<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended June 30, 1995
or
[ ] 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 0-8667
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PUBLIC STORAGE PROPERTIES, LTD.
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(Exact name of registrant as specified in its charter)
California 95-3196921
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
600 N. Brand Boulevard
Glendale, California 91203
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080
--------------
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
----- -----
<PAGE>
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Condensed balance sheets at June 30, 1995
and December 31, 1994 2
Condensed statements of operations for the three and six
months ended June 30, 1995 and 1994 3
Condensed statement of partners' deficit for the
six months ended June 30, 1995 4
Condensed statements of cash flows for the
six months ended June 30, 1995 and 1994 5
Notes to condensed financial statements 6-7
Management's discussion and analysis of
financial condition and results of operations 8-9
PART II. OTHER INFORMATION 10
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PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- ------------
<S> <C> <C>
ASSETS
------
Cash and cash equivalents $ 72,000 $ 162,000
Marketable securities of affiliate
at market value (cost of $347,000) 654,000 574,000
Rent and other receivables 42,000 63,000
Real estate facilities at cost:
Building, land improvements and equipment 7,353,000 7,149,000
Land 2,511,000 2,511,000
----------- -----------
9,864,000 9,660,000
Less accumulated depreciation (4,456,000) (4,288,000)
----------- -----------
5,408,000 5,372,000
----------- -----------
Other assets 231,000 247,000
----------- -----------
Total assets $ 6,407,000 $ 6,418,000
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Accounts payable $ 108,000 $ 30,000
Deferred revenue 125,000 136,000
Notes payable 17,479,000 17,995,000
Partners' deficit:
Limited partners' deficit, $500 per
unit, 20,000 units authorized, issued
and outstanding (8,674,000) (8,888,000)
General partners' deficit (2,938,000) (3,082,000)
Unrealized gain on marketable
securities 307,000 227,000
------------ ------------
Total partners' deficit (11,305,000) (11,743,000)
------------ ------------
Total liabilities and partners' deficit $ 6,407,000 $ 6,418,000
============ ============
</TABLE>
see accompanying notes.
2
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PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------- ------------------------
1995 1994 1995 1994
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUE:
Rental income $963,000 $902,000 $1,897,000 $1,778,000
Dividends and other income
(including dividends from marketable
securities of affiliate) 8,000 27,000 18,000 53,000
-------- -------- ---------- ----------
971,000 929,000 1,915,000 1,831,000
-------- -------- ---------- ----------
COSTS AND EXPENSES:
Costs of operations 219,000 220,000 457,000 427,000
Management fees paid to an affiliate 58,000 54,000 114,000 107,000
Depreciation and amortization 87,000 74,000 168,000 148,000
Administrative 13,000 35,000 47,000 50,000
Interest expense 383,000 435,000 771,000 874,000
-------- -------- ---------- ----------
760,000 818,000 1,557,000 1,606,000
-------- -------- ---------- ----------
NET INCOME $211,000 $111,000 $ 358,000 $ 225,000
======== ======== ========== ==========
Limited partners' share of net income
($17.70 per unit in 1995 and
$11.15 per unit in 1994) $ 354,000 $ 223,000
General partners' share of net income 4,000 2,000
---------- ----------
$ 358,000 $ 225,000
========== ==========
</TABLE>
see accompanying notes.
3
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
Unrealized
Gain on Total
Limited General Marketable Partners
Partners Partners Securities Deficit
------------- ------------- ---------- --------------
<S> <C> <C> <C> <C>
Balance at December 31, 1994 $(8,888,000) $(3,082,000) $227,000 $(11,743,000)
Unrealized gain on marketable
Securities - - 80,000 80,000
Net income 354,000 4,000 - 358,000
Equity transfer (140,000) 140,000 - -
----------- ----------- -------- ------------
Balance at June 30, 1995 $(8,674,000) $(2,938,000) $307,000 $(11,305,000)
=========== =========== ======== ============
</TABLE>
see accompanying notes.
