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, 2000
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
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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 No X
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<PAGE>
INDEX
Page
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PART I. FINANCIAL INFORMATION
Condensed balance sheets at March 31, 2000
and December 31, 1999 2
Condensed statements of income for the three
months ended March 31, 2000 and 1999 3
Condensed statement of partners' deficit for the
three months ended March 31, 2000 4
Condensed statements of cash flows for the
three months ended March 31, 2000 and 1999 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
Item 6 Exhibits and Reports on Form 8-K 9
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------- ---------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $ 301,000 $ 153,000
Rent and other receivables 26,000 73,000
Real estate facilities, at cost:
Building, land improvements and equipment 8,613,000 8,611,000
Land 2,479,000 2,511,000
--------------- ---------------
11,092,000 11,122,000
Less accumulated depreciation (6,708,000) (6,569,000)
--------------- ---------------
4,384,000 4,553,000
Other assets 90,000 94,000
--------------- ---------------
Total assets $ 4,801,000 $ 4,873,000
=============== ===============
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Accounts payable $ 100,000 $ 78,000
Deferred revenue 156,000 156,000
Note payable to commercial bank 8,425,000 9,225,000
Partners' deficit:
Limited partners' deficit, $500 per unit, 20,000 units
authorized, issued and outstanding (2,881,000) (3,405,000)
General partners' deficit (999,000) (1,181,000)
--------------- ---------------
Total partners' deficit (3,880,000) (4,586,000)
--------------- ---------------
Total liabilities and partners' deficit $ 4,801,000 $ 4,873,000
=============== ===============
</TABLE>
See accompanying notes.
2
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------
2000 1999
--------------- ---------------
REVENUES:
<S> <C> <C>
Rental income $ 1,287,000 $ 1,174,000
Gain on sale of land 66,000 -
Other income 2,000 2,000
--------------- ---------------
1,355,000 1,176,000
--------------- ---------------
COSTS AND EXPENSES:
Cost of operations 287,000 306,000
Management fees paid to affiliate 77,000 70,000
Depreciation 139,000 142,000
Administrative 29,000 25,000
Interest expense 117,000 165,000
--------------- ---------------
649,000 708,000
--------------- ---------------
NET INCOME $ 706,000 $ 468,000
=============== ===============
Limited partners' share of net income ($34.95 per unit
in 2000 and $23.15 per unit in 1999) $ 699,000 $ 463,000
General partners' share of net income 7,000 5,000
--------------- ---------------
$ 706,000 $ 468,000
=============== ===============
</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, 1999 $ (3,405,000) $ (1,181,000) $ (4,586,000)
Net income 699,000 7,000 706,000
Equity transfer (175,000) 175,000 -
----------------- ----------------- -----------------
Balance at March 31, 2000 $ (2,881,000) $ (999,000) $ (3,880,000)
================= ================= =================
</TABLE>
See accompanying notes.
4
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------
2000 1999
---------------- ----------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 706,000 $ 468,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 139,000 142,000
Gain on sale of land (66,000) -
Decrease in rent and other receivables 47,000 7,000
Decrease in other assets 4,000 4,000
Increase in accounts payable 22,000 83,000
Increase in deferred revenue - 1,000
---------------- ----------------
Total adjustments 146,000 237,000
---------------- ----------------
Net cash provided by operating activities 852,000 705,000
---------------- ----------------
Cash flows from investing activities:
Proceeds from sale of land 98,000 -
Additions to real estate facilities (2,000) (64,000)
---------------- ----------------
Net cash provided by (used in) investing activities 96,000 (64,000)
---------------- ----------------
Cash flows from financing activities:
Principal payments on note payable to commercial bank (800,000) (775,000)
---------------- ----------------
Net cash used in financing activities (800,000) (775,000)
---------------- ----------------
Net increase (decrease) in cash and cash equivalents 148,000 (134,000)
Cash and cash equivalents at the beginning of the period 153,000 248,000
---------------- ----------------
Cash and cash equivalents at the end of the period $ 301,000 $ 114,000
================ ================
</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, 1999.
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, 2000, the results of its operations for the three
months ended March 31, 2000 and 1999 and its cash flows for the three
months then ended.
3. The results of operations for the three months ended March 31, 2000 are
not necessarily indicative of the results expected for the full year.
4. During October 1998, we borrowed $12,400,000 from a commercial bank.
The loan is unsecured and bears interest at the London Interbank
Offering Rate ("LIBOR") plus 0.55% (6.68% as of March 31, 2000). The
loan requires monthly payments of interest and matures October 2002.
Principal may be paid, in whole or in part, at any time without penalty
or premium. We also entered into interest rate swap agreements to
reduce the impact of changes in interest rates on a portion of its
floating rate debt. The agreement, which covers $5,000,000 of debt
through October 2000, effectively changes the interest rate exposure
from floating rate to a fixed rate of 5.205%. The second agreement,
which covers $2,500,000 of debt through October 2001 and effectively
changes the interest rate exposure from floating rate to a fixed rate
of 5.33%. Market gains and losses on the value of the swap are deferred
and included in income over the life of the contract. We record the
differences paid or received on the interest rate swap in interest
expense as payments are made or received. As of March 31, 2000 the
unrealized gain on the interest swap, if required to be liquidated was
approximately $85,000.
