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Previous: DYNAMIC HOMES INC, 10-Q, 1997-05-14 |
Next: REAL ESTATE ASSOCIATES LTD/CA, NT 10-Q, 1997-05-14 |
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, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
--------------- ---------------
Commission File Number 0-8908
PUBLIC STORAGE PROPERTIES IV, LTD.
----------------------------------
(Exact name of registrant as specified in its charter)
California 95-3192402
- ----------------------------------------- -----------------------
(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 March 31, 1997
and December 31, 1996 2
Condensed statements of income for the three
months ended March 31, 1997 and 1996 3
Condensed statement of partners' deficit for the
three months ended March 31, 1997 4
Condensed statements of cash flows for the
three months ended March 31, 1997 and 1996 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 IV, LTD.
CONDENSED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1997 1996
--------------- ---------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $ 3,015,000 $ 2,440,000
Marketable securities of affiliate (cost of $3,791,000) 8,617,000 9,211,000
Rent and other receivables 110,000 150,000
Real estate facilities at cost:
Buildings and equipment 15,569,000 15,441,000
Land 5,244,000 5,244,000
--------------- ---------------
20,813,000 20,685,000
Less accumulated depreciation (10,232,000) (10,017,000)
--------------- ---------------
10,581,000 10,668,000
--------------- ---------------
Other assets 225,000 273,000
--------------- ---------------
Total assets $22,548,000 $22,742,000
=============== ===============
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Accounts payable $ 158,000 $ 52,000
Deferred revenue 266,000 224,000
Mortgage note payable 26,114,000 26,338,000
Partners' deficit:
Limited partners' deficit, $500 per unit, 40,000 units
authorized, issued and outstanding (6,539,000) (6,892,000)
General partners' deficit (2,277,000) (2,400,000)
Unrealized gain on marketable securities 4,826,000 5,420,000
--------------- ---------------
Total partners' deficit (3,990,000) (3,872,000)
--------------- ---------------
Total liabilities and partners' deficit $22,548,000 $22,742,000
=============== ===============
</TABLE>
See accompanying notes.
2
<PAGE>
<TABLE>
PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
---------------------------------------
1997 1996
------------------ -----------------
REVENUES:
<S> <C> <C>
Rental income $ 1,917,000 $ 1,783,000
Dividends from marketable securities of affiliate 65,000 65,000
Other income 35,000 14,000
------------------ -----------------
2,017,000 1,862,000
------------------ -----------------
COSTS AND EXPENSES:
Cost of operations 490,000 448,000
Management fees paid to affiliate 115,000 99,000
Depreciation 215,000 197,000
Administrative 11,000 10,000
Interest expense 710,000 733,000
------------------ -----------------
1,541,000 1,487,000
------------------ -----------------
NET INCOME $ 476,000 $ 375,000
================== =================
Limited partners' share of net income ($11.78 per unit
in 1997 and $9.28 per unit in 1996) $ 471,000 $ 371,000
General partners' share of net income 5,000 4,000
------------------ -----------------
$ 476,000 $ 375,000
================== =================
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
<CAPTION>
Unrealized
Gain on Total
Limited General Marketable Partners'
Partners Partners Securities Deficit
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Balance at December 31, 1996 $(6,892,000) $(2,400,000) $5,420,000 $(3,872,000)
Unrealized loss on marketable securities - - (594,000) (594,000)
Net income 471,000 5,000 - 476,000
Equity transfer (118,000) 118,000 - -
------------ ------------- ------------ ------------
Balance at March 31, 1997 $(6,539,000) $(2,277,000) $4,826,000 $(3,990,000)
============ ============= ============ ============
</TABLE>
See accompanying notes.
4
<PAGE>
<TABLE>
PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
---------------------------------------
1997 1996
----------------- ------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 476,0000 $ 375,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 215,000 197,000
Decrease in rent and other receivables 40,000 5,000
Amortization of prepaid loan fees 23,000 23,000
Decrease in other assets 25,000 -
Amortization of prepaid management fees - 99,000
Increase in accounts payable 106,000 50,000
Increase in deferred revenue 42,000 29,000
----------------- ------------------
Total adjustments 451,000 403,000
----------------- ------------------
Net cash provided by operating activities 927,000 778,000
----------------- ------------------
Cash flows from investing activities:
Additions to real estate facilities (128,000) (12,000)
----------------- ------------------
Net cash used in investing activities (128,000) (12,000)
----------------- ------------------
Cash flows from financing activities:
Principal payments on mortgage note payable (224,000) (202,000)
----------------- ------------------
Net cash used in financing activities (224,000) (202,000)
----------------- ------------------
Net increase in cash and cash equivalents 575,000 564,000
Cash and cash equivalents at beginning of period 2,440,000 967,000
----------------- ------------------
Cash and cash equivalents at end of period $ 3,015,000 $ 1,531,000
================= ==================
Supplemental schedule of non-cash investing
and financing activities:
Decrease (increase) in fair market value of marketable securities $ 594,000 $ (409,000)
================= ==================
Unrealized (loss) gain on marketable securities $ (594,000) $ 409,000
================= ==================
</TABLE>
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,
1996.
