UNITED STATES 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, 2006.
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to .
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Commission File Number: 1-8389
PUBLIC STORAGE, INC.
(Exact name of Registrant as specified in its charter)
California 95-3551121
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
701 Western Avenue, Glendale, California 91201-2349
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(Address of principal executive offices) (Zip Code)
(818) 244-8080
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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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 7.500% Cumulative
Preferred Stock, Series V $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.500% Cumulative
Preferred Stock, Series W $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.450% Cumulative
Preferred Stock, Series X $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.250% Cumulative
Preferred Stock, Series Z $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.125% Cumulative
Preferred Stock, Series A $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.125% Cumulative
Preferred Stock, Series B $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.600% Cumulative
Preferred Stock, Series C $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.180% Cumulative
Preferred Stock, Series D $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.750% Cumulative
Preferred Stock, Series E $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.450% Cumulative
Preferred Stock, Series F $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.000% Cumulative
Preferred Stock, Series G $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.950% Cumulative
Preferred Stock, Series H $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.250% Cumulative
Preferred Stock, Series I $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 7.250% Cumulative
Preferred Stock, Series K $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.750% Cumulative
Preferred Stock, Series L $.01 par value................................... New York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a Share of 6.625% Cumulative New York Stock Exchange
Preferred Stock, Series M $.01 par value...................................
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
1
Securities registered pursuant to Section 12(g) of the Act: None (Title of
class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [X] No [ ]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X]
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.
Yes [X] 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 this
Form 10-K. [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).
Large Accelerated Filer [X] Accelerated Filer [ ] Non-accelerated Filer [ ]
The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the Registrant as of June 30, 2006:
Common Stock, $0.10 Par Value - $6,207,100,000 (computed on the basis of $75.90
per share which was the reported closing sale price of the Company's Common
Stock on the New York Stock Exchange on June 30, 2006.
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series
A, $.01 Par Value - $198,175,000 (computed on the basis of $26.70 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 June 30, 2006.
As of February 26, 2007, the number of outstanding shares of Common
Stock, $.10 par value, was 170,388,218 shares and the number of outstanding
Depositary Shares Each Representing 1/1,000 of a Share of Equity Stock, Series
A, $.01 par value, was 8,744,193 (representing 8,744.193 shares of Equity Stock,
Series A).
2
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement to be filed in connection with the
Annual Meeting of Shareholders to be held in 2007 are incorporated by reference
into Part III of this Annual Report on Form 10-K.
EXPLANATORY NOTE
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This Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended
December 31, 2006, is being filed solely to change the date in the last line of
the Report of Independent Registered Public Accounting Firm included in Item 9A
of the 10-K filed on March 1, 2007 (the "Original Filing"). As required by SEC
rules, we have also included the complete text of Item 9A with no other changes.
Also included as part of this filing is a currently dated consent from Ernst &
Young LLP, our independent registered public accounting firm, dated March 8,
2007 and currently dated certifications as required by Rules 13a-14(a) or
15d-14(a) under the Securities Exchange Act of 1934.
Except as described above, this amendment does not modify or update disclosure
in, or exhibits to, the Original Filing. Furthermore, this amendment does not
change any previously reported financial results, nor does it reflect events
occurring after the date of the Original Filing.
PART II
ITEM 9A. CONTROLS AND PROCEDURES
CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in reports the
Company files and submits under the Exchange Act, is recorded, processed,
summarized and reported within the time periods specified in accordance with SEC
guidelines and that such information is communicated to the Company's
management, including its Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure based on the definition
of "disclosure controls and procedures" in Rules 13a-15(e) of the Exchange Act.
In designing and evaluating the disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives and management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures in
reaching that level of reasonable assurance. Also, the Company has investments
in certain unconsolidated entities. As the Company does not control or manage
these entities, its disclosure controls and procedures with respect to such
entities are substantially more limited than those it maintains with respect to
its consolidated subsidiaries.
