<PAGE>
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, 1995
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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 ___________________
Commission File Number 0-15800
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PS PARTNERS VII, LTD., a California Limited Partnership
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(Exact name of registrant as specified in its charter)
California 95-4018460
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
600 North Brand Blvd.
Glendale, California 91203-1241
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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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INDEX
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PART I. FINANCIAL INFORMATION
Condensed consolidated balance sheets at June 30,
1995 and December 31, 1994 2
Condensed consolidated statements of income for the three and six
months ended June 30, 1995 and 1994 3
Condensed consolidated statements of cash flows for the six
months ended June 30, 1995 and 1994 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 5 are not applicable)
Item 6 - Exhibits and Reports on Form 8-K 9
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PS PARTNERS VII, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
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(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 1,710,000 $ 1,844,000
Rent and other receivables 49,000 43,000
Real estate facilities, at cost:
Land 18,839,000 18,839,000
Buildings and equipment 50,198,000 50,008,000
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69,037,000 68,847,000
Less accumulated depreciation (17,293,000) (16,222,000)
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51,744,000 52,625,000
Other assets 119,000 118,000
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$ 53,622,000 $ 54,630,000
============ ============
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 933,000 $ 960,000
Advance payments from renters 389,000 373,000
Minority interest in general
partnerships 21,185,000 21,073,000
Partners' equity:
Limited partners' equity, $500
per unit, 150,000 units
authorized, 108,831 issued and
outstanding 30,733,000 31,831,000
General partners' equity 382,000 393,000
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Total partners' equity 31,115,000 32,224,000
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$ 53,622,000 $ 54,630,000
============ ============
</TABLE>
See accompanying notes.
2
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PS PARTNERS VII, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUE:
Rental income $2,579,000 $2,503,000 $5,110,000 $4,943,000
Interest income 26,000 14,000 55,000 30,000
---------- ---------- ---------- ----------
2,605,000 2,517,000 5,165,000 4,973,000
---------- ---------- ---------- ----------
COSTS AND EXPENSES:
Cost of operations 749,000 750,000 1,516,000 1,456,000
Management fees 153,000 141,000 303,000 285,000
Depreciation and amortization 529,000 519,000 1,071,000 1,075,000
Administrative 53,000 23,000 81,000 48,000
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1,484,000 1,433,000 2,971,000 2,864,000
---------- ---------- ---------- ----------
Income before minority interest 1,121,000 1,084,000 2,194,000 2,109,000
Minority interest in income 566,000 553,000 1,103,000 1,087,000
---------- ---------- ---------- ----------
NET INCOME $ 555,000 $ 531,000 $1,091,000 $1,022,000
========== ========== ========== ==========
Limited partners' share of net income
($7.93 per unit in 1995 and $7.66
per unit in 1994) $ 863,000 $ 833,000
General partners' share of net income 228,000 189,000
---------- ----------
$1,091,000 $1,022,000
========== ==========
</TABLE>
See accompanying notes.
3
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PS PARTNERS VII, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------
1995 1994
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,091,000 $ 1,022,000
Adjustments to reconcile net
income to net cash provided by
operating activities
Depreciation and amortization 1,071,000 1,075,000
(Increase) decrease in rent
and other receivables (6,000) 4,000
(Increase) decrease in other
assets (1,000) 48,000
Decrease in accounts payable (27,000) (567,000)
Increase (decrease) in
advance payments from renters 16,000 (39,000)
Minority interest in income 1,103,000 1,087,000
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Total adjustments 2,156,000 1,608,000
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Net cash provided by
operating activities 3,247,000 2,630,000
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from insurance settlement
related to destroyed real estate
facility - 386,000
Additions to real estate facilities (190,000) (106,000)
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Net cash (used in)
provided by investing
activities (190,000) 280,000
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CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to holder of
minority interest (991,000) (921,000)
Distributions to partners (2,200,000) (2,879,000)
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Net cash used in
financing activities (3,191,000) (3,800,000)
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Net decrease in cash and cash
equivalents (134,000) (890,000)
Cash and cash equivalents at the
beginning of the period 1,844,000 2,675,000
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Cash and cash equivalents at the end of
the period $ 1,710,000 $ 1,785,000
=========== ===========
</TABLE>
See accompanying notes.
4
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PS PARTNERS VII, LTD.,
a California Limited Partnership
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(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,
1994.
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, 1995, the results of operations for the three and six
months ended June 30, 1995 and 1994 and cash flows for the six months then
ended.
3. The results of operations for the three and six months ended June 30, 1995
are not necessarily indicative of the results to be expected for the full
year.
5
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PS PARTNERS VII, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
----------------------
THREE AND SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO THREE AND SIX MONTHS ENDED
JUNE 30, 1994:
The Partnership's net income for the six months ended June 30, 1995 was
$1,091,000 compared to $1,022,000 for the six months ended June 30, 1994,
representing an increase of $69,000, or 7%. Net income for the three months
ended June 30, 1995 was $555,000 compared to $531,000 for the six months ended
June 30, 1994, representing an increase of $24,000, or 5%. These increases were
primarily due to increased property operating results combined with an increase
in interest income, partially offset by increased general and administrative
expenses, and minority interest in income for those properties held in joint
venture with Storage Equities, Inc. ("SEI").
