SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: Commission File Number:
September 30, 1996 2-95034LA
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ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Arizona 85-0503193
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3839 North 3rd Street, Suite 108
Phoenix, Arizona 85012
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(Address of and zip code of principal executive offices)
(602) 230-1656
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(Registrant's telephone number, including area code)
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>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
PART I
FINANCIAL INFORMATION
---------------------
ITEM 1 FINANCIAL STATEMENTS PAGE
- ---------------------------- ----
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Unaudited Financial Statements 6
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
BALANCE SHEETS
(Unaudited)
September 30, September 30,
1996 1995
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ASSETS
Property
Land $ 1,139,828 $ 1,139,828
Buildings 5,856,761 5,835,812
Furniture and fixtures 74,576 74,576
----------- -----------
7,071,165 7,050,216
Less accumulated depreciation 2,000,523 1,805,747
----------- -----------
5,070,642 5,244,469
Cash and cash equivalents 264,154 969,714
Other assets 21,849 29,218
----------- -----------
$ 5,356,645 $ 6,243,401
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Note payable to bank $ -0- $ 904,267
Accounts payable 83,732 106,159
----------- -----------
83,732 1,010,426
Commitments (Note 3)
Partners' capital
General partner $ 47,056 $ 20,099
Limited partners 5,225,857 5,212,876
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$ 5,356,645 $ 6,243,401
=========== ===========
See notes to financial statements.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
STATEMENTS OF OPERATIONS
(unaudited)
For the Nine Months For the Years
Ended Ended
------------------- -------------
Sept. 30, Sept. 30, Dec. 31, Dec. 31,
1996 1995 1995 1994
--------- --------- ---------- ----------
Income
Rental $ 856,452 $ 801,595 $1,070,463 $ 964,399
Interest 5,199 18,983 24,664 11,888
--------- --------- ---------- ---------
861,651 820,578 1,095,127 976,287
--------- --------- ---------- ---------
Expenses
Property Operations 297,964 292,772 406,069 378,120
Administration 69,474 68,181 87,566 83,985
Amortization &
Depreciation 147,441 147,977 197,365 206,530
Interest -0- 66,464 86,987 86,640
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514,879 575,394 777,987 755,275
--------- --------- ---------- ---------
Net Income (loss) $ 346,772 $ 245,184 $ 317,140 $ 221,012
========= ========= =========== =========
See notes to financial statements.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
STATEMENTS OF CASH FLOWS
(unaudited)
For the nine months ended
---------------------------------
Sept. 30, 1996 Sept. 30, 1995
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CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 856,452 $ 801,595
Cash paid to suppliers (374,814) (336,328)
Interest received 5,199 18,983
Interest paid -0- (66,464)
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Net cash provided by
operating activities $ 486,837 $ 417,786
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment - -
--------- ---------
Net cash provided by (used in)
Investing activities $ - $ -
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners (378,787) -
--------- ---------
Net cash used in financing activities (378,787) -
--------- ---------
Increase (decrease) in cash $ 108,050 $ 417,786
Cash and cash equivalents:
Beginning 156,104 551,928
--------- ---------
Ending $ 264,154 $ 969,714
========= =========
RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net income $ 346,772 $ 245,184
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 147,441 147,977
Increase (decrease) in accounts payable (7,376) 24,625
--------- ---------
Net cash provided by
operating activities $ 486,837 $ 417,786
========= =========
See notes to financial statements.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1996
NOTE 1. Partnership Organization
Armored Storage Income Investors Limited Partnership ("the Partnership")
was organized under the laws of the State of Arizona pursuant to an
agreement of limited partnership filed December 4, 1984, for the purpose
of acquiring, developing, owning and operating self-service storage
facilities. The initial General Partners were Armored Storage, Inc., an
Arizona corporation (the "Managing General Partner") and Armored Storage
One Limited Partnership, an Arizona Limited Partnership. The Partnership
commenced full activity on January 9, 1985. During 1986, the Partnership
completed an offering of limited partnership units wherein 15,000 limited
partnership units were purchased by investors for $7,500,000. In December
1987 Armored Storage, Inc., withdrew and Armored Storage One Limited
Partnership, became the "Managing General Partner."
NOTE 2. Summary of Significant Accounting Policies
Property and equipment:
Property and equipment is stated at cost. Depreciation is
computed principally by the straight-line method over the
following estimated useful lives:
Years
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Buildings 30
Furniture and fixtures 5
Interest, real estate taxes and other costs related directly to
properties under long-term development contracts were
capitalized. Costs were not capitalized beyond net realizable
value. Costs related to operating properties are expensed as
incurred.
Acquisition fees are allocated to the Partnership's property
based on the expected total capitalized cost of the respective
property.
Development fees are allocated to the Partnership's property
based on the expected total capitalized cost of the respective
property.
Loan acquisition costs:
Loan acquisition costs which are included in other assets are
amortized over the life of the note payable of 9 years.
