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, 1999
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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
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Commission File Number 0-14475
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PS PARTNERS IV, LTD.
---------------------------------------------------------
(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
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<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
Condensed balance sheets at March 31, 1999
and December 31, 1998 2
Condensed statements of income for the three
months ended March 31, 1999 and 1998 3
Condensed statements of cash flows for the three
months ended March 31, 1999 and 1998 4
Notes to condensed financial statements 5-6
Management's discussion and analysis of financial condition
and results of operations 7-9
PART II. OTHER INFORMATION
(Items 1 through 5 are not applicable)
Item 6 - Exhibits and Reports on Form 8-K 10
<PAGE>
PS PARTNERS IV, LTD.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---------------- -----------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $770,000 $3,414,000
Rent and other receivables - 2,000
Real estate facility, at cost:
Land 101,000 101,000
Buildings and equipment 1,535,000 1,534,000
---------------- -----------------
1,636,000 1,635,000
Less accumulated depreciation (664,000) (647,000)
---------------- -----------------
972,000 988,000
Investment in real estate entities 15,831,000 16,115,000
Other assets 5,000 5,000
---------------- -----------------
$17,578,000 $20,524,000
================ =================
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $131,000 $122,000
Advance payments from renters 13,000 12,000
Partners' equity:
Limited partners' equity, $500 per unit, 128,000
units authorized, issued and outstanding 17,177,000 20,103,000
General partner's equity 257,000 287,000
---------------- -----------------
Total partners' equity 17,434,000 20,390,000
---------------- -----------------
$17,578,000 $20,524,000
================ =================
</TABLE>
See accompanying notes.
2
<PAGE>
PS PARTNERS IV, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1999 1998
-------------- ----------------
REVENUE:
<S> <C> <C>
Rental income $72,000 $67,000
Equity in earnings of real estate entities 662,000 514,000
Interest income 36,000 21,000
-------------- ----------------
770,000 602,000
-------------- ----------------
COSTS AND EXPENSES:
Cost of operations 31,000 29,000
Management fees 4,000 4,000
Depreciation and amortization 17,000 16,000
Administrative 23,000 19,000
-------------- ----------------
75,000 68,000
-------------- ----------------
NET INCOME $695,000 $534,000
============== ================
Limited partners' share of net income
($2.55 per unit in 1999 and
$3.74 per unit in 1998) $326,000 $479,000
General partner's share of net income 369,000 55,000
-------------- ----------------
$695,000 $534,000
============== ================
</TABLE>
See accompanying notes.
3
<PAGE>
PS PARTNERS IV, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------------
1999 1998
------------------ -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $695,000 $534,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 17,000 16,000
Decrease (increase) in rent and other receivables 2,000 (1,000)
Increase (decrease) in accounts payable 9,000 (8,000)
Increase in advance payments from renters 1,000 -
Equity in earnings of real estate entities (662,000) (514,000)
------------------ -----------------
Total adjustments (633,000) (507,000)
------------------ -----------------
Net cash provided by operating activities 62,000 27,000
------------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from real estate entities 946,000 1,040,000
Additions to real estate facility (1,000) (3,000)
------------------ -----------------
Net cash provided by investing activities 945,000 1,037,000
------------------ -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (3,651,000) (500,000)
------------------ -----------------
Net cash used in financing activities (3,651,000) (500,000)
------------------ -----------------
Net (decrease) increase in cash and cash equivalents (2,644,000) 564,000
Cash and cash equivalents at the beginning of the period 3,414,000 1,293,000
------------------ -----------------
Cash and cash equivalents at the end of the period $770,000 $1,857,000
================== =================
</TABLE>
See accompanying notes.
4
<PAGE>
PS PARTNERS IV, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(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, 1998.
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, 1999, the results of operations for the three
months ended March 31, 1999 and 1998 and cash flows for the three
months then ended.
3. The results of operations for the three months ended March 31, 1999 are
not necessarily indicative of the results to be expected for the full
year.
4. In January 1998, the Joint Venture, PSI, and other related partnerships
transferred a total of 35 business parks to PS Business Parks, LP
("PSBPLP"), an operating partnership formed to own and operate business
parks in which PSI has a significant interest. Included among the
properties transferred were the Joint Venture's business parks in
exchange for a partnership interest in PSBPLP. The general partner of
PSBPLP is PS Business Parks, Inc.
5. Summarized combined financial data with respect to the Real Estate
Entities is as follows:
Three Months Ended March 31,
-------------------------------------
1999 1998
----------------- -----------------
Total revenues....................... $32,595,000 $17,965,000
Minority interest in income.......... $2,966,000 $2,814,000
Net income........................... $10,117,000 $4,844,000
6. The City of Manchester, Airport Authority ("Airport Authority") is
considering the acquisition of a small parcel of land at the Joint
Venture's Manchester, New Hampshire property either through the
exercise of its right of eminent domain or pursuant to a conveyance in
lieu of an exercise of such power. If acquired, the Airport Authority
intends to use the parcel of land for the widening of an adjoining
5
<PAGE>
road. The Joint Venture is currently in communication with the Airport
Authority concerning the status of its decision with regard to the
possible partial taking.
