.
We believe that principally as a result of our more aggressive rental
rates and reductions in the amount of promotional discounts, and partially as a
result of the national economic contraction (discussed below), our weighted
average occupancy levels decreased during 2001 as compared to 2000. Our
occupancy levels through the first two months of fiscal 2002 continued to trend
downward, with the Same Store Facilities average occupancy level at 83.4% at
February 28, 2002 as compared to 89.0% at February 28, 2001. While the occupancy
level at February 28, 2002 is significantly lower than the average occupancy
levels experienced during the year, some decreases in occupancy are expected due
to minor seasonal fluctuations in occupancies. Occupancies are generally higher
in the summer months than in the winter months. We therefore believe that the
comparison of occupancies at February 28, 2001 versus that at February 28, 2002
provides a more meaningful measure of occupancy trends.
We believe that the national economic contraction has also contributed
to our decreasing occupancies; however, it is difficult to isolate the impact of
the downturn from our aforementioned pricing decisions. While there can be no
assurance, we believe that the potential impact of regional downturns are
partially mitigated by the geographic diversification and quality locations of
our facilities. Our storage facilities are geographically diversified and are
located primarily in or near major metropolitan markets in 37 states.
We are continuously evaluating our call volume, reservation activity,
and move-in/move-out rates for each of our markets relative to our marketing
activities and rental rates. In addition, we are evaluating market supply and
demand factors and based upon these analyses we are continuing to adjust our
marketing activities, and are currently reducing rental rates charged to new
incoming tenants in an effort to increase our occupancy levels.
43
Same-Store Operating Trends by Region
(Dollar amounts in thousands, except weighted average amounts)
------------------------------------------------------------------------------------------------------------
Northern California Southern California Texas Florida
--------------------- --------------------- --------------------- ---------------------
% change % change % change % change
from from from from
Amount prior year Amount prior year Amount prior year Amount prior year
-------- ---------- -------- ---------- -------- ---------- -------- ----------
Rental income:
--------------
2001 $88,169 8.50% $115,232 10.80% $48,786 5.50% $34,905 6.90%
2000 $81,262 5.30% $103,972 7.60% $46,242 1.40% $32,664 3.20%
1999 $77,154 3.00% $96,672 8.30% $45,601 2.10% $31,649 2.40%
Cost of operations:
-------------------
2001 $20,100 6.50% $24,828 3.00% $18,986 4.90% $12,208 5.30%
2000 $18,881 7.00% $24,115 7.70% $18,101 1.00% $11,591 3.70%
1999 $17,654 1.20% $22,393 2.10% $17,920 4.40% $11,180 3.20%
Net operating income:
---------------------
2001 $68,069 9.10% $90,404 13.20% $29,800 5.90% $22,697 7.70%
2000 $62,381 4.80% $79,857 7.50% $28,141 1.70% $21,073 3.00%
1999 $59,500 3.50% $74,279 10.30% $27,681 0.60% $20,469 2.00%
Weighted avg. occupancy:
------------------------
2001 90.60% (4.00)% 91.00% (4.70)% 89.80% (0.60)% 88.90% (0.50)%
2000 94.60% 1.40% 95.70% 0.80% 90.40% (1.60)% 89.40% (0.70)%
1999 93.20% (1.50)% 94.90% 0.70% 92.00% (0.60)% 90.10% (0.50)%
Weighted avg. annual realized rents per occupied sq. ft.:
---------------------------------------------------------
2001 $15.33 13.40% $15.25 16.70% $8.06 6.10% $10.18 7.80%
2000 $13.52 3.80% $13.07 6.60% $7.60 3.30% $9.44 4.10%
1999 $13.03 4.50% $12.26 7.60% $7.36 2.80% $9.07 2.80%
Number of
facilities 120 134 107 70
Same-Store Operating Trends by Region
(Dollar amounts in thousands, except weighted average amounts)
------------------------------------------------------------------------------------
Illinois Other states Total
--------------------- --------------------- ---------------------
% change % change % change
from from from
Amount prior year Amount prior year Amount prior year
-------- ---------- -------- ---------- -------- ----------
Rental income:
--------------
2001 $41,045 6.40% $255,762 5.90% $583,899 7.30%
2000 $38,592 4.90% $241,470 3.50% $544,202 4.40%
1999 $36,779 6.00% $233,401 3.60% $521,256 4.30%
Cost of operations:
-------------------
2001 $14,192 (1.20)% $76,705 0.50% $167,019 2.20%
2000 $14,369 6.90% $76,333 6.40% $163,390 5.90%
1999 $13,441 (5.50)% $71,722 3.70% $154,310 2.30%
Net operating income:
---------------------
2001 $26,853 10.90% $179,057 8.40% $416,880 9.50%
2000 $24,223 3.80% $165,137 2.10% $380,812 3.80%
1999 $23,338 13.90% $161,679 3.60% $366,946 5.20%
Weighted avg. occupancy:
------------------------
2001 89.30% (2.50)% 89.20% (2.30)% 89.70% (2.60)%
2000 91.80% (0.80)% 91.50% (0.40)% 92.30% (0.20)%
1999 92.60% (0.10)% 91.90% 0.30% 92.50% 0.00%
Weighted avg. annual realized rents per occupied sq. ft.:
---------------------------------------------------------
2001 $13.00 9.20% $10.97 8.80% $11.85 10.40%
2000 $11.90 5.60% $10.08 3.80% $10.73 4.60%
1999 $11.27 5.90% $9.71 3.20% $10.26 4.30%
Number of
facilities 56 458 945
44
Liquidity and Capital Resources
--------------------------------------------------------------------------------
We believe that our internally generated net cash provided by operating
activities will continue to be sufficient to enable us to meet our operating
expenses, capital improvements, debt service requirements and distributions to
shareholders for the foreseeable future.
Operating as a real estate investment trust ("REIT"), our ability to
retain cash flow for reinvestment is restricted. In order for us to maintain our
REIT status, a substantial portion of our operating cash flow must be used to
make distributions to our shareholders (see "Requirement to Pay Distributions"
below). However, despite the significant distribution requirements, we have been
able to retain a significant amount of our operating cash flow. The following
table summarizes our ability to fund distributions to the minority interest,
capital improvements to maintain our facilities, and distributions to our
shareholders through the use of cash provided by operating activities. The
remaining cash flow generated is available to make both scheduled and optional
principal payments on debt and for reinvestment.
For the Year Ended December 31,
----------------------------------------
(Amount in thousands)
2001 2000 1999
--------- --------- ---------
Net cash provided by operating activities............................. $538,534 $522,565 $463,292
Allocable to minority interests (Preferred Units)..................... (31,737) (24,859) -
Allocable to minority interests (common equity)....................... (22,125) (20,635) (25,300)
--------- --------- ---------
Cash from operations allocable to our shareholders.................... 484,672 477,071 437,992
Capital improvements to maintain our facilities:
Storage facilities.................................................. (34,436) (32,410) (28,267)
Commercial properties............................................... (1,042) (613) (756)
Add back: minority interest share of capital improvements to maintain
facilities........................................................ 1,267 728 1,269
--------- --------- ---------
Remaining operating cash flow available for distributions to our
shareholders....................................................... 450,461 444,776 410,238
Distributions paid:
Preferred stock dividends.......................................... (117,979) (100,138) (94,793)
Equity Stock, Series A dividends................................... (19,455) (11,042) -
Regular distributions to Common and Class B shareholders........... (162,481) (115,460) (113,297)
Special distributions to Common and Class B shareholders (a)....... (42,115) (78,673) (82,086)
--------- --------- ---------
Cash available for principal payments on debt and reinvestment........ $108,431 $139,463 $120,062
========= ========= =========
(a) The special distribution for 2001 was declared in August 2001 and paid in
September 2001. The special distribution for 2000 was declared in August
2000 and paid in September 2000. The special distribution for 1999 was
declared in 1999 and paid in January 2000. In each instance, the special
distribution enabled the Company to maintain its REIT status with respect
to the distribution requirements.
Our financial profile is characterized by a low level of debt to total
capitalization, increasing net income, increasing cash flow from operations, and
a conservative dividend payout ratio with respect to the common stock. We expect
to fund our growth strategies with cash on hand at December 31, 2001, internally
generated retained cash flows, and proceeds from issuing equity securities. In
general, our current strategy is to continue to finance our growth with
permanent capital; either common or preferred equity. We have in the past used
our $200 million line of credit as temporary "bridge" financing, and repaid
those amounts with internally generated cash flows and proceeds from the
placement of permanent capital. As of December 31, 2001, outstanding borrowings
under our $200 million bank line of credit totaled $25 million. In addition,
outstanding debt at December 31, 2001 totaled $143.6 million, consisting of
mortgage debt of $23.8 million and unsecured debt of $119.8 million. By
comparison, our real estate facilities had a net book value of approximately
$3.8 billion at December 31, 2001. Accordingly, our portfolio of real estate
facilities is substantially unencumbered.
45
Over the past three years we have funded substantially all of our
acquisitions with permanent capital (both common and preferred securities). We
have elected to use preferred securities as a form of leverage despite the fact
that the dividend rates of our preferred securities exceed the prevailing market
interest rates on conventional debt. We have chosen this method of financing for
the following reasons: (i) under the REIT structure, a significant amount of
operating cash flow needs to be distributed to our shareholders making it
difficult to repay debt with operating cash flow alone, (ii) our perpetual
preferred stock has no sinking fund requirement, or maturity date and does not
require redemption, all of which eliminate any future refinancing risks, (iii)
after the end of a non-call period, we have the option to redeem the preferred
stock at any time, which in 2001 enabled us to effectively refinance higher
coupon preferred stock with new preferred stock at lower rates, (iv) preferred
stock does not contain onerous covenants, thus allowing us to maintain
significant financial flexibility, and (v) dividends on the preferred stock can
be applied to our REIT distribution requirements.
Our credit ratings on each of our series of Cumulative Preferred Stock
by each of the three major credit agencies are "Baa2" by Moody's and BBB+ by
both Standard & Poor's and Fitch IBCA.
We believe that our size and financial flexibility enables us to access
capital when appropriate. During 2001, we completed the following capital
raising activities (amounts are presented net of issuance costs):
Cumulative Equity Stock,
Securities issued Date issued Preferred Stock Series A
-------------------------------------------- ------------------ --------------- -------------
(in thousands)
8.60% Cumulative Preferred Stock, Series Q January 19, 2001 $ 166,966 $ -
Public issuance of Equity Stock, Series A April 11, 2001 - 51,836
Direct placement of Equity Stock, Series A May 31, 2001 - 20,294
8.00% Cumulative Preferred Stock, Series R September 28, 2001 493,085 -
7.875% Cumulative Preferred Stock, Series S October 31, 2001 139,022 -
Direct placement of Equity Stock, Series A November 21, 2001 - 2,690
--------------- -------------
$ 799,073 $74,820
=============== =============
The net proceeds raised through the issuance of our Cumulative
Preferred Stock, Series R and Series S allowed us to take advantage of favorable
rate spreads. Accordingly, at our option, we redeemed for cash our Cumulative
Preferred Stock Series G, Series H and Series I, each having higher coupon rates
than either the Series R or Series S. In addition, we repurchased all of our
outstanding Series P Partnership Preferred Units and a portion of our
outstanding Series O Partnership Preferred Units. These transactions, summarized
below, represented a refinancing of a portion of our permanent capital structure
into lower coupon securities.
Date Redeemed or Cumulative Preferred
Security Redeemed or Repurchased Repurchased Preferred Stock Partnership Units
------------------------------------------- ------------------- --------------- -----------------
(in thousands)
9.125% Cumulative Preferred Units, Series O August 31, 2001 $ - $ 30,000
8 7/8% Cumulative Preferred Stock, Series G September 28, 2001 172,525 -
8.45% Cumulative Preferred Stock, Series H October 5, 2001 168,775 -
8.75% Cumulative Preferred Units, Series P October 15, 2001 - 50,000
8 5/8% Cumulative Preferred Stock, Series I November 13, 2001 100,025 -
--------------- -----------------
$ 441,325 $80,000
=============== =================
The Cumulative Preferred Stock amounts listed above include redemption
cost of approximately $25,000 per redemption.
Subsequent to December 31, 2001, we issued additional Cumulative
Preferred Stock: $150 million of our 7.625% Cumulative Preferred Stock, Series T
was issued on January 18, 2002 and $150 million of our 7.625% Cumulative
Preferred Stock, Series U was issued on February 19, 2002.
46
It is our intent to call for redemption our 10% Senior Preferred Stock
Series A, which becomes redeemable on September 30, 2002. The aggregate
redemption amount for this security is $25 per share or approximately $45.6
million, plus accrued dividends.
REQUIREMENT TO PAY DISTRIBUTIONS: We have operated, and intend to
continue to operate, in such a manner as to qualify as a REIT under the Internal
Revenue Code of 1986, but no assurance can be given that we will at all times so
qualify. To the extent that the Company continues to qualify as a REIT, we will
not be taxed, with certain limited exceptions, on the taxable income that is
distributed to our shareholders, provided that at least 90% of our taxable
income is so distributed to our shareholders prior to filing of the Company's
tax return. We have satisfied the REIT distribution requirement since 1980.
During 2001, we paid regular quarterly distributions of $0.22 per
common share for the first two quarters; during the third and fourth quarters
the regular quarterly distribution was $0.45 per common share. In addition, in
the third quarter, a special distribution in the amount of $0.35 per common
share (an aggregate of $39.7 million) was declared and paid.
Aggregate dividends paid during 2001, totaled $118.0 million to the
holders of our Cumulative Preferred Stock, $193.1 million to the holders of our
Common Stock, $11.5 million to the holders of our Class B Common Stock and $19.5
million to the holders of our Equity Stock, Series A. Although we have not
finalized the calculation of our 2001 taxable income, we believe that the
aggregate dividends paid in 2001 to our shareholders were designed to enable us
to continue to qualify as a REIT.
We estimate that the distribution requirements for fiscal 2002 with
respect to our Cumulative Preferred Stock outstanding (including the Series T
and U issued subsequent to December 31, 2001), and assuming the redemption of
Cumulative Preferred Stock, Series A, will be approximately $150.6 million.
During 2001, we paid distributions totaling $31.7 million with respect
to our Preferred Partnership Units. We estimate the annual distributions
requirements with respect to the preferred partnership units outstanding at
December 31, 2001 to be approximately $26.9 million.
For 2002, distributions with respect to the Common Stock and Equity
Stock, Series A will be determined based upon our REIT distribution requirements
after taking into consideration distributions to the preferred shareholders. We
anticipate that, at a minimum, quarterly distributions per common share will
remain at $0.45 per common share (increased from $0.22 per common share during
2000 and in the first two quarters of 2001). For the first quarter of 2002, a
quarterly distribution of $0.45 per common share has been declared by our Board
of Directors. Over the past several years, in addition to the regular quarterly
dividends paid to our common shareholder, we also paid special distributions.
These special distributions were necessary to meet our distribution requirements
in order to maintain our REIT tax status. The need to make a special
distribution in 2002 is not determinable at this time and will depend in large
part on our 2002 taxable income relative to the distributions being paid to all
of our 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 annual distributions equal to
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.
CAPITAL IMPROVEMENT REQUIREMENTS: During 2002, we have budgeted
approximately $31 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.
47
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, 2001, we had total outstanding notes payable of approximately
$143.6 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.
GROWTH STRATEGIES: During 2002, we intend to continue to expand our
asset and capital base through the acquisition of real estate assets and
interests in real estate assets through direct purchases, mergers, tender offers
or other transactions and through the development of additional storage
facilities.
ACQUISITION AND DEVELOPMENT OF FACILITIES: During 2001, we acquired
only one self-storage facility for approximately $3.5 million. During 2000, we
acquired two commercial facilities and 12 storage facilities at an aggregate
cost of approximately $67.1 million. Our low level of third party acquisitions
over the past two 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 2002, we will continue to seek to acquire additional self-storage
facilities from third parties, however, it is difficult to estimate the level of
third party acquisitions.
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.
In April 1997, we formed a joint venture partnership with an
institutional investor for the purpose of developing up to $220.0 million of
self-storage facilities. The joint venture is funded solely with equity capital
consisting of 30% from us and 70% from the institutional investor. Our share of
the cost of the real estate in the joint venture was approximately $69 million
at December 31, 2001. As of December 31, 2001, the joint venture had 47
operating facilities, with 2,804,000 net rentable square feet and total
development costs of approximately $232 million. On January 16, 2002, we
acquired the 70% interest from the institutional investor for approximately
$155,358,000 in cash. This transaction was principally financed with the capital
raised through the issuance of our 7.625% Cumulative Preferred Stock, Series T.
We recently mailed an information statement relating to the April 19,
2002 acquisition by the Company of all of the 55,150 limited partnership units
that it did not own in PS Partners V, Ltd., a partnership which is consolidated
with the Company. The acquisition of the 55,150 units will be accomplished
through a merger of a subsidiary of the Company into the partnership and the
conversion of the 55,150 units into either cash or common stock of the Company.
Each unit will be converted into the right to receive a value of $596 in our
common stock or, cash at the election of the unitholder. We expect that the cash
portion of the transaction will be funded by available cash on hand.
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, 2001, this development joint venture was committed to develop 22
facilities (approximately 1,464,000 net rentable sq. ft.), of which 20
facilities (approximately 1,285,000 net rentable sq. ft.) were completed at an
aggregate cost of approximately $96.0 million. As of December 31, 2001, this
development joint venture is developing two additional projects (approximately
144,000 net rentable square feet) that were in process, with total costs
incurred of $11.0 million and estimated remaining costs to complete of $700,000.
48
We currently have a development "pipeline" of 46 self-storage
facilities, combination facilities, and expansions to existing self-storage
facilities with an aggregate estimated cost of approximately $298.4 million.
Approximately $121.2 million of development cost has been incurred as of
December 31, 2001. We have acquired the land for 32 of these projects, which
have an aggregate estimated cost of approximately $200.4 million, and costs
incurred as of December 31, 2001 of approximately $117.1 million. The remaining
14 facilities represent identified sites where we have an agreement in place to
acquire the land, generally within one year. We anticipate that the development
of these projects will be funded solely by the Company.
The development and fill-up of these storage facilities is subject to
significant contingencies such as obtaining appropriate governmental approvals.
We estimate that the amount remaining to be spent of approximately $177.2
million will be incurred over the next 18 - 24 months. The following table sets
forth our development pipeline and a range of estimated opening dates for these
projects:
Number Total Estimated Totla Cost Estimated time
of Cost of Incurred through Frames of Facility
Facilities Development December 31, 2001 Openings
---------- --------------- ----------------- -------------------
Development - Land Acquired at 12/31/01
---------------------------------------
Self-storage facilities............... 23 $ 157,283 $ 91,103 Q1 '02 - Q2 `03
Expansions of existing self-storage
facilities........................ 6 23,165 7,321 Q1 '02 - Q2 `03
Expansion of existing self-storage
facilities into Combination 1 5,850 5,542 Q1 `02
Facilities........................
Combination facilities................ 2 14,136 13,111 Q1 `02
---------- --------------- -----------------
Total............................ 32 200,434 117,077
---------- --------------- -----------------
Potential Development - Land to be
---------------------------------------
Acquired After 12/31/01
-----------------------
Other self-storage facilities......... 14 97,971 4,104 Q4 '02 - Q4 `03
---------- --------------- -----------------
Total Development Pipeline....... 46 $ 298,405 $ 121,181
========== =============== =================
In addition to the above projects, we have 12 parcels of land held for
development with total costs of approximately $30,001,000 at December 31, 2001.
STOCK REPURCHASE PROGRAM: The Company's Board of Directors has
authorized the repurchase from time to time of up to 25,000,000 shares of the
Company's common stock on the open market or in privately negotiated
transactions. During 2001, we repurchased a total of 10,585,593 common shares,
for a total aggregate cost of approximately $276.9 million. From the inception
of the repurchase program through December 31, 2001, we have repurchased a total
of 21,486,020 shares of common stock at an aggregate cost of approximately
$535.5 million. From January 1, 2002 until March 26, 2002, there were no
significant repurchases of our common stock.
FUNDS FROM OPERATIONS: Total funds from operations ("FFO") increased to
$499.6 million for the year ended 2001 compared to $452.2 million for the year
ended 2000 and $429.0 million in 1999. FFO available to common shareholders
(after deducting preferred stock dividends) increased to $362.1 million for the
year ended December 31, 2001 compared to $341.0 million in 2000 and $334.2
million in 1999. FFO means net income (loss) (computed in accordance with
generally accepted accounting principles) before (i) gain (loss) on early
extinguishment of debt, (ii) minority interest in income and (iii) gain (loss)
on disposition of real estate, adjusted as follows: (i) plus depreciation and
amortization related to real estate assets (including the Company's pro-rata
share of depreciation and amortization of unconsolidated equity interests and
amortization of assets acquired in a merger, including property management
agreements and goodwill), and (ii) less FFO attributable to minority interests.
49
FFO is a supplemental performance measure for equity REITs as defined
by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT").
The NAREIT definition does not specifically address the treatment of minority
interest in the determination of FFO or the treatment of the amortization of
property management agreements and goodwill. In the case of the Company, FFO
represents amounts attributable to its shareholders after deducting amounts
attributable to the minority interests and before deductions for the
amortization of property management agreements and goodwill. FFO is presented
because management, as well as many industry analysts, consider FFO to be one
measure of the performance of the Company and it is used in establishing the
terms of the Class B Common Stock. FFO does not take into consideration capital
improvements, scheduled principal payments on debt, distributions and other
obligations of the Company. Accordingly, FFO is not a substitute for the
Company's cash flow or net income (as discussed above) as a measure of the
Company's liquidity or operating performance. FFO is not comparable to similarly
entitled items reported by other REITs that do not define it exactly as we have
defined it.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
To limit our exposure to market risk, we principally finance our
operations and growth with permanent equity capital consisting either of common
or preferred stock. At December 31, 2001, the Company's debt as a percentage of
total shareholders' equity (based on book values) was 4.3%.
Our preferred stock is not redeemable at the option of the holders.
Except under certain conditions relating to the Company's qualification as a
REIT, the Senior Preferred Stock is not redeemable by the Company prior to the
following dates: Series A - September 30, 2002, Series B - March 31, 2003,
Series C - June 30, 1999, Series D - September 30, 2004, Series E - January 31,
2005, Series F - April 30, 2005, Series J - August 31, 2002, Series K - January
19, 2004, Series L - March 10, 2004, Series M - August 17, 2004, Series Q -
January 19, 2006, Series R - September 28, 2006, Series S - October 31, 2006,
Series T - January 18, 2007 and Series U - February 19, 2007. On or after the
respective dates, each of the series of Senior Preferred Stock will be
redeemable at the option of the Company, in whole or in part, at $25 per share
(or depositary share in the case of the Series J through Series U), plus accrued
and unpaid dividends.
Our market risk sensitive instruments include notes payable, which
totaled $168,552,000 at December 31, 2001. All of our notes payable bear
interest at fixed rates. See Note 7 to the consolidated financial statements for
terms, valuations and approximate principal maturities of the notes payable as
of December 31, 2001.
ITEM 8. Financial Statements and Supplementary Data
The financial statements of the Company at December 31, 2001 and
December 31, 2000 and for each of the three years in the period ended December
31, 2001 and the report of Ernst & Young LLP, Independent Auditors, thereon and
the related financial statement schedule, are included elsewhere herein.
Reference is made to the Index to Financial Statements and Schedules in Item 14.
ITEM 9. Disagreements on Accounting and Financial Disclosure
Not applicable.
50
PART III
ITEM 10. Directors and Executive Officers of the Registrant
The information required by this item with respect to directors is
hereby incorporated by reference to the material appearing in the Company's
definitive proxy statement to be filed in connection with the annual
shareholders' meeting to be held on May 9, 2002 (the "Proxy Statement") under
the caption "Proposal No. 1 - Election of Directors." Information required by
this item with respect to executive officers is provided in Item 4A of this
report. See "Executive Officers of the Company."
ITEM 11. Executive Compensation
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the captions
"Compensation" and "Compensation Committee Interlocks and Insider
Participation."
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the captions
"Proposal No. 1 - Election of Directors - Security Ownership of Certain
Beneficial Owners" and "- Security Ownership of Management."
ITEM 13. Certain Relationships and Related Transactions
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the caption
"Compensation Committee Interlocks and Insider Participation - Certain
Relationships and Related Transactions."
51
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
a. 1. Financial Statements
The financial statements listed in the accompanying Index to
Financial Statements and Schedules hereof are filed as part of
this report.
2. Financial Statement Schedules
The financial statements schedules listed in the accompanying
Index to Financial Statements and Schedules are filed as part
of this report.
3. Exhibits
See Index to Exhibits contained herein.
b. Reports on Form 8-K
The Company filed a Current Report on form 8-K dated September 4, 2001
(filed September 5, 2001), pursuant to Item 5, in connection with the
Company's public offering of depositary shares each representing
1/1,000 of a share of 8.000% Cumulative Preferred Stock, Series R in
September 2001.
The Company filed a Current Report on form 8-K dated October 16, 2001
(filed October 17, 2001), pursuant to Item 5, in connection with the
Company's public offering of depositary shares each representing
1/1,000 of a share of 7.875% Cumulative Preferred Stock, Series S in
October 2001.
The Company filed a Current Report on form 8-K dated January 15, 2002
(filed January 16, 2002), pursuant to Item 5, in connection with the
Company's public offering of depositary shares each representing
1/1,000 of a share of 7.625% Cumulative Preferred Stock, Series T in
January 2002.
The Company filed a Current Report on form 8-K dated February 13, 2002
(filed February 14, 2002), pursuant to Item 5, in connection with the
Company's public offering of depositary shares each representing
1/1,000 of a share of 7.625% Cumulative Preferred Stock, Series U in
February 2002.
c. Exhibits:
See Index to Exhibits contained herein.
d. Financial Statement Schedules
Not applicable.
52
PUBLIC STORAGE, INC.
INDEX TO EXHIBITS
(Items 14(a)(3) and 14(c))
3.1 Restated Articles of Incorporation. Filed with Registrant's
Registration Statement No. 33-54557 and incorporated herein by
reference.
3.2 Certificate of Determination for the 10% Cumulative Preferred Stock,
Series A. Filed with Registrant's Registration Statement No. 33-54557
and incorporated herein by reference.
3.3 Certificate of Determination for the 9.20% Cumulative Preferred Stock,
Series B. Filed with Registrant's Registration Statement No. 33-54557
and incorporated herein by reference.
3.4 Amendment to Certificate of Determination for the 9.20% Cumulative
Preferred Stock, Series B. Filed with Registrant's Registration
Statement No. 33-56925 and incorporated herein by reference.
3.5 Certificate of Determination for the 8.25% Convertible Preferred Stock.
Filed with Registrant's Registration Statement No. 33-54557 and
incorporated herein by reference.
3.6 Certificate of Determination for the Adjustable Rate Cumulative
Preferred Stock, Series C. Filed with Registrant's Registration
Statement No. 33-54557 and incorporated herein by reference.
3.7 Certificate of Determination for the 9.50% Cumulative Preferred Stock,
Series D. Filed with Registrant's Form 8-A/A Registration Statement
relating to the 9.50% Cumulative Preferred Stock, Series D and
incorporated herein by reference.
3.8 Certificate of Determination for the 10% Cumulative Preferred Stock,
Series E. Filed with Registrant's Form 8-A/A Registration Statement
relating to the 10% Cumulative Preferred Stock, Series E and
incorporated herein by reference.
3.9 Certificate of Determination for the 9.75% Cumulative Preferred Stock,
Series F. Filed with Registration's Form 8-A/A Registration Statement
relating to the 9.75% Cumulative Preferred Stock, Series F and
incorporated herein by reference.
3.10 Certificate of Determination for the Convertible Participating
Preferred Stock. Filed with Registrant's Registration Statement No.
33-63947 and incorporated herein by reference.
3.11 Certificate of Amendment of Articles of Incorporation, Filed with
Registrant's Registration Statement No. 33-63947 and incorporated
herein by reference.
3.12 Certificate of Determination for the 8-7/8% Cumulative Preferred Stock,
Series G. Filed with Registration's Form 8-A/A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8-7/8% Cumulative Preferred Stock, Series G and incorporated herein
by reference.
3.13 Certificate of Determination for the 8.45% Cumulative Preferred Stock,
Series H. Filed with Registrant's Form 8-A/A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8.45% Cumulative Preferred Stock, Series H and incorporated herein
by reference.
3.14 Certificate of Determination for the Convertible Preferred Stock,
Series CC. Filed with Registrant's Registration Statement No. 333-03749
and incorporated herein by reference.
53
3.15 Certificate of Correction of Certificate of Determination for the
Convertible Participating Preferred Stock. Filed with Registrant's
Registration Statement No. 333-08791 and incorporated herein by
reference.
3.16 Certificate of Determination for 8-5/8% Cumulative Preferred Stock,
Series I. Filed with Registrant's Form 8-A/A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8-5/8% Cumulative Preferred Stock, Series I and incorporated herein
by reference.
3.17 Certificate of Amendment of Articles of Incorporation. Filed with
Registrant's Registration Statement No. 333-18395 and incorporated
herein by reference.
3.18 Certification of Determination for Equity Stock, Series A. Filed with
Registrant's Form 10-Q for the quarterly period ended June 30, 1997 and
incorporated herein by reference.
3.19 Certificate of Determination for Equity Stock, Series AA. Filed with
Registrant's Form 10-Q for the quarterly period ended September 30,
1999 and incorporated herein by reference.
3.20 Certificate Decreasing Shares Constituting Equity Stock, Series A.
Filed with Registrant's Form 10-Q for the quarterly period ended
September 30, 1999 and incorporated herein by reference.
3.21 Certificate of Determination for Equity Stock, Series A. Filed with
Registrant's Form 10-Q for the quarterly period ended September 30,
1999 and incorporated herein by reference.
3.22 Certification of Determination for 8% Cumulative Preferred Stock,
Series J. Filed with Registrant's Form 8-A/A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8% Cumulative Preferred Stock, Series J and incorporated herein by
reference.
3.23 Certificate of Correction of Certificate of Determination for the 8.25%
Convertible Preferred Stock. Filed with Registrant's Registration
Statement No. 333-61045 and incorporated herein by reference.
3.24 Certification of Determination for 8-1/4% Cumulative Preferred Stock,
Series K. Filed with Registrant's Form 8-A/A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8-1/4% Cumulative Preferred Stock, Series K and incorporated herein
by reference.
3.25 Certificate of Determination for 8-1/4% Cumulative Preferred Stock,
Series L. Filed with Registrant's Form 8-A/A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8-1/4% Cumulative Preferred Stock, Series L and incorporated herein
by reference.
3.26 Certificate of Determination for 8.75% Cumulative Preferred Stock,
Series M. Filed with Registrant's Form 8-A/A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8.75% Cumulative Preferred Stock, Series M and incorporated herein
by reference.
3.27 Certificate of Determination for Equity Stock, Series AAA. Filed with
Registrant's Current Report on Form 8-K dated November 15, 1999 and
incorporated herein by reference.
3.28 Certification of Determination for 9.5% Cumulative Preferred Stock,
Series N. Filed with Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999 and incorporated herein by reference.
3.29 Certification of Determination for 9.125% Cumulative Preferred Stock,
Series O. Filed with Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2000 and incorporated herein by
reference.
3.30 Certificate of Determination for 8.75% Cumulative Preferred Stock,
Series P. Filed with Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2000 and incorporated herein by
reference.
54
3.31 Certificate of Determination for 8.600% Cumulative Preferred Stock,
Series Q. Filed with Registrant's Form 8-A/A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8.600% Cumulative Preferred Stock, Series Q and incorporated herein
by reference.
3.32 Amendment to Certificate of Determination for Equity Stock, Series A.
Filed with Registrant's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2001 and incorporated herein by reference.
3.33 Certificate of Determination for 8.000% Cumulative Preferred Stock,
Series R. Filed with Registrant's Form 8-A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 8.000% Cumulative Preferred Stock, Series R and incorporated herein
by reference.
3.34 Certificate of Determination for 7.875% Cumulative Preferred Stock,
Series S. Filed with Registrant's Form 8-A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 7.875% Cumulative Preferred Stock, Series S and incorporated herein
by reference.
3.35 Certificate of Determination for 7.625% Cumulative Preferred Stock,
Series T. Filed with Registrant's Form 8-A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 7.625% Cumulative Preferred Stock, Series T and incorporated herein
by reference.
3.36 Certificate of Determination for 7.625% Cumulative Preferred Stock,
Series U. Filed with Registrant's Form 8-A Registration Statement
relating to the Depositary Shares Each Representing 1/1,000 of a Share
of 7.625% Cumulative Preferred Stock, Series U and incorporated herein
by reference.
3.37 Bylaws, as amended. Filed with Registrant's Registration Statement No.
33-64971 and incorporated herein by reference.
3.38 Amendment to Bylaws adopted on May 9, 1996. Filed with Registrant's
Registration Statement No. 333-03749 and incorporated herein by
reference.
3.39 Amendment to Bylaws adopted on June 26, 1997. Filed with Registrant's
Registration Statement No. 333-41123 and incorporated herein by
reference.
3.40 Amendment to Bylaws adopted on January 6, 1998. Filed with Registrant's
Registration Statement No. 333-41123 and incorporated herein by
reference.
3.41 Amendment to Bylaws adopted on February 10, 1998. Filed with
Registrant's Current Report on Form 8-K dated February 10, 1998 and
incorporated herein by reference.
3.42 Amendment to Bylaws adopted on March 4, 1999. Filed with Registrant's
Current Report on Form 8-K dated March 4, 1999 and incorporated herein
by reference.
3.43 Amendment to Bylaws adopted on May 6, 1999. Filed with Registrant's
Form 10-Q for the quarterly period ended March 31, 1999 and
incorporated herein by reference.
10.1 Second Amended and Restated Management Agreement by and among
Registrant and the entities listed therein dated as of November 16,
1995. Filed with PS Partners, Ltd.'s Annual Report on Form 10-K for the
year ended December 31, 1996 and incorporated herein by reference.
10.2 Amended Management Agreement between Registrant and Public Storage
Commercial Properties Group, Inc. dated as of February 21, 1995. Filed
with Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994 and incorporated herein by reference.
10.3 Loan Agreement between Registrant and Aetna Life Insurance Company
dated as of July 11, 1988. Filed with Registrant's Current Report on
Form 8-K dated July 14, 1988 and incorporated herein by reference.
55
10.4 Amendment to Loan Agreement between Registrant and Aetna Life Insurance
Company dated as of September 1, 1993. Filed with Registrant's Annual
Report on Form 10-K for the year ended December 31, 1993 and
incorporated herein by reference.
10.5 Second Amended and Restated Credit Agreement by and among Registrant,
Wells Fargo Bank, National Association, as agent, and the financial
institutions party thereto dated as of February 25, 1997. Filed with
Registrant's Registration Statement No. 333-22665 and incorporated
herein by reference.
10.6 Note Assumption and Exchange Agreement by and among Public Storage
Management, Inc., Public Storage, Inc., Registrant and the holders of
the notes dated as of November 13, 1995. Filed with Registrant's
Registration Statement No. 33-64971 and incorporated herein by
reference.
10.7* Registrant's 1990 Stock Option Plan. Filed with Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference.
10.8* Registrant's 1994 Stock Option Plan. Filed with Registrant's Annual
Report on Form 10-K for the year ended December 31, 1997 and
incorporated herein by reference.
10.9* Registrant's 1996 Stock Option and Incentive Plan. Filed with
registrant's Annual Report on Form 10-K for the year ended December 31,
2000 and incorporated herein by reference.
10.10 Deposit Agreement dated as of December 13, 1995, among Registrant, The
First National Bank of Boston, and the holders of the depositary
receipts evidencing the Depositary Shares Each Representing 1/1,000 of
a Share of 8-7/8 Cumulative Preferred Stock, Series G. Filed with
Registrant's Form 8-A/A Registration Statement relating to the
Depositary Shares Each Representing 1/1,000 of a Share of 8-7/8
Cumulative Preferred Stock, Series G and incorporated herein by
reference.
10.11 Deposit Agreement dated as of January 25, 1996, among Registrant, The
First National Bank of Boston, and the holders of the depositary
receipts evidencing the Depositary Shares Each Representing 1/1,000 of
a Share of 8.45% Cumulative Preferred Stock, Series H. Filed with
Registrant's Form 8-A/A Registration Statement relating to the
Depositary Shares Each Representing 1/1,000 of a Share of 8.45%
Cumulative Preferred Stock, Series H and incorporated herein by
reference.
10.12** Employment Agreement between Registrant and B. Wayne Hughes dated as of
November 16, 1995. Filed with Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995 and incorporated herein by
reference.
10.13 Deposit Agreement dated as of November 1, 1996, among Registrant, The
First National Bank of Boston, and the holders of the depositary
receipts evidencing the Depositary Shares Each Representing 1/1,000 of
a Share of 8-5/8% Cumulative Preferred Stock, Series I. Filed with
Registrant's Form 8-A/A Registration Statement relating to the
Depositary Shares Each Representing 1/1,000 of a Share of 8-5/8%
Cumulative Preferred Stock, Series I and incorporated herein by
reference.
10.14 Limited Partnership Agreement of PSAF Development Partners, L. P.
between PSAF Development, Inc. and the Limited Partner dated as of
April 10, 1997. Filed with Registrant's Form 10-Q for the quarterly
period ended March 31, 1997 and incorporated herein by reference.
10.15 Deposit Agreement dated as of August 28, 1997 among Registrant, The
First National Bank of Boston, and the holders of the depositary
receipts evidencing the Depositary Shares Each Representing 1/1,000 of
a Share of 8% Cumulative Preferred Stock, Series J. Filed with
Registrant's Form 8-A/A Registration Statement relating to the
Depositary Shares Each Representing 1/1,000 of a Share of 8% Cumulative
Preferred Stock, Series J and incorporated herein by reference.
56
10.16 Agreement of Limited Partnership of PS Business Parks, L. P. dated as
of March 17, 1998. Filed with PS Business Parks, Inc.'s Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 1998 and
incorporated herein by reference.
10.17 Deposit Agreement dated as of January 19, 1999 among Registrant,
BankBoston, N. A. and the holders of the depositary receipts evidencing
the Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4%
Cumulative Preferred Stock, Series K. Filed with Registrant's Form
8-A/A Registration Statement relating to the Depositary Shares Each
Representing 1/1,000 of a Share of 8-1/4% Cumulative Preferred Stock,
Series K and incorporated herein by reference.
10.18 Agreement and Plan of Merger among Storage Trust Realty, Registrant and
Newco Merger Subsidiary, Inc. dated as of November 12, 1998. Filed with
Registrant's Registration Statement No. 333-68543 and incorporated
herein by reference.
10.19 Amendment No. 1 to Agreement and Plan of Merger among Storage Trust
Realty, Registrant, Newco Merger Subsidiary, Inc. and STR Merger
Subsidiary, Inc. dated as of January 19, 1999. Filed with Registrant's
Registration Statement No. 333-68543 and incorporated herein by
reference.
10.20 Amended and Restated Agreement of Limited Partnership of Storage Trust
Properties, L. P., dated as of March 12, 1999. Filed with Registrant's
Form 10-Q for the quarterly period ended June 30, 1999 and incorporated
herein by reference.
10.21* Storage Trust Realty 1994 Share Incentive Plan. Filed with Storage
Trust Realty's Annual Report on Form 10-K for the year ended December
31, 1997 and incorporated herein by reference.
10.22 Amended and Restated Storage Trust Realty Retention Bonus Plan
effective as of November 12, 1998. Filed with Registrant's Registration
Statement No. 333-68543 and incorporated herein by reference.
10.23 Deposit Agreement dated as of March 10, 1999 among Registrant, Bank
Boston, N.A. and the holders of the depositary receipts evidencing the
Depositary Shares Each Representing 1/1,000 of a Share of 8-1/4%
Cumulative Preferred Stock, Series L. Filed with Registrant's Form
8-A/A Registration Statement relating to the Depositary Shares Each
Representing 1/1,000 of a Share of 8-1/4% Cumulative Preferred Stock,
Series L and incorporated herein by reference.
10.24 Note Purchase Agreement and Guaranty Agreement with respect to
$100,000,000 of Senior Notes of Storage Trust Properties, L.P. Filed
with Storage Trust Realty's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by reference.
10.25 Deposit Agreement dated as of August 17, 1999 among Registrant, Bank
Boston, N.A. and the holders of the depositary receipts evidencing the
Depositary Shares Each Representing 1/1,000 of a Share of 8.75%
Cumulative Preferred Stock, Series M. Filed with Registrant's Form
8-A/A Registration Statement relating to the Depositary Shares Each
Representing 1/1,000 of a Share of 8.75% Cumulative Preferred Stock,
Series M and incorporated herein by reference.
10.26 Limited Partnership Agreement of PSAC Development Partners, L.P. among
PS Texas Holdings, Ltd., PS Pennsylvania Trust and PSAC Storage
Investors, L.L.C. dated as November 15, 1999. Filed with Registrant's
Current Report on Form 8-K dated November 15, 1999 and incorporated
herein by reference.
10.27 Agreement of Limited Liability Company of PSAC Storage Investors,
L.L.C. dated as of November 15, 1999. Filed with Registrant's Current
Report on Form 8-K dated November 15, 1999 and incorporated herein by
reference.
57
10.28 Deposit Agreement dated as of January 14, 2000 among Registrant,
BankBoston, N.A. and the holders of the depositary receipts evidencing
the Depositary Shares Each Representing 1/1,000 of a Share of Equity
Stock, Series A. Filed with Registrant's Form 8-A/A Registration
Statement relating to the Depositary Shares Each Representing 1/1,000
of a Share of Equity Stock, Series A and incorporated herein by
reference.
10.29 Amended and Restated Agreement of Limited Partnership of PSA
Institutional Partners, L.P. among PS Texas Holdings, Ltd. and the
Limited Partners dated as of March 29, 2000. Filed with Registrant's
Annual Report on Form 10-K for the year ended December 31, 1999 and
incorporated herein by reference.
10.30 Amended and Restated Agreement of Limited Partnership of PSA
Institutional Partners, L.P. among PS Texas Holdings, Ltd. and the
Limited Partners dated as of August 11, 2000. Filed with Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2000 and incorporated herein by reference.
10.31* Registrant's 2000 Non-Executive/Non-Director Stock Option and Incentive
Plan. Filed with Registrant's Registration Statement No. 333-52400 and
incorporated herein by reference.
10.32 Deposit Agreement dated as of January 19, 2001 among Registrant, Fleet
National Bank and the holders of the depositary receipts evidencing the
Depositary Shares Each Representing 1/1,000 of a Share of 8.600%
Cumulative Preferred Stock, Series Q. Filed with Registrant's Form
8-A/A Registration Statement relating to the Depositary Shares Each
Representing 1/1,000 of a Share of 8.600% Cumulative Preferred Stock,
Series Q and incorporated herein by reference.
10.33* Registrant's 2001 Non-Executive/Non-Director Stock Option and Incentive
Plan. Filed with Registrant's Registration Statement No. 333-59218 and
incorporated herein by reference.
10.34* Registrant's 2001 Stock Option and Incentive Plan. Filed with
Registrant's Registration Statement No. 333-59218 and incorporated
herein by reference.
10.35 Deposit Agreement dated as of September 28, 2001 among Registrant,
Fleet National Bank and the holders of the depositary receipts
evidencing the Depositary Shares Each Representing 1/1,000 of a Share
of 8.000% Cumulative Preferred Stock, Series R. Filed with Registrant's
Form 8-A Registration Statement relating to the Depositary Shares Each
Representing 1/1,000 of a Share of 8.000% Cumulative Preferred Stock,
Series R and incorporated herein by reference.
10.36 Deposit Agreement dated as of October 31, 2001 among Registrant, Fleet
National Bank and the holders of the depositary receipts evidencing the
Depositary Shares Each Representing 1/1,000 of a Share of 7.875%
Cumulative Preferred Stock, Series S. Filed with Registrant's Form 8-A
Registration Statement relating to the Depositary Shares Each
Representing 1/1,000 of a Share of 7.875% Cumulative Preferred Stock,
Series S and incorporated herein by reference.
10.37 Credit Agreement by and among Registrant, Wells Fargo Bank, National
Association, as agent, and the financial institutions party thereto
dated as of November 1, 2001. Filed with Registrant's Quarterly Report
on Form 10-Q for the quarterly period ended September 30, 2001 and
incorporated herein by reference.
10.38 Deposit Agreement dated as of January 18, 2002 among Registrant, Fleet
National Bank and the holders of the depositary receipts evidencing the
Depositary Shares Each Representing 1/1,000 of a Share of 7.625%
Cumulative Preferred Stock, Series T. Filed with Registrant's Form 8-A
Registration Statement relating to the Depositary Shares Each
Representing 1/1,000 of a Share of 7.625% Cumulative Preferred Stock,
Series T and incorporated herein by reference.
58
10.39 Deposit Agreement dated as of February 19, 2002 among Registrant, Fleet
National Bank and the holders of the depositary receipts evidencing the
Depositary Shares Each Representing 1/1,000 of a Share of 7.625%
Cumulative Preferred Stock, Series U. Filed with Registrant's Form 8-A
Registration Statement relating to the Depositary Shares Each
Representing 1/1,000 of a Share of 7.625% Cumulative Preferred Stock,
Series U and incorporated herein by reference.
11 Statement Re Computation of Ratio of Earnings Per Share. Filed
herewith.
12 Statement Re Computation of Ratio of Earnings to Fixed Charges. Filed
herewith.