4
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
1995 1994
--------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 358,000 $ 225,000
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 168,000 148,000
Decrease (increase) in rent and other receivables 21,000 (25,000)
Decrease in prepaid loan fees 16,000 16,000
Increase in other assets - (9,000)
Increase (decrease) in accounts payable 78,000 (15,000)
Decrease in deferred revenue (11,000) (8,000)
--------- -----------
Total adjustments 272,000 107,000
--------- -----------
Net cash provided
by operating activities 630,000 332,000
--------- -----------
Cash flows from investing activities:
Additions to real estate facilities (204,000) (34,000)
--------- -----------
Net cash used in
investing activities (204,000) (34,000)
--------- -----------
Cash flows from financing activities:
Proceeds from note payable - 3,000,000
Proceeds from note payable to affiliate - 1,250,000
Principal payment on note payable
to affiliate - (4,350,000)
Principal payments on note payable (516,000) (201,000)
--------- -----------
Net cash used in
financing activities (516,000) (301,000)
--------- -----------
Net decrease in cash
and cash equivalents (90,000) (3,000)
Cash and cash equivalents at
the beginning of the period 162,000 136,000
--------- -----------
Cash and cash equivalents at
the end of the period $ 72,000 $ 133,000
========= ===========
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Increase in fair value of marketable securities $ (80,000) $ -
========= ===========
Unrealized gain on marketable securities 80,000 -
========= ===========
</TABLE>
see accompanying notes.
5
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying unaudited condensed financial statements have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although management believes that
the disclosures contained herein are adequate to make the information
presented not misleading. These unaudited condensed financial statements
should be read in conjunction with the financial statements and related
notes appearing in the Partnership's Form 10-K for the year ended
December 31, 1994.
2. In the opinion of management, the accompanying unaudited condensed
financial statements reflect all adjustments, consisting of only normal
accruals, necessary to present fairly the Partnership's financial
position at June 30, 1995, the results of its operations for the three
and six months ended June 30, 1995 and 1994 and its cash flows for the
six months then ended.
3. The results of operations for the three and six months ended June 30,
1995 are not necessarily indicative of the results expected for the full
year.
4. Marketable securities at June 30, 1995 consist of 39,911 common shares of
Storage Equities, Inc. ("SEI"), a publicly traded real estate investment
trust, whose investment advisor is an affiliate of Public Storage, Inc. (a
general partner of the Partnership). FASB Statement No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," requires
marketable securities to be classified as trading or available for sale.
The Partnership has designated its portfolio of marketable securities as
available for sale. Accordingly, at June 30, 1995, the Partnership has
recorded the marketable securities at fair value and, based upon the
closing quoted price of the securities at June 30, 1995, recorded a
corresponding unrealized gain totaling $307,000 as a credit to Partnership
equity.
6
<PAGE>
5. Substantially all of the Partnership's facilities were acquired prior to
the time that it was customary to conduct environmental investigations in
connection with property acquisitions. During the six month period ended
June 30, 1995, the Partnership completed environmental assessments on its
properties. Those assessments indicated that the Partnership's property
sites do not have any significant environmental issues which would have a
materially adverse effect on the Company's financial position. Included in
administrative expenses on the statements of operations for six months
ended June 30, 1995 is approximately $24,000 incurred in connection with
the environmental assessments.
7
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PUBLIC STORAGE PROPERTIES, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
---------------------
THREE AND SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO THREE AND SIX MONTHS
ENDED JUNE 30, 1994:
The Partnership's net income for the six months ended June 30, 1995 was
$358,000 compared to $225,000 for the six months ended June 30, 1994,
representing an increase of $133,000, or 59%. The Partnership's net income
for the three months ended June 30, 1995 was $211,000 compared to $111,000
for the three months ended June 30, 1994, representing an increase of
$100,000, or 90%. These increases are primarily a result of increased rental
income combined with decreased interest expense due to lower outstanding loan
balances in 1995 compared to 1994.
