PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED BALANCE SHEETS
September 30, December 31,
2000 1999
---------------- ----------------
(Unaudited)
ASSETS
------
Cash and cash equivalents $ 510,000 $ 302,000
Marketable securities of affiliate (cost of $8,181,000 at
September 30, 2000 and $7,834,000 at December 31, 1999) 13,168,000 12,100,000
Rent and other receivables 344,000 460,000
Real estate facilities, at cost:
Buildings and equipment 16,355,000 16,144,000
Land 4,714,000 4,714,000
---------------- ----------------
21,069,000 20,858,000
Less accumulated depreciation (12,420,000) (11,707,000)
---------------- ----------------
8,649,000 9,151,000
Other assets 96,000 105,000
---------------- ----------------
Total assets $ 22,767,000 $ 22,118,000
================ ================
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $ 431,000 $ 168,000
Deferred revenue 219,000 236,000
Note payable to commercial bank 8,900,000 12,825,000
Partners' equity:
Limited partners' equity, $500 per unit, 44,000 units
authorized, issued and outstanding 6,111,000 3,433,000
General partners' equity 2,119,000 1,190,000
Other comprehensive income 4,987,000 4,266,000
---------------- ----------------
Total partners' equity 13,217,000 8,889,000
---------------- ----------------
Total liabilities and partners' equity $ 22,767,000 $ 22,118,000
================ ================
See accompanying notes.
2
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- -------------------------------
2000 1999 2000 1999
------------- ------------- ------------- -------------
REVENUES:
Rental income $ 2,084,000 $ 2,010,000 $ 6,058,000 $ 5,797,000
Dividends from marketable securities of affiliate 448,000 117,000 702,000 351,000
Other income 1,000 1,000 5,000 66,000
------------- ------------- ------------- -------------
2,533,000 2,128,000 6,765,000 6,214,000
------------- ------------- ------------- -------------
COSTS AND EXPENSES:
Cost of operations 498,000 471,000 1,488,000 1,420,000
Management fees paid to affiliates 124,000 120,000 361,000 346,000
Depreciation and amortization 241,000 243,000 722,000 718,000
Administrative 15,000 12,000 68,000 54,000
Interest expense 154,000 230,000 519,000 1,097,000
------------- ------------- ------------- -------------
1,032,000 1,076,000 3,158,000 3,635,000
------------- ------------- ------------- -------------
NET INCOME $ 1,501,000 $ 1,052,000 $ 3,607,000 $ 2,579,000
============= ============= ============= =============
Limited partners' share of net income ($81.16 per
unit in 2000 and $58.02 per unit in 1999) $ 3,571,000 $ 2,553,000
------------- -------------
General partners' share of net income 36,000 26,000
------------- -------------
$ 3,607,000 $ 2,579,000
============= =============
See accompanying notes.
3
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED STATEMENT OF PARTNERS' EQUITY
(UNAUDITED)
Other
Limited General Comprehensive Total Partners'
Partners Partners Income Equity
----------------- ----------------- ----------------- -----------------
Balance at December 31, 1999 $ 3,433,000 $ 1,190,000 $ 4,266,000 $ 8,889,000
Change in unrealized gain of marketable
equity securities - - 721,000 721,000
Net income 3,571,000 36,000 - 3,607,000
Equity transfer (893,000) 893,000 - -
----------------- ----------------- ----------------- -----------------
Balance at September 30, 2000 $ 6,111,000 $ 2,119,000 $ 4,987,000 $ 13,217,000
================= ================= ================= =================
See accompanying notes.