21 Subsidiaries of the Registrant. Filed herewith.
23 Consent of Independent Auditors. Filed herewith.
--------------------
* Compensatory benefit plan.
** Management contract.
59
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
PUBLIC STORAGE, INC.
Date: July 11, 2002 By: /s/ Harvey Lenkin
-----------------
Harvey Lenkin, President
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
----------------------------- ----------------------------------- -------------
/s/ B. Wayne Hughes Chairman of the Board, Chief July 11, 2002
----------------------------- Executive Officer and Director
B. Wayne Hughes (principal executive officer)
/s/ Harvey Lenkin President and Director July 11, 2002
-----------------------------
Harvey Lenkin
/s/ Marvin M. Lotz Senior Vice President and Director July 11, 2002
-----------------------------
Marvin M. Lotz
/s/ B. Wayne Hughes, Jr. Vice President and Director July 11, 2002
-----------------------------
B. Wayne Hughes, Jr.
/s/ John Reyes Senior Vice President and July 11, 2002
----------------------------- Chief Financial Officer
John Reyes (principal financial officer and
principal accounting officer)
/s/ Robert J. Abernethy Director July 11, 2002
-----------------------------
Robert J. Abernethy
Director
-----------------------------
Dann V. Angeloff
/s/ William C. Baker Director July 11, 2002
-----------------------------
William C. Baker
Director
-----------------------------
Thomas J. Barrack, Jr.
/s/ Uri P. Harkham Director July 11, 2002
-----------------------------
Uri P. Harkham
/s/ Daniel C. Staton Director July 11, 2002
-----------------------------
Daniel C. Staton
60
PUBLIC STORAGE, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND SCHEDULES
(Item 14 (a))
Page
References
----------
Report of Independent Auditors..................................... F-1
Consolidated balance sheets as of December 31, 2001 and 2000....... F-2
For each of the three years in the period ended December 31, 2001:
Consolidated statements of income.................................. F-3
Consolidated statements of shareholders' equity ................... F-4
Consolidated statements of cash flows.............................. F-5 - F-6
Notes to consolidated financial statements......................... F-7 - F-33
Schedule:
III - Real estate and accumulated depreciation.....................F-34 - F-62
All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the consolidated
financial statements or notes thereto.
61
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Public Storage, Inc.
We have audited the accompanying consolidated balance sheets of Public Storage,
Inc. as of December 31, 2001 and 2000, and the related consolidated statements
of income, shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 2001. Our audits also included the financial
statement schedule listed in the Index at Item 14 (a). These financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Public
Storage, Inc. at December 31, 2001 and 2000, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
ERNST & YOUNG L L P
Los Angeles, California
February 22, 2002
F-1
PUBLIC STORAGE, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2001 and 2000
(amounts in thousands, except share data)
December 31, December 31,
2001 2000
------------- -------------
ASSETS
Cash and cash equivalents ...................................................... $ 49,347 $ 89,467
Real estate facilities, at cost:
Land ........................................................................ 1,165,111 1,107,867
Buildings ................................................................... 3,265,943 3,026,550
------------- -------------
4,431,054 4,134,417
Accumulated depreciation .................................................... (819,932) (668,018)
------------- -------------
3,611,122 3,466,399
Construction in process ..................................................... 121,181 217,140
Land held for development ................................................... 30,001 21,447
------------- -------------
3,762,304 3,704,986
Investment in real estate entities ............................................. 479,300 448,928
Intangible assets, net ......................................................... 202,701 185,017
Notes receivable, including amounts due from related parties ................... 59,344 26,238
Other assets ................................................................... 72,883 59,305
------------- -------------
Total assets ..................................................... $ 4,625,879 $ 4,513,941
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Line of credit borrowings ...................................................... $ 25,000 $ -
Notes payable .................................................................. 143,552 156,003
Accrued and other liabilities .................................................. 93,143 100,903
------------- -------------
Total liabilities ..................................................... 261,695 256,906
Minority interest:
Preferred partnership interests ............................................. 285,000 365,000
Other partnership interests ................................................. 169,601 167,918
Commitments and contingencies
Shareholders' equity:
Preferred Stock, $0.01 par value, 50,000,000 shares authorized, 11,156,500
shares issued and outstanding, (11,141,100 at December 31, 2000) at
liquidation preference:
Cumulative Preferred Stock, issued in series .......................... 1,540,150 1,155,150
Common Stock, $0.10 par value, 200,000,000 shares authorized, 114,961,915
shares issued and outstanding (123,703,874 at December 31, 2000) .......... 11,496 12,370
Equity Stock, Series A, $0.01 par value, 200,000,000 shares authorized,
8,776.102 shares issued and outstanding (5,635.602 at December 31, 2000) .. - -
Class B Common Stock, $0.10 par value, 7,000,000 shares authorized and issued 700 700
Paid-in capital ............................................................. 2,325,898 2,506,736
Cumulative net income ....................................................... 1,711,269 1,387,061
Cumulative distributions paid ............................................... (1,679,930) (1,337,900)
------------- -------------
Total shareholders' equity ............................................ 3,909,583 3,724,117
------------- -------------
Total liabilities and shareholders' equity ....................... $ 4,625,879 $ 4,513,941
============= =============
See accompanying notes.
F-2
PUBLIC STORAGE, INC.
CONSOLIDATED STATEMENTS OF INCOME
For each of the three years in the period ended December 31, 2001
(amounts in thousands, except per share data)
2001 2000 1999
----------- ----------- -----------
Revenues:
Rental income:
Self-storage facilities .................................. $ 721,662 $ 653,110 $ 592,619
Commercial properties .................................... 12,530 11,341 8,204
Containerized storage facilities ......................... 47,686 37,914 27,028
Equity in earnings of real estate entities .................. 38,542 36,109 32,183
Interest and other income ................................... 14,225 18,836 16,700
----------- ----------- -----------
834,645 757,310 676,734
----------- ----------- -----------
Expenses:
Cost of operations:
Storage facilities ....................................... 229,211 210,462 184,481
Commercial properties .................................... 3,972 3,826 2,826
Containerized storage facilities ......................... 43,004 37,798 29,509
Depreciation and amortization ................................ 168,061 148,967 137,719
General and administrative ................................... 21,038 21,306 12,491
Interest expense ............................................. 3,227 3,293 7,971
----------- ----------- -----------
468,513 425,652 374,997
----------- ----------- -----------
Income before minority interest and gain on disposition of real
estate and real estate investments .......................... 366,132 331,658 301,737
Minority interest in income:
Preferred partnership interests .............................. (31,737) (24,859) --
Other partnership interests .................................. (14,278) (13,497) (16,006)
----------- ----------- -----------
Net income before gain on disposition of real estate ........... 320,117 293,302 285,731
Gain on disposition of real estate and real estate investments . 4,091 3,786 2,154
----------- ----------- -----------
Net income ..................................................... $ 324,208 $ 297,088 $ 287,885
=========== =========== ===========
Net income allocation:
Allocable to preferred shareholders ......................... $ 117,979 $ 100,138 $ 94,793
Allocable to Equity Stock, Series A ......................... 19,455 11,042 --
Allocable to common shareholders ............................ 186,774 185,908 193,092
----------- ----------- -----------
$ 324,208 $ 297,088 $ 287,885
=========== =========== ===========
Per common share:
Basic net income per share ..................................... $ 1.53 $ 1.41 $ 1.53
=========== =========== ===========
Diluted net income per share ................................... $ 1.51 $ 1.41 $ 1.52
=========== =========== ===========
Basic weighted average common shares outstanding ............... 122,310 131,566 126,308
=========== =========== ===========
Diluted weighted average common shares outstanding ............. 123,577 131,657 126,669
=========== =========== ===========
See accompanying notes.
F-3
PUBLIC STORAGE, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For each of the three years in the period ended December 31, 2001
(Amounts in thousands, except share and per share amounts)
Cumulative Class B
Preferred Common Common Paid-in
Stock Stock Stock Capital
----------- ----------- ------------ ------------
Balances at December 31, 1998.................................... $ 868,900 $ 11,598 $ 700 $ 2,178,465
Issuance of Preferred Stock, net of issuance costs:
Series K (4,600 shares), Series L (4,600 shares) and Series M
(2,250 shares)............................................ 286,250 - - (9,318)
Issuance of Common Stock (15,320,505 shares) ................. - 1,532 - 402,152
Repurchase of Common Stock (4,589,427 shares)................ - (459) - (108,106)
Net income.................................................... - - - -
Distributions to shareholders:
Preferred Stock............................................. - - - -
Common Stock ($1.52 per share).............................. - - - -
----------- ----------- ------------ ------------
Balances at December 31, 1999.................................... 1,155,150 12,671 700 2,463,193
Issuance of Equity Stock, Series A (5,635.602 shares)......... - - - 113,354
Issuance of Common Stock (498,451 shares) .................... - 50 - 11,387
Repurchase of Common Stock (3,491,600 shares)................ - (351) - (77,448)
Issuance costs: Preferred operating partnership units (Note 8) - - - (3,750)
Net income.................................................... - - - -
Distributions to shareholders:
Preferred Stock............................................. - - - -
Equity Stock, Series A...................................... - - - -
Common Stock ($1.48 per share).............................. - - - -
----------- ----------- ------------ -----------
Balances at December 31, 2000.................................... 1,155,150 12,370 700 2,506,736
Issuance of Series Q (6,900 shares), Series R (20,400 shares) and
Series S (5,750 shares)..................................... 826,250 - - (27,177)
Redemption of Series G (6,900 shares), Series H (6,750 shares)
and Series I (4,000 shares)................................. (441,250) - - (75)
Issuance of Equity Stock, Series A (3,140.500 shares)......... - - - 74,820
Issuance of Common Stock (1,843,634 shares) .................. - 184 - 46,487
Repurchase of Common Stock (10,585,593 shares)............... - (1,058) - (275,803)
Issuance of Put Option (Note 9).............................. - - - 910
Net income.................................................... - - - -
Distributions to shareholders:
Preferred Stock............................................. - - - -
Equity Stock, Series A...................................... - - - -
Common Stock ($1.69 per share).............................. - - - -
----------- ----------- ------------ ------------
Balances at December 31, 2001.................................... $ 1,540,150 $ 11,496 $ 700 $ 2,325,898
=========== =========== ============ ============
Total
Cumulative Cumulative Shareholders'
Net Income Distributions Equity
----------- -------------- --------------
Balances at December 31, 1998.................................... $ 802,088 $ (742,411) $ 3,119,340
Issuance of Preferred Stock, net of issuance costs:
Series K (4,600 shares), Series L (4,600 shares) and Series M
(2,250 shares)............................................ - - 276,932
Issuance of Common Stock (15,320,505 shares) ................. - - 403,684
Repurchase of Common Stock (4,589,427 shares)................ - - (108,565)
Net income.................................................... 287,885 - 287,885
Distributions to shareholders:
Preferred Stock............................................. - (94,793) (94,793)
Common Stock ($1.52 per share).............................. - (195,383) (195,383)
----------- -------------- --------------
Balances at December 31, 1999.................................... 1,089,973 (1,032,587) 3,689,100
Issuance of Equity Stock, Series A (5,635.602 shares)......... - - 113,354
Issuance of Common Stock (498,451 shares) .................... - - 11,437
Repurchase of Common Stock (3,491,600 shares)................ - - (77,799)
Issuance costs: Preferred operating partnership units (Note 8) - - (3,750)
Net income.................................................... 297,088 - 297,088
Distributions to shareholders:
Preferred Stock............................................. - (100,138) (100,138)
Equity Stock, Series A...................................... - (11,042) (11,042)
Common Stock ($1.48 per share).............................. - (194,133) (194,133)
----------- -------------- --------------
Balances at December 31, 2000.................................... 1,387,061 (1,337,900) 3,724,117
Issuance of Series Q (6,900 shares), Series R (20,400 shares) and
Series S (5,750 shares)..................................... - - 799,073
Redemption of Series G (6,900 shares), Series H (6,750 shares)
and Series I (4,000 shares)................................. - - (441,325)
Issuance of Equity Stock, Series A (3,140.500 shares)......... - - 74,820
Issuance of Common Stock (1,843,634 shares) .................. - - 46,671
Repurchase of Common Stock (10,585,593 shares)............... - - (276,861)
Issuance of Put Option (Note 9).............................. - - 910
Net income.................................................... 324,208 - 324,208
Distributions to shareholders:
Preferred Stock............................................. - (117,979) (117,979)
Equity Stock, Series A...................................... - (19,455) (19,455)
Common Stock ($1.69 per share).............................. - (204,596) (204,596)
----------- -------------- --------------
Balances at December 31, 2001.................................... $1,711,269 $ (1,679,930) $ 3,909,583
=========== ============== ==============
See accompanying notes.
F-4
PUBLIC STORAGE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For each of the three years in the period ended December 31, 2001
(amounts in thousands)
2001 2000 1999
------------ ------------ ------------
Cash flows from operating activities:
Net income............................................................... $ 324,208 $ 297,088 $ 287,885
Adjustments to reconcile net income to net cash provided by operating
activities:
Less gain on disposition of real estate and real estate investments. (4,091) (3,786) (2,154)
Depreciation and amortization....................................... 168,061 148,967 137,719
Depreciation included in equity in earnings of real estate entities. 25,096 21,825 19,721
Minority interest in income......................................... 46,015 38,356 16,006
Other............................................................... (20,755) 20,115 4,115
------------ ------------ ------------
Total adjustments................................................. 214,326 225,477 175,407
------------ ------------ ------------
Net cash provided by operating activities......................... 538,534 522,565 463,292
------------ ------------ ------------
Cash flows from investing activities:
Principal payments received on mortgage notes receivable............ 2,199 7,650 28,837
Acquisition of minority interests................................... (11,841) (31,271) (36,846)
Notes receivable from affiliates.................................... (35,000) (11,400) (30,594)
Acquisition of real estate facilities............................... (3,503) (62,938) (26,640)
Business combinations (Note 3)...................................... 6,276 (66,776) (180,216)
Investments in real estate entities................................. (55,468) (75,146) (77,656)
Construction in process............................................. (171,865) (226,423) (107,567)
Land held for development........................................... (12,425) (6,495) (1,480)
Capital improvements to real estate facilities ..................... (35,478) (33,023) (29,023)
Proceeds from the sale of real estate facilities and real estate
investments....................................................... 19,936 58,319 12,656
Other investments .................................................. (8,889) (14,751) (3,680)
------------ ------------ ------------
Net cash used in investing activities............................. (306,058) (462,254) (452,209)
------------ ------------ ------------
Cash flows from financing activities:
Net proceeds from the issuance of preferred stock................... 799,073 - 276,932
Net proceeds from the issuance of preferred partnership units....... - 361,250 -
Net proceeds from the issuance of Equity Stock, Series A............ 74,820 68,318 -
Net proceeds from the issuance of common stock...................... 15,857 4,608 10,000
Repurchase of the Company's common stock............................ (276,861) (77,799) (108,565)
Redemption of preferred stock....................................... (441,325) - -
Repurchase of preferred partnership units........................... (80,000) - -
Principal payments on notes payable................................. (12,451) (11,335) (14,088)
Borrowings on Line of Credit........................................ 25,000 - -
Distributions paid to shareholders.................................. (342,030) (343,388) (208,090)
Distributions paid to minority interests............................ (53,862) (45,494) (25,300)
Investment by minority interests.................................... 18,273 17,871 61,928
Issuance of Put Option (Note 9)..................................... 910 - -
------------ ------------ ------------
Net cash used in financing activities............................. (272,596) (25,969) (7,183)
------------ ------------ ------------
Net increase in cash and cash equivalents................................ (40,120) 34,342 3,900
Cash and cash equivalents at the beginning of the year................... 89,467 55,125 51,225
------------ ------------ ------------
Cash and cash equivalents at the end of the year......................... $ 49,347 $ 89,467 $ 55,125
============ ============ ============
See accompanying notes.
F-5
PUBLIC STORAGE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For each of the three years in the period ended December 31, 2001
(amounts in thousands)
(Continued)
2001 2000 1999
---------- ---------- ----------
Supplemental schedule of non cash investing and financing activities:
Business combinations (Note 3):
Real estate facilities.............................................. $ - $ (82,163) $ (727,925)
Construction in process............................................. - - (11,449)
Investment in real estate entities.................................. - 14,393 66,334
Mortgage notes receivable........................................... - - (6,739)
Intangible assets................................................... (26,993) -
Other assets........................................................ (4,538) (183) (3,295)
Accrued and other liabilities....................................... 6,993 1,177 23,434
Minority interest................................................... - - 32,201
Notes payable....................................................... - - 100,000
Acquisition of real estate facilities in exchange for minority interests,
common stock, the cancellation of mortgage notes receivable, the
reduction of investment in real estate entities and other assets...... - (19,281) (55,120)
Other assets given in exchange for real estate facilities............... - - 3,800
Minority interest acquired in exchange for the sale of real estate - (6,427) -
facilities ...........................................................
Cancellation of mortgage notes receivable to acquire real estate facilities - - 5,573
Reduction of investment in real estate entities in exchange for real estate
facilities........................................................... - 3,144 -
Disposition of real estate facilities in exchange for notes receivable,
other assets, and investment in real estate entities.................. 16,150 20,265 29,675
Notes receivable issued in connection with real estate dispositions..... (305) (3,690) (10,460)
Other assets received in connection with real estate dispositions....... - - (3,800)
Investment in real estate entities...................................... - - (15,415)
Acquisition of minority interest in exchange for common stock........... - (22,988) (37,560)
Distributions payable................................................... - (82,086) 82,086
Cumulative distributions paid........................................... - - (82,086)
Issuance of Common Stock:
In connection with business combinations............................ 30,814 - 347,223
To acquire minority interests....................................... - 6,829 46,461
Issuance of equity stock, Series A in connection with special distribution to
common shareholders and in connection with acquisition of real estate
facilities............................................................ - 45,037 -
See accompanying notes.
F-6
PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
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, 2001, we had direct and indirect equity
interests in 1,384 self-storage facilities located in 37 states and
operating under the "Public Storage" name. We also have direct and indirect
equity interests in approximately 15.2 million net rentable square feet of
commercial space located in 11 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
1,275 real estate facilities, consisting of 1,270 storage facilities and
five commercial properties.
At December 31, 2001, we had equity investments in 10 limited
partnerships in which we do not have a controlling interest. These limited
partnerships collectively own 114 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 14.8
million net rentable square feet of commercial space at December 31, 2001.
We do not control these entities, accordingly, our investments in these
limited partnerships and PSB 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 2001, 2000
and 1999; accordingly, no provision for income taxes has been made in the
accompanying financial statements.
Notes Receivable
----------------
Notes receivable includes $24,344,000 in mortgage notes receivable
that are secured by real estate facilities, and a $35,000,000 loan to PSB.
The loan to PSB, which bore interest at the rate of 3.25% per year, was
repaid (unaudited) on January 28, 2002.
F-7
Financial instruments
---------------------
The methods and assumptions used to estimate the fair value of
financial instruments is described below. We have estimated the fair value
of our financial instruments using available market information and
appropriate valuation methodologies. Considerable judgment is required in
interpreting market data to develop estimates of market value. Accordingly,
estimated fair values are not necessarily indicative of the amounts that
could be realized in current market exchanges.
For purposes of financial statement presentation, we consider all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
Due to the short period to maturity of our cash and cash
equivalents, accounts receivable, and other financial assets included in
other assets, and accrued and other liabilities, the carrying values as
presented on the consolidated balance sheets are reasonable estimates of
fair value. The carrying amount of mortgage notes receivable approximates
fair value because the applicable interest rates approximate market rates
for these loans. A comparison of the carrying amount of notes payable to
their estimated fair value is included in Note 7, "Notes Payable."
Financial assets that are exposed to credit risk consist primarily
of cash and cash equivalents, accounts receivable, and notes receivable.
Cash and cash equivalents, which consist of short-term investments,
including commercial paper, are only invested in entities with an
investment grade rating. Other than the $35,000,000 note receivable from
PSB noted above, which was repaid (unaudited) on January 28, 2002, notes
receivable are secured by real estate facilities that we believe are valued
in excess of the related note receivable. Accounts receivable are not a
significant portion of total assets and are comprised of a large number of
individual customers.
Real estate facilities
----------------------
Real estate facilities are recorded at cost. Costs associated with
the acquisition, development, construction, and improvement of properties
are capitalized. Interest, property taxes, and other costs associated with
development are capitalized as building cost. Expenditures for repairs and
maintenance are charged to expense when incurred. Depreciation is computed
using the straight-line method over the estimated useful lives of the
buildings and improvements, which are generally between 5 and 25 years.
Evaluation of asset impairment
------------------------------
In 1995, the Financial Accounting Standards Board issued Statement
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" which requires impairment losses to be
recorded on long-lived assets. We annually evaluate long-lived assets
(including intangibles), by identifying indicators of impairment and, if
such indicators exist, by comparing the sum of the estimated undiscounted
future cash flows for each asset to the asset's carrying amount. When
indicators of impairment are present and the sum of the undiscounted cash
flows is less than the carrying value of such asset, an impairment loss is
recorded equal to the difference between the asset's current carrying value
and its value based upon discounting its estimated future cash flows.
Statement No. 121 also addresses the accounting for long-lived assets that
are expected to be disposed of. Such assets are to be reported at the lower
of their carrying amount or fair value, less cost to sell. Our evaluations
have indicated no impairment in the carrying amount of our assets.
F-8
Other assets
------------
Other assets primarily consist of furniture, fixtures, equipment,
and other such assets associated with the containerized storage business as
well as accounts receivable, prepaid expenses, and other such assets of the
Company. Included in other assets with respect to the containerized storage
business is furniture, fixtures, and equipment (net of accumulated
depreciation) of $30,699,000 and $28,544,000 at December 31, 2001 and 2000,
respectively. Included in depreciation and amortization expense is
$5,851,000, $4,801,000, and $4,915,000 in the years ended December 31,
2001, 2000 and 1999, respectively, of depreciation of furniture, fixtures,
and equipment relating to the containerized storage business.
Intangible assets and goodwill
------------------------------
Intangible assets consist of property management contracts
($165,000,000 at December 31, 2001 and 2000) and the excess of acquisition
cost over the fair value of net tangible and identifiable intangible assets
or "goodwill" ($94,719,000 at December 31, 2001 and $ 67,726,000 at
December 31, 2000) acquired in business combinations. Intangible assets are
amortized straight-line over 25 years. At December 31, 2001 and 2000,
intangible assets are net of accumulated amortization of $57,018,000 and
$47,709,000, respectively. Included in depreciation and amortization
expense is $9,309,000 in each of the three fiscal years ended December 31,
2001 with respect to the amortization of intangible assets.
Intangible assets and goodwill increased by $26,993,000 in the
year ended December 31, 2001 as a result of the acquisition of PS Insurance
Company, Ltd. (See Note 3).
Revenue and expense recognition
-------------------------------
Property rents are recognized as earned. Equity in earnings of
real estate entities are recognized based on our ownership interest in the
earnings of each of the unconsolidated real estate entities. Advertising
costs of $21,987,000, $11,987,000 and $10,160,000 for 2001, 2000 and 1999,
respectively, were expensed as incurred. Repairs and maintenance
expenditures are expensed as incurred.
Environmental costs
-------------------
Our policy is to accrue environmental assessments and/or
remediation cost when it is probable that such efforts will be required and
the related costs can be reasonably estimated. Our current practice is to
conduct environmental investigations in connection with property
acquisitions. Although there can be no assurance, we are not aware of any
environmental contamination of any of our facilities which individually or
in the aggregate would be material to our overall business, financial
condition, or results of operations.
Net income per common share
---------------------------
Preferred stock dividends totaling $117,979,000, $100,138,000 and
$94,793,000 for the years ended December 31, 2001, 2000 and 1999,
respectively, have been deducted from net income to arrive at net income
allocable to our common shareholders.
F-9
Net income allocated to our common shareholders has been further
allocated among our two classes of common stock; our regular common stock
and our Equity Stock, Series A. The allocation among each class was based
upon the two-class method. Under the two-class method, earnings per share
for each class of common stock is determined according to dividends
declared (or accumulated) and participation rights in undistributed
earnings. Under the two-class method, the Equity Stock, Series A for the
years ended December 31, 2001 and 2000 were allocated approximately
$19,455,000 and $11,042,000 of net income. The remaining $186,774,000,
$185,908,000, and $193,092,000, for the years ended December 31, 2001,
2000, and 1999, respectively, was allocated to the regular common shares.
Basic net income per share is computed using the weighted average
common shares outstanding (prior to the dilutive impact of stock options
outstanding). Diluted net income per common share is computed using the
weighted average common shares outstanding (adjusted for the dilutive
impact of stock options outstanding that totaled 1,267,000 in 2001, 91,000
in 2000 and 361,000 shares in 1999).
Commencing January 1, 2000, the Company's 7,000,000 Class B common
shares outstanding began to participate in distributions of the Company's
earnings. Distributions per share of Class B common stock are equal to 97%
of the per share distribution paid to the Company's regular common shares.
As a result of this participation in distribution of earnings, for purposes
of computing net income per common share, we began to include 6,790,000
(7,000,000 x 97%) Class B common shares in the weighted average common
equivalent shares for the years ended December 31, 2001 and 2000. Weighted
average shares for the year ended December 31, 1999 does not include any
shares with respect to the Class B common stock as these shares did not
participate in distributions of the Company's earnings prior to January 1,
2000.
Stock-based compensation
------------------------
In October 1995, the Financial Accounting Standards Board issued
Statement No. 123 "Accounting for Stock-Based Compensation" which provides
companies an alternative to accounting for stock-based compensation as
prescribed under APB Opinion No. 25 (APB 25). Statement 123 encourages, but
does not require companies to recognize expense for stock-based awards
based on their fair value at date of grant. Statement No. 123 allows
companies to continue to follow existing accounting rules (fair value
method under APB 25) provided that pro-forma disclosures are made of what
net income and earnings per share would have been had the new fair value
method been used. We have elected to adopt the disclosure requirements of
Statement No. 123 but will continue to account for stock-based compensation
under APB 25.
Reclassifications
-----------------
Certain reclassifications have been made to the consolidated
financial statements for 1999 and 2000 in order to conform to the 2001
presentation.
3. Business combinations
---------------------
On December 31, 2001, we acquired all of the capital stock of PS
Insurance Company, Ltd. ("PS Insurance Company"), which reinsures policies
against losses to goods stored by tenants in our self-storage facilities
and which owned, and continues to own, 301,032 shares of the Company's
common stock. This acquisition was completed in order to provide an
additional source of operating income for the Company. Prior to December
31, 2001, PS Insurance was owned by our chairman and chief executive
officer, B. Wayne Hughes, and members of his family (collectively,
"Hughes").
F-10
The acquisition cost was $24,538,000, which was composed of
$30,814,000 in common stock (1,439,765 shares issued to Hughes less the
301,032 shares held by PS Insurance Company) valued at the market price of
the common stock at the time the acquisition agreement was entered into and
announced publicly) less $6,276,000 cash held by PS Insurance Company.
The purchase price was allocated first to the tangible assets and
liabilities of PS Insurance Company. The difference between the purchase
price and the net tangible assets was determined to be related to the value
of the ongoing operations of the enterprise as a whole (and not to any
specific intangible asset) and was therefore allocated to goodwill. The
goodwill will not be amortized but instead will be evaluated for
recoverability on an annual basis in accordance with Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
During 2000, we acquired the remaining ownership interests in a
partnership, of which we are the general partner, for an aggregate
acquisition cost of $81,169,000, consisting of cash of $66,776,000 and the
reduction of our pre-existing investment in the amount of $14,393,000.
Prior to the acquisition, we accounted for our investment in the
partnership using the equity method of accounting.
On March 12, 1999, we completed a merger with Storage Trust
Realty, Inc. ("Storage Trust"). All the outstanding stock of Storage Trust
was exchanged for 13,009,485 shares of the Company's common stock and an
additional 1,011,963 shares were reserved for issuance upon conversion of
limited partnership units in Storage Trust's operating partnership. The
aggregate acquisition cost of the merger was approximately $575,676,000,
consisting of the issuance of the Company's common stock of approximately
$347,223,000, cash of approximately $105,239,000, the assumption of debt in
the amount of $100,000,000, and the Company's pre-existing investment in
Storage Trust of approximately $23,214,000.
During 1999, we acquired all of the limited partner interests in
fourteen partnerships, which owned an aggregate of 40 storage facilities.
Prior to the acquisitions, we accounted for our investment in each of these
partnerships using the equity method. As a result of increasing our
ownership interest and obtaining control of the partnerships, we began to
consolidate the accounts of the partnerships in the consolidated financial
statements. The aggregate amount of the interests acquired totaled
$118,453,000 consisting of a $43,476,000 reduction of the Company's
pre-existing investment and cash of $74,977,000.
Each of the business combinations, indicated above, has been
accounted for using the purchase method. Accordingly, allocations of the
total acquisition cost to the net assets acquired were made based upon the
fair value of such assets and liabilities assumed with respect to the
transactions, with the remainder, if any, allocated to goodwill.
Accordingly, allocations of the total acquisition cost to the net assets
acquired were made based upon the fair value of such assets and liabilities
assumed with respect to the transactions occurring in 2001, 2000, and 1999
are summarized as follows:
F-11
PS Insurance Partnership Storage Trust
Acquisition Acquisitions Merger Total
------------ ------------ ------------ ------------
(Amounts in thousands)
2001 business combinations:
Goodwill............................. $ 26,993 $ - $ - $ 26,993
Other assets......................... 4,538 - - 4,538
Accrued and other liabilities........ (6,993) - - (6,993)
------------ ------------ ------------ ------------
$ 24,538 $ - $ - $ 24,538
============ ============ ============ ============
2000 business combinations:
Real estate facilities.............. $ - $ 82,163 $ - $ 82,163
Other assets........................ - 183 - 183
Accrued and other liabilities....... - (1,177) - (1,177)
------------ ------------ ------------ ------------
$ - $ 81,169 $ - $ 81,169
============ ============ ============ ============
1999 business combinations:
Real estate facilities............... $ - $ 129,348 $ 598,577 $ 727,925
Construction in process.............. - - 11,449 11,449
Investment in real estate entities... - - 356 356
Mortgage notes receivable............ - - 6,739 6,739
Other assets......................... - 386 2,909 3,295
Accrued liabilities.................. - (6,089) (17,345) (23,434)
Minority interest.................... - (5,192) (27,009) (32,201)
------------ ------------ ------------ ------------
$ - $ 118,453 $ 575,676 $ 694,129
============ ============ ============ ============
The historical operating results of the above acquisitions prior
to each respective acquisition date have not been included in the Company's
historical operating results. Pro forma data (unaudited) for the two years
ended December 31, 2001 as though the business combinations above had been
effective at the beginning of fiscal 2000 are as follows:
For the Year
Ended December 31,
------------------------------------
2001 2000
(in thousands except per share data)
Revenues.................................... $853,280 $782,972
Net income.................................. 333,739 305,498
Net income per common share (Basic)......... 1.59 1.46
Net income per common share (Diluted)....... 1.57 1.46
The pro forma data does not purport to be indicative either of
results of operations that would have occurred had the transactions
occurred at the beginning of fiscal 2000 or future results of operations of
the Company. Certain pro forma adjustments were made to the combined
historical amounts to reflect (i) expected reductions in general and
administrative expenses, (ii) estimated increased interest expense from
bank borrowings to finance the cash portion of the acquisition cost and
(iii) estimated increase in depreciation expense.
F-12
4. Real estate facilities
----------------------
Activity in real estate facilities during 2001, 2000 and 1999 is
as follows:
2001 2000 1999
-------------- -------------- --------------
(Amounts in thousands)
Operating facilities, at cost:
Beginning balance....................................... $ 4,134,417 $ 3,822,433 $ 2,962,291
Property acquisitions:
Business combinations (Note 3) ...................... - 82,163 727,925
Other acquisitions.................................. 3,503 67,107 36,013
Disposition of facilities............................... (9,603) (20,516) (26,021)
Facilities contributed to unconsolidated real estate - - (15,415)
entities................................................
Newly developed facilities opened for operations........ 264,161 135,095 62,870
Acquisition of minority interest (Note 8)............... 3,098 15,112 45,747
Capital improvements.................................... 35,478 33,023 29,023
-------------- -------------- --------------
Ending balance.......................................... 4,431,054 4,134,417 3,822,433
-------------- -------------- --------------
Accumulated depreciation:
Beginning balance....................................... (668,018) (533,412) (411,176)
Additions during the year............................... (152,901) (134,857) (123,495)
Disposition of facilities............................... 987 251 1,259
-------------- -------------- --------------
Ending balance.......................................... (819,932) (668,018) (533,412)
-------------- -------------- --------------
Construction in process:
Beginning balance...................................... 217,140 125,812 69,666
Current development.................................... 171,865 226,423 107,567
Property acquisitions - merger with Storage Trust...... - - 11,449
Transfers to land held for development................. (3,663) - -
Newly developed facilities opened for operations....... (264,161) (135,095) (62,870)
-------------- -------------- --------------
Ending balance......................................... 121,181 217,140 125,812
-------------- -------------- --------------
Land held for development:
Beginning balance....................................... 21,447 14,952 13,472
Acquisitions............................................ 12,425 6,495 1,480
Transfers from construction in process.................. 3,663 -
Dispositions............................................ (7,534) - -
-------------- -------------- --------------
Ending balance.......................................... 30,001 21,447 14,952
-------------- -------------- --------------
Total real estate facilities............................. $ 3,762,304 $ 3,704,986 $ 3,429,785
============== ============== ==============
Operating Facilities
--------------------
During 2001, we opened 23 newly developed facilities having
approximately 1,511,000 aggregate net rentable square feet and a total cost
of approximately $179,213,000. In addition, expansions of existing
facilities with a total cost of approximately $84,948,000 with a total of
895,000 net rentable square feet were completed during 2001.
During 2001, we purchased one existing storage facility from a
third party for approximately $3,503,000 in cash.
During 2001, we disposed of two existing real estate facilities
and a parcel of land for a total of $20,241,000, composed of $19,936,000
cash and a note receivable of $305,000. An aggregate gain of $4,091,000 was
recorded on these dispositions.
F-13
During 2000, we acquired a total of 13 facilities for an aggregate
cost of $82,163,000 in connection with a business combination (Note 3). In
addition, we acquired 12 storage facilities and 2 industrial facilities for
an aggregate cost of $67,107,000, consisting of $62,938,000 cash, the
issuance of Equity Stock, Series A ($1,025,000) and an existing investment
($3,144,000). In addition, we opened 24 facilities we had developed with a
total cost of $122,889,000 and completed various expansions of existing
storage facilities at an aggregate cost of $12,206,000.
During 2000, we disposed of eight storage facilities and two
parcels of land for an aggregate of $20,561,000, consisting of cash
($10,444,000), the acquisition of minority interest ($6,427,000), and a
note receivable ($3,690,000). An aggregate gain of $296,000 was recorded on
these dispositions.
During 1999, we acquired a total of 253 real estate facilities for
an aggregate cost of $727,925,000 in connection with certain business
combinations (Note 3). In addition, we also acquired three storage
facilities and two industrial facilities for an aggregate cost of
$36,013,000, consisting of the cancellation of mortgage notes receivable
($5,573,000), other assets ($3,800,000), and cash ($26,640,000).
In April 1999, we sold six properties for approximately
$10,500,000 (composed of $1,460,000 cash, notes receivable of $5,240,000,
and other assets of $3,800,000). In addition, during 1999, we disposed of
an industrial facility, two storage facilities through condemnation
proceedings, and four parcels of land for an aggregate of approximately
$16,416,000, composed of $11,196,000 cash and $5,220,000 mortgage notes
receivable. In aggregate, we recorded a gain upon sale of $2,154,000,
representing the difference between the proceeds received and the net book
value of the real estate.
At December 31, 2001, the unaudited adjusted basis of real estate
facilities for Federal income tax purposes was approximately $3.0 billion.
Construction in process and land held for development
-----------------------------------------------------
Construction in process consists of land and development costs
relating to the development of storage facilities. At December 31, 2001,
construction in process consists primarily of 25 facilities being developed
on newly acquired land and the expansion of seven existing facilities.
In addition, we have 12 parcels of land held for development with
total costs of approximately $30,001,000.
5. Investments in real estate entities
-----------------------------------
At December 31, 2001, our investments in real estate entities
consist of ownership interests in 10 partnerships, which principally own
self-storage facilities, and an ownership interest in PSB. These interests
are non-controlling interests of less than 50% and are accounted for using
the equity method of accounting. Accordingly, earnings are recognized based
upon our ownership interest in each of the partnerships. The accounting
policies of these entities are similar to the Company's.
During 2001, 2000 and 1999, we recognized earnings from our
investments of $38,542,000, $36,109,000 and $32,183,000, respectively, and
received cash distributions totaling $24,124,000, $16,984,000 and
$15,949,000, respectively. In addition, during 2000, we recognized a gain
of $3,210,000, representing our share of PSB's gains on sale of real estate
and real estate investments; this gain is presented as "Gain on the
disposition of real estate and real estate investments" in our consolidated
income statement.
F-14
The following table sets forth our investments in the
Unconsolidated Entities at December 31, 2001 and 2000 and our Equity in
Earnings of Real Estate Investments for each of the three years ended
December 31, 2001:
Investments in Real Estate Entities Equity in Earnings of Real Estate Entities for the
at December 31, year ended December 31,
----------------------------------- ------------------------------------------------------
2001 2000 2001 2000 1999
----------------- ---------------- ----------------- ---------------- -----------------
PSB $ 267,472 $ 259,554 $ 22,361 $ 20,740 $ 18,988
Development Joint Venture 79,263 65,631 4,227 2,694 1,179
Other Investments........ 132,565 123,743 11,954 12,675 12,016
----------------- ---------------- ----------------- ---------------- -----------------
Total................ $ 479,300 $ 448,928 $ 38,542 $ 36,109 $ 32,183
================= ================ ================= ================ =================
Investment in PSB
-----------------
On January 2, 1997, we reorganized our commercial property
operations into an entity now known as PS Business Parks, Inc., a REIT
traded on the American Stock Exchange, and an operating partnership
controlled by PS Business Parks, Inc. (collectively, the REIT and the
operating partnership are referred to as "PSB"). The Company and certain
partnerships in which the Company has a controlling interest have a 44%
common equity interest in PSB as of December 31, 2001. This 44% common
equity interest is comprised of the ownership of 5,418,273 shares of common
stock and 7,305,355 limited partnership units in the operating partnership;
these limited partnership units are convertible at our option, subject to
certain conditions, on a one-for-one basis into PSB common stock. Based
upon PSB's trading price at December 31, 2001 ($31.50), the shares and
units had a market value of approximately $400.8 million.
At December 31, 2001, PSB owned and operated 14.8 million net
rentable square feet of commercial space located in nine states. PSB also
manages the commercial space owned by the Company and the Consolidated
Entities.
During 2001 and 2000, respectively, we received a total of
$14,443,000 and $12,391,000 in distributions from PSB.
The following table sets forth the condensed statements of
operations for each of the two years ended December 31, 2001, and the
condensed balance sheets of PSB at December 31, 2001 and 2000. These
amounts below represent 100% of PSB's balances and not our pro-rata share.
PSB For the Year Ended December 31,
--- -----------------------------------
2001 2000
---------------- ----------------
(Amount in thousands)
For the year ended December 31,
------------------------------
Total revenue........................................ $ 170,391 $ 150,634
Gain on real estate investments...................... 8 8,105
Cost of operations and other expenses................ (51,973) (45,180)
Depreciation and amortization........................ (41,067) (35,637)
Minority interest.................................... (27,489) (26,741)
---------------- ----------------
Net income......................................... $ 49,870 $ 51,181
================ ================
At December 31,
Total assets (primarily real estate)................. $ 1,169,955 $ 930,756
Total debt........................................... 165,145 30,971
Other liabilities.................................... 45,188 28,964
Preferred equity and preferred minority interests.... 318,750 199,750
Common equity........................................ 640,872 671,071
F-15
Investment in Development Joint Venture
---------------------------------------
In April 1997, the Company and an institutional investor formed a
joint venture partnership (the "Development Joint Venture") for the purpose
of developing approximately $220 million of self-storage facilities. The
Development Joint Venture has a total of 47 opened facilities with a total
cost of $232 million and was fully committed at December 31, 2000. The
partnership is funded solely with equity capital consisting of 30% from the
Company and 70% from the institutional investor.
The term of the joint venture is 7 years, after which the
properties would either be sold to third parties or acquired by either of
the partners (at their option) based upon the then fair market value of the
facilities. Under the partnership agreement, the sales proceeds would
generally be allocated to the partners pro rata based upon ownership
interests, however, at various returns on investment milestones to the
investor our share in the sales proceeds would be promoted to a higher
percentage interest.
In addition, five years after inception of the partnership, the
Company has the right (but not the obligation) to purchase the
institutional investor's interest in the partnership. Under the partnership
agreement, the purchase price for the interest would be equal to an amount,
when combined with all the prior cash flows of the institutional investor,
would result in an internal rate of return of 11.5% to the investor from
the inception of the partnership through the acquisition date.
During 2001 and 2000, respectively, we invested a total of
$14,997,000 and $3,262,000 in the Development Joint Venture. During 2001
and 2000, respectively, we received distributions totaling $5,592,000 and
$1,120,000 from the Development Joint Venture.
The following table sets forth the statements of operations for
each of the two years ended December 31, 2001.and the condensed balance
sheets of the Development Joint Venture at December 31, 2001 and 2000.
These amounts below represent 100% of the Development Joint Venture's
balances and not our pro-rata share.
Development Joint Venture 2001 2000
------------------------- --------------- --------------
(Amount in thousands)
For the year ended December 31
Total revenue...................... $ 34,162 $ 26,247
Cost of operations and other expenses (13,203) (10,987)
Depreciation and amortization...... (6,880) (6,290)
--------------- --------------
Net income....................... $ 14,079 $ 8,970
=============== ==============
At December 31,
Total assets....................... $ 215,550 $ 222,670
Other liabilities.................. 2,765 3,899
Partners' equity................... 212,785 218,771
Other Investments
-----------------
In addition to our investments in PSB and the Development Joint
Venture, our investments in real estate entities has included the other
Unconsolidated Entities as well as certain other entities (collectively,
the "Other Investments") throughout each of the three years ended December
31, 2001.
At December 31, 2001 and 2000, the Other Investments primarily
represent an average 46% common equity interest in 10 limited partnerships
owning an aggregate of 67 storage facilities. During 2001 and 2000,
respectively, we invested a total of $957,000 and $27,772,000,
respectively, in the Other Investments. During 2001 and 2000, we received a
total of $4,089,000 and $3,473,000 in distributions from the Other
Investments, respectively.
F-16
During 2000, the Other Investments reflected decreases as a result
of business combinations whereby the Company eliminated approximately
$14,393,000 of Other Investments.
During 2000, we disposed of other investments, for total proceeds
of $47,875,000. We recorded a net gain of $280,000 as "Gain on the
disposition of real estate and real estate investments" representing the
difference between our cost and proceeds received.
The following table sets forth certain condensed financial
information (representing 100% of these entities balances and not our
pro-rata share) with respect to the 10 limited partnerships comprising the
Other Investments that we held at December 31, 2001:
Other Investments 2001 2000
----------------- --------------- --------------
(Amount in thousands)
For the year ended December 31
Total revenue........................ $ 48,651 $ 43,120
Cost of operations and other expenses (16,136) (16,169)
Depreciation and amortization........ (4,511) (4,437)
--------------- --------------
Net income....................... $ 28,004 $ 22,514
=============== ==============
At December 31,
Total assets (primarily storage $ 110,165 $ 100,129
facilities)......................
Total debt........................... 12,907 32,675
Other liabilities.................... 8,746 7,657
Partners' equity..................... 88,513 59,797
6. Revolving line of credit
------------------------
In November 2001, we entered into a new agreement for a $200
million revolving line of credit (the "Credit Agreement") to replace our
$150 million line of credit which was due to expire on July 1, 2002. The
Credit Agreement has a maturity date of October 31, 2004 and bears an
annual interest rate ranging from the London Interbank Offered Rate
("LIBOR") plus 0.45% to LIBOR plus 1.50% depending on our credit ratings
(currently 0.45%). In additions, we are required to pay a quarterly
commitment fee ranging from 0.20% per annum to 0.30% per annum depending on
our credit ratings (currently the fee is 0.20% per annum). At December 31,
2001, we had borrowings of $25 million on our line of credit, at an
interest rate of 2.45% per year.
The Credit Agreement includes various covenants, the more
significant of which requires us to (i) maintain a balance sheet leverage
ratio of less than 0.50 to 1.00, (ii) maintain certain quarterly interest
and fixed-charge coverage ratios (as defined) of not less than 2.50 to 1.0
and 1.75 to 1.0, respectively, and (iii) maintain a minimum total
shareholders' equity (as defined). In addition, we are limited in our
ability to incur additional borrowings (we are required to maintain
unencumbered assets with an aggregate book value equal to or greater than
two times our unsecured recourse debt). We were in compliance with all the
covenants of the Credit Agreement at December 31, 2001.
