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, 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
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Commission File Number 0-16876
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PS PARTNERS VIII, LTD., a California Limited Partnership
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-4029178
- ------------------------------------ --------------------------
(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 balance sheets at June 30, 1996
and December 31, 1995 2
Condensed statements of income for the three and six
months ended June 30, 1996 and 1995 3
Condensed statements of cash flows for the six
months ended June 30, 1996 and 1995 4
Notes to condensed financial statements 5
Management's discussion and analysis of financial condition
and results of operations 6-7
PART II. OTHER INFORMATION
(Items 1 through 4 are not applicable)
Item 5 - Other Information 8
Item 6 - Exhibits and Reports on Form 8-K 8
<PAGE>
<TABLE>
PS PARTNERS VIII, LTD.,
a California Limited Partnership
CONDENSED BALANCE SHEETS
<CAPTION>
June 30, December 31,
1996 1995
------------------- -------------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 282,000 $ 217,000
Rent and other receivables 12,000 9,000
Real estate facilities, at cost:
Land 7,461,000 7,461,000
Buildings and equipment 16,305,000 16,213,000
------------------- -------------------
23,766,000 23,674,000
Less accumulated depreciation (5,901,000) (5,501,000)
------------------- -------------------
17,865,000 18,173,000
Other assets 32,000 27,000
------------------- -------------------
$ 18,191,000 $ 18,426,000
=================== ===================
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 377,000 $ 324,000
Advance payments from renters 115,000 112,000
Partners' equity:
Limited partners' equity,
$500 per unit, 150,000 units authorized,
52,751 issued and outstanding 17,488,000 17,776,000
General partners' equity 211,000 214,000
------------------- -------------------
Total partners' equity 17,699,000 17,990,000
------------------- -------------------
$ 18,191,000 $ 18,426,000
=================== ===================
</TABLE>
See accompanying notes.
2
<PAGE>
<TABLE>
PS PARTNERS VIII, LTD.,
a California Limited Partnership
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------------- -----------------------------------------
1996 1995 1996 1995
---------------------- ---------------- ------------------ -------------------
REVENUE:
<S> <C> <C> <C> <C>
Rental income $ 727,000 $ 704,000 $ 1,424,000 $ 1,388,000
Interest income 4,000 13,000 7,000 28,000
---------------------- ---------------- ------------------ -------------------
731,000 717,000 1,431,000 1,416,000
---------------------- ---------------- ------------------ -------------------
COSTS AND EXPENSES:
Cost of operations 199,000 193,000 402,000 391,000
Management fees 42,000 41,000 83,000 81,000
Depreciation and amortization 201,000 185,000 400,000 369,000
Administrative 23,000 22,000 36,000 39,000
---------------------- ---------------- ------------------ -------------------
465,000 441,000 921,000 880,000
---------------------- ---------------- ------------------ -------------------
NET INCOME $ 266,000 $ 276,000 $ 510,000 $ 536,000
====================== ================ ================== ===================
Limited partners' share of net income
($8.06 per unit in 1996 and $8.55
per unit in 1995) $ 425,000 $ 451,000
General partners' share of net income 85,000 85,000
------------------ -------------------
$ 510,000 $ 536,000
================== ===================
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
PS PARTNERS VIII, LTD.,
a California Limited Partnership
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Six Months Ended
June 30,
-----------------------------------------
1996 1995
---------------- ----------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 510,000 $ 536,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 400,000 369,000
(Increase) decrease in rent and other receivables (3,000) 2,000
(Increase) decrease in other assets (5,000) 1,000
Increase in accounts payable 53,000 24,000
Increase (decrease) in advance payments from renters 3,000 (10,000)
---------------- ----------------
Total adjustments 448,000 386,000
---------------- ----------------
Net cash provided by operating activities 958,000 922,000
---------------- ----------------
Cash flows from investing activities:
Additions to real estate facilities (92,000) (140,000)
---------------- ----------------
Net cash used in investing activities (92,000) (140,000)
---------------- ----------------
Cash flows from financing activities:
Distributions to partners (801,000) (800,000)
---------------- ----------------
Net cash used in financing activities (801,000) (800,000)
---------------- ----------------
Net increase (decrease) in cash and cash equivalents 65,000 (18,000)
Cash and cash equivalents at the beginning of the period 217,000 888,000
---------------- ----------------
Cash and cash equivalents at the end of the period $ 282,000 $ 870,000
================ ================
</TABLE>
See accompanying notes.
4
<PAGE>
PS PARTNERS VIII, LTD.,
a California Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1996
(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,
1995.
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, 1996, the results of operations for the three and six months
ended June 30, 1996 and 1995 and cash flows for the six months then ended.
3. The results of operations for the three and six months ended June 30, 1996
are not necessarily indicative of the results to be expected for the full
year.
5
<PAGE>
PS PARTNERS VIII, 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, 1996 compared to three months ended June 30, 1995:
The Partnership's net income was $266,000 and $276,000 for the three months
ended June 30, 1996 and 1995, respectively, representing a decrease of $10,000,
or 4%. This decrease was primarily due to increases in depreciation expense,
partially offset by improved operating results at the Partnership's facilities.
Net property income (rental income less cost of operations and management
fees and excluding depreciation) for the three months ended June 30, 1996
increased $16,000 or 3%, as rental income increased $23,000 or 3%, and costs of
operations (including management fees and excluding depreciation expense)
increased $7,000 or 3%, compared to the same period in 1995. These improvements
are due to improved operations at the Partnership's mini-warehouse facilities
partially offset by reduced operations at the Partnership's business park
facility.
Rental income for the Partnership's mini-warehouse operations was $594,000
compared to $565,000 for the three months ended June 30, 1996 and 1995,
respectively, representing an increase of $29,000, or 5%. 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 $.75 compared to $.73 for the three months ended June 30, 1996
and 1995, respectively. The weighted average occupancy levels at the
mini-warehouse facilities was 90% and 89% for the three months ended June 30,
1996 and 1995, respectively. Cost of operations (including management fees) for
the mini-warehouses increased $8