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 September 30, 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
-------- ---------
Commission File Number 0-14477
--------
PS PARTNERS VI, LTD., a California Limited Partnership
------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-3950440
- ----------------------------------- ----------------------
(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 September 30, 1996
and December 31, 1995 2
Condensed consolidated statements of income for the three and nine
months ended September 30, 1996 and 1995 3
Condensed consolidated statements of cash flows for the nine
months ended September 30, 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 4 are not applicable)
Item 5 - Other Information 9
Item 6 - Exhibits and Reports on Form 8-K 9
<PAGE>
<TABLE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 30, December 31,
1996 1995
------------------- --------------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 2,061,000 $ 2,054,000
Rent and other receivables 94,000 53,000
Real estate facilities, at cost:
Land 24,282,000 24,282,000
Buildings and equipment 68,648,000 66,819,000
------------------- --------------------
92,930,000 91,101,000
Less accumulated depreciation (28,214,000) (25,636,000)
------------------- --------------------
64,716,000 65,465,000
Other assets 197,000 145,000
------------------- --------------------
$ 67,068,000 $ 67,717,000
=================== ====================
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 1,099,000 $ 1,063,000
Advance payments from renters 369,000 373,000
Minority interest in general partnerships 24,182,000 23,596,000
Partners' equity:
Limited partners' equity, $500 per unit, 150,000
units authorized, issued and outstanding 40,907,000 42,161,000
General partners' equity 511,000 524,000
------------------- --------------------
Total partners' equity 41,418,000 42,685,000
------------------- --------------------
$ 67,068,000 $ 67,717,000
=================== ====================
</TABLE>
See accompanying notes.
2
<PAGE>
<TABLE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------- ------------------------------------
1996 1995 1996 1995
----------------- ---------------- ----------------- -----------------
REVENUE:
<S> <C> <C> <C> <C>
Rental income $ 3,358,000 $ 3,215,000 $ 9,821,000 $ 9,429,000
Interest income 27,000 26,000 74,000 69,000
----------------- ---------------- ----------------- -----------------
3,385,000 3,241,000 9,895,000 9,498,000
----------------- ---------------- ----------------- -----------------
COSTS AND EXPENSES:
Cost of operations 1,029,000 979,000 3,077,000 2,986,000
Management fees 196,000 188,000 574,000 552,000
Depreciation and amortization 887,000 821,000 2,578,000 2,357,000
Administrative 52,000 49,000 103,000 154,000
----------------- ---------------- ----------------- -----------------
2,164,000 2,037,000 6,332,000 6,049,000
----------------- ---------------- ----------------- -----------------
Income before minority interest 1,221,000 1,204,000 3,563,000 3,449,000
Minority interest in income (633,000) (606,000) (1,824,000) (1,728,000)
----------------- ---------------- ----------------- -----------------
NET INCOME $ 588,000 $ 598,000 $ 1,739,000 $ 1,721,000
================= ================ ================= =================
Limited partners' share of net income
($9.49 per unit in 1996 and $9.37
per unit in 1995) $ 1,424,000 $ 1,406,000
General partners' share of net income 315,000 315,000
----------------- -----------------
$ 1,739,000 $ 1,721,000
================= =================
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Nine Months Ended
September 30,
-----------------------------------------
1996 1995
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 1,739,000 $ 1,721,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 2,578,000 2,357,000
Increase in rent and other receivables (41,000) (6,000)
(Increase) decrease in other assets (52,000) 1,000
Increase in accounts payable 36,000 123,000
Decrease in advance payments from renters (4,000) (14,000)
Minority interest in income 1,824,000 1,728,000
------------------- -------------------
Total adjustments 4,341,000 4,189,000
------------------- -------------------
Net cash provided by operating activities 6,080,000 5,910,000
------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate facilities (1,829,000) (719,000)
------------------- -------------------
Net cash used in investing activities (1,829,000) (719,000)
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to holder of minority interest (1,238,000) (1,563,000)
Distributions to partners (3,006,000) (3,006,000)
------------------- -------------------
Net cash used in financing activities (4,244,000) (4,569,000)
------------------- -------------------
Net increase in cash and cash equivalents 7,000 622,000
Cash and cash equivalents at the beginning of the period 2,054,000 1,407,000
------------------- -------------------
Cash and cash equivalents at the end of the period $ 2,061,000 $ 2,029,000
=================== ===================
</TABLE>
See accompanying notes.