F-17
7. Notes payable
-------------
Notes payable at December 31, 2001 and 2000 consist of the
following:
2001 2000
----------------------- -----------------------
Carrying Carrying
amount Fair value amount Fair value
---------- ----------- ---------- -----------
(Amounts in thousands)
Unsecured senior notes:
7.08% note due November 2003............................ $ 19,750 $ 19,750 $ 29,250 $ 29,250
7.47% note due January 2004............................. 44,000 44,000 44,000 44,000
7.66% note due January 2007............................. 56,000 56,000 56,000 56,000
Mortgage notes payable:
10.55% mortgage notes secured by real estate facilities,
principal and interest payable monthly, due August 2004 21,142 22,499 23,820 25,105
7.134% to 10.5% mortgage notes secured by real estate
facilities, principal and interest payable monthly, due
at varying dates between May 2004 and September 2028 2,660 2,660 2,933 2,933
---------- ----------- ---------- -----------
Total notes payable.............................. $143,552 $144,909 $156,003 $157,288
========== =========== ========== ===========
All of our notes payable are fixed rate. The senior notes require
interest and principal payments to be paid semi-annually and have various
restrictive covenants, all of which have been met at December 31, 2001.
The 10.55% mortgage notes consist of five notes, which are
cross-collateralized by 19 properties and are due to a life insurance
company. Although there is a negative spread between the carrying value and
the estimated fair value of the notes, the notes provide for the prepayment
of principal subject to the payment of penalties, which exceed this
negative spread. Accordingly, prepayment of the notes at this time would
not be economically practicable.
Mortgage notes payable are secured by 24 real estate facilities
having an aggregate net book value of approximately $57.8 million at
December 31, 2001.
At December 31, 2001, approximate principal maturities of notes
payable are as follows:
Unsecured
Senior Notes Mortgage debt Total
------------ ------------- ---------
(in thousands)
2002..................... $ 24,450 $ 3,530 $ 27,980
2003..................... 35,900 3,585 39,485
2004..................... 25,800 15,063 40,863
2005..................... 11,200 156 11,356
2006..................... 11,200 170 11,370
Thereafter............... 11,200 1,298 12,498
------------ ------------- ---------
$ 119,750 $ 23,802 $ 143,552
============ ============= =========
Weighted average rate.... 7.5% 10.2% 7.9%
============ ============= =========
Interest paid (including interest related to the borrowings on the
Credit Facility) during 2001, 2000 and 1999 was $12,219,000, $13,071,000
and $12,480,000, respectively. In addition, in 2001, 2000 and 1999,
capitalized interest totaled $8,992,000, $9,778,000 and $4,509,000,
respectively, related to construction of real estate facilities.
F-18
8. Minority interest
-----------------
In consolidation, we classify ownership interests in the net
assets of each of the Consolidated Entities, other than our own, as
minority interest on the consolidated financial statements. Minority
interest in income consists of the minority interests' share of the
operating results of the Company relating to the consolidated operations of
the Consolidated Entities.
Preferred partnership interests:
--------------------------------
During 2000, one of our consolidated operating partnerships issued
in aggregate $365.0 million of preferred partnership units: March 17, 2000,
- $240.0 million of 9.5% Series N Cumulative Redeemable Perpetual Preferred
Units, March 29, 2000 - $75.0 million of 9.125% Series O Cumulative
Redeemable Perpetual Preferred Units, and August 11, 2000 - $50.0 million
of 8.75% Series P Cumulative Redeemable Perpetual Preferred Units.
We incurred approximately $3,750,000 in costs in connection with
the issuances; these costs were recorded as a reduction to Paid in Capital
during 2000. The issuance of these units in 2000 had the effect of
increasing minority interest by $365.0 million. For the years ended
December 31, 2001 and 2000, the holders of these preferred units were paid
in aggregate approximately $31,737,000 and $24,859,000, respectively, in
distributions and received an equivalent allocation of minority interest in
earnings.
During 2001, we repurchased all of the 8.75% Series P Cumulative
Redeemable Perpetual Preferred Units and $30 million of the 9.125% Series O
Cumulative Redeemable Perpetual Preferred Units. The units were repurchased
at an amount equal to the original issuance price.
The following table summarizes the preferred partnership units
outstanding:
At December 31, 2001 At December 31, 2000
---------------------------- ----------------------------
Distribution Units Carrying Units Carrying
Series Rate Outstanding Amount Outstanding Amount
--------------------- ------------ ----------- ---------- ----------- ----------
(Dollar and unit amounts in thousands)
Series N 9.500% 9,600 $ 240,000 9,600 $ 240,000
Series O 9.125% 1,800 45,000 3,000 75,000
Series P 8.750% - - 2,000 50,000
----------- ---------- ----------- ----------
Total 11,400 $285,000 14,600 $365,000
=========== ========== =========== ==========
These preferred units are not redeemable during the first 5 years,
thereafter, at our option, we can call the units for redemption at the
issuance amount plus any unpaid distributions. The units are not redeemable
by the holder. Subject to certain conditions, the Series N preferred units
are convertible into shares of 9.5% Series N Cumulative Preferred Stock,
and the Series O preferred units are convertible into shares of 9.125%
Series O Cumulative Preferred Stock of the Company.
F-19
Other partnership interests:
----------------------------
Other partnership interests included in minority interest consists
of the following:
Minority interest at Minority interest in income for the year ended
------------------------------ ----------------------------------------------
December 31, December 31, December 31, December 31, December 31,
Description 2001 2000 2001 2000 1999
--------------------------------- ------------ ------------- ------------ ------------- ------------
(in thousands)
Consolidated Development Joint
Venture........................ $ 82,879 $ 77,126 $ 1,074 $ 325 $ 8
Convertible OP Units............. 6,418 6,461 359 577 1,175
Other consolidated partnerships.. 80,304 84,331 12,845 12,595 14,823
------------ ------------- ------------ ------------- ------------
Total other partnership interests $ 169,601 $ 167,918 $ 14,278 $ 13,497 $ 16,006
============ ============= ============ ============= ============
In November 1999, we formed a development joint venture (the
"Consolidated Development Joint Venture") with a joint venture partner
(PSAC Storage Investors) whose partners include an institutional investor
and B. Wayne Hughes ("Mr. Hughes"), chairman and chief executive officer of
the Company, to develop approximately $100 million of self-storage
facilities and to purchase $100 million of the Company's Equity Stock,
Series AAA (see Note 9). At December 31, 2001, the Consolidated Development
Joint Venture had completed construction on 20 storage facilities with a
total cost of approximately $96.0 million, and had 2 facilities under
construction with an aggregate cost incurred of approximately $11.0 million
and total additional unaudited estimated cost to complete of approximately
$0.7 million.
The Consolidated Development Joint Venture is funded solely with
equity capital consisting of 51% from the Company and 49% from PSAC Storage
Investors. The accounts of the Consolidated Development Joint Venture are
included in the Company's consolidated financial statements. The accounts
of PSAC Storage Investors are not included in the Company's consolidated
financial statements, as the Company has no ownership interest in this
entity.
The term of the Consolidated Development Joint Venture is 15
years; however, during the sixth year PSAC Storage Investors has the right
to cause an early termination of the partnership. If PSAC Storage Investors
exercises this right, we then have the option, but not the obligation, to
acquire their interest for an amount that will allow them to receive an
annual return of 10.75%. If the Company does not exercise its option to
acquire PSAC Storage Investors' interest, the partnership's assets will be
sold to third parties and the proceeds distributed to the Company and PSAC
Storage Investors in accordance with the partnership agreement. If PSAC
Storage Investors does not exercise its right to early termination during
the sixth year, the partnership will be liquidated 15 years after its
formation with the assets sold to third parties and the proceeds
distributed to the Company and PSAC Storage Investors in accordance with
the partnership agreement. PSAC Storage Investors provides Mr. Hughes with
a fixed yield of approximately 8.0% per annum on his preferred non-voting
interest (representing an investment of approximately $64.1 million at
December 31, 2001).
In consolidation, the Equity Stock, Series AAA owned by the joint
venture and the related dividend income have been eliminated. Minority
interests primarily represent the total contributions received from PSAC
Storage Investors combined with the accumulated net income allocated to
PSAC Storage Investors, net of cumulative distributions.
F-20
As of December 31, 2001, one of our Consolidated Entities had
approximately 237,935 operating partnership units ("Convertible OP Units")
outstanding, representing a limited partnership interest in the
partnership. The Convertible OP Units are convertible on a one-for-one
basis (subject to certain limitations) into common shares of the Company at
the option of the unitholder. Minority interest in income with respect to
Convertible OP Units reflects the Convertible OP Units' share of the net
income of the Company, with net income allocated to minority interests with
respect to weighted average outstanding Convertible OP Units on a per unit
basis equal to diluted earnings per common share. During the year ended
December 31, 2001, no units were converted. During the year ended December
31, 2000, 277,104 Convertible OP Units were redeemed in connection with the
sale of real estate facilities (reducing minority interest by $6,427,000)
and 255,853 Convertible OP Units were converted into shares of the
Company's common stock (reducing minority interest by $6,829,000).
During fiscal 2001, we acquired minority interests in the
Consolidated Entities for an aggregate cash cost of $11,841,000; these
acquisitions had the effect of reducing minority interest by $8,743,000,
with the excess of cost over underlying book value ($3,098,000) to real
estate.
During fiscal 2000, we acquired minority interests in the
Consolidated Entities for an aggregate cash cost of $31,271,000; these
acquisitions had the effect of reducing minority interest by $16,159,000,
with the excess of cost over underlying book value ($15,112,000) allocated
to real estate.
9. Shareholders' equity
--------------------
Preferred Stock
---------------
At December 31, 2001 and 2000, we had the following series of
Preferred Stock outstanding:
At December 31, 2001 At December 30, 2000
---------------------------- ----------------------------
Dividend Shares Carrying Shares Carrying
Series Rate Outstanding Amount Outstanding Amount
--------------------------------- ----------- ----------- ----------- ----------- -----------
(Dollar amount in thousands) (Dollar amount in thousands)
Series A 10.000% 1,825,000 $ 45,625 1,825,000 $ 45,625
Series B 9.200% 2,386,000 59,650 2,386,000 59,650
Series C Adjustable 1,200,000 30,000 1,200,000 30,000
Series D 9.500% 1,200,000 30,000 1,200,000 30,000
Series E 10.000% 2,195,000 54,875 2,195,000 54,875
Series F 9.750% 2,300,000 57,500 2,300,000 57,500
Series G 8.875% - - 6,900 172,500
Series H 8.450% - - 6,750 168,750
Series I 8.625% - - 4,000 100,000
Series J 8.000% 6,000 150,000 6,000 150,000
Series K 8.250% 4,600 115,000 4,600 115,000
Series L 8.250% 4,600 115,000 4,600 115,000
Series M 8.750% 2,250 56,250 2,250 56,250
Series Q 8.600% 6,900 172,500 - -
Series R 8.000% 20,400 510,000 - -
Series S 7.875% 5,750 143,750 - -
----------- ----------- ----------- -----------
Total Senior Preferred Stock 11,156,500 $ 1,540,150 11,141,100 $ 1,155,150
=========== =========== =========== ===========
F-21
During 2001, we issued our Series Q, Series R and Series S
Preferred Stock: Series Q - issued on January 19, 2001, net proceeds of
$166,966,000, Series R - issued on September 28, 2001, net proceeds of
$493,085,000 and Series S - issued October 31, 2001, net proceeds of
$139,022,000.
On January 18, 2002, (unaudited) we issued $150 million of 7.625%
Cumulative Preferred Stock, Series T and on February 19, 2002, (unaudited)
we issued $150 million of 7.625% Cumulative Preferred Stock, Series U (Note
13).
The Series A through Series U (collectively the "Cumulative Senior
Preferred Stock") have general preference rights with respect to
liquidation and quarterly distributions. Holders of the preferred stock,
except under certain conditions and as noted above, will not be entitled to
vote on most matters. In the event of a cumulative arrearage equal to six
quarterly dividends or failure to maintain a Debt Ratio (as defined) of 50%
or less, holders of all outstanding series of preferred stock (voting as a
single class without regard to series) will have the right to elect two
additional members to serve on the Company's Board of Directors until
events of default have been cured. At December 31, 2001, there were no
dividends in arrears and the Debt Ratio was 3.1%.
Except under certain conditions relating to the Company's
qualification as a REIT, the Senior Preferred Stock is not redeemable prior
to the following dates: Series A - September 30, 2002, Series B - March 31,
2003, Series C - June 30, 1999, Series D - September 30, 2004, Series E -
January 31, 2005, Series F - April 30, 2005, Series J - August 31, 2002,
Series K - January 19, 2004, Series L - March 10, 2004, Series M - August
17, 2004, Series Q - January 19, 2006, Series R - September 28, 2006 ,
Series S - October 31, 2006, Series T - January 18, 2007, Series U -
February 19, 2007. On or after the respective dates, each of the series of
Senior Preferred Stock will be redeemable, at the option of the Company, in
whole or in part, at $25 per share (or depositary share in the case of the
Series J through Series U), plus accrued and unpaid dividends.
Common Stock
------------
During 2001, 2000 and 1999, we issued and repurchased shares of
our common stock as follows:
2001 2000 1999
-------------------------- ------------------------ -------------------------
(Dollar amount in thousands)
Shares Amount Shares Amount Shares Amount
------------ ----------- ----------- ---------- ----------- ----------
Exercise of stock options........... 704,901 $ 15,857 242,598 $ 4,608 511,989 $ 10,000
In connection with mergers (Note 3) - - - - 13,009,485 347,223
Conversion of OP Units.......... - - 255,853 6,829 241,071 6,434
Business Combinations (a)........ 1,138,733 30,814 - - 1,557,960 40,027
Repurchases of stock (b)......... (10,585,593) (276,861) (3,491,600) (77,799) (4,589,427) (108,565)
------------ ----------- ----------- ---------- ----------- ----------
(8,741,959) $ (230,190) (2,993,149) $ (66,362) 10,731,078 $ 295,119
============ =========== =========== ========== =========== ==========
(a) See Note 3 regarding acquisition of PS Insurance Company.
(b) Includes 10,000 shares purchased in January 2001 from a corporation
wholly-owned by a director of the Company for an aggregate of $251,875
cash. Includes 2,619,893 shares purchased in March 2001 from a limited
liability company of which a director of the Company is a controlling
member for an aggregate of $68,064,820 in cash. In each transaction, the
purchase price approximated market value as of the date of each
transaction.
F-22
As previously announced, the Board of Directors authorized the
repurchase from time to time of up to 10,000,000 shares of the Company's
common stock on the open market or in privately negotiated transactions. On
March 4, 2000, the Board of Directors increased the authorized number of
shares which the Company could repurchase to 15,000,000. On March 15, 2001,
the Board of Directors increased the authorized number of shares the
Company could repurchase to 20,000,000. During 2001, the Board of Directors
increased the authorized number of shares the Company could repurchase to
25,000,000. Cumulatively through December 31, 2001, we repurchased a total
of 21,486,020 shares of common stock at an aggregate cost of approximately
$535,481,000.
During 2001, we entered into an arrangement with a financial
institution whereby we sold to the institution the right to require us to
purchase from the institution (or, at our option, pay in cash or common
stock the differential between the market price and $26.26 per share) up to
1,000,000 shares of our common stock at a price of $26.26 on certain dates
in September 2001 and October 2001. In exchange for this right, the
financial institution paid us $910,000, the amount of which has been
reflected as an increase to our paid-in capital. The right expired without
being exercised.
On December 31, 2001, we issued 1,138,733 shares of common stock
in connection with the acquisition of PS Insurance Company (Note 3),
representing 1,439,765 shares issued to Hughes less 301,032 shares held by
PS Insurance. On March 12, 1999, we issued 13,009,485 shares of common
stock pursuant to the merger with Storage Trust Realty.
At December 31, 2001, the Company had 11,240,846 shares of common
stock reserved in connection with the Company's stock option plans (Note
11), 7,000,000 shares of common stock reserved for the conversion of the
Class B Common Stock and 237,935 shares reserved for the conversion of
Convertible OP Units.
Class B Common Stock
--------------------
Commencing January 1, 2000, the Class B Common Stock participates
in distributions at the rate of 97% of the per share distributions on the
Common Stock, provided that cumulative distributions of at least $0.22 per
quarter per share have been paid on the Common Stock. The Class B Common
Stock will (I) not participate in liquidating distributions, (ii) not be
entitled to vote (except as expressly required by California law) and (iii)
automatically convert into Common Stock, on a share for share basis, upon
the later to occur of FFO per common share aggregating $3.00 during any
period of four consecutive calendar quarters or January 1, 2003.
For these purposes, FFO means net income (loss) (computed in
accordance with generally accepted accounting principles) before (i) gain
(loss) on early extinguishment of debt, (ii) minority interest in income
and (iii) gain (loss) on disposition of real estate, adjusted as follows:
(i) plus depreciation and amortization (including the Company's pro-rata
share of depreciation and amortization of unconsolidated equity interests
and amortization of assets acquired in a merger, including property
management agreements and goodwill), and (ii) less FFO attributable to
minority interest. For these purposes, FFO per Common Share means FFO less
preferred stock dividends (other than dividends on convertible preferred
stock) divided by the outstanding weighted average shares of Common Stock
assuming conversion of all outstanding convertible securities and the Class
B Common Stock.
For these purposes, FFO per share of Common Stock (as defined) was
$2.93 for the year ended December 31, 2001.
F-23
Equity Stock
------------
The Company is authorized to issue up to 200,000,000 shares of
Equity Stock. The Articles of Incorporation provide that the Equity Stock
may be issued from time to time in one or more series and gives the Board
of Directors broad authority to fix the dividend and distribution rights,
conversion and voting rights, redemption provisions and liquidation rights
of each series of Equity Stock.
Equity Stock, Series A
-----------------------
As of December 31, 2001, there were 8,776,102 depositary shares,
each representing 1/1,000 of a share, of Equity Stock, Series A
outstanding. The following table summarizes the activity:
2001 2000
------------------------ -------------------------
Depositary Issuance Depositary Issuance
Shares Amount Shares Amount
---------- ---------- ----------- -----------
(Dollar amounts in thousands)
Amount at beginning of year......... 5,635,602 $ 113,354 - $ -
Public offerings.................... 2,210,500 51,836 3,382,500 68,318
Direct placements................ 930,000 22,984 - -
Special dividend................. - - 2,200,555 44,011
Issued to a related party in
connection with acquisitions of
real estate facilities........ - - 52,547 1,025
---------- ---------- ----------- -----------
Amount at end of year........... 8,776,102 $ 188,174 5,635,602 $ 113,354
========== ========== =========== ===========
The issuance amounts have been recorded as part of paid-in capital
on the consolidated balance sheet.
The Equity Stock, Series A ranks on a parity with common stock and
junior to the Senior Preferred Stock with respect to general preference
rights and has a liquidation amount which cannot exceed $24.50 per share.
Distributions with respect to each depositary share shall be the lesser of:
a) five times the per share dividend on the Common Stock or b) $2.45 per
annum (prorated for the year 2000). Except in order to preserve the
Company's federal income tax status as a REIT, we may not redeem the
depositary shares before March 31, 2010. On or after March 31, 2010, we
may, at our option, redeem the depositary shares at $24.50 per depositary
share. If the Company fails to preserve its federal income tax status as a
REIT, each depositary share will be convertible into 0.956 shares of our
common stock. The depositary shares are otherwise not convertible into
common stock. Holders of depositary shares vote as a single class with our
holders of common stock on shareholder matters, but the depositary shares
have the equivalent of one-tenth of a vote per depositary share. We have no
obligation to pay distributions if no distributions are paid to common
shareholders.
Equity Stock, Series AA
-----------------------
In June 1997, we contributed $22,500,000 (225,000 shares) of
Equity Stock, Series AA to a partnership in which the Company is the
general partner. As a result of this contribution, the Company obtained a
controlling interest in the partnership and began to consolidate the
accounts of the partnership and therefore the Equity Stock, Series AA and
related dividends are eliminated in consolidation. The Equity Stock, Series
AA ranks on a parity with Common Stock and junior to the Senior Preferred
Stock with respect to general preference rights and has a liquidation
amount of ten times the amount paid to each Common Share up to a maximum of
$100 per share. Quarterly distributions per share on the Equity Stock,
Series AA are equal to the lesser of (i) 10 times the amount paid per
Common Stock or (ii) $2.20. We have no obligation to pay distributions if
no distributions are paid to common shareholders.
F-24
Equity Stock, Series AAA
------------------------
In November 1999, we sold $100,000,000 (4,289,544 shares) of
Equity Stock, Series AAA to the Consolidated Development Joint Venture
(Note 8). We control the joint venture and consolidate the accounts of the
joint venture, and accordingly the Equity Stock, Series AAA and related
dividends are eliminated in consolidation. The Equity Stock, Series AAA
ranks on a parity with Common Stock and junior to the Senior Preferred
Stock with respect to general preference rights, and has a liquidation
amount equal to 120% of the amount distributed to each common share. Annual
distributions per share are equal to the lesser of (i) five times the
amount paid per common share or (ii) $2.1564. We have no obligation to pay
distributions if no distributions are paid to common shareholders.
Dividends
---------
On August 9, 2001, the Board of Directors increased the quarterly
distribution paid on the Company's common stock from $0.22 to $0.45, an
increase of $0.23 or 104.5% over the previous quarterly distribution.
The unaudited characterization of dividends for Federal income tax
purposes is made based upon earnings and profits of the Company, as defined
by the Internal Revenue Code. Distributions declared by the Board of
Directors (including distributions to the holders of preferred stock) in
2001 were characterized as follows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
----------- ----------- ----------- -----------
Ordinary income 96.60% 99.67% 100.00% 100.00%
Long-term Capital Gain 3.40% 0.33% 0.00% 0.00%
----------- ----------- ----------- -----------
Total 100.00% 100.00% 100.00% 100.00%
----------- ----------- ----------- -----------
On August 9, 2001, the Board of Directors declared a special
distribution to the common shareholders of $0.35 per common share in cash,
which was paid on September 30, 2001. On August 30, 2000, the Board of
Directors declared a special distribution to the common shareholders of
$0.60 per common share in cash, which was paid on September 30, 2000. On
November 4, 1999, the Board of Directors declared a special distribution to
the common shareholders. The special distribution is comprised of (i) $0.65
per common share payable in depositary shares, representing interests in
Equity Stock, Series A, with cash being paid in lieu of fractional shares
or (ii) at the election of each common shareholder, $0.62 per common share
payable in cash. The special distribution was accrued at December 31, 1999,
and paid on January 14, 2000 to shareholders of record as of November 15,
1999.
F-25
The following summarizes dividends during 2001, 2000 and 1999:
2001 2000 1999
------------------ ------------------ ------------------
Per share Total Per share Total Per share Total
--------- -------- --------- -------- --------- --------
(in thousands, except per share data)
Preferred Stock
Series A $2.500 $4,563 $2.500 $4,563 $2.500 $4,563
Series B $2.300 5,488 $2.300 5,488 $2.300 5,488
Series C $1.688 2,024 $1.711 2,052 $1.688 2,024
Series D $2.375 2,850 $2.375 2,850 $2.375 2,850
Series E $2.500 5,488 $2.500 5,488 $2.500 5,488
Series F $2.437 5,606 $2.437 5,606 $2.437 5,606
Series G $1.664 11,482 $2.219 15,309 $2.219 15,309
Series H $1.608 10,853 $2.112 14,259 $2.112 14,259
Series I $1.869 7,475 $2.156 8,625 $2.156 8,625
Series J $2.000 12,000 $2.000 12,000 $2.000 12,000
Series K $2.063 9,488 $2.063 9,48 $1.965 9,040
Series L $2.063 9,488 $2.063 9,488 $1.673 7,695
Series M $2.188 4,92 $2.188 4,922 $0.820 1,846
Series Q $2.048 14,134 - - - -
Series R $0.500 10,200 - - - -
Series S $0.334 1,918 - - - -
----- ----- -----
117,979 100,138 94,793
Common Stock
Common Stock (a) $1.690 193,121 $1.480 184,084 $1.520 195,383
Equity Stock, Series A $2.450 19,455 $2.363 11,042 - -
Class B Common Stock $1.639 11,475 $1.436 10,049 - -
-------- -------- --------
$342,030 $305,313 $290,176
======== ======== ========
(a) $82,086,000 ($0.64 per share) of the common dividend in 1999 was accrued at
December 31, 1999, of which $38,075,000 was paid on January 14, 2000 in
cash and $44,011,000 was paid in the issuance of depositary shares of
Equity Stock, Series A.
The dividend rate on the Series C Preferred Stock is adjusted
quarterly and is equal to the highest of one of three U.S. Treasury indices
(Treasury Bill Rate, Ten Year Constant Maturity Rate, and Thirty Year
Constant Maturity Rate) multiplied by 110%. However, the dividend rate for
any dividend period will not be less than 6.75% per annum nor greater than
10.75% per annum. The dividend rate with respect to the first quarter of
2002 will be equal to 6.75% per annum.
10. Related Party Transactions
--------------------------
On December 31, 2001, the Company purchased all of the capital
stock of PS Insurance Company from B. Wayne Hughes, our Chairman and Chief
Executive Officer, and members of his family. This acquisition is discussed
more fully in Note 3.
In November 1999, we formed the Consolidated Development Joint
Venture with a joint venture partner whose partners include an
institutional investor and Mr. Hughes. This transaction is discussed more
fully in Note 8.
On December 31, 2001, the Company acquired equity interests in the
Consolidated Entities from Mr. Hughes for a cash price of $786,770, a price
representing the Hughes family's original cost in these equity interests.
This amount is included in the amounts described as "acquisition of
minority interests" in Note 8.
F-26
In January 2001, the Company repurchased 10,000 shares of common
stock from a corporation wholly-owned by a director of the Company for an
aggregate of $251,875 cash. In March 2001, the Company repurchased
2,619,893 shares of common stock from a limited liability company of which
a director of the Company is a controlling member for an aggregate of
$68,064,820 cash. In each transaction, the purchase price approximated
market value as of the date of each transaction.
In December 2001, the Company loaned $35,000,000 to PSB. This loan
bears interest at the rate of 3.25% per year. All outstanding principal and
accrued and unpaid interest shall be repaid on June 30, 2002; however, PSB
may make prepayments in whole or in part at any time without penalty. This
loan, which was repaid in full on January 28, 2002 (unaudited), was
included in Notes Receivable at December 31, 2001.
11. Stock options
-------------
The Company has a 1990 Stock Option Plan (the "1990 Plan") which
provides for the grant of non-qualified stock options. The Company has a
1994 Stock Option Plan (the "1994 Plan"), a 1996 Stock Option and Incentive
Plan (the "1996 Plan") and a 2000 Non-Executive/Non-Director Stock Option
and Incentive Plan (the "2000 Plan"), each of which provides for the grant
of non-qualified options and incentive stock options. (The 1990 Plan, the
1994 Plan, the 1996 Plan and the 2000 Plan are collectively referred to as
the "PSI Plans"). Under the PSI Plans, the Company has granted
non-qualified options to certain directors, officers and key employees to
purchase shares of the Company's common stock at a price equal to the fair
market value of the common stock at the date of grant. Generally, options
under the Plans vest over a three-year period from the date of grant at the
rate of one-third per year and expire (i) under the 1990 Plan, five years
after the date they became exercisable and (ii) under the 1994 Plan, the
1996 Plan and the 2000 Plan, ten years after the date of grant. The 1996
Plan and the 2000 Plan also provide for the grant of restricted stock to
officers, key employees and service providers on terms determined by an
authorized committee of the Board of Directors; no shares of restricted
stock have been granted. In connection with the Storage Trust merger in
March 1999, we assumed the outstanding non-qualified options under the
Storage Trust Realty 1994 Share Incentive Plan (the "Storage Trust Plan"),
which were converted into non-qualified options to purchase our common
stock (the PSI Plans and the Storage Trust Plan are collectively referred
to as the "Plans.") The Company determined there was no material impact
from the use of the fair value method for the years ended December 31,
2001, 2000 and 1999.
Information with respect to the Plans during 2001, 2000 and 1999
is as follows:
2001 2000 1999
------------------------- -------------------------- ---------------------------
Number Average Number Average Number Average
of Price per of Price per of Price per
Options Share Options Share Options Share
----------- ---------- ----------- ---------- ----------- ----------
Options outstanding January 1 6,412,576 $23.65 3,024,274 $24.08 2,054,285 $22.85
Granted or assumed 1,776,500 27.93 3,762,500 23.06 1,576,626 24.39
Exercised (704,901) 22.50 (242,598) 18.99 (511,989) 19.53
Canceled (806,841) 24.51 (131,600) 26.01 (94,648) 27.28
----------- ---------- ----------- ---------- ----------- ----------
Options outstanding December 31 6,677,334 24.81 6,412,576 23.65 3,024,274 $24.08
========== ========== ==========
$14.88 $14.13 $9.38
Option price range at December 31 (A) to $34.68 to $33.56 to $33.56
Options exercisable at December 31 2,618,889 $24.14 1,680,083 $23.83 1,259,771 $21.97
=========== ========== =========== ========== =========== ==========
Options available for grant at December 31 4,563,512 33,171 1,683,505
=========== =========== ===========
(A) Approximately 6,532,334, 6,362,575 and 2,967,274 of options outstanding at
December 31, 2001, 2000 and 1999, had exercise prices less than $30.
F-27
In 1996, the Company adopted the disclosure requirement provision
of SFAS 123 in accounting for stock-based compensation issued to employees.
As of December 31, 2001, 2000 and 1999 there were 6,675,667, 6,372,741 and
2,935,338 options outstanding, respectively, that were subject to SFAS 123
disclosure requirements. The Company follows Accounting Principles Board
Opinion 25, "Accounting for Stock Issued to Employees", ("APB 25") to
account for employee stock options. An alternative method of accounting for
stock options is Financial Accounting Standards Board Statement No. 123
("SFAS 123"). Under SFAS 123, employee stock options are valued at grant
date, and this expense is recognized ratably over the vesting period,
rather than including the dilutive impact of stock options in weighted
average shares outstanding - diluted as the Company does in following APB
25. Had the Company computed compensation cost with respect to SFAS 123,
net income would have been $320,032,000, $295,417,000 and $286,551,000 in
2001, 2000 and 1999, respectively. Diluted net income per share would have
been $1.48, $1.40 and $1.51 in 2001, 2000 and 1999, respectively. Basic net
income per share would have been $1.49, $1.40 and $1.52, respectively. In
computing such compensation cost, the Company used the Black-Scholes method
with a risk-free interest rate of 5.55% for 1999, 6.16% for 2000 and 4.08%
for 2001; an expected life of 5 years for each year; expected volatility of
.201 for 1999, .191 for 2000 and .155 for 2001; and an expected dividend
yield of 7% for each year.
12. Disclosures regarding segment reporting
---------------------------------------
In July 1997, the Financial Accounting Standards Board issued
Statement No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("FAS 131"), which establishes standards for the way that
public business enterprises report information about operating segments.
This statement is effective for financial statements for periods beginning
after December 15, 1997. We adopted this standard effective for the year
ended December 31, 1998.
Description of each reportable segment
--------------------------------------
Our reportable segments reflect significant operating activities
that are evaluated separately by management. We have three reportable
segments: self-storage operations, containerized storage operations, and
commercial property operations.
The self-storage segment comprises the direct ownership,
development, and operation of traditional storage facilities, and the
ownership of equity interests in entities that own storage properties.
PSPUD operates the containerized storage segment. The commercial property
segment reflects our interest in the ownership, operation, and management
of commercial properties. The vast majority of the commercial property
operations are conducted through PSB, and to a much lesser extent the
Company and certain of its unconsolidated subsidiaries own commercial
space, managed by PSB, within facilities that combine storage and
commercial space for rent.
Measurement of segment profit or loss
-------------------------------------
We evaluate performance and allocate resources based upon the net
segment income of each segment. Net segment income represents net income in
conformity with generally accepted accounting principles and our
significant accounting policies as denoted in Note 2, before interest and
other income, interest expense, corporate general and administrative
expense, and minority interest in income. The accounting policies of the
reportable segments are the same as those described in the Summary of
Significant Accounting Policies.
Interest and other income, interest expense, corporate general and
administrative expense, and minority interest in income are not allocated
to segments because management does not utilize them to evaluate the
results of operations of each segment.
F-28
Measurement of segment assets
-----------------------------
No segment data relative to assets or liabilities is presented,
because we do not evaluate performance based upon the assets or liabilities
of the segments. We believe that the historical cost of the Company's real
property does not have any significant bearing upon the performance of the
commercial property and storage segments. In the same manner, management
believes that the book value of investment in real estate entities as
having no bearing upon the results of those investments. The only other
types of assets that might be allocated to individual segments are trade
receivables, payables, and other assets which arise in the ordinary course
of business, but they are also not a significant factor in the measurement
of segment performance. We perform post-acquisition analysis of various
investments; however, such evaluations are beyond the scope of FAS 131.
Presentation of segment information
-----------------------------------
Our income statement provides most of the information required in
order to determine the performance of each of the Company's three segments.
The following tables reconcile the performance of each segment, in terms of
segment revenues and segment income, to our consolidated revenues and net
income. It further provides detail of the segment components of the income
statement item, "Equity in earnings of real estate entities."
Year Ended December 31, Year Ended December 31,
------------------------ -------------------------
Reconciliation of Revenues by Segment: 2001 2000 Change 2000 1999 Change
-------------------------------------- ----------- ----------- ----------- ------------ ----------- ------------
(Dollar amounts in thousands)
Self-storage
Rental revenue............................ $ 721,662 $ 653,110 $ 68,552 $ 653,110 $ 592,619 $ 60,491
Equity in earnings - self storage property
operations............................. 22,912 21,265 1,647 21,265 20,382 883
Equity in earnings - Depreciation (self
-storage).............................. (7,562) (7,153) (409) (7,153) (7,591) 438
----------- ----------- ----------- ------------ ----------- ------------
Self Storage segment revenues......... 737,012 667,222 69,790 667,222 605,410 61,812
----------- ----------- ----------- ------------ ----------- ------------
Containerized storage revenues 47,686 37,914 9,772 37,914 27,028 10,886
-------------------------------
Commercial properties
----------------------
Rental revenue............................ 12,530 11,341 1,189 11,341 8,204 3,137
Equity in earnings - commercial property
operations............................. 51,335 42,562 8,773 42,562 35,623 6,939
Equity in earnings - Depreciation
(commercial properties)................ (17,534) (14,672) (2,862) (14,672) (12,130) (2,542)
----------- ----------- ----------- ------------ ----------- ------------
Commercial properties segment revenues 46,331 39,231 7,100 39,231 31,697 7,534
----------- ----------- ----------- ------------ ----------- ------------
Other items not allocated to segments
-------------------------------------
Equity in earnings - general and
administrative and other............... (10,609) (5,893) (4,716) (5,893) (4,101) (1,792)
Interest and other income................. 14,225 18,836 (4,611) 18,836 16,700 2,136
----------- ----------- ----------- ------------ ----------- ------------
Total other items not allocated to 3,616 12,943 (9,327) 12,943 12,599 344
segments............................
----------- ----------- ----------- ------------ ----------- ------------
Total consolidated revenues........... $ 834,645 $ 757,310 $ 77,335 $ 757,310 $ 676,734 $ 80,576
=========== =========== =========== ============ =========== ============
F-29
Year Ended December 31, Year Ended December 31,
------------------------ -------------------------
2001 2000 Change 2000 1999 Change
----------- ----------- ----------- ------------ ----------- ------------
(Dollar amounts in thousands)
Reconciliation of Net Income by Segment:
Self-storage
Storage properties........................ $492,451 $442,648 $49,803 $442,648 $408,138 $34,510
Depreciation and amortization - self
-storage............................... (158,476) (141,425) (17,051) (141,425) (131,118) (10,307)
Equity in earnings - storage property
operations............................. 22,912 21,265 1,647 21,265 20,382 883
Equity in earnings - depreciation (storage) (7,562) (7,153) (409) (7,153) (7,591) 438
----------- ----------- ----------- ------------ ----------- ------------
Total self-storage segment income..... 349,325 315,335 33,990 315,335 289,811 25,524
----------- ----------- ----------- ------------ ----------- ------------
Containerized storage
Containerized storage..................... 4,682 116 4,566 116 (2,481) 2,597
Depreciation.............................. (6,900) (5,251) (1,649) (5,251) (4,915) (336)
----------- ----------- ----------- ------------ ----------- ------------
Total containerized storage segment loss (2,218) (5,135) 2,917 (5,135) (7,396) 2,261
----------- ----------- ----------- ------------ ----------- ------------
Commercial properties
Commercial properties..................... 8,558 7,515 1,043 7,515 5,378 2,137
Depreciation and amortization - commercial
properties............................. (2,685) (2,291) (394) (2,291) (1,686) (605)
Equity in earnings - commercial property
operations............................. 51,335 42,562 8,773 42,562 35,623 6,939
Equity in earnings - depreciation
(commercial properties) ............... (17,534) (14,672) (2,862) (14,672) (12,130) (2,542)
----------- ----------- ----------- ------------ ----------- ------------
Total commercial property segment income 39,674 33,114 6,560 33,114 27,185 5,929
----------- ----------- ----------- ------------ ----------- ------------
Other items not allocated to segments
-------------------------------------
Equity in earnings - general and
administrative and other.............. (10,609) (5,893) (4,716) (5,893) (4,101) (1,792)
Interest and other income................. 14,225 18,836 (4,611) 18,836 16,700 2,136
General and administrative ............... (21,038) (21,306) 268 (21,306) (12,491) (8,815)
Interest expense.......................... (3,227) (3,293) 66 (3,293) (7,971) 4,678
Minority interest in income .............. (46,015) (38,356) (7,659) (38,356) (16,006) (22,350)
Gain on disposition of real estate ....... 4,091 3,786 305 3,786 2,154 1,632
----------- ----------- ----------- ------------ ----------- ------------
Total other items not allocated to segments (62,573) (46,226) (16,347) (46,226) (21,715) (24,511)
----------- ----------- ----------- ------------ ----------- ------------
Total consolidated company net income $324,208 $297,088 $27,120 $297,088 $287,885 $9,203
=========== =========== =========== ============ =========== ============
13. Events subsequent to December 31, 2001 (Unaudited)
--------------------------------------------------
On January 16, 2002, we acquired the remaining interest in the
Development Joint Venture, not previously consolidated in our consolidated
financial statements, for approximately $155 million in cash, representing
the amount necessary to provide the investor with an internal rate of
return of 11.5% since inception of the partnership. The Development Joint
Venture completed and opened 47 storage facilities from April 1997 to
December 2000 for a total cost of $232 million. The partnership was funded
solely with equity capital consisting of 30% from the Company and 70% from
the institutional investor.
F-30
On January 18, 2002, we completed a public offering of 6,000,000
depositary shares ($25 stated value per depositary share) each representing
1/1,000 of a share of 7.625% Cumulative Preferred Stock, Series T ("Series
T Preferred Stock"). The Series T Preferred Stock has general preference
rights over the Common Stock with respect to distributions and liquidation
proceeds. Except in certain conditions relating to the Company's
qualification as a REIT, the Series T preferred stock is not redeemable
prior to January 18, 2007. After January 18, 2007, the Series T preferred
stock will be redeemable at the option of the Company, in whole or in part,
at $25 per depository share, plus accrued and unpaid dividends.
On February 19, 2002, we completed a public offering of 6,000,000
depositary shares ($25 stated value per depositary share) each representing
1/1,000 of a share of 7.625% Cumulative Preferred Stock, Series U ("Series
U Preferred Stock"). The Series U Preferred Stock has general preference
rights over the Common Stock with respect to distributions and liquidation
proceeds. Except in certain conditions relating to the Company's
qualification as a REIT, the Series U preferred stock is not redeemable
prior to February 19, 2007. After February 19, 2007, the Series U preferred
stock will be redeemable at the option of the Company, in whole or in part,
at $25 per depository share, plus accrued and unpaid dividends.
On April 19, 2002 we expect to acquire all of the 55,150 limited
partnership units that we did not own in PS Partners V, Ltd., a partnership
which is consolidated with the Company. The acquisition of the 55,150 units
will be accomplished through a merger of a subsidiary of the Company into
the partnership and the conversion of the 55,150 units into either cash or
common stock of the Company. Each unit will be converted into the right to
receive a value of $596 in our common stock or, cash at the election of the
unitholder.
14. Recent accounting pronouncements and guidance
---------------------------------------------
Accounting for business combinations
------------------------------------
In June 2001, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard No. 141, "Business
Combinations," ("SFAS 141") which sets forth revised accounting guidance
with respect to accounting for acquisitions of business enterprises. In
accordance with the transition provisions of SFAS 141, the Company adopted
the disclosure and accounting provisions of SFAS 141 for the business
combinations it completed after June 30, 2001.
Accounting for goodwill and other intangible assets
----------------------------------------------------
In June 2001, the FASB issued Statement of Financial Accounting
Standard No. 142, "Goodwill and Other Intangible Assets," ("SFAS 142")
which addresses how intangible assets that are acquired individually or
with a group of other assets (but not those acquired in a business
combination, which are addressed in SFAS 141) are to be accounted for. It
also addresses how goodwill and other intangible assets should be accounted
for after they have been initially recognized in the financial statements.
In accordance with SFAS 142, the Company will adopt the provisions of SFAS
No. 142 in its financial statements beginning with the year ending December
31, 2002. The impact will include a reduction in amortization expense
relative to goodwill and other intangible assets outstanding at December
31, 2001 of approximately $2,709,000 per year, pursuant to SFAS No. 142's
provision that precludes amortization of intangibles with indeterminate
lives. The Company will continue to annually review the recoverability of
its intangible assets and goodwill by comparing the estimated value of such
assets to their carrying value, in accordance with SFAS 142.
F-31
Accounting for the impairment and disposal of long-lived assets
---------------------------------------------------------------
In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144 ("SFAS 144") which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets and
supersedes SFAS 121, and the accounting and reporting provisions of APB
Opinion No. 30, "Reporting the Results of Operations" for a disposal of a
segment of a business. SFAS 144 is effective for fiscal years beginning
after December 15, 2001, with earlier application encouraged. The Company
expects to adopt SFAS 144 on January 1, 2002, and does not expect that the
adoption of the Statement will have a material impact upon the Company's
financial position or results of operations.
15. Commitments and Contingencies
-----------------------------
Lease obligations
-----------------
As of December 31, 2001, we leased 18 containerized storage
facilities from third parties; in addition, certain trucks and related
equipment are leased. Total lease expense for the facilities and equipment,
comprised entirely of minimum lease payments, was approximately $8.0
million, $10.7 million and $13.6 million for the years ended December 31,
2001, 2000 and 1999, respectively. Future minimum lease payments at
December 31, 2001 under these non-cancelable operating leases are as
follows (in thousands):
2002......................... $ 4,613
2003......................... 2,926
2004......................... 2,024
2005......................... 1,249
2006......................... 860
Thereafter................... 325
----------
$ 11,997
==========
Legal proceedings
-----------------
In February 2000, a lawsuit was filed against the Company. The
plaintiffs in this case are suing the Company on behalf of a purported
class of California resident property managers who claim that they were not
compensated for all the hours they worked. The named plaintiffs have
indicated that their claims total less than $20,000 in aggregate. This
maximum potential liability can only be increased if a class is certified
or if claims are permitted to be brought on behalf of the others under the
California Unfair Business Practices Act.
The Company is continuing to vigorously contest the claims in this
case and intends to resist any expansion beyond the named plaintiffs on the
grounds of lack of commonality of claims. The Company does not believe that
this case will have any material adverse effect.
The Company is a party to various claims, complaints and other
legal actions that have arisen in the normal course of business from time
to time. The Company believes that the outcome of these other pending legal
proceedings, in the aggregate, will not have a material adverse effect upon
the operations or financial position of the Company.
F-32
16. Supplementary quarterly financial data (unaudited)
--------------------------------------------------
Three months ended
------------------------------------------------------------
March 31, June 30, September 30, December 31,
2001 2001 2001 2001
---------- ----------- ---------- ----------
(in thousands, except per share data)
Rental revenues.................. $ 184,959 $ 194,484 $ 202,715 $ 199,720
========== =========== ========== ==========
Cost of operations............... $ 66,897 $ 66,536 $ 70,521 $ 72,233
========== =========== ========== ==========
Net income....................... $ 74,635 $ 81,773 $ 83,604 $ 84,196
========== =========== ========== ==========
Per Common Share (Note 2):
Net income - Basic........... $ 0.34 $ 0.40 $ 0.41 $ 0.38
========== =========== ========== ==========
Net income - Diluted......... $ 0.34 $ 0.39 $ 0.41 $ 0.38
========== =========== ========== ==========
Three months ended
------------------------------------------------------------
March 31, June 30, September 30, December 31,
2000 2000 2000 2000
---------- ----------- ---------- ----------
(in thousands, except per share data)
Rental revenues.................. $ 164,866 $ 173,278 $ 181,792 $ 182,429
========== =========== ========== ==========
Cost of operations............... $ 59,160 $ 60,801 $ 64,810 $ 67,315
========== =========== ========== ==========
Net income....................... $ 72,561 $ 74,303 $ 75,652 $ 74,572
========== =========== ========== ==========
Per Common Share (Note 2):
Net income - Basic............ $ 0.34 $ 0.35 $ 0.37 $ 0.35
========== =========== ========== ==========
Net income - Diluted.......... $ 0.34 $ 0.35 $ 0.37 $ 0.35
========== =========== ========== ==========
F-33
PUBLIC STORAGE, INC.
