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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, 1995
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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 ___________________
Commission File Number 0-11981
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PS PARTNERS II, LTD.
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(Exact name of registrant as specified in its charter)
California 95-3878680
- - ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
600 North Brand Blvd.
Glendale, California 91203-1241
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080
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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
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INDEX
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<S> <C>
PART I. FINANCIAL INFORMATION
Condensed consolidated balance sheets at March 31, 1995
and December 31, 1994 2
Condensed consolidated statements of operations for the three
months ended March 31, 1995 and 1994 3
Condensed consolidated statements of cash flows for the three
months ended March 31, 1995 and 1994 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) 8
Item 6 - Exhibits and Reports on Form 8-K 8
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PS PARTNERS II, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
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(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 4,060,000 $ 3,258,000
Rent and other receivables 25,000 28,000
Real estate facilities, at cost:
Land 17,404,000 17,414,000
Buildings and equipment 71,224,000 71,183,000
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88,628,000 88,597,000
Less accumulated depreciation (31,697,000) (30,887,000)
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56,931,000 57,710,000
Other assets 161,000 153,000
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$ 61,177,000 $ 61,149,000
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LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 346,000 $ 433,000
Advance payments from renters 448,000 439,000
Mortgage notes payable 2,318,000 2,326,000
Minority interest in general
partnerships 13,943,000 14,001,000
Partners' equity:
Limited partners' equity, $500 per
unit, 128,000 units authorized,
issued and outstanding 43,599,000 43,430,000
General partners' equity 523,000 520,000
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Total partners' equity 44,122,000 43,950,000
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$ 61,177,000 $ 61,149,000
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</TABLE>
See accompanying notes.
2
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PS PARTNERS II, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1995 1994
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<S> <C> <C>
REVENUE:
Rental income $3,589,000 $3,558,000
Interest income 55,000 7,000
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3,644,000 3,565,000
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COSTS AND EXPENSES:
Cost of operations 1,177,000 1,214,000
Management fees 210,000 208,000
Depreciation and amortization 810,000 922,000
Interest expense 45,000 158,000
Administrative 56,000 85,000
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2,298,000 2,587,000
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Income before minority interest 1,346,000 978,000
Minority interest in income 374,000 387,000
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NET INCOME $ 972,000 $ 591,000
============ ============
Limited partners' share of net income
($6.90 per unit in 1995 and $4.26
per unit in 1994) $ 883,000 $ 546,000
General partners' share of net income 89,000 45,000
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$ 972,000 $ 591,000
============ ============
</TABLE>
See accompanying notes.
3
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PS PARTNERS II, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 972,000 $ 591,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 810,000 922,000
Decrease in rent and other receivables 3,000 -
Increase in other assets (8,000) (8,000)
Decrease in accounts payable (87,000) (3,000)
Increase in advance payments from renters 9,000 19,000
Minority interest in income 374,000 387,000
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Total adjustments 1,101,000 1,317,000
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Net cash provided by operating activities 2,073,000 1,908,000
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Cash flows from investing activities:
Additions to real estate facilities (31,000) (70,000)
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Net cash used in investing activities (31,000) (70,000)
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Cash flows from financing activities:
Principal payments on mortgage notes payable (8,000) (2,094,000)
Distributions to holder of minority interest (432,000) (40,000)
Distributions to partners (800,000) (395,000)
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Net cash used in financing activities (1,240,000) (2,529,000)
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Net increase (decrease) in cash and cash equivalents 802,000 (691,000)
Cash and cash equivalents at the beginning of the period 3,258,000 1,083,000
--------------- ---------------
Cash and cash equivalents at the end of the period $ 4,060,000 $ 392,000
=============== ===============
</TABLE>
See accompanying notes.
4
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PS PARTNERS II, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(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, 1994.
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, 1995, the results of operations for the
three months ended March 31, 1995 and 1994 and cash flows for the three
months then ended.
3. The results of operations for the three months ended March 31, 1995 are not
necessarily indicative of the results to be expected for the full year.
5
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PS PARTNERS II, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
- - ----------------------
THREE MONTHS ENDED MARCH 31, 1995 COMPARED TO THREE MONTHS ENDED MARCH 31,
1994:
The Partnership's net income for the three months ended March 31, 1995 was
$972,000 compared to $591,000 for the three months ended March 31, 1994,
representing an increase of $381,000. This increase was primarily due to
improved operating results at the Partnership's mini-warehouse facilities
combined with decreases in depreciation expense, due to the full amortization of
certain tenant improvements at the business park facilities, and interest
expense.
