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Previous: FRANKLIN CALIFORNIA TAX FREE INCOME FUND INC, N-30D, 1998-05-14 |
Next: FIDELITY CAPITAL TRUST, 13F-E, 1998-05-14 |
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, 1998
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, 1998
and December 31, 1997 2
Condensed statements of income for the three
months ended March 31, 1998 and 1997 3
Condensed statement of partners' deficit for the
three months ended March 31, 1998 4
Condensed statements of cash flows for the
three months ended March 31, 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 IV, LTD.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------------------- -----------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $ 2,630,000 $ 1,911,000
Marketable securities of affiliate (cost of $6,091,000) 11,793,000 11,220,000
Rent and other receivables 160,000 166,000
Real estate facilities, at cost:
Buildings and equipment 16,063,000 16,031,000
Land 5,244,000 5,244,000
----------------------- -----------------
21,307,000 21,275,000
Less accumulated depreciation (11,128,000) (10,898,000)
----------------------- -----------------
10,179,000 10,377,000
----------------------- -----------------
Other assets 124,000 144,000
----------------------- -----------------
Total assets $ 24,886,000 $ 23,818,000
======================= =================
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Accounts payable $ 117,000 $ 65,000
Deferred revenue 278,000 230,000
Mortgage note payable 25,156,000 25,405,000
Partners' deficit:
Limited partners' deficit, $500 per unit, 40,000 units
authorized, issued and outstanding (4,723,000) (5,200,000)
General partners' deficit (1,644,000) (1,811,000)
Unrealized gain on marketable securities 5,702,000 5,129,000
----------------------- -----------------
Total partners' deficit (665,000) (1,882,000)
----------------------- -----------------
Total liabilities and partners' deficit $ 24,886,000 $ 23,818,000
======================= =================
</TABLE>
See accompanying notes.
2
<PAGE>
PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------------
1998 1997
--------------------- -------------------
REVENUES:
<S> <C> <C>
Rental income $ 2,110,000 $ 1,917,000
Dividends from marketable securities of affiliate 84,000 65,000
Interest and other income 30,000 35,000
--------------------- -------------------
2,224,000 2,017,000
--------------------- -------------------
COSTS AND EXPENSES:
Cost of operations 522,000 490,000
Management fees paid to affiliate 127,000 115,000
Depreciation 230,000 215,000
Administrative 15,000 11,000
Interest expense 686,000 710,000
--------------------- -------------------
1,580,000 1,541,000
--------------------- -------------------
NET INCOME $ 644,000 $ 476,000
===================== ===================
Limited partners' share of net income ($15.93 per unit
in 1998 and $11.78 per unit in 1997) $ 637,000 $ 471,000
General partners' share of net income 7,000 5,000
--------------------- -------------------
$ 644,000 $ 476,000
===================== ===================
</TABLE>
See accompanying notes.
3
<PAGE>
PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
Unrealized
Gain on Total
Limited General Marketable Partners'
Partners Partners Securities Deficit
----------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Balance at December 31, 1997 $ (5,200,000) $ (1,811,000) $ 5,129,000 $ (1,882,000)
Unrealized gain marketable securities - - 573,000 573,000
Net income 637,000 7,000 - 644,000
Equity transfer (160,000) 160,000 - -
----------------- --------------- --------------- --------------
Balance at March 31, 1998 $ (4,723,000) $ (1,644,000) $ 5,702,000 $ (665,000)
================= =============== =============== ==============
</TABLE>
See accompanying notes.
4
<PAGE>
PUBLIC STORAGE PROPERTIES IV, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------------
1998 1997
------------------- -------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 644,000 $ 476,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 230,000 215,000
Decrease in rent and other receivables 6,000 40,000
Amortization of prepaid loan fees 23,000 23,000
(Increase) decrease in other assets (3,000) 25,000
Increase in accounts payable 52,000 106,000
Increase in deferred revenue 48,000 42,000
------------------- -------------------
Total adjustments 356,000 451,000
------------------- -------------------
Net cash provided by operating activities 1,000,000 927,000
------------------- -------------------
Cash flows from investing activities:
Additions to real estate facilities (32,000) (128,000)
------------------- -------------------
Net cash used in investing activities (32,000) (128,000)
------------------- -------------------
Cash flows from financing activities:
Principal payments on mortgage note payable (249,000) (224,000)
------------------- -------------------
Net cash used in financing activities (249,000) (224,000)
------------------- -------------------
Net increase in cash and cash equivalents 719,000 575,000
Cash and cash equivalents at beginning of period 1,911,000 2,440,000
------------------- -------------------
Cash and cash equivalents at end of period $ 2,630,000 $ 3,015,000
=================== ===================
Supplemental schedule of non-cash investing
and financing activities:
(Increase) decrease in fair market value of marketable securities $ (573,000) $ 594,000
=================== ===================
Unrealized gain (loss) on marketable securities $ 573,000 $ (594,000)
=================== ===================
</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, 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 March 31, 1998, the results of its operations for the three
months ended March 31, 1998 and 1997 and its cash flows for the three
months then ended.
