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, 1997
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 0-9208
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PUBLIC STORAGE PROPERTIES V, LTD.
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(Exact name of registrant as specified in its charter)
California 95-3292068
- --------------------------------------- --------------------
(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
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PART I. FINANCIAL INFORMATION
Condensed balance sheets at June 30, 1997
and December 31, 1996 2
Condensed statements of income for the three
and six months ended June 30, 1997 and 1996 3
Condensed statement of partners' equity for the
six months ended June 30, 1997 4
Condensed statements of cash flows for the
six months ended June 30, 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 V, LTD.
CONDENSED BALANCE SHEETS
June 30, December 31,
1997 1996
------------------ ----------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $ 3,086,000 $ 3,177,000
Marketable securities of affiliate
(cost of $6,353,000 in 1997 and $5,283,000 in 1996) 14,035,000 13,658,000
Rent and other receivables 130,000 115,000
Real estate facilities, at cost:
Buildings and equipment 14,936,000 14,686,000
Land (including land held for sale of $230,000) 4,714,000 4,714,000
------------------ ----------------
19,650,000 19,400,000
Less accumulated depreciation (9,457,000) (9,046,000)
------------------ ----------------
10,193,000 10,354,000
------------------ ----------------
Other assets 237,000 286,000
------------------ ----------------
Total assets $ 27,681,000 $ 27,590,000
================== ================
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $ 91,000 $ 51,000
Deferred revenue 186,000 195,000
Mortgage note payable 22,517,000 22,748,000
Partners' equity:
Limited partners' deficit, $500 per unit, 44,000 units
authorized, issued and outstanding (2,075,000) (2,806,000)
General partners' deficit (720,000) (973,000)
Unrealized gain on marketable securities 7,682,000 8,375,000
------------------ ----------------
Total partners' equity 4,887,000 4,596,000
------------------ ----------------
Total liabilities and partners' equity $ 27,681,000 $ 27,590,000
================== ================
</TABLE>
See accompanying notes.
2
<PAGE>
<TABLE>
<CAPTION>
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------- ------------------------------
1997 1996 1997 1996
------------- ------------- ------------- -------------
REVENUES:
<S> <C> <C> <C> <C>
Rental income $ 1,739,000 $ 1,631,000 $ 3,451,000 $ 3,215,000
Dividends from marketable securities of affiliate 105,000 97,000 202,000 194,000
Other income 46,000 23,000 91,000 40,000
------------- ------------- ------------- -------------
1,890,000 1,751,000 3,744,000 3,449,000
------------- ------------- ------------- -------------
COSTS AND EXPENSES:
Cost of operations 413,000 403,000 863,000 800,000
Management fees paid to affiliates 104,000 88,000 206,000 177,000
Depreciation 206,000 189,000 411,000 372,000
Administrative 25,000 21,000 35,000 30,000
Interest expense 627,000 640,000 1,245,000 1,263,000
------------- ------------- ------------- -------------
1,375,000 1,341,000 2,760,000 2,642,000
------------- ------------- ------------- -------------
Net income before gain on sale of land 515,000 410,000 984,000 807,000
Gain on sale of land - 13,000 - 13,000
------------- ------------- ------------- -------------
NET INCOME $ 515,000 $ 423,000 $ 984,000 $ 820,000
============= ============= ============= =============
Limited partners' share of net income ($22.14 per
unit in 1997 and $18.45 per unit in 1996) $ 974,000 $ 812,000
General partners' share of net income 10,000 8,000
------------- -------------
$ 984,000 $ 820,000
============== =============
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
<CAPTION>
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED STATEMENT OF PARTNERS' EQUITY
(UNAUDITED)
Unrealized
Gain on Total
Limited General Marketable Partners'
Partners Partners Securities Equity
----------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Balance at December 31, 1996 $(2,806,000) $(973,000) $8,375,000 $4,596,000
Unrealized loss on marketable securities - - (693,000) (693,000)
Net income 974,000 10,000 - 984,000
Equity transfer (243,000) 243,000 - -
----------- --------- ----------- ----------
Balance at June 30, 1997 $(2,075,000) $(720,000) $7,682,000 $4,887,000
============ ========== =========== ==========
</TABLE>
See accompanying notes.
