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 0-8908
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PUBLIC STORAGE PROPERTIES IV, LTD.
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(Exact name of registrant as specified in its charter)
California 95-3192402
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
701 Western Avenue
Glendale, California 91201
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(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 X No
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<PAGE>
INDEX
Page
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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 6-7
Management's discussion and analysis of
financial condition and results of operations 8-9
PART II. OTHER INFORMATION 10
<PAGE>
PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED BALANCE SHEETS
March 31, December 31,
1996 1995
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(Unaudited)
ASSETS
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Cash and cash equivalents $ 1,531,000 $ 967,000
Marketable securities of affiliate
(cost of $3,791,000 in 1996 and 1995) 6,054,000 5,645,000
Rent and other receivables 95,000 100,000
Real estate facilities at cost:
Buildings and equipment 15,027,000 15,015,000
Land 5,244,000 5,244,000
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20,271,000 20,259,000
Less accumulated depreciation (9,400,000) (9,203,000)
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10,871,000 11,056,000
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Other assets 477,000 599,000
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Total assets $19,028,000 $18,367,000
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Accounts payable $ 131,000 $ 81,000
Deferred revenue 273,000 244,000
Mortgage note payable 26,976,000 27,178,000
Partners' deficit:
Limited partners' deficit, $500 per
unit, 40,000 units authorized,
issued and outstanding (7,874,000) (8,152,000)
General partners' deficit (2,741,000) (2,838,000)
Unrealized gain on marketable
securities 2,263,000 1,854,000
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Total partners' deficit (8,352,000) (9,136,000)
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Total liabilities and partners'deficit $19,028,000 $18,367,000
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See accompanying notes.
2
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PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31,
----------------------
1996 1995
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(Restated)
REVENUES:
Rental income $1,783,000 $1,700,000
Dividends from marketable securities of affiliate 65,000 60,000
Other income 14,000 58,000
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1,862,000 1,818,000
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COSTS AND EXPENSES:
Cost of operations 448,000 448,000
Management fees paid to affiliate 99,000 102,000
Depreciation 197,000 180,000
Administrative 10,000 16,000
Environmental cost -- 25,000
Interest expense 733,000 757,000
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1,487,000 1,528,000
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NET INCOME $ 375,000 $ 290,000
========= =========
Limited partners'
share of net income
($9.28 per unit in 1996
and $7.18 per unit in 1995) $ 371,000 $ 287,000
General partners' share
of net income 4,000 3,000
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$ 375,000 $ 290,000
========= =========
See accompanying notes.
3
<PAGE>
PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
Unrealized
Gain on Total
Limited General Marketable Partners'
Partners Partners Securities Deficit
------------ ------------ ---------- -----------
Balance at December 31, 1995 $(8,152,000) $(2,838,000) $1,854,000 $(9,136,000)
Unrealized gain on marketable
securities - - 409,000 409,000
Net income 371,000 4,000 - 375,000
Equity transfer (93,000) 93,000 - -
------------ ------------ ---------- -----------
Balance at March 31, 1996 $(7,874,000) $(2,741,000) $2,263,000 $(8,352,000)
=========== =========== ========== ===========
See accompanying notes.
4
<PAGE>
PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
-----------------------------
1996 1995
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Cash flows from operating activities:
Net income $375,000 $ 290,000
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 197,000 180,000
Decrease (increase) in rent and other receivables 5,000 (15,000)
Decrease in other assets 23,000 22,000
Amortization of prepaid management fees 99,000 -
Increase (decrease) in accounts payable 50,000 (6,000)
Increase (decrease) in deferred revenue 29,000 (40,000)
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Total adjustments 403,000 141,000
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Net cash provided by operating activities 778,000 431,000
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Cash flows from investing activities:
Additions to real estate facilities (12,000) (17,000)
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Net cash used in investing activities (12,000) (17,000)
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Cash flows from financing activities:
Principal payments on mortgage note payable (202,000) (178,000)
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Net cash used in financing activities (202,000) (178,000)
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Net increase in cash and
cash equivalents 564,000 236,000
Cash and cash equivalents at
the beginning of the period 967,000 551,000
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Cash and cash equivalents at
the end of the period $1,531,000 $ 787,000
========== ==========
Supplemental schedule of non-cash
investing and financing activities:
Increase in fair value of marketable securities $(409,000) $(687,000)
========== ==========
Unrealized gain on marketable securities $ 409,000 $ 687,000
========== ==========
See accompanying notes.
