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, 2000
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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, 2000
and December 31, 1999 2
Condensed statements of income for the three
months ended March 31, 2000 and 1999 3
Condensed statements of cash flows for the
three months ended March 31, 2000 and 1999 4
Notes to condensed 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 BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-----------------------------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $2,803,000 $2,337,000
Rent and other receivables 1,000 2,000
Real estate facility, at cost:
Land 101,000 101,000
Buildings and equipment 1,543,000 1,537,000
-----------------------------------
1,644,000 1,638,000
Less accumulated depreciation (733,000) (716,000)
-----------------------------------
911,000 922,000
Investment in real estate entities 14,882,000 15,140,000
Other assets 29,000 3,000
-----------------------------------
$18,626,000 $18,404,000
===================================
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $143,000 $178,000
Advance payments from renters 15,000 12,000
Partners' equity:
Limited partners' equity, $500 per unit, 128,000
units authorized, issued and outstanding 18,201,000 17,949,000
General partner's equity 267,000 265,000
-----------------------------------
Total partners' equity 18,468,000 18,214,000
-----------------------------------
$18,626,000 $18,404,000
===================================
</TABLE>
See accompanying notes.
2
<PAGE>
PS PARTNERS IV, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------
2000 1999
-----------------------------------
REVENUE:
<S> <C> <C>
Rental income $77,000 $72,000
Equity in earnings of real estate entities 716,000 662,000
Interest income 37,000 36,000
-----------------------------------
830,000 770,000
-----------------------------------
COSTS AND EXPENSES:
Cost of operations 28,000 31,000
Management fees 5,000 4,000
Depreciation and amortization 17,000 17,000
Administrative 26,000 23,000
-----------------------------------
76,000 75,000
-----------------------------------
NET INCOME $754,000 $695,000
===================================
Limited partners' share of net income
($5.45 per unit in 2000 and
$2.55 per unit in 1999) $697,000 $326,000
General partner's share of net income 57,000 369,000
-----------------------------------
$754,000 $695,000
===================================
</TABLE>
See accompanying notes.
3
<PAGE>
PS PARTNERS IV, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------
2000 1999
-------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $754,000 $695,000
Adjustments to reconcile net income to net cash (used in)
provided by operating activities
Depreciation and amortization 17,000 17,000
Decrease in rent and other receivables 1,000 2,000
Increase in other assets (26,000) -
(Decrease) increase in accounts payable (35,000) 9,000
Increase in advance payments from renters 3,000 1,000
Equity in earnings of real estate entities (716,000) (662,000)
-------------------------------------
Total adjustments (756,000) (633,000)
-------------------------------------
Net cash (used in) provided by operating activities (2,000) 62,000
-------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from real estate entities 974,000 946,000
Additions to real estate facility (6,000) (1,000)
-------------------------------------
Net cash provided by investing activities 968,000 945,000
-------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (500,000) (3,651,000)
-------------------------------------
Net cash used in financing activities (500,000) (3,651,000)
-------------------------------------
Net increase (decrease) in cash and cash equivalents 466,000 (2,644,000)
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 $2,803,000 $770,000
=====================================
</TABLE>
See accompanying notes.
4
<PAGE>
PS PARTNERS IV, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 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 March 31, 2000, the results of operations for the three
months ended March 31, 2000 and 1999 and cash flows for the three
months then ended.
3. The results of operations for the three months ended March 31, 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:
Three Months Ended March 31,
------------------------------
2000 1999
----------- -----------
Total revenues...................... $39,195,000 $32,595,000
Minority interest in income......... $5,911,000 $2,966,000
Net income.......................... $11,459,000 $10,117,000
5
<PAGE>
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 MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999:
Our net income for the three months ended March 31, 2000 was $754,000
compared to $695,000 for the three months ended March 31, 1999, representing an
increase of $59,000, or 8.5%. The increase was primarily due to a decrease in
depreciation expense allocated to us with respect to the Joint Venture,
partially 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 $77,000
compared to $72,000 for the three months ended March 31, 2000 and 1999,
respectively, representing an increase of $5,000, or 6.9%. Cost of operations
(including management fees) decreased $2,000, or 5.7%, to $33,000 from $35,000
for the three months ended March 31, 2000 and 1999, respectively. Accordingly,
for our wholly-owned mini-warehouse property, property net operating income
increased by $7,000, or 18.9%, from $37,000 to $44,000 for the three months
ended March 31, 1999 and 2000, respectively.
