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, 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 0-14477
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PS PARTNERS VI, LTD.
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(Exact name of registrant as specified in its charter)
California 95-3950440
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
701 Western Avenue
Glendale, California 91201-2394
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080
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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 June 30, 2000
and December 31, 1999 2
Condensed statements of income for the three
and six months ended June 30, 2000 and 1999 3
Condensed statements of cash flows for the
six months ended June 30, 2000 and 1999 4
Notes to condensed financial statements 5
Management's discussion and analysis of financial condition
and results of operations 6-9
PART II. OTHER INFORMATION
(Items 1 through 5 are not applicable)
Item 6 - Exhibits and Reports on Form 8-K 10
<PAGE>
PS PARTNERS VI, LTD.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
-----------------------------------
(Unaudited)
ASSETS
------
<S> <C> <C>
Cash and cash equivalents $2,643,000 $2,092,000
Rent and other receivables 12,000 5,000
Real estate facility, at cost:
Land 404,000 404,000
Buildings and equipment 2,898,000 2,887,000
-----------------------------------
3,302,000 3,291,000
Less accumulated depreciation (1,636,000) (1,560,000)
-----------------------------------
1,666,000 1,731,000
Investment in real estate entities 30,385,000 31,345,000
Other assets 5,000 4,000
-----------------------------------
$34,711,000 $35,177,000
===================================
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable $127,000 $122,000
Advance payments from renters 17,000 10,000
Partners' equity:
Limited partners' equity, $500 per unit, 150,000
units authorized, issued and outstanding 34,124,000 34,598,000
General partner's equity 443,000 447,000
-----------------------------------
Total partners' equity 34,567,000 35,045,000
-----------------------------------
$34,711,000 $35,177,000
===================================
</TABLE>
See accompanying notes.
2
<PAGE>
PS PARTNERS VI, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------------------------------
2000 1999 2000 1999
----------------------------------------------------------------------
REVENUE:
<S> <C> <C> <C> <C>
Rental income $154,000 $143,000 $300,000 $288,000
Equity in earnings of real estate entities 800,000 737,000 1,492,000 1,393,000
Interest income 46,000 15,000 78,000 42,000
----------------------------------------------------------------------
1,000,000 895,000 1,870,000 1,723,000
----------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of operations 57,000 57,000 121,000 122,000
Management fees 9,000 8,000 18,000 17,000
Depreciation and amortization 38,000 36,000 76,000 72,000
Administrative 88,000 45,000 130,000 66,000
----------------------------------------------------------------------
192,000 146,000 345,000 277,000
----------------------------------------------------------------------
NET INCOME $808,000 $749,000 $1,525,000 $1,446,000
======================================================================
Limited partners' share of net income
($8.74 per unit in 2000 and
$7.17 per unit in 1999) $1,311,000 $1,075,000
General partner's share of net income 214,000 371,000
-----------------------------------
$1,525,000 $1,446,000
===================================
</TABLE>
See accompanying notes.
3
<PAGE>
PS PARTNERS VI, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-------------------------------------
2000 1999
-------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $1,525,000 $1,446,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 76,000 72,000
Increase in rent and other receivables (7,000) (1,000)
Increase in other assets (1,000) (2,000)
Increase in accounts payable 5,000 1,000
Increase in advance payments from renters 7,000 3,000
Equity in earnings of real estate entities (1,492,000) (1,393,000)
-------------------------------------
Total adjustments (1,412,000) (1,320,000)
-------------------------------------
Net cash provided by operating activities 113,000 126,000
-------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from real estate entities 2,452,000 2,427,000
Additions to real estate facility (11,000) (7,000)
-------------------------------------
Net cash provided by investing activities 2,441,000 2,420,000
-------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (2,003,000) (3,602,000)
-------------------------------------
Net cash used in financing activities (2,003,000) (3,602,000)
-------------------------------------
Net increase (decrease) in cash and cash equivalents 551,000 (1,056,000)
Cash and cash equivalents at the beginning of the period 2,092,000 2,388,000
-------------------------------------
Cash and cash equivalents at the end of the period $2,643,000 $1,332,000
=====================================
</TABLE>
See accompanying notes.