5
<PAGE>
PUBLIC STORAGE PROPERTIES IV, 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 1995 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. Certain prior year amounts have been reclassified to conform with the 1996
presentation.
5. Marketable securities at March 31, 1996 consist of 297,130 shares of common
stock of Public Storage, Inc., a publicly traded real estate investment
trust and a general partner of the Partnership. The Partnership has
designated its portfolio of marketable securities as available for sale.
Accordingly, at March 31, 1996, the Partnership has recorded the marketable
securities at fair value, based upon the closing quoted prices of the
securities at March 31, 1996, and has recorded a corresponding unrealized
gain totaling $409,000 as a credit to Partnership equity.
6
<PAGE>
6. In 1995, the Partnership prepaid eight months of 1996 management fees at a
total cost of $265,000. The Partnership expensed $99,000 of the 1996
prepaid management fees for the three months ended March 31, 1996. The
balance of prepaid management fees, $166,000, is included in other assets
in the Balance Sheet at March 31, 1996.
7
<PAGE>
PUBLIC STORAGE PROPERTIES IV, 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
$375,000 compared to $290,000 for the three months ended March 31, 1995,
representing an increase of $85,000 or 29%. The increase is primarily a result
of increased operating results at the Partnership's mini-warehouse facilities
combined with decreased interest expense.
Rental income was $1,783,000 compared to $1,700,000 for the three months
ended March 31, 1996 and 1995, respectively, representing an increase of $83,000
or 5%. This increase is primarily attributable to an increase in rental rates at
the Partnership's mini-warehouse facilities. The weighted average occupancy
levels at the mini-warehouse facilities were 84% for both the three months ended
March 31, 1996 and 1995. Realized rent per occupied square foot increased from
$.78 for the three months ended March 31, 1995 to $.79 for the three months
ended March 31, 1996.
Other income decreased $44,000 for the three months ended March 31, 1996
compared to the same period in 1995. This decrease is primarily due to the
recognition of the remaining business interruption income of $49,000 in the
first quarter of 1995 on a mini-warehouse facility located in Miami, Florida
which was damaged by Hurricane Andrew in August 1992.
Dividend income from marketable securities of affiliate increased $5,000
for the three months ended March 31, 1996 compared to the same period in 1995
due to an increase in the number of shares owned in 1996 compared to the same
period in 1995.
Cost of operations (including management fees paid to affiliate) was stable
for the three months ended March 31, 1996 compared to the same period in 1995.
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 $99,000 of prepaid
management fees. The amount is shown as management fees paid to affiliate in the
condensed statements of income. As a result of the prepayment, the Partnership
saved approximately $8,000 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.
Interest expense decreased $24,000 for the three months ended March 31,
1996 compared to the same period in 1995 due primarily to a lower outstanding
loan balance in 1996 over 1995.
In 1995, the Partnership incurred cost of $25,000 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.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash flows from operating activities ($778,000 for the three months ended
March 31, 1996) have been sufficient to meet all current obligations of the
Partnership.
At March 31, 1996, the Partnership held 297,130 shares of common stock
(marketable securities) with a fair value totaling $6,054,000 (cost basis of
$3,791,000 at March 31, 1996) in Public Storage, Inc. The Partnership recognized
$65,000 in dividends for the three months ended March 31, 1996.
In the third quarter of 1991, quarterly distributions were discontinued to
enable the Partnership to make principal payments that commenced in 1990 and to
increase cash reserves in subsequent years through 1998, at which time the
remaining principal balance is due.
9
<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 IV, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ Ronald L. Havner, Jr.
--------------------------
Ronald L. Havner, Jr.
Vice President and Chief
Financial Officer
10
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-START> Jan-01-1996
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