Filed by Public Storage, Inc.
Pursuant to Rule 165 and Rule 425(a) under the
United States Securities Act of 1933, as amended
Subject Company: Shurgard Storage Centers, Inc.
Commission File No. 001-11455
Date: March 8, 2006
FINAL TRANSCRIPT
PSA - PUBLIC STORAGE TO ACQUIRE SHURGARD - CONFERENCE CALL
EVENT DATE/TIME: MAR. 07. 2006 / 11:00AM ET
CORPORATE PARTICIPANTS
RONALD L. HAVNER
Public Storage - President and CEO
JOHN REYES
Public Storage - SVP and CFO
CLEM TENG
Public Storage - VP of Investor Relations
DAVID GRANT
Shurgard - President and CEO
CONFERENCE CALL PARTICIPANTS
STEVE SAKWA
Merrill Lynch - Analyst
DAVID TOTI
Lehman Brothers - Analyst
DAVID HARRIS
Lehman Brothers - Analyst
ROSS NUSSBAUM
Banc of America Securities - Analyst
MICHAEL MUELLER
JP Morgan - Analyst
JOHN SHEEHAN
A.G. Edwards - Analyst
ERIC ROTHMAN
Wachovia Securities - Analyst
PAUL ADORNATO
Harris Nesbitt - Analyst
CHRIS BROWN
Banc of America Securities - Analyst
LOU TAYLOR
Deutsche Bank - Analyst
DAVID COHEN
Morgan Stanley - Analyst
MICHAEL KNOTT
Green Street Advisors - Analyst
P R E S E N T A T I O N
OPERATOR
Good morning everyone. My name is Andrew and I will be your conference operator.
At this time I would like to welcome everyone to today's conference call to
discuss the combination of Public Storage and Shurgard Storage Centers. All
lines have been placed on mute to prevent any background noise. After these
speakers' remarks, there will be a question-and-answer session. At this time I
would like to turn the call over to Mr. Clem Teng of Public Storage. Mr. Teng,
you may resume your conference.
CLEM TENG - PUBLIC STORAGE - VP OF INVESTOR RELATIONS
Good morning. This is Clem Teng, Vice-President of Investor Relations of Public
Storage. Joining me today are Ron Havner, President and CEO of Public Storage,
John Reyes, CFO of Public Storage, and Dave Grant, President and CEO of Shurgard
Storage Centers. Our formal remarks this morning will be followed by a
question-and-answer period. However, to allow for equal participation, we
request that you ask only one question when your turn comes up, then return to
the queue for any follow-up questions.
Before we begin with the formal remarks, I would like to provide the
forward-looking statement warning. This conference call will contain
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 conference
call are forward-looking statements. All forward-looking statements speak only
as of the date of this conference call, and Public Storage and Shurgard
undertake no obligation to update or revise any forward-looking statements that
become untrue because of subsequent events.
These forward-looking statements are subject to a number of risks,
uncertainties, and other factors that may cause actual results, performance,
achievements or transactions to differ materially than those set forth in or
implied by such forward-looking statements. These risks and uncertainties and
other factors relate to, among others, difficulties encountered in integrating
the companies, approval of the transaction by the shareholders of both
companies, satisfaction of closing conditions to the transaction, inability to
realize
or delays in realizing the expected synergies, and anticipated operating costs
and the effect of general and local economic and real estate conditions.
Additional information about risks and uncertainties which could impact the
companies and the forward-looking statements made during this conference call
are included in each company's filings with the Securities and Exchange
Commission. A slide presentation on our merger with Shurgard, along with our
press release, and an audio webcast replay of this conference call can be found
at our web site at WWW.PUBLICSTORAGE.COM.
With that, I will turn the call over to Ron Havner.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Thank you, Clem. Today we announced that the board of directors of Public
Storage and Shurgard approved a definitive merger agreement under which Public
Storage will acquire Shurgard for a total value of approximately $5 billion. The
transaction is targeted to close by the end of the second quarter of 2006.
The key terms of the agreement are as follows: Each share of Shurgard's common
stock will be exchanged for .82 shares of Public Storage common stock. The
exchange will not include any caps or collars on price. A Shurgard independent
director will join the Public Storage board of directors. Upon completion of the
merger, Shurgard's shareholders will own about 23 percent of the combined
company, while Public Storage's shareholders will own the remaining 77 percent.
