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 0-14475
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PS PARTNERS IV, LTD.
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(Exact name of registrant as specified in its charter)
California 95-3931619
- ----------------------------------- -----------------------
(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 6-8
PART II. OTHER INFORMATION
(Items 1 through 5 are not applicable)
Item 6 - Exhibits and Reports on Form 8-K 9
<PAGE>
PS PARTNERS IV, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
March 31, December 31,
1996 1995
------------------- -------------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $ 421,000 $ 464,000
Rent and other receivables 39,000 55,000
Real estate facilities, at cost:
Land 19,957,000 19,957,000
Buildings and equipment 71,415,000 71,328,000
------------------- -------------------
91,372,000 91,285,000
Less accumulated depreciation (31,540,000) (30,692,000)
------------------- -------------------
59,832,000 60,593,000
Other assets 160,000 158,000
------------------- -------------------
$ 60,452,000 $ 61,270,000
=================== ===================
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $ 903,000 $ 1,128,000
Advance payments from renters 432,000 418,000
Minority interest in general partnerships 37,999,000 37,887,000
Partners' equity:
Limited partners' equity, $500 per unit, 128,000
units authorized, issued and outstanding 20,824,000 21,536,000
General partner's equity 294,000 301,000
------------------- -------------------
Total partners' equity 21,118,000 21,837,000
------------------- -------------------
$ 60,452,000 $ 61,270,000
=================== ===================
</TABLE>
See accompanying notes.
2
<PAGE>
PS PARTNERS IV, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31,
--------------------------------------
1996 1995
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REVENUE:
Rental income $ 3,751,000 $ 3,527,000
Interest income 4,000 25,000
-------------- --------------
3,755,000 3,552,000
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COSTS AND EXPENSES:
Cost of operations 1,439,000 1,405,000
Management fees 216,000 204,000
Depreciation and amortization 848,000 789,000
Administrative 17,000 55,000
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2,520,000 2,453,000
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Income before minority interest 1,235,000 1,099,000
Minority interest in income 954,000 887,000
-------------- --------------
NET INCOME $ 281,000 $ 212,000
============== ==============
Limited partners' share of net income
($1.40 per unit in 1996 and $.87
per unit in 1995) $ 179,000 $ 111,000
General partner's share of net income 102,000 101,000
-------------- --------------
$ 281,000 $ 212,000
============== ==============
See accompanying notes.
3
<PAGE>
PS PARTNERS IV, 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 $ 281,000 $ 212,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 848,000 789,000
Decrease (increase) in rent and other receivables 16,000 (20,000)
Increase in other assets (2,000) (8,000)
Decrease in accounts payable (225,000) (145,000)
Increase (decrease) in advance payments from renters 14,000 (17,000)
Minority interest in income 954,000 887,000
------------------ -------------------
Total adjustments 1,605,000 1,486,000
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Net cash provided by operating activities 1,886,000 1,698,000
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Cash flows from investing activities:
Additions to real estate facilities (87,000) (107,000)
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Net cash used in investing activities (87,000) (107,000)
------------------ -------------------
Cash flows from financing activities:
Distributions to holder of minority interest (842,000) (756,000)
Distributions to partners (1,000,000) (999,000)
------------------ -------------------
Net cash used in financing activities (1,842,000) (1,755,000)
------------------ -------------------
Net decrease in cash and cash equivalents (43,000) (164,000)
Cash and cash equivalents at the beginning of the period 464,000 1,712,000
------------------ -------------------
Cash and cash equivalents at the end of the period $ 421,000 $ 1,548,000
================== ===================
</TABLE>
See accompanying notes.
4
<PAGE>
PS PARTNERS IV, 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 IV, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION 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 for the three months ended March 31, 1996 was
$281,000 compared to $212,000 for the three months ended March 31, 1995,
representing an increase of $69,000 or 33%. This increase was primarily due to
increased property operating results at the Partnership's real estate facilities
combined with a decrease in administrative expenses, partially offset by
increases in minority interest in income for those properties held in joint
venture with PSI and depreciation, combined with a decrease in interest income.
Property net operating income (rental income less cost of operations and
management fees and excluding depreciation expense) increased approximately
$178,000 or 9% for the three months ended March 31, 1996 compared to the three
months ended March 31, 1995, as rental income increased by $224,000 or 6%, and
cost of operations (including management fees) increased by $46,000 or 3%.
