PS PARTNERS IV, LTD.
CONDENSED BALANCE SHEETS
September 30, December 31,
2000 1999
-----------------------------------
(Unaudited)
ASSETS
------
Cash and cash equivalents $3,754,000 $2,337,000
Rent and other receivables 1,000 2,000
Real estate facility, at cost:
Land 101,000 101,000
Buildings and equipment 1,563,000 1,537,000
-----------------------------------
1,664,000 1,638,000
Less accumulated depreciation (768,000) (716,000)
-----------------------------------
896,000 922,000
Investment in real estate entities 14,384,000 15,140,000
Other assets 3,000 3,000
-----------------------------------
$19,038,000 $18,404,000
===================================
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $144,000 $178,000
Advance payments from renters 13,000 12,000
Partners' equity:
Limited partners' equity, $500 per unit, 128,000
units authorized, issued and outstanding 18,610,000 17,949,000
General partner's equity 271,000 265,000
-----------------------------------
Total partners' equity 18,881,000 18,214,000
-----------------------------------
$19,038,000 $18,404,000
===================================
See accompanying notes.
2
PS PARTNERS IV, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------------------------------------
2000 1999 2000 1999
----------------------------------------------------------------------
REVENUE:
Rental income $83,000 $83,000 $241,000 $231,000
Equity in earnings of real estate entities 835,000 761,000 2,366,000 2,189,000
Interest income 62,000 23,000 153,000 71,000
----------------------------------------------------------------------
980,000 867,000 2,760,000 2,491,000
----------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of operations 31,000 37,000 88,000 98,000
Management fees 5,000 5,000 15,000 14,000
Depreciation and amortization 18,000 17,000 52,000 51,000
Administrative 26,000 36,000 138,000 119,000
----------------------------------------------------------------------
80,000 95,000 293,000 282,000
----------------------------------------------------------------------
NET INCOME $900,000 $772,000 $2,467,000 $2,209,000
======================================================================
Limited partners' share of net income
($17.69 per unit in 2000 and
$13.49 per unit in 1999) $2,264,000 $1,727,000
General partner's share of net income 203,000 482,000
-----------------------------------
$2,467,000 $2,209,000
===================================
See accompanying notes.
3
PS PARTNERS IV, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
-------------------------------------
2000 1999
-------------------------------------
Cash flows from operating activities:
Net income $2,467,000 $2,209,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 52,000 51,000
Decrease in rent and other receivables 1,000 -
Decrease in other assets - 2,000
(Decrease) increase in accounts payable (34,000) 26,000
Increase (decrease) in advance payments from renters 1,000 (1,000)
Equity in earnings of real estate entities (2,366,000) (2,189,000)
-------------------------------------
Total adjustments (2,346,000) (2,111,000)
-------------------------------------
Net cash provided by operating activities 121,000 98,000
-------------------------------------
Cash flows from investing activities:
Distributions from real estate entities 3,122,000 3,602,000
Additions to real estate facility (26,000) (2,000)
-------------------------------------
Net cash provided by investing activities 3,096,000 3,600,000
-------------------------------------
Cash flows from financing activities:
Distributions to partners (1,800,000) (4,650,000)
-------------------------------------
Net cash used in financing activities (1,800,000) (4,650,000)
-------------------------------------
Net increase (decrease) in cash and cash equivalents 1,417,000 (952,000)
Cash and cash equivalents at the beginning of the period 2,337,000 3,414,000
-------------------------------------
Cash and cash equivalents at the end of the period $3,754,000 $2,462,000
=====================================
See accompanying notes.
4
PS PARTNERS IV, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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 September 30, 2000, the results of operations for the three and nine months ended September
30, 2000 and 1999 and cash flows for the nine months then ended.
3. The results of operations for the three and nine months ended September 30, 2000 are not necessarily
indicative of the results to be expected for the full year.
