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, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the transition period from to
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Commission File Number 0-11186
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PS PARTNERS, LTD.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-3729108
- ---------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
701 Western Avenue
Glendale, California 91201-2394
- --------------------------------------- --------------------
(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
PART I. FINANCIAL INFORMATION
Condensed consolidated balance sheets at March 31, 1996
and December 31, 1995 2
Condensed consolidated statements of income for the three
months ended March 31, 1996 and 1995 3
Condensed consolidated statements of cash flows for the three
months ended March 31, 1996 and 1995 4
Notes to condensed consolidated financial statements 5
Management's discussion and analysis of financial condition
and results of operations 6-7
PART II. OTHER INFORMATION
(Items 1 through 5 are not applicable)
Item 6 - Exhibits and Reports on Form 8-K 8
<PAGE>
PS PARTNERS, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
March 31, December 31,
1996 1995
---------------- ---------------
(Unaudited)
ASSETS
------
<S> <C>
Cash and cash equivalents $ 548,000 $ 511,000
Rent and other receivables 72,000 121,000
Real estate facilities, at cost:
Land 11,855,000 11,855,000
Buildings and equipment 45,963,000 45,866,000
---------------- ---------------
57,818,000 57,721,000
Less accumulated depreciation (22,766,000) (22,175,000)
---------------- ---------------
35,052,000 35,546,000
Other assets 131,000 129,000
---------------- ---------------
$ 35,803,000 $ 36,307,000
================ ===============
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $ 623,000 $ 746,000
Advance payments from renters 419,000 391,000
Minority interest in general partnerships 21,210,000 21,317,000
Partners' equity:
Limited partners' equity, $500 per unit, 66,000
units authorized, issued and outstanding 13,372,000 13,671,000
General partner's equity 179,000 182,000
---------------- ---------------
Total partners' equity 13,551,000 13,853,000
---------------- ---------------
$ 35,803,000 $ 36,307,000
================ ===============
</TABLE>
See accompanying notes.
2
<PAGE>
PS PARTNERS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31,
------------------------------
1996 1995
--------------- ------------
REVENUE:
Rental income $ 2,695,000 $ 2,647,000
Interest income 6,000 29,000
--------------- ------------
2,701,000 2,676,000
--------------- ------------
COSTS AND EXPENSES:
Cost of operations 961,000 864,000
Management fees 160,000 158,000
Depreciation and amortization 591,000 552,000
Administrative 15,000 28,000
--------------- ------------
1,727,000 1,602,000
--------------- ------------
Income before minority interest 974,000 1,074,000
Minority interest in income 476,000 573,000
--------------- ------------
NET INCOME $ 498,000 $ 501,000
=============== ============
Limited partners' share of net income
($6.27 per unit in 1996 and $6.44
per unit in 1995) $ 414,000 $ 425,000
General partner's share of net income 84,000 76,000
--------------- ------------
$ 498,000 $ 501,000
=============== ============
See accompanying notes.
3
<PAGE>
PS PARTNERS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
Three Months Ended
March 31,
-------------------------------
1996 1995
--------------- ---------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 498,000 $ 501,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 591,000 552,000
Decrease in rent and other receivables 49,000 13,000
Increase in other assets (2,000) (6,000)
Decrease in accounts payable (123,000) (68,000)
Increase (decrease) in advance payments from renters 28,000 (13,000)
Minority interest in income 476,000 573,000
--------------- ---------------
Total adjustments 1,019,000 1,051,000
--------------- ---------------
Net cash provided by operating activities 1,517,000 1,552,000
--------------- ---------------
Cash flows from investing activities:
Additions to real estate facilities (97,000) (48,000)
--------------- ---------------
Net cash used in investing activities (97,000) (48,000)
--------------- ---------------
Cash flows from financing activities:
Distributions to holder of minority interest (583,000) (656,000)
Distributions to partners (800,000) (722,000)
--------------- ---------------
Net cash used in financing activities (1,383,000) (1,378,000)
--------------- ---------------
Net increase in cash and cash equivalents 37,000 126,000
Cash and cash equivalents at the beginning of the period 511,000 1,855,000
--------------- ---------------
Cash and cash equivalents at the end of the period $ 548,000 $ 1,981,000
=============== ===============
</TABLE>
See accompanying notes.
4
<PAGE>
PS PARTNERS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
1. The accompanying unaudited condensed consolidated 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
consolidated 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, 1995.
2. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments, consisting of
only normal accruals, necessary to present fairly the Partnership's
financial position at March 31, 1996, the results of operations for the
three months ended March 31, 1996 and 1995 and cash flows for the three
months then ended.
3. The results of operations for the three months ended March 31, 1996 are
not necessarily indicative of the results to be expected for the full
year.
5
<PAGE>
PS PARTNERS, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
- ----------------------
Three months ended March 31, 1996 compared to three months ended March 31,
1995:
The Partnership's net income was $498,000 and $501,000 for the three months
ended March 31, 1996 and 1995, respectively, representing a decrease of $3,000.
The decrease was primarily due to a decrease in operating results at the
Partnership's mini-warehouse facilities, combined with a decrease in interest
income, partially offset by a decrease in operations at the Partnership's real
estate facilities owned jointly with Public Storage, Inc. ("PSI").