Based upon yesterday's closing price of Public Storage's common stock, the .82
exchange rate represents an implied value of $65.16 per Shurgard share. This
equates to a 39 percent premium based on Shurgard's closing price on July 29,
2005, the last day prior to Public Storage's original proposal.
The total enterprise value of the combined company will be about $18 billion,
have annual revenues in excess of $1.5 billion, and an exceptional portfolio of
over 2100 facilities in 38 states and seven European countries. It will be the
largest Self-Storage company in the world with significant operating platforms
in both the United States and Europe suitable for continued expansion.
The combined company will maintain a strong and flexible financial profile with
access to capital for continued growth. As a result of being part of a stronger
and larger company, there should be enhanced career opportunities for the best
people of both organizations. Combining these two leading companies should
result in synergies from reduced general and administrative expenses, lower
operating costs, along with enhanced revenue opportunities. These include
eliminating redundancies and the combined companies' back office support
structure such as accounting, the executive infrastructure, and SOX compliance
costs.
Public Storage and Shurgard operate in about 35 of the same markets, including
Chicago, Dallas, Los Angeles, Minneapolis, San Francisco, and Seattle where
duplicative costs can
be eliminated and efficiencies improved, including Yellow Pages, MIS and field
support services. Media programs can also be utilized in the same markets with
no incremental costs. For example, we would spend the same dollars for TV in
Seattle regardless of whether we owned 40 to 80 properties.
The combined domestic portfolio should benefit from national media and
promotional programs, which may drive additional customer traffic to the
facility. We do need to recognize that in 2006 there will be costs of
implementing the merger and in combining the operations of these two companies.
We have not quantified the impact of these costs on our financial results.
Further, most of the synergies from this merger probably won't be reflected in
our 2006 operating results.
With that, let me turn it over now to Dave Grant.
DAVID GRANT - SHURGARD - PRESIDENT AND CEO
Thanks, Ron, and good morning, everybody. As Ron indicated, this merger really
does represent a win-win situation for both Shurgard and Public Storage
shareholders. A few months ago we initiated a process to determine the best
course of action for our company. And after reviewing a number of strategic
alternatives, it is clear that this transaction is the best option to create
long-term value for our shareholders.
There are very few real estate asset classes that are as scaleable as
Self-Storage and none that benefit as much from economies of scale. There will
definitely be synergies and cost savings between these two companies on many
levels. However, I'd also like to point out this combined company not only
benefits from its size, but also from the combined knowledge and talent pool of
its people. Both Shurgard and Public Storage were early pioneers in this
industry. The company's respective founders, Chuck Barbo and Wayne Hughes,
started from scratch, and over the past 35 years have built two great companies.
Our combined employees represent the best and the brightest brains in the
industry with deep experience in every aspect of the business in eight different
countries, so there's a huge opportunity for these two groups of employees to
feed off of each other's experience and ideas.
Ron's right. There will be many great enhanced career opportunities for our
employees, but I do also want to acknowledge one unfortunate fact of life when
it comes to mergers. People do lose their jobs and some of our great people
will, too. You can't have cost savings without consolidation. At this point, we
had not developed a specific integration plan, so we really don't know who will
be affected or how many. That is something that Ron and I and our collective
team will be putting a great deal of focus on in the months ahead. So I just
want to take this moment and thank all of our Shurgard employees, who've done a
fabulous job over these past six difficult months. During this entire period,
our team has stayed totally focused on doing their job and have not only
maintained the company's momentum, but they've actually helped to accelerate it.
So I and our shareholders sincerely thank them for this great effort. When this
merger is consummated, we'll have formed a strong global industry-leading
enterprise that has a platform that should enable it to grow and enhance value
for many years to come. I'm excited about the prospects for the combined company
and I look forward to working with Ron and his team to ensure a smooth seamless
integration. And as mentioned previously, we're also going to have one of our
independent board members serve on the combined board of the company. So without
further ado, I'll pass it back over to Ron.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Thanks, Dave. This combination creates an exciting global enterprise with
critical mass and leverageable strengths that has the opportunity to achieve
superior revenue growth, lower operating costs, lower capital costs, and
improved operating efficiency. In short, one capable of delivering superior
returns to owners, to more career opportunities for employees, and in an
expanded platform combining best practices for our customers. With that, let's
open it up for questions.