Rental income:
The Partnership receives rental income from its self-storage
facilities. All rental agreements are for month-to-month tenancy.
Rental income is recognized on the accrual basis in accordance
with generally accepted accounting principles.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1996
NOTE 2. Summary of Significant Accounting Policies, continued
Income taxes:
The Partnership does not record a provision for income taxes,
since Federal and state income tax regulations provide that any
taxes on income of a Partnership are payable by the partners as
individuals. The Partnership's tax returns are prepared on the
accrual basis.
Syndication fees:
Syndication fees are those expenses incurred in the issuing and
marketing of partnership interests. These expenses include broker
and registration fees, legal fees, tax and accounting fees, and
printing costs. These fees are not amortizable and are presented
as a reduction in partners' capital in the financial statements.
Organization costs:
Organization costs which are included in other assets consist of
legal fees incident to the creation of the Partnership,
accounting fees for establishing an accounting system and filing
fees. These costs are being amortized using the straight-line
method over 60 months.
Cash and cash equivalents:
For purposes of reporting cash flows, the Partnership considers
all money market funds to be cash equivalents.
Unaudited financial statements:
The financial statement for the nine months ended September 30,
1996 are unaudited, however, in management's opinion they include
all adjustments necessarily for a fair statement of the results
of operations for such interim period. The interim period results
of operations are not necessarily indicative of results for a
full year.
NOTE 3. Commitments
The Partnership has the following commitments:
The Partnership entered into agreements with QuestCor, Inc., on
November 1, 1989, to manage the Partnership's self-storage
facilities. The term of the agreements are for one year and shall
be renewed from year to year unless, and until, either party
terminates the agreements. The agreements provide that the
manager shall receive, as compensation for services, 6% of the
actual gross cash receipts.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1996
NOTE 3 Commitments, continued
The Partnership also entered into an agreement with QuestCor,
Inc. for the management of the Partnership's accounting,
securities reporting, database and investor relations activities.
The term of the agreement is for one year and shall be renewed
from year to year unless either party terminates the agreement.
The agreement provides for a flat fee of $4,500 per month as
compensation for administration services.
The Partnership reimburses the General Partner for the costs of
goods and materials used by and for the Partnership and
administrative services necessary to the operation of the
Partnership.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1996
ITEM 2 MANAGEMENT'S DISCUSSIONS AND ANALYSIS
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Results of Operations
The Partnership has three operating facilities, two located in Phoenix,
Arizona, and one in Albuquerque, New Mexico. The Partnership's three facilities
generated an aggregate gross operating revenue of $856,452 during the first nine
months of 1996 compared to $801,595 during the first nine months of 1995. All
three facilities posted increases in rental income over the prior year.
Occupancies (based on number of available units) at the three facilities
are summarized as follows:
Sept. 30, 1996 Sept. 30, 1995
-------------- --------------
Bell Road 91% 91%
63rd Avenue 74% 81%
Tramway 85% 92%
Operational expenses through September 30, 1996 were $297,964 compared to
$292,772 for 1995. Administrative expenses for 1996 were $69,474 compared to
$68,181 for the corresponding period in 1995.
Liquidity and Capital Resources
As of September 30, 1996, the Partnership held cash and cash equivalents
totaling $264,154 as compared to $969,714 for the corresponding quarter of 1995.
<PAGE>
ARMORED STORAGE INCOME INVESTORS LIMITED PARTNERSHIP
an Arizona Limited Partnership
PART II
OTHER INFORMATION
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Item 1: Legal Proceedings:
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Not applicable.
Item 2: Changes in securities:
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Not applicable.
Item 3: Defaults Upon Senior Securities:
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Not applicable.
Item 4: Submission of Matters to a Vote of Security Holders:
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Not applicable.
Item 5: Other information:
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Not applicable.
<PAGE>
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.
ARMORED STORAGE INCOME INVESTORS
(Registrant)
By: Armored Management L.L.C.
Its General Partner
By: /s/ Dale D. Ulrich
----------------------
Dale D. Ulrich
Its: Member
Dated: 11/8/96
----------------
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<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 264,154
<SECURITIES> 0
<RECEIVABLES> 43,368
<ALLOWANCES> 21,684
<INVENTORY> 0
<CURRENT-ASSETS> 285,838
<PP&E> 7,071,166
<DEPRECIATION> 2,000,523
<TOTAL-ASSETS> 5,356,645
<CURRENT-LIABILITIES> 83,732
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,272,913
<TOTAL-LIABILITY-AND-EQUITY> 5,356,645
<SALES> 0
<TOTAL-REVENUES> 856,452
<CGS> 0
<TOTAL-COSTS> 445,405
<OTHER-EXPENSES> 69,474
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 514,879
<INCOME-TAX> 0
<INCOME-CONTINUING> 514,879
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 514,879
<EPS-PRIMARY> 32.60
<EPS-DILUTED> 32.60
</TABLE>