4
<PAGE>
<TABLE>
<CAPTION>
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1997 1996
--------------------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 984,000 $ 820,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of land - (13,000)
Depreciation 411,000 372,000
Increase in rent and other receivables (15,000) (11,000)
Amortization of prepaid loan fees 41,000 41,000
Decrease (increase) in other assets 8,000 (9,000)
Amortization of prepaid management fees - 172,000
Increase in accounts payable 40,000 33,000
(Decrease) increase in deferred revenue (9,000) 12,000
--------------- ---------------
Total adjustments 476,000 597,000
--------------- ---------------
Net cash provided by operating activities 1,460,000 1,417,000
--------------- ---------------
Cash flow from investing activities:
Purchase of marketable securities of affiliate (1,070,000) -
Proceeds from sale of land - 376,000
Additions to real estate facilities (250,000) (231,000)
--------------- ---------------
Net cash (used in) provided by investing activities (1,320,000) 145,000
--------------- ---------------
Cash flow from financing activities:
Principal payments on mortgage note payable (231,000) (227,000)
--------------- ---------------
Net cash used in financing activities (231,000) (227,000)
--------------- ---------------
Net (decrease) increase in cash and cash equivalents (91,000) 1,335,000
Cash and cash equivalents at beginning of period 3,177,000 1,156,000
--------------- ---------------
Cash and cash equivalents at end of period $ 3,086,000 $ 2,491,000
=============== ===============
Supplemental schedule of non-cash investing and
financing activities:
Decrease (increase) in fair value of marketable securities $ 693,000 $ (716,000)
=============== ===============
Unrealized (loss) gain on marketable securities $ (693,000) $ 716,000
=============== ===============
Decrease in land due to sale $ - $ 363,000
=============== ===============
</TABLE>
See accompanying notes.
5
<PAGE>
PUBLIC STORAGE PROPERTIES V, 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 June 30, 1997, the results of its operations for the three and six
months ended June 30, 1997 and 1996 and its cash flows for the six months
then ended.
3. The results of operations for the three and six months ended June 30, 1997
are not necessarily indicative of the results expected for the full year.
4. Marketable securities at June 30, 1997 consist of 479,834 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 June 30, 1997, the Partnership has recorded the marketable
securities at fair value, based upon the closing quoted prices of the
securities at June 30, 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 V, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
THREE AND SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE AND SIX
MONTHS ENDED JUNE 30, 1996:
The Partnership's net income for the six months ended June 30, 1997 was
$984,000 compared to $820,000 for the six months ended June 30, 1996,
representing an increase of $164,000 or 20%. The Partnership's net income for
the three months ended June 30, 1997 was $515,000 compared to $423,000 for the
three months ended June 30, 1996, representing an increase of $92,000 or 22%.
These increases are primarily a result of increased operating results at the
Partnership's mini-warehouse facilities combined with a decrease in interest
expense.
Rental income for the six months ended June 30, 1997 was $3,451,000
compared to $3,215,000 for the six months ended June 30, 1996, representing an
increase of $236,000 or 7%. Rental income for the three months ended June 30,
1997 was $1,739,000 compared to $1,631,000 for the three months ended June 30,
1996, representing an increase of $108,000 or 7%. The increases for the three
and six months ended June 30, 1997 are attributable to increases in rental rates
and occupancy levels at the Partnership's mini-warehouse and business-park
facilities. Realized rent at the mini-warehouse facilities for the six months
ended June 30, 1997 increased to $.80 per occupied square foot from $.78 per
occupied square foot for the six months ended June 30, 1996. Weighted average
occupancy levels at the mini-warehouse facility were 94% and 90% for the six
months ended June 30, 1997 and 1996, respectively. Rental income at the
Partnership's San Francisco business park facility increased by $9,000 for the
six months ended June 30, 1997 compared to the same period in 1996 due to
increases in both rental rates and occupancy levels. Realized rent for the six
months ended June 30, 1997 increased to $1.18 per occupied square foot from
$1.15 per occupied square foot for the six months ended June 30, 1996. Weighted
average occupancy levels at the business park facility were 96% and 92% for the
six months ended June 30, 1997 and 1996, respectively.