QUESTIONS AND ANSWERS
OPERATOR
(OPERATOR INSTRUCTIONS.) Your first question comes from Steve Sakwa.
STEVE SAKWA - MERRILL LYNCH - ANALYST
Good morning. Ron or maybe Dave, could you talk a little bit about, I guess, the
European operations and, Ron, just kind of the integration and who may be
running that and how that may fit into the broader strategy of the company?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Well, Steve, a couple of things on Europe. First, Shurgard has the largest
operating platform in Europe. They're the largest owner and operator over there.
They have developed over the past eight or ten years a fantastic portfolio of
assets in seven different countries. Dave and I will be formulating plans
bringing me up to speed in terms of what some of the additional opportunities
are over in Europe, and we look for that to be a key growth strategy going
forward.
STEVE SAKWA - MERRILL LYNCH - ANALYST
Okay. So it's currently part of your plans to keep that in the combined entity?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
At this time, yes.
STEVE SAKWA - MERRILL LYNCH - ANALYST
Okay. And then could you maybe just talk about - I guess you haven't really
talked about or haven't formulated, I guess, anything on the costs savings side,
but could you talk maybe about what the cost of this deal are, maybe banking
fees, lawyer fees that may impact the yield on the transaction?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Steve, in a couple of weeks here as soon as possible we'll be filing a document
that outlines all the various transaction costs and various banking fees
associated with the transaction, but as best I know, they're customary for a
transaction of this type.
STEVE SAKWA - MERRILL LYNCH - ANALYST
Okay. Thank you.
OPERATOR
Our next question comes from David Toti with Lehman Brothers.
DAVID TOTI - LEHMAN BROTHERS - ANALYST
Good morning. Just a quick question. Are there any plans to prune any portion of
the combined portfolio?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
You know, this transaction is really about growth. There's a lot of synergies
associated with combining the portfolio. Both companies, I think, have the best
portfolios in the self-storage industry, so at this time there are no immediate
plans to sell or dispose of any property.
DAVID TOTI - LEHMAN BROTHERS - ANALYST
Great. Thank you.
OPERATOR
Our next question comes from David Harris with Lehman Brothers.
DAVID HARRIS - LEHMAN BROTHERS - ANALYST
It's a full-core press from Lehman, huh? Couple points of detail on the details,
and maybe I missed this. Is there a break-up fee? Could you just talk about
dividend payments?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Well, that's two questions, so which one would you like?
DAVID HARRIS - LEHMAN BROTHERS - ANALYST
Well, dividend questions. I'll begin with that.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
For Public Storage or Shurgard?
DAVID HARRIS - LEHMAN BROTHERS - ANALYST
For Shurgard and for PS. And for PSA.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Dave?
DAVID GRANT - SHURGARD - PRESIDENT AND CEO
Sure. Under the merger agreement, Shurgard shareholders will get their regular
Shurgard divided at the $0.56 a share rate for the quarter that we've just
declared. And then for the next quarter, also at the same $0.56 a share rate.
For subsequent quarters the dividend will be at the Public Storage dividend
rate, obviously pro rata for the percentage of share that any shareholder gets
for Public Storage stock.
DAVID HARRIS - LEHMAN BROTHERS - ANALYST
Okay. Do you - would you give me an answer to my breakup fee?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
That will be part of the documents that get filed here in a couple of weeks and
you can review it.
DAVID HARRIS - LEHMAN BROTHERS - ANALYST
Okay. Thank you.
OPERATOR
Your next question comes from Ross Nussbaum with Banc of America Securities.
ROSS NUSSBAUM - BANC OF AMERICA SECURITIES - ANALYST
Good morning. My question relates to integration with respect to branding
change. Can you walk us through what the time line is going to be for the
branding change? Are you going to, in fact, turn everything over to the PSA
brand name? And will that include Europe, because I guess Shurgard spent an
awful lot of time building brand awareness of their brand name in Europe. How do
you plan to tackle that?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Two things there, Ross. First, in the US, the portfolio will be branded under
the Public Storage name. Obviously you've got 1500 properties versus 450, 460,
so they will be branded under the Public Storage name. And that will take place
over - my guess is a 12 to 18-month period, more immediate things in terms of
sign changes, coloring. We're not going to repaint the properties or anything
like that.