4
<PAGE>
PS PARTNERS VI, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 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 June 30, 2000, the results of operations for the three and
six months ended June 30, 2000 and 1999 and cash flows for the six
months then ended.
3. The results of operations for the three and six months ended June 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:
Six Months Ended June 30,
-----------------------------------
2000 1999
----------- -----------
Total revenues..................... $80,399,000 $42,902,000
Minority interest in income........ $12,031,000 $5,683,000
Net income......................... $23,747,000 $12,655,000
5
<PAGE>
PS PARTNERS VI, 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 JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999:
Our net income for the three months ended June 30, 2000 was $808,000
compared to $749,000 for the three months ended June 30, 1999, representing an
increase of $59,000, or 7.9%. The increase was primarily due to our share of
improved property operations at the real estate facilities in which we have an
interest combined with a decrease in depreciation expense allocated to us with
respect to the Joint Venture and increased interest income.
Property Operations
-------------------
Rental income for our wholly-owned mini-warehouse property was $154,000
compared to $143,000 for the three months ended June 30, 2000 and 1999,
respectively, representing an increase of $11,000, or 7.7%. Cost of operations
(including management fees) increased $1,000, or 1.5%, to $66,000 from $65,000
for the three months ended June 30, 2000 and 1999, respectively. Accordingly,
for our wholly-owned mini-warehouse property, property net operating income
increased by $10,000, or 12.8%, from $78,000 to $88,000 for the three months
ended June 30, 1999 and 2000, respectively.
6
<PAGE>
Equity in Earnings of Real Estate Entities
------------------------------------------
Equity in earnings of real estate entities was $800,000 in the three
months ended June 30, 2000 as compared to $737,000 during the three months ended
June 30, 1999, representing an increase of $63,000, or 8.5%. This was due
primarily to our share of increased property net income at the Joint Venture's
mini-warehouses and a decrease in depreciation expense allocated to us with
respect to the Joint Venture.
Interest Income
---------------
Interest income increased by $31,000, or 206.7%, from $15,000 for the
three months ended June 30, 1999 to $46,000 for the three months ended June 30,
2000, due to higher invested cash balances and interest rates.
Depreciation and Amortization
-----------------------------
Depreciation and amortization increased $2,000, or 5.6%, from $36,000
to $38,000 for the three months ended June 30, 1999 and 2000, respectively.
Administrative
--------------
Administrative expense increased from $45,000 for the three months
ended June 30, 1999 to $88,000 for the three months ended June 30, 2000, due
primarily to higher state tax expense and the timing of investor relations
expense.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999:
Our net income for the six months ended June 30, 2000 was $1,525,000
compared to $1,446,000 for the six months ended June 30, 1999, representing an
increase of $79,000, or 5.5%. The increase was primarily due to our share of
improved property operations at the real estate facilities in which we have an
interest combined with a decrease in depreciation expense allocated to us with
respect to the Joint Venture and increased interest income.
Property Operations
-------------------
Rental income for our wholly-owned mini-warehouse property was $300,000
compared to $288,000 for the six months ended June 30, 2000 and 1999,
respectively, representing an increase of $12,000, or 4.2%. Cost of operations
(including management fees) remained stable at $139,000 for the six months ended
June 30, 2000 and 1999, respectively. Accordingly, for our wholly-owned
7
<PAGE>
mini-warehouse property, property net operating income increased by $12,000, or
8.1%, from $149,000 to $161,000 for the six months ended June 30, 1999 and 2000,
respectively.
