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 June 30, 1998
-------------
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
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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
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<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
Condensed consolidated balance sheets at June 30, 1998
and December 31, 1997 2
Condensed consolidated statements of income for the three
and six months ended June 30, 1998 and 1997 3
Condensed consolidated statements of cash flows for the
six months ended June 30, 1998 and 1997 4-5
Notes to condensed consolidated financial statements 6
Management's discussion and analysis of financial condition
and results of operations 7-8
PART II. OTHER INFORMATION
(Items 1 through 5 are not applicable)
Item 6 - Exhibits and Reports on Form 8-K 9
<PAGE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
---------------------------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $2,117,000 $1,353,000
Rent and other receivables 85,000 85,000
Real estate facilities, at cost:
Land 17,618,000 17,618,000
Buildings and equipment 56,436,000 56,089,000
---------------------------------
74,054,000 73,707,000
Less accumulated depreciation (26,956,000) (25,447,000)
---------------------------------
47,098,000 48,260,000
Investment in real estate entity 14,585,000 14,540,000
Other assets 126,000 115,000
---------------------------------
$64,011,000 $64,353,000
=================================
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $859,000 $806,000
Advance payments from renters 411,000 341,000
Minority interest in general partnerships 24,753,000 24,563,000
Partners' equity:
Limited partners' equity, $500 per unit, 150,000
units authorized, issued and outstanding 37,511,000 38,160,000
General partners' equity 477,000 483,000
---------------------------------
Total partners' equity 37,988,000 38,643,000
---------------------------------
$64,011,000 $64,353,000
=================================
</TABLE>
See accompanying notes.
2
<PAGE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------------------------
1998 1997 1998 1997
------------------------------------------------------------------
REVENUE:
<S> <C> <C> <C> <C>
Rental income $3,054,000 $2,902,000 $6,003,000 $5,724,000
Equity in income of real estate entity 260,000 221,000 481,000 378,000
Interest income 25,000 25,000 42,000 49,000
------------------------------------------------------------------
3,339,000 3,148,000 6,526,000 6,151,000
------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of operations 1,020,000 870,000 1,989,000 1,793,000
Management fees 185,000 174,000 362,000 343,000
Depreciation and amortization 757,000 735,000 1,509,000 1,460,000
Administrative 43,000 36,000 61,000 56,000
------------------------------------------------------------------
2,005,000 1,815,000 3,921,000 3,652,000
------------------------------------------------------------------
Income before minority interest 1,334,000 1,333,000 2,605,000 2,499,000
Minority interest in income (637,000) (622,000) (1,257,000) (1,204,000)
------------------------------------------------------------------
NET INCOME $697,000 $711,000 $1,348,000 $1,295,000
==================================================================
Limited partners' share of net income
($7.57 per unit in 1998 and
$7.23 per unit in 1997) $1,136,000 $1,084,000
General partners' share of net income 212,000 211,000
---------------------------------
$1,348,000 $1,295,000
=================================
</TABLE>
See accompanying notes.
3
<PAGE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------------------
1998 1997
---------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $1,348,000 $1,295,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 1,509,000 1,460,000
Decrease in rent and other receivables - 22,000
(Increase) decrease in other assets (11,000) 80,000
Increase (decrease) in accounts payable 53,000 (412,000)
Increase in advance payments from renters 70,000 32,000
Equity in income of real estate entity (481,000) (378,000)
Minority interest in income 1,257,000 1,204,000
---------------------------------
Total adjustments 2,397,000 2,008,000
---------------------------------
Net cash provided by operating activities 3,745,000 3,303,000
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from real estate entity 436,000 -
Investment in real estate entity - (4,000)
Additions to real estate facilities (347,000) (475,000)
---------------------------------
Net cash provided by (used in) investing activities 89,000 (479,000)
---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to holder of minority interest (1,067,000) (969,000)
Distributions to partners (2,003,000) (2,003,000)
---------------------------------
Net cash used in financing activities (3,070,000) (2,972,000)
---------------------------------
Net increase (decrease) in cash and cash equivalents 764,000 (148,000)
Cash and cash equivalents at the beginning of the period 1,353,000 2,047,000
---------------------------------
Cash and cash equivalents at the end of the period $2,117,000 $1,899,000
=================================
</TABLE>
See accompanying notes.
4
<PAGE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------------------
1998 1997
--------------------------------------
Supplemental schedule of noncash investing and financing activities:
<S> <C> <C>
Investment in real estate entity $- $(14,106,000)
Transfer of real estate facilities for interest in real estate entity, net - 14,106,000
</TABLE>
See accompanying notes.
5
<PAGE>
PS PARTNERS VI, LTD.,
a California Limited Partnership
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
(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, 1997.
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 June 30, 1998, the results of operations for the
three and six months ended June 30, 1998 and 1997 and cash flows for the
six months then ended.
3. The results of operations for the three and six months ended June 30, 1998
are not necessarily indicative of the results to be expected for the full
year.
6
<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 JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997:
The Partnership's net income was $697,000 and $711,000 for the three months
ended June 30, 1998 and 1997, respectively, representing a decrease of $14,000,
or 2%. The decrease was primarily due to increased minority interest in income
for those properties held jointly with PSI.
