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, 1998
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 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 June 30, 1998
and December 31, 1997 2
Condensed statements of income for the three
and six months ended June 30, 1998 and 1997 3
Condensed statement of partners' deficit for the
six months ended June 30, 1998 4
Condensed statements of cash flows for the
six months ended June 30, 1998 and 1997 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
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
----------------- ----------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $ 263,000 $ 546,000
Rent and other receivables 30,000 46,000
Real estate facilities, at cost:
Building, land improvements and equipment 8,237,000 8,001,000
Land 2,511,000 2,511,000
----------------- ----------------
10,748,000 10,512,000
Less accumulated depreciation (5,728,000) (5,492,000)
----------------- ----------------
5,020,000 5,020,000
----------------- ----------------
Other assets 133,000 148,000
----------------- ----------------
Total assets $ 5,446,000 $ 5,760,000
================= ================
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Accounts payable $ 88,000 $ 32,000
Deferred revenue 138,000 131,000
Mortgage note payable 1,935,000 14,093,000
Note payable to affiliate 11,000,000 -
Partners' deficit:
Limited partners' deficit, $500 per unit, 20,000 units
authorized, issued and outstanding (5,728,000) (6,308,000)
General partners' deficit (1,987,000) (2,188,000)
----------------- ----------------
Total partners' deficit (7,715,000) (8,496,000)
----------------- ----------------
Total liabilities and partners' deficit $ 5,446,000 $ 5,760,000
================= ================
</TABLE>
See accompanying notes.
2
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------- ----------------------------------
1998 1997 1998 1997
---------------- ---------------- --------------- -----------------
REVENUES:
<S> <C> <C> <C> <C>
Rental income $ 1,160,000 $ 1,051,000 $ 2,267,000 $ 2,101,000
Other income 7,000 3,000 15,000 5,000
---------------- ---------------- --------------- -----------------
1,167,000 1,054,000 2,282,000 2,106,000
---------------- ---------------- --------------- -----------------
COSTS AND EXPENSES:
Cost of operations 258,000 220,000 520,000 476,000
Management fees paid to affiliate 70,000 63,000 136,000 126,000
Depreciation 119,000 107,000 236,000 214,000
Administrative 22,000 15,000 35,000 25,000
Interest expense 277,000 328,000 574,000 638,000
---------------- ---------------- --------------- -----------------
746,000 733,000 1,501,000 1,479,000
---------------- ---------------- --------------- -----------------
NET INCOME $ 421,000 $ 321,000 $ 781,000 $ 627,000
================ ================ =============== =================
Limited partners' share of net income
($38.65 per unit in 1998 and $31.05 per
unit in 1997) $ 773,000 $ 621,000
General partners' share of net income 8,000 6,000
--------------- -----------------
$ 781,000 $ 627,000
=============== =================
</TABLE>
See accompanying notes.
3
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
Total
Limited General Partners'
Partners Partners Deficit
------------------ ------------------ ------------------
<S> <C> <C> <C>
Balance at December 31, 1997 $ (6,308,000) $ (2,188,000) $ (8,496,000)
Net income 773,000 8,000 781,000
Equity transfer (193,000) 193,000 -
------------------ ------------------ ------------------
Balance at June 30, 1998 $ (5,728,000) $ (1,987,000) $ (7,715,000)
================== ================== ==================
</TABLE>
See accompanying notes.
4
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------------------------
1998 1997
--------------------- ---------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 781,000 $ 627,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 236,000 214,000
Decrease (increase) in rent and other receivables 16,000 (30,000)
Amortization of prepaid loan fees 16,000 16,000
(Increase) decrease in other assets (1,000) 11,000
Increase in accounts payable 56,000 7,000
Increase in deferred revenue 7,000 5,000
--------------------- ---------------------
Total adjustments 330,000 223,000
--------------------- ---------------------
Net cash provided by opererating activities 1,111,000 850,000
--------------------- ---------------------
Cash flows from investing activities:
Additions to real estate facilities (236,000) (126,000)
--------------------- ---------------------
Net cash used in investing activities (236,000) (126,000)
--------------------- ---------------------
Cash flows from financing activities:
Principal payments on notes payable (1,158,000) (556,000)
--------------------- ---------------------
Net cash used in financing activities (1,158,000) (556,000)
--------------------- ---------------------
Net (decrease) increase in cash and cash equivalents (283,000) 168,000
Cash and cash equivalents at the beginning of the period 546,000 69,000
--------------------- ---------------------
Cash and cash equivalents at the end of the period $ 263,000 $ 237,000
===================== =====================
</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,
1997.