Rental income was $3,589,000 compared to $3,558,000 for the three months
ended March 31, 1995 and 1994, respectively, representing an increase of
$31,000. Rental income was $3,036,000 and $3,046,000 at the Partnership's mini-
warehouse facilities for the three months ended March 31, 1995 and 1994,
respectively, representing a decrease of $10,000. Rental income for 1994
includes $119,000 (none in 1995) relating to a mini-warehouse facility which was
condemned during the fourth quarter of fiscal 1994 by a governmental authority
exercising its right of eminent domain . Accordingly, for those facilities
which were in operation throughout each of the first quarters of 1994 and 1995,
rental income increased from $2,927,000 to $3,036,000 for the three months ended
March 31, 1994 and 1995, respectively, representing an increase of $109,000, or
3.7%. Rental income at the Partnership's business park facilities increased
from $512,000 to $553,000 for the three months ended March 31, 1994 and 1995,
respectively, representing an increase of 8.0%. These increases were the result
of increased average realized rental rates at the Partnership's mini-warehouse
facilities and business park facilities. The weighted average occupancy levels
at the mini-warehouse and business park facilities were 89% and 96%,
respectively, for the three months ended March 31, 1995 compared to 90% and 94%
respectively, for the three months ended March 31, 1994. The monthly average
realized rent per square foot for the mini-warehouse and business park
facilities was $.57 and $.76, respectively, for the three months ended March 31,
1995 and $.55 and $.67, respectively, for the three months ended March 31, 1994.
Cost of operations (including management fees) were $1,387,000 and
$1,422,000 for the three months ended March 31, 1995 and 1994, respectively,
representing a decrease of $35,000. Cost of operations during 1994, for the
condemned facility was $50,000, accordingly, cost of operations for the
remaining facilities increased $15,000 or 1%.
6
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PS PARTNERS II, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Interest expense decreased approximately $113,000 from $158,000 to $45,000
for the three months ended March 31, 1994 and 1995, respectively, as a result of
overall debt reduction.
Minority interest in income decreased $13,000 to $374,000 from $387,000 for
the three months ended March 31, 1995 and 1994, respectively. This decrease was
primarily attributable to the increased allocation of depreciation expense to
the minority interest which offsets the increase in operations at the
Partnership's real estate facilities for those properties owned jointly with
SEI.
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
($2,070,000 for the three months ended March 31, 1995) has been sufficient to
meet all current obligations of the Partnership.
During 1995, the Partnership anticipates approximately $800,000 of capital
improvements (of which $123,000 represents SEI's joint venture share). Total
capital improvements were $31,000 for the three months ended March 31, 1995 of
which $26,000 represents the Partnership's share.
The Partnership paid distributions to the limited and general partners
totaling $714,000 ($5.57 per unit) and $86,000, respectively, during the first
three months of 1995. Future distribution rates may be adjusted to levels which
are supported by operating cash flow after capital improvements and any other
necessary obligations.
7
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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 10, 1995
PS PARTNERS II, LTD.
BY: Storage Equities, Inc.
General Partner
BY: /s/ Ronald L. Havner
------------------------------------
Ronald L. Havner, Jr.
Vice President - Storage Equities,Inc.
(principal financial and accounting
officer)
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 4,060,000
<SECURITIES> 0
<RECEIVABLES> 25,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,085,000
<PP&E> 88,789,000
<DEPRECIATION> (31,697,000)
<TOTAL-ASSETS> 61,177,000
<CURRENT-LIABILITIES> 794,000
<BONDS> 2,318,000
<COMMON> 0
0
0
<OTHER-SE> 44,122,000
<TOTAL-LIABILITY-AND-EQUITY> 61,177,000
<SALES> 0
<TOTAL-REVENUES> 3,644,000
<CGS> 0
<TOTAL-COSTS> 1,387,000
<OTHER-EXPENSES> 866,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,000
<INCOME-PRETAX> 1,346,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 972,000
<EPS-PRIMARY> 6.90
<EPS-DILUTED> 0
</TABLE>