Rental income was $1,897,000 compared to $1,778,000 for the six months
ended June 30, 1995 and 1994, respectively, representing an increase of
$119,000. Rental income was $963,000 compared to $902,000 for the three
months ended June 30, 1995 and 1994, respectively, representing an increase
of $61,000. These increases are primarily attributable to increased
occupancy levels and increased rental rates. The weighted average occupancy
levels at the mini-warehouse facilities were 90% and 85% for the six months
ended June 30, 1995 and 1994, respectively. Realized rent for the six
months ended June 30, 1995 increased to $.69 per occupied square foot from
$.68 per occupied square foot for the six months ended June 30, 1994.
Cost of operations (including management fees paid to affiliate)
increased $37,000 to $571,000 from $534,000 for the six months ended June 30,
1995 and 1994 respectively. This increase is mainly attributable to
increases in payroll and management fees paid to an affiliate. Cost of
operations (including management fees paid to affiliate) remained stable for
the three months ended June 30, 1995 and 1994, respectively.
Administrative expenses increased $3,000 for the six months ended June
30, 1995 compared to the same period in 1994 primarily as the result of cost
incurred on environmental assessments on the Partnership's properties offset
by legal costs incurred in 1994. Substantially all of the Partnership's
facilities were acquired prior to the time that it was customary to conduct
extensive environmental investigations in connection with the property
acquisitions. During the first quarter of 1995, the Partnership commenced
environmental assessments on its properties. The result of those assessments
have been completed.
8
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However, the Partnership is not presently aware of any significant
environmental matters with respect to any of its properties which would have
a materially adverse effect on the Company's financial position.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Cash generated from operations ($630,000 for the six months ended June
30, 1995) has been sufficient to meet all current obligations of the
Partnership.
At June 30, 1995 the Partnership held 39,911 shares of common stock
(marketable securities) with a fair value totaling $654,000 (cost basis of
$326,000 at March 31, 1995) in Storage Equities, Inc. ("SEI"), a publicly
traded real estate investment trust, whose investment advisor is an affiliate
of Public Storage, Inc. (a general partner of the Partnership). The
Partnership recognized $9,000 in dividends for the three months ended June
30, 1995 and included this in other income on the condensed Statements of
Operations.
In the fourth quarter of 1990, quarterly distributions were discontinued
to enable the Partnership to increase its cash reserves for principal
payments that commenced in 1993. Future distribution rates may be adjusted
to levels supported by operating cash flow after capital improvements and
scheduled debt service.
9
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1 through 4 are inapplicable.
ITEM 5 Other Information
-----------------
On August 7, 1995 PSI and B. Wayne Hughes, general partners of the
Partnership, commenced a cash tender offer for up to 9,000 of the 20,000
outstanding Units in the Partnership at a purchase price of $171 per Unit (the
"August 7, 1995 Offer to Purchase"). The August 7, 1995 Offer to purchase
will expire on September 11, 1995, unless extended.
ITEM 6 Exhibits and Reports on Form 8-K
--------------------------------
(a) The following Exhibit is included herein:
(27) Financial Data Schedule
(b) Form 8 - K
None.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: August 11, 1995
PUBLIC STORAGE PROPERTIES, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ Ronald L. Havner, Jr.
----------------------------
Ronald L. Havner, Jr.
Vice President and Chief
Financial Officer
(principal accounting and
financial officer)
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 72,000
<SECURITIES> 654,000
<RECEIVABLES> 42,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 768,000
<PP&E> 9,864,000
<DEPRECIATION> (4,456,000)
<TOTAL-ASSETS> 6,407,000
<CURRENT-LIABILITIES> 233,000
<BONDS> 17,479,000
<COMMON> 0
0
0
<OTHER-SE> (11,612,000)
<TOTAL-LIABILITY-AND-EQUITY> 6,407,000
<SALES> 0
<TOTAL-REVENUES> 1,915,000
<CGS> 0
<TOTAL-COSTS> 739,000
<OTHER-EXPENSES> 47,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 771,000
<INCOME-PRETAX> 358,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 358,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 358,000
<EPS-PRIMARY> 17.70
<EPS-DILUTED> 0
</TABLE>
