Public Storage · NYSE:PSA
Public Storage — NAREIT Investor Conference 2006
22 slides from Public Storage's conference presentation, June 2006
Slide 1: NAREIT Investor Conference
THE MOST RECOGNIZED BRANDS IN SELF-STORAGE NAREIT Investor Conference Summary of Public Storage/Shurgard Merger June 6-8, 2006 page 1
Slide 2: Disclosures
Disclosures Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this presentatio
Slide 3: Merger Terms
°s Public Storage. Merger Terms page
Slide 4: Terms of Merger
Terms of Merger • Each share of Shurgard’s common stock will be exchanged for .82 shares of Public Storage’s common stock – No caps or collars on share exchange – Issue approximately 38.7 million common shares, assume $1.9 billion of Shurgard debt and $136 million of Shurgard preferred will be redee
Slide 5: Combined Company and Portfolio
Combined Company and Portfolio page 5
Slide 6: 2005 Combined Revenues and NOI
2005 Combined Revenues and NOI ($ in millions) 2005 Combined Pro Forma Company PSA SHU Combined3 Percent Revenues U.S. $1,061 $357 $1,422 92% Europe - 127 127 8% Total $1,061 $484 $1,549 100% Property NOI1 U.S. $666 $204 $872 95% Europe - 42 42 5% Total $666 $246 $914 100% Operations Footprint2 1,50
Slide 7: Competitive Landscape – U.S.
Competitive Landscape – U.S.1 Net Rentable Number of Square Feet Properties (million sq ft) 1 Public Storage / Shurgard 1,992 123 2 Extra Space Storage 634 48 3 U-Haul 1,000 33 4 U-Store-It 339 21 5 Sovran Self Storage 290 18 (1) Public Storage and Shurgard owned properties as of March 31, 2006. Com
Slide 8: Competitive Landscape – Europe
Competitive Landscape – Europe1 Number of Countries Properties Served 1 Shurgard Europe 158 Belgium, France, Sweden, UK, Netherlands, Denmark, Germany 2 Safestore / Spaces / Une piece en plus 104 UK, France 3 Access Self Storage 44 UK 4 Big Yellow Self Storage 44 UK 5 City Self Storage 29 Denmark, C
Slide 9: Combined U.S. Portfolio
Combined U.S. Portfolio Property Count 1,992 Domestic Facilities1 NH 2 Public (as of March 31, 2006) ME Storage WA 1,508 42 VT MA 19 Shurgard 51 484 MN MN MT ND 25 19 NYNY 25 19 48 9 RI 2 OR 49 11 WI WI MI 24 14 ID 15MI CT 14 16 0 16 24 PAPA SD 15 28 22 6 21 7 NJ: 48 7 WY IA IN OH OH DE 4 30 0 NV NE
Slide 10: U.S. Portfolio - Self Storage sq ft
U.S. Portfolio - Self Storage sq ft1 (as of March 31, 2006) Public Storage Shurgard Seattle-Tacoma Los Angeles Other 10% 11% 29% Charlotte Chicago 7% 7% Other 33% Detroit San Francisco 6% 7% Los Angeles 5% Dallas-Ft. Worth Portland 5% 3% San Francisco Minneapolis 2% Houston Phoenix 5% Sacramento 5%
Slide 11: European Portfolio
European Portfolio1 (as of March 31, 2006) Sweden 22 Denmark 8 United Netherlands Kingdom 32 18 Germany Belgium 11 19 France 48 Total Locations: 158 Total Rentable sq ft: 8,309,000 (1) Shurgard owned properties as of March 31, 2006, per first quarter 2006 10-Q filing. page 11
Slide 12: European Portfolio – Self Storage sq ft
European Portfolio – Self Storage sq ft1 (as of March 31, 2006) Same Store (123) New Store (35) Germany Denmark 4% 4% Belgium France United Kingdom 3% 24% 8% United Kingdom 11% France Netherlands 54% 9% Denmark 9% Belgium 16% Netherlands 23% Sweden 18% All Stores (158) Germany Denmark 17% Germany 5%
Slide 13: Shurgard Merger Sources and Uses
Shurgard Merger Sources and Uses1 • Public Storage has raised the capital to fund the merger costs, payoff SHU’s short-term debt and redeem SHU’s preferred stock. Merger Funding Funding Sources ($ in millions) % Funding Requirements ($ in millions) % Common equity $ 3,177 78% Common equity $ 3,177 7
Slide 14: Combined Capitalization as of March 31, 2006
Combined Capitalization as of March 31, 2006 ($ in millions, except share price) Pro Forma PSA SHU Combined 2 1 Share Price (close at 3/31/06) $ 81.23 $ 66.63 $ 81.23 Common Shares (in millions) 128.2 47.3 166.9 Equity Market Capitalization $ 10,414 $ 3,152 $ 13,557 Debt 142 1,943 1,413 Preferred St
Slide 15: Strategic Rationale
°s Public Storage. Strategic Rationale page 15
Slide 16: Strategic Rationale
Strategic Rationale • Highest quality, best located portfolio complimentary to PSA’s portfolio – Best opportunity to drive “economies of scale” in operations • Opportunity to acquire large competitor in all stock, taxable transaction – Significant increase in depreciable assets – Significant increas
Slide 17: General & Administrative Expenses
General & Administrative Expenses1 ($ in millions) SHU G&A costs can be reduced or eliminated SHU G&A costs ($millions) 2005 $40 $35 Potential synergy cost savings $33 Executive and personnel expenses $ 9.5 Audit and consulting fee (including Sarbanes-Oxley compliance costs) 9.4 $21 Other costs of b
Slide 18: Domestic Same Store Operating Margins
Domestic Same Store Operating Margins1 • Duplicative Yellow Pages costs can be significantly reduced • Television advertising costs will be 75% 65.6% 67.0% allocated over a larger number of 65.3% 61.1% 60.5% 59.6% properties 50% • Duplicative support service costs will be reduced or eliminated – Hum
Slide 19: Domestic Same Store Sq Ft Occupancy
Domestic Same Store Sq Ft Occupancy1 • SHU’s occupancy levels can be enhanced with the aid of PSA’s marketing efforts, 100% national reservation center 91.0% 91.0% 89.2% and centralized pricing 86.0% programs 83.0% 84.0% 80% • Opportunity to enhance revenues by incorporating PSA’s tenant reinsurance
Slide 20: Business Plan
°s Public Storage. Business Plan page 20
Slide 21: Business Plan
Business Plan • Rebrand all domestic properties to Public Storage and use PSA operating platform • Maximize revenue growth – Strive to improve occupancy levels to those experienced by PSA – Centralize pricing at corporate level – Utilize national call center – Expand usage of internet and website to
Slide 22: Long-term Financing Plan
Long-term Financing Plan • Capital structure – Use preferred stock and retained cash as sources of permanent capital to repay debt assumed in the merger and future growth opportunities • Shurgard debt assumed – Refinance where possible with permanent capital • Goal is to quickly recapitalize Public