4. In January 1997, 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:
Nine Months Ended September 30,
------------------------------------
2000 1999
------------------------------------
Total revenues............................................... $122,728,000 $104,130,000
Minority interest in income.................................. $18,391,000 $10,769,000
Net income................................................... $38,426,000 $35,170,000
5
PS PARTNERS IV, 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 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
in which the Partnership has an interest; the Partnership's ability to effectively compete in the markets in
which it does business; 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 in which the Partnership has an
interest.
Results of Operations
Three months ended September 30, 2000 compared to three months ended September 30, 1999:
Our net income for the three months ended September 30, 2000 was $900,000 compared to $772,000 for the
three months ended September 30, 1999, representing an increase of $128,000, or 16.6%. The increase was
primarily due to a decrease in depreciation expense allocated to us with respect to the Joint Venture, our share
of increased earnings of PSBPLP, lower administrative expense and increased interest income, offset by our share
of lower property operations at the real estate facilities in which we have an interest.
Property Operations
Rental income for our wholly-owned mini-warehouse property was $83,000 for the three months ended
September 30, 2000 and 1999, respectively. Cost of operations (including management fees) decreased $6,000, or
14.3%, to $36,000 from $42,000 for the three months ended September 30, 2000 and 1999, respectively.
Accordingly, for our wholly-owned mini-warehouse property, property net operating income increased by $6,000, or
14.6%, from $41,000 to $47,000 for the three months ended September 30, 1999 and 2000, respectively.
6
Equity in Earnings of Real Estate Entities
Equity in earnings of real estate entities was $835,000 in the three months ended September 30, 2000 as
compared to $761,000 during the three months ended September 30, 1999, representing an increase of $74,000, or
9.7%. This was due primarily to our share of higher earnings with respect to PSBPLP and a decrease in
depreciation expense allocated to us with respect to the Joint Venture, partially offset by lower operating
results of the Joint Venture's mini-warehouses.
Interest Income
Interest income increased by $39,000 from $23,000 for the three months ended September 30, 1999 to
$62,000 for the three months ended September 30, 2000, due to higher invested cash balances and interest rates.
Depreciation and Amortization
Depreciation and amortization increased by $1,000, from $17,000 to $18,000 for the three months ended
September 30, 1999 and 2000, respectively.
Administrative
Administrative expense decreased $10,000, to $26,000 for the three months ended September 30, 2000 as
compared to $36,000 for the same period in 1999, due primarily to lower accounting and investor services expenses.
Nine months ended September 30, 2000 compared to nine months ended September 30, 1999:
Our net income for the nine months ended September 30, 2000 was $2,467,000 compared to $2,209,000 for
the nine months ended September 30, 1999, representing an increase of $258,000, or 11.7%. The increase was
primarily due to a decrease in depreciation expense allocated to us with respect to the Joint Venture and our
share of higher earnings with respect to PSBPLP, offset partially by lower property operations at the real estate
facilities in which we have an interest.
Property Operations
Rental income for our wholly-owned mini-warehouse property was $241,000 compared to $231,000 for the
nine months ended September 30, 2000 and 1999, respectively, representing an increase of $10,000, or 4.3%. Cost
of operations (including management fees) decreased $9,000, or 8.0%, to $103,000 from $112,000 for the nine
7
months ended September 30, 2000 and 1999, respectively. Accordingly, for our wholly-owned mini-warehouse
property, property net operating income increased by $19,000, or 16.0%, from $119,000 to $138,000 for the nine
months ended September 30, 1999 and 2000, respectively.
Equity in Earnings of Real Estate Entities
Equity in earnings of real estate entities was $2,366,000 in the nine months ended September 30, 2000 as
compared to $2,189,000 during the nine months ended September 30, 1999, representing an increase of $177,000, or
8.1%. This was due primarily to our share of higher earnings with respect to PSBPLP and a decrease in
depreciation expense allocated to us with respect to the Joint Venture, partially offset by lower operating
results of the Joint Venture's mini-warehouses.