4
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
------------------------------------
2000 1999
--------------- ---------------
Cash flows from operating activities:
Net income $ 3,607,000 $ 2,579,000
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 713,000 712,000
(Increase) decrease in rent and other receivables (231,000) 74,000
Amortization of prepaid loan fees 9,000 -
Increase in other assets - (2,000)
Increase in accounts payable 263,000 176,000
Decrease in deferred revenue (17,000) (28,000)
--------------- ---------------
Total adjustments 737,000 932,000
--------------- ---------------
Net cash provided by operating activities 4,344,000 3,511,000
--------------- ---------------
Cash flow from investing activities:
Additions to real estate facilities (211,000) (199,000)
--------------- ---------------
Net cash used in investing activities (211,000) (199,000)
--------------- ---------------
Cash flow from financing activities:
Proceeds from commercial bank - 17,000,000
Principal payments on note to commercial bank (3,925,000) (3,245,000)
Principal payments on mortgage note payable - (21,742,000)
--------------- ---------------
Net cash used in financing activities (3,925,000) (7,987,000)
--------------- ---------------
Net increase in cash and cash equivalents 208,000 (4,675,000)
Cash and cash equivalents at beginning of period 302,000 4,904,000
--------------- ---------------
Cash and cash equivalents at end of period $ 510,000 $ 229,000
=============== ===============
Supplemental schedule of non-cash activities:
Receipt of stock dividend:
Marketable securities $ 347,000 $ -
=============== ===============
Rent and other receivables $ (347,000) $ -
=============== ===============
Increase (decrease) in fair market value of marketable securities:
Marketable securities $ 721,000 $ (1,000,000)
=============== ===============
Other comprehensive income $ 721,000 $ (1,000,000)
=============== ===============
See accompanying notes.
5
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, 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 September 30, 2000, the results of its operations for the nine months ended September 30,
2000 and 1999 and its cash flows for the nine months then ended.
3. The results of operations for the nine months ended September 30, 2000 are not necessarily indicative of
the results expected for the full year.
4. Marketable securities at September 30, 2000 consist of 533,334 shares of common stock and 17,331 shares
of Equity Stock, Series A of Public Storage, Inc., a publicly traded real estate investment trust and a
general partner of the Partnership. We have designated our portfolio of marketable securities as
available for sale. Accordingly, at September 30, 2000, we have recorded the marketable securities at
fair value, based upon the closing quoted prices of the securities at September 30, 2000. 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. On April 1, 1999, we borrowed $17,000,000 from a commercial bank. The proceeds of the loan were used to
repay our mortgage debt. The loan is unsecured and bears interest at the London Interbank Offering Rate
("LIBOR") plus 0.60% to 1.20% depending on our interest coverage ratio (7.22 % at September 30, 2000).
The loan requires monthly payments of interest and matures April 2003. Principal may be paid, in whole
or in part, at any time without penalty or premium.
6
5. (Continued)
We have entered into an interest rate swap agreement to reduce the impact of changes in interest rates
on a portion of our floating rate debt. The agreement, which covers $15,000,000 of debt through April,
2002 effectively changes the interest rate exposure from floating rate to a fixed rate of 5.64% plus
0.60% to 1.20% based on our interest coverage ratio (6.24% as of September 30, 2000). 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 September 30, 2000, the unrealized gain on the interest rate swap, if required
to be liquidated, was approximately $45,000.
6. In June 1998, June 1999 and June 2000, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities -- Deferral of the Effective Date of SFAS No. 133," and SFAS No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities - an, amendment of SFAS No.
133." These statements outline the accounting treatment for all derivative activity. The Partnership is
required to and will adopt SFAS No. 133 in the first quarter of fiscal 2001 and does not expect adoption
to have a significant effect on its consolidated results of operations or financial position.
7
PUBLIC STORAGE PROPERTIES V, 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 and nine months ended September 30, 2000 compared to three and nine months ended September 30,
1999:
Our net income for the nine months ended September 30, 2000 was $3,607,000 compared to $2,579,000 for
the nine months ended September 30, 1999, representing an increase of $1,028,000 or 40%. Our net income for the
three months ended September 30, 2000 was $1,501,000 compared to $1,052,000 for the three months ended September
30, 1999, representing an increase of $449,000 or 43%. These increases are primarily a result of increased
operating results at our mini-warehouse facilities, increase in dividend income on marketable securities of an
affiliate, and a decrease in interest expense resulting from our lower outstanding debt.
