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, 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
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)
701 Western Ave.
Glendale, California 91201-2349
- --------------------------------- -------------
(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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<PAGE>
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Condensed balance sheets at March 31, 1996
and December 31, 1995 .................................................... 2
Condensed statements of income for the three
months ended March 31, 1996 and 1995 ..................................... 3
Condensed statement of partners' deficit for the
three months ended March 31, 1996 ........................................ 4
Condensed statements of cash flows for the
three months ended March 31, 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>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED BALANCE SHEETS
March 31, December31,
1996 1995
----------- -----------
(unaudited)
ASSETS
------
Cash and cash equivalents $ 321,000 $ 89,000
Rent and other receivables 34,000 42,000
Real estate facilities at cost:
Building, land improvements and equipment 7,496,000 7,493,000
Land 2,511,000 2,511,000
10,007,000 10,004,000
Less accumulated depreciation (4,741,000) (4,644,000)
----------- -----------
5,266,000 5,360,000
----------- -----------
Other assets 303,000 354,000
----------- -----------
Total assets $ 5,924,000 $ 5,845,000
============ ============
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Accounts payable $ 71,000 $ 77,000
Deferred revenue 114,000 132,000
Due to affiliate 130,000 130,000
Notes payable 16,194,000 16,351,000
Partners' deficit:
Limited partners' deficit, $500 per
unit, 20,000 units authorized,
issued and outstanding (7,859,000) (8,052,000)
General partners' deficit (2,726,000) (2,793,000)
Total partners' deficit (10,585,000) (10,845,000)
----------- -----------
Total liabilities and partners' deficit $ 5,924,000 $ 5,845,000
============ ============
See accompanying notes.
2
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31,
---------------------------------
1996 1995
------------ ------------
REVENUES:
Rental income $ 964,000 $ 934,000
Other income - 10,000
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964,000 944,000
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COSTS AND EXPENSES:
Cost of operations 231,000 238,000
Management fees paid to affiliate 52,000 56,000
Depreciation expense 97,000 81,000
Administrative 9,000 12,000
Environmental costs - 22,000
Interest expense 315,000 388,000
------------ ------------
704,000 797,000
------------ ------------
NET INCOME $ 260,000 $ 147,000
============ ============
Limited partners'
share of net income
($12.85 per unit in 1996
and $9.20 per unit in 1995) $ 257,000 $ 145,000
General partners' share
of net income 3,000 2,000
------------ ------------
$ 260,000 $ 147,000
============ ============
See accompanying notes.
3
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
Limited General
Partners Partners Total
------------ ------------ -------------
Balance at December 31, 1995 $ (8,052,000) $(2,793,000) $(10,845,000)
Net Income 257,000 3,000 260,000
Equity transfer (64,000) 64,000 -
------------ ------------ -------------
Balance at March 31, 1996 $(7,859,000) $(2,726,000) $(10,585,000)
============ ============ =============
See accompanying notes.
4
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
---------------------------------
1996 1995
------------ ------------
Cash flows from operating activities:
Net income $ 260,000 $ 147,000
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 97,000 81,000
Decrease (increase) in rent and other receivables 8,000 (15,000)
Amortization of prepaid management fees 52,000 -
Decrease in other assets (1,000) 8,000
(Decrease) increase in accounts payable (6,000) 207,000
Decrease in deferred revenue (18,000) (10,000)
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Total adjustments 132,000 271,000
------------ ------------
Net cash provided by operating activities 392,000 418,000
------------ ------------
Cash flows from investing activities:
Additions to real estate facilities (3,000) (88,000)
------------ ------------
Net cash used in investing activities (3,000) (88,000)
------------ ------------
Cash flows from financing activities:
Principal payments on note payable (157,000) (257,000)
------------ ------------
Net cash used in financing activities (157,000) (257,000)
------------ ------------
Net increase (decrease) in cash
and cash equivalents 232,000 (73,000)
Cash and cash equivalents at
the beginning of the period 89,000 162,000
------------ ------------
Cash and cash equivalents at
the end of the period $ 321,000 $ 235,000
=========== ============
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
=========== ============
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 March 31, 1996, the results of its operations for the three months ended
March 31, 1996 and its cash flows for the three months then ended.
3. The results of operations for the three months ended March 31, 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
total cost of $137,000. The Partnership expensed $52,000 of the 1996
prepaid management fees for the three months ended March 31, 1996. The
balance of prepaid management fees, $85,000, is included in other assets in
the Balance Sheet at March 31, 1996.
5. Certain prior year amounts have been reclassified to conform with the 1996
classifications.
6
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.,
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Three months ended March 31, 1996 compared to three months ended March 31,
1995:
The Partnership's net income for the three months ended March 31, 1996 was
$260,000 compared to $147,000 for the three months ended March 31, 1995,
representing an increase of $113,000. 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 1996
compared to 1995.
Rental income was $964,000 compared to $934,000 for the three months ended
March 31, 1996 and 1995, respectively, representing an increase of $30,000. This
increase is primarily attributable to an increase of approximately 3% in rental
rates at the Partnership's mini-warehouse facilities. The weighted average
occupancy levels at the mini-warehouse facilities were 89% and 90% for the three
months ended March 31, 1996 and 1995, respectively.
Other income decreased $10,000 in the three months ended March 31, 1996
compared to the same period in 1995 as a result of a decrease in dividend income
earned on its marketable securities sold in November 1995.
Cost of operations (including management fees paid to an affiliate)
decreased $11,000 to $283,000 from $294,000 for the three months ended March 31,
1996 and 1995, respectively. This decrease is mainly attributable to a decrease
in management fees paid to an affiliate described below.
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
at the rate of 14% per year to compensate for early payment. During the three
month period ended March 31, 1996, the Partnership expensed $52,000 of prepaid
management fees. 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 $6,000 in management fees, based on the
management fees that would have been payable on rental income generated in the
three months ended March 31, 1996 compared to the amount prepaid.
7
<PAGE>
Interest expense decreased $73,000 to $315,000 from $388,000 for the three
months ended March 31, 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 ($392,000 for the three months ended March
31, 1996) has been sufficient to meet all current obligations of the
Partnership.
For the three months ended March 31, 1995, the Partnership recognized
$9,000 in dividends from 39,911 shares of common stock (marketable securities)
held in Public Storage, Inc. ("PSI"), 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: May 13, 1996
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
9
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> PUBLIC STORAGE PROPERTIES, LTD.
<CURRENCY> US
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<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1996
<PERIOD-END> Mar-31-1996
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<INCOME-PRETAX> 260,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 260,000
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