Rental income for the Partnership's mini-warehouse operations was
$3,054,000 compared to $2,902,000 for the three months ended June 30, 1998 and
1997, respectively, representing an increase of $152,000, or 5%. The increase in
rental income was primarily attributable to increased rental rates at the
mini-warehouse facilities. The monthly average realized rent per square foot for
the mini-warehouse facilities was $.66 compared to $.62 for the three months
ended June 30, 1998 and 1997, respectively. The weighted average occupancy
levels at the mini-warehouse facilities remained stable at 92% for the three
months ended June 30, 1997 and 1998. Cost of operations (including management
fees) increased $161,000, or 15%, to $1,205,000 from $1,044,000 for the three
months ended June 30, 1998 and 1997, respectively. This increase was primarily
attributable to increases in advertising and promotion (due primarily to the PSI
national telephone reservations center), property tax, and payroll expenses.
Accordingly, for the Partnership's mini-warehouse operations, property net
operating income decreased by $9,000 from $1,858,000 to $1,849,000 for the
three months ended June 30, 1997 and 1998, respectively.
Depreciation and amortization increased $22,000, or 3%, from $735,000 to
$757,000 for the three months ended June 30, 1997 and 1998, respectively. This
increase was primarily attributable to the depreciation of capital expenditures
made during 1997 and 1998.
Minority interest in income increased $15,000, or 2%, to $637,000 from
$622,000 for the three months ended June 30, 1998 and 1997, respectively. This
increase was primarily attributable to an increase in operations at the
Partnership's real estate facilities owned jointly with PSI.
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997:
The Partnership's net income was $1,348,000 and $1,295,000 for the six
months ended June 30, 1998 and 1997, respectively, representing an increase of
$53,000, or 4%. The increase was primarily attributable to an increase in
property operations at the Partnership's real estate facilities, partially
offset by increased minority interest in income for those properties held
jointly with PSI.
7
<PAGE>
Rental income for the Partnership's mini-warehouse operations was
$6,003,000 compared to $5,724,000 for the six months ended June 30, 1998 and
1997, respectively, representing an increase of $279,000, or 5%. The increase in
rental income was primarily attributable to increased rental rates and occupancy
levels at the mini-warehouse facilities. The monthly average realized rent per
square foot for the mini-warehouse facilities was $.65 compared to $.63 for the
six months ended June 30, 1998 and 1997, respectively. The weighted average
occupancy levels at the mini-warehouse facilities increased from 91% to 92% for
the six months ended June 30, 1997 and 1998, respectively. Cost of operations
(including management fees) increased $215,000, or 10%, to $2,351,000 from
$2,136,000 for the six months ended June 30, 1998 and 1997, respectively. This
increase was primarily attributable to increases in advertising and promotion
(due primarily to the PSI national telephone reservations center), property tax,
and repairs and maintenance expenses. Accordingly, for the Partnership's
mini-warehouse operations, property net operating income increased by $64,000,
or 2%, from $3,588,000 to $3,652
,000 for the six months ended June 30, 1997 and
1998, respectively.
Depreciation and amortization increased $49,000, or 3%, from $1,460,000 to
$1,509,000 for the six months ended June 30, 1997 and 1998, respectively. This
increase was primarily attributable to the depreciation of capital expenditures
made during 1997 and 1998.
Minority interest in income increased $53,000, or 4%, to $1,257,000 from
$1,204,000 for the six months ended June 30, 1998 and 1997, respectively. This
increase was primarily attributable to an increase in operations at the
Partnership's real estate facilities owned jointly with PSI.
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
($3,745,000 for the six months ended June 30, 1998) has been sufficient to meet
all current obligations of the Partnership.
During 1998, the Partnership anticipates approximately $934,000 of capital
improvements (of which $287,000 represents PSI's joint venture share). Total
capital improvements were $347,000 for the six months ended June 30, 1998 of
which $241,000 represents the Partnership's share.
The Partnership paid distributions to the limited and general partners
totaling $1,785,000 ($11.90 per unit) and $218,000, respectively, during the
first six months of 1998. 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 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) 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: August 13, 1998
PS PARTNERS VI, LTD.,
a California Limited Partnership
BY: Public Storage, Inc.
General Partner
BY: /s/ 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> 0000773281
<NAME> PS PARTNERS VI, LTD.
<MULTIPLIER> 1
<CURRENCY> U.S. $
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 2,117,000
<SECURITIES> 0
<RECEIVABLES> 85,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,202,000
<PP&E> 74,054,000
<DEPRECIATION> (26,956,000)
<TOTAL-ASSETS> 64,011,000
<CURRENT-LIABILITIES> 1,270,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 37,988,000
<TOTAL-LIABILITY-AND-EQUITY> 64,011,000
<SALES> 0
<TOTAL-REVENUES> 6,526,000
<CGS> 0
<TOTAL-COSTS> 2,351,000
<OTHER-EXPENSES> 1,570,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,348,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,348,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,348,000
<EPS-PRIMARY> 7.57
<EPS-DILUTED> 7.57
</TABLE>