3. The results of operations for the three months ended March 31, 1998 are
not necessarily indicative of the results expected for the full year.
4. Marketable securities at March 31, 1998 consist of 381,980 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, 1998, the Partnership has
recorded the marketable securities at fair value, based upon the
closing quoted prices of the securities at March 31, 1998. 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.
5. The Partnership's mortgage note payable matures on October 1, 1998. The
general partners believe the Partnership can refinance the loan on
terms acceptable to the Partnership upon maturity.
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, 1998 compared to three months ended March
31, 1997:
The Partnership's net income for the three months ended March 31, 1998
was $644,000 compared to $476,000 for the three months ended March 31, 1997,
representing an increase of $168,000 or 35%. 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, 1998 was $2,110,000
compared to $1,917,000 for the three months ended March 31, 1997, representing
an increase of $193,000 or 10%. 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 94% and 90% for the three months ended March 31, 1998 and 1997,
respectively. Average monthly realized rent per occupied square foot increased
from $.81 for the three months ended March 31, 1997 to $.85 for the three months
ended March 31, 1998.
Interest and other income decreased $5,000 for the three months ended
March 31, 1998 compared to the same period in 1997. The decrease is primarily a
result of increased purchase of marketable securities of affiliate, which
resulted in lower cash balances and consequently less interest earned.
Dividend income from marketable securities of affiliate increased
$19,000 for the three months ended March 31, 1998 compared to the same period in
1997 due to an increase in the number of shares owned in 1998 compared to the
same period in 1997.
Cost of operations (including management fees paid to affiliate) for
the three months ended March 31, 1998 was $649,000 compared to $605,000 for the
three months ended March 31, 1997, representing an increase of $44,000 or 7%.
This increase is mainly attributable to increases in advertising and promotion
costs and property tax expenses. Property taxes increased due to an increase in
property tax rates at some of the Partnership's mini-warehouse facilities.
Interest expense decreased $24,000 for the three months ended March 31,
1998 compared to the same period in 1997 due to a lower outstanding loan
balance.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash flows from operating activities ($1,000,000 for the three months
ended March 31, 1998) have been sufficient to meet all current obligations of
the Partnership.
At March 31, 1997, the Partnership held 381,980 shares of common stock
with a fair value totaling $11,793,000 (cost basis of $6,091,000 at March 31,
1998) in Public Storage, Inc. The Partnership recognized $84,000 in dividends
for the three months ended March 31, 1998.
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.
The Partnership's mortgage note payable matures on October 1, 1998. The
general partners believe the Partnership can refinance the loan on terms
acceptable to the Partnership upon maturity.
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, 1998
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
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000225775
<NAME> Public Storage Properties IV, Ltd.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Mar-31-1998
<EXCHANGE-RATE> 1
<CASH> 2,630,000
<SECURITIES> 11,793,000
<RECEIVABLES> 160,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14,707,000
<PP&E> 21,307,000
<DEPRECIATION> (11,128,000)
<TOTAL-ASSETS> 24,886,000
<CURRENT-LIABILITIES> 395,000
<BONDS> 25,156,000
0
0
<COMMON> 0
<OTHER-SE> (665,000)
<TOTAL-LIABILITY-AND-EQUITY> 24,886,000
<SALES> 0
<TOTAL-REVENUES> 2,224,000
<CGS> 0
<TOTAL-COSTS> 649,000
<OTHER-EXPENSES> 245,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 686,000
<INCOME-PRETAX> 644,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 644,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 644,000
<EPS-PRIMARY> 15.90
<EPS-DILUTED> 15.90
</TABLE>
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