Shurgard Storage Centers — Merger or Acquisition (June 2006)
22 slides from Shurgard Storage Centers's merger presentation, Jun 6, 2006
Slide 1: NAREIT Investor Conference Summary of Public Storage/Shurgard Merger
NAREIT Investor Conference Summary of Public Storage/Shurgard Merger June 6-8, THE MOST RECOGNIZED BRANDS IN SELF-STORAGE SLIDE PRESENTATION, FILED JUNE 6, Filed by Public Storage, Inc. Pursuant to Rule and Rule 425(a) under the United States Securities Act of 1933, as amended Subject Company: Shurg
Slide 2: Disclosures
Disclosures Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this presentation are
Slide 3: Public Storage
°s) Public Storage.
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 $136 million of Shurgard preferred will be redee
Slide 5: Combined Company and Portfolio
Combined Company and Portfolio
Slide 6: 2005 Combined Revenues and NOI
2005 Combined Revenues and NOI ($ in millions) (1) Before minority interest and depreciation (2) PSA and SHU owned properties as of March 31, 2006 (3) Includes reclassification adjustments made to certain SHU historical amounts to conform to PSA presentation as filed in S-4 amendment on May 24, 2006
Slide 7: Competitive Landscape – U.S.
Competitive Landscape – U.S. Net Rentable Number of Square Feet Properties (million sq ft) Public Storage / Shurgard 1,992 Extra Space Storage U-Haul 1,000 U-Store-It Sovran Self Storage (1) Public Storage and Shurgard owned properties as of March 31, 2006. Competitor’s information based on data dis
Slide 8: Competitive Landscape – Europe
Competitive Landscape – Europe Shurgard Europe Belgium, France, Sweden, UK, Netherlands, Denmark, Germany Safestore / Spaces / Une piece en plus UK, France Access Self Storage UK Big Yellow Self Storage UK City Self Storage Denmark, Czech Republic, Italy, Norway, Spain, Sweden Lok'n Store UK Homebox
Slide 9: Combined U.S. Portfolio
NV UT HI KS OK NE MO LA AL CT DE MA NH RI OH WI CA OR WA AZ ID NM CO WY MT TX SD ND IA MI IL IN KY AR ME VT WV VA TN MS GA FL SC OH MD: 44 NJ: 48 MI Combined U.S. Portfolio Operations overlap Public Storage alone Shurgard alone 1,992 Domestic Facilities (as of March 31, 2006) Property Count Public S
Slide 10: Over one million customers
Over one million customers Chicago 7% San Francisco 7% Dallas-Ft. Worth 5% Houston 5% New York 5% Other 33% Miami 4% Wash DC 3% Philadelphia 3% Atlanta 5% Sacramento 2% Seattle-Tacoma 3% Denver 3% Tampa 2% Minneapolis 2% Los Angeles 11% U.S. Portfolio - Self Storage sq ft (as of March 31, 2006) Chic
Slide 11: Public Storage
°s| Public Storage.
Slide 12: European Portfolio
European Portfolio – Self Storage sq ft (as of March 31, 2006) United Kingdom 8% Netherlands 9% Denmark 9% Germany 17% Belgium 3% France 54% United Kingdom 11% Belgium 16% Sweden 18% Netherlands 23% Germany 4% Denmark 4% France 24% Same Store (123) New Store (35) United Kingdom 10% Belgium 13% Swede
Slide 13: Merger Funding
Merger Funding Shurgard Merger Sources and Uses • Public Storage has raised the capital to fund the merger costs, payoff SHU’s short-term debt and redeem SHU’s preferred stock. (1) Per information filed in S-4 amendment May 24, 2006 (2) Unsecured credit facility balance of $621M at 3/31/06 and $67M
Slide 14: Post merger, the combined company will still have one of the most conservative capital structures
Post merger, the combined company will still have one of the most conservative capital structures in the REIT industry Combined Capitalization as of March 31, 2006 ($ in millions, except share price) (1) Pro forma combined company uses PSA’s stock price and pro forma shares outstanding to calculate
Slide 15: Strategic Rationale
Strategic Rationale
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: $22.7 million of G&A costs is expected to be eliminated
$22.7 million of G&A costs is expected to be eliminated SHU G&A costs ($millions) 2005 General & Administrative Expenses ($ in millions) SHU G&A costs can be reduced or eliminated $17 $19 $21 $18 $33 $35 $0 $20 $40 PSA SHU 6% Rev 8% Rev 7% Rev 2% Rev 2% Rev 2% Rev Executive and personnel expenses Au
Slide 18: Each basis point improvement in SHU's domestic Same Store margin contributes $3.2 million
Each 100 basis point improvement in SHU’s domestic Same Store margin contributes $3.2 million in annual cash flow Domestic Same Store Operating Margins • Duplicative Yellow Pages costs can be significantly reduced • Television advertising costs will be allocated over a larger number of properties •
Slide 19: Each basis point improvement in SHU's domestic Same Store occupancy increases revenues by $3.7 million
Each 100 basis point improvement in SHU’s domestic Same Store occupancy, at constant rental rates, increases annual revenues by $3.7 million Domestic Same Store Sq Ft Occupancy • SHU’s occupancy levels can be enhanced with the aid of PSA’s marketing efforts, national reservation center and centraliz
Slide 20: Public Storage
°s) Public Storage.
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
Shurgard Storage Centers — Merger or Acquisition (June 2006) on 6ix