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
STORAGE FACILITIES
6/30/99 Winter Park/N. Semor 342,000 638,000 349,000 728,000
6/30/99 N. Richland Hills/Da 455,000 769,000 219,000 832,000
6/30/99 Rolling Meadows/Lois 441,000 849,000 278,000 898,000
6/30/99 Gresham/Burnside Cou 354,000 544,000 184,000 627,000
6/30/99 Jacksonville/Univers 211,000 741,000 191,000 700,000
6/30/99 Irving/W. Airport Fw 419,000 960,000 171,000 857,000
6/30/99 Houston/Highway 6 So 751,000 1,006,000 274,000 1,057,000
6/30/99 Concord/Arnold Indus 827,000 1,553,000 285,000 1,874,000
6/30/99 Rockville/Gude Drive 602,000 768,000 307,000 880,000
6/30/99 Bradenton/Cortez Roa 476,000 885,000 199,000 906,000
6/30/99 San Antonio/NW Loop 511,000 786,000 179,000 855,000
6/30/99 Anaheim/La Palma 1,378,000 851,000 164,000 1,221,000
6/30/99 Spring Valley/Sweetw 271,000 380,000 76,000 416,000
6/30/99 Ft. Myers/Tamiami Tr 948,000 962,000 275,000 1,208,000
6/30/99 Littleton/Centennial 421,000 804,000 172,000 812,000
6/30/99 Newark/Cedar Blvd 729,000 971,000 206,000 1,067,000
6/30/99 Falls Church/Columbi 901,000 975,000 204,000 1,141,000
6/30/99 Fairfax/Lee Highwa 586,000 1,078,000 242,000 1,106,000
6/30/99 Wheat Ridge/W. 44t 480,000 789,000 187,000 831,000
6/30/99 Huntington Bch/Gotha 952,000 890,000 240,000 1,130,000
6/30/99 Fort Worth/Mc Cart A 372,000 942,000 149,000 703,000
6/30/99 San Diego/Clairemont 1,601,000 2,035,000 308,000 2,034,000
6/30/99 Houston/Millridge N. 1,160,000 1,983,000 168,000 2,433,000
6/30/99 Woodbridge/Jefferson 840,000 1,689,000 212,000 1,446,000
6/30/99 Mountainside (Was 1,260,000 1,237,000 290,000 1,523,000
6/30/99 Woodbridge/Davis F 1,796,000 1,623,000 323,000 1,996,000
6/30/99 Huntington Bch/Bolsa 1,026,000 1,437,000 101,000 1,450,000
6/30/99 Edison/Old Post Ro 498,000 1,267,000 217,000 1,175,000
6/30/99 Northridge/Parthenia 1,848,000 1,486,000 148,000 1,839,000
6/30/99 Brick Township/Brick 590,000 1,431,000 259,000 1,364,000
6/30/99 Stone Mountain/Rockb 1,233,000 288,000 278,000 852,000
6/30/99 Hyattsville/Chillu 768,000 2,186,000 223,000 1,919,000
6/30/99 Union City/Alvarad 992,000 1,776,000 179,000 1,690,000
6/30/99 Oak Park/Greenfiel 621,000 1,735,000 154,000 1,490,000
6/30/99 Tujunga/Foothill Blv 1,746,000 2,383,000 112,000 2,370,000
10/1/97 Marietta/Austell Rd 398,000 1,326,000 243,000 460,000
10/1/97 Denver/Leetsdale 1,407,000 1,682,000 171,000 580,000
10/1/97 Baltimore/York Road 1,538,000 1,952,000 264,000 684,000
10/1/97 Bolingbrook 737,000 1,776,000 185,000 601,000
10/1/97 Kent/Central 483,000 1,321,000 172,000 455,000
10/1/97 Geneva/Roosevelt 355,000 1,302,000 157,000 451,000
10/1/97 Denver/Sheridan 429,000 1,105,000 131,000 389,000
10/1/97 Mountlake Terrace 1,017,000 1,783,000 218,000 604,000
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
STORAGE FACILITIES
6/30/99 Winter Park/N. Semor 426,000 1,631,000 2,057,000 214,000
6/30/99 N. Richland Hills/Da 568,000 1,707,000 2,275,000 209,000
6/30/99 Rolling Meadows/Lois 550,000 1,916,000 2,466,000 239,000
6/30/99 Gresham/Burnside Cou 441,000 1,268,000 1,709,000 159,000
6/30/99 Jacksonville/Univers 263,000 1,580,000 1,843,000 198,000
6/30/99 Irving/W. Airport Fw 523,000 1,884,000 2,407,000 241,000
6/30/99 Houston/Highway 6 So 936,000 2,152,000 3,088,000 261,000
6/30/99 Concord/Arnold Indus 1,031,000 3,508,000 4,539,000 415,000
6/30/99 Rockville/Gude Drive 750,000 1,807,000 2,557,000 210,000
6/30/99 Bradenton/Cortez Roa 593,000 1,873,000 2,466,000 231,000
6/30/99 San Antonio/NW Loop 637,000 1,694,000 2,331,000 202,000
6/30/99 Anaheim/La Palma 1,718,000 1,896,000 3,614,000 213,000
6/30/99 Spring Valley/Sweetw 338,000 805,000 1,143,000 97,000
6/30/99 Ft. Myers/Tamiami Tr 1,182,000 2,211,000 3,393,000 259,000
6/30/99 Littleton/Centennial 525,000 1,684,000 2,209,000 195,000
6/30/99 Newark/Cedar Blvd 909,000 2,064,000 2,973,000 226,000
6/30/99 Falls Church/Columbi 1,124,000 2,097,000 3,221,000 232,000
6/30/99 Fairfax/Lee Highwa 731,000 2,281,000 3,012,000 250,000
6/30/99 Wheat Ridge/W. 44t 598,000 1,689,000 2,287,000 190,000
6/30/99 Huntington Bch/Gotha 1,187,000 2,025,000 3,212,000 224,000
6/30/99 Fort Worth/Mc Cart A 463,000 1,703,000 2,166,000 182,000
6/30/99 San Diego/Clairemont 1,996,000 3,982,000 5,978,000 438,000
6/30/99 Houston/Millridge N. 1,446,000 4,298,000 5,744,000 477,000
6/30/99 Woodbridge/Jefferson 1,047,000 3,140,000 4,187,000 339,000
6/30/99 Mountainside (Was 1,571,000 2,739,000 4,310,000 300,000
6/30/99 Woodbridge/Davis F 2,239,000 3,499,000 5,738,000 343,000
6/30/99 Huntington Bch/Bolsa 1,279,000 2,735,000 4,014,000 285,000
6/30/99 Edison/Old Post Ro 621,000 2,536,000 3,157,000 265,000
6/30/99 Northridge/Parthenia 2,304,000 3,017,000 5,321,000 286,000
6/30/99 Brick Township/Brick 735,000 2,909,000 3,644,000 270,000
6/30/99 Stone Mountain/Rockb 1,537,000 1,114,000 2,651,000 100,000
6/30/99 Hyattsville/Chillu 958,000 4,138,000 5,096,000 367,000
6/30/99 Union City/Alvarad 1,237,000 3,400,000 4,637,000 320,000
6/30/99 Oak Park/Greenfiel 774,000 3,226,000 4,000,000 288,000
6/30/99 Tujunga/Foothill Blv 2,177,000 4,434,000 6,611,000 353,000
10/1/97 Marietta/Austell Rd 398,000 2,029,000 2,427,000 432,000
10/1/97 Denver/Leetsdale 1,407,000 2,433,000 3,840,000 537,000
10/1/97 Baltimore/York Road 1,538,000 2,900,000 4,438,000 616,000
10/1/97 Bolingbrook 737,000 2,562,000 3,299,000 549,000
10/1/97 Kent/Central 483,000 1,948,000 2,431,000 418,000
10/1/97 Geneva/Roosevelt 355,000 1,910,000 2,265,000 417,000
10/1/97 Denver/Sheridan 429,000 1,625,000 2,054,000 357,000
10/1/97 Mountlake Terrace 1,017,000 2,605,000 3,622,000 536,000
F-34
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
10/1/97 Carol Stream/St.Charles 185,000 1,187,000 150,000 411,000
10/1/97 Marietta/Cobb Park 420,000 1,131,000 259,000 416,000
10/1/97 Venice/Rose 5,468,000 5,478,000 595,000 1,817,000
10/1/97 Ventura/Ventura Blvd 911,000 2,227,000 218,000 760,000
10/1/97 Studio City/Ventura 2,421,000 1,610,000 139,000 534,000
10/1/97 Madison Heights 428,000 1,686,000 2,026,000 561,000
10/1/97 Lax/Imperial 1,662,000 2,079,000 185,000 714,000
10/1/97 Justice/Industrial 233,000 1,181,000 132,000 404,000
10/1/97 Burbank/San Fernando 1,825,000 2,210,000 192,000 744,000
10/1/97 Pinole/Appian Way 728,000 1,827,000 171,000 618,000
10/1/97 Denver/Tamarac Park 2,545,000 1,692,000 300,000 632,000
10/1/97 Gresham/Powell 322,000 1,298,000 193,000 439,000
10/1/97 Warren/Mound Road 268,000 1,025,000 158,000 350,000
10/1/97 Woodside/Brooklyn 5,016,000 3,950,000 301,000 1,359,000
10/1/97 Enfield/Elm Street 399,000 1,900,000 252,000 639,000
10/1/97 Roselle/Lake Street 312,000 1,411,000 182,000 488,000
10/1/97 Milwaukee/Appleton 324,000 1,385,000 165,000 469,000
10/1/97 Emeryville/Bay St 1,602,000 1,830,000 150,000 621,000
10/1/97 Monterey/Del Rey 257,000 1,048,000 178,000 350,000
10/1/97 San Leandro/Washington 660,000 1,142,000 148,000 389,000
10/1/97 Boca Raton/N.W. 20 1,140,000 2,256,000 360,000 770,000
10/1/97 Washington Dc/So Capital 1,437,000 4,489,000 397,000 1,509,000
10/1/97 Lynn/Lynnway 463,000 3,059,000 343,000 1,062,000
10/1/97 Pompano Beach 1,077,000 1,527,000 501,000 524,000
10/1/97 Lake Oswego/N.State 465,000 1,956,000 249,000 661,000
10/1/97 Daly City/Mission 389,000 2,921,000 231,000 955,000
10/1/97 Odenton/Route 175 456,000 2,104,000 214,000 717,000
10/1/97 Novato/Landing 2,416,000 3,496,000 226,000 317,000
10/1/97 St. Louis/Lindberg 584,000 1,508,000 186,000 122,000
10/1/97 Oakland/International 358,000 1,568,000 196,000 127,000
10/1/97 Stockton/March Lane 663,000 1,398,000 102,000 110,000
10/1/97 Des Plaines/Golf Rd 1,363,000 3,093,000 192,000 238,000
10/1/97 Morton Grove/Wauke 2,658,000 3,232,000 3,401,000 452,000
10/1/97 Los Angeles/Jefferson 1,090,000 1,580,000 226,000 126,000
10/1/97 Los Angeles/Martin 869,000 1,152,000 90,000 91,000
10/1/97 San Leandro/E. 14t 627,000 1,289,000 96,000 102,000
10/1/97 Tucson/Tanque Verde 345,000 1,709,000 140,000 134,000
10/1/97 Randolph/Warren St 2,330,000 1,914,000 442,000 153,000
10/1/97 Forrestville/Penn. 1,056,000 2,347,000 215,000 187,000
10/1/97 Bridgeport/Wordin 4,877,000 2,739,000 561,000 229,000
10/1/97 North Hollywood/Vine 906,000 2,379,000 154,000 184,000
10/1/97 Santa Cruz/Portola 535,000 1,526,000 143,000 122,000
10/1/97 Hyde Park/River St 626,000 1,748,000 228,000 139,000
10/1/97 Dublin/San Ramon Rd 942,000 1,999,000 149,000 154,000
10/1/97 Vallejo/Humboldt 473,000 1,651,000 115,000 128,000
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
10/1/97 Carol Stream/St.Charles 185,000 1,748,000 1,933,000 368,000
10/1/97 Marietta/Cobb Park 420,000 1,806,000 2,226,000 379,000
10/1/97 Venice/Rose 5,468,000 7,890,000 13,358,000 1,524,000
10/1/97 Ventura/Ventura Blvd 911,000 3,205,000 4,116,000 668,000
10/1/97 Studio City/Ventura 2,421,000 2,283,000 4,704,000 494,000
10/1/97 Madison Heights 428,000 4,273,000 4,701,000 478,000
10/1/97 Lax/Imperial 1,662,000 2,978,000 4,640,000 625,000
10/1/97 Justice/Industrial 233,000 1,717,000 1,950,000 371,000
10/1/97 Burbank/San Fernando 1,825,000 3,146,000 4,971,000 651,000
10/1/97 Pinole/Appian Way 728,000 2,616,000 3,344,000 551,000
10/1/97 Denver/Tamarac Park 2,545,000 2,624,000 5,169,000 605,000
10/1/97 Gresham/Powell 322,000 1,930,000 2,252,000 396,000
10/1/97 Warren/Mound Road 268,000 1,533,000 1,801,000 307,000
10/1/97 Woodside/Brooklyn 5,016,000 5,610,000 10,626,000 1,008,000
10/1/97 Enfield/Elm Street 399,000 2,791,000 3,190,000 540,000
10/1/97 Roselle/Lake Street 312,000 2,081,000 2,393,000 425,000
10/1/97 Milwaukee/Appleton 324,000 2,019,000 2,343,000 401,000
10/1/97 Emeryville/Bay St 1,602,000 2,601,000 4,203,000 530,000
10/1/97 Monterey/Del Rey 257,000 1,576,000 1,833,000 308,000
10/1/97 San Leandro/Washington 660,000 1,679,000 2,339,000 344,000
10/1/97 Boca Raton/N.W. 20 1,140,000 3,386,000 4,526,000 654,000
10/1/97 Washington Dc/So Capital 1,437,000 6,395,000 7,832,000 1,063,000
10/1/97 Lynn/Lynnway 463,000 4,464,000 4,927,000 840,000
10/1/97 Pompano Beach 1,077,000 2,552,000 3,629,000 458,000
10/1/97 Lake Oswego/N.State 465,000 2,866,000 3,331,000 542,000
10/1/97 Daly City/Mission 389,000 4,107,000 4,496,000 775,000
10/1/97 Odenton/Route 175 456,000 3,035,000 3,491,000 501,000
10/1/97 Novato/Landing 2,416,000 4,039,000 6,455,000 966,000
10/1/97 St. Louis/Lindberg 584,000 1,816,000 2,400,000 424,000
10/1/97 Oakland/International 358,000 1,891,000 2,249,000 437,000
10/1/97 Stockton/March Lane 663,000 1,610,000 2,273,000 380,000
10/1/97 Des Plaines/Golf Rd 1,363,000 3,523,000 4,886,000 861,000
10/1/97 Morton Grove/Wauke 2,658,000 7,085,000 9,743,000 1,310,000
10/1/97 Los Angeles/Jefferson 1,090,000 1,932,000 3,022,000 434,000
10/1/97 Los Angeles/Martin 869,000 1,333,000 2,202,000 313,000
10/1/97 San Leandro/E. 14t 627,000 1,487,000 2,114,000 344,000
10/1/97 Tucson/Tanque Verde 345,000 1,983,000 2,328,000 420,000
10/1/97 Randolph/Warren St 2,330,000 2,509,000 4,839,000 491,000
10/1/97 Forrestville/Penn. 1,056,000 2,749,000 3,805,000 628,000
10/1/97 Bridgeport/Wordin 4,877,000 3,529,000 8,406,000 767,000
10/1/97 North Hollywood/Vine 906,000 2,717,000 3,623,000 577,000
10/1/97 Santa Cruz/Portola 535,000 1,791,000 2,326,000 389,000
10/1/97 Hyde Park/River St 626,000 2,115,000 2,741,000 433,000
10/1/97 Dublin/San Ramon Rd 942,000 2,302,000 3,244,000 573,000
10/1/97 Vallejo/Humboldt 473,000 1,894,000 2,367,000 411,000
F-35
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
10/1/97 Fremont/Warm Springs 848,000 2,885,000 209,000 225,000
10/1/97 Seattle/Stone Way 829,000 2,180,000 253,000 172,000
10/1/97 W. Olympia 149,000 1,096,000 250,000 90,000
10/1/97 Mercer/Parkside Ave 359,000 1,763,000 193,000 141,000
10/1/97 Bridge Water/Main 445,000 2,054,000 245,000 160,000
10/1/97 Norwalk/Hoyt Street 2,369,000 3,049,000 520,000 255,000
9/30/95 Whittier 215,000 384,000 104,000 719,000
9/30/95 Van Nuys/Balboa 295,000 657,000 98,000 1,177,000
9/30/95 Huntington Beach 176,000 321,000 147,000 727,000
9/30/95 Monterey Park 133,000 124,000 346,000 99,000 783,000
9/30/95 Downey 191,000 317,000 132,000 823,000
9/30/95 Del Amo 474,000 742,000 100,000 948,000
9/30/95 Carson 375,000 735,000 112,000 447,000
12/83 Charlotte 165,000 1,274,000 434,000 442,000
12/83 Greensboro/Market 214,000 1,653,000 616,000 794,000
12/83 Greensboro/Electra 112,000 869,000 329,000 382,000
1/83 Raleigh/Yonkers 203,000 914,000 414,000 425,000
12/83 Columbia 171,000 1,318,000 497,000 492,000
12/83 Richmond 176,000 1,360,000 388,000 468,000
12/83 Augusta 97,000 747,000 312,000 324,000
4/84 Providence 92,000 1,087,000 384,000 423,000
1/85 Cranston 175,000 722,000 320,000 267,000
3/84 Marrietta/Cobb 73,000 542,000 296,000 259,000
1/84 Fremont/Albrae 636,000 1,659,000 479,000 532,000
12/83 Tacoma 553,000 1,173,000 372,000 487,000
1/84 Belton 175,000 858,000 575,000 378,000
1/84 Gladstone 275,000 1,799,000 452,000 640,000
1/84 Hickman/112 257,000 1,848,000 445,000 618,000
1/84 Holmes 289,000 1,333,000 374,000 455,000
1/84 Independence 221,000 1,848,000 356,000 609,000
1/84 Merriam 255,000 1,469,000 379,000 480,000
1/84 Olathe 107,000 992,000 312,000 361,000
1/84 Shawnee 205,000 1,420,000 437,000 502,000
1/84 Topeka 75,000 1,049,000 245,000 356,000
2/84 Unicorn/Nkoxville 662,000 1,887,000 686,000 692,000
2/84 Central/Knoxville 449,000 1,281,000 567,000 455,000
3/84 Manassas 320,000 1,556,000 377,000 553,000
3/84 Pico Rivera 743,000 807,000 345,000 321,000
5/84 Raleigh/Departure 302,000 2,484,000 487,000 788,000
4/84 Milwaukie/Oregon 289,000 584,000 251,000 311,000
7/84 Trevose/Old Lincoln 421,000 1,749,000 398,000 582,000
5/84 Virginia Beach 509,000 2,121,000 680,000 776,000
5/84 Philadelphia/Grant 1,041,000 3,262,000 463,000 971,000
6/84 Lorton 435,000 2,040,000 517,000 682,000
6/84 Baltimore 382,000 1,793,000 724,000 634,000
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
10/1/97 Fremont/Warm Springs 848,000 3,319,000 4,167,000 676,000
10/1/97 Seattle/Stone Way 829,000 2,605,000 3,434,000 509,000
10/1/97 W. Olympia 149,000 1,436,000 1,585,000 280,000
10/1/97 Mercer/Parkside Ave 359,000 2,097,000 2,456,000 429,000
10/1/97 Bridge Water/Main 445,000 2,459,000 2,904,000 495,000
10/1/97 Norwalk/Hoyt Street 2,369,000 3,824,000 6,193,000 713,000
9/30/95 Whittier 215,000 1,207,000 1,422,000 403,000
9/30/95 Van Nuys/Balboa 295,000 1,932,000 2,227,000 649,000
9/30/95 Huntington Beach 176,000 1,195,000 1,371,000 387,000
9/30/95 Monterey Park 124,000 1,228,000 1,352,000 430,000
9/30/95 Downey 191,000 1,272,000 1,463,000 408,000
9/30/95 Del Amo 474,000 1,790,000 2,264,000 750,000
9/30/95 Carson 375,000 1,294,000 1,669,000 346,000
12/83 Charlotte 165,000 2,150,000 2,315,000 1,281,000
12/83 Greensboro/Market 214,000 3,063,000 3,277,000 1,823,000
12/83 Greensboro/Electra 112,000 1,580,000 1,692,000 943,000
1/83 Raleigh/Yonkers 203,000 1,753,000 1,956,000 1,090,000
12/83 Columbia 171,000 2,307,000 2,478,000 1,407,000
12/83 Richmond 176,000 2,216,000 2,392,000 1,316,000
12/83 Augusta 97,000 1,383,000 1,480,000 824,000
4/84 Providence 92,000 1,894,000 1,986,000 1,137,000
1/85 Cranston 175,000 1,309,000 1,484,000 759,000
3/84 Marrietta/Cobb 73,000 1,097,000 1,170,000 649,000
1/84 Fremont/Albrae 636,000 2,670,000 3,306,000 1,650,000
12/83 Tacoma 553,000 2,032,000 2,585,000 1,241,000
1/84 Belton 175,000 1,811,000 1,986,000 1,096,000
1/84 Gladstone 275,000 2,891,000 3,166,000 1,728,000
1/84 Hickman/112 257,000 2,911,000 3,168,000 1,760,000
1/84 Holmes 289,000 2,162,000 2,451,000 1,262,000
1/84 Independence 221,000 2,813,000 3,034,000 1,677,000
1/84 Merriam 255,000 2,328,000 2,583,000 1,408,000
1/84 Olathe 107,000 1,665,000 1,772,000 1,002,000
1/84 Shawnee 205,000 2,359,000 2,564,000 1,393,000
1/84 Topeka 75,000 1,650,000 1,725,000 979,000
2/84 Unicorn/Nkoxville 662,000 3,265,000 3,927,000 1,884,000
2/84 Central/Knoxville 449,000 2,303,000 2,752,000 1,257,000
3/84 Manassas 320,000 2,486,000 2,806,000 1,479,000
3/84 Pico Rivera 743,000 1,473,000 2,216,000 914,000
5/84 Raleigh/Departure 302,000 3,759,000 4,061,000 2,246,000
4/84 Milwaukie/Oregon 289,000 1,146,000 1,435,000 687,000
7/84 Trevose/Old Lincoln 421,000 2,729,000 3,150,000 1,618,000
5/84 Virginia Beach 499,000 3,587,000 4,086,000 2,101,000
5/84 Philadelphia/Grant 1,040,000 4,697,000 5,737,000 2,821,000
6/84 Lorton 435,000 3,239,000 3,674,000 1,939,000
6/84 Baltimore 382,000 3,151,000 3,533,000 1,816,000
F-36
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
6/84 Laurel 501,000 2,349,000 673,000 824,000
6/84 Delran 279,000 1,472,000 295,000 573,000
5/84 Garland 356,000 844,000 235,000 360,000
6/84 Orange Blossom 226,000 924,000 228,000 398,000
6/84 Safe Place (Cincinnati) 402,000 1,573,000 550,000 672,000
6/84 Safe Place (Florence) 185,000 740,000 405,000 376,000
8/84 Medley 584,000 1,016,000 343,000 464,000
8/84 Oklahoma City 340,000 1,310,000 524,000 652,000
8/84 Newport News 356,000 2,395,000 653,000 1,013,000
8/84 Kaplan (Walnut Hill) 971,000 2,359,000 851,000 1,041,000
9/84 Cockrell Hill 380,000 913,000 1,063,000 675,000
11/84 Omaha 109,000 806,000 480,000 399,000
12/84 Austin (Ben White) 325,000 474,000 288,000 (274,000)
12/84 Austin (Lamar) 643,000 947,000 451,000 443,000
12/84 Pompano 399,000 1,386,000 628,000 698,000
12/84 Fort Worth 122,000 928,000 23,000 303,000
11/84 Hialeah 886,000 1,784,000 295,000 672,000
12/84 Montgomeryville 215,000 2,085,000 351,000 776,000
1/85 Bossier City 184,000 1,542,000 460,000 656,000
2/85 Simi Valley 737,000 1,389,000 320,000 520,000
3/85 Chattanooga 202,000 1,573,000 444,000 683,000
2/85 Hurst 231,000 1,220,000 232,000 480,000
3/85 Portland 285,000 941,000 254,000 438,000
5/85 Longwood 355,000 1,645,000 274,000 669,000
3/85 Fern Park 144,000 1,107,000 217,000 432,000
3/85 Fairfield 338,000 1,187,000 422,000 527,000
4/85 Laguna Hills 1,224,000 3,303,000 412,000 1,213,000
7/85 Columbus (Morse Rd.) 195,000 1,510,000 383,000 670,000
7/85 Columbus (Kenney Rd.) 199,000 1,531,000 380,000 598,000
5/85 Columbus (Busch Blvd.) 202,000 1,559,000 359,000 592,000
5/85 Columbus (Kinnear Rd.) 241,000 1,865,000 358,000 771,000
6/85 Grove City/Marlane Drive 150,000 1,157,000 326,000 471,000
6/85 Reynoldsburg 204,000 1,568,000 402,000 598,000
5/85 Worthington 221,000 1,824,000 358,000 709,000
7/85 Westerville 199,000 1,517,000 427,000 620,000
5/85 Arlington 201,000 1,497,000 406,000 618,000
7/85 Springfield 90,000 699,000 294,000 332,000
7/85 Dayton (Needmore Road) 144,000 1,108,000 377,000 460,000
7/85 Dayton (Executive Blvd.) 160,000 1,207,000 391,000 569,000
7/85 Lilburn 331,000 969,000 231,000 424,000
4/85 Austin/S. First 778,000 1,282,000 342,000 170,000
4/85 Cincinnati/E. Kemper 232,000 1,573,000 270,000 222,000
4/85 Cincinnati/Colerain 253,000 1,717,000 352,000 228,000
4/85 Florence/Tanner Lane 218,000 1,477,000 343,000 209,000
5/85 Tacoma/Phillips Rd. 396,000 1,204,000 277,000 168,000
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
6/84 Laurel 501,000 3,846,000 4,347,000 2,305,000
6/84 Delran 279,000 2,340,000 2,619,000 1,313,000
5/84 Garland 356,000 1,439,000 1,795,000 811,000
6/84 Orange Blossom 226,000 1,550,000 1,776,000 869,000
6/84 Safe Place (Cincinnati) 402,000 2,795,000 3,197,000 1,582,000
6/84 Safe Place (Florence) 185,000 1,521,000 1,706,000 859,000
8/84 Medley 584,000 1,823,000 2,407,000 1,037,000
8/84 Oklahoma City 340,000 2,486,000 2,826,000 1,353,000
8/84 Newport News 356,000 4,061,000 4,417,000 2,285,000
8/84 Kaplan (Walnut Hill) 971,000 4,251,000 5,222,000 2,337,000
9/84 Cockrell Hill 380,000 2,651,000 3,031,000 1,525,000
11/84 Omaha 109,000 1,685,000 1,794,000 959,000
12/84 Austin (Ben White) 216,000 597,000 813,000 258,000
12/84 Austin (Lamar) 643,000 1,841,000 2,484,000 985,000
12/84 Pompano 399,000 2,712,000 3,111,000 1,470,000
12/84 Fort Worth 122,000 1,254,000 1,376,000 714,000
11/84 Hialeah 886,000 2,751,000 3,637,000 1,558,000
12/84 Montgomeryville 215,000 3,212,000 3,427,000 1,749,000
1/85 Bossier City 184,000 2,658,000 2,842,000 1,411,000
2/85 Simi Valley 737,000 2,229,000 2,966,000 1,228,000
3/85 Chattanooga 202,000 2,700,000 2,902,000 1,434,000
2/85 Hurst 231,000 1,932,000 2,163,000 1,058,000
3/85 Portland 285,000 1,633,000 1,918,000 882,000
5/85 Longwood 355,000 2,588,000 2,943,000 1,406,000
3/85 Fern Park 144,000 1,756,000 1,900,000 963,000
3/85 Fairfield 338,000 2,136,000 2,474,000 1,134,000
4/85 Laguna Hills 1,224,000 4,928,000 6,152,000 2,710,000
7/85 Columbus (Morse Rd.) 195,000 2,563,000 2,758,000 1,314,000
7/85 Columbus (Kenney Rd.) 199,000 2,509,000 2,708,000 1,332,000
5/85 Columbus (Busch Blvd.) 202,000 2,510,000 2,712,000 1,316,000
5/85 Columbus (Kinnear Rd.) 241,000 2,994,000 3,235,000 1,561,000
6/85 Grove City/Marlane Drive 150,000 1,954,000 2,104,000 1,042,000
6/85 Reynoldsburg 204,000 2,568,000 2,772,000 1,332,000
5/85 Worthington 221,000 2,891,000 3,112,000 1,511,000
7/85 Westerville 199,000 2,564,000 2,763,000 1,355,000
5/85 Arlington 201,000 2,521,000 2,722,000 1,330,000
7/85 Springfield 90,000 1,325,000 1,415,000 688,000
7/85 Dayton (Needmore Road) 144,000 1,945,000 2,089,000 1,025,000
7/85 Dayton (Executive Blvd.) 159,000 2,168,000 2,327,000 1,167,000
7/85 Lilburn 330,000 1,625,000 1,955,000 852,000
4/85 Austin/S. First 778,000 1,794,000 2,572,000 1,122,000
4/85 Cincinnati/E. Kemper 232,000 2,065,000 2,297,000 1,291,000
4/85 Cincinnati/Colerain 253,000 2,297,000 2,550,000 1,418,000
4/85 Florence/Tanner Lane 218,000 2,029,000 2,247,000 1,270,000
5/85 Tacoma/Phillips Rd. 396,000 1,649,000 2,045,000 1,005,000
F-37
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
5/85 Milwaukie/Mcloughlin II 458,000 742,000 350,000 209,000
7/85 San Diego/Kearny Mesa Rd 783,000 1,750,000 337,000 267,000
5/85 Manchester/S. Willow II 371,000 2,129,000 (161,000) 198,000
6/85 N. Hollywood/Raymer 967,000 848,000 256,000 144,000
7/85 Scottsdale/70th St 632,000 1,368,000 289,000 173,000
7/85 Concord/Hwy 29 150,000 750,000 361,000 188,000
10/85 N. Hollywood/Whitsett (A) 1,524,000 2,576,000 363,000 334,000
10/85 Portland/SE 82nd St 354,000 496,000 288,000 94,000
9/85 Madison/Copps Ave. 450,000 1,150,000 388,000 150,000
9/85 Columbus/Sinclair 307,000 893,000 297,000 108,000
9/85 Philadelphia/Tacony St 118,000 1,782,000 277,000 187,000
10/85 Perrysburg/Helen Dr. 110,000 1,590,000 (61,000) 140,000
10/85 Columbus/Ambleside 124,000 1,526,000 (30,000) 136,000
10/85 Indianapolis/Pike Place 229,000 1,531,000 220,000 215,000
10/85 Indianapolis/Beach Grove 198,000 1,342,000 226,000 176,000
10/85 Hartford/Roberts 219,000 1,481,000 335,000 318,000
10/85 Wichita/S. Rock Rd. 501,000 1,478,000 150,000 136,000
10/85 Wichita/E. Harry 313,000 1,050,000 65,000 102,000
10/85 Wichita/S. Woodlawn 263,000 905,000 43,000 85,000
10/85 Wichita/E. Kellogg 185,000 658,000 (46,000) 56,000
10/85 Wichita/S. Tyler 294,000 1,004,000 68,000 152,000
10/85 Wichita/W. Maple 234,000 805,000 (59,000) 68,000
10/85 Wichita/Carey Lane 192,000 674,000 14,000 63,000
10/85 Wichita/E. Macarthur 220,000 775,000 (110,000) 93,000
10/85 Joplin/S. Range Line 264,000 904,000 97,000 91,000
12/85 Milpitas 1,623,000 1,577,000 238,000 275,000
12/85 Pleasanton/Santa Rita (A) 1,226,000 2,078,000 314,000 327,000
7/88 Fort Wayne 101,000 1,524,000 53,000 144,000
10/85 San Antonio/Wetmore Rd. 306,000 1,079,000 403,000 65,000
10/85 San Antonio/Callaghan 288,000 1,016,000 354,000 44,000
10/85 San Antonio/Zarzamora 364,000 1,281,000 496,000 34,000
10/85 San Antonio/Hackberry 388,000 1,367,000 2,192,000 45,000
10/85 San Antonio/Fredericksburg 287,000 1,009,000 395,000 56,000
10/85 Dallas/S. Westmoreland 474,000 1,670,000 159,000 92,000
10/85 Dallas/Alvin St. 359,000 1,266,000 161,000 65,000
10/85 Fort Worth/W. Beach St. 356,000 1,252,000 161,000 41,000
10/85 Fort Worth/E. Seminary 382,000 1,346,000 178,000 33,000
10/85 Fort Worth/Cockrell St. 323,000 1,136,000 162,000 64,000
11/85 Everett/Evergreen 706,000 2,294,000 448,000 93,000
11/85 Seattle/Empire Way 1,652,000 5,348,000 581,000 171,000
12/85 Amherst/Niagra Falls 132,000 701,000 221,000 64,000
12/85 West Sams Blvd. 164,000 1,159,000 (277,000) 63,000
3/86 Jacksonville/Wiley 140,000 510,000 266,000 51,000
12/85 MacArthur Rd. 204,000 1,628,000 173,000 30,000
2/86 Costa Mesa/Pomona 1,405,000 1,520,000 358,000 54,000
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
5/85 Milwaukie/Mcloughlin II 458,000 1,301,000 1,759,000 802,000
7/85 San Diego/Kearny Mesa Rd 783,000 2,354,000 3,137,000 1,487,000
5/85 Manchester/S. Willow II 371,000 2,166,000 2,537,000 1,356,000
6/85 N. Hollywood/Raymer 967,000 1,248,000 2,215,000 797,000
7/85 Scottsdale/70th St 632,000 1,830,000 2,462,000 1,109,000
7/85 Concord/Hwy 29 150,000 1,299,000 1,449,000 808,000
10/85 N. Hollywood/Whitsett (A) 1,524,000 3,273,000 4,797,000 2,021,000
10/85 Portland/SE 82nd St 354,000 878,000 1,232,000 579,000
9/85 Madison/Copps Ave. 450,000 1,688,000 2,138,000 1,042,000
9/85 Columbus/Sinclair 307,000 1,298,000 1,605,000 778,000
9/85 Philadelphia/Tacony St 118,000 2,246,000 2,364,000 1,369,000
10/85 Perrysburg/Helen Dr. 110,000 1,669,000 1,779,000 1,021,000
10/85 Columbus/Ambleside 124,000 1,632,000 1,756,000 961,000
10/85 Indianapolis/Pike Place 229,000 1,966,000 2,195,000 1,208,000
10/85 Indianapolis/Beach Grove 198,000 1,744,000 1,942,000 1,073,000
10/85 Hartford/Roberts 219,000 2,134,000 2,353,000 1,278,000
10/85 Wichita/S. Rock Rd. 642,000 1,623,000 2,265,000 981,000
10/85 Wichita/E. Harry 313,000 1,217,000 1,530,000 790,000
10/85 Wichita/S. Woodlawn 263,000 1,033,000 1,296,000 666,000
10/85 Wichita/E. Kellogg 185,000 668,000 853,000 429,000
10/85 Wichita/S. Tyler 294,000 1,224,000 1,518,000 833,000
10/85 Wichita/W. Maple 234,000 814,000 1,048,000 500,000
10/85 Wichita/Carey Lane 192,000 751,000 943,000 458,000
10/85 Wichita/E. Macarthur 220,000 758,000 978,000 467,000
10/85 Joplin/S. Range Line 264,000 1,092,000 1,356,000 687,000
12/85 Milpitas 1,623,000 2,090,000 3,713,000 1,299,000
12/85 Pleasanton/Santa Rita (A) 1,226,000 2,719,000 3,945,000 1,657,000
7/88 Fort Wayne 101,000 1,721,000 1,822,000 885,000
10/85 San Antonio/Wetmore Rd. 306,000 1,547,000 1,853,000 1,017,000
10/85 San Antonio/Callaghan 288,000 1,414,000 1,702,000 937,000
10/85 San Antonio/Zarzamora 364,000 1,811,000 2,175,000 1,146,000
10/85 San Antonio/Hackberry 389,000 3,603,000 3,992,000 1,225,000
10/85 San Antonio/Fredericksburg 287,000 1,460,000 1,747,000 972,000
10/85 Dallas/S. Westmoreland 474,000 1,921,000 2,395,000 1,270,000
10/85 Dallas/Alvin St. 359,000 1,492,000 1,851,000 992,000
10/85 Fort Worth/W. Beach St. 356,000 1,454,000 1,810,000 969,000
10/85 Fort Worth/E. Seminary 382,000 1,557,000 1,939,000 1,045,000
10/85 Fort Worth/Cockrell St. 323,000 1,362,000 1,685,000 907,000
11/85 Everett/Evergreen 706,000 2,835,000 3,541,000 1,965,000
11/85 Seattle/Empire Way 1,652,000 6,100,000 7,752,000 4,064,000
12/85 Amherst/Niagra Falls 132,000 986,000 1,118,000 672,000
12/85 West Sams Blvd. 164,000 945,000 1,109,000 640,000
3/86 Jacksonville/Wiley 140,000 827,000 967,000 532,000
12/85 MacArthur Rd. 204,000 1,831,000 2,035,000 1,199,000
2/86 Costa Mesa/Pomona 1,405,000 1,932,000 3,337,000 1,276,000
F-38
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
12/85 Brockton/Main 153,000 2,020,000 (215,000) 58,000
1/86 Mapleshade/Rudderow 362,000 1,811,000 282,000 88,000
1/86 Bordentown/Groveville 196,000 981,000 149,000 69,000
12/85 Eatontown/Hwy 35 308,000 4,067,000 453,000 120,000
2/86 Brea/Imperial Hwy 1,069,000 2,165,000 359,000 92,000
12/85 Denver/Leetsdale 603,000 847,000 215,000 34,000
2/86 Skokie/McCormick 638,000 1,912,000 258,000 46,000
1/86 Sun Valley/Sheldon 544,000 1,836,000 335,000 54,000
3/86 St. Louis/Forder 517,000 1,133,000 275,000 38,000
1/86 Las Vegas/Highland 432,000 848,000 222,000 38,000
5/86 Westlake Village 1,205,000 995,000 222,000 17,000
2/86 Colorado Springs/Sinton 535,000 1,115,000 251,000 104,000
2/86 Oklahoma City/Penn 146,000 829,000 147,000 61,000
2/86 Oklahoma City/39th Expressway 238,000 812,000 284,000 73,000
4/86 Reno/ Telegraph 649,000 1,051,000 447,000 122,000
7/86 Colorado Springs/Hollow Tree 574,000 726,000 264,000 63,000
4/86 St. Louis/Kirkham 199,000 1,001,000 218,000 8,000
4/86 St. Louis/Reavis 192,000 958,000 201,000 11,000
4/86 Fort Worth/East Loop 196,000 804,000 228,000 24,000
6/86 Richland Hills 543,000 857,000 425,000 (5,000)
5/86 Sacramento/Franklin Blvd. 872,000 978,000 466,000 (55,000)
6/86 West Valley/So. 3600 208,000 1,552,000 374,000 (164,000)
7/86 West LA/Purdue Ave. 2,415,000 3,585,000 247,000 (1,000)
7/86 Capital Heights/Central Ave. 649,000 3,851,000 348,000 (51,000)
10/86 Peralta/Fremont 851,000 1,074,000 277,000 14,000
7/86 Pontiac/Dixie Hwy. 259,000 2,091,000 90,000 34,000
8/86 Laurel/Ft. Meade Rd. 475,000 1,475,000 242,000 52,000
9/86 Kansas City/S. 44th. 509,000 1,906,000 476,000 (32,000)
10/86 Birmingham/Highland 89,000 786,000 217,000 72,000
10/86 Birmingham/Riverchase 262,000 1,338,000 383,000 64,000
10/86 Birmingham/Eastwood 166,000 1,184,000 281,000 120,000
10/86 Birmingham/Forestdale 152,000 948,000 222,000 111,000
10/86 Birmingham/Centerpoint 265,000 1,305,000 270,000 6,000
10/86 Birmingham/Roebuck Plaza 101,000 399,000 249,000 213,000
10/86 Birmingham/Greensprings 347,000 1,173,000 290,000 (232,000)
10/86 Birmingham/Hoover-Lorna 372,000 1,128,000 356,000 (64,000)
10/86 Midfield/Bessemer 170,000 355,000 286,000 (101,000)
10/86 Huntsville/Leeman Ferry Rd. 158,000 992,000 256,000 123,000
10/86 Huntsville/Drake 253,000 1,172,000 244,000 56,000
10/86 Anniston/Whiteside 59,000 566,000 189,000 77,000
10/86 Houston/Glenvista 595,000 1,043,000 511,000 (30,000)
10/86 Houston/I-45 704,000 1,146,000 760,000 (8,000)
10/86 Houston/Rogerdale 1,631,000 2,792,000 502,000 113,000
10/86 Houston/Gessner 1,032,000 1,693,000 891,000 (70,000)
10/86 Houston/Richmond-Fairdale 1,502,000 2,506,000 900,000 19,000
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
12/85 Brockton/Main 153,000 1,863,000 2,016,000 1,219,000
1/86 Mapleshade/Rudderow 362,000 2,181,000 2,543,000 1,395,000
1/86 Bordentown/Groveville 196,000 1,199,000 1,395,000 770,000
12/85 Eatontown/Hwy 35 308,000 4,640,000 4,948,000 3,046,000
2/86 Brea/Imperial Hwy 1,069,000 2,616,000 3,685,000 1,714,000
12/85 Denver/Leetsdale 603,000 1,096,000 1,699,000 719,000
2/86 Skokie/McCormick 638,000 2,216,000 2,854,000 1,423,000
1/86 Sun Valley/Sheldon 544,000 2,225,000 2,769,000 1,484,000
3/86 St. Louis/Forder 517,000 1,446,000 1,963,000 940,000
1/86 Las Vegas/Highland 432,000 1,108,000 1,540,000 744,000
5/86 Westlake Village 1,205,000 1,234,000 2,439,000 811,000
2/86 Colorado Springs/Sinton 535,000 1,470,000 2,005,000 906,000
2/86 Oklahoma City/Penn 146,000 1,037,000 1,183,000 673,000
2/86 Oklahoma City/39th Expressway 238,000 1,169,000 1,407,000 785,000
4/86 Reno/ Telegraph 649,000 1,620,000 2,269,000 1,093,000
7/86 Colorado Springs/Hollow Tree 574,000 1,053,000 1,627,000 659,000
4/86 St. Louis/Kirkham 199,000 1,227,000 1,426,000 813,000
4/86 St. Louis/Reavis 192,000 1,170,000 1,362,000 790,000
4/86 Fort Worth/East Loop 196,000 1,056,000 1,252,000 701,000
6/86 Richland Hills 543,000 1,277,000 1,820,000 895,000
5/86 Sacramento/Franklin Blvd. 872,000 1,389,000 2,261,000 973,000
6/86 West Valley/So. 3600 208,000 1,762,000 1,970,000 1,180,000
7/86 West LA/Purdue Ave. 2,416,000 3,830,000 6,246,000 2,505,000
7/86 Capital Heights/Central Ave. 649,000 4,148,000 4,797,000 2,707,000
10/86 Peralta/Fremont 851,000 1,365,000 2,216,000 894,000
7/86 Pontiac/Dixie Hwy. 259,000 2,215,000 2,474,000 1,420,000
8/86 Laurel/Ft. Meade Rd. 475,000 1,769,000 2,244,000 1,137,000
9/86 Kansas City/S. 44th. 509,000 2,350,000 2,859,000 1,583,000
10/86 Birmingham/Highland 150,000 1,014,000 1,164,000 700,000
10/86 Birmingham/Riverchase 278,000 1,769,000 2,047,000 1,200,000
10/86 Birmingham/Eastwood 232,000 1,519,000 1,751,000 969,000
10/86 Birmingham/Forestdale 190,000 1,243,000 1,433,000 786,000
10/86 Birmingham/Centerpoint 273,000 1,573,000 1,846,000 1,016,000
10/86 Birmingham/Roebuck Plaza 340,000 622,000 962,000 444,000
10/86 Birmingham/Greensprings 16,000 1,562,000 1,578,000 1,014,000