Depreciation and Amortization
Depreciation and amortization increased $1,000 from $51,000 to $52,000 for the nine months ended
September 30, 1999 and 2000, respectively.
Administrative
Administrative expense increased $19,000, to $138,000 for the nine months ended September 30, 2000 as
compared to $119,000 for the same period in 1999, due primarily to the timing of investor services related
expenses.
Interest Income
Interest income increased by $82,000 from $71,000 for the nine months ended September 30, 1999 to
$153,000 for the nine months ended September 30, 2000, due to higher invested cash balances and interest rates.
Supplemental Property Data
Most of our net income is from the our share of the operating results of the Mini-Warehouse Properties.
Therefore, in order to evaluate our operating results, the General Partners analyze the operating performance of
the Mini-Warehouse Properties.
Three months ended September 30, 2000 compared to three months ended September 30, 1999:
Rental income for the Mini-Warehouse Properties was $3,380,000 compared to $3,394,000 for the three
months ended September 30, 2000 and 1999, respectively, representing a decrease of $14,000, or 0.4%. The
8
decrease in rental income was primarily attributable to lower occupancy rates offset partially by higher average
realized rents at the Mini-Warehouse Properties. The annual average realized rent per occupied square foot for
the Mini-Warehouse Properties was $8.43 compared to $8.17 for the three months ended September 30, 2000 and 1999,
respectively. The weighted average occupancy levels at the Mini-Warehouse Properties decreased from 91% to 88%
for the three months ended September 30, 1999 and 2000, respectively. Cost of operations (including management
fees) increased $80,000, or 6.2%, to $1,375,000 from $1,295,000 for the three months ended September 30, 2000 and
1999, respectively. This increase is primarily attributable to increases in repairs and maintenance, advertising
and payroll expenses. Accordingly, for the Mini-Warehouse Properties, property net operating income decreased by
$94,000, or 4.4%, from $2,099,000 to $2,005,000 for the three months ended September 30, 1999 and 2000,
respectively.
Nine months ended September 30, 2000 compared to nine months ended September 30, 1999:
Rental income for the Mini-Warehouse Properties was $9,882,000 compared to $9,886,000 for the nine
months ended September 30, 2000 and 1999, respectively, representing a decrease of $4,000. The decrease in
rental income was primarily attributable to decreased average occupancy rates offset partially by higher realized
rents at the Mini-Warehouse Properties. The annual average realized rent per occupied square foot for the
Mini-Warehouse Properties was $8.21 compared to $8.01 for the nine months ended September 30, 2000 and 1999,
respectively. The weighted average occupancy levels at the Mini-Warehouse Properties decreased from 90% to 88%
for the nine months ended September 30, 1999 and 2000, respectively. Cost of operations (including management
fees) increased $166,000, or 4.4%, to $3,936,000 from $3,770,000 for the nine months ended September 30, 2000 and
1999, respectively. This increase is primarily attributable to higher payroll, repairs and maintenance, and
advertising expenses. Accordingly, for the Mini-Warehouse Properties, property net operating income decreased by
$170,000, or 2.8%, from $6,116,000 to $5,946,000 for the nine months ended September 30, 1999 and 2000,
respectively.
Liquidity and Capital Resources
We have adequate sources of cash to finance our 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 ($3,243,000 for the nine months ended September 30, 2000)
has been sufficient to meet all of our current obligations.
9
Total capital improvements for the nine months ended September 30, 2000 with respect to the
Partnership's wholly-owned property was $26,000. During the remainder of fiscal 2000, we do not anticipate
incurring significant costs for capital improvements for this property
We paid distributions to the limited and general partners totaling $1,603,000 ($12.52 per unit) and
$197,000, respectively, during the first nine months of 2000. Future distribution rates may be adjusted to
levels which are supported by operating cash flow after capital improvements and any other necessary obligations.
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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) 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: November 13, 2000
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)
11