Equity in Earnings of Real Estate Entities
------------------------------------------
Equity in earnings of real estate entities was $1,492,000 in the six
months ended June 30, 2000 as compared to $1,393,000 during the six months ended
June 30, 1999, representing an increase of $99,000, or 7.1%. This was due
primarily to our share of increased property net income at the Joint Venture's
mini-warehouses and a decrease in depreciation expense allocated to us with
respect to the Joint Venture.
Interest Income
---------------
Interest income increased by $36,000, or 85.7%, from $42,000 for the
six months ended June 30, 1999 to $78,000 for the six months ended June 30,
2000, due to higher invested cash balances and interest rates.
Depreciation and Amortization
-----------------------------
Depreciation and amortization increased $4,000, or 5.6%, from $72,000
to $76,000 for the six months ended June 30, 1999 and 2000, respectively.
Administrative
--------------
Administrative expense increased from $66,000 for the six months ended
June 30, 1999 to $130,000 for the six months ended June 30, 2000, due primarily
to higher state tax expense and the timing of investor relations expense.
SUPPLEMENTAL PROPERTY DATA
--------------------------
Most of our net income is from 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 JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999:
Rental income for the Mini-Warehouse Properties was $3,193,000 compared
to $3,152,000 for the three months ended June 30, 2000 and 1999, respectively,
representing an decrease of $41,000, or 1.3%. The increase in rental income was
primarily attributable to higher rental rates at the Mini-Warehouse Properties,
offset partially by decreased average occupancy rates. The annual average
realized rent per square foot for the Mini-Warehouse Properties was $8.25
compared to $8.09 for the three months ended June 30, 2000 and 1999,
respectively. The weighted average occupancy levels at the Mini-Warehouse
8
<PAGE>
Properties decreased from 93% to 92% for the three months ended June 30, 1999
and 2000, respectively. Cost of operations (including management fees) increased
$53,000, or 4.3%, to $1,275,000 from $1,222,000 for the three months ended June
30, 2000 and 1999, respectively. This increase is primarily attributable to
higher advertising and repairs and maintenance expenses, offset partially by
lower property tax expenses. Accordingly, for the Mini-Warehouse Properties,
property net operating income decreased by $12,000, or 0.6%, from $1,930,000 to
$1,918,000 for the three months ended June 30, 1999 and 2000, respectively.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999:
Rental income for the Mini-Warehouse Properties was $6,251,000 compared
to $6,268,000 for the six months ended June 30, 2000 and 1999, respectively,
representing an decrease of $17,000, or 0.3%. The decrease in rental income was
primarily attributable to decreased average occupancy rates at the
Mini-Warehouse Properties, offset partially by increased rental rates. The
annual average realized rent per square foot for the Mini-Warehouse Properties
was $8.15 compared to $8.09 for the six months ended June 30, 2000 and 1999,
respectively. The weighted average occupancy levels at the Mini-Warehouse
Properties decreased from 92% to 91% for the six months ended June 30, 1999 and
2000, respectively. Cost of operations (including management fees) increased
$47,000, or 1.9%, to $2,515,000 from $2,468,000 for the six months ended June
30, 2000 and 1999, respectively. This increase is primarily attributable to
higher advertising, payroll and office expenses, offset partially by lower
property tax expenses. Accordingly, for the Mini-Warehouse Properties, property
net operating income decreased by $64,000, or 1.7%, from $3,800,000 to
$3,736,000 for the six months ended June 30, 1999 and 2000, respectively.
Liquidity and Capital Resources
-------------------------------
We have adequate sources of cash to finance 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 ($2,565,000 for the six months ended
June 30, 2000) has been sufficient to meet all our current obligations.
9
<PAGE>
During 2000, we do not anticipate incurring significant costs for
capital improvements for our wholly-owned property. Total capital improvements
for the six months ended June 30, 2000 with respect to this property was
$11,000.
We 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 2000. Future distribution rates may be adjusted to levels which are
supported by operating cash flow after capital improvements and any other
necessary obligations.
10
<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: August 11, 2000
PS PARTNERS VI, 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