10/86 Birmingham/Hoover-Lorna 266,000 1,526,000 1,792,000 970,000
10/86 Midfield/Bessemer 95,000 615,000 710,000 416,000
10/86 Huntsville/Leeman Ferry Rd. 198,000 1,331,000 1,529,000 895,000
10/86 Huntsville/Drake 248,000 1,477,000 1,725,000 940,000
10/86 Anniston/Whiteside 107,000 784,000 891,000 530,000
10/86 Houston/Glenvista 595,000 1,524,000 2,119,000 1,069,000
10/86 Houston/I-45 704,000 1,898,000 2,602,000 1,405,000
10/86 Houston/Rogerdale 1,631,000 3,407,000 5,038,000 2,198,000
10/86 Houston/Gessner 1,032,000 2,514,000 3,546,000 1,762,000
10/86 Houston/Richmond-Fairdale 1,502,000 3,425,000 4,927,000 2,408,000
F-39
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
10/86 Houston/Gulfton 1,732,000 3,036,000 879,000 77,000
10/86 Houston/Westpark 503,000 854,000 155,000 75,000
10/86 Jonesboro 157,000 718,000 211,000 51,000
9/15/00 Gardena/W. El Segundo 1,532,000 3,424,000 78,000 0
9/15/00 Chicago/Ashland Avenue 850,000 4,880,000 135,000 0
9/15/00 Oakland/Macarthur 678,000 2,751,000 97,000 0
9/15/00 Alexandria/Pickett II 2,743,000 6,198,000 251,000 0
9/15/00 Royal Oak/Coolidge Highway 1,062,000 2,576,000 106,000 0
9/15/00 Hawthorne/Crenshaw Blvd. 1,079,000 2,913,000 90,000 0
9/15/00 Rockaway/U.S. Route 46 2,424,000 4,945,000 219,000 0
9/15/00 Evanston/Greenbay 846,000 4,436,000 121,000 0
9/15/00 Los Angeles/Coliseum & Crenshaw 3,109,000 4,013,000 90,000 0
9/15/00 Bethpage/Hempstead Turnpike 2,899,000 5,457,000 207,000 0
9/15/00 Northport/Fort Salonga Road 2,999,000 5,698,000 215,000 0
9/15/00 Brooklyn/St. Johns Place 3,492,000 6,026,000 224,000 0
9/15/00 Lake Ronkonkoma/Portion Rd. 937,000 4,199,000 137,000 0
1/1/96 Bensenville/York R 667,000 1,602,000 152,000 895,000
1/1/96 Louisville/Preston 211,000 1,060,000 64,000 594,000
1/1/96 San Jose/Aborn Road 615,000 1,342,000 88,000 759,000
1/1/96 Englewood/Federal 481,000 1,395,000 80,000 777,000
1/1/96 W. Hollywood/Santa Monica 3,415,000 4,577,000 188,000 2,552,000
1/1/96 Orland Hills/W. 159th 917,000 2,392,000 132,000 1,342,000
1/1/96 Merrionette Park/S 818,000 2,020,000 88,000 1,122,000
1/1/96 Denver/S Quebec 1,849,000 1,941,000 139,000 1,086,000
1/1/96 Tigard/S.W. Pacific 633,000 1,206,000 114,000 705,000
1/1/96 Coram/Middle Count 507,000 1,421,000 70,000 792,000
1/1/96 Houston/FM 1960 635,000 1,294,000 210,000 783,000
1/1/96 Kent/Military Trail 409,000 1,670,000 148,000 956,000
1/1/96 Turnersville/Black H 165,000 1,360,000 98,000 758,000
1/1/96 Sewell/Rts. 553 323,000 1,138,000 93,000 658,000
1/1/96 Maple Shade/Fellowship 331,000 1,421,000 109,000 803,000
1/1/96 Hyattsville/Kenilworth 509,000 1,757,000 121,000 1,000,000
1/1/96 Waterbury/Captain Ne 434,000 2,089,000 122,000 1,162,000
1/1/96 Bedford Hts/Miles 835,000 1,577,000 208,000 929,000
1/1/96 Livonia/Newburgh 635,000 1,407,000 75,000 783,000
1/1/96 Sunland/Sunland Blvd. 631,000 1,965,000 71,000 1,090,000
1/1/96 Des Moines 448,000 1,350,000 89,000 768,000
1/1/96 Oxonhill/Indianhead 772,000 2,017,000 188,000 1,141,000
1/1/96 Sacramento/N. 16th 582,000 2,610,000 133,000 1,466,000
1/1/96 Houston/Westheimer 1,508,000 2,274,000 154,000 1,304,000
1/1/96 San Pablo/San Pablo 565,000 1,232,000 127,000 713,000
1/1/96 Bowie/Woodcliff 718,000 2,336,000 71,000 1,292,000
1/1/96 Milwaukee/S. 84th 444,000 1,868,000 215,000 1,091,000
1/1/96 Clinton/Malcolm Road 593,000 2,123,000 161,000 1,187,000
1/83 Platte 409,000 953,000 359,000 428,000
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
10/86 Houston/Gulfton 1,732,000 3,992,000 5,724,000 2,784,000
10/86 Houston/Westpark 503,000 1,084,000 1,587,000 706,000
10/86 Jonesboro 157,000 980,000 1,137,000 655,000
9/15/00 Gardena/W. El Segundo 1,532,000 3,502,000 5,034,000 172,000
9/15/00 Chicago/Ashland Avenue 850,000 5,015,000 5,865,000 264,000
9/15/00 Oakland/Macarthur 678,000 2,848,000 3,526,000 139,000
9/15/00 Alexandria/Pickett II 2,743,000 6,449,000 9,192,000 267,000
9/15/00 Royal Oak/Coolidge Highway 1,062,000 2,682,000 3,744,000 121,000
9/15/00 Hawthorne/Crenshaw Blvd. 1,079,000 3,003,000 4,082,000 138,000
9/15/00 Rockaway/U.S. Route 46 2,424,000 5,164,000 7,588,000 230,000
9/15/00 Evanston/Greenbay 846,000 4,557,000 5,403,000 202,000
9/15/00 Los Angeles/Coliseum & Crenshaw 3,109,000 4,103,000 7,212,000 176,000
9/15/00 Bethpage/Hempstead Turnpike 2,899,000 5,664,000 8,563,000 230,000
9/15/00 Northport/Fort Salonga Road 2,999,000 5,913,000 8,912,000 241,000
9/15/00 Brooklyn/St. Johns Place 3,492,000 6,250,000 9,742,000 265,000
9/15/00 Lake Ronkonkoma/Portion Rd. 937,000 4,336,000 5,273,000 169,000
1/1/96 Bensenville/York R 667,000 2,649,000 3,316,000 597,000
1/1/96 Louisville/Preston 211,000 1,718,000 1,929,000 384,000
1/1/96 San Jose/Aborn Road 615,000 2,189,000 2,804,000 493,000
1/1/96 Englewood/Federal 481,000 2,252,000 2,733,000 530,000
1/1/96 W. Hollywood/Santa Monica 3,415,000 7,317,000 10,732,000 1,601,000
1/1/96 Orland Hills/W. 159th 917,000 3,866,000 4,783,000 889,000
1/1/96 Merrionette Park/S 818,000 3,230,000 4,048,000 716,000
1/1/96 Denver/S Quebec 1,849,000 3,166,000 5,015,000 699,000
1/1/96 Tigard/S.W. Pacific 633,000 2,025,000 2,658,000 442,000
1/1/96 Coram/Middle Count 507,000 2,283,000 2,790,000 486,000
1/1/96 Houston/FM 1960 635,000 2,287,000 2,922,000 527,000
1/1/96 Kent/Military Trail 409,000 2,774,000 3,183,000 587,000
1/1/96 Turnersville/Black H 165,000 2,216,000 2,381,000 476,000
1/1/96 Sewell/Rts. 553 323,000 1,889,000 2,212,000 418,000
1/1/96 Maple Shade/Fellowship 331,000 2,333,000 2,664,000 479,000
1/1/96 Hyattsville/Kenilworth 509,000 2,878,000 3,387,000 589,000
1/1/96 Waterbury/Captain Ne 434,000 3,373,000 3,807,000 613,000
1/1/96 Bedford Hts/Miles 835,000 2,714,000 3,549,000 568,000
1/1/96 Livonia/Newburgh 635,000 2,265,000 2,900,000 476,000
1/1/96 Sunland/Sunland Blvd. 631,000 3,126,000 3,757,000 619,000
1/1/96 Des Moines 448,000 2,207,000 2,655,000 483,000
1/1/96 Oxonhill/Indianhead 772,000 3,346,000 4,118,000 668,000
1/1/96 Sacramento/N. 16th 582,000 4,209,000 4,791,000 736,000
1/1/96 Houston/Westheimer 1,508,000 3,732,000 5,240,000 801,000
1/1/96 San Pablo/San Pablo 565,000 2,072,000 2,637,000 426,000
1/1/96 Bowie/Woodcliff 718,000 3,699,000 4,417,000 693,000
1/1/96 Milwaukee/S. 84th 444,000 3,174,000 3,618,000 605,000
1/1/96 Clinton/Malcolm Road 593,000 3,471,000 4,064,000 626,000
1/83 Platte 409,000 1,740,000 2,149,000 1,000,000
F-40
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
5/83 Delta Drive 67,000 481,000 203,000 241,000
12/82 Port/Halsey 357,000 1,150,000 (420,000) 326,000
12/82 Sacto/Folsom 396,000 329,000 633,000 323,000
1/83 Semoran 442,000 1,882,000 6,098,000 720,000
3/83 Blackwood 213,000 1,559,000 242,000 595,000
10/83 Orlando J. Y. Parkway 383,000 1,512,000 343,000 622,000
9/83 Southington 124,000 1,233,000 305,000 546,000
4/83 Vailsgate 103,000 990,000 426,000 505,000
6/83 Ventura 658,000 1,734,000 187,000 583,000
9/83 Southhampton 331,000 1,738,000 623,000 806,000
9/83 Webster/Keystone 449,000 1,688,000 701,000 813,000
9/83 Dover 107,000 1,462,000 441,000 627,000
9/83 Newcastle 227,000 2,163,000 400,000 817,000
9/83 Newark 208,000 2,031,000 293,000 746,000
9/83 Langhorne 263,000 3,549,000 454,000 1,445,000
8/83 Hobart 215,000 1,491,000 552,000 838,000
9/83 Ft. Wayne/W. Coliseum 160,000 1,395,000 259,000 535,000
9/83 Ft. Wayne/Bluffton 88,000 675,000 159,000 285,000
11/83 Aurora 505,000 758,000 281,000 341,000
11/83 Campbell 1,379,000 1,849,000 (556,000) 474,000
11/83 Col Springs/Ed (Coulter) 471,000 1,640,000 110,000 554,000
11/83 Col Springs/Mv (Coulter) 320,000 1,036,000 200,000 441,000
11/83 Thorton (Coulter) 418,000 1,400,000 106,000 536,000
11/83 Oklahoma City (Coulter) 454,000 1,030,000 764,000 620,000
11/83 Tucson (Coulter) 343,000 778,000 600,000 420,000
11/83 Webster/Nasa 1,570,000 2,457,000 299,000 1,372,000
7/87 Oakbrook Terrace 912,000 2,688,000 (45,000) 399,000
10/87 Plantation/S. State Rd. 924,000 1,801,000 (244,000) 298,000
2/88 Anaheim/Lakeview 995,000 1,505,000 (12,000) 256,000
8/87 San Antonio/Austin Hwy. 400,000 850,000 (61,000) 164,000
10/87 Rockville/Fredrick Rd. 1,695,000 3,305,000 (273,000) 519,000
10/11/99 Matthews 937,000 3,155,000 212,000 0
12/30/99 Santa Anna 2,657,000 3,167,000 425,000 0
4/29/00 St.Louis/Ellisville Twn Centre 765,000 4,397,000 249,000 0
2/8/00 Lewisville/Justin Rd 529,000 2,812,000 276,000 0
8/23/00 Morris Plains 1,501,000 4,147,000 420,000 0
6/5/00 Mount Sinai/Route 25a 950,000 3,318,000 198,000 0
1/5/01 Troy/E. Big Beaver Rd, MI 2,195,000 4,221,000 300,000 0
8/1/00 Pineville 2,197,000 3,293,000 286,000 0
9/13/00 Merrillville 343,000 2,459,000 151,000 0
1/25/01 Lombard/Finley, IL 851,000 3,805,000 214,000 0
11/15/00 Largo/Missouri, FL 1,092,000 3,726,000 782,000 0
1/18/01 Tuscon/E. Speedway, AZ 735,000 2,903,000 170,000 0
9/30/01 Syosset, NY 2,461,000 5,171,000 350,000 0
6/26/01 Middletown 1,535,000 4,287,000 268,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
5/83 Delta Drive 68,000 924,000 992,000 535,000
12/82 Port/Halsey 357,000 1,056,000 1,413,000 614,000
12/82 Sacto/Folsom 396,000 1,285,000 1,681,000 794,000
1/83 Semoran 442,000 8,700,000 9,142,000 1,786,000
3/83 Blackwood 213,000 2,396,000 2,609,000 1,389,000
10/83 Orlando J. Y. Parkway 383,000 2,477,000 2,860,000 1,416,000
9/83 Southington 123,000 2,085,000 2,208,000 1,170,000
4/83 Vailsgate 103,000 1,921,000 2,024,000 1,128,000
6/83 Ventura 658,000 2,504,000 3,162,000 1,364,000
9/83 Southhampton 331,000 3,167,000 3,498,000 1,856,000
9/83 Webster/Keystone 449,000 3,202,000 3,651,000 1,937,000
9/83 Dover 107,000 2,530,000 2,637,000 1,506,000
9/83 Newcastle 227,000 3,380,000 3,607,000 1,941,000
9/83 Newark 208,000 3,070,000 3,278,000 1,742,000
9/83 Langhorne 263,000 5,448,000 5,711,000 3,090,000
8/83 Hobart 215,000 2,881,000 3,096,000 1,629,000
9/83 Ft. Wayne/W. Coliseum 160,000 2,189,000 2,349,000 1,203,000
9/83 Ft. Wayne/Bluffton 88,000 1,119,000 1,207,000 642,000
11/83 Aurora 505,000 1,380,000 1,885,000 784,000
11/83 Campbell 1,379,000 1,767,000 3,146,000 990,000
11/83 Col Springs/Ed (Coulter) 471,000 2,304,000 2,775,000 1,370,000
11/83 Col Springs/Mv (Coulter) 320,000 1,677,000 1,997,000 971,000
11/83 Thorton (Coulter) 418,000 2,042,000 2,460,000 1,184,000
11/83 Oklahoma City (Coulter) 454,000 2,414,000 2,868,000 1,383,000
11/83 Tucson (Coulter) 343,000 1,798,000 2,141,000 991,000
11/83 Webster/Nasa 1,571,000 4,127,000 5,698,000 2,338,000
7/87 Oakbrook Terrace 912,000 3,042,000 3,954,000 2,139,000
10/87 Plantation/S. State Rd. 924,000 1,855,000 2,779,000 1,269,000
2/88 Anaheim/Lakeview 995,000 1,749,000 2,744,000 1,167,000
8/87 San Antonio/Austin Hwy. 400,000 953,000 1,353,000 685,000
10/87 Rockville/Fredrick Rd. 1,695,000 3,551,000 5,246,000 2,416,000
10/11/99 Matthews 986,000 3,318,000 4,304,000 240,000
12/30/99 Santa Anna 2,796,000 3,453,000 6,249,000 249,000
4/29/00 St.Louis/Ellisville Twn Centre 806,000 4,605,000 5,411,000 295,000
2/8/00 Lewisville/Justin Rd 557,000 3,060,000 3,617,000 232,000
8/23/00 Morris Plains 1,581,000 4,487,000 6,068,000 225,000
6/5/00 Mount Sinai/Route 25a 999,000 3,467,000 4,466,000 212,000
1/5/01 Troy/E. Big Beaver Rd, MI 2,310,000 4,406,000 6,716,000 155,000
8/1/00 Pineville 2,312,000 3,464,000 5,776,000 228,000
9/13/00 Merrillville 361,000 2,592,000 2,953,000 125,000
1/25/01 Lombard/Finley, IL 896,000 3,974,000 4,870,000 139,000
11/15/00 Largo/Missouri, FL 1,147,000 4,453,000 5,600,000 178,000
1/18/01 Tuscon/E. Speedway, AZ 774,000 3,034,000 3,808,000 107,000
9/30/01 Syosset, NY 2,590,000 5,392,000 7,982,000 35,000
6/26/01 Middletown 1,616,000 4,474,000 6,090,000 86,000
F-41
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
12/27/01 Howell/Hgwy 9 941,000 3,979,000 220,000 0
1/11/01 Ft Lauderdale, FL 954,000 4,165,000 232,000 0
6/15/00 Pinellas Park 526,000 2,408,000 165,000 0
7/17/00 La Palco/New Orleans 1,023,000 3,204,000 196,000 0
11/15/99 Poplar, Memphis 1,631,000 3,062,000 265,000 0
1/25/00 Memphis/N.Germantwn Pkwy 884,000 3,012,000 184,000 0
12/9/93 Salt Lake City 765,000 1,422,000 (47,000) 0
6/24/94 Las Vegas/N. Lamb Blvd. 869,000 1,629,000 (3,000) 0
12/19/94 Salt Lake City/West North Temple 490,000 917,000 (101,000) 0
5/1/95 Sandy/S. State Street 1,043,000 2,442,000 (383,000) 0
6/25/97 L.A./Venice Blvd. 523,000 1,221,000 1,772,000 0
4/1/99 Fresno 45,000 44,000 206,000 (325,000) 804,000
5/1/99 Stockton 164,000 151,000 402,000 (306,000) 2,017,000
1/31/00 Rowland Heights/Walnut B 681,000 1,589,000 112,000 0
12/23/96 Eagle Rock/Colorado 330,000 813,000 355,000 0
9/1/99 Charlotte/Ashley Road 664,000 1,551,000 (8,000) 0
9/1/99 Raleigh/Capital Blvd 927,000 2,166,000 (41,000) 0
9/1/99 Charlotte/South Blvd. 734,000 1,715,000 (8,000) 0
9/1/99 Greensboro/W.Market St. 603,000 1,409,000 (1,000) 0
10/11/96 Hampton/Pembroke Road 1,080,000 2,346,000 (314,000) 0
10/11/96 Norfolk/Widgeon Road 1,110,000 2,405,000 (406,000) 0
10/11/96 Richmond/Bloom Lane 1,188,000 2,512,000 (267,000) 0
11/14/96 Bossier City LA 633,000 1,488,000 (185,000) 0
4/1/98 St. Louis/Hwy. 141 659,000 1,628,000 395,000 0
4/1/98 Island Park/Austin 2,313,000 3,015,000 1,160,000 0
4/1/98 Akron/Brittain Rd. 275,000 2,248,000 (250,000) 0
10/8/99 Belmont/O'neill Ave 869,000 4,582,000 157,000 0
12/30/99 Oak Park/Greenfield Rd & 8 Mile 1,184,000 2,826,000 744,000 0
12/17/99 Dallas/Swiss Ave 1,862,000 4,344,000 112,000 0
3/12/99 River Grove/N. 5th Ave. 1,094,000 2,552,000 (38,000) 0
3/12/99 St. Charles/E. Main St. 951,000 2,220,000 (335,000) 0
1/21/00 Hanover Park 262,000 3,245,000 (119,000) 0
8/31/00 Florissant/New Halls Fry 800,000 4,222,000 63,000 0
7/29/00 Tracy/1615& 1650 W.11th S 1,745,000 4,189,000 605,000 0
9/30/00 Marietta/Kennestone& Hwy5 622,000 3,388,000 132,000 0
7/13/00 Lincolnwood 1,598,000 3,729,000 116,000 0
9/18/00 Tampa/N. Del Mabry 2,204,000 5,148,000 4,684,000 0
9/1/00 Bayshore, NY 1,277,000 2,980,000 114,000 0
9/1/00 Los Angeles, CA 590,000 1,376,000 49,000 0
5/26/00 Phoenix/N. 35th Ave 860,000 2,959,000 70,000 0
9/30/00 Lilburn/Indian Trail 1,695,000 5,170,000 133,000 0
8/31/00 Orange, CA 661,000 1,542,000 43,000 0
6/17/01 Port Washington/Seaview &W.Sh 0 2,381,000 4,608,000 0 0
2/28/00 Plano/Avenue K 2,064,000 10,407,000 344,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
12/27/01 Howell/Hgwy 9 990,000 4,150,000 5,140,000 27,000
1/11/01 Ft Lauderdale, FL 1,004,000 4,347,000 5,351,000 152,000
6/15/00 Pinellas Park 543,000 2,556,000 3,099,000 50,000
7/17/00 La Palco/New Orleans 1,077,000 3,346,000 4,423,000 54,000
11/15/99 Poplar, Memphis 1,717,000 3,241,000 4,958,000 254,000
1/25/00 Memphis/N.Germantwn Pkwy 930,000 3,150,000 4,080,000 243,000
12/9/93 Salt Lake City 633,000 1,507,000 2,140,000 176,000
6/24/94 Las Vegas/N. Lamb Blvd. 669,000 1,826,000 2,495,000 237,000
12/19/94 Salt Lake City/West North Temple 385,000 921,000 1,306,000 106,000
5/1/95 Sandy/S. State Street 923,000 2,179,000 3,102,000 251,000
6/25/97 L.A./Venice Blvd. 1,044,000 2,472,000 3,516,000 284,000
4/1/99 Fresno 193,000 536,000 729,000 60,000
5/1/99 Stockton 590,000 1,674,000 2,264,000 187,000
1/31/00 Rowland Heights/Walnut B 688,000 1,694,000 2,382,000 197,000
12/23/96 Eagle Rock/Colorado 444,000 1,054,000 1,498,000 121,000
9/1/99 Charlotte/Ashley Road 651,000 1,556,000 2,207,000 177,000
9/1/99 Raleigh/Capital Blvd 909,000 2,143,000 3,052,000 247,000
9/1/99 Charlotte/South Blvd. 719,000 1,722,000 2,441,000 198,000
9/1/99 Greensboro/W.Market St. 591,000 1,420,000 2,011,000 171,000
10/11/96 Hampton/Pembroke Road 914,000 2,198,000 3,112,000 252,000
10/11/96 Norfolk/Widgeon Road 908,000 2,201,000 3,109,000 258,000
10/11/96 Richmond/Bloom Lane 995,000 2,438,000 3,433,000 288,000
11/14/96 Bossier City LA 557,000 1,379,000 1,936,000 162,000
4/1/98 St. Louis/Hwy. 141 790,000 1,892,000 2,682,000 221,000
4/1/98 Island Park/Austin 1,928,000 4,560,000 6,488,000 521,000
4/1/98 Akron/Brittain Rd. 669,000 1,604,000 2,273,000 189,000
10/8/99 Belmont/O'neill Ave 878,000 4,730,000 5,608,000 540,000
12/30/99 Oak Park/Greenfield Rd & 8 Mile 1,196,000 3,558,000 4,754,000 363,000
12/17/99 Dallas/Swiss Ave 1,878,000 4,440,000 6,318,000 509,000
3/12/99 River Grove/N. 5th Ave. 1,034,000 2,574,000 3,608,000 514,000
3/12/99 St. Charles/E. Main St. 802,000 2,034,000 2,836,000 446,000
1/21/00 Hanover Park 256,000 3,132,000 3,388,000 238,000
8/31/00 Florissant/New Halls Fry 807,000 4,278,000 5,085,000 370,000
7/29/00 Tracy/1615& 1650 W.11th S 1,762,000 4,777,000 6,539,000 415,000
9/30/00 Marietta/Kennestone& Hwy5 628,000 3,514,000 4,142,000 318,000
7/13/00 Lincolnwood 1,613,000 3,830,000 5,443,000 362,000
9/18/00 Tampa/N. Del Mabry 2,225,000 9,811,000 12,036,000 1,875,000
9/1/00 Bayshore, NY 1,294,000 3,077,000 4,371,000 344,000
9/1/00 Los Angeles, CA 598,000 1,417,000 2,015,000 159,000
5/26/00 Phoenix/N. 35th Ave 876,000 3,013,000 3,889,000 311,000
9/30/00 Lilburn/Indian Trail 1,712,000 5,286,000 6,998,000 340,000
8/31/00 Orange, CA 667,000 1,579,000 2,246,000 128,000
6/17/01 Port Washington/Seaview &W.Sh 2,381,000 4,608,000 6,989,000 124,000
2/28/00 Plano/Avenue K 2,084,000 10,731,000 12,815,000 2,792,000
F-42
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
4/7/01 Farmingdale/Rte 110 0 2,364,000 5,807,000 0 0
11/21/00 St. Louis/Wilson 1,608,000 3,913,000 622,000 0
12/30/00 Raleigh/Glenwood 1,545,000 3,253,000 435,000 0
4/1/01 Lakewood/Cedar Dr. 0 1,329,000 9,356,000 0 0
1/16/01 No Hollywood/Sherman Way 0 2,173,000 5,442,000 0 0
3/15/01 Los Angeles/West Pico 0 8,579,000 8,630,000 0 0
3/31/01 Long Island (Pud Only) 2,630,000 7,196,000 0 0
12/29/01 Catonsville/Kent 0 1,378,000 5,289,000 0 0
12/27/01 Los Angeles/W.Jefferson Bl(V 0 8,285,000 9,429,000 0 0
12/31/01 Santa Ana/E.Mcfadden(Rnvtn)M 0 7,587,000 8,612,000 0 0
1/1/81 Newport News/Jefferson Ave. 578,000 108,000 1,071,000 555,000 0
1/1/81 Virginia Beach/Diamond Springs 648,000 186,000 1,094,000 609,000 0
8/1/81 San Jose/Snell 312,000 1,815,000 380,000 0
10/1/81 Tampa/Lazy Lane 282,000 1,899,000 624,000 0
6/1/82 San Jose/Tully 826,000 645,000 1,579,000 11,626,000 0
6/1/82 San Carlos/Storage 1,001,000 780,000 1,387,000 518,000 0
6/1/82 Mountain View 1,424,000 1,180,000 1,182,000 557,000 0
6/1/82 Cupertino/Storage 1,119,000 572,000 1,270,000 432,000 0
10/1/82 Sorrento Valley 1,021,000 1,002,000 1,343,000 (826,000) 0
10/1/82 Northwood 1,541,000 1,034,000 1,522,000 283,000 0
3/1/85 Houston/Westheimer 492,000 850,000 1,179,000 716,000 0
3/3/86 Tampa/56th 441,000 450,000 1,360,000 453,000 0
12/31/86 Monrovia/Myrtle Avenue 1,141,000 1,149,000 2,446,000 193,000 0
12/31/86 Chatsworth/Topanga 765,000 1,447,000 1,243,000 241,000 0
12/31/86 Houston/Larkwood 270,000 247,000 602,000 346,000 0
12/31/86 Northridge 1,713,000 3,624,000 1,922,000 3,369,000 0
12/31/86 Santa Clara/Duane 688,000 1,950,000 1,004,000 377,000 0
12/31/86 Oyster Point 1,569,000 1,490,000 354,000 0
12/31/86 Walnut 767,000 613,000 3,594,000 0
6/7/88 Mesquite/Sorrento Drive 928,000 1,011,000 3,308,000 0
1/1/92 Costa Mesa 533,000 980,000 645,000 0
3/1/92 Dallas/Walnut St. 537,000 1,008,000 270,000 0
5/1/92 Camp Creek 576,000 1,075,000 252,000 0
9/1/92 Orlando/W. Colonial 368,000 713,000 125,000 0
9/1/92 Jacksonville/Arlington 554,000 1,065,000 188,000 0
10/1/92 Stockton/Mariners 381,000 730,000 157,000 0
11/18/92 Virginia Beach/General Booth Blvd 599,000 1,119,000 352,000 0
1/1/93 Redwood City/Storage 907,000 1,684,000 218,000 0
1/1/93 City Of Industry 1,611,000 2,991,000 266,000 0
1/1/93 San Jose/Felipe 1,124,000 2,088,000 275,000 0
1/1/93 Baldwin Park/Garvey Ave 840,000 1,561,000 291,000 0
3/19/93 Westminister / W. 80th 840,000 1,586,000 217,000 0
4/26/93 Costa Mesa / Newport 932,000 2,141,000 3,989,000 122,000 0
5/13/93 Austin /N. Lamar 919,000 1,695,000 7,346,000 0
5/28/93 Jacksonville/Phillips Hwy. 406,000 771,000 161,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
4/7/01 Farmingdale/Rte 110 2,364,000 5,807,000 8,171,000 357,000
11/21/00 St. Louis/Wilson 1,628,000 4,515,000 6,143,000 324,000
12/30/00 Raleigh/Glenwood 1,560,000 3,673,000 5,233,000 231,000
4/1/01 Lakewood/Cedar Dr. 1,329,000 9,356,000 10,685,000 551,000
1/16/01 No Hollywood/Sherman Way 2,173,000 5,442,000 7,615,000 323,000
3/15/01 Los Angeles/West Pico 8,579,000 8,630,000 17,209,000 535,000
3/31/01 Long Island (Pud Only) 2,630,000 7,196,000 9,826,000 66,000
12/29/01 Catonsville/Kent 1,378,000 5,289,000 6,667,000 32,000
12/27/01 Los Angeles/W.Jefferson Bl(V 8,285,000 9,429,000 17,714,000 0
12/31/01 Santa Ana/E.Mcfadden(Rnvtn)M 7,587,000 8,612,000 16,199,000 0
1/1/81 Newport News/Jefferson Ave. 108,000 1,626,000 1,734,000 1,346,000
1/1/81 Virginia Beach/Diamond Springs 186,000 1,703,000 1,889,000 1,387,000
8/1/81 San Jose/Snell 312,000 2,195,000 2,507,000 1,818,000
10/1/81 Tampa/Lazy Lane 282,000 2,523,000 2,805,000 2,024,000
6/1/82 San Jose/Tully 4,521,000 9,329,000 13,850,000 1,704,000
6/1/82 San Carlos/Storage 780,000 1,905,000 2,685,000 1,512,000
6/1/82 Mountain View 1,179,000 1,740,000 2,919,000 1,390,000
6/1/82 Cupertino/Storage 572,000 1,702,000 2,274,000 1,298,000
10/1/82 Sorrento Valley 651,000 868,000 1,519,000 678,000
10/1/82 Northwood 1,034,000 1,805,000 2,839,000 1,346,000
3/1/85 Houston/Westheimer 849,000 1,896,000 2,745,000 1,269,000
3/3/86 Tampa/56th 450,000 1,813,000 2,263,000 1,155,000
12/31/86 Monrovia/Myrtle Avenue 1,148,000 2,640,000 3,788,000 1,600,000
12/31/86 Chatsworth/Topanga 1,446,000 1,485,000 2,931,000 1,026,000
12/31/86 Houston/Larkwood 246,000 949,000 1,195,000 539,000
12/31/86 Northridge 3,622,000 5,293,000 8,915,000 1,783,000
12/31/86 Santa Clara/Duane 1,949,000 1,382,000 3,331,000 819,000
12/31/86 Oyster Point 1,568,000 1,845,000 3,413,000 1,067,000
12/31/86 Walnut 768,000 4,206,000 4,974,000 688,000
6/7/88 Mesquite/Sorrento Drive 1,044,000 4,203,000 5,247,000 1,163,000
1/1/92 Costa Mesa 535,000 1,623,000 2,158,000 1,061,000
3/1/92 Dallas/Walnut St. 537,000 1,278,000 1,815,000 1,203,000
5/1/92 Camp Creek 575,000 1,328,000 1,903,000 568,000
9/1/92 Orlando/W. Colonial 367,000 839,000 1,206,000 366,000
9/1/92 Jacksonville/Arlington 553,000 1,254,000 1,807,000 536,000
10/1/92 Stockton/Mariners 380,000 888,000 1,268,000 368,000
11/18/92 Virginia Beach/General Booth Blvd 599,000 1,471,000 2,070,000 586,000
1/1/93 Redwood City/Storage 906,000 1,903,000 2,809,000 741,000
1/1/93 City Of Industry 1,610,000 3,258,000 4,868,000 1,180,000
1/1/93 San Jose/Felipe 1,124,000 2,363,000 3,487,000 920,000
1/1/93 Baldwin Park/Garvey Ave 840,000 1,852,000 2,692,000 733,000
3/19/93 Westminister / W. 80th 839,000 1,804,000 2,643,000 688,000
4/26/93 Costa Mesa / Newport 2,139,000 4,113,000 6,252,000 1,463,000
5/13/93 Austin /N. Lamar 1,420,000 8,540,000 9,960,000 1,618,000
5/28/93 Jacksonville/Phillips Hwy. 406,000 932,000 1,338,000 392,000
F-43
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
5/28/93 Tampa/Nebraska Avenue 550,000 1,043,000 141,000 0
6/9/93 Calabasas/Ventura Blvd. 1,762,000 3,269,000 182,000 0
6/9/93 Carmichael/Fair Oaks 573,000 1,052,000 235,000 0
6/9/93 Santa Clara/Duane 454,000 834,000 90,000 0
6/10/93 Citrus Heights/Sylvan Road 438,000 822,000 178,000 0
6/25/93 Trenton/Allen Road 623,000 1,166,000 164,000 0
6/30/93 Los Angeles/W.Jefferson Blvd 1,085,000 2,017,000 149,000 0
7/16/93 Austin/So. Congress Ave 777,000 1,445,000 291,000 0
8/1/93 Gaithersburg/E. Diamond 602,000 1,139,000 159,000 0
8/11/93 Atlanta/Northside 1,150,000 2,149,000 267,000 0
8/11/93 Smyrna/Rosswill Rd 446,000 842,000 195,000 0
8/13/93 So. Brunswick/Highway 1,076,000 2,033,000 276,000 0
10/1/93 Denver/Federal Blvd 875,000 1,633,000 157,000 0
10/1/93 Citrus Heights 527,000 987,000 103,000 0
10/1/93 Lakewood/6th Ave 798,000 1,489,000 (10,000) 0
10/27/93 Houston/S Shaver St 481,000 896,000 165,000 0
11/3/93 Upland/S. Euclid Ave. 431,000 807,000 395,000 0
11/16/93 Norcross/Jimmy Carter 627,000 1,167,000 171,000 0
11/16/93 Seattle/13th 1,085,000 2,015,000 611,000 0
12/16/93 West Valley City 683,000 1,276,000 163,000 0
12/21/93 Pinellas Park/34th St. W 607,000 1,134,000 182,000 0
12/28/93 New Orleans/S. Carrollton Ave 1,575,000 2,941,000 284,000 0
12/29/93 Orange/Main 1,238,000 2,317,000 1,411,000 0
12/29/93 Sunnyvale/Wedell 554,000 1,037,000 766,000 0
12/29/93 El Cajon/Magnolia 421,000 791,000 525,000 0
12/29/93 Orlando/S. Semoran Blvd. 462,000 872,000 635,000 0
12/29/93 Tampa/W. Hillsborough Ave 352,000 665,000 389,000 0
12/29/93 Irving/West Loop 12 341,000 643,000 171,000 0
12/29/93 Fullerton/W. Commonwealth 904,000 1,687,000 1,037,000 0
12/29/93 N. Lauderdale/Mcnab Rd 628,000 1,182,000 688,000 0
12/29/93 Los Alimitos/Cerritos 695,000 1,299,000 680,000 0
12/29/93 Frederick/Prospect Blvd. 573,000 1,082,000 557,000 0
12/29/93 Indianapolis/E. Washington 403,000 775,000 458,000 0
12/29/93 Gardena/Western Ave. 552,000 1,035,000 584,000 0
12/29/93 Palm Bay/Bobcock Street 409,000 775,000 516,000 0
1/10/94 Hialeah/W. 20Th Ave. 1,855,000 3,497,000 189,000 0
1/12/94 Sunnyvale/N. Fair Oaks Ave 689,000 1,285,000 325,000 0
1/12/94 Honolulu/Iwaena 0 3,382,000 688,000 0
1/12/94 Miami/Golden Glades 579,000 1,081,000 380,000 0
1/21/94 Herndon/Centreville Road 1,584,000 2,981,000 274,000 0
2/8/94 Las Vegas/S. Martin Luther King 1,383,000 2,592,000 1,038,000 0
2/28/94 Arlingtn/Old Jeffersn Davishwy 735,000 1,399,000 237,000 0
3/8/94 Beaverton/SW Barnes Road 942,000 1,810,000 167,000 0
3/21/94 Austin/Arboretum 473,000 897,000 2,758,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
5/28/93 Tampa/Nebraska Avenue 550,000 1,184,000 1,734,000 445,000
6/9/93 Calabasas/Ventura Blvd. 1,761,000 3,452,000 5,213,000 1,266,000
6/9/93 Carmichael/Fair Oaks 572,000 1,288,000 1,860,000 499,000
6/9/93 Santa Clara/Duane 453,000 925,000 1,378,000 353,000
6/10/93 Citrus Heights/Sylvan Road 437,000 1,001,000 1,438,000 405,000
6/25/93 Trenton/Allen Road 623,000 1,330,000 1,953,000 478,000
6/30/93 Los Angeles/W.Jefferson Blvd 1,084,000 2,167,000 3,251,000 774,000
7/16/93 Austin/So. Congress Ave 777,000 1,736,000 2,513,000 735,000
8/1/93 Gaithersburg/E. Diamond 602,000 1,298,000 1,900,000 459,000
8/11/93 Atlanta/Northside 1,149,000 2,417,000 3,566,000 885,000
8/11/93 Smyrna/Rosswill Rd 446,000 1,037,000 1,483,000 415,000
8/13/93 So. Brunswick/Highway 1,076,000 2,309,000 3,385,000 843,000
10/1/93 Denver/Federal Blvd 874,000 1,791,000 2,665,000 630,000
10/1/93 Citrus Heights 527,000 1,090,000 1,617,000 402,000
10/1/93 Lakewood/6th Ave 685,000 1,592,000 2,277,000 555,000
10/27/93 Houston/S Shaver St 481,000 1,061,000 1,542,000 405,000
11/3/93 Upland/S. Euclid Ave. 508,000 1,125,000 1,633,000 406,000
11/16/93 Norcross/Jimmy Carter 626,000 1,339,000 1,965,000 484,000
11/16/93 Seattle/13th 1,084,000 2,627,000 3,711,000 989,000
12/16/93 West Valley City 682,000 1,440,000 2,122,000 521,000
12/21/93 Pinellas Park/34th St. W 607,000 1,316,000 1,923,000 496,000
12/28/93 New Orleans/S. Carrollton Ave 1,574,000 3,226,000 4,800,000 1,100,000
12/29/93 Orange/Main 1,592,000 3,374,000 4,966,000 1,099,000
12/29/93 Sunnyvale/Wedell 725,000 1,632,000 2,357,000 540,000
12/29/93 El Cajon/Magnolia 541,000 1,196,000 1,737,000 412,000
12/29/93 Orlando/S. Semoran Blvd. 601,000 1,368,000 1,969,000 480,000
12/29/93 Tampa/W. Hillsborough Ave 436,000 970,000 1,406,000 340,000
12/29/93 Irving/West Loop 12 354,000 801,000 1,155,000 294,000
12/29/93 Fullerton/W. Commonwealth 1,159,000 2,469,000 3,628,000 806,000
12/29/93 N. Lauderdale/Mcnab Rd 797,000 1,701,000 2,498,000 565,000
12/29/93 Los Alimitos/Cerritos 874,000 1,800,000 2,674,000 583,000
12/29/93 Frederick/Prospect Blvd. 692,000 1,520,000 2,212,000 498,000
12/29/93 Indianapolis/E. Washington 504,000 1,132,000 1,636,000 384,000
12/29/93 Gardena/Western Ave. 694,000 1,477,000 2,171,000 470,000
12/29/93 Palm Bay/Bobcock Street 525,000 1,175,000 1,700,000 388,000
1/10/94 Hialeah/W. 20Th Ave. 1,589,000 3,952,000 5,541,000 1,331,000
1/12/94 Sunnyvale/N. Fair Oaks Ave 657,000 1,642,000 2,299,000 531,000
1/12/94 Honolulu/Iwaena 0 4,070,000 4,070,000 1,312,000
1/12/94 Miami/Golden Glades 557,000 1,483,000 2,040,000 519,000
1/21/94 Herndon/Centreville Road 1,357,000 3,482,000 4,839,000 972,000
2/8/94 Las Vegas/S. Martin Luther King 1,435,000 3,578,000 5,013,000 1,179,000
2/28/94 Arlingtn/Old Jeffersn Davishwy 630,000 1,741,000 2,371,000 615,000
3/8/94 Beaverton/SW Barnes Road 807,000 2,112,000 2,919,000 749,000
3/21/94 Austin/Arboretum 1,553,000 2,575,000 4,128,000 580,000
F-44
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
3/25/94 Tinton Falls/Shrewsbury Ave 1,074,000 2,033,000 212,000 0
3/25/94 East Brunswick/Milltown Road 1,282,000 2,411,000 293,000 0
3/25/94 Mercerville/Quakerbridge Road 1,109,000 2,111,000 238,000 0
3/31/94 Hypoluxo 735,000 1,404,000 1,837,000 0
4/26/94 No. Highlands/Roseville Road 980,000 1,835,000 296,000 0
5/12/94 Fort Pierce/Okeechobee Road 438,000 842,000 208,000 0
5/24/94 Hempstead/Peninsula Blvd. 2,053,000 3,832,000 287,000 0
5/24/94 La/Huntington 483,000 905,000 128,000 0
6/18/94 Las Vegas/S. Valley View Blvd 837,000 1,571,000 135,000 0
6/23/94 Las Vegas/Tropicana 750,000 1,408,000 183,000 0
6/23/94 Henderson/Green Valley Pkwy 1,047,000 1,960,000 153,000 0
6/30/94 Birmingham/W. Oxmoor Road 532,000 1,004,000 371,000 0
7/20/94 Milpitas/Dempsey Road 1,260,000 2,358,000 158,000 0
8/17/94 New Orleans/I-10 784,000 1,470,000 191,000 0
8/17/94 Beaverton/S.W. Denny Road 663,000 1,245,000 110,000 0
8/17/94 Irwindale/Central Ave. 674,000 1,263,000 83,000 0
8/17/94 Suitland/St. Barnabas Rd 1,530,000 2,913,000 231,000 0
8/17/94 North Brunswick/How Lane 1,238,000 2,323,000 111,000 0
8/17/94 Lombard/64th 847,000 1,583,000 122,000 0
8/17/94 Alsip/27th 406,000 765,000 91,000 0
9/15/94 Huntsville/Old Monrovia Road 613,000 1,157,000 232,000 0
9/27/94 West Haven/Bull Hill Lane 455,000 873,000 5,274,000 0
9/30/94 San Francisco/Marin St. 1,227,000 2,339,000 1,212,000 0
9/30/94 Baltimore/Hillen Street 580,000 1,095,000 241,000 0
9/30/94 San Francisco/10th & Howard 1,423,000 2,668,000 236,000 0
9/30/94 Montebello/E. Whittier 383,000 732,000 116,000 0
9/30/94 Arlington/Collins 228,000 435,000 217,000 0
9/30/94 Miami/S.W. 119th Ave 656,000 1,221,000 58,000 0
9/30/94 Blackwood/Erial Road 774,000 1,437,000 98,000 0
9/30/94 Concord/Monument 1,092,000 2,027,000 351,000 0
9/30/94 Rochester/Lee Road 469,000 871,000 207,000 0
9/30/94 Houston/Bellaire 623,000 1,157,000 145,000 0
9/30/94 Austin/Lamar Blvd 781,000 1,452,000 125,000 0
9/30/94 Milwaukee/Lovers Lane Rd 469,000 871,000 116,000 0
9/30/94 Monterey/Del Rey Oaks 1,093,000 1,897,000 92,000 0
9/30/94 St. Petersburg/66Th St. 427,000 793,000 163,000 0
9/30/94 Dayton Bch/N. Nova Road 396,000 735,000 125,000 0
9/30/94 Maple Shade/Route 38 994,000 1,846,000 156,000 0
9/30/94 Marlton/Route 73 N. 938,000 1,742,000 75,000 0
9/30/94 Naperville/E. Ogden Ave 683,000 1,268,000 103,000 0
9/30/94 Long Beach/South Street 1,778,000 3,307,000 224,000 0
9/30/94 Aloha/S.W. Shaw 805,000 1,495,000 123,000 0
9/30/94 Alexandria/S. Pickett 1,550,000 2,879,000 193,000 0
9/30/94 Houston/Highway 6 North 1,120,000 2,083,000 216,000 0
9/30/94 San Antonio/Nacogdoches Rd 571,000 1,060,000 163,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
3/25/94 Tinton Falls/Shrewsbury Ave 920,000 2,399,000 3,319,000 836,000
3/25/94 East Brunswick/Milltown Road 1,098,000 2,888,000 3,986,000 981,000
3/25/94 Mercerville/Quakerbridge Road 950,000 2,508,000 3,458,000 848,000
3/31/94 Hypoluxo 630,000 3,346,000 3,976,000 2,163,000
4/26/94 No. Highlands/Roseville Road 839,000 2,272,000 3,111,000 772,000
5/12/94 Fort Pierce/Okeechobee Road 375,000 1,113,000 1,488,000 425,000
5/24/94 Hempstead/Peninsula Blvd. 1,761,000 4,411,000 6,172,000 1,392,000
5/24/94 La/Huntington 414,000 1,102,000 1,516,000 386,000
6/18/94 Las Vegas/S. Valley View Blvd 717,000 1,826,000 2,543,000 606,000
6/23/94 Las Vegas/Tropicana 642,000 1,699,000 2,341,000 584,000
6/23/94 Henderson/Green Valley Pkwy 897,000 2,263,000 3,160,000 750,000
6/30/94 Birmingham/W. Oxmoor Road 461,000 1,446,000 1,907,000 625,000
7/20/94 Milpitas/Dempsey Road 1,079,000 2,697,000 3,776,000 884,000
8/17/94 New Orleans/I-10 671,000 1,774,000 2,445,000 568,000
8/17/94 Beaverton/S.W. Denny Road 568,000 1,450,000 2,018,000 460,000