4
<PAGE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 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 September 30, 1996, the results of operations for the
three and nine months ended September 30, 1996 and 1995 and cash flows for
the nine months then ended.
3. The results of operations for the three and nine months ended September 30,
1996 are not necessarily indicative of the results to be expected for the
full year.
5
<PAGE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
- ----------------------
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1995:
The Partnership's net income was $588,000 and $598,000 for the three months
ended September 30, 1996 and 1995, respectively, representing a decrease of
$10,000, or 2%. This decrease was primarily due to increases in depreciation
expense and minority interest in income for those properties held in joint
9venture with Public Storage, Inc. ("PSI"), partially offset by increased
property operating results.
Net property income (rental income less cost of operations and management
fees and excluding depreciation) for the three months ended September 30, 1996
increased $85,000 or 4%, as rental income increased $143,000 or 4%, and costs of
operations (including management fees and excluding depreciation expense)
increased $58,000 or 5%, compared to the same period in 1995. These increase are
due to improved operations at both the Partnership's mini-warehouse and business
park facilities.
Rental income for the Partnership's mini-warehouse operations was
$2,858,000 compared to $2,739,000 for the three months ended September 30, 1996
and 1995, respectively, representing an increase of $119,000, or 4%. This
increase was primarily attributable to increased rental rates and average
occupancy levels. The monthly average realized rent per square foot for the
mini-warehouse facilities was $.62 compared to $.61 for the three months ended
September 30, 1996 and 1995, respectively. The weighted average occupancy levels
at the mini-warehouse facilities was 92% and 89% for the three months ended
September 30, 1996 and 1995, respectively. Cost of operations (including
management fees) for the mini-warehouses increased $64,000, or 7%, to $1,018,000
from $954,000 for the three months ended September 30, 1996 and 1995,
respectively. This increase was primarily attributable to increases in
advertising, property tax, payroll, and repairs and maintenance expenses.
Accordingly, for the Partnership's mini-warehouse operations, property net
operating income increased $55,000, or 3%, from $1,785,000 to $1,840,000 for the
three months ended September 30, 1995 and 1996, respectively.
Rental income for the Partnership's business park operations increased
$24,000, or 5%, to $500,000 from $476,000 for the three months ended September
30, 1996 and 1995, respectively. This increase was primarily attributable to
increased rental rates and average occupancy levels. The weighted average
occupancy levels at the business park facilities were 98% compared to 96% for
the three months ended September 30, 1996 and 1995, respectively. The monthly
average realized rent per square foot for the business park facilities was $.56
compared to $.54 for the three months ended September 30, 1996 and 1995,
respectively. Cost of operations (including management fees) for the business
parks decreased $6,000, or 8%, from $207,000 to $213,000 for the three months
ended September 30, 1996 and 1995, respectively. Accordingly, for the
Partnership's business park facilities, property net operating income increased
by $30,000, or 11%, from $263,000 to $293,000 for the three months ended
September 30, 1995 and 1996, respectively.
Depreciation and amortization increased $66,000 from $821,000 for the three
months ended September 30, 1995 to $887,000 for the same period in 1996. This
increase is principally due to the depreciation of capital expenditures made
during 1995 and 1996.
Minority interest in income was $633,000 for the three months ended
September 30, 1996 compared to $606,000 for the same period in 1995,
representing an increase of $27,000, or 4%. This increase is primarily the
result of additional income allocated to the minority interest from improved
operations at the Partnership's facilities which are owned jointly with PSI.
6
<PAGE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1995:
The Partnership's net income was $1,739,000 and $1,721,000 for the nine
months ended September 30, 1996 and 1995, respectively, representing an increase
of $18,000, or 1%. The increase was primarily due to increased operating results
at the Partnership's facilities combined with a decrease in administrative
expenses, partially offset by increases in depreciation expense and minority
interest in income for those properties held in joint venture with PSI.
Net property income (rental income less cost of operations and management
fees and excluding depreciation) for the nine months ended September 30, 1996
increased $279,000 or 5%, as rental income increased $392,000 or 4%, and costs
of operations (including management fees and excluding depreciation expense)
increased $113,000 or 3%, compared to the same period in 1995.
