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 September 30, 1996
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 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)
701 Western Avenue
Glendale, California 91201
- ---------------------------------------- ---------------------
(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 September 30, 1996
and December 31, 1995 2
Condensed statements of income for the three and nine
months ended September 30, 1996 and 1995 3
Condensed statement of partners' deficit for the
nine months ended September 30, 1996 4
Condensed statements of cash flows for the
nine months ended September 30, 1996 and 1995 5
Notes to condensed financial statements 6
Management's discussion and analysis of
financial condition and results of operations 7-8
PART II. OTHER INFORMATION 9
<PAGE>
<TABLE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED BALANCE SHEETS
<CAPTION>
September 30, December 31,
1996 1995
------------------ -------------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 92,000 $ 89,000
Rent and other receivables 35,000 42,000
Real estate facilities, at cost:
Buildings and equipment 7,653,000 7,493,000
Land 2,511,000 2,511,000
------------------ -------------------
10,164,000 10,004,000
Less accumulated depreciation (4,942,000) (4,644,000)
------------------ -------------------
5,222,000 5,360,000
------------------ -------------------
Other assets 205,000 354,000
------------------ -------------------
Total assets $ 5,554,000 $ 5,845,000
================== ===================
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 49,000 $ 77,000
Deferred revenue 113,000 132,000
Due to affiliate - 130,000
Notes payable 15,494,000 16,351,000
Partners' deficit:
Limited partners' deficit, $500 per
unit, 20,000 units authorized,
issued and outstanding (7,501,000) (8,052,000)
General partners' deficit (2,601,000) (2,793,000)
------------------ -------------------
Total partners' deficit (10,102,000) (10,845,000)
------------------ -------------------
Total liabilities and partners' deficit $ 5,554,000 $ 5,845,000
================== ===================
</TABLE>
See accompanying notes.
2
<PAGE>
<TABLE>
<CAPTION>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------- -------------------------------------
1996 1995 1996 1995
----------------- ------------------ ----------------- -----------------
(Restated) (Restated)
REVENUE:
<S> <C> <C> <C> <C>
Rental income $ 1,012,000 $ 976,000 $ 2,960,000 $ 2,873,000
Dividends and other income
(including dividends from marketable
securities of affiliate in 1995) 2,000 8,000 4,000 26,000
----------------- ------------------ ----------------- -----------------
1,014,000 984,000 2,964,000 2,899,,000
----------------- ------------------ ----------------- -----------------
COSTS AND EXPENSES:
Cost of operations 230,000 213,000 697,000 670,000
Management fees paid to affiliate 55,000 58,000 158,000 172,000
Depreciation 103,000 92,000 298,000 260,000
Administrative 15,000 13,000 36,000 38,000
Environmental cost - - - 22,000
Interest expense 343,000 379,000 1,032,000 1,150,000
----------------- ------------------ ----------------- -----------------
746,000 755,000 2,221,000 2,312,000
----------------- ------------------ ----------------- -----------------
NET INCOME $ 268,000 $ 229,000 $ 743,000 $ 587,000
================= ================== ================= =================
Limited partners' share of net income
($36.75 per unit in 1996 and $29.05
per unit in 1995) $ 735,000 $ 581,000
General partners' share of net income 8,000 6,000
----------------- -----------------
$ 743,000 $ 587,000
================= =================
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
<CAPTION>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
Total
Limited General Partners'
Partners Partners Deficit
--------------------------------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1995 ($8,052,000) ($2,793,000) ($10,845,000)
Net income 735,000 8,000 743,000
Equity transfer (184,000) 184,000 -
------------------- ----------------- -----------------
Balance at September 30, 1996 ($7,501,000) ($2,601,000) ($10,102,000)
=================== ================= =================
</TABLE>
See accompanying notes.
4
<PAGE>
<TABLE>
<CAPTION>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
----------------------------------------------
1996 1995
--------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 743,000 $ 587,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 298,000 260,000
Decrease in rent and other receivables 7,000 23,000
Amortization of prepaid management fees 137,000 -
Decrease in prepaid loan fees 25,000 24,000
Increase (decrease) in other assets (13,000) 1,000
(Decrease) increase in accounts payable (28,000) 138,000
Decrease in deferred revenue (19,000) (21,000)
--------------------- --------------------
Total adjustments 407,000 425,000
--------------------- --------------------
Net cash provided by operating activities 1,150,000 1,1012,000
--------------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate facilities (160,000) (315,000)
--------------------- --------------------
Net cash used in investing activities (160,000) (315,000)
--------------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of note payable to affiliate (130,000) -
Principal payments on mortgage notes payable (857,000) (778,000)
--------------------- --------------------
Net cash used in financing activities (987,000) (778,000)
--------------------- --------------------
Net increase (decrease) in cash and cash equivalents 3,000 (81,000)
Cash and cash equivalents at the beginning of the period 89,000 162,000
--------------------- --------------------
Cash and cash equivalents at the end of the period $ 92,000 $ 81,000
==================== =====================
Supplemental schedule of noncash investing and financing activities:
Increase in fair value of marketable securities $ - $ (169,000)
==================== =====================
Unrealized gain on marketable securities - 169,000
==================== =====================
</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,
1995.