8/17/94 Irwindale/Central Ave. 578,000 1,442,000 2,020,000 455,000
8/17/94 Suitland/St. Barnabas Rd 1,311,000 3,363,000 4,674,000 1,085,000
8/17/94 North Brunswick/How Lane 1,061,000 2,611,000 3,672,000 792,000
8/17/94 Lombard/64th 725,000 1,827,000 2,552,000 581,000
8/17/94 Alsip/27th 348,000 914,000 1,262,000 313,000
9/15/94 Huntsville/Old Monrovia Road 525,000 1,477,000 2,002,000 491,000
9/27/94 West Haven/Bull Hill Lane 1,963,000 4,639,000 6,602,000 656,000
9/30/94 San Francisco/Marin St. 1,370,000 3,408,000 4,778,000 1,050,000
9/30/94 Baltimore/Hillen Street 497,000 1,419,000 1,916,000 448,000
9/30/94 San Francisco/10th & Howard 1,221,000 3,106,000 4,327,000 951,000
9/30/94 Montebello/E. Whittier 328,000 903,000 1,231,000 306,000
9/30/94 Arlington/Collins 195,000 685,000 880,000 312,000
9/30/94 Miami/S.W. 119th Ave 562,000 1,373,000 1,935,000 419,000
9/30/94 Blackwood/Erial Road 663,000 1,646,000 2,309,000 504,000
9/30/94 Concord/Monument 935,000 2,535,000 3,470,000 807,000
9/30/94 Rochester/Lee Road 402,000 1,145,000 1,547,000 372,000
9/30/94 Houston/Bellaire 534,000 1,391,000 1,925,000 449,000
9/30/94 Austin/Lamar Blvd 668,000 1,690,000 2,358,000 540,000
9/30/94 Milwaukee/Lovers Lane Rd 402,000 1,054,000 1,456,000 355,000
9/30/94 Monterey/Del Rey Oaks 903,000 2,179,000 3,082,000 715,000
9/30/94 St. Petersburg/66Th St. 366,000 1,017,000 1,383,000 341,000
9/30/94 Dayton Bch/N. Nova Road 339,000 917,000 1,256,000 312,000
9/30/94 Maple Shade/Route 38 851,000 2,145,000 2,996,000 660,000
9/30/94 Marlton/Route 73 N. 804,000 1,951,000 2,755,000 600,000
9/30/94 Naperville/E. Ogden Ave 585,000 1,469,000 2,054,000 461,000
9/30/94 Long Beach/South Street 1,523,000 3,786,000 5,309,000 1,167,000
9/30/94 Aloha/S.W. Shaw 689,000 1,734,000 2,423,000 548,000
9/30/94 Alexandria/S. Pickett 1,328,000 3,294,000 4,622,000 1,000,000
9/30/94 Houston/Highway 6 North 959,000 2,460,000 3,419,000 801,000
9/30/94 San Antonio/Nacogdoches Rd 489,000 1,305,000 1,794,000 413,000
F-45
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
9/30/94 San Ramon/San Ramon Valley 1,530,000 2,840,000 356,000 0
9/30/94 San Rafael/Merrydale Rd 1,705,000 3,165,000 187,000 0
9/30/94 San Antonio/Austin Hwy 592,000 1,098,000 178,000 0
9/30/94 Sharonville/E. Kemper 574,000 1,070,000 182,000 0
10/13/94 Davie/State Road 84 744,000 1,467,000 850,000 0
10/13/94 Carrollton/Marsh Lane 770,000 1,437,000 1,383,000 0
10/31/94 Sherman Oaks/Van Nuys Blvd 1,278,000 2,461,000 906,000 0
12/28/94 Milpitas/Watson 1,575,000 2,925,000 187,000 0
12/28/94 Las Vegas/Jones Blvd 1,208,000 2,243,000 150,000 0
12/28/94 Venice/Guthrie 578,000 1,073,000 115,000 0
12/30/94 Apple Valley/Foliage Ave 910,000 1,695,000 167,000 0
1/4/95 Chula Vista/Main Street 735,000 1,802,000 159,000 0
1/5/95 Pantego/West Park 315,000 735,000 141,000 0
1/12/95 Roswell/Alpharetta 423,000 993,000 298,000 0
1/23/95 North Bergen/Tonne 1,564,000 3,772,000 333,000 0
1/23/95 San Leandro/Hesperian 734,000 1,726,000 114,000 0
2/3/95 Reno/S. Mccarron Blvd 1,080,000 2,537,000 161,000 0
2/15/95 Schiller Park 1,688,000 3,939,000 232,000 0
2/15/95 Lansing 1,514,000 3,534,000 124,000 0
2/15/95 Pleasanton 1,257,000 2,932,000 61,000 0
2/15/95 LA/Sepulveda 1,453,000 3,390,000 105,000 0
2/28/95 Decatur/Flat Shoal 970,000 2,288,000 398,000 0
2/28/95 Smyrna/S. Cobb 663,000 1,559,000 231,000 0
2/28/95 Downey/Bellflower 916,000 2,158,000 102,000 0
2/28/95 Vallejo/Lincoln 445,000 1,052,000 160,000 0
2/28/95 Lynnwood/180th St 516,000 1,205,000 178,000 0
2/28/95 Kent/Pacific Hwy 728,000 1,711,000 123,000 0
2/28/95 Kirkland 1,254,000 2,932,000 189,000 0
2/28/95 Federal Way/Pacific 785,000 1,832,000 264,000 0
2/28/95 Tampa/S. Dale 791,000 1,852,000 213,000 0
2/28/95 Burlingame/Adrian Rd 2,280,000 5,349,000 316,000 0
2/28/95 Miami/Cloverleaf 606,000 1,426,000 201,000 0
2/28/95 Pinole/San Pablo 639,000 1,502,000 209,000 0
2/28/95 South Gate/Firesto 1,442,000 3,449,000 277,000 0
2/28/95 San Jose/Mabury 892,000 2,088,000 98,000 0
2/28/95 La Puente/Valley Blvd 591,000 1,390,000 218,000 0
2/28/95 San Jose/Capitol E 1,215,000 2,852,000 142,000 0
2/28/95 Milwaukie/40th Street 576,000 1,388,000 104,000 0
2/28/95 Portland/N. Lombard 812,000 1,900,000 190,000 0
2/28/95 Miami/Biscayne 1,313,000 3,076,000 118,000 0
2/28/95 Chicago/Clark Street 442,000 1,031,000 317,000 0
2/28/95 Palatine/Dundee 698,000 1,643,000 163,000 0
2/28/95 Williamsville/Transit 284,000 670,000 139,000 0
2/28/95 Amherst/Sheridan 484,000 1,151,000 127,000 0
3/2/95 Everett/Highway 99 859,000 2,022,000 218,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
9/30/94 San Ramon/San Ramon Valley 1,310,000 3,416,000 4,726,000 1,105,000
9/30/94 San Rafael/Merrydale Rd 1,460,000 3,597,000 5,057,000 1,111,000
9/30/94 San Antonio/Austin Hwy 506,000 1,362,000 1,868,000 457,000
9/30/94 Sharonville/E. Kemper 492,000 1,334,000 1,826,000 418,000
10/13/94 Davie/State Road 84 637,000 2,424,000 3,061,000 732,000
10/13/94 Carrollton/Marsh Lane 1,021,000 2,569,000 3,590,000 767,000
10/31/94 Sherman Oaks/Van Nuys Blvd 1,422,000 3,223,000 4,645,000 1,042,000
12/28/94 Milpitas/Watson 1,349,000 3,338,000 4,687,000 1,000,000
12/28/94 Las Vegas/Jones Blvd 1,034,000 2,567,000 3,601,000 764,000
12/28/94 Venice/Guthrie 495,000 1,271,000 1,766,000 384,000
12/30/94 Apple Valley/Foliage Ave 780,000 1,992,000 2,772,000 630,000
1/4/95 Chula Vista/Main Street 735,000 1,961,000 2,696,000 686,000
1/5/95 Pantego/West Park 315,000 876,000 1,191,000 314,000
1/12/95 Roswell/Alpharetta 423,000 1,291,000 1,714,000 397,000
1/23/95 North Bergen/Tonne 1,563,000 4,106,000 5,669,000 1,141,000
1/23/95 San Leandro/Hesperian 733,000 1,841,000 2,574,000 535,000
2/3/95 Reno/S. Mccarron Blvd 1,079,000 2,699,000 3,778,000 800,000
2/15/95 Schiller Park 1,687,000 4,172,000 5,859,000 1,024,000
2/15/95 Lansing 1,513,000 3,659,000 5,172,000 866,000
2/15/95 Pleasanton 1,256,000 2,994,000 4,250,000 700,000
2/15/95 LA/Sepulveda 1,452,000 3,496,000 4,948,000 824,000
2/28/95 Decatur/Flat Shoal 969,000 2,687,000 3,656,000 867,000
2/28/95 Smyrna/S. Cobb 662,000 1,791,000 2,453,000 561,000
2/28/95 Downey/Bellflower 916,000 2,260,000 3,176,000 657,000
2/28/95 Vallejo/Lincoln 444,000 1,213,000 1,657,000 389,000
2/28/95 Lynnwood/180th St 516,000 1,383,000 1,899,000 456,000
2/28/95 Kent/Pacific Hwy 728,000 1,834,000 2,562,000 554,000
2/28/95 Kirkland 1,253,000 3,122,000 4,375,000 901,000
2/28/95 Federal Way/Pacific 785,000 2,096,000 2,881,000 691,000
2/28/95 Tampa/S. Dale 791,000 2,065,000 2,856,000 652,000
2/28/95 Burlingame/Adrian Rd 2,279,000 5,666,000 7,945,000 1,622,000
2/28/95 Miami/Cloverleaf 606,000 1,627,000 2,233,000 498,000
2/28/95 Pinole/San Pablo 638,000 1,712,000 2,350,000 560,000
2/28/95 South Gate/Firesto 1,441,000 3,727,000 5,168,000 1,184,000
2/28/95 San Jose/Mabury 892,000 2,186,000 3,078,000 614,000
2/28/95 La Puente/Valley Blvd 591,000 1,608,000 2,199,000 533,000
2/28/95 San Jose/Capitol E 1,214,000 2,995,000 4,209,000 870,000
2/28/95 Milwaukie/40th Street 579,000 1,489,000 2,068,000 451,000
2/28/95 Portland/N. Lombard 811,000 2,091,000 2,902,000 610,000
2/28/95 Miami/Biscayne 1,313,000 3,194,000 4,507,000 919,000
2/28/95 Chicago/Clark Street 441,000 1,349,000 1,790,000 416,000
2/28/95 Palatine/Dundee 698,000 1,806,000 2,504,000 550,000
2/28/95 Williamsville/Transit 283,000 810,000 1,093,000 265,000
2/28/95 Amherst/Sheridan 483,000 1,279,000 1,762,000 408,000
3/2/95 Everett/Highway 99 858,000 2,241,000 3,099,000 717,000
F-46
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
3/2/95 Burien/1St Ave South 763,000 1,783,000 245,000 0
3/2/95 Kent/South 238th Street 763,000 1,783,000 260,000 0
3/31/95 Cheverly/Central Ave 911,000 2,164,000 138,000 0
5/3/95 Largo/Ulmerton Roa 263,000 654,000 111,000 0
5/8/95 Fairfield/Western Street 439,000 1,030,000 75,000 0
5/8/95 Dallas/W. Mockingbird 1,440,000 3,371,000 144,000 0
5/8/95 East Point/Lakewood 884,000 2,071,000 299,000 0
5/25/95 Falls Church/Gallo 350,000 835,000 192,000 0
6/12/95 Baltimore/Old Waterloo 769,000 1,850,000 109,000 0
6/12/95 Pleasant Hill/Hookston 766,000 1,848,000 96,000 0
6/12/95 Mountain View/Old Middlefield 2,095,000 4,913,000 97,000 0
6/30/95 San Jose/Blossom Hill 1,467,000 3,444,000 172,000 0
6/30/95 Fairfield/Kings Highway 1,811,000 4,273,000 200,000 0
6/30/95 Pacoima/Paxton Street 1,116,000 840,000 1,976,000 89,000 0
6/30/95 Portland/Prescott 647,000 1,509,000 158,000 0
6/30/95 St. Petersburg 352,000 827,000 160,000 0
6/30/95 Dallas/Audelia Road 1,166,000 2,725,000 775,000 0
6/30/95 Miami Gardens 823,000 1,929,000 151,000 0
6/30/95 Grand Prairie/19th 566,000 1,329,000 126,000 0
6/30/95 Joliet/Jefferson Street 501,000 1,181,000 142,000 0
6/30/95 Bridgeton/Pennridge 283,000 661,000 151,000 0
6/30/95 Portland/S.E.92nd 638,000 1,497,000 154,000 0
6/30/95 Houston/S.W. Freeway 537,000 1,254,000 4,782,000 0
6/30/95 Milwaukee/Brown 358,000 849,000 142,000 0
6/30/95 Orlando/W. Oak Ridge 698,000 1,642,000 192,000 0
6/30/95 Lauderhill/State Road 644,000 1,508,000 119,000 0
6/30/95 Orange Park/Blanding Blvd 394,000 918,000 184,000 0
6/30/95 St. Petersburg/Joe'S Creek 704,000 1,642,000 174,000 0
6/30/95 St. Louis/Page Service Drive 531,000 1,241,000 141,000 0
6/30/95 Independence/E. 42nd 438,000 1,023,000 148,000 0
6/30/95 Cherry Hill/Dobbs Lane 716,000 1,676,000 95,000 0
6/30/95 Edgewater Park/Route 130 683,000 1,593,000 91,000 0
6/30/95 Beaverton/S.W. 110 572,000 1,342,000 140,000 0
6/30/95 Markham/W. 159Th Place 230,000 539,000 108,000 0
6/30/95 Houston/N.W. Freeway 447,000 1,066,000 116,000 0
6/30/95 Portland/Gantenbein 537,000 1,262,000 118,000 0
6/30/95 Upper Chichester/Market St. 569,000 1,329,000 104,000 0
6/30/95 Fort Worth/Hwy 80 379,000 891,000 110,000 0
6/30/95 Greenfield/S. 108th 728,000 1,707,000 185,000 0
6/30/95 Altamonte Springs 566,000 1,326,000 103,000 0
6/30/95 East Hazel Crest/Halsted 483,000 1,127,000 153,000 0
6/30/95 Seattle/Delridge Way 760,000 1,779,000 152,000 0
6/30/95 Elmhurst/Lake Frontage Rd 748,000 1,758,000 144,000 0
6/30/95 Los Angeles/Beverly Blvd 787,000 1,886,000 297,000 0
6/30/95 Lawrenceville/Brunswick 841,000 1,961,000 89,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
3/2/95 Burien/1St Ave South 763,000 2,028,000 2,791,000 690,000
3/2/95 Kent/South 238th Street 763,000 2,043,000 2,806,000 674,000
3/31/95 Cheverly/Central Ave 910,000 2,303,000 3,213,000 656,000
5/3/95 Largo/Ulmerton Roa 262,000 766,000 1,028,000 296,000
5/8/95 Fairfield/Western Street 439,000 1,105,000 1,544,000 323,000
5/8/95 Dallas/W. Mockingbird 1,439,000 3,516,000 4,955,000 975,000
5/8/95 East Point/Lakewood 884,000 2,370,000 3,254,000 732,000
5/25/95 Falls Church/Gallo 349,000 1,028,000 1,377,000 390,000
6/12/95 Baltimore/Old Waterloo 768,000 1,960,000 2,728,000 545,000
6/12/95 Pleasant Hill/Hookston 766,000 1,944,000 2,710,000 556,000
6/12/95 Mountain View/Old Middlefield 2,094,000 5,011,000 7,105,000 1,343,000
6/30/95 San Jose/Blossom Hill 1,466,000 3,617,000 5,083,000 991,000
6/30/95 Fairfield/Kings Highway 1,809,000 4,475,000 6,284,000 1,263,000
6/30/95 Pacoima/Paxton Street 839,000 2,066,000 2,905,000 579,000
6/30/95 Portland/Prescott 646,000 1,668,000 2,314,000 491,000
6/30/95 St. Petersburg 352,000 987,000 1,339,000 318,000
6/30/95 Dallas/Audelia Road 1,165,000 3,501,000 4,666,000 1,137,000
6/30/95 Miami Gardens 822,000 2,081,000 2,903,000 589,000
6/30/95 Grand Prairie/19th 566,000 1,455,000 2,021,000 431,000
6/30/95 Joliet/Jefferson Street 500,000 1,324,000 1,824,000 405,000
6/30/95 Bridgeton/Pennridge 283,000 812,000 1,095,000 264,000
6/30/95 Portland/S.E.92nd 637,000 1,652,000 2,289,000 490,000
6/30/95 Houston/S.W. Freeway 1,605,000 4,968,000 6,573,000 404,000
6/30/95 Milwaukee/Brown 357,000 992,000 1,349,000 310,000
6/30/95 Orlando/W. Oak Ridge 697,000 1,835,000 2,532,000 555,000
6/30/95 Lauderhill/State Road 643,000 1,628,000 2,271,000 473,000
6/30/95 Orange Park/Blanding Blvd 393,000 1,103,000 1,496,000 338,000
6/30/95 St. Petersburg/Joe'S Creek 703,000 1,817,000 2,520,000 514,000
6/30/95 St. Louis/Page Service Drive 530,000 1,383,000 1,913,000 412,000
6/30/95 Independence/E. 42nd 438,000 1,171,000 1,609,000 368,000
6/30/95 Cherry Hill/Dobbs Lane 715,000 1,772,000 2,487,000 477,000
6/30/95 Edgewater Park/Route 130 682,000 1,685,000 2,367,000 457,000
6/30/95 Beaverton/S.W. 110 572,000 1,482,000 2,054,000 422,000
6/30/95 Markham/W. 159Th Place 229,000 648,000 877,000 213,000
6/30/95 Houston/N.W. Freeway 447,000 1,182,000 1,629,000 381,000
6/30/95 Portland/Gantenbein 536,000 1,381,000 1,917,000 398,000
6/30/95 Upper Chichester/Market St. 569,000 1,433,000 2,002,000 404,000
6/30/95 Fort Worth/Hwy 80 378,000 1,002,000 1,380,000 308,000
6/30/95 Greenfield/S. 108th 727,000 1,893,000 2,620,000 550,000
6/30/95 Altamonte Springs 566,000 1,429,000 1,995,000 408,000
6/30/95 East Hazel Crest/Halsted 483,000 1,280,000 1,763,000 387,000
6/30/95 Seattle/Delridge Way 760,000 1,931,000 2,691,000 559,000
6/30/95 Elmhurst/Lake Frontage Rd 748,000 1,902,000 2,650,000 537,000
6/30/95 Los Angeles/Beverly Blvd 786,000 2,184,000 2,970,000 712,000
6/30/95 Lawrenceville/Brunswick 840,000 2,051,000 2,891,000 565,000
F-47
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
6/30/95 Richmond/Carlson 865,000 2,025,000 243,000 0
6/30/95 Liverpool/Oswego Road 545,000 1,279,000 209,000 0
6/30/95 Rochester/East Ave 578,000 1,375,000 123,000 0
6/30/95 Pasadena/E. Beltway 757,000 1,767,000 109,000 0
7/13/95 Tarzana/Burbank Blvd 2,895,000 6,823,000 389,000 0
7/31/95 Orlando/Lakehurst 953,000 450,000 1,063,000 131,000 0
7/31/95 Livermore/Portola 1,280,000 921,000 2,157,000 157,000 0
7/31/95 San Jose/Tully 1,583,000 912,000 2,137,000 238,000 0
7/31/95 Mission Bay 3,928,000 1,617,000 3,785,000 413,000 0
7/31/95 Las Vegas/Decatur 1,147,000 2,697,000 211,000 0
7/31/95 Pleasanton/Stanley 1,624,000 3,811,000 191,000 0
7/31/95 Castro Valley/Grove 757,000 1,772,000 78,000 0
7/31/95 Honolulu/Kaneohe 1,215,000 2,846,000 2,016,000 0
7/31/95 Chicago/Wabash Ave 645,000 1,535,000 572,000 0
7/31/95 Springfield/Parker 765,000 1,834,000 137,000 0
7/31/95 Huntington Bch/Gotham 765,000 1,808,000 165,000 0
7/31/95 Tucker/Lawrenceville 630,000 1,480,000 164,000 0
7/31/95 Marietta/Canton Road 600,000 1,423,000 206,000 0
7/31/95 Wheeling/Hintz 450,000 1,054,000 116,000 0
8/1/95 Gresham/Division 607,000 1,428,000 90,000 0
8/1/95 Tucker/Lawrenceville 600,000 1,405,000 245,000 0
8/1/95 Decatur/Covington 720,000 1,694,000 175,000 0
8/11/95 Studio City/Ventura 1,285,000 3,015,000 138,000 0
8/12/95 Smyrna/Hargrove Road 1,020,000 3,038,000 331,000 0
9/1/95 Hayward/Mission Blvd 1,020,000 2,383,000 130,000 0
9/1/95 Park City/Belvider 600,000 1,405,000 81,000 0
9/1/95 New Castle/Dupont Parkway 990,000 2,369,000 140,000 0
9/1/95 Las Vegas/Rainbow 1,050,000 2,459,000 103,000 0
9/1/95 Mountain View/Reng 945,000 2,216,000 113,000 0
9/1/95 Venice/Cadillac 930,000 2,182,000 204,000 0
9/1/95 Simi Valley/Los Angeles 1,590,000 3,724,000 181,000 0
9/1/95 Spring Valley/Foreman 1,095,000 2,572,000 145,000 0
9/6/95 Darien/Frontage Road 975,000 2,321,000 100,000 0
9/30/95 Van Nuys/Balboa Blvd 1,920,000 4,504,000 313,000 0
10/31/95 San Lorenzo/Hesperian 1,590,000 3,716,000 355,000 0
10/31/95 Chicago/W. 47th Street 300,000 708,000 170,000 0
10/31/95 Los Angeles/Eastern 455,000 1,070,000 127,000 0
11/15/95 Costa Mesa - B 522,000 1,218,000 64,000 0
11/15/95 Plano/E. 14th 705,000 1,646,000 82,000 0
11/15/95 Citrus Heights/Sunrise 520,000 1,213,000 116,000 0
11/15/95 Modesto/Briggsmore Ave 470,000 1,097,000 86,000 0
11/15/95 So San Francisco/Spruce 1,905,000 4,444,000 305,000 0
11/15/95 Pacheco/Buchanan Circle 1,681,000 3,951,000 168,000 0
11/16/95 Palm Beach Gardens 657,000 1,540,000 114,000 0
11/16/95 Delray Beach 600,000 1,407,000 149,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
6/30/95 Richmond/Carlson 864,000 2,269,000 3,133,000 648,000
6/30/95 Liverpool/Oswego Road 545,000 1,488,000 2,033,000 425,000
6/30/95 Rochester/East Ave 578,000 1,498,000 2,076,000 440,000
6/30/95 Pasadena/E. Beltway 757,000 1,876,000 2,633,000 526,000
7/13/95 Tarzana/Burbank Blvd 2,893,000 7,214,000 10,107,000 2,095,000
7/31/95 Orlando/Lakehurst 450,000 1,194,000 1,644,000 343,000
7/31/95 Livermore/Portola 920,000 2,315,000 3,235,000 656,000
7/31/95 San Jose/Tully 911,000 2,376,000 3,287,000 673,000
7/31/95 Mission Bay 1,616,000 4,199,000 5,815,000 1,271,000
7/31/95 Las Vegas/Decatur 1,146,000 2,909,000 4,055,000 819,000
7/31/95 Pleasanton/Stanley 1,623,000 4,003,000 5,626,000 1,077,000
7/31/95 Castro Valley/Grove 756,000 1,851,000 2,607,000 503,000
7/31/95 Honolulu/Kaneohe 2,132,000 3,945,000 6,077,000 932,000
7/31/95 Chicago/Wabash Ave 645,000 2,107,000 2,752,000 741,000
7/31/95 Springfield/Parker 765,000 1,971,000 2,736,000 556,000
7/31/95 Huntington Bch/Gotham 765,000 1,973,000 2,738,000 577,000
7/31/95 Tucker/Lawrenceville 630,000 1,644,000 2,274,000 503,000
7/31/95 Marietta/Canton Road 600,000 1,629,000 2,229,000 488,000
7/31/95 Wheeling/Hintz 450,000 1,170,000 1,620,000 344,000
8/1/95 Gresham/Division 607,000 1,518,000 2,125,000 427,000
8/1/95 Tucker/Lawrenceville 600,000 1,650,000 2,250,000 505,000
8/1/95 Decatur/Covington 720,000 1,869,000 2,589,000 559,000
8/11/95 Studio City/Ventura 1,284,000 3,154,000 4,438,000 845,000
8/12/95 Smyrna/Hargrove Road 1,020,000 3,369,000 4,389,000 871,000
9/1/95 Hayward/Mission Blvd 1,019,000 2,514,000 3,533,000 673,000
9/1/95 Park City/Belvider 600,000 1,486,000 2,086,000 406,000
9/1/95 New Castle/Dupont Parkway 989,000 2,510,000 3,499,000 667,000
9/1/95 Las Vegas/Rainbow 1,049,000 2,563,000 3,612,000 693,000
9/1/95 Mountain View/Reng 944,000 2,330,000 3,274,000 625,000
9/1/95 Venice/Cadillac 929,000 2,387,000 3,316,000 682,000
9/1/95 Simi Valley/Los Angeles 1,589,000 3,906,000 5,495,000 1,056,000
9/1/95 Spring Valley/Foreman 1,094,000 2,718,000 3,812,000 721,000
9/6/95 Darien/Frontage Road 974,000 2,422,000 3,396,000 679,000
9/30/95 Van Nuys/Balboa Blvd 1,919,000 4,818,000 6,737,000 1,104,000
10/31/95 San Lorenzo/Hesperian 1,589,000 4,072,000 5,661,000 819,000
10/31/95 Chicago/W. 47th Street 300,000 878,000 1,178,000 221,000
10/31/95 Los Angeles/Eastern 454,000 1,198,000 1,652,000 291,000
11/15/95 Costa Mesa - B 522,000 1,282,000 1,804,000 324,000
11/15/95 Plano/E. 14th 705,000 1,728,000 2,433,000 421,000
11/15/95 Citrus Heights/Sunrise 519,000 1,330,000 1,849,000 367,000
11/15/95 Modesto/Briggsmore Ave 470,000 1,183,000 1,653,000 317,000
11/15/95 So San Francisco/Spruce 1,903,000 4,751,000 6,654,000 1,165,000
11/15/95 Pacheco/Buchanan Circle 1,680,000 4,120,000 5,800,000 1,011,000
11/16/95 Palm Beach Gardens 657,000 1,654,000 2,311,000 466,000
11/16/95 Delray Beach 600,000 1,556,000 2,156,000 452,000
F-48
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
1/3/96 San Gabriel 1,005,000 2,345,000 219,000 0
1/5/96 San Francisco, Second St. 2,880,000 6,814,000 203,000 0
1/12/96 San Antonio, TX 912,000 2,170,000 68,000 0
2/29/96 Naples, FL/Old US 41 849,000 2,016,000 136,000 0
2/29/96 Lake Worth, FL/S. Military Tr. 1,782,000 4,723,000 168,000 0
2/29/96 Brandon, FL/W Brandon Blvd. 1,928,000 4,523,000 888,000 0
2/29/96 Coral Springs FL/W Sample Rd. 3,480,000 8,148,000 176,000 0
2/29/96 Delray Beach FL/S Military Tr 941,000 2,222,000 155,000 0
2/29/96 Jupiter FL/Military Trail 2,280,000 5,347,000 214,000 0
2/29/96 Lakeworth FL/Lake Worth Rd 737,000 1,742,000 138,000 0
2/29/96 New Port Richey FL/State rd 54 857,000 2,025,000 124,000 0
2/29/96 Pompano Beach FL/W Copans 1,601,000 3,756,000 189,000 0
2/29/96 Sanford FL/S Orlando Dr 734,000 1,749,000 1,858,000 0
3/8/96 Atlanta/Roswell 898,000 3,649,000 94,000 0
3/31/96 Oakland, CA 1,065,000 2,764,000 203,000 0
3/31/96 Saratoga, CA 2,339,000 6,081,000 123,000 0
3/31/96 Randallstown, MD 1,359,000 3,527,000 207,000 0
3/31/96 Plano, TX 650,000 1,682,000 114,000 0
3/31/96 Houston, TX 543,000 1,402,000 91,000 0
3/31/96 Irvine, CA 1,920,000 4,975,000 433,000 0
3/31/96 Milwaukee, WI 542,000 1,402,000 100,000 0
3/31/96 Carrollton, TX 578,000 1,495,000 97,000 0
3/31/96 Torrance, CA 1,415,000 3,675,000 123,000 0
3/31/96 Jacksonville, FL 713,000 1,845,000 167,000 0
3/31/96 Dallas, TX 315,000 810,000 1,684,000 0
3/31/96 Houston, TX 669,000 1,724,000 281,000 0
3/31/96 Baltimore, MD 842,000 2,180,000 143,000 0
3/31/96 New Haven, CT 740,000 1,907,000 (263,000) 0
4/1/96 Chicago/Pulaski 764,000 1,869,000 144,000 0
4/1/96 Las Vegas/Desert Inn 1,115,000 2,729,000 110,000 0
4/1/96 Torrance/Crenshaw 916,000 2,243,000 80,000 0
4/1/96 Weymouth, WA state 485,000 1,187,000 134,000 0
4/1/96 St. Louis/Barrett Station Road 630,000 1,542,000 102,000 0
4/1/96 Rockville/Randolph 1,153,000 2,823,000 137,000 0
4/1/96 Simi Valley/East Street 970,000 2,374,000 61,000 0
4/1/96 Houston/Westheimer 1,390,000 3,402,000 4,175,000 0
4/3/96 Naples, FL 1,187,000 2,809,000 199,000 0
6/26/96 Boca Raton FL 3,180,000 7,468,000 846,000 0
6/28/96 Venice FL 669,000 1,575,000 154,000 0
6/30/96 Las Vegas, NV 921,000 2,155,000 157,000 0
6/30/96 Bedford Park, IL 606,000 1,419,000 167,000 0
6/30/96 Los Angeles, CA 692,000 1,616,000 91,000 0
6/30/96 Silver Spring, MD 1,513,000 3,535,000 221,000 0
6/30/96 Newark, CA 1,051,000 2,458,000 85,000 0
6/30/96 Brooklyn, NY 783,000 1,830,000 343,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
1/3/96 San Gabriel 1,004,000 2,565,000 3,569,000 721,000
1/5/96 San Francisco, Second St. 2,878,000 7,019,000 9,897,000 1,709,000
1/12/96 San Antonio, TX 911,000 2,239,000 3,150,000 568,000
2/29/96 Naples, FL/Old US 41 848,000 2,153,000 3,001,000 534,000
2/29/96 Lake Worth, FL/S. Military Tr. 1,781,000 4,892,000 6,673,000 1,180,000
2/29/96 Brandon, FL/W Brandon Blvd. 1,927,000 5,412,000 7,339,000 1,721,000
2/29/96 Coral Springs FL/W Sample Rd. 3,478,000 8,326,000 11,804,000 1,983,000
2/29/96 Delray Beach FL/S Military Tr 940,000 2,378,000 3,318,000 644,000
2/29/96 Jupiter FL/Military Trail 2,279,000 5,562,000 7,841,000 1,302,000
2/29/96 Lakeworth FL/Lake Worth Rd 736,000 1,881,000 2,617,000 507,000
2/29/96 New Port Richey FL/State rd 54 856,000 2,150,000 3,006,000 555,000
2/29/96 Pompano Beach FL/W Copans 1,600,000 3,946,000 5,546,000 993,000
2/29/96 Sanford FL/S Orlando Dr 974,000 3,367,000 4,341,000 817,000
3/8/96 Atlanta/Roswell 898,000 3,743,000 4,641,000 886,000
3/31/96 Oakland, CA 1,064,000 2,968,000 4,032,000 751,000
3/31/96 Saratoga, CA 2,338,000 6,205,000 8,543,000 1,446,000
3/31/96 Randallstown, MD 1,358,000 3,735,000 5,093,000 899,000
3/31/96 Plano, TX 649,000 1,797,000 2,446,000 458,000
3/31/96 Houston, TX 543,000 1,493,000 2,036,000 378,000
3/31/96 Irvine, CA 1,919,000 5,409,000 7,328,000 1,317,000
3/31/96 Milwaukee, WI 542,000 1,502,000 2,044,000 379,000
3/31/96 Carrollton, TX 578,000 1,592,000 2,170,000 394,000
3/31/96 Torrance, CA 1,414,000 3,799,000 5,213,000 913,000
3/31/96 Jacksonville, FL 712,000 2,013,000 2,725,000 503,000
3/31/96 Dallas, TX 315,000 2,494,000 2,809,000 295,000
3/31/96 Houston, TX 669,000 2,005,000 2,674,000 566,000
3/31/96 Baltimore, MD 842,000 2,323,000 3,165,000 560,000
3/31/96 New Haven, CT 667,000 1,717,000 2,384,000 434,000
4/1/96 Chicago/Pulaski 763,000 2,014,000 2,777,000 432,000
4/1/96 Las Vegas/Desert Inn 1,114,000 2,840,000 3,954,000 624,000
4/1/96 Torrance/Crenshaw 916,000 2,323,000 3,239,000 477,000
4/1/96 Weymouth, WA state 485,000 1,321,000 1,806,000 225,000
4/1/96 St. Louis/Barrett Station Road 630,000 1,644,000 2,274,000 332,000
4/1/96 Rockville/Randolph 1,152,000 2,961,000 4,113,000 594,000
4/1/96 Simi Valley/East Street 969,000 2,436,000 3,405,000 497,000
4/1/96 Houston/Westheimer 1,389,000 7,578,000 8,967,000 1,440,000
4/3/96 Naples, FL 1,186,000 3,009,000 4,195,000 774,000
6/26/96 Boca Raton FL 3,178,000 8,316,000 11,494,000 1,955,000
6/28/96 Venice FL 669,000 1,729,000 2,398,000 445,000
6/30/96 Las Vegas, NV 921,000 2,312,000 3,233,000 564,000
6/30/96 Bedford Park, IL 605,000 1,587,000 2,192,000 411,000
6/30/96 Los Angeles, CA 691,000 1,708,000 2,399,000 410,000
6/30/96 Silver Spring, MD 1,512,000 3,757,000 5,269,000 878,000
6/30/96 Newark, CA 1,050,000 2,544,000 3,594,000 585,000
6/30/96 Brooklyn, NY 782,000 2,174,000 2,956,000 575,000
F-49
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
7/2/96 Glen Burnie/Furnace Br Rd 1,755,000 4,150,000 135,000 0
7/22/96 Lakewood/W Hampton 717,000 2,092,000 67,000 0
8/13/96 Norcross/Holcomb Bridge Rd 955,000 3,117,000 120,000 0
9/5/96 Spring Valley/S Pascack rd 1,260,000 2,966,000 243,000 0
9/16/96 Dallas/Royal Lane 1,008,000 2,426,000 182,000 0
9/16/96 Colorado Springs/Tomah Drive 731,000 1,759,000 98,000 0
9/16/96 Lewisville/S. Stemmons 603,000 1,451,000 129,000 0
9/16/96 Las Vegas/Boulder Hwy. 947,000 2,279,000 168,000 0
9/16/96 Sarasota/S. Tamiami Trail 584,000 1,407,000 88,000 0
9/16/96 Willow Grove/Maryland Road 673,000 1,620,000 65,000 0
9/16/96 Houston/W. Montgomery Rd. 524,000 1,261,000 128,000 0
9/16/96 Denver/W. Hampden 1,084,000 2,609,000 103,000 0
9/16/96 Littleton/Southpark Way 922,000 2,221,000 186,000 0
9/16/96 Petaluma/Baywood Drive 861,000 2,074,000 112,000 0
9/16/96 Canoga Park/Sherman Way 1,543,000 3,716,000 130,000 0
9/16/96 Jacksonville/South Lane Ave. 554,000 1,334,000 155,000 0
9/16/96 Newport News/Warwick Blvd. 575,000 1,385,000 131,000 0
9/16/96 Greenbrook/Route 22 1,227,000 2,954,000 213,000 0
9/16/96 Monsey/Route 59 1,068,000 2,572,000 104,000 0
9/16/96 Santa Rosa/Santa Rosa Ave. 575,000 1,385,000 84,000 0
9/16/96 Fort Worth/Brentwood Stair 823,000 2,016,000 117,000 0
9/16/96 Glendale/San Fernando Road 2,500,000 6,124,000 100,000 0
9/16/96 Houston/Harwin 549,000 1,344,000 121,000 0
9/16/96 Irvine/Cowan Street 1,890,000 4,631,000 190,000 0
9/16/96 Fairfield/Dixie Highway 427,000 1,046,000 80,000 0
9/16/96 Mesa/Country Club Drive 701,000 1,718,000 129,000 0
9/16/96 San Francisco/Geary Blvd. 2,957,000 7,244,000 173,000 0
9/16/96 Houston/Gulf Freeway 701,000 1,718,000 3,298,000 0
9/16/96 Las Vegas/S. Decatur Blvd. 1,037,000 2,539,000 113,000 0
9/16/96 Tempe/McKellips Road 823,000 1,972,000 191,000 0
9/16/96 Richland Hills/Airport Fwy. 473,000 1,158,000 122,000 0
10/11/96 Virginia Beach/Southern Blvd 282,000 610,000 211,000 0
10/11/96 Chesapeake/Military Hwy 912,000 1,974,000 335,000 0
10/11/96 Richmond/Midlothian Park 762,000 1,588,000 407,000 0
10/11/96 Roanoke/Peters Creek Road 819,000 1,776,000 210,000 0
10/11/96 Orlando/E Oakridge Rd 927,000 2,020,000 161,000 0
10/11/96 Orlando/South Hwy 17-92 1,170,000 2,549,000 166,000 0
10/25/96 Austin/Renelli 1,710,000 3,990,000 186,000 0
10/25/96 Austin/Santiago 900,000 2,100,000 170,000 0
10/25/96 Dallas/East N.W. Highway 698,000 1,628,000 138,000 0
10/25/96 Dallas/Denton Drive 900,000 2,100,000 124,000 0
10/25/96 Houston/Hempstead 518,000 1,207,000 180,000 0
10/25/96 Pasadena/So. Shaver 420,000 980,000 143,000 0
10/31/96 Houston/Joel Wheaton Rd 465,000 1,085,000 151,000 0
10/31/96 Mt Holly/541 Bypass 360,000 840,000 133,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
7/2/96 Glen Burnie/Furnace Br Rd 1,754,000 4,286,000 6,040,000 974,000
7/22/96 Lakewood/W Hampton 715,000 2,161,000 2,876,000 484,000
8/13/96 Norcross/Holcomb Bridge Rd 954,000 3,238,000 4,192,000 709,000
9/5/96 Spring Valley/S Pascack rd 1,259,000 3,210,000 4,469,000 772,000
9/16/96 Dallas/Royal Lane 1,007,000 2,609,000 3,616,000 577,000
9/16/96 Colorado Springs/Tomah Drive 730,000 1,858,000 2,588,000 417,000
9/16/96 Lewisville/S. Stemmons 602,000 1,581,000 2,183,000 366,000
9/16/96 Las Vegas/Boulder Hwy. 946,000 2,448,000 3,394,000 533,000
9/16/96 Sarasota/S. Tamiami Trail 584,000 1,495,000 2,079,000 342,000
9/16/96 Willow Grove/Maryland Road 672,000 1,686,000 2,358,000 372,000
9/16/96 Houston/W. Montgomery Rd. 523,000 1,390,000 1,913,000 329,000
9/16/96 Denver/W. Hampden 1,083,000 2,713,000 3,796,000 587,000
9/16/96 Littleton/Southpark Way 922,000 2,407,000 3,329,000 522,000
9/16/96 Petaluma/Baywood Drive 861,000 2,186,000 3,047,000 479,000
9/16/96 Canoga Park/Sherman Way 1,542,000 3,847,000 5,389,000 818,000
9/16/96 Jacksonville/South Lane Ave. 554,000 1,489,000 2,043,000 368,000
9/16/96 Newport News/Warwick Blvd. 575,000 1,516,000 2,091,000 343,000
9/16/96 Greenbrook/Route 22 1,226,000 3,168,000 4,394,000 686,000
9/16/96 Monsey/Route 59 1,068,000 2,676,000 3,744,000 569,000
9/16/96 Santa Rosa/Santa Rosa Ave. 575,000 1,469,000 2,044,000 319,000
9/16/96 Fort Worth/Brentwood Stair 823,000 2,133,000 2,956,000 488,000
9/16/96 Glendale/San Fernando Road 2,498,000 6,226,000 8,724,000 1,298,000
9/16/96 Houston/Harwin 548,000 1,466,000 2,014,000 346,000
9/16/96 Irvine/Cowan Street 1,889,000 4,822,000 6,711,000 1,031,000
9/16/96 Fairfield/Dixie Highway 427,000 1,126,000 1,553,000 244,000
9/16/96 Mesa/Country Club Drive 701,000 1,847,000 2,548,000 405,000
9/16/96 San Francisco/Geary Blvd. 2,956,000 7,418,000 10,374,000 1,561,000
9/16/96 Houston/Gulf Freeway 701,000 5,016,000 5,717,000 495,000
9/16/96 Las Vegas/S. Decatur Blvd. 1,036,000 2,653,000 3,689,000 581,000
9/16/96 Tempe/McKellips Road 823,000 2,163,000 2,986,000 483,000
9/16/96 Richland Hills/Airport Fwy. 472,000 1,281,000 1,753,000 319,000
10/11/96 Virginia Beach/Southern Blvd 282,000 821,000 1,103,000 262,000
10/11/96 Chesapeake/Military Hwy 911,000 2,310,000 3,221,000 603,000
10/11/96 Richmond/Midlothian Park 762,000 1,995,000 2,757,000 614,000
10/11/96 Roanoke/Peters Creek Road 819,000 1,986,000 2,805,000 495,000
10/11/96 Orlando/E Oakridge Rd 926,000 2,182,000 3,108,000 510,000
10/11/96 Orlando/South Hwy 17-92 1,169,000 2,716,000 3,885,000 622,000
10/25/96 Austin/Renelli 1,709,000 4,177,000 5,886,000 939,000
10/25/96 Austin/Santiago 899,000 2,271,000 3,170,000 530,000
10/25/96 Dallas/East N.W. Highway 697,000 1,767,000 2,464,000 405,000
10/25/96 Dallas/Denton Drive 899,000 2,225,000 3,124,000 512,000
10/25/96 Houston/Hempstead 517,000 1,388,000 1,905,000 372,000
10/25/96 Pasadena/So. Shaver 420,000 1,123,000 1,543,000 269,000
10/31/96 Houston/Joel Wheaton Rd 465,000 1,236,000 1,701,000 299,000
10/31/96 Mt Holly/541 Bypass 360,000 973,000 1,333,000 229,000
F-50
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
11/13/96 Town East/Mesquite 330,000 770,000 106,000 0
12/5/96 Lake Forest/Bake Parkway 971,000 2,173,000 567,000 0
12/16/96 Cherry Hill/Old Cuthbert 645,000 1,505,000 243,000 0
12/16/96 Oklahoma City/SW 74th Exprw. 375,000 875,000 102,000 0
12/16/96 Oklahoma City/S Santa Fe 360,000 840,000 127,000 0
12/16/96 Oklahoma City/S. May 360,000 840,000 120,000 0
12/16/96 Arlington/S. Watson Rd. 930,000 2,170,000 379,000 0
12/16/96 Richardson/E. Arapaho 1,290,000 3,010,000 209,000 0
12/23/96 Upper Darby/Lansdowne 899,000 2,272,000 127,000 0
12/23/96 Plymouth Meeting /Chemical 1,109,000 2,802,000 100,000 0
12/23/96 Philadelphia/Byberry 1,019,000 2,575,000 129,000 0
12/23/96 Ft. Lauderdale/State Road 1,199,000 3,030,000 122,000 0
12/23/96 Englewood/Costilla 1,739,000 4,393,000 113,000 0
12/23/96 Lilburn/Beaver Ruin Road 600,000 1,515,000 133,000 0
12/23/96 Carmichael/Fair Oaks 809,000 2,045,000 144,000 0
12/23/96 Portland/Division Street 989,000 2,499,000 118,000 0
12/23/96 Napa/Industrial 660,000 1,666,000 125,000 0
12/23/96 Wheatridge/W. 44th Avenue 1,439,000 3,636,000 131,000 0
12/23/96 Las Vegas/Charleston 1,049,000 2,651,000 101,000 0
12/23/96 Las Vegas/South Arvill 929,000 2,348,000 96,000 0
12/23/96 Los Angeles/Santa Monica 3,328,000 8,407,000 157,000 0
12/23/96 Warren/Schoenherr Rd. 749,000 1,894,000 131,000 0
12/23/96 Portland/N.E. 71st Avenue 869,000 2,196,000 152,000 0
12/23/96 Seattle/Pacific Hwy. South 689,000 1,742,000 167,000 0
12/23/96 Broadview/S. 25th Avenue 1,289,000 3,257,000 165,000 0
12/23/96 Winter Springs/W. St. Rte 434 689,000 1,742,000 96,000 0
12/23/96 Tampa/15th Street 420,000 1,060,000 171,000 0
12/23/96 Pompano Beach/S. Dixie Hwy. 930,000 2,292,000 203,000 0
12/23/96 Overland Park/Mastin 990,000 2,440,000 2,696,000 0
12/23/96 Auburn/R Street 690,000 1,700,000 131,000 0
12/23/96 Federal Heights/W. 48th Ave. 720,000 1,774,000 70,000 0
12/23/96 Decatur/Covington 930,000 2,292,000 144,000 0