Net property income (rental income less cost of operations and management
fees and excluding depreciation) for the three months ended March 31, 1996
decreased $51,000 or 3%, as rental income increased $48,000 or 2%, and costs of
operations (including management fees and excluding depreciation expense)
increased $99,000 or 10% compared to the same period in 1995.
Rental income for the Partnership's mini-warehouse operations was
$2,539,000 compared to $2,491,000 for the three months ended March 31,1996 and
1995, respectively, representing an increase of $48,000, or 2%. The increase in
rental income was primarily attributable to increased rental rates. The weighted
average occupancy levels at the mini-warehouse facilities was 87% for both the
three months ended March 31, 1996 and 1995. The monthly average realized rent
per square foot for the mini-warehouse facilities was $.60 compared to $.58 for
the three months ended March 31, 1996 and 1995, respectively. Costs of
operations (including management fees) for the mini-warehouses increased
$107,000 or 11%, to $1,052,000 from $945,000 for the three months ended March
31, 1996 and 1995, respectively. This increase was the result of increases in
repairs and maintenance and property tax expenses. Accordingly, for the
Partnership's mini-warehouse operations, property net operating income decreased
$59,000 or 4% from $1,546,000 to $1,487,000 for the three months ended March 31,
1995 and 1996, respectively.
Rental income for the Partnership's business park operations remained
stable at $156,000 for the three months ended March 31, 1996 and 1995. The
weighted average occupancy levels at the business park facilities was 93%
compared to 92% for the three months ended March 31, 1996 and 1995,
respectively. The monthly average realized rent per square foot for the business
park facilities was $.60 compared to $.65 for the three months ended March 31,
1996 and 1995, respectively. Cost of operations (including management fees) for
the business parks decreased $8,000 or 10%, to $69,000 from $77,000 for the
three months ended March 31, 1996 and 1995, respectively. Accordingly, for the
Partnership's business park facilities, property net operating income increased
by $8,000 or 10%, from $79,000 to $87,000 for the three months ended March 31,
1995 and 1996, respectively.
Administrative expenses decreased $13,000 from $28,000 in 1995 to $15,000
in 1996. This decrease is principally a result of decreases in accounting and
state provision for tax expenses.
Minority interest in income decreased $97,000 to $476,000 from $573,000 for
the three months ended March 31, 1996 and 1995, respectively. This decrease was
primarily attributable to the allocation of depreciation and amortization
expense (pursuant to the partnership agreement with respect to those real estate
facilities which are jointly owned with PSI) to PSI of $167,000 for the three
months ended March 31, 1996 compared to $102,000 for the same period in 1995,
combined with a decrease in operations at the Partnership's real estate
facilities owned jointly with PSI.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnership has adequate sources of cash to finance its operations,
both on a short-term and long-term basis, primarily from internally generated
cash from property operations and cash reserves. Cash generated from operations
($1,517,000 for the three months ended March 31, 1996) have been sufficient to
meet all current obligations of the Partnership.
6
<PAGE>
During 1996, the Partnership anticipates approximately $909,000 of capital
improvements (of which $372,000 represents PSI's joint venture share). During
1995, the Partnership's property manager commenced a program to enhance the
visual appearance of the mini-warehouse facilities managed by it. Such
enhancements will include new signs, exterior color schemes, and improvements to
the rental offices. Included in the 1996 capital improvement budget are
estimated costs of $163,000 for such enhancements. Total capital improvements
were $97,000 for the three months ended March 31, 1996 of which $69,000
represents the Partnership's share.
The Partnership paid distributions to the limited and general partners
totaling $713,000 ($10.80 per unit) and $87,000, respectively, during the first
three months of 1996. Future distribution rates may be adjusted to levels which
are supported by operating cash flow after capital improvements and any other
necessary obligations.
7
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1 through 5 are not applicable.
Item 6 Exhibits and Reports on Form 8-K
(a) The following Exhibits are 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 14, 1996
PS PARTNERS, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ Ronald L. Havner , Jr.
-----------------------------
Ronald L. Havner, Jr.
Senior Vice President & Chief Financial
Officer of Public Storage, Inc.
(principal financial officer)
BY: /s/ John Reyes
-----------------------------
John Reyes
Vice President and Controller
of Public Storage, Inc.
(Principal accounting officer)
8
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000702276
<NAME> PS PARTNERS, LTD.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 548,000
<SECURITIES> 0
<RECEIVABLES> 72,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 620,000
<PP&E> 57,818,000
<DEPRECIATION> (22,766,000)
<TOTAL-ASSETS> 35,803,000
<CURRENT-LIABILITIES> 1,042,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13,551,000
<TOTAL-LIABILITY-AND-EQUITY> 35,803,000
<SALES> 2,695,000
<TOTAL-REVENUES> 2,701,000
<CGS> 1,121,000
<TOTAL-COSTS> 1,121,000
<OTHER-EXPENSES> 606,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 498,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 498,000
<EPS-PRIMARY> 6.27
<EPS-DILUTED> 0.000
</TABLE>