6
<PAGE>
PS PARTNERS IV, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS
- --------------------------
Management's Discussion and Analysis of Financial Condition and Results
of Operations contains "forward looking" statements that involve risks and
uncertainties and are based upon a number of assumptions. Actual results and
trends may differ materially depending upon a number of factors. Information
regarding these factors is contained in the Partnership's Annual Report on Form
10-K for the fiscal year ended December 31, 1998.
RESULTS OF OPERATIONS
- ---------------------
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998:
The Partnership's net income for the three months ended March 31, 1999
was $695,000 compared to $534,000 for the three months ended March 31, 1998,
representing an increase of $161,000, or 30%. The increase was primarily due to
the Partnership's share of improved property operations at the real estate
facilities that the Partnership has an interest in, combined with a decrease in
depreciation allocated to the Partnership with respect to the Joint Venture.
Property Operations
- -------------------
Rental income for the Partnership's wholly-owned mini-warehouse
property was $72,000 compared to $67,000 for the three months ended March 31,
1999 and 1998, respectively, representing an increase of $5,000, or 8%. Cost of
operations (including management fees) increased $2,000, or 6%, to $35,000 from
$33,000 for the three months ended March 31, 1999 and 1998, respectively.
Accordingly, for the Partnership's wholly-owned mini-warehouse property,
property net operating income increased by $3,000, or 9%, from $34,000 to
$37,000 for the three months ended March 31, 1998 and 1999, respectively.
Equity in Earnings of Real Estate Entities
- ------------------------------------------
Equity in earnings of real estate entities was $662,000 in the three
months ended March 31, 1999 as compared to $514,000 during the three months
ended March 31, 1998, representing an increase of $148,000, or 29%. This was due
primarily to the Partnership's share of improved operating results at the Joint
Venture's mini-warehouse properties and a decrease in depreciation allocated to
the Partnership with respect to the Joint Venture.
7
<PAGE>
Depreciation and Amortization
- -----------------------------
Depreciation and amortization increased $1,000, or 6% from $16,000 to
$17,000 for the three months ended March 31, 1998 and 1999, respectively. This
increase was primarily attributable to the depreciation of capital expenditures
made during 1998 and 1999.
SUPPLEMENTAL PROPERTY DATA
- --------------------------
Most of the Partnership's net income is from the Partnership's share of
the operating results of the Mini-Warehouse Properties. Therefore, in order to
evaluate the Partnership's operating results, the General Partners analyze the
operating performance of the Mini-Warehouse Properties.
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998:
Rental income for the Mini-Warehouse Properties was $3,206,000 compared
to $3,063,000 for the three months ended March 31, 1999 and 1998, respectively,
representing an increase of $143,000, or 5%. The increase in rental income was
primarily attributable to increases in rental rates at the Mini-Warehouse
Properties. The monthly average realized rent per square foot for the
mini-warehouse facilities was $.66 compared to $.63 for the three months ended
March 31, 1999 and 1998, respectively. The weighted average occupancy levels at
the Mini-Warehouse Properties remained stable at 89% for the three months ended
March 31, 1998 and 1999. Cost of operations (including management fees)
increased $90,000, or 8%, to $1,263,000 from $1,173,000 for the three months
ended March 31, 1999 and 1998, respectively. This increase was primarily
attributable to increases in repairs and maintenance, advertising, and payroll
expenses. Accordingly, for the Mini-Warehouse Properties, property net operating
income increased by $53,000, or 3%, from $1,890,000 to $1,943,000 for the three
months ended March 31, 1998 and 1999, respectively.
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
and distributions from real estate entities ($1,008,000 for the three months
ended March 31, 1999) has been sufficient to meet all current obligations of the
Partnership.
8
<PAGE>
During 1999, the Partnership does not anticipate incurring significant
costs for capital improvements to Partnership's wholly-owned property. Total
capital improvements for the three months ended March 31, 1999 with respect to
this property was $1,000.
The Partnership paid distributions to the limited and general partners
totaling $3,252,000 ($25.41 per unit) and $399,000, respectively, during the
first three months of 1999. Included in these distributions were special
distributions of a portion of the Partnership's operating reserve to the limited
and general partners totaling $2,807,000 ($21.93 per unit) and $345,000,
respectively. Future distribution rates may be adjusted to levels which are
supported by operating cash flow after capital improvements and any other
necessary obligations.
9
<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) Reports on 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, 1999
PS PARTNERS IV, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ John Reyes
---------------------------------------------
John Reyes
Senior Vice President and Chief Financial
Officer of Public Storage, Inc.
(principal financial and accounting officer)
10
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000748901
<NAME> PS PARTNERS IV, LTD.
<MULTIPLIER> 1
<CURRENCY> U.S. $
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 770,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 770,000
<PP&E> 1,636,000
<DEPRECIATION> (664,000)
<TOTAL-ASSETS> 17,578,000
<CURRENT-LIABILITIES> 144,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 17,434,000
<TOTAL-LIABILITY-AND-EQUITY> 17,578,000
<SALES> 0
<TOTAL-REVENUES> 770,000
<CGS> 0
<TOTAL-COSTS> 35,000
<OTHER-EXPENSES> 40,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 695,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 695,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 695,000
<EPS-PRIMARY> 2.55
<EPS-DILUTED> 2.55
</TABLE>