12/23/96 Forest Park/Jonesboro Rd. 540,000 1,331,000 137,000 0
12/23/96 Mangonia Park/Australian Ave. 840,000 2,070,000 114,000 0
12/23/96 Whittier/Colima 540,000 1,331,000 77,000 0
12/23/96 Kent/Pacific Hwy South 930,000 2,292,000 134,000 0
12/23/96 Topeka/8th Street 150,000 370,000 111,000 0
12/23/96 Denver East Evans 1,740,000 4,288,000 140,000 0
12/23/96 Pittsburgh/California Ave. 630,000 1,552,000 100,000 0
12/23/96 Ft. Lauderdale/Powerline 660,000 1,626,000 244,000 0
12/23/96 Philadelphia/Oxford 900,000 2,218,000 104,000 0
12/23/96 Dallas/Lemmon Ave. 1,710,000 4,214,000 128,000 0
12/23/96 Alsip/115th Street 750,000 1,848,000 1,878,000 0
12/23/96 Green Acres/Jog Road 600,000 1,479,000 121,000 0
12/23/96 Pompano Beach/Sample Road 1,320,000 3,253,000 117,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
11/13/96 Town East/Mesquite 330,000 876,000 1,206,000 212,000
12/5/96 Lake Forest/Bake Parkway 972,000 2,739,000 3,711,000 487,000
12/16/96 Cherry Hill/Old Cuthbert 645,000 1,748,000 2,393,000 411,000
12/16/96 Oklahoma City/SW 74th Exprw. 375,000 977,000 1,352,000 234,000
12/16/96 Oklahoma City/S Santa Fe 360,000 967,000 1,327,000 239,000
12/16/96 Oklahoma City/S. May 360,000 960,000 1,320,000 239,000
12/16/96 Arlington/S. Watson Rd. 929,000 2,550,000 3,479,000 634,000
12/16/96 Richardson/E. Arapaho 1,289,000 3,220,000 4,509,000 705,000
12/23/96 Upper Darby/Lansdowne 899,000 2,399,000 3,298,000 513,000
12/23/96 Plymouth Meeting /Chemical 1,109,000 2,902,000 4,011,000 249,000
12/23/96 Philadelphia/Byberry 1,019,000 2,704,000 3,723,000 581,000
12/23/96 Ft. Lauderdale/State Road 1,198,000 3,153,000 4,351,000 679,000
12/23/96 Englewood/Costilla 1,738,000 4,507,000 6,245,000 926,000
12/23/96 Lilburn/Beaver Ruin Road 599,000 1,649,000 2,248,000 353,000
12/23/96 Carmichael/Fair Oaks 809,000 2,189,000 2,998,000 479,000
12/23/96 Portland/Division Street 989,000 2,617,000 3,606,000 561,000
12/23/96 Napa/Industrial 659,000 1,792,000 2,451,000 403,000
12/23/96 Wheatridge/W. 44th Avenue 1,438,000 3,768,000 5,206,000 774,000
12/23/96 Las Vegas/Charleston 1,049,000 2,752,000 3,801,000 577,000
12/23/96 Las Vegas/South Arvill 929,000 2,444,000 3,373,000 519,000
12/23/96 Los Angeles/Santa Monica 3,326,000 8,566,000 11,892,000 1,769,000
12/23/96 Warren/Schoenherr Rd. 749,000 2,025,000 2,774,000 438,000
12/23/96 Portland/N.E. 71st Avenue 869,000 2,348,000 3,217,000 527,000
12/23/96 Seattle/Pacific Hwy. South 689,000 1,909,000 2,598,000 431,000
12/23/96 Broadview/S. 25th Avenue 1,288,000 3,423,000 4,711,000 727,000
12/23/96 Winter Springs/W. St. Rte 434 689,000 1,838,000 2,527,000 406,000
12/23/96 Tampa/15th Street 419,000 1,232,000 1,651,000 299,000
12/23/96 Pompano Beach/S. Dixie Hwy. 929,000 2,496,000 3,425,000 583,000
12/23/96 Overland Park/Mastin 1,305,000 4,821,000 6,126,000 557,000
12/23/96 Auburn/R Street 690,000 1,831,000 2,521,000 418,000
12/23/96 Federal Heights/W. 48th Ave. 720,000 1,844,000 2,564,000 384,000
12/23/96 Decatur/Covington 929,000 2,437,000 3,366,000 517,000
12/23/96 Forest Park/Jonesboro Rd. 540,000 1,468,000 2,008,000 344,000
12/23/96 Mangonia Park/Australian Ave. 839,000 2,185,000 3,024,000 478,000
12/23/96 Whittier/Colima 540,000 1,408,000 1,948,000 314,000
12/23/96 Kent/Pacific Hwy South 929,000 2,427,000 3,356,000 534,000
12/23/96 Topeka/8th Street 150,000 481,000 631,000 136,000
12/23/96 Denver East Evans 1,739,000 4,429,000 6,168,000 933,000
12/23/96 Pittsburgh/California Ave. 630,000 1,652,000 2,282,000 373,000
12/23/96 Ft. Lauderdale/Powerline 660,000 1,870,000 2,530,000 434,000
12/23/96 Philadelphia/Oxford 899,000 2,323,000 3,222,000 497,000
12/23/96 Dallas/Lemmon Ave. 1,709,000 4,343,000 6,052,000 916,000
12/23/96 Alsip/115th Street 750,000 3,726,000 4,476,000 522,000
12/23/96 Green Acres/Jog Road 600,000 1,600,000 2,200,000 353,000
12/23/96 Pompano Beach/Sample Road 1,319,000 3,371,000 4,690,000 725,000
F-51
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
12/23/96 Wyndmoor/Ivy Hill 2,160,000 5,323,000 165,000 0
12/23/96 W. Palm Beach/Belvedere 960,000 2,366,000 129,000 0
12/23/96 Renton 174th St. 960,000 2,366,000 189,000 0
12/23/96 Sacramento/Northgate 1,021,000 2,647,000 126,000 0
12/23/96 Phoenix/19th Avenue 991,000 2,569,000 150,000 0
12/23/96 Bedford Park/Cicero 1,321,000 3,426,000 194,000 0
12/23/96 Lake Worth/Lk Worth 1,111,000 2,880,000 157,000 0
12/23/96 Arlington/Algonquin 991,000 2,569,000 235,000 0
12/23/96 Seattle/15th Avenue NE 781,000 2,024,000 137,000 0
12/23/96 Southington/Spring 811,000 2,102,000 119,000 0
12/23/96 Clifton/Broad Street 1,411,000 3,659,000 123,000 0
12/23/96 Hillside/Glenwood 563,000 4,051,000 212,000 0
12/30/96 Concorde/Treat 1,396,000 3,258,000 109,000 0
12/30/96 Virginia Beach 535,000 1,248,000 100,000 0
12/30/96 San Mateo 2,408,000 5,619,000 132,000 0
1/22/97 Austin, 1033 E. 41 Street 257,000 3,633,000 48,000 0
4/12/97 Annandale/Backlick 955,000 2,229,000 302,000 0
4/12/97 Ft. Worth/West Freeway 667,000 1,556,000 239,000 0
4/12/97 Campbell/S. Curtner 2,550,000 5,950,000 682,000 0
4/12/97 Aurora/S. Idalia 1,002,000 2,338,000 331,000 0
4/12/97 Santa Cruz/Capitola 1,037,000 2,420,000 298,000 0
4/12/97 Indianapolis/Lafayette Road 682,000 1,590,000 264,000 0
4/12/97 Indianapolis/Route 31 619,000 1,444,000 239,000 0
4/12/97 Farmingdale/Broad Hollow Rd. 1,568,000 3,658,000 538,000 0
4/12/97 Tyson's Corner/Springhill Rd. 3,861,000 9,010,000 1,185,000 0
4/12/97 Fountain Valley/Newhope 1,137,000 2,653,000 305,000 0
4/12/97 Dallas/Winsted 1,375,000 3,209,000 451,000 0
4/12/97 Columbia/Broad River Rd. 121,000 282,000 134,000 0
4/12/97 Livermore/S. Front Road 876,000 2,044,000 183,000 0
4/12/97 Garland/Plano 889,000 2,073,000 211,000 0
4/12/97 San Jose/Story Road 1,352,000 3,156,000 327,000 0
4/12/97 Aurora/Abilene 1,406,000 3,280,000 323,000 0
4/12/97 Antioch/Sunset Drive 1,035,000 2,416,000 211,000 0
4/12/97 Rancho Cordova/Sunrise 1,048,000 2,445,000 318,000 0
4/12/97 Berlin/Wilbur Cross 756,000 1,764,000 222,000 0
4/12/97 Whittier/Whittier Blvd. 648,000 1,513,000 131,000 0
4/12/97 Peabody/Newbury Street 1,159,000 2,704,000 289,000 0
4/12/97 Denver/Blake 602,000 1,405,000 147,000 0
4/12/97 Evansville/Green River Road 470,000 1,096,000 142,000 0
4/12/97 Burien/First Ave. So. 792,000 1,847,000 204,000 0
4/12/97 Rancho Cordova/Mather Field 494,000 1,153,000 149,000 0
4/12/97 Sugar Land/Eldridge 705,000 1,644,000 191,000 0
4/12/97 Columbus/Eastland Drive 602,000 1,405,000 194,000 0
4/12/97 Slickerville/Black Horse Pike 539,000 1,258,000 182,000 0
4/12/97 Seattle/Aurora 1,145,000 2,671,000 243,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
12/23/96 Wyndmoor/Ivy Hill 2,159,000 5,489,000 7,648,000 1,136,000
12/23/96 W. Palm Beach/Belvedere 959,000 2,496,000 3,455,000 547,000
12/23/96 Renton 174th St. 959,000 2,556,000 3,515,000 548,000
12/23/96 Sacramento/Northgate 1,020,000 2,774,000 3,794,000 598,000
12/23/96 Phoenix/19th Avenue 990,000 2,720,000 3,710,000 566,000
12/23/96 Bedford Park/Cicero 1,320,000 3,621,000 4,941,000 773,000
12/23/96 Lake Worth/Lk Worth 1,110,000 3,038,000 4,148,000 649,000
12/23/96 Arlington/Algonquin 990,000 2,805,000 3,795,000 629,000
12/23/96 Seattle/15th Avenue NE 780,000 2,162,000 2,942,000 467,000
12/23/96 Southington/Spring 810,000 2,222,000 3,032,000 487,000
12/23/96 Clifton/Broad Street 1,410,000 3,783,000 5,193,000 782,000
12/23/96 Hillside/Glenwood 563,000 4,263,000 4,826,000 930,000
12/30/96 Concorde/Treat 1,395,000 3,368,000 4,763,000 709,000
12/30/96 Virginia Beach 535,000 1,348,000 1,883,000 302,000
12/30/96 San Mateo 2,407,000 5,752,000 8,159,000 1,181,000
1/22/97 Austin, 1033 E. 41 Street 257,000 3,681,000 3,938,000 713,000
4/12/97 Annandale/Backlick 955,000 2,531,000 3,486,000 498,000
4/12/97 Ft. Worth/West Freeway 667,000 1,795,000 2,462,000 369,000
4/12/97 Campbell/S. Curtner 2,548,000 6,634,000 9,182,000 1,258,000
4/12/97 Aurora/S. Idalia 1,001,000 2,670,000 3,671,000 518,000
4/12/97 Santa Cruz/Capitola 1,037,000 2,718,000 3,755,000 529,000
4/12/97 Indianapolis/Lafayette Road 681,000 1,855,000 2,536,000 388,000
4/12/97 Indianapolis/Route 31 618,000 1,684,000 2,302,000 353,000
4/12/97 Farmingdale/Broad Hollow Rd. 1,567,000 4,197,000 5,764,000 843,000
4/12/97 Tyson's Corner/Springhill Rd. 3,859,000 10,197,000 14,056,000 1,958,000
4/12/97 Fountain Valley/Newhope 1,136,000 2,959,000 4,095,000 569,000
4/12/97 Dallas/Winsted 1,374,000 3,661,000 5,035,000 731,000
4/12/97 Columbia/Broad River Rd. 121,000 416,000 537,000 125,000
4/12/97 Livermore/S. Front Road 876,000 2,227,000 3,103,000 434,000
4/12/97 Garland/Plano 888,000 2,285,000 3,173,000 460,000
4/12/97 San Jose/Story Road 1,352,000 3,483,000 4,835,000 684,000
4/12/97 Aurora/Abilene 1,405,000 3,604,000 5,009,000 701,000
4/12/97 Antioch/Sunset Drive 1,035,000 2,627,000 3,662,000 512,000
4/12/97 Rancho Cordova/Sunrise 1,047,000 2,764,000 3,811,000 552,000
4/12/97 Berlin/Wilbur Cross 755,000 1,987,000 2,742,000 416,000
4/12/97 Whittier/Whittier Blvd. 648,000 1,644,000 2,292,000 322,000
4/12/97 Peabody/Newbury Street 1,158,000 2,994,000 4,152,000 589,000
4/12/97 Denver/Blake 602,000 1,552,000 2,154,000 312,000
4/12/97 Evansville/Green River Road 469,000 1,239,000 1,708,000 259,000
4/12/97 Burien/First Ave. So. 791,000 2,052,000 2,843,000 413,000
4/12/97 Rancho Cordova/Mather Field 494,000 1,302,000 1,796,000 279,000
4/12/97 Sugar Land/Eldridge 704,000 1,836,000 2,540,000 380,000
4/12/97 Columbus/Eastland Drive 602,000 1,599,000 2,201,000 335,000
4/12/97 Slickerville/Black Horse Pike 539,000 1,440,000 1,979,000 302,000
4/12/97 Seattle/Aurora 1,144,000 2,915,000 4,059,000 571,000
F-52
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
4/12/97 Gaithersburg/Christopher Ave. 972,000 2,268,000 252,000 0
4/12/97 Manchester/Tolland Turnpike 807,000 1,883,000 200,000 0
6/25/97 Kirkland-Totem 2,131,000 4,972,000 153,000 0
6/25/97 Idianapolis 471,000 1,098,000 61,000 0
6/25/97 Dallas 699,000 1,631,000 50,000 0
6/25/97 Atlanta 1,183,000 2,761,000 74,000 0
6/25/97 Bensalem 1,159,000 2,705,000 42,000 0
6/25/97 Evansville 429,000 1,000,000 48,000 0
6/25/97 Austin 813,000 1,897,000 39,000 0
6/25/97 Harbor City 1,244,000 2,904,000 121,000 0
6/25/97 Birmingham 539,000 1,258,000 64,000 0
6/25/97 Sacramento 489,000 1,396,000 (210,000) 0
6/25/97 Carrollton 441,000 1,029,000 29,000 0
6/25/97 La Habra 822,000 1,918,000 42,000 0
6/25/97 Lombard 1,527,000 3,564,000 1,719,000 0
6/25/97 Fairfield 740,000 1,727,000 14,000 0
6/25/97 Seattle 1,498,000 3,494,000 232,000 0
6/25/97 Bellevue 1,653,000 3,858,000 68,000 0
6/25/97 Citrus Heights 642,000 1,244,000 473,000 0
6/25/97 San Jose 1,273,000 2,971,000 9,000 0
6/25/97 Stanton 948,000 2,212,000 39,000 0
6/25/97 Garland 486,000 1,135,000 47,000 0
6/25/97 Westford 857,000 1,999,000 56,000 0
6/25/97 Dallas 1,627,000 3,797,000 599,000 0
6/25/97 Wheat Ridge 1,054,000 2,459,000 298,000 0
6/25/97 Berlin 825,000 1,925,000 235,000 0
6/25/97 Gretna 1,069,000 2,494,000 391,000 0
6/25/97 Spring 461,000 1,077,000 168,000 0
6/25/97 Sacramento 592,000 1,380,000 868,000 0
6/25/97 Houston/South Dairyashford 856,000 1,997,000 269,000 0
6/25/97 Naperville 1,108,000 2,585,000 328,000 0
6/25/97 Carrollton 1,158,000 2,702,000 424,000 0
6/25/97 Waipahu 1,620,000 3,780,000 515,000 0
6/25/97 Davis 628,000 1,465,000 210,000 0
6/25/97 Decatur 951,000 2,220,000 347,000 0
6/25/97 Jacksonville 653,000 1,525,000 270,000 0
6/25/97 Chicoppe 663,000 1,546,000 291,000 0
6/25/97 Alexandria 1,533,000 3,576,000 444,000 0
6/25/97 Houston/Veterans Memorial Dr. 458,000 1,070,000 166,000 0
6/25/97 Los Angeles/Olympic 4,392,000 10,247,000 1,233,000 0
6/25/97 Littleton 1,340,000 3,126,000 416,000 0
6/25/97 Metairie 1,229,000 2,868,000 408,000 0
6/25/97 Louisville 717,000 1,672,000 263,000 0
6/25/97 East Hazel Crest 753,000 1,757,000 266,000 0
6/25/97 Edmonds 1,187,000 2,770,000 392,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
4/12/97 Gaithersburg/Christopher Ave. 972,000 2,520,000 3,492,000 503,000
4/12/97 Manchester/Tolland Turnpike 807,000 2,083,000 2,890,000 418,000
6/25/97 Kirkland-Totem 2,129,000 5,127,000 7,256,000 999,000
6/25/97 Idianapolis 470,000 1,160,000 1,630,000 235,000
6/25/97 Dallas 699,000 1,681,000 2,380,000 337,000
6/25/97 Atlanta 1,182,000 2,836,000 4,018,000 545,000
6/25/97 Bensalem 1,159,000 2,747,000 3,906,000 520,000
6/25/97 Evansville 428,000 1,049,000 1,477,000 207,000
6/25/97 Austin 812,000 1,937,000 2,749,000 372,000
6/25/97 Harbor City 1,244,000 3,025,000 4,269,000 615,000
6/25/97 Birmingham 539,000 1,322,000 1,861,000 264,000
6/25/97 Sacramento 489,000 1,186,000 1,675,000 229,000
6/25/97 Carrollton 441,000 1,058,000 1,499,000 208,000
6/25/97 La Habra 822,000 1,960,000 2,782,000 381,000
6/25/97 Lombard 2,046,000 4,764,000 6,810,000 825,000
6/25/97 Fairfield 740,000 1,741,000 2,481,000 335,000
6/25/97 Seattle 1,497,000 3,727,000 5,224,000 807,000
6/25/97 Bellevue 1,652,000 3,927,000 5,579,000 759,000
6/25/97 Citrus Heights 642,000 1,717,000 2,359,000 339,000
6/25/97 San Jose 1,272,000 2,981,000 4,253,000 555,000
6/25/97 Stanton 947,000 2,252,000 3,199,000 417,000
6/25/97 Garland 486,000 1,182,000 1,668,000 235,000
6/25/97 Westford 856,000 2,056,000 2,912,000 400,000
6/25/97 Dallas 1,626,000 4,397,000 6,023,000 837,000
6/25/97 Wheat Ridge 1,053,000 2,758,000 3,811,000 515,000
6/25/97 Berlin 825,000 2,160,000 2,985,000 399,000
6/25/97 Gretna 1,068,000 2,886,000 3,954,000 558,000
6/25/97 Spring 461,000 1,245,000 1,706,000 246,000
6/25/97 Sacramento 720,000 2,120,000 2,840,000 369,000
6/25/97 Houston/South Dairyashford 855,000 2,267,000 3,122,000 439,000
6/25/97 Naperville 1,107,000 2,914,000 4,021,000 548,000
6/25/97 Carrollton 1,157,000 3,127,000 4,284,000 610,000
6/25/97 Waipahu 1,619,000 4,296,000 5,915,000 813,000
6/25/97 Davis 627,000 1,676,000 2,303,000 326,000
6/25/97 Decatur 951,000 2,567,000 3,518,000 483,000
6/25/97 Jacksonville 653,000 1,795,000 2,448,000 362,000
6/25/97 Chicoppe 662,000 1,838,000 2,500,000 374,000
6/25/97 Alexandria 1,532,000 4,021,000 5,553,000 744,000
6/25/97 Houston/Veterans Memorial Dr. 458,000 1,236,000 1,694,000 242,000
6/25/97 Los Angeles/Olympic 4,389,000 11,483,000 15,872,000 2,129,000
6/25/97 Littleton 1,339,000 3,543,000 4,882,000 673,000
6/25/97 Metairie 1,229,000 3,276,000 4,505,000 639,000
6/25/97 Louisville 716,000 1,936,000 2,652,000 372,000
6/25/97 East Hazel Crest 752,000 2,024,000 2,776,000 388,000
6/25/97 Edmonds 1,186,000 3,163,000 4,349,000 601,000
F-53
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
6/25/97 Foster City 1,064,000 2,483,000 316,000 0
6/25/97 Chicago 1,160,000 2,708,000 417,000 0
6/25/97 Philadelphia 924,000 2,155,000 308,000 0
6/25/97 Dallas/Vilbig Rd. 508,000 1,184,000 202,000 0
6/25/97 Staten Island 1,676,000 3,910,000 541,000 0
6/25/97 Pelham Manor 1,209,000 2,820,000 483,000 0
6/25/97 Irving 469,000 1,093,000 187,000 0
6/25/97 Elk Grove 642,000 1,497,000 235,000 0
6/25/97 LAX 1,312,000 3,062,000 474,000 0
6/25/97 Denver 1,316,000 3,071,000 452,000 0
6/25/97 Plano 1,369,000 3,193,000 401,000 0
6/25/97 Lynnwood 839,000 1,959,000 334,000 0
6/25/97 Lilburn 507,000 1,182,000 315,000 0
6/25/97 Parma 881,000 2,055,000 441,000 0
6/25/97 Davie 1,086,000 2,533,000 572,000 0
6/25/97 Allen Park 953,000 2,223,000 486,000 0
6/25/97 Aurora 808,000 1,886,000 385,000 0
6/25/97 San Diego/16th Street 932,000 2,175,000 569,000 0
6/25/97 Sterling Heights 766,000 1,787,000 405,000 0
6/25/97 East L.A./Boyle Heights 957,000 2,232,000 472,000 0
6/25/97 Springfield/Alban Station 1,317,000 3,074,000 630,000 0
6/25/97 Littleton 868,000 2,026,000 421,000 0
6/25/97 Sacramento/57th Street 869,000 2,029,000 458,000 0
6/25/97 Miami 1,762,000 4,111,000 811,000 0
8/13/97 Santa Monica/Wilshire Blvd. 2,040,000 4,760,000 254,000 0
11/2/97 Lansing, IL 758,000 1,768,000 114,000 0
11/7/97 Phoenix, AZ 1,197,000 2,793,000 104,000 0
11/13/97 Tinley Park, IL 1,422,000 3,319,000 40,000 0
3/17/98 Houston/De Soto Dr. 659,000 1,537,000 55,000 0
3/17/98 Houston/East Freeway 593,000 1,384,000 119,000 0
3/17/98 Austin/Ben White Bl 692,000 1,614,000 69,000 0
3/17/98 Arlington/E.Pioneer 922,000 2,152,000 74,000 0
3/17/98 Las Vegas/Tropicana 1,285,000 2,998,000 100,000 0
3/17/98 Branford/Summit Place 728,000 1,698,000 84,000 0
3/17/98 Las Vegas/Charleston 791,000 1,845,000 66,000 0
3/17/98 So. San Francisco 1,550,000 3,617,000 71,000 0
3/17/98 Pasadena/Arroyo Prkwy 3,005,000 7,012,000 118,000 0
3/17/98 Tempe/E. Broadway 633,000 1,476,000 96,000 0
3/17/98 Phoenix/N. 43rd Ave 443,000 1,033,000 114,000 0
3/17/98 Phoenix/No. 43rd 380,000 886,000 137,000 0
3/17/98 Phoenix/Black Canyon 380,000 886,000 109,000 0
3/17/98 Phoenix/Black Canyon 136,000 317,000 140,000 0
3/17/98 Nesconset/Southern 1,423,000 3,321,000 76,000 0
5/1/98 Berkeley/2nd St. 1,914,000 4,466,000 (160,000) 0
5/20/98 Boynton Beach/S. C. 1,299,000 3,034,000 109,000 0
Gross Carrying Amount
At December 31, 2001
Date Encum- ---------------------------------------- Accumulated
Acquired Description brances Land Building Total Depreciation
-----------------------------------------------------------------------------------------------------------------------
6/25/97 Foster City 1,064,000 2,799,000 3,863,000 520,000
6/25/97 Chicago 1,160,000 3,125,000 4,285,000 592,000
6/25/97 Philadelphia 923,000 2,464,000 3,387,000 460,000
6/25/97 Dallas/Vilbig Rd. 507,000 1,387,000 1,894,000 279,000
6/25/97 Staten Island 1,675,000 4,452,000 6,127,000 830,000
6/25/97 Pelham Manor 1,208,000 3,304,000 4,512,000 608,000
6/25/97 Irving 468,000 1,281,000 1,749,000 262,000
6/25/97 Elk Grove 641,000 1,733,000 2,374,000 330,000
6/25/97 LAX 1,311,000 3,537,000 4,848,000 678,000
6/25/97 Denver 1,315,000 3,524,000 4,839,000 663,000
6/25/97 Plano 1,368,000 3,595,000 4,963,000 665,000
6/25/97 Lynnwood 839,000 2,293,000 3,132,000 442,000
6/25/97 Lilburn 506,000 1,498,000 2,004,000 295,000
6/25/97 Parma 880,000 2,497,000 3,377,000 471,000
6/25/97 Davie 1,085,000 3,106,000 4,191,000 608,000
6/25/97 Allen Park 952,000 2,710,000 3,662,000 508,000
6/25/97 Aurora 808,000 2,271,000 3,079,000 420,000
6/25/97 San Diego/16th Street 932,000 2,744,000 3,676,000 544,000
6/25/97 Sterling Heights 765,000 2,193,000 2,958,000 414,000
6/25/97 East L.A./Boyle Heights 956,000 2,705,000 3,661,000 506,000
6/25/97 Springfield/Alban Station 1,317,000 3,704,000 5,021,000 694,000
6/25/97 Littleton 868,000 2,447,000 3,315,000 450,000
6/25/97 Sacramento/57th Street 869,000 2,487,000 3,356,000 476,000
6/25/97 Miami 1,761,000 4,923,000 6,684,000 923,000
8/13/97 Santa Monica/Wilshire Blvd. 2,039,000 5,015,000 7,054,000 979,000
11/2/97 Lansing, IL 757,000 1,883,000 2,640,000 365,000
11/7/97 Phoenix, AZ 1,196,000 2,898,000 4,094,000 528,000
11/13/97 Tinley Park, IL 1,421,000 3,360,000 4,781,000 563,000
3/17/98 Houston/De Soto Dr. 659,000 1,592,000 2,251,000 259,000
3/17/98 Houston/East Freeway 593,000 1,503,000 2,096,000 255,000
3/17/98 Austin/Ben White Bl 691,000 1,684,000 2,375,000 269,000
3/17/98 Arlington/E.Pioneer 922,000 2,226,000 3,148,000 355,000
3/17/98 Las Vegas/Tropicana 1,284,000 3,099,000 4,383,000 482,000
3/17/98 Branford/Summit Place 727,000 1,783,000 2,510,000 293,000
3/17/98 Las Vegas/Charleston 790,000 1,912,000 2,702,000 307,000
3/17/98 So. San Francisco 1,549,000 3,689,000 5,238,000 571,000
3/17/98 Pasadena/Arroyo Prkwy 3,003,000 7,132,000 10,135,000 1,080,000
3/17/98 Tempe/E. Broadway 632,000 1,573,000 2,205,000 249,000
3/17/98 Phoenix/N. 43rd Ave 443,000 1,147,000 1,590,000 195,000
3/17/98 Phoenix/No. 43rd 379,000 1,024,000 1,403,000 152,000
3/17/98 Phoenix/Black Canyon 379,000 996,000 1,375,000 168,000
3/17/98 Phoenix/Black Canyon 136,000 457,000 593,000 80,000
3/17/98 Nesconset/Southern 1,423,000 3,397,000 4,820,000 525,000
5/1/98 Berkeley/2nd St. 1,836,000 4,384,000 6,220,000 669,000
5/20/98 Boynton Beach/S. C. 1,298,000 3,144,000 4,442,000 478,000
F-54
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
5/8/98 Cleveland/W. 117th 930,000 2,277,000 152,000 0
5/8/98 La/Venice Blvd 1,470,000 3,599,000 65,000 0
5/8/98 Aurora/Farnsworth 960,000 2,350,000 67,000 0
5/8/98 Santa Rosa/Hopper 1,020,000 2,497,000 70,000 0
5/8/98 Golden Valley/Winn 630,000 1,542,000 65,000 0
5/8/98 St. Louis/Benham 810,000 1,983,000 117,000 0
5/8/98 Chicago/S. Chicago 840,000 2,057,000 32,000 0
4/1/98 Patchogue/W.Sunrise 936,000 2,184,000 85,000 0
4/1/98 Havertown/West Chester 1,254,000 2,926,000 59,000 0
4/1/98 Schiller Park/River 568,000 1,390,000 41,000 0
4/1/98 Chicago/Cuyler 1,400,000 2,695,000 70,000 0
4/1/98 Chicago Heights/West 468,000 1,804,000 49,000 0
4/1/98 Arlington Hts/University 670,000 3,004,000 76,000 0
4/1/98 Cicero/Ogden 1,678,000 2,266,000 264,000 0
4/1/98 Chicago/W. Howard St. 974,000 2,875,000 111,000 0
4/1/98 Chicago/N. Western Ave 1,453,000 3,205,000 104,000 0
4/1/98 Chicago/Northwest Hwy 925,000 2,412,000 54,000 0
4/1/98 Chicago/N. Wells St. 1,446,000 2,828,000 79,000 0
4/1/98 Chicago/Pulaski Rd. 1,276,000 2,858,000 45,000 0
4/1/98 Artesia/Artesia 625,000 1,419,000 78,000 0
4/1/98 Arcadia/Lower Azusa 821,000 1,369,000 50,000 0
4/1/98 Manassas/Centreville 405,000 2,137,000 148,000 0
4/1/98 La Downtwn/10 Fwy 1,608,000 3,358,000 121,000 0
4/1/98 Bellevue/Northup 1,232,000 3,306,000 214,000 0
4/1/98 Hollywood/Cole & Wilshire 1,590,000 1,785,000 57,000 0
4/1/98 Atlanta/John Wesley 1,233,000 1,665,000 152,000 0
4/1/98 Montebello/S. Maple 1,274,000 2,299,000 55,000 0
4/1/98 Lake City/Forest Park 248,000 1,445,000 74,000 0
4/1/98 Baltimore/W. Patap 403,000 2,650,000 108,000 0
4/1/98 Fraser/Groesbeck Hwy 368,000 1,796,000 48,000 0
4/1/98 Vallejo/Mini Drive 560,000 1,803,000 50,000 0
4/1/98 San Diego/54th & Euclid 952,000 2,550,000 70,000 0
4/1/98 Miami/5th Street 2,327,000 3,234,000 94,000 0
4/1/98 Silver Spring/Hill 922,000 2,080,000 114,000 0
4/1/98 Chicago/E. 95th St. 397,000 2,357,000 69,000 0
4/1/98 Chicago/S. Harlem 791,000 1,424,000 61,000 0
4/1/98 St. Charles /Highway 623,000 1,501,000 80,000 0
4/1/98 Chicago/Burr Ridge Rd. 421,000 2,165,000 53,000 0
4/1/98 St. Louis/Hwy. 141 0 0 0 0
4/1/98 Island Park/Austin 0 0 0 0
4/1/98 Yonkers/Route 9a 1,722,000 3,823,000 106,000 0
4/1/98 Silverlake/Glendale 2,314,000 5,481,000 106,000 0
4/1/98 Chicago/Harlem Ave 1,430,000 3,038,000 91,000 0
4/1/98 Bethesda/Butler Rd 1,146,000 2,509,000 61,000 0
4/1/98 Dundalk/Wise Ave 447,000 2,005,000 59,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
5/8/98 Cleveland/W. 117th 929,000 2,430,000 3,359,000 376,000
5/8/98 La/Venice Blvd 1,469,000 3,665,000 5,134,000 528,000
5/8/98 Aurora/Farnsworth 959,000 2,418,000 3,377,000 353,000
5/8/98 Santa Rosa/Hopper 1,019,000 2,568,000 3,587,000 378,000
5/8/98 Golden Valley/Winn 630,000 1,607,000 2,237,000 253,000
5/8/98 St. Louis/Benham 810,000 2,100,000 2,910,000 321,000
5/8/98 Chicago/S. Chicago 839,000 2,090,000 2,929,000 304,000
4/1/98 Patchogue/W.Sunrise 936,000 2,269,000 3,205,000 372,000
4/1/98 Havertown/West Chester 1,248,000 2,991,000 4,239,000 479,000
4/1/98 Schiller Park/River 568,000 1,431,000 1,999,000 243,000
4/1/98 Chicago/Cuyler 1,399,000 2,766,000 4,165,000 494,000
4/1/98 Chicago Heights/West 467,000 1,854,000 2,321,000 333,000
4/1/98 Arlington Hts/University 670,000 3,080,000 3,750,000 532,000
4/1/98 Cicero/Ogden 1,677,000 2,531,000 4,208,000 436,000
4/1/98 Chicago/W. Howard St. 973,000 2,987,000 3,960,000 536,000
4/1/98 Chicago/N. Western Ave 1,452,000 3,310,000 4,762,000 578,000
4/1/98 Chicago/Northwest Hwy 925,000 2,466,000 3,391,000 430,000
4/1/98 Chicago/N. Wells St. 1,445,000 2,908,000 4,353,000 510,000
4/1/98 Chicago/Pulaski Rd. 1,275,000 2,904,000 4,179,000 491,000
4/1/98 Artesia/Artesia 625,000 1,497,000 2,122,000 354,000
4/1/98 Arcadia/Lower Azusa 821,000 1,419,000 2,240,000 339,000
4/1/98 Manassas/Centreville 404,000 2,286,000 2,690,000 542,000
4/1/98 La Downtwn/10 Fwy 1,607,000 3,480,000 5,087,000 802,000
4/1/98 Bellevue/Northup 1,231,000 3,521,000 4,752,000 829,000
4/1/98 Hollywood/Cole & Wilshire 1,589,000 1,843,000 3,432,000 430,000
4/1/98 Atlanta/John Wesley 1,232,000 1,818,000 3,050,000 479,000
4/1/98 Montebello/S. Maple 1,273,000 2,355,000 3,628,000 548,000
4/1/98 Lake City/Forest Park 248,000 1,519,000 1,767,000 356,000
4/1/98 Baltimore/W. Patap 402,000 2,759,000 3,161,000 610,000
4/1/98 Fraser/Groesbeck Hwy 368,000 1,844,000 2,212,000 421,000
4/1/98 Vallejo/Mini Drive 560,000 1,853,000 2,413,000 432,000
4/1/98 San Diego/54th & Euclid 952,000 2,620,000 3,572,000 703,000
4/1/98 Miami/5th Street 2,326,000 3,329,000 5,655,000 853,000
4/1/98 Silver Spring/Hill 921,000 2,195,000 3,116,000 585,000
4/1/98 Chicago/E. 95th St. 397,000 2,426,000 2,823,000 651,000
4/1/98 Chicago/S. Harlem 790,000 1,486,000 2,276,000 403,000
4/1/98 St. Charles /Highway 622,000 1,582,000 2,204,000 443,000
4/1/98 Chicago/Burr Ridge Rd. 421,000 2,218,000 2,639,000 601,000
4/1/98 St. Louis/Hwy. 141 0 0 0 0
4/1/98 Island Park/Austin 0 0 0 0
4/1/98 Yonkers/Route 9a 1,721,000 3,930,000 5,651,000 1,011,000
4/1/98 Silverlake/Glendale 2,312,000 5,589,000 7,901,000 1,436,000
4/1/98 Chicago/Harlem Ave 1,430,000 3,129,000 4,559,000 809,000
4/1/98 Bethesda/Butler Rd 1,146,000 2,570,000 3,716,000 638,000
4/1/98 Dundalk/Wise Ave 447,000 2,064,000 2,511,000 498,000
F-55
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
10/1/98 El Segundo/Sepulveda 6,586,000 5,795,000 95,000 0
10/1/98 Atlanta/Memorial Dr. 414,000 2,239,000 129,000 0
10/1/98 Chicago/W. 79th St 861,000 2,789,000 215,000 0
10/1/98 Chicago/N. Broadway 1,918,000 3,824,000 120,000 0
10/1/98 Tacoma/Orchard 358,000 1,987,000 69,000 0
10/1/98 St. Louis/Gravois 312,000 2,327,000 101,000 0
10/1/98 White Bear Lake 578,000 2,079,000 55,000 0
10/1/98 Santa Cruz/Soquel 832,000 2,385,000 69,000 0
10/1/98 Coon Rapids/Hwy 10 330,000 1,646,000 66,000 0
10/1/98 Oxnard/Hueneme Rd 923,000 3,925,000 88,000 0
10/1/98 Vancouver/Millplain 343,000 2,000,000 68,000 0
10/1/98 Tigard/Mc Ewan 597,000 1,652,000 71,000 0
10/1/98 Griffith/Cline 299,000 2,118,000 37,000 0
10/1/98 Miami/Sunset Drive 1,656,000 2,321,000 1,926,000 0
10/1/98 Farmington/9 Mile 580,000 2,526,000 55,000 0
10/1/98 Los Gatos/University 2,234,000 3,890,000 (277,000) 0
10/1/98 N. Hollywood 1,484,000 3,143,000 40,000 0
10/1/98 Petaluma/Transport 460,000 1,840,000 74,000 0
10/1/98 Chicago/111th 341,000 2,898,000 46,000 0
10/1/98 Upper Darby/Market 808,000 5,011,000 105,000 0
10/1/98 San Jose/Santa 966,000 3,870,000 79,000 0
10/1/98 San Diego/Morena 3,173,000 5,469,000 83,000 0
10/1/98 Brooklyn/Rockaway Ave 6,272,000 9,691,000 191,000 0
10/1/98 Revere/Charger St 1,997,000 3,727,000 165,000 0
10/1/98 Las Vegas/E. Charles 602,000 2,545,000 84,000 0
10/1/98 Laurel/Baltimore Ave 1,899,000 4,498,000 118,000 0
10/1/98 East La/Figueroa & 4th 1,213,000 2,689,000 48,000 0
10/1/98 Oldsmar/Tampa Road 760,000 2,154,000 2,713,000 0
10/1/98 Ft. Lauderdale/S.W. 1,046,000 2,928,000 38,000 0
10/1/98 Miami/NW 73rd St 1,050,000 3,064,000 69,000 0
4/1/98 Dallas/Kingsly 1,095,000 1,712,000 81,000 0
10/1/98 Dallas/Greenville 1,933,000 2,892,000 66,000 0
1/6/99 Brandon/E. Brandon Blvd 1,560,000 3,695,000 61,000 0
1/1/99 New Orleans/St.Charles 1,463,000 2,634,000 50,000 0
7/1/99 Pantego/W. Pioneer Pkwy 432,000 1,228,000 41,000 0
3/12/99 St. Louis/N. Lindbergh Blvd. 1,688,000 3,939,000 91,000 0
3/12/99 St. Louis/Vandeventer Midtown 699,000 1,631,000 58,000 0
3/12/99 St. Ann/Maryland Heights 1,035,000 2,414,000 56,000 0
3/12/99 Florissant/N. Hwy 67 971,000 2,265,000 56,000 0
3/12/99 Ferguson Area-W.Florissant 1,194,000 2,732,000 176,000 0
3/12/99 Florissant/New Halls Ferry Rd 1,144,000 2,670,000 129,000 0
3/12/99 St. Louis/Airport 785,000 1,833,000 27,000 0
3/12/99 St. Louis/S.Third St 1,096,000 2,557,000 49,000 0
3/12/99 Kansas City/E. 47th St. 610,000 1,424,000 46,000 0
3/12/99 Kansas City/E. 67th Terrace 1,136,000 2,643,000 55,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
10/1/98 El Segundo/Sepulveda 6,582,000 5,894,000 12,476,000 832,000
10/1/98 Atlanta/Memorial Dr. 414,000 2,368,000 2,782,000 358,000
10/1/98 Chicago/W. 79th St 860,000 3,005,000 3,865,000 453,000
10/1/98 Chicago/N. Broadway 1,916,000 3,946,000 5,862,000 582,000
10/1/98 Tacoma/Orchard 358,000 2,056,000 2,414,000 310,000
10/1/98 St. Louis/Gravois 312,000 2,428,000 2,740,000 365,000
10/1/98 White Bear Lake 578,000 2,134,000 2,712,000 313,000
10/1/98 Santa Cruz/Soquel 832,000 2,454,000 3,286,000 364,000
10/1/98 Coon Rapids/Hwy 10 329,000 1,713,000 2,042,000 254,000
10/1/98 Oxnard/Hueneme Rd 922,000 4,014,000 4,936,000 577,000
10/1/98 Vancouver/Millplain 342,000 2,069,000 2,411,000 315,000
10/1/98 Tigard/Mc Ewan 597,000 1,723,000 2,320,000 267,000
10/1/98 Griffith/Cline 299,000 2,155,000 2,454,000 309,000
10/1/98 Miami/Sunset Drive 2,265,000 3,638,000 5,903,000 381,000
10/1/98 Farmington/9 Mile 580,000 2,581,000 3,161,000 369,000
10/1/98 Los Gatos/University 2,233,000 3,614,000 5,847,000 502,000
10/1/98 N. Hollywood 1,483,000 3,184,000 4,667,000 455,000
10/1/98 Petaluma/Transport 460,000 1,914,000 2,374,000 282,000
10/1/98 Chicago/111th 341,000 2,944,000 3,285,000 422,000
10/1/98 Upper Darby/Market 807,000 5,117,000 5,924,000 726,000
10/1/98 San Jose/Santa 965,000 3,950,000 4,915,000 574,000
10/1/98 San Diego/Morena 3,172,000 5,553,000 8,725,000 788,000
10/1/98 Brooklyn/Rockaway Ave 6,269,000 9,885,000 16,154,000 1,409,000
10/1/98 Revere/Charger St 1,996,000 3,893,000 5,889,000 562,000
10/1/98 Las Vegas/E. Charles 602,000 2,629,000 3,231,000 388,000
10/1/98 Laurel/Baltimore Ave 1,898,000 4,617,000 6,515,000 654,000
10/1/98 East La/Figueroa & 4th 1,212,000 2,738,000 3,950,000 392,000
10/1/98 Oldsmar/Tampa Road 1,049,000 4,578,000 5,627,000 410,000
10/1/98 Ft. Lauderdale/S.W. 1,045,000 2,967,000 4,012,000 425,000
10/1/98 Miami/NW 73rd St 1,049,000 3,134,000 4,183,000 456,000
4/1/98 Dallas/Kingsly 1,095,000 1,793,000 2,888,000 416,000
10/1/98 Dallas/Greenville 1,932,000 2,959,000 4,891,000 419,000
1/6/99 Brandon/E. Brandon Blvd 1,559,000 3,757,000 5,316,000 345,000
1/1/99 New Orleans/St.Charles 1,462,000 2,685,000 4,147,000 310,000
7/1/99 Pantego/W. Pioneer Pkwy 432,000 1,269,000 1,701,000 126,000
3/12/99 St. Louis/N. Lindbergh Blvd. 1,687,000 4,031,000 5,718,000 460,000
3/12/99 St. Louis/Vandeventer Midtown 699,000 1,689,000 2,388,000 200,000
3/12/99 St. Ann/Maryland Heights 1,034,000 2,471,000 3,505,000 289,000
3/12/99 Florissant/N. Hwy 67 970,000 2,322,000 3,292,000 271,000
3/12/99 Ferguson Area-W.Florissant 1,193,000 2,909,000 4,102,000 346,000
3/12/99 Florissant/New Halls Ferry Rd 1,143,000 2,800,000 3,943,000 329,000
3/12/99 St. Louis/Airport 785,000 1,860,000 2,645,000 215,000
3/12/99 St. Louis/S.Third St 1,095,000 2,607,000 3,702,000 301,000
3/12/99 Kansas City/E. 47th St. 610,000 1,470,000 2,080,000 174,000
3/12/99 Kansas City/E. 67th Terrace 1,136,000 2,698,000 3,834,000 312,000
F-56
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
3/12/99 Kansas City/James A. Reed Rd 749,000 1,748,000 69,000 0
3/12/99 Independence/291 871,000 2,032,000 42,000 0
3/12/99 Raytown/Woodson Rd 915,000 2,134,000 63,000 0
3/12/99 Kansas City/34th Main Street 114,000 2,599,000 473,000 0
3/12/99 Columbia/River Dr 671,000 1,566,000 134,000 0
3/12/99 Columbia/Buckner Rd 714,000 1,665,000 227,000 0
3/12/99 Columbia/Decker Park Rd 605,000 1,412,000 96,000 0
3/12/99 Columbia/Rosewood Dr 777,000 1,814,000 74,000 0
3/12/99 W. Columbia/Orchard Dr. 272,000 634,000 104,000 0
3/12/99 W. Columbia/Airport Blvd 493,000 1,151,000 77,000 0
3/12/99 Greenville/Whitehorse Rd 882,000 2,058,000 70,000 0
3/12/99 Greenville/Woods Lake Rd 364,000 849,000 89,000 0
3/12/99 Mauldin/N. Main Street 571,000 1,333,000 98,000 0
3/12/99 Simpsonville/Grand View Dr 582,000 1,358,000 94,000 0
3/12/99 Taylors/Wade Hampton Blvd 650,000 1,517,000 104,000 0
3/12/99 Charleston/Ashley Phosphate B 839,000 1,950,000 168,000 0
3/12/99 N. Charleston/Dorchester Rd 380,000 886,000 71,000 0
3/12/99 N. Charleston/Dorchester 487,000 1,137,000 103,000 0
3/12/99 Charleston/Sam Rittenberg Blvd 555,000 1,296,000 90,000 0
3/12/99 Hilton Head/Office Park Rd 1,279,000 2,985,000 78,000 0
3/12/99 Columbia/Plumbers Rd 368,000 858,000 90,000 0