As of December 31, 2006, the Company carried out an evaluation, under
the supervision and with the participation of the Company's management,
including the Company's Chief Executive Officer and the Company's Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Act of 1934 as amended). The scope
of our evaluation excluded the operations of Shurgard Self-Storage SCA
("Shurgard Europe"), our subsidiary based in Europe. For the year ended December
31, 2006, our total revenues were $1.4 billion, of which Shurgard Europe
represented $65 million; our total net assets at December 31, 2006 were $8.2
billion, of which Shurgard Europe represented $445 million. Based on that
evaluation, and considering the relative significance of Shurgard Europe to our
operations, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures were effective
as of December 31, 2006.
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MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Exchange
Act Rules 13a-15(f). Under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
we conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in Internal Control-Integrated
Framework issued by the Committee on Sponsoring Organizations of the Treadway
Commission. The scope of our evaluation excluded the operations of Shurgard
Self-Storage SCA ("Shurgard Europe"), our subsidiary based in Europe. For the
year ended December 31, 2006, our total revenues were $1.4 billion, of which
Shurgard Europe represented $65 million; our total net assets at December 31,
2006 were $8.2 billion, of which Shurgard Europe represented $445 million. Based
on our evaluation under the framework in Internal Control-Integrated Framework,
and considering the relative significance of Shurgard Europe, our management
concluded that our internal control over financial reporting was effective as of
December 31, 2006.
Our management's assessment of the effectiveness of our internal
control over financial reporting as of December 31, 2006 has been audited by
Ernst & Young LLP, an independent registered public accounting firm, as stated
in their report which is included herein.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have not been any changes in our internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the quarter to which this report relates that have
materially affected, or are reasonable likely to materially affect, our internal
control over financial reporting.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of Public Storage, Inc.:
We have audited management's assessment, included in the accompanying
Management's Report on Internal Control Over Financial Reporting, that Public
Storage, Inc. maintained effective internal control over financial reporting as
of December 31, 2006, based on criteria established in Internal
Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the COSO criteria). Public Storage,
Inc.'s management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal
control over financial reporting. Our responsibility is to express an opinion on
management's assessment and an opinion on the effectiveness of the company's
internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, evaluating management's assessment, testing and evaluating
the design and operating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
As indicated in the accompanying Management's Report on Internal Controls Over
Financial Reporting, management's assessment of and conclusion on the
effectiveness of internal control over financial reporting did not include the
internal controls of Shurgard Self Storage SCA and subsidiaries, which is
included in the 2006 consolidated financial statements of Public Storage, Inc.
and constituted $2,108 million and $445 million of total and net assets,
respectively, as of December 31, 2006 and $65 million of revenues and a net loss
of $43 million for the year then ended. Our audit of internal control over
financial reporting of Public Storage Inc. and subsidiaries also did not include
an evaluation of the internal control over financial reporting of Shurgard Self
Storage SCA and subsidiaries.
In our opinion, management's assessment that Public Storage, Inc. maintained
effective internal control over financial reporting as of December 31, 2006, is
fairly stated, in all material respects, based on the COSO criteria. Also, in
our opinion, Public Storage, Inc. maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2006,
based on the COSO criteria.
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We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets of
Public Storage, Inc. as of December 31, 2006 and 2005, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 2006 of Public Storage, Inc.
and our report dated February 28, 2007 expressed an unqualified opinion thereon.
Ernst & Young LLP
Los Angeles, CA
February 28, 2007
PART IV
ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(3) The exhibits to this Form 10-K/A are set forth in the Index to
Exhibits beginning on page 7.
(b) Exhibits
See Item 15(a)(3) above.
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INDEX TO EXHIBITS
The following exhibits are filed with this Annual Report on Form 10-K/A:
23 Consent of Independent Registered Public Accounting Firm. Filed herewith.
31.1 Certification of Chief Executive Officer under Rules 13a-14(a)/15d-14(a)
under the Securities and Exchange Act and Section 302 of Sarbanes-Oxley Act
of 2002. Filed herewith.
31.2 Certification of Chief Financial Officer under Rules 13a-14(a)/15d-14(a)
under the Securities and Exchange Act and Section 302 of Sarbanes-Oxley Act
of 2002. Filed herewith.
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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: March 9, 2007 By: /s/ Ronald L. Havner, Jr.
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Ronald L. Havner, Jr., Vice-Chairman of
the Board, Chief Executive Officer and
President
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