5. We sold during March 2000 excess land adjacent to one of our operating
properties for $98,000. This resulted in a gain of $66,000 being
realized in the first quarter of 2000.
6
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.,
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS
- --------------------------
When used within this document, the words "expects," "believes,"
"anticipates," "should," "estimates," and similar expressions are intended to
identify "forward-looking statements" within the meaning of that term in Section
27A of the Securities Exchange Act of 1933, as amended, and in Section 21F of
the Securities Exchange Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks, uncertainties, and other factors, which may
cause the actual results and performance of the Partnership to be materially
different from those expressed or implied in the forward looking statements.
Such factors include the impact of competition from new and existing real estate
facilities which could impact rents and occupancy levels at the real estate
facilities that the Partnership has an interest in; the Partnership's ability to
effectively compete in the markets that it does business in; the impact of the
regulatory environment as well as national, state, and local laws and
regulations including, without limitation, those governing Partnerships; and the
impact of general economic conditions upon rental rates and occupancy levels at
the real estate facilities that the Partnership has an interest in.
RESULTS OF OPERATIONS
- ---------------------
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH
31, 1999:
Our net income for the three months ended March 31, 2000 was $706,000
compared to $468,000 for the three months ended March 31, 1999, representing an
increase of $238,000 or 51%. These increases are primarily a result of the sale
of excess land which resulted in a gain of $66,000 and increased property
operating results combined with a decrease in interest expense.
Rental income for the three months ended March 31, 2000 was $1,287,000
compared to $1,174,000 for the three months ended March 31, 1999, representing
an increase of $113,000 or 10%. These increases are primarily attributable to
higher rental rates and higher occupancy levels at our mini-warehouse
facilities. The weighted average occupancy levels at the mini-warehouse
facilities were 95% and 93% for the three months ended March 31, 2000 and 1999,
respectively. Annual realized rent for the three months ended March 31, 2000
increased to $10.64 per occupied square foot from $9.94 per occupied square foot
for the three months ended March 31,1999.
Cost of operations (including management fees paid to an affiliate) for
the three months ended March 31, 2000 was $364,000 compared to $376,000 for the
three months ended March 31, 1999, representing a decrease of $12,000 or 3%.
This decrease is mainly attributable to decreases in professional fees.
7
<PAGE>
Interest expense decreased $48,000 to $117,000 for the three months
ended March 31, 2000 from $165,000 for the same period in 1999. This decrease is
mainly attributable to lower outstanding principal balances. See Liquidity and
Capital Resources for a discussion of the refinancing of the Partnership's
indebtedness.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash generated from operations ($852,000 for the three months ended
March 31, 2000) has been sufficient to meet all current obligations of the
Partnership.
During October 1998, we borrowed $12,400,000 from a commercial bank to
payoff other loans. The loan is unsecured and bears interest at the London
Interbank Offering Rate ("LIBOR") plus 0.55% (6.68% as of March 31, 2000). The
loan requires monthly payments of interest and mature October 2002. Principal
may be paid, in whole or in part, at any time without penalty or premium.
We have also entered into interest rate swap agreements to reduce the
impact of changes in interest rates on a portion of its floating rate debt. The
agreement, which covers $5,000,000 of debt through October 2000, effectively
changes the interest rate exposure from floating rate to a fixed rate of 5.205%.
The second agreement, which covers $2,500,000 of debt through October 2001 and
effectively changes the interest rate exposure from floating rate to a fixed
rate of 5.33%. Market gains and losses on the value of the swap are deferred and
included in income over the life of the contract. We record the differences paid
or received on the interest rate swap in interest expense as payments are made
or received. As of March 31, 2000, the unrealized gain on the interest rate
swap, if required to be liquidated was approximately $85,000.
Year 2000 System Issues
- -----------------------
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise in
some systems which use certain dates in 1999 to represent something other than a
date. Although the change in date to the year 2000 has occurred and no Year 2000
Issues have been identified, it is not possible to conclude that all aspects of
the Year 2000 Issue that may affect the entity, including those related to
customers, suppliers, or other third parties, have been fully resolved.
8
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1 through 5 are inapplicable.
ITEM 6 Exhibits and Reports on Form 8-K
(a) The following Exhibits are 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 12, 2000
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> 3-MOS
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000
<EXCHANGE-RATE> 1
<CASH> 301,000
<SECURITIES> 0
<RECEIVABLES> 26,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 327,000
<PP&E> 11,092,000
<DEPRECIATION> (6,708,000)
<TOTAL-ASSETS> 4,801,000
<CURRENT-LIABILITIES> 8,681,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (3,880,000)
<TOTAL-LIABILITY-AND-EQUITY> 4,801,000
<SALES> 0
<TOTAL-REVENUES> 1,355,000
<CGS> 0
<TOTAL-COSTS> 364,000
<OTHER-EXPENSES> 168,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 117,000
<INCOME-PRETAX> 706,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 706,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 706,000
<EPS-BASIC> 34.95
<EPS-DILUTED> 34.95
</TABLE>