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, 1997, the results of its operations for the three months ended
March 31, 1997 and 1996 and its cash flows for the three months then ended.
3. The results of operations for the three months ended March 31, 1997 are not
necessarily indicative of the results expected for the full year.
4. Marketable securities at March 31, 1997 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, 1997, the Partnership has recorded the marketable
securities at fair value, based upon the closing quoted prices of the
securities at March 31, 1997. Changes in market value of marketable
securities are reflected as unrealized gains or losses directly in
Partners' Equity and accordingly have no effect on net income.
6
<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, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31,
1996:
The Partnership's net income for the three months ended March 31, 1997 was
$476,000 compared to $375,000 for the three months ended March 31, 1996,
representing an increase of $101,000 or 27%. The increase is primarily a result
of increased operating results at the Partnership's mini-warehouse facilities
combined with decreased interest expense.
Rental income for the three months ended March 31, 1997 was $1,917,000
compared to $1,783,000 for the three months ended March 31, 1996, representing
an increase of $134,000 or 8%. This increase is primarily attributable to
increased occupancy levels and rental rates at the Partnership's mini-warehouse
facilities. The weighted average occupancy levels at the mini-warehouse
facilities were 90% and 86% for the three months ended March 31, 1997 and 1996.
Realized rent per occupied square foot increased from $.79 for the three months
ended March 31, 1996 to $.81 for the three months ended March 31, 1997.
Other income increased $21,000 for the three months ended March 31, 1997
compared to the same period in 1996. This increase is primarily due to an
increase in invested cash balances.
Cost of operations (including management fees paid to affiliate) for the
three months ended March 31, 1997 was $605,000 compared to $547,000 for the
three months ended March 31, 1996, representing an increase of $58,000 or 11%.
This increase is mainly attributable to increases in management fees and
property tax expenses. Property taxes increased due to an increase in property
tax rates at some of the Partnership's mini-warehouse facilities.
In 1995, the Partnership prepaid eight months of 1996 management fees on
its mini-warehouse operations, discounted at the rate of 14% effective rate to
compensate for early payment. As a result, management fee expense for the three
months ended March 31, 1996 was $8,000 lower than it would have been under the
customary, undiscounted fee structure.
Interest expense decreased $23,000 for the three months ended March 31,
1997 compared to the same period in 1996 due primarily to a lower outstanding
loan balance in 1997 over 1996.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash flows from operating activities ($927,000 for the three months ended
March 31, 1997) have been sufficient to meet all current obligations of the
Partnership.
At March 31, 1997, the Partnership held 297,130 shares of common stock with
a fair value totaling $8,617,000 (cost basis of $3,791,000 at March 31, 1997) in
Public Storage, Inc. The Partnership recognized $65,000 in dividends for the
three months ended March 31, 1997. From April 1, 1997 through May 5, 1997 the
Partnership purchased an additional 8,100 shares of common stock in Public
Storage, Inc. at an aggregate cost of $218,000.
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.
8
<PAGE>
PART II. OTHER INFORMATION
Items 1 through 4 are inapplicable.
Item 5 Other Information
-----------------
In May 1997, B. Wayne Hughes completed a cash tender offer, which had
commenced in March 1997, pursuant to which B. Wayne Hughes acquired a total of
5,033 additional limited partnership units in the Partnership at $447 per unit.
PSI has an option to purchase such 5,033 units from B. Wayne Hughes, at his
cost, at any time after May 2, 1998.
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, 1997
PUBLIC STORAGE PROPERTIES IV, 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> 0000225775
<NAME> PUBLIC STORAGE PROPERTIES IV, LTD.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Mar-31-1997
<EXCHANGE-RATE> 1
<CASH> 3,015,000
<SECURITIES> 8,617,000
<RECEIVABLES> 110,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,967,000
<PP&E> 20,813,000
<DEPRECIATION> (10,232,000)
<TOTAL-ASSETS> 22,548,000
<CURRENT-LIABILITIES> 424,000
<BONDS> 26,114,000
0
0
<COMMON> 0
<OTHER-SE> (3,990,000)
<TOTAL-LIABILITY-AND-EQUITY> 22,548,000
<SALES> 0
<TOTAL-REVENUES> 2,017,000
<CGS> 0
<TOTAL-COSTS> 605,000
<OTHER-EXPENSES> 226,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 710,000
<INCOME-PRETAX> 476,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 476,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 476,000
<EPS-PRIMARY> 11.78
<EPS-DILUTED> 11.78
</TABLE>
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