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, 2000
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 0-9208
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PUBLIC STORAGE PROPERTIES V, LTD.
---------------------------------
(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 No X
--- ---
<PAGE>
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Condensed balance sheets at March 31, 2000
and December 31, 1999 2
Condensed statements of income for the three
months ended March 31, 2000 and 1999 3
Condensed statement of partners' equity for the
three months ended March 31, 2000 4
Condensed statements of cash flows for the
three months ended March 31, 2000 and 1999 5
Notes to condensed financial statements 6-7
Management's discussion and analysis of
financial condition and results of operations 8-10
PART II. OTHER INFORMATION 11
<PAGE>
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---------------- ----------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $ 322,000 $ 302,000
Marketable securities of affiliate (cost of $8,181,000 at
March 31, 2000 and $7,834,000 at December 31, 1999) 11,540,000 12,100,000
Rent and other receivables 123,000 460,000
Real estate facilities, at cost:
Buildings and equipment 16,157,000 16,144,000
Land (including land held for sale of $230,000) 4,714,000 4,714,000
---------------- ----------------
20,871,000 20,858,000
Less accumulated depreciation (11,943,000) (11,707,000)
---------------- ----------------
8,928,000 9,151,000
Other assets 103,000 105,000
---------------- ----------------
Total assets $ 21,016,000 $ 22,118,000
================ ================
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $ 184,000 $ 168,000
Deferred revenue 240,000 236,000
Note payable to commercial bank 11,575,000 12,825,000
Partners' equity:
Limited partners' equity, $500 per unit, 44,000 units
authorized, issued and outstanding 4,202,000 3,433,000
General partners' equity 1,456,000 1,190,000
Other comprehensive income 3,359,000 4,266,000
---------------- ----------------
Total partners' equity 9,017,000 8,889,000
---------------- ----------------
Total liabilities and partners' equity $ 21,016,000 $ 22,118,000
================ ================
See accompanying notes.
2
<PAGE>
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended March 31,
----------------------------------------
2000 1999
----------------- -----------------
REVENUES:
<S> <C> <C>
Rental income $ 1,956,000 $ 1,866,000
Dividends from marketable securities of affiliate 126,000 117,000
Other income 2,000 62,000
----------------- -----------------
2,084,000 2,045,000
----------------- -----------------
COSTS AND EXPENSES:
Cost of operations 469,000 470,000
Management fees paid to affiliates 117,000 111,000
Depreciation and amortization 240,000 235,000
Administrative 24,000 26,000
Interest expense 199,000 603,000
----------------- -----------------
1,049,000 1,445,000
----------------- -----------------
NET INCOME $ 1,035,000 $ 600,000
================= =================
Limited partners' share of net income ($23.29 per
unit in 2000 and $13.48 per unit in 1999) $ 1,025,000 $ 593,000
General partners' share of net income 10,000 7,000
----------------- -----------------
$ 1,035,000 $ 600,000
================= =================
</TABLE>
See accompanying notes.
3
<PAGE>
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED STATEMENT OF PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Other
Limited General Comprehensive Total Partners'
Partners Partners Income Equity
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
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 - - (907,000) (907,000)
Net income 1,025,000 10,000 - 1,035,000
Equity transfer (256,000) 256,000 - -
----------------- ----------------- ----------------- -----------------
Balance at March 31, 2000 $ 4,202,000 $ 1,456,000 $ 3,359,000 $ 9,017,000
================= ================= ================= =================
</TABLE>
See accompanying notes.
4
<PAGE>
PUBLIC STORAGE PROPERTIES V, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------------
2000 1999
--------------- ---------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 1,035,000 $ 600,000
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation 236,000 235,000
(Increase) decrease in rent and other receivables (10,000) 51,000
Amortization of prepaid loan fees 4,000 20,000
Increase in other assets (2,000) (1,000)
Increase in accounts payable 16,000 175,000
Increase in deferred revenue 4,000 4,000
--------------- ---------------
Total adjustments 248,000 484,000
--------------- ---------------
Net cash provided by operating activities 1,283,000 1,084,000
--------------- ---------------
Cash flow from investing activities:
Additions to real estate facilities (13,000) (25,000)
--------------- ---------------
Net cash used in investing activities (13,000) (25,000)
--------------- ---------------
Cash flow from financing activities:
Principal payments on note to commercial bank (1,250,000) -
Principal payments on mortgage note payable - (94,000)
--------------- ---------------
Net cash used in financing activities (1,250,000) (94,000)
--------------- ---------------
Net increase in cash and cash equivalents 20,000 965,000
Cash and cash equivalents at beginning of period 302,000 4,904,000
--------------- ---------------
Cash and cash equivalents at end of period $ 322,000 $ 5,869,000
=============== ===============
Supplemental schedule of non-cash activities:
Receipt of stock dividend:
Marketable securities $ 347,000 $ -
=============== ===============
Rent and other receivables $ (347,000) $ -
=============== ===============
Decrease in fair market value of marketable securities
Marketable securities $ (907,000) $ (1,100,000)
=============== ===============
Other comprehensive income $ (907,000) $ (1,100,000)
=============== ===============
</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, 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 March 31, 2000, the results of its operations for the three
months ended March 31, 2000 and 1999 and its cash flows for the three
months then ended.