In Europe, it's a different story we will be undertaking, and I'm sure Dave will
be helpful in this regard. In terms of brand awareness, imaging in Europe, no
one from a self-storage standpoint knows Public Storage in Europe, and so we
will try to figure out what is the brand awareness of self storage - Shurgard in
Europe. And if that makes sense, we will continue with that brand name in
Europe.
OPERATOR
Our next question comes from Michael Mueller with JP Morgan.
MICHAEL MUELLER - JP MORGAN - ANALYST
Hi. Ron, you talked a lot about cost reduction that can occur over the next
several quarters. But would you say the more the attractiveness of this deal is
the synergies you can get on the costs side or just looking at the occupancy
differential between your portfolio and Shurgard's domestically and where the
occupancy levels are on the European leased properties?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Well, Mike, there's what I would characterize as two areas of synergies and
opportunity here in the transaction. One is what I would call the operating
synergies, and that falls into three areas, the G&A costs, and you can compare
the two G&A levels of the two companies, operating margins at the property
level, and then the occupancies. And so there's opportunities in all three.
Secondarily, we have two great platforms, both here and in the United States and
in Europe that are very suitable for continued expansion. And we have the
financial wherewithal to continue expanding those platforms. So it's just not
about cost or just about revenue. It's a whole myriad of things, both in terms
of driving the revenue potential, the operating efficiencies of the property,
and ongoing growth on a go-forward basis.
MICHAEL MUELLER - JP MORGAN - ANALYST
Can I ask a related question here just tied to that?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Why don't you get back in queue and we'll keep answering questions?
MICHAEL MUELLER - JP MORGAN - ANALYST
Sure.
OPERATOR
Our next question comes from Eric Rothman with Wachovia.
ERIC ROTHMAN - WACHOVIA SECURITIES - ANALYST
Now, do your current call center and computer systems are they scaleable enough
to allow you to absorb the Shurgard portfolio without upsizing them or will you
have to add to that capacity?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Yes, our systems are really scaleable to multiples of our current operating
platform here and even multiples post merger with Shurgard.
ERIC ROTHMAN - WACHOVIA SECURITIES - ANALYST
Thank you.
OPERATOR
Our next question comes from Chris Brown with Bank of America Securities.
CHRIS BROWN - BANC OF AMERICA SECURITIES - ANALYST
Real quick on the bond side. Do you - what are your intentions with respect to
the Shurgard Public bonds outstanding? And do you have any longer-term plans of
participating in the unsecured market?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Well, the bonds that are currently outstanding with respect to Shurgard will be
an assumed obligation by Public Storage post-merger.
CHRIS BROWN - BANC OF AMERICA SECURITIES - ANALYST
And I guess I mean just do you have any other plans in the future to use that
unsecured market?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Well, typically what we've done here at Public Storage is really inject leverage
into our capital structure through the use of perpetual preferred stock, and my
guess is that is where our bias will rely on a go-forward basis.
CHRIS BROWN - BANC OF AMERICA SECURITIES - ANALYST
Thank you much.
OPERATOR
Our next question is a follow-up question from Ross Nussbaum, Banc of America
Securities.
ROSS NUSSBAUM - BANC OF AMERICA SECURITIES - ANALYST
That was quick. Can you talk about what your game plan is for the first and
second Shurgard Europe JVs? Are you going to try to buy those out or leave them
in place? And do you plan on cost - I guess on finishing up the developments in
progress there within the joint ventures, and then everything that happens from
that point forward is on your own books?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
You know, Ross, obviously there's a joint venture structure over there in Europe
and we will satisfy the obligations associated with that transaction. The second
Shurgard joint venture, I think, has a number of properties yet to be developed,
and those will be developed according to the terms of the JV. Post that, we
haven't made any decisions yet.
OPERATOR
Our next question comes from Michael Mueller with JPMorgan.
MICHAEL MUELLER - JP MORGAN - ANALYST
What are targeted and stabilized yields on the developments that you're having
in Europe?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Dave, would you like to answer that?
