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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 March 31, 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.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-3196921
- - ---------------------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
600 N. Brand Boulevard
Glendale, California 91203
- - ---------------------------------------------- ------------------------
(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
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INDEX
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Page
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PART I. FINANCIAL INFORMATION
Condensed balance sheets at March 31, 1995
and December 31, 1994 2
Condensed statements of operations for the three
months ended March 31, 1995 and 1994 3
Condensed statement of partners' deficit for the
three months ended March 31, 1995 4
Condensed statements of cash flows for the
three months ended March 31, 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
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<CAPTION>
March 31, December 31,
1995 1994
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<S> <C> <C>
ASSETS
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Cash and cash equivalents $ 235,000 $ 162,000
Marketable securities of affiliate
at market value (cost of $347,000) 673,000 574,000
Rent and other receivables 78,000 63,000
Real estate facilities at cost:
Building, land improvements and equipment 7,237,000 7,149,000
Land 2,511,000 2,511,000
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9,748,000 9,660,000
Less accumulated depreciation (4,369,000) (4,288,000)
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5,379,000 5,372,000
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Other assets 239,000 247,000
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Total assets $ 6,604,000 $ 6,418,000
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Accounts payable $ 237,000 $ 30,000
Deferred revenue 126,000 136,000
Notes payable 17,738,000 17,995,000
Partners' deficit:
Limited partners' deficit, $500 per
unit, 10,000 units authorized, 9,890
issued and outstanding (8,779,000) (8,888,000)
General partners' deficit (3,044,000) (3,082,000)
Unrealized gain on marketable
securities 326,000 227,000
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Total partners' deficit (11,497,000) (11,743,000)
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Total liabilities and partners' deficit $ 6,604,000 $ 6,418,000
============ ============
</TABLE>
See accompanying notes.
2
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PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
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<CAPTION>
Three Months Ended
March 31,
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1995 1994
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<S> <C> <C>
REVENUES:
Rental income $934,000 $876,000
Interest income and other income
(including dividends from marketable
securities of affiliate in 1995) 10,000 26,000
-------- --------
944,000 902,000
-------- --------
COSTS AND EXPENSES:
Cost of operations 238,000 207,000
Management fees paid to affiliate 56,000 53,000
Depreciation and amortization 81,000 74,000
Administrative 34,000 15,000
Interest expense 388,000 439,000
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797,000 788,000
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NET INCOME $147,000 $114,000
======== ========
Limited partners'
share of net income
($9.20 per unit in 1995
and $5.65 per unit in 1994) $145,000 $113,000
General partners' share
of net income 2,000 1,000
-------- --------
$147,000 $114,000
======== ========
</TABLE>
See accompanying notes.
3
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PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
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<CAPTION>
Unrealized
Gain on Total
Limited General Marketable Partners'
Partners Partners Securities Equity
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<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 - - 99,000 99,000
Net Income 145,000 2,000 - 147,000
Equity transfer (36,000) 36,000 - -
----------- ----------- -------- ------------
Balance at March 31, 1995 $(8,779,000) $(3,044,000) $326,000 $(11,497,000)
=========== =========== ======== ============
</TABLE>
See accompanying notes.
4
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PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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<CAPTION>
THREE MONTHS ENDED
March 31,
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1995 1994
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Cash flows from operating activities:
Net income $ 147,000 $114,000
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 81,000 74,000
Increase in rent and other receivables (15,000) (47,000)
Decrease in other assets 8,000 7,000
Decrease in accounts payable 207,000 (9,000)
Decrease in deferred revenue (10,000) (12,000)
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Total adjustments 271,000 13,000
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Net cash provided
by operating activities 418,000 127,000
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Cash flows from investing activities:
Additions to real estate facilities (88,000) (28,000)
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Net cash used in
investing activities (88,000) (28,000)
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Cash flows from financing activities:
Principal payments on note payable (257,000) (99,000)
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Net cash used in
financing activities (257,000) (99,000)
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Net decrease in
cash and cash equivalents (73,000) -
Cash and cash equivalents at
the beginning of the period 162,000 136,000
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Cash and cash equivalents at
the end of the period $ 235,000 $136,000
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SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Increase in fair value of marketable securities $(326,000) $ -
========= =========
Unrealized gain on marketable securities 326,000 -
========= =========
</TABLE>
See accompanying notes.
5
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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 March 31, 1995, the results of its operations for the three
months ended March 31, 1995 and its cash flows for the three months then
ended.
3. The results of operations for the three months ended March 31, 1995 are
not necessarily indicative of the results expected for the full year.
4. Marketable securities at March 31, 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). SFAS 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 March 31, 1995, the
Partnership has recorded the marketable securities at fair value and,
based upon the closing quoted price of the securities at March 31, 1995,
recorded a corresponding unrealized gain totaling $326,000 as a credit to
Partnership equity.
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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 first quarter of 1995,
the Partnership commenced environmental assessments on its properties.
The result of those assessments have not been completed. The Partnership
is not presently aware of any environmental matters with respect to any
of its properties which would have a materially adverse effect on the
Company's financial position. Included in administrative expenses on the
statements of operations for three months ended March 31, 1995 is
approximately $24,000 in cost 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
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THREE MONTHS ENDED MARCH 31, 1995 COMPARED TO THREE MONTHS ENDED MARCH
31, 1994:
The Partnership's net income for the three months ended March 31, 1995
was $147,000 compared to $114,000 for the three months ended March 31, 1994,
representing an increase of $33,000. This increase is primarily a result of
increased operating results at the Partnership's real estate facilities and a
decrease in interest expense resulting from a lower note payable balance in
1995 compared to 1994.
Rental income was $934,000 compared to $876,000 for the three months
ended March 31, 1995 and 1994, respectively, representing an increase of
$58,000. This increase is primarily attributable to an increase in occupancy
levels at the Partnership's mini-warehouse facilities. The weighted average
occupancy levels at the mini-warehouse facilities were 90% and 84% for the
three months ended March 31, 1995 and 1994, respectively.
Other income decreased $16,000 in the three months ended March 31, 1995
compared to the same period in 1994 as the result of less dividend income
earned on marketable securities of affiliate. This decrease is due to a
decrease in the number of shares held in 1995 compared to 1994.
Cost of operations (including management fees paid to an affiliate)
increased $34,000 to $294,000 from $260,000 for the three months ended March
31, 1995 and 1994, respectively. This increase is mainly attributable to
increases in payroll and management fees paid to an affiliate. Payroll
increased in 1995 compared to 1994 due to an increase in incentive payroll
attributable to an increase in property performance.
Administrative expenses increased $19,000 for the three months ended
March 31, 1995 compared to the same period in 1994 primarily as the result of
cost incurred on environmental assessments on the Partnership's properties.
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 not been completed. However, the
Partnership is not presently aware of
8
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any 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 ($418,000 for the three months ended March
31, 1995) has been sufficient to meet all current obligations of the
Partnership.
At March 31, 1995 the Partnership held 39,911 shares of common stock
(marketable securities) with a fair value totaling $673,000 (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 March
31, 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.
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PART II. OTHER INFORMATION
ITEMS 1 through 6 are inapplicable.
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: April 28, 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)
10