Rental income for the Partnership's mini-warehouse operations was
$2,790,000 compared to $2,704,000 for the three months ended March 31, 1996 and
1995, respectively, representing an increase of $86,000 or 3%. The increase in
rental income was primarily attributable to increased rental rates at the
mini-warehouse facilities. The monthly average realized rent per square foot for
the mini-warehouse facilities was $.58 compared to $.56 for the three months
ended March 31, 1996 and 1995, respectively. The weighted average occupancy
levels at the mini-warehouse facilities remained stable at 88% for both three
month periods ended March 31, 1995 and 1996. Cost of operations (including
management fees) decreased $17,000 or 2% to $1,101,000 from $1,118,000 for the
three months ended March 31, 1996 and 1995, respectively. Accordingly, for the
Partnership's mini-warehouse operations, property net operating income increased
by $103,000 or 7% from $1,586,000 to $1,689,000 for the three months ended March
31, 1995 and 1996, respectively.
6
<PAGE>
Rental income for the Partnership's business park operations was
$961,000 compared to $823,000 for the three months ended March 31, 1996 and
1995, respectively, representing an increase of $138,000 or 17%. Rental income
includes $90,000 and $166,000 in 1995 and 1996, respectively, from the buyout of
leases by tenants which vacated their space prior to the termination of their
leases and other non-reoccurring adjustments to income. Excluding these
adjustments, rental income for the Partnership's business park operations was
$795,000 compared to $733,000 for the three months ended March 31, 1996 and
1995, respectively, representing an increase of $62,000. This increase in rental
income is primarily attributable to an increase in the weighted average
occupancy level at the Partnership's business park facilities, and increased
rental rates. The weighted average occupancy level at the business park
facilities was 99% compared to 96% 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 $.82 compared to $.78 for the three months ended
March 31, 1996 and 1995, respectively. Cost of operations (including management
fees) increased $63,000 or 13% to $554,000 from $491,000 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 $75,000 or
22% from $332,000 to $407,000 for the three months ended March 31, 1995 and
1996, respectively.
Minority interest in income was $954,000 in 1996 compared to $887,000 in
1995, representing an increase of $67,000, or 8%. This increase was primarily
the result of improved operations at the Partnership's mini-warehouse facilities
which are owned jointly with PSI.
Administrative expenses decreased $38,000 from $55,000 in 1995 to $17,000
in 1996. This decrease is principally attributable to decreases in non-recurring
expenses incurred in connection with having the Partnership's facilities undergo
environmental studies, state income tax provisions, investor services expenses,
and accounting expenses.
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
($1,886,000 for the three months ended March 31, 1996) has been sufficient to
meet all current obligations of the Partnership.
During 1996, the Partnership anticipates approximately $1,774,000 of
capital improvements (of which $723,000 represents PSI's joint venture share).
The anticipated increase in capital improvements in 1996 is mainly due to
$975,000 of budgeted improvements at the Partnership's business parks;
specifically to include renovations to common areas, roof replacements, and
tenant improvement on vacated spaces. 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 $121,000 for such
enhancements. Total capital improvements were $87,000 for the three months ended
March 31, 1996 of which $50,000 represents the Partnership's share.
7
<PAGE>
The Partnership paid distributions to the limited and general partners
totaling $891,000 ($6.96 per unit) and $109,000, 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.
8
<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 IV, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ Ronald L. Havner Jr.
-----------------------------------------
Ronald L. Havner, Jr.
Senior Vice President and 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)
9
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000748901
<NAME> PS Partner IV
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> Jan-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 421,000
<SECURITIES> 0
<RECEIVABLES> 39,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 460,000
<PP&E> 91,372,000
<DEPRECIATION> (31,540,000)
<TOTAL-ASSETS> 60,452,000
<CURRENT-LIABILITIES> 1,335,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 21,118,000
<TOTAL-LIABILITY-AND-EQUITY> 60,452,000
<SALES> 3,751,000
<TOTAL-REVENUES> 3,755,000
<CGS> 1,655,000
<TOTAL-COSTS> 1,655,000
<OTHER-EXPENSES> 865,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 281,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 281,000
<EPS-PRIMARY> 1.40
<EPS-DILUTED> 0.000
</TABLE>