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, 1998, the results of its operations for the six months ended
June 30, 1998 and its cash flows for the six months then ended.
3. The results of operations for the six months ended June 30, 1998 are not
necessarily indicative of the results expected for the full year.
4. On June 1, 1998, the Partnership paid down its mortgage note with a third
party lender by $11,641,000. The payment was made from cash reserves and an
$11,000,000 loan from Public Storage, Inc. The loan from Public Storage,
Inc. bears interest at the fixed rate of 7.3% and matures June 1999. The
loan calls for monthly payments of interest only. Principal may be paid at
anytime without penalty. Public Storage, Inc. has also provided the
Partnership with options to extend the loan term through June 2003.
6
<PAGE>
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, 1998 COMPARED TO THREE AND SIX MONTHS
ENDED JUNE 30, 1997:
The Partnership's net income for the six months ended June 30, 1998 was
$781,000 compared to $627,000 for the six months ended June 30, 1997,
representing an increase of $154,000 or 25%. The Partnership's net income for
the three months ended June 30, 1998 was $421,000 compared to $321,000 for the
three months ended June 30, 1997, representing an increase of $100,000 or 31%.
These increases are primarily a result of increased operating results at the
Partnership's real estate facilities combined with a decrease in interest
expense resulting from a lower notes payable balance in 1998 compared to 1997.
Rental income for the six months ended June 30, 1998 was $2,267,000
compared to $2,101,000 for the six months ended June 30, 1997 representing an
increase of $166,000 or 8%. Rental income for the three months ended June 30,
1998 was $1,160,000 compared to $1,051,000 for the three months ended June 30,
1997, representing an increase of $109,000 or 10%. These increases are primarily
attributable to higher rental rates at the Partnership's mini-warehouse
facilities. The weighted average occupancy levels at the mini-warehouse
facilities was 94% for the six months ended June 30, 1998 and 1997. Realized
rent for the six months ended June 30, 1998 increased to $.79 per occupied
square foot from $.74 per occupied square foot for the six months ended June 30,
1997.
Cost of operations (including management fees paid to affiliate) for the
six months ended June 30, 1998 was $656,000 compared to $602,000 for the six
months ended June 30, 1997, representing an increase of $54,000 or 9%. This
increase is mainly attributable to increases in management fees and advertising
and promotion expenses. Cost of operations (including management fees paid to
affiliate) for the three months ended June 30, 1998 was $328,000 compared to
$283,000 for the three months ended June 30, 1997, representing an increase of
$45,000 or 16%. This increase is mainly attributable to an increase in repairs
and maintenance, management fees and advertising and promotion expenses.
Interest expense decreased $64,000 to $574,000 in the six months ended June
30, 1998 from $638,000 in the same period in 1997. This decrease is mainly
attributable to lower outstanding principal balances on the Partnership's notes
payable.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash generated from operations ($1,111,000 for the six months ended June
30, 1998) has been sufficient to meet all current obligations of the
Partnership.
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.
On June 1, 1998, the Partnership paid down its mortgage note with a third
party lender by $11,641,000. The payment was made from cash reserves and an
$11,000,000 loan from Public Storage, Inc. The loan from Public Storage, Inc.
bears interest at the fixed rate of 7.3% and matures June 1999. The loan calls
for monthly payments of interest only. Principal may be paid at anytime without
penalty. Public Storage, Inc. has also provided the Partnership with options to
extend the loan term through June 2003.
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: August 12, 1998
PUBLIC STORAGE PROPERTIES, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ John Reyes
-------------------------
John Reyes
Senior Vice President and
Chief Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000202953
<NAME> Public Storage Properties, Ltd.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Jun-30-1998
<EXCHANGE-RATE> 1
<CASH> 263,000
<SECURITIES> 0
<RECEIVABLES> 30,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 426,000
<PP&E> 10,748,000
<DEPRECIATION> (5,728,000)
<TOTAL-ASSETS> 5,446,000
<CURRENT-LIABILITIES> 226,000
<BONDS> 12,935,000
0
0
<COMMON> 0
<OTHER-SE> (7,715,000)
<TOTAL-LIABILITY-AND-EQUITY> 5,446,000
<SALES> 0
<TOTAL-REVENUES> 2,282,000
<CGS> 0
<TOTAL-COSTS> 656,000
<OTHER-EXPENSES> 271,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 574,000
<INCOME-PRETAX> 781,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 781,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 781,000
<EPS-PRIMARY> 38.65
<EPS-DILUTED> 38.65
</TABLE>