Rental income for the nine months ended September 30, 2000 was $6,058,000 compared to $5,797,000 for the
nine months ended September 30, 1999, representing an increase of $261,000 or 5%. Rental income for the three
months ended September 30, 2000 was $2,084,000 compared to $2,010,000 for the three months ended September 30,
1999, representing an increase of $74,000 or 4%. The increases for the three and nine months ended September 30,
2000 are attributable to increases in rental rates at our mini-warehouse and business park facilities. Annual
realized rent at the mini-warehouse facilities for the nine months ended September 30, 2000 increased to $11.17
per occupied square foot from $10.75 per occupied square foot for the nine months ended September 30, 1999.
Weighted average occupancy levels at the mini-warehouse facility were 94% for both of the nine months ended
8
September 30, 2000 and 1999 respectively. Annual realized rent at our business park facility for the nine months
ended September 30, 2000 increased to $17.40 per occupied square foot from $16.05 per occupied square foot for
the nine months ended September 30, 1999. Weighted average occupancy levels at the business park facility were
98% and 96% for the nine months ended September 30, 2000 and 1999, respectively.
Interest and other income decreased $61,000 for the nine months ended September 30, 2000 compared to the
same period in 1999. The decrease is primarily a result of the increase in the pay down of our note payable,
which resulted in lower cash balances and consequently less interest earned.
Dividend income from marketable securities of affiliate increased $351,000 for the nine months ended
September 30, 2000 compared to the same period in 1999. The increase includes special dividend of $320,000
we received on the Public Storage common stock in the third quarter of year 2000 and from $22,000 in dividends
we received on the Public Storage Equity Stock, Series A which we received as a stock dividend in January
2000.
Cost of operations (including management fees paid to affiliate) for the nine months ended September 30,
2000 was $1,849,000 compared to $1,766,000 for the nine months ended September 30, 1999, representing an increase
of $83,000 or 5%. Cost of operations (including management fees paid to affiliate) for the three months ended
September 30, 2000 was $622,000 compared to $591,000 for the three months ended September 30, 1999, representing
an increase of $31,000 or 5%. This increase is mainly attributable to increases in management fees, repairs and
maintenance expense and payroll expense.
Interest expense was $519,000 in the nine months ended September 30, 2000 from $1,097,000 in the same
period in 1999, a $578,000 or 53% decrease. This decrease is mainly attributable to a lower outstanding
principal balance.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operating activities ($4,344,000 for the nine months ended September 30, 2000) have been
sufficient to meet all current obligations of the Partnership.
At September 30, 2000, we held 533,334 shares of common stock and 17,331 shares of Equity Stock, Series
A of Public Storage, Inc. with a fair value totaling $13,168,000 (cost basis of $8,181,000 at September 30,
2000). We recognized $702,000 in dividends for the nine months ended September 30, 2000.
On April 1, 1999, we borrowed $17,000,000 from a commercial bank. The proceeds of the loan were used to
repay our mortgage debt. The loan is unsecured and bears interest at the London Interbank Offering Rate
("LIBOR") plus 0.60% to 1.20% depending on our interest coverage ratio (7.22% at September 30, 2000). The loan
9
requires monthly payments of interest and matures April 2003. Principal may be paid, in whole or in part, at any
time without penalty or premium.
We have entered into an interest rate swap agreement to reduce the impact of changes in interest rates
on a portion of its floating rate debt. The agreement, which covers $15,000,000 of debt through April, 2002
effectively changes the interest rate exposure from floating rate to a fixed rate of 5.64% plus 0.60% to 1.20%
based on our interest coverage ratio (6.24% at September 30, 2000). 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 September 30,
2000, the unrealized gain on the interest rate swap, if required to be liquidated, was approximately $45,000.
10
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: November 13, 2000
PUBLIC STORAGE PROPERTIES V, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ John Reyes
John Reyes
Senior Vice President and
Chief Financial Officer
11