DAVID GRANT - SHURGARD - PRESIDENT AND CEO
Sure. We typically are shooting between 11 and 13 percent as a stabilized yield
for European properties, depending on the market. Cash on cash.
MICHAEL MUELLER - JP MORGAN - ANALYST
Okay. Okay. Thank you.
OPERATOR
Our next question comes from John Sheehan. John, your line is open.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
John? Okay. Operator, go to the next question.
OPERATOR
Our next question comes from Steve Sakwa with Merrill Lynch.
STEVE SAKWA - MERRILL LYNCH - ANALYST
Just on the G&A front, are - I realize that you're still working on, I guess,
the integration plan, but I guess the G&A level, how do you feel about the
staffing level at PSA to handle 400-some properties coming in? And are there, I
guess, costs whether it's accounts or others that you would need to incur to
take on this portfolio?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Steve, there will be both savings as well as opportunities for the good people
of both organizations. A lot of the people associated with the property level at
Shurgard and Public Storage, while there will be changes in name and a variety
of other things, really aren't impacted in a sense of job changes. I mean, the
properties need to operate. We need district managers. We need regional
managers. And so my guess is over a period of time it will actually be expanded
for our opportunities from the larger portfolio.
At the corporate level there are certainly some synergies and then there's some
additional opportunity for people in combining their portfolios, because we will
need additional people to do various functions.
OPERATOR
Your next question comes from Eric Rothman with Wachovia.
ERIC ROTHMAN - WACHOVIA SECURITIES - ANALYST
The $136 million of Shurgard preferred is that immediately redeemable or do you
have to hold that for a bit?
JOHN REYES - PUBLIC STORAGE - CFO
It is redeemable now, and as part of the merger agreement right now, that
preferred stock will be called on a contingent basis contingent upon the merger
happening, and it would be redeemed day one of the merger in its entirety.
ERIC ROTHMAN - WACHOVIA SECURITIES - ANALYST
Any D42 charges associated with that?
JOHN REYES - PUBLIC STORAGE - CFO
I'm sure there will be. That amount we haven't yet computed yet, Eric.
ERIC ROTHMAN - WACHOVIA SECURITIES - ANALYST
Thank you very much.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Next question, Operator?
OPERATOR
Your next question comes from Paul Adornato.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Paul?
PAUL ADORNATO - - ANALYST
If you'd expand upon - hello?
OPERATOR
Paul, your line is open.
PAUL ADORNATO - - ANALYST
Yes. Can you hear me?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Yeah.
PAUL ADORNATO - - ANALYST
Okay. Ron, you talked a little bit about best practices and the combined entity.
Was wondering if you could expand upon some of the Shurgard best practices that
you think might be applicable to the combined Public Storage/Shurgard.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
You know, Paul, there's a whole bunch of combined practices between both sets of
organizations. And part of the integration process that Dave and I will be
undertaking is not only combining the back offices in the field organizations,
but also trying to identify best practices between the two organizations and
taking the best of both company's cultures.
PAUL ADORNATO - - ANALYST
Okay. Thank you.
OPERATOR
Your next question comes from Lou Taylor.
LOU TAYLOR - - ANALYST
Thanks. Good morning. Ron, you talked a little bit about your savings on the -
or your margin improvement in savings and occupancy costs. What's your
expectation for how long it'll take to realize the goals that you see out there
for both those two items?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Well, Lou, different costs and revenue opportunities have different - I call
them life cycles. If you take something like Yellow Pages, if we started today
in combining Yellow Pages - Yellow Page in different markets comes up each
month, and so you - if we combine the Yellow Pages today for the month of March,
it would be six months before they got combined, because you have to place the
ad six months in advance. In that instance, there's a one-year cycle on that. So
just for Yellow Pages alone, you're talking about a 12 to 18-month cycle to
combine Yellow Pages for both companies. Other things are more immediate. Once
the portfolios are combined and operating under the same name here in the US
certainly the media programs, promotional programs can be applied to both
portfolios promptly.
LOU TAYLOR - - ANALYST
Okay. Thank you.
OPERATOR
Your next question comes from Greg Whyte with Morgan Stanley.