3. The results of operations for the three months ended March 31, 2000 are
not necessarily indicative of the results expected for the full year.
4. Marketable securities at March 31, 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 March 31,
2000, we have recorded the marketable securities at fair value, based
upon the closing quoted prices of the securities at March 31, 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") rounded up to the nearest .125% plus 0.60% to 1.20% depending
on our interest coverage ratio (6.73% at March 31, 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
<PAGE>
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 March 31, 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 March 31, 2000, the unrealized gain on the interest
rate swap, if required to be liquidated, was approximately $45,000.
6. We hold excess land in Florida with a carrying value of $230,000. There
are no improvements on the land. The property has been listed for sale
with a broker.
7
<PAGE>
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 MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE AND MONTHS ENDED
MARCH 31, 1999:
Our net income for the three months ended March 31, 2000 was $1,035,000
compared to $600,000 for the three months ended March 31, 1999, representing an
increase of $435,000 or 73%. These increases are primarily a result of increased
operating results at our mini-warehouse facilities combined with decreased
interest expense.
Rental income for the three months ended March 31, 2000 was $1,956,000
compared to $1,866,000 for the three months ended March 31, 1999, representing
an increase of $90,000 or 5%. The increases for the three months ended March 31,
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 three months ended March 31, 2000 increased to $10.91 per occupied
square foot from $10.53 per occupied square foot for the three months ended
March 31, 1999. Weighted average occupancy levels at the mini-warehouse facility
were 93% for each of the three months ended March 31, 2000 and 1999. Annual
realized rent at our business park facility for the three months ended March 31,
2000 increased to $16.65 per occupied square foot from $15.78 per occupied
square foot for the three months ended March 31, 1999. Weighted average
occupancy levels at the business park facility were 100% and 97% for the three
months ended March 31, 2000 and 1999, respectively.
8
<PAGE>
Interest and other income decreased $60,000 for the three months ended
March 31, 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
$9,000 for the three months ended March 31, 2000 compared to the same period in
1999. The increase is equal to the dividends 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 three months ended March 31, 2000 was $586,000 compared to $581,000 for the
three months ended March 31, 1999, representing an increase of $5,000 or 1%.
Interest expense was $199,000 in the three months ended March 31, 2000
from $603,000 in the same period in 1999, a $404,000 or 67% decrease. This
decrease is mainly attributable to a lower outstanding principal balance.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash flows from operating activities ($1,283,000 for the three months
ended March 31, 2000) have been sufficient to meet all current obligations of
the Partnership.
At March 31, 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 $11,540,000 (cost basis of $8,181,000 at March 31, 2000). We recognized
$126,000 in dividends for the three months ended March 31, 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") .125% plus
0.60% to 1.20% depending on our interest coverage ratio (6.73% at March 31,
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.
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 March 31,
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 March 31, 2000, the unrealized gain on the interest rate
swap, if required to be liquidated, was approximately $45,000.
9
<PAGE>
Year 2000 System Issues
- -----------------------
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise in
some systems which use certain dates in 1999 to represent something other than a
date. Although the change in date to the year 2000 has occurred and no Year 2000
Issues have been identified, it is not possible to conclude that all aspects of
the Year 2000 Issue that may affect the entity, including those related to
customers, suppliers, or other third parties, have been fully resolved.
10
<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 12, 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
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000277925
<NAME> Public Storage Properties V, Ltd.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-1-2000
<PERIOD-END> Mar-31-2000
<EXCHANGE-RATE> 1
<CASH> 322,000
<SECURITIES> 11,540,000
<RECEIVABLES> 123,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,985,000
<PP&E> 20,871,000
<DEPRECIATION> (11,943,000)
<TOTAL-ASSETS> 21,016,000
<CURRENT-LIABILITIES> 424,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,017,000
<TOTAL-LIABILITY-AND-EQUITY> 21,016,000
<SALES> 0
<TOTAL-REVENUES> 2,084,000
<CGS> 0
<TOTAL-COSTS> 586,000
<OTHER-EXPENSES> 264,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 199,000
<INCOME-PRETAX> 1,035,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,035,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,035,000
<EPS-BASIC> 23.29
<EPS-DILUTED> 23.29
</TABLE>