6
<PAGE>
Equity in Earnings of Real Estate Entities
- ------------------------------------------
Equity in earnings of real estate entities was $716,000 in the three
months ended March 31, 2000 as compared to $662,000 during the three months
ended March 31, 1999, representing an increase of $54,000, or 8.2%. This was due
primarily to a decrease in depreciation expense allocated to us with respect to
the Joint Venture, partially offset by our share of lower operating results at
the Joint Venture's mini-warehouses.
Depreciation and Amortization
- -----------------------------
Depreciation and amortization remained stable at $17,000 for the three
months ended March 31, 1999 and 2000.
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 MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999:
Rental income for the Mini-Warehouse Properties was $3,176,000 compared
to $3,206,000 for the three months ended March 31, 2000 and 1999, respectively,
representing a decrease of $30,000, or 1.0%. The decrease in rental income was
primarily attributable to decreased average occupancy rates partially offset by
increased rental rates at the Mini-Warehouse Properties. The annual average
realized rent per square foot for the Mini-Warehouse Properties was $7.96
compared to $7.93 for the three months ended March 31, 2000 and 1999,
respectively. The weighted average occupancy levels at the Mini-Warehouse
Properties decreased from 89% to 88% for the three months ended March 31, 1999
and 2000, respectively. Cost of operations (including management fees) increased
$30,000, or 2.4%, to $1,293,000 from $1,263,000 for the three months ended March
31, 2000 and 1999, respectively. This increase is primarily attributable to
higher payroll and advertising expenses. Accordingly, for the Mini-Warehouse
Properties, property net operating income decreased by $60,000, or 3.1%, from
$1,943,000 to $1,883,000 for the three months ended March 31, 1999 and 2000,
respectively.
7
<PAGE>
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 ($972,000 for the three months ended
March 31, 2000) has been sufficient to meet all of our current obligations.
During 2000, we do not anticipate incurring significant costs for
capital improvements for the Partnership's wholly-owned property. Total capital
improvements for the three months ended March 31, 2000 with respect to this
property was $6,000.
We paid distributions to the limited and general partners totaling
$445,000 ($3.48 per unit) and $55,000, respectively, during the first three
months of 2000. Future distribution rates may be adjusted to levels which are
supported by operating cash flow after capital improvements and any other
necessary obligations.
Impact of Year 2000
- -------------------
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise in
some systems which use certain dates in 1999 to represent something other than a
date. Although the change in date to the year 2000 has occurred and no Year 2000
Issues have been identified, it is not possible to conclude that all aspects of
the Year 2000 Issue that may affect the entity, including those related to
customers, suppliers, or other third parties, have been fully resolved.
8
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1 through 5 are not applicable.
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
(a) The following Exhibits are included herein:
(27) Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: May 12, 2000
PS PARTNERS IV, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ John Reyes
--------------------------------------------
John Reyes
Senior Vice President and Chief Financial
Officer of Public Storage, Inc.
(principal financial and accounting officer)
9
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000748901
<NAME> PS PARTNERS IV, LTD.
<MULTIPLIER> 1
<CURRENCY> U.S.$
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 2,803,000
<SECURITIES> 0
<RECEIVABLES> 1,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,804,000
<PP&E> 1,644,000
<DEPRECIATION> (733,000)
<TOTAL-ASSETS> 18,626,000
<CURRENT-LIABILITIES> 158,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18,468,000
<TOTAL-LIABILITY-AND-EQUITY> 18,626,000
<SALES> 0
<TOTAL-REVENUES> 830,000
<CGS> 0
<TOTAL-COSTS> 33,000
<OTHER-EXPENSES> 43,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 754,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 754,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 754,000
<EPS-BASIC> 5.45
<EPS-DILUTED> 5.45
</TABLE>