3/12/99 Greenville/Pineknoll Rd 927,000 2,163,000 123,000 0
3/12/99 Hilton Head/Yacht Cove Dr 1,182,000 2,753,000 116,000 0
3/12/99 Spartanburg/Chesnee Hwy 533,000 1,244,000 144,000 0
3/12/99 Charleston/Ashley River Rd 1,114,000 2,581,000 104,000 0
3/12/99 Columbia/Broad River 1,463,000 3,413,000 135,000 0
3/12/99 Charlotte/East Wt Harris Blvd 736,000 1,718,000 75,000 0
3/12/99 Charlotte/North Tryon St. 708,000 1,653,000 150,000 0
3/12/99 Charlotte/South Blvd 641,000 1,496,000 85,000 0
3/12/99 Kannapoliz/Oregon St 463,000 1,081,000 76,000 0
3/12/99 Durham/E. Club Blvd 947,000 2,209,000 76,000 0
3/12/99 Durham/N. Duke St. 769,000 1,794,000 89,000 0
3/12/99 Raleigh/Maitland Dr 679,000 1,585,000 90,000 0
3/12/99 Greensboro/O'henry Blvd 577,000 1,345,000 153,000 0
3/12/99 Gastonia/S. York Rd 467,000 1,089,000 102,000 0
3/12/99 Durham/Kangaroo Dr. 1,102,000 2,572,000 165,000 0
3/12/99 Pensacola/Brent Lane 402,000 938,000 78,000 0
3/12/99 Pensacola/Creighton Road 454,000 1,060,000 99,000 0
3/12/99 Jacksonville/Park Avenue 905,000 2,113,000 109,000 0
3/12/99 Jacksonville/Phillips Hwy 665,000 1,545,000 138,000 0
3/12/99 Clearwater/Highland Ave 724,000 1,690,000 92,000 0
3/12/99 Tarpon Springs/US Highway 19 892,000 2,081,000 120,000 0
3/12/99 Orlando/S. Orange Blossom Trail 1,229,000 2,867,000 115,000 0
3/12/99 Casselberry II 1,160,000 2,708,000 79,000 0
3/12/99 Miami/NW 14th Street 1,739,000 4,058,000 92,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
3/12/99 Kansas City/James A. Reed Rd 749,000 1,817,000 2,566,000 213,000
3/12/99 Independence/291 870,000 2,075,000 2,945,000 242,000
3/12/99 Raytown/Woodson Rd 915,000 2,197,000 3,112,000 253,000
3/12/99 Kansas City/34th Main Street 114,000 3,072,000 3,186,000 355,000
3/12/99 Columbia/River Dr 671,000 1,700,000 2,371,000 210,000
3/12/99 Columbia/Buckner Rd 713,000 1,893,000 2,606,000 265,000
3/12/99 Columbia/Decker Park Rd 605,000 1,508,000 2,113,000 186,000
3/12/99 Columbia/Rosewood Dr 777,000 1,888,000 2,665,000 227,000
3/12/99 W. Columbia/Orchard Dr. 272,000 738,000 1,010,000 102,000
3/12/99 W. Columbia/Airport Blvd 493,000 1,228,000 1,721,000 145,000
3/12/99 Greenville/Whitehorse Rd 882,000 2,128,000 3,010,000 253,000
3/12/99 Greenville/Woods Lake Rd 364,000 938,000 1,302,000 119,000
3/12/99 Mauldin/N. Main Street 571,000 1,431,000 2,002,000 182,000
3/12/99 Simpsonville/Grand View Dr 582,000 1,452,000 2,034,000 175,000
3/12/99 Taylors/Wade Hampton Blvd 650,000 1,621,000 2,271,000 199,000
3/12/99 Charleston/Ashley Phosphate B 838,000 2,119,000 2,957,000 258,000
3/12/99 N. Charleston/Dorchester Rd 379,000 958,000 1,337,000 117,000
3/12/99 N. Charleston/Dorchester 487,000 1,240,000 1,727,000 152,000
3/12/99 Charleston/Sam Rittenberg Blvd 555,000 1,386,000 1,941,000 172,000
3/12/99 Hilton Head/Office Park Rd 1,278,000 3,064,000 4,342,000 349,000
3/12/99 Columbia/Plumbers Rd 368,000 948,000 1,316,000 121,000
3/12/99 Greenville/Pineknoll Rd 927,000 2,286,000 3,213,000 277,000
3/12/99 Hilton Head/Yacht Cove Dr 1,182,000 2,869,000 4,051,000 335,000
3/12/99 Spartanburg/Chesnee Hwy 533,000 1,388,000 1,921,000 178,000
3/12/99 Charleston/Ashley River Rd 1,113,000 2,686,000 3,799,000 303,000
3/12/99 Columbia/Broad River 1,462,000 3,549,000 5,011,000 419,000
3/12/99 Charlotte/East Wt Harris Blvd 736,000 1,793,000 2,529,000 220,000
3/12/99 Charlotte/North Tryon St. 708,000 1,803,000 2,511,000 220,000
3/12/99 Charlotte/South Blvd 641,000 1,581,000 2,222,000 195,000
3/12/99 Kannapoliz/Oregon St 463,000 1,157,000 1,620,000 146,000
3/12/99 Durham/E. Club Blvd 946,000 2,286,000 3,232,000 272,000
3/12/99 Durham/N. Duke St. 768,000 1,884,000 2,652,000 219,000
3/12/99 Raleigh/Maitland Dr 679,000 1,675,000 2,354,000 204,000
3/12/99 Greensboro/O'henry Blvd 576,000 1,499,000 2,075,000 192,000
3/12/99 Gastonia/S. York Rd 466,000 1,192,000 1,658,000 155,000
3/12/99 Durham/Kangaroo Dr. 1,102,000 2,737,000 3,839,000 328,000
3/12/99 Pensacola/Brent Lane 402,000 1,016,000 1,418,000 122,000
3/12/99 Pensacola/Creighton Road 454,000 1,159,000 1,613,000 136,000
3/12/99 Jacksonville/Park Avenue 905,000 2,222,000 3,127,000 267,000
3/12/99 Jacksonville/Phillips Hwy 665,000 1,683,000 2,348,000 211,000
3/12/99 Clearwater/Highland Ave 724,000 1,782,000 2,506,000 215,000
3/12/99 Tarpon Springs/US Highway 19 891,000 2,202,000 3,093,000 267,000
3/12/99 Orlando/S. Orange Blossom Trail 1,228,000 2,983,000 4,211,000 350,000
3/12/99 Casselberry II 1,160,000 2,787,000 3,947,000 329,000
3/12/99 Miami/NW 14th Street 1,738,000 4,151,000 5,889,000 484,000
F-57
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
3/12/99 Tarpon Springs/Highway 19 1,179,000 2,751,000 84,000 0
3/12/99 Ft. Myers/Tamiami Trail South 834,000 1,945,000 65,000 0
3/12/99 Jacksonville/Ft. Caroline Rd. 1,037,000 2,420,000 112,000 0
3/12/99 Orlando/South Semoran 565,000 1,319,000 42,000 0
3/12/99 Jacksonville/Southside Blvd. 1,278,000 2,982,000 159,000 0
3/12/99 Miami/NW 7th Ave 783,000 1,827,000 119,000 0
3/12/99 Vero Beach/US Hwy 1 678,000 1,583,000 58,000 0
3/12/99 Ponte Vedra/Palm Valley Rd. 745,000 2,749,000 398,000 0
3/12/99 Miami Lakes/NW 153rd St. 425,000 992,000 58,000 0
3/12/99 Deerfield Beach/SW 10th St. 1,844,000 4,302,000 61,000 0
3/12/99 Apopka/S. Orange Blossom 307,000 717,000 78,000 0
3/12/99 Davie/University 313,000 4,379,000 185,000 0
3/12/99 Arlington/Division 998,000 2,328,000 66,000 0
3/12/99 Duncanville/S.Cedar Ridge 1,477,000 3,447,000 128,000 0
3/12/99 Carrollton/Trinity Mills West 530,000 1,237,000 71,000 0
3/12/99 Houston/Wallisville Rd. 744,000 1,736,000 59,000 0
3/12/99 Houston/Fondren South 647,000 1,510,000 45,000 0
3/12/99 Houston/Addicks Satsuma 409,000 954,000 52,000 0
3/12/99 Addison/Inwood Road 1,204,000 2,808,000 40,000 0
3/12/99 Garland/Jackson Drive 755,000 1,761,000 58,000 0
3/12/99 Garland/Buckingham Road 492,000 1,149,000 93,000 0
3/12/99 Houston/South Main 1,461,000 3,409,000 70,000 0
3/12/99 Plano/Parker Road-Avenue K 1,517,000 3,539,000 90,000 0
3/12/99 Houston/Bingle Road 576,000 1,345,000 61,000 0
3/12/99 Houston/Mangum Road 737,000 1,719,000 85,000 0
3/12/99 Houston/Hayes Road 916,000 2,138,000 42,000 0
3/12/99 Katy/Dominion Drive 995,000 2,321,000 38,000 0
3/12/99 Houston/Fm 1960 West 513,000 1,198,000 69,000 0
3/12/99 Webster/Fm 528 Road 756,000 1,764,000 55,000 0
3/12/99 Houston/Loch Katrine Lane 580,000 1,352,000 61,000 0
3/12/99 Houston/Milwee St. 779,000 1,815,000 76,000 0
3/12/99 Lewisville/Highway 121 688,000 1,605,000 70,000 0
3/12/99 Richardson/Central Expressway 465,000 1,085,000 43,000 0
3/12/99 Houston/Hwy 6 South 569,000 1,328,000 39,000 0
3/12/99 Houston/Westheimer West 1,075,000 2,508,000 40,000 0
3/12/99 Ft. Worth/Granbury Road 763,000 1,781,000 46,000 0
3/12/99 Houston/New Castle 2,346,000 5,473,000 1,188,000 0
3/12/99 Dallas/Inwood Road 1,478,000 3,448,000 36,000 0
3/12/99 Fort Worth/Loop 820 North 729,000 1,702,000 62,000 0
3/12/99 Carrollton/Marsh Lane South 1,353,000 3,156,000 35,000 0
3/12/99 Dallas/Forest Central Dr 859,000 2,004,000 48,000 0
3/12/99 Arlington/Cooper St 779,000 1,818,000 41,000 0
3/12/99 Webster/Highway 3 677,000 1,580,000 52,000 0
3/12/99 Augusta/Peach Orchard Rd 860,000 2,007,000 248,000 0
3/12/99 Martinez/Old Petersburg Rd 407,000 950,000 83,000 0
Gross Carrying Amount
At December 31, 2001
Date Encum- ---------------------------------------- Accumulated
Acquired Description brances Land Building Total Depreciation
-----------------------------------------------------------------------------------------------------------------------
3/12/99 Tarpon Springs/Highway 19 1,178,000 2,836,000 4,014,000 332,000
3/12/99 Ft. Myers/Tamiami Trail South 833,000 2,011,000 2,844,000 239,000
3/12/99 Jacksonville/Ft. Caroline Rd. 1,037,000 2,532,000 3,569,000 301,000
3/12/99 Orlando/South Semoran 565,000 1,361,000 1,926,000 163,000
3/12/99 Jacksonville/Southside Blvd. 1,277,000 3,142,000 4,419,000 372,000
3/12/99 Miami/NW 7th Ave 783,000 1,946,000 2,729,000 242,000
3/12/99 Vero Beach/US Hwy 1 678,000 1,641,000 2,319,000 198,000
3/12/99 Ponte Vedra/Palm Valley Rd. 745,000 3,147,000 3,892,000 403,000
3/12/99 Miami Lakes/NW 153rd St. 425,000 1,050,000 1,475,000 131,000
3/12/99 Deerfield Beach/SW 10th St. 1,842,000 4,365,000 6,207,000 499,000
3/12/99 Apopka/S. Orange Blossom 307,000 795,000 1,102,000 105,000
3/12/99 Davie/University 313,000 4,564,000 4,877,000 489,000
3/12/99 Arlington/Division 997,000 2,395,000 3,392,000 273,000
3/12/99 Duncanville/S.Cedar Ridge 1,477,000 3,575,000 5,052,000 419,000
3/12/99 Carrollton/Trinity Mills West 530,000 1,308,000 1,838,000 159,000
3/12/99 Houston/Wallisville Rd. 744,000 1,795,000 2,539,000 216,000
3/12/99 Houston/Fondren South 647,000 1,555,000 2,202,000 185,000
3/12/99 Houston/Addicks Satsuma 409,000 1,006,000 1,415,000 127,000
3/12/99 Addison/Inwood Road 1,203,000 2,849,000 4,052,000 326,000
3/12/99 Garland/Jackson Drive 754,000 1,820,000 2,574,000 217,000
3/12/99 Garland/Buckingham Road 492,000 1,242,000 1,734,000 159,000
3/12/99 Houston/South Main 1,460,000 3,480,000 4,940,000 404,000
3/12/99 Plano/Parker Road-Avenue K 1,516,000 3,630,000 5,146,000 426,000
3/12/99 Houston/Bingle Road 576,000 1,406,000 1,982,000 175,000
3/12/99 Houston/Mangum Road 736,000 1,805,000 2,541,000 224,000
3/12/99 Houston/Hayes Road 916,000 2,180,000 3,096,000 253,000
3/12/99 Katy/Dominion Drive 994,000 2,360,000 3,354,000 274,000
3/12/99 Houston/Fm 1960 West 513,000 1,267,000 1,780,000 158,000
3/12/99 Webster/Fm 528 Road 756,000 1,819,000 2,575,000 218,000
3/12/99 Houston/Loch Katrine Lane 579,000 1,414,000 1,993,000 172,000
3/12/99 Houston/Milwee St. 778,000 1,892,000 2,670,000 231,000
3/12/99 Lewisville/Highway 121 687,000 1,676,000 2,363,000 200,000
3/12/99 Richardson/Central Expressway 465,000 1,128,000 1,593,000 138,000
3/12/99 Houston/Hwy 6 South 569,000 1,367,000 1,936,000 163,000
3/12/99 Houston/Westheimer West 1,074,000 2,549,000 3,623,000 295,000
3/12/99 Ft. Worth/Granbury Road 763,000 1,827,000 2,590,000 216,000
3/12/99 Houston/New Castle 2,237,000 6,770,000 9,007,000 655,000
3/12/99 Dallas/Inwood Road 1,477,000 3,485,000 4,962,000 399,000
3/12/99 Fort Worth/Loop 820 North 729,000 1,764,000 2,493,000 209,000
3/12/99 Carrollton/Marsh Lane South 1,353,000 3,191,000 4,544,000 245,000
3/12/99 Dallas/Forest Central Dr 859,000 2,052,000 2,911,000 161,000
3/12/99 Arlington/Cooper St 779,000 1,859,000 2,638,000 217,000
3/12/99 Webster/Highway 3 677,000 1,632,000 2,309,000 195,000
3/12/99 Augusta/Peach Orchard Rd 860,000 2,255,000 3,115,000 306,000
3/12/99 Martinez/Old Petersburg Rd 407,000 1,033,000 1,440,000 128,000
F-58
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
3/12/99 Jonesboro/Tara Blvd 785,000 1,827,000 122,000 0
3/12/99 Atlanta/Briarcliff Rd 2,171,000 5,066,000 148,000 0
3/12/99 Decatur/N Decatur Rd 933,000 2,177,000 132,000 0
3/12/99 Douglasville/Westmoreland 453,000 1,056,000 153,000 0
3/12/99 Doraville/Mcelroy Rd 827,000 1,931,000 170,000 0
3/12/99 Roswell/Alpharetta 1,772,000 4,135,000 82,000 0
3/12/99 Douglasville/Duralee Lane 533,000 1,244,000 76,000 0
3/12/99 Douglasville/Highway 5 804,000 1,875,000 342,000 0
3/12/99 Forest Park/Jonesboro 659,000 1,537,000 121,000 0
3/12/99 Marietta/Whitlock 1,016,000 2,370,000 100,000 0
3/12/99 Marietta/Cobb Iv 727,000 1,696,000 176,000 0
3/12/99 Norcross/Jones Mill Rd 1,142,000 2,670,000 120,000 0
3/12/99 Norcross/Dawson Blvd 1,232,000 2,874,000 135,000 0
3/12/99 Forest Park/Old Dixie Hwy 895,000 2,070,000 157,000 0
3/12/99 Decatur/Covington 1,764,000 4,116,000 103,000 0
3/12/99 Alpharetta/Maxwell Rd 1,075,000 2,509,000 63,000 0
3/12/99 Alpharetta/N. Main St 1,240,000 2,893,000 52,000 0
3/12/99 Atlanta/Bolton Rd 866,000 2,019,000 85,000 0
3/12/99 Riverdale/Georgia Hwy 85 1,075,000 2,508,000 64,000 0
3/12/99 Kennesaw/Rutledge Road 803,000 1,874,000 103,000 0
3/12/99 Lawrenceville/Buford Dr. 256,000 597,000 66,000 0
3/12/99 Hanover Park/W. Lake Street 1,320,000 3,081,000 93,000 0
3/12/99 Chicago/W. Jarvis Ave 313,000 731,000 72,000 0
3/12/99 Chicago/N. Broadway St 535,000 1,249,000 118,000 0
3/12/99 Carol Stream/Phillips Court 829,000 1,780,000 31,000 0
3/12/99 Winfield/Roosevelt Road 1,109,000 2,587,000 83,000 0
3/12/99 Schaumburg/S. Roselle Road 659,000 1,537,000 71,000 0
3/12/99 Tinley Park/Brennan Hwy 771,000 1,799,000 96,000 0
3/12/99 Schaumburg/Palmer Drive 1,333,000 3,111,000 90,000 0
3/12/99 Geneva/Gary Ave 1,072,000 2,501,000 65,000 0
3/12/99 Naperville/Lasalle Ave 1,501,000 3,502,000 87,000 0
3/12/99 Mobile/Hillcrest Road 554,000 1,293,000 84,000 0
3/12/99 Mobile/Azalea Road 517,000 1,206,000 100,000 0
3/12/99 Mobile/Moffat Road 537,000 1,254,000 101,000 0
3/12/99 Mobile/Grelot Road 804,000 1,877,000 97,000 0
3/12/99 Mobile/Government Blvd 407,000 950,000 60,000 0
3/12/99 New Orleans/Tchoupitoulas 1,092,000 2,548,000 177,000 0
3/12/99 Louisville/Breckenridge Lane 581,000 1,356,000 68,000 0
3/12/99 Louisville 554,000 1,292,000 85,000 0
3/12/99 Louisville/Poplar Level 463,000 1,080,000 93,000 0
3/12/99 Chesapeake/Western Branch 1,274,000 2,973,000 94,000 0
3/12/99 Centreville/Lee Hwy 1,650,000 3,851,000 104,000 0
3/12/99 Sterling/S. Sterling Blvd 1,282,000 2,992,000 91,000 0
3/12/99 Manassas/Sudley Road 776,000 1,810,000 86,000 0
3/12/99 Longmont/Wedgewood Ave 717,000 1,673,000 45,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
3/12/99 Jonesboro/Tara Blvd 785,000 1,949,000 2,734,000 233,000
3/12/99 Atlanta/Briarcliff Rd 2,170,000 5,215,000 7,385,000 597,000
3/12/99 Decatur/N Decatur Rd 932,000 2,310,000 3,242,000 279,000
3/12/99 Douglasville/Westmoreland 452,000 1,210,000 1,662,000 155,000
3/12/99 Doraville/Mcelroy Rd 827,000 2,101,000 2,928,000 256,000
3/12/99 Roswell/Alpharetta 1,771,000 4,218,000 5,989,000 480,000
3/12/99 Douglasville/Duralee Lane 533,000 1,320,000 1,853,000 162,000
3/12/99 Douglasville/Highway 5 803,000 2,218,000 3,021,000 274,000
3/12/99 Forest Park/Jonesboro 658,000 1,659,000 2,317,000 211,000
3/12/99 Marietta/Whitlock 1,015,000 2,471,000 3,486,000 290,000
3/12/99 Marietta/Cobb Iv 726,000 1,873,000 2,599,000 233,000
3/12/99 Norcross/Jones Mill Rd 1,141,000 2,791,000 3,932,000 330,000
3/12/99 Norcross/Dawson Blvd 1,231,000 3,010,000 4,241,000 352,000
3/12/99 Forest Park/Old Dixie Hwy 894,000 2,228,000 3,122,000 277,000
3/12/99 Decatur/Covington 1,763,000 4,220,000 5,983,000 483,000
3/12/99 Alpharetta/Maxwell Rd 1,075,000 2,572,000 3,647,000 299,000
3/12/99 Alpharetta/N. Main St 1,239,000 2,946,000 4,185,000 340,000
3/12/99 Atlanta/Bolton Rd 866,000 2,104,000 2,970,000 245,000
3/12/99 Riverdale/Georgia Hwy 85 1,074,000 2,573,000 3,647,000 302,000
3/12/99 Kennesaw/Rutledge Road 802,000 1,978,000 2,780,000 242,000
3/12/99 Lawrenceville/Buford Dr. 256,000 663,000 919,000 88,000
3/12/99 Hanover Park/W. Lake Street 1,320,000 3,174,000 4,494,000 365,000
3/12/99 Chicago/W. Jarvis Ave 313,000 803,000 1,116,000 109,000
3/12/99 Chicago/N. Broadway St 535,000 1,367,000 1,902,000 175,000
3/12/99 Carol Stream/Phillips Court 828,000 1,812,000 2,640,000 211,000
3/12/99 Winfield/Roosevelt Road 1,108,000 2,671,000 3,779,000 308,000
3/12/99 Schaumburg/S. Roselle Road 659,000 1,608,000 2,267,000 193,000
3/12/99 Tinley Park/Brennan Hwy 771,000 1,895,000 2,666,000 224,000
3/12/99 Schaumburg/Palmer Drive 1,333,000 3,201,000 4,534,000 372,000
3/12/99 Geneva/Gary Ave 1,071,000 2,567,000 3,638,000 295,000
3/12/99 Naperville/Lasalle Ave 1,500,000 3,590,000 5,090,000 426,000
3/12/99 Mobile/Hillcrest Road 554,000 1,377,000 1,931,000 167,000
3/12/99 Mobile/Azalea Road 516,000 1,307,000 1,823,000 157,000
3/12/99 Mobile/Moffat Road 537,000 1,355,000 1,892,000 164,000
3/12/99 Mobile/Grelot Road 804,000 1,974,000 2,778,000 233,000
3/12/99 Mobile/Government Blvd 407,000 1,010,000 1,417,000 126,000
3/12/99 New Orleans/Tchoupitoulas 1,091,000 2,726,000 3,817,000 314,000
3/12/99 Louisville/Breckenridge Lane 581,000 1,424,000 2,005,000 170,000
3/12/99 Louisville 553,000 1,378,000 1,931,000 164,000
3/12/99 Louisville/Poplar Level 463,000 1,173,000 1,636,000 142,000
3/12/99 Chesapeake/Western Branch 1,273,000 3,068,000 4,341,000 359,000
3/12/99 Centreville/Lee Hwy 1,649,000 3,956,000 5,605,000 458,000
3/12/99 Sterling/S. Sterling Blvd 1,281,000 3,084,000 4,365,000 357,000
3/12/99 Manassas/Sudley Road 775,000 1,897,000 2,672,000 227,000
3/12/99 Longmont/Wedgewood Ave 717,000 1,718,000 2,435,000 200,000
F-59
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
3/12/99 Fort Collins/So.College Ave 745,000 1,739,000 70,000 0
3/12/99 Colo Sprngs/Parkmoor Village 620,000 1,446,000 49,000 0
3/12/99 Colo Sprngs/Van Teylingen 1,216,000 2,837,000 90,000 0
3/12/99 Denver/So. Clinton St. 462,000 1,609,000 62,000 0
3/12/99 Denver/Washington St. 795,000 1,846,000 248,000 0
3/12/99 Colo Sprngs/Centennial Blvd 1,352,000 3,155,000 34,000 0
3/12/99 Colo Sprngs/Astrozon Court 810,000 1,889,000 108,000 0
3/12/99 Arvada/64th Ave 671,000 1,566,000 68,000 0
3/12/99 Golden/Simms Street 918,000 2,143,000 145,000 0
3/12/99 Lawrence/Haskell Ave 636,000 1,484,000 48,000 0
3/12/99 Overland Park/Hemlock St 1,168,000 2,725,000 62,000 0
3/12/99 Lenexa/Long St. 720,000 1,644,000 28,000 0
3/12/99 Shawnee/Hedge Lane Terrace 570,000 1,331,000 74,000 0
3/12/99 Mission/Foxridge Dr 1,657,000 3,864,000 84,000 0
3/12/99 Milwaukee/W. Dean Road 1,362,000 3,163,000 249,000 0
3/12/99 Columbus/Morse Road 1,415,000 3,302,000 183,000 0
3/12/99 Milford/Branch Hill 527,000 1,229,000 2,181,000 0
3/12/99 Fairfield/Dixie 519,000 1,211,000 50,000 0
3/12/99 Cincinnati/Western Hills 758,000 1,769,000 120,000 0
3/12/99 Austin/N. Mopac Expressway 865,000 2,791,000 51,000 0
3/12/99 Atlanta/Dunwoody Place 1,410,000 3,296,000 193,000 0
3/12/99 Kennedale/Bowman Sprgs 425,000 991,000 43,000 0
3/12/99 Colo Sprngs/N.Powers 1,124,000 2,622,000 110,000 0
3/12/99 St. Louis/S. Third St 206,000 480,000 15,000 0
3/12/99 Orlando/L.B. Mcleod Road 521,000 1,217,000 44,000 0
3/12/99 Jacksonville/Roosevelt Blvd. 851,000 1,986,000 201,000 0
3/12/99 Miami-Kendall/SW 84th Street 935,000 2,180,000 122,000 0
3/12/99 North Miami Beach/69th St 1,594,000 3,720,000 118,000 0
3/12/99 Miami Beach/Dade Blvd 962,000 2,245,000 69,000 0
3/12/99 Chicago/N. Natchez Ave 1,684,000 3,930,000 105,000 0
3/12/99 Chicago/W. Cermak Road 1,294,000 3,019,000 396,000 0
3/12/99 Kansas City/State Ave 645,000 1,505,000 103,000 0
3/12/99 Lenexa/Santa Fe Trail Road 713,000 1,663,000 61,000 0
3/12/99 Waukesha/Foster Court 765,000 1,785,000 42,000 0
3/12/99 Chicago/West 47th St. 705,000 1,645,000 36,000 0
3/12/99 Carol Stream/S. Main Place 1,320,000 3,079,000 146,000 0
3/12/99 Carpentersville/N. Western Ave 911,000 2,120,000 72,000 0
3/12/99 Elgin/E. Chicago St. 570,000 2,163,000 62,000 0
3/12/99 Elgin/Big Timber Road 1,347,000 3,253,000 211,000 0
3/12/99 Chicago/S. Pulaski Road 458,000 2,118,000 245,000 0
3/12/99 Aurora/Business 30 900,000 2,097,000 95,000 0
3/12/99 Streamwood/Old Church Road 855,000 1,991,000 38,000 0
3/12/99 Mt. Prospect/Central Road 802,000 1,847,000 123,000 0
6/1/98 Renton/SW 39th St. 725,000 2,196,000 1,009,000 0
6/29/98 Pompano Bch/Center Port Circle 795,000 2,312,000 1,342,000 0
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
3/12/99 Fort Collins/So.College Ave 745,000 1,809,000 2,554,000 209,000
3/12/99 Colo Sprngs/Parkmoor Village 619,000 1,496,000 2,115,000 174,000
3/12/99 Colo Sprngs/Van Teylingen 1,215,000 2,928,000 4,143,000 334,000
3/12/99 Denver/So. Clinton St. 462,000 1,671,000 2,133,000 179,000
3/12/99 Denver/Washington St. 795,000 2,094,000 2,889,000 230,000
3/12/99 Colo Sprngs/Centennial Blvd 1,351,000 3,190,000 4,541,000 361,000
3/12/99 Colo Sprngs/Astrozon Court 809,000 1,998,000 2,807,000 233,000
3/12/99 Arvada/64th Ave 671,000 1,634,000 2,305,000 191,000
3/12/99 Golden/Simms Street 918,000 2,288,000 3,206,000 267,000
3/12/99 Lawrence/Haskell Ave 636,000 1,532,000 2,168,000 180,000
3/12/99 Overland Park/Hemlock St 1,168,000 2,787,000 3,955,000 320,000
3/12/99 Lenexa/Long St. 720,000 1,672,000 2,392,000 194,000
3/12/99 Shawnee/Hedge Lane Terrace 570,000 1,405,000 1,975,000 167,000
3/12/99 Mission/Foxridge Dr 1,656,000 3,949,000 5,605,000 453,000
3/12/99 Milwaukee/W. Dean Road 1,361,000 3,413,000 4,774,000 420,000
3/12/99 Columbus/Morse Road 1,414,000 3,486,000 4,900,000 416,000
3/12/99 Milford/Branch Hill 526,000 3,411,000 3,937,000 179,000
3/12/99 Fairfield/Dixie 519,000 1,261,000 1,780,000 152,000
3/12/99 Cincinnati/Western Hills 758,000 1,889,000 2,647,000 224,000
3/12/99 Austin/N. Mopac Expressway 865,000 2,842,000 3,707,000 279,000
3/12/99 Atlanta/Dunwoody Place 1,409,000 3,490,000 4,899,000 366,000
3/12/99 Kennedale/Bowman Sprgs 425,000 1,034,000 1,459,000 125,000
3/12/99 Colo Sprngs/N.Powers 1,123,000 2,733,000 3,856,000 325,000
3/12/99 St. Louis/S. Third St 206,000 495,000 701,000 61,000
3/12/99 Orlando/L.B. Mcleod Road 521,000 1,261,000 1,782,000 151,000
3/12/99 Jacksonville/Roosevelt Blvd. 851,000 2,187,000 3,038,000 265,000
3/12/99 Miami-Kendall/SW 84th Street 935,000 2,302,000 3,237,000 270,000
3/12/99 North Miami Beach/69th St 1,593,000 3,839,000 5,432,000 446,000
3/12/99 Miami Beach/Dade Blvd 962,000 2,314,000 3,276,000 270,000
3/12/99 Chicago/N. Natchez Ave 1,683,000 4,036,000 5,719,000 465,000
3/12/99 Chicago/W. Cermak Road 1,293,000 3,416,000 4,709,000 453,000
3/12/99 Kansas City/State Ave 645,000 1,608,000 2,253,000 190,000
3/12/99 Lenexa/Santa Fe Trail Road 712,000 1,725,000 2,437,000 204,000
3/12/99 Waukesha/Foster Court 765,000 1,827,000 2,592,000 215,000
3/12/99 Chicago/West 47th St. 705,000 1,681,000 2,386,000 198,000
3/12/99 Carol Stream/S. Main Place 1,319,000 3,226,000 4,545,000 376,000
3/12/99 Carpentersville/N. Western Ave 910,000 2,193,000 3,103,000 260,000
3/12/99 Elgin/E. Chicago St. 569,000 2,226,000 2,795,000 247,000
3/12/99 Elgin/Big Timber Road 1,346,000 3,465,000 4,811,000 415,000
3/12/99 Chicago/S. Pulaski Road 458,000 2,363,000 2,821,000 233,000
3/12/99 Aurora/Business 30 900,000 2,192,000 3,092,000 257,000
3/12/99 Streamwood/Old Church Road 854,000 2,030,000 2,884,000 237,000
3/12/99 Mt. Prospect/Central Road 802,000 1,970,000 2,772,000 239,000
6/1/98 Renton/SW 39th St. 725,000 3,205,000 3,930,000 737,000
6/29/98 Pompano Bch/Center Port Circle 794,000 3,655,000 4,449,000 788,000
F-60
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
12/9/98 Miami/NW 115th Ave 1,095,000 2,349,000 1,434,000 0
12/30/99 Tamarac Parkway - Denver, CO 1,902,000 4,467,000 1,862,000 0
3/31/99 Forest Park 270,000 3,378,000 981,000 0
4/1/00 Hyattsville(Edmonson) 1,036,000 2,653,000 28,000 0
6/30/00 San Antonio/Broadway St 1,131,000 4,558,000 24,000 0
12/29/00 Chicago, IL 1,946,000 4,580,000 1,442,000 0
12/30/00 Frazier, PA 800,000 2,933,000 404,000 0
9/15/00 Tampa/Gunn Hwy 1,843,000 4,300,000 42,000 0
12/21/00 Houston, TX (7715 Katy Frwy) 2,274,000 5,307,000 102,000 0
12/21/00 Houston, TX (10801 Katy Frwy) 1,664,000 3,883,000 81,000 0
12/21/00 Houston, TX (Main St) 1,681,000 3,923,000 71,000 0
12/21/00 Houston, TX (W. Loop/S. Frwy) 2,036,000 4,750,000 86,000 0
5/2/00 Mill Valley 1,412,000 3,294,000 22,000 0
5/2/00 Culver City 2,439,000 5,689,000 36,000 0
6/9/94 Chattanooga/Brainerd Road 613,000 1,170,000 215,000 0
6/9/94 Chattanooga/Ringgold Road 761,000 1,433,000 381,000 0
10/7/94 Alcoa/Airport Plaza Drive 543,000 1,017,000 165,000 0
1/24/95 Nashville/Elm Hill 338,000 791,000 345,000 0
12/27/94 Knoxville/Chapman Highway 753,000 1,411,000 355,000 0
12/23/96 Nashville/Dickerson Pike 990,000 2,440,000 177,000 0
12/23/96 Madison/Gallatin Road 780,000 1,922,000 177,000 0
7/1/99 Nashville/Lafayette St 486,000 1,135,000 140,000 0
7/1/99 Nashville/Metroplex Dr 380,000 886,000 103,000 0
7/1/99 Madison/Myatt Dr 441,000 1,028,000 77,000 0
7/1/99 Hixson/Highway 153 488,000 1,138,000 144,000 0
7/1/99 Hixson/Gadd Rd 207,000 484,000 190,000 0
7/1/99 Red Bank/Harding Rd 452,000 1,056,000 121,000 0
7/1/99 Nashville/Welshwood Dr 934,000 2,179,000 127,000 0
7/1/99 Madison/Williams Ave 1,318,000 3,076,000 202,000 0
7/1/99 Nashville/Mcnally Dr 884,000 2,062,000 312,000 0
7/1/99 Hermitage/Central Ct 646,000 1,508,000 115,000 0
7/1/99 Antioch/Cane Ridge Rd 353,000 823,000 106,000 0
12/29/00 Gardena 1,737,000 5,456,000 14,000 0
9/86 Lakewood/Wadsworth - 6th 1,070,000 3,155,000 581,000 1,027,000
10/86 Houston/South Loop West 1,299,000 3,491,000 1,046,000 1,366,000
10/86 Houston/Plainfield Road 904,000 2,319,000 686,000 920,000
10/86 Houston/North Freeway II 719,000 1,987,000 31,000 609,000
10/86 Houston/Old Katy Road 1,365,000 3,431,000 952,000 1,274,000
10/86 Houston/Long Piont 451,000 1,187,000 582,000 563,000
10/86 Austin/Research Blvd. 1,390,000 1,710,000 503,000 672,000
12/86 Lynnwood/196th Street SW 1,063,000 1,602,000 5,669,000 571,000
12/86 N. Auburn/Auburn Way N. 606,000 1,144,000 356,000 533,000
12/86 Gresham/Burnside & 202nd 351,000 1,056,000 380,000 482,000
12/86 Denver/Sheridan Blvd 1,033,000 2,792,000 738,000 1,007,000
12/86 Marietta/Cobb Parkway II 536,000 2,764,000 711,000 1,016,000
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
12/9/98 Miami/NW 115th Ave 1,101,000 3,777,000 4,878,000 802,000
12/30/99 Tamarac Parkway - Denver, CO 1,889,000 6,342,000 8,231,000 461,000
3/31/99 Forest Park 270,000 4,359,000 4,629,000 1,193,000
4/1/00 Hyattsville(Edmonson) 1,035,000 2,682,000 3,717,000 215,000
6/30/00 San Antonio/Broadway St 1,130,000 4,583,000 5,713,000 322,000
12/29/00 Chicago, IL 1,937,000 6,031,000 7,968,000 222,000
12/30/00 Frazier, PA 800,000 3,337,000 4,137,000 13,000
9/15/00 Tampa/Gunn Hwy 1,842,000 4,343,000 6,185,000 220,000
12/21/00 Houston, TX (7715 Katy Frwy) 2,275,000 5,408,000 7,683,000 13,000
12/21/00 Houston, TX (10801 Katy Frwy) 1,666,000 3,962,000 5,628,000 10,000
12/21/00 Houston, TX (Main St) 1,683,000 3,992,000 5,675,000 8,000
12/21/00 Houston, TX (W. Loop/S. Frwy) 2,037,000 4,835,000 6,872,000 11,000
5/2/00 Mill Valley 1,410,000 3,318,000 4,728,000 211,000
5/2/00 Culver City 2,437,000 5,727,000 8,164,000 366,000
6/9/94 Chattanooga/Brainerd Road 525,000 1,473,000 1,998,000 501,000
6/9/94 Chattanooga/Ringgold Road 652,000 1,923,000 2,575,000 661,000
10/7/94 Alcoa/Airport Plaza Drive 465,000 1,260,000 1,725,000 448,000
1/24/95 Nashville/Elm Hill 337,000 1,137,000 1,474,000 462,000
12/27/94 Knoxville/Chapman Highway 645,000 1,874,000 2,519,000 642,000
12/23/96 Nashville/Dickerson Pike 989,000 2,618,000 3,607,000 578,000
12/23/96 Madison/Gallatin Road 780,000 2,099,000 2,879,000 479,000
7/1/99 Nashville/Lafayette St 486,000 1,275,000 1,761,000 165,000
7/1/99 Nashville/Metroplex Dr 379,000 990,000 1,369,000 125,000
7/1/99 Madison/Myatt Dr 440,000 1,106,000 1,546,000 139,000
7/1/99 Hixson/Highway 153 487,000 1,283,000 1,770,000 152,000
7/1/99 Hixson/Gadd Rd 207,000 674,000 881,000 99,000
7/1/99 Red Bank/Harding Rd 452,000 1,177,000 1,629,000 149,000
7/1/99 Nashville/Welshwood Dr 933,000 2,307,000 3,240,000 279,000
7/1/99 Madison/Williams Ave 1,317,000 3,279,000 4,596,000 392,000
7/1/99 Nashville/Mcnally Dr 883,000 2,375,000 3,258,000 309,000
7/1/99 Hermitage/Central Ct 646,000 1,623,000 2,269,000 195,000
7/1/99 Antioch/Cane Ridge Rd 352,000 930,000 1,282,000 120,000
12/29/00 Gardena 1,736,000 5,471,000 7,207,000 865,000
9/86 Lakewood/Wadsworth - 6th 1,069,000 4,764,000 5,833,000 2,461,000
10/86 Houston/South Loop West 1,298,000 5,904,000 7,202,000 3,125,000
10/86 Houston/Plainfield Road 903,000 3,926,000 4,829,000 2,034,000
10/86 Houston/North Freeway II 661,000 2,685,000 3,346,000 1,441,000
10/86 Houston/Old Katy Road 1,364,000 5,658,000 7,022,000 3,067,000
10/86 Houston/Long Piont 451,000 2,332,000 2,783,000 1,265,000
10/86 Austin/Research Blvd. 1,389,000 2,886,000 4,275,000 1,472,000
12/86 Lynnwood/196th Street SW 1,303,000 7,602,000 8,905,000 1,434,000
12/86 N. Auburn/Auburn Way N. 605,000 2,034,000 2,639,000 1,072,000
12/86 Gresham/Burnside & 202nd 350,000 1,919,000 2,269,000 969,000
12/86 Denver/Sheridan Blvd 1,033,000 4,537,000 5,570,000 2,295,000
12/86 Marietta/Cobb Parkway II 535,000 4,492,000 5,027,000 2,247,000
F-61
Adjustments
Resulting
from
Initial Cost Costs the
--------------------------- Subsequent Acquisition
Date Encum- Buildings & to of Minority
Acquired Description brances Land Improvements Acquisition Interests
--------------------------------------------------------------------------------------------------------------------
12/86 Hillsboro/T.V. Highway 461,000 574,000 249,000 414,000
11/86 Arleta/Osborne Street 987,000 663,000 259,000 290,000
4/87 City Of Industry/Amar 748,000 2,052,000 426,000 702,000
3/87 Annandale/Ravensworth 679,000 1,621,000 246,000 596,000
5/87 Oklahoma City/W. Hefner 459,000 941,000 232,000 417,000
12/86 San Antonio/West Sunset Road 1,206,000 1,594,000 547,000 649,000
8/86 Hammond/Calumet 97,000 751,000 491,000 366,000
7/86 Portland/Johns Landing Area 663,000 1,637,000 (30,000) 538,000
8/84 Kaplan (Irving) 677,000 1,592,000 3,306,000 639,000
4/17/01 Philadelphia/Aramingo & Wheatshe 968,000 4,555,000 0 0
6/18/01 Silver Springs/Prosperity 1,065,000 5,391,000 0 0
4/18/01 Largo/Walsingham Road 1,000,000 3,554,000 0 0
7/29/01 Miami/SW 85th Av(Dixie Hwy) US 2,755,000 4,964,000 0 0
6/19/01 Tampa/W. Waters Ave & Wilsky 953,000 3,792,000 0 0
12/29/01 Sacremento/Roseville 876,000 5,344,000 0 0
12/29/01 Old Bridge/Rte 9-N.Of Sprng Vl 1,243,000 4,718,000 0 0
8/28/01 Hoover/John Hawkins Pkwy 1,050,000 2,455,000 7,000 0
Other Properties
Glendale/Western Avenue 1,622,000 3,771,000 12,107,000 0
12/13/99 Burlingame 4,043,000 9,434,000 1,274,000 0
12/30/99 West Palm Beach 984,000 2,358,000 47,000 0
12/30/99 St. Petersburg 932,000 2,766,000 70,000 0
04/28/00 San Diego/Sorrento 1,282,000 3,016,000 (84,000) 0
05/04/00 Van Nuys/Oxnard 495,000 1,155,000 3,000 0
01/00/00 Construction in Progress 0 0 151,182,000 0
-------------------------------------------------------------------------
$23,802,000 $1,152,078,000 $2,717,451,000 $524,334,000 $188,373,000
=========================================================================
Gross Carrying Amount
At December 31, 2001
Date ---------------------------------------- Accumulated
Acquired Description Land Building Total Depreciation
---------------------------------------------------------------------------------------------------------
12/86 Hillsboro/T.V. Highway 461,000 1,237,000 1,698,000 695,000
11/86 Arleta/Osborne Street 986,000 1,213,000 2,199,000 625,000
4/87 City Of Industry/Amar 748,000 3,180,000 3,928,000 882,000
3/87 Annandale/Ravensworth 679,000 2,463,000 3,142,000 1,239,000
5/87 Oklahoma City/W. Hefner 459,000 1,590,000 2,049,000 786,000
12/86 San Antonio/West Sunset Road 1,206,000 2,790,000 3,996,000 1,400,000
8/86 Hammond/Calumet 97,000 1,608,000 1,705,000 798,000
7/86 Portland/Johns Landing Area 663,000 2,145,000 2,808,000 1,048,000
8/84 Kaplan (Irving) 677,000 5,537,000 6,214,000 1,542,000
4/17/01 Philadelphia/Aramingo & Wheatshe 968,000 4,555,000 5,523,000 122,000
6/18/01 Silver Springs/Prosperity 1,065,000 5,391,000 6,456,000 162,000
4/18/01 Largo/Walsingham Road 1,000,000 3,554,000 4,554,000 95,000
7/29/01 Miami/SW 85th Av(Dixie Hwy) US 2,755,000 4,964,000 7,719,000 83,000
6/19/01 Tampa/W. Waters Ave & Wilsky 953,000 3,792,000 4,745,000 76,000
12/29/01 Sacremento/Roseville 876,000 5,344,000 6,220,000 36,000
12/29/01 Old Bridge/Rte 9-N.Of Sprng Vl 1,243,000 4,718,000 5,961,000 16,000
8/28/01 Hoover/John Hawkins Pkwy 1,050,000 2,462,000 3,512,000 33,000
Other Properties
Glendale/Western Avenue 1,616,000 15,884,000 17,500,000 11,608,000
12/13/99 Burlingame 4,041,000 10,710,000 14,751,000 1,213,000
12/30/99 West Palm Beach 913,000 2,476,000 3,389,000 197,000
12/30/99 St. Petersburg 935,000 2,833,000 3,768,000 302,000
04/28/00 San Diego/Sorrento 1,023,000 3,191,000 4,214,000 246,000
05/04/00 Van Nuys/Oxnard 495,000 1,158,000 1,653,000 69,000
01/00/00 Construction in Progress 30,001,000 121,181,000 151,182,000 0
-------------------------------------------------------------
$1,195,112,000 $3,387,124,000 $4,582,236,000 $819,932,000
=============================================================
F-62