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 September 30, 1996, the results of its operations for the three and nine
months ended September 30, 1996 and 1995 and its cash flows for the nine
months then ended.
3. The results of operations for the three and nine months ended September 30,
1996 are not necessarily indicative of the results expected for the full
year.
4. In 1995, the Partnership prepaid eight months of 1996 management fees at a
cost of $137,000. The amount has been amortized at management fees paid to
affiliate during the nine months ended September 30, 1996.
5. Certain prior year amounts have been reclassified to conform with the 1996
presentation.
6
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 1995:
The Partnership's net income for the nine months ended September 30, 1996
was $743,000 compared to $587,000 for the nine months ended September 30, 1995,
representing an increase of $156,000, or 27%. The Partnership's net income for
the three months ended September 30, 1996 was $268,000 compared to $229,000 for
the three months ended September 30, 1995, representing an increase of $39,000
or 17%. These increases are primarily a result of increased rental income
combined with decreased interest expense due to lower outstanding loan balances
in 1996 compared to 1995, partially offset by a decrease in dividend income.
During 1995, the Partnership held 39,911 shares of common stock in Public
Storage, Inc., an affiliate of the Partnership. In November 1995, the
Partnership sold these shares.
Rental income was $2,960,000 compared to $2,873,000 for the nine months
ended September 30, 1996 and 1995, respectively, representing an increase of
$87,000 or 3%. Rental income was $1,012,000 compared to $976,000 for the three
months ended September 30, 1996 and 1995, respectively, representing an increase
of $36,000 or 4%. These increases are primarily attributable to increases in
occupancy levels and rental rates. The weighted average occupancy levels at the
mini-warehouse facilities were 91% and 90% for the nine months ended September
30, 1996 and 1995, respectively. Realized rent for the nine months ended
September 30, 1996 increased to $.71 per occupied square foot from $.70 per
occupied square foot for the nine months ended September 30, 1995.
Cost of operations (including management fees paid to affiliate) increased
$13,000 or 2% to $855,000 from $842,000 for the nine months ended September 30,
1996 and 1995, respectively. This increase is mainly attributable to increases
in payroll and advertising expenses. Cost of operations (including management
fees paid to affiliate) increased $14,000 or 5% to $285,000 from $271,000 for
the three months ended September 30, 1996 and 1995, respectively. This increase
is mainly attributable to increases in payroll and advertising expenses,
partially offset by a decrease in management fees paid to an affiliate.
In 1995, the Partnership prepaid eight months of 1996 management fees on
its mini-warehouse operations (based on the management fees for the comparable
period during the calendar year immediately preceding the prepayment) discounted
7
<PAGE>
at the rate of 14% per year to compensate for early payment. The Partnership has
expensed the prepaid management fees during the nine months ended September 30,
1996 The amount is included in management fees paid to affiliate in the
condensed statements of income. As a result of the prepayment, the Partnership
saved approximately $20,000 in management fees, based on the management fees
that would have been payable on rental income generated in the nine months ended
September 30, 1996 compared to the amount prepaid.
Interest expense decreased $118,000 to $1,032,000 from $1,150,000 for the
nine months ended September 30, 1996 and 1995, respectively. This decrease is
mainly attributable to lower outstanding principal balances on the Partnership's
notes payable.
In 1995, the Partnership incurred cost of $22,000 to conduct environmental
assessments of its properties to evaluate the environmental condition of and
potential environmental liabilities of such properties. Those assessments did
not indicate any environmental contamination of any of its property sites which
individually or in the aggregate would be material to the Partnership's overall
business, financial condition, or results of operations. No such cost was
incurred in 1996.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash generated from operations ($1,150,000 for the nine months ended
September 30, 1996) has been sufficient to meet all current obligations of the
Partnership, including principal repayments of the Partnership's notes payable.
For the nine months ended September 30, 1995, the Partnership recognized
$26,000 in dividends from 39,911 shares of common stock (marketable securities)
held in Public Storage, Inc., one of the general partners in the Partnership.
The marketable securities were sold in November 1995, and, as a result, no such
dividend income was earned in 1996.
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.
8
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1 through 5 are inapplicable.
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.
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: November 12, 1996
PUBLIC STORAGE PROPERTIES, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ Ronald L. Havner, Jr.
------------------------------------
Ronald L. Havner, Jr.
Senior Vice President and
Chief Financial Officer
(principal financial officer)
9
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000202953
<NAME> PUBLIC STORAGE PROPERTIES , LTD.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 92,000
<SECURITIES> 0
<RECEIVABLES> 240,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 332,000
<PP&E> 10,164,000
<DEPRECIATION> (4,942,000)
<TOTAL-ASSETS> 5,554,000
<CURRENT-LIABILITIES> 162,000
<BONDS> 15,494,000
0
0
<COMMON> 0
<OTHER-SE> (10,102,000)
<TOTAL-LIABILITY-AND-EQUITY> 5,554,000
<SALES> 0
<TOTAL-REVENUES> 2,964,000
<CGS> 0
<TOTAL-COSTS> 855,000
<OTHER-EXPENSES> 334,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,032,000
<INCOME-PRETAX> 743,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 743,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 743,000
<EPS-PRIMARY> 36.75
<EPS-DILUTED> 36.75
</TABLE>