Rental income for the Partnership's mini-warehouse operations was
$8,333,000 compared to $8,011,000 for the nine months ended September 30, 1996
and 1995, respectively, representing an increase of $322,000, or 4%. This
increase was primarily attributable to increased rental rates and average
occupancy levels. The weighted average occupancy levels at the business park
facilities were 90% compared to 88% for the nine months ended September 30, 1996
and 1995, respectively. The monthly average realized rent per square foot for
the mini-warehouse facilities was $.61 compared to $.60 for the nine months
ended September 30, 1996 and 1995, respectively. Cost of operations (including
management fees) for the mini-warehouses increased $120,000, or 4%, to
$3,025,000 from $2,905,000 for the nine months ended September 30, 1996 and
1995, respectively. This increase was primarily attributable to increases in
property tax, advertising, and payroll expenses. Accordingly, for the
Partnership's mini-warehouse operations, property net operating income increased
$202,000, or 4%, from $5,106,000 to $5,308,000 for the nine months ended
September 30, 1995 and 1996, respectively.
Rental income for the Partnership's business park operations increased
$70,000, or 5%, to $1,488,000 from $1,418,000 for the nine months ended
September 30, 1996 and 1995, respectively. This increase was primarily
attributable to increased rental rates and average occupancy levels. The
weighted average occupancy levels at the business park facilities were 98%
compared to 97% for the nine months ended September 30, 1996 and 1995,
respectively. The monthly average realized rent per square foot for the business
park facilities was $.56 compared to $.54 for the nine months ended September
30, 1996 and 1995, respectively. Cost of operations (including management fees)
for the business parks decreased $7,000, or 1%, to $626,000 from $633,000 for
the nine months ended September 30, 1996 and 1995, respectively. Accordingly,
for the Partnership's business park facilities, property net operating income
increased by $77,000, or 10%, from $785,000 to $862,000 for the nine months
ended September 30, 1995 and 1996, respectively.
Depreciation and amortization increased $221,000 from $2,357,000 for the
nine months ended September 30, 1995 to $2,578,000 for the same period in 1996.
This increase is principally due to the depreciation of capital expenditures
made during 1995 and 1996.
Administrative expenses decreased $51,000 from $154,000 in 1995 to $103,000
in 1996. This decrease is principally a result of non-recurring expenses
incurred during 1995 in connection with environmental assessments of the
Partnership's facilities.
Minority interest in income was $1,824,000 in 1996 compared to $1,728,000
in 1995, representing an increase of $96,000, or 6%. This increase was primarily
the result of improved operations at the Partnership's facilities which are
owned jointly with PSI.
7
<PAGE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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
($6,080,000 for the nine months ended September 30, 1996) has been sufficient to
meet all current obligations of the Partnership.
During 1996, the Partnership anticipates approximately $2,226,000 of
capital improvements (of which $611,000 represents PSI's joint venture share).
During 1995, the Partnership's property manager commenced a program to enhance
the visual appearance of the mini-warehouse facilities managed by it. In
addition, several of the Texas properties are undergoing major property
enhancements, which include the installation of climate control. Total capital
improvements were $1,829,000 for the nine months ended September 30, 1996 of
which $1,315,000 represents the Partnership's share.
The Partnership paid distributions to the limited and general partners
totaling $2,678,000 ($17.85 per unit) and $328,000, respectively, during the
first nine 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 4 are not applicable.
Item 5 Other Information
-----------------
In July and August 1996, PSI completed cash tender offers pursuant to which
PSI acquired a total of 23,800 limited partnership units in the Partnership at
$281 per unit.
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: November 12, 1996
PS PARTNERS VI, LTD.,
a California Limited Partnership
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> 0000773281
<NAME> PS PARTNERS VI, LTD.
<MULTIPLIER> 1
<CURRENCY> US
<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> 2,061,000
<SECURITIES> 0
<RECEIVABLES> 94,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,155,000
<PP&E> 92,930,000
<DEPRECIATION> (28,214,000)
<TOTAL-ASSETS> 67,068,000
<CURRENT-LIABILITIES> 1,468,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 41,418,000
<TOTAL-LIABILITY-AND-EQUITY> 67,068,000
<SALES> 0
<TOTAL-REVENUES> 9,895,000
<CGS> 0
<TOTAL-COSTS> 3,651,000
<OTHER-EXPENSES> 2,681,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,739,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,739,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,739,000
<EPS-PRIMARY> 9.49
<EPS-DILUTED> 9.49
</TABLE>