Rental income for the six months ended June 30, 1995 and 1994 was $5,110,000
and $4,943,000, respectively, representing an increase of $167,000, or 3%. This
increase was due to improvements at both the mini-warehouse facilities and the
business park facilities. Rental income at the mini-warehouse facilities for
the six months ended June 30, 1995 and 1995 was $4,655,000 and $4,550,000,
respectively, representing an increase of $104,000 or 2%. Rental income at the
business park facilities for the six months ended June 30, 1995 and 1994 was
$455,000 and $393,000, respectively, representing an increase of $62,000 or 16%.
The increase in rental income at the business park facilities is partially due
to the buyout of a lease ($36,000) by a tenant which vacated its leased space
prior to the termination of the lease at one of the facilities.
Rental income for the three months ended June 30, 1995 and 1994 was
$2,579,000 and $2,503,000, respectively, representing an increase of $76,000, or
3%. Rental income at the mini-warehouse facilities increased from $2,306,000 to
$2,364,000 for the three months ended June 30, 1994 and 1995, respectively,
representing an increase of $58,000 or 3%. Rental income at the business park
facilities increased from $197,000 to $215,000 for the three months ended June
30, 1994 and 1995, respectively, representing an increase of $18,000 or 9%.
The increases in rental income were the result of increased average realized
rental rates, partially offset by decreases in the average occupancy levels at
the Partnership's facilities. The weighted average occupancy levels at the
mini-warehouse and business park facilities were 88% and 98%,
6
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PS PARTNERS VII, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
respectively, for the six months ended June 30, 1995 compared to 89% and 99%
respectively, for the six months ended June 30, 1994. The monthly average
realized rent per square foot for the mini-warehouse and business park
facilities was $.60 and $.48, respectively, for the six months ended June 30,
1995 and $.58 and $.45, respectively, for the six months ended June 30, 1994.
Cost of operations (including management fees) was $1,819,000 and $1,741,000
for the six months ended June 30, 1995 and 1994, respectively, representing an
increase of $78,000. This increase was primarily attributable to increases in
property taxes, payroll expense, and utilities expense, partially offset by a
decrease in tenant settlement costs. Cost of operations (including management
fees) were $902,000 and $891,000 for the three months ended June 30, 1995 and
1994, respectively, representing an increase of $11,000. This increase was
primarily attributable to an increase in property taxes, partially offset by a
decrease in tenant settlement costs.
General and administrative expenses increased from $48,000 in 1994 to $81,000
in 1995, or $33,000. This increase is principally a result of non-recurring
expenses totaling $24,000 incurred in connection with having the Partnership's
facilities undergo environmental studies.
Minority interest in income increased $69,000 to $1,091,000 from $1,022,000
for the six months ended June 30, 1995 and 1994, respectively. Minority
interest in income increased $13,000 to $566,000 from $553,000 for the three
months ended June 30, 1995 and 1994, respectively. These increases were
primarily attributable to increased operations at the Partnership's real estate
facilities for those properties owned jointly with SEI.
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
($3,247,000 for the six months ended June 30, 1995) has been sufficient to meet
all current obligations of the Partnership.
7
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PS PARTNERS VII, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
During 1995, the Partnership anticipates approximately $378,000 of capital
improvements (of which $142,000 represents SEI's joint venture share). Total
capital improvements were $190,000 for the six months ended June 30, 1995 of
which $136,000 represents the Partnership's share.
The Partnership paid distributions to the limited and general partners
totaling $1,961,000 ($18.02 per unit) and $239,000, respectively, during the
first six months of 1995. Future distribution rates may be adjusted to levels
which are supported by operating cash flow after capital improvements and any
other necessary obligations.
8
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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 8, 1995
PS PARTNERS VII, LTD.,
a California Limited Partnership
BY: Storage Equities, Inc.
General Partner
BY: /s/ Ronald L. Havner, Jr.
----------------------------------------
Ronald L. Havner, Jr.
Vice President - Storage Equities, Inc.
(principal financial and accounting
officer)
9
<TABLE> <S> <C>
<PAGE>
<S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<CASH> 1,710,000
<SECURITIES> 0
<RECEIVABLES> 49,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,759,000
<PP&E> 69,037,000
<DEPRECIATION> (17,293,000)
<TOTAL-ASSETS> 53,622,000
<CURRENT-LIABILITIES> 1,322,000
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 31,115,000
<TOTAL-LIABILITY-AND-EQUITY> 53,622,000
<SALES> 5,110,000
<TOTAL-REVENUES> 5,165,000
<CGS> 1,819,000
<TOTAL-COSTS> 1,819,000
<OTHER-EXPENSES> 1,152,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,091,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,091,000
<EPS-PRIMARY> 7.93
<EPS-DILUTED> 0.000
</TABLE>