Other income increased $51,000 for the six months ended June 30, 1997
compared to the same period in 1996 due to an increase in interest income earned
on invested cash.
Dividend income from marketable securities of affiliate increased $8,000
for the six months ended June 30, 1997 compared to the same period in 1996 due
to an increase in the number of shares owned in 1997 compared to the same period
in 1996.
7
<PAGE>
Cost of operations (including management fees paid to affiliates) for the
six months ended June 30, 1997 was $1,069,000 compared to $977,000 for the six
months ended June 30, 1996, representing an increase of $92,000 or 9%. Cost of
operations (including management fees paid to affiliates) for the three months
ended June 30, 1997 was $517,000 compared to $491,000 for the three months ended
June 30, 1996, representing an increase of $26,000 or 5%. This increase is
mainly attributable to increases in management fees, property tax and payroll
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 six
months ended June 30, 1996 was $16,000 lower than it would have been under the
customary undiscounted fee structure.
Interest expense decreased $18,000 for the six months ended June 30, 1997
compared to the same period in 1996 due primarily to a lower outstanding loan
balance in 1997 over 1996.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash flows from operating activities ($1,460,000 for the six months ended
June 30, 1997) have been sufficient to meet all current obligations of the
Partnership.
At June 30, 1997, the Partnership held 479,834 shares of common stock
(marketable securities) with a fair value totaling $14,035,000 (cost basis of
$6,353,000 at June 30, 1997) in Public Storage, Inc. In May 1997, the
Partnership purchased an additional 39,250 shares of common stock in Public
Storage, Inc. at an aggregate cost of $1,070,000. The Partnership recognized
$202,000 in dividends for the six months ended June 30, 1997.
In the third quarter of 1991, quarterly distributions were discontinued to
enable the Partnership to make principal payments that commenced in 1991 and to
increase cash reserves in subsequent years through 1999, at which time the
remaining principal balance is due.
8
<PAGE>
PART II. OTHER INFORMATION
Items 1 through 4 are inapplicable.
Item 5 In May 1997, B. Wayne Hughes ("Hughes"), a general partner of the
Partnership, completed a cash tender offer, which commenced in March
1997, pursuant to which Hughes acquired a total of 5,937 limited
partnership units at $459 per Unit. Public Storage, inc. ("PSI"), the
other general partner of the Partnership, has an option to purchase
such 5,937 Units from Hughes, at Hughes' 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
The Partnership filed a Current Report on From 8-K dated May
2, 1997 (filed May 9, 1997), pursuant to Item 1, which stated
that as a result of B. Wayne Hughes' cash tender offer to
purchase limited partnership units in the Partnership
("Units") which was completed on May 2, 1997, as of May 2,
1997 B. Wayne Hughes and Public Storage, Inc., the general
partners of the Partnership, beneficially owned an aggregate
of 27,288 Units, representing 62.0% of the Units, and are in a
position to control all voting decisions with respect to the
Partnership.
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, 1997
PUBLIC STORAGE PROPERTIES V, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ John Reyes
---------------
John Reyes
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000277925
<NAME> PUBLIC STORAGE PROPERTIES V, LTD.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Jun-30-1997
<EXCHANGE-RATE> 1
<CASH> 3,086,000
<SECURITIES> 14,035,000
<RECEIVABLES> 130,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,251,000
<PP&E> 19,650,000
<DEPRECIATION> (9,457,000)
<TOTAL-ASSETS> 27,681,000
<CURRENT-LIABILITIES> 277,000
<BONDS> 22,517,000
0
0
<COMMON> 0
<OTHER-SE> 4,887,000
<TOTAL-LIABILITY-AND-EQUITY> 27,681,000
<SALES> 0
<TOTAL-REVENUES> 3,744,000
<CGS> 0
<TOTAL-COSTS> 1,069,000
<OTHER-EXPENSES> 446,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,245,000
<INCOME-PRETAX> 984,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 984,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 984,000
<EPS-PRIMARY> 22.14
<EPS-DILUTED> 22.14
</TABLE>