DAVID COHEN - MORGAN STANLEY - ANALYST
Hi, this is David Cohen for Greg. Just a question. Can you just talk about the
taxability of the transaction, and also if any - if there's any tax
indemnification for OP unit holders for Shurgard?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
The transaction is taxable. And in terms of OP unit holders, I don't think there
are any.
DAVID GRANT - SHURGARD - PRESIDENT AND CEO
No, that's my understanding as well.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Next question?
OPERATOR
Your next question comes from David Harris with Lehman Brothers.
DAVID HARRIS - LEHMAN BROTHERS - ANALYST
If you could just talk a little bit more about valuation. You said that on
consensus that the - Shurgard's been taken out at 26-plus times FFO. And our
numbers that represents that are 5 percent cap rate. And this is against in a
context where there's clearly a lot of portfolio activity amongst our
Self-Storage facilities. I just wonder how you feel - why you feel if it's right
to pay this sort of price when a lot of transactions don't appear - at the
property level don't appear to be quite so aggressively priced as this.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Well, one way to look at the transaction is really the combining of two
companies and the value given and the value received. And obviously, both
organizations know the Self Storage industry extremely well, and both companies
have concluded that at the exchange ratio .82 it's an appropriate consideration
for the consideration being given by Public Storage, vis-a-vis the company
Shurgard being acquired. Next question?
OPERATOR
Your next question comes from Michael Knott.
MICHAEL KNOTT - GREEN STREET ADVISORS - ANALYST
Hey, guys. Green Street Advisors. This question is for Dave. Just curious if the
previous employment offer from the summer still stands. And Dave, assuming it
is, can you give us your thoughts on the likelihood that you're going to stay
around past the transaction closing?
DAVID GRANT - SHURGARD - PRESIDENT AND CEO
Well, as we said in the press release, I will definitely stay through the
closing to assist Ron. And as Ron and I go through this overall integration
study and plan, he and I will be exploring different options of roles I could
play post-merger to assist him, and we'll just see how that unfolds.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Next question?
OPERATOR
Your next question comes from Ross Nussbaum with Banc of America Securities.
ROSS NUSSBAUM - BANC OF AMERICA SECURITIES - ANALYST
Ron, do you care to comment whether or not this transaction is accretive to
PSA's FFO in 2007?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
No.
ROSS NUSSBAUM - BANC OF AMERICA SECURITIES - ANALYST
No, you won't comment?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Well, Ross, you know that we don't provide earnings guidance, and I think you're
capable of taking the First Call estimates and applying the exchange ratio and
kind of formulating your own conclusion in terms of accretion in 2007.
ROSS NUSSBAUM - BANC OF AMERICA SECURITIES - ANALYST
Thank you.
OPERATOR
Your next question comes from Eric Rothman with Wachovia.
ERIC ROTHMAN - WACHOVIA SECURITIES - ANALYST
Would you mobile [ph] prefer - could you remind us what the coupon is?
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Yeah, a piece of it is at 875 and a piece of it at 87. I think there's about 80
million at about 87 and the remainder is at 875.
ERIC ROTHMAN - WACHOVIA SECURITIES - ANALYST
Can you remind us what you spent - what both companies spent on Yellow Pages ads
in 2005?
RONALD L. HAVNER - PUBLIC STORAGE - CEO 2005?
Yeah, that's - it's in excess of $10 million.
ERIC ROTHMAN - WACHOVIA SECURITIES - ANALYST
Excess of $10 million.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Yes.
ERIC ROTHMAN - WACHOVIA SECURITIES - ANALYST
Thank you very much.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Okay. This will be our last question. Operator?
OPERATOR
Your next question comes from Michael Mueller with JPMorgan.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Mike?
CLEM TENG - PUBLIC STORAGE - VP INVESTOR RELATIONS
Okay. Operator, I think that's all the questions we'll take today. I want to
thank everybody for attending our conference this morning. If you have any
questions, give us a call here. If not, we'll talk to you when we report our
quarterly earnings.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Thank you.
DAVID GRANT - SHURGARD - PRESIDENT AND CEO
Thank you.
RONALD L. HAVNER - PUBLIC STORAGE - CEO
Goodbye.
OPERATOR
This concludes today's conference call. You may now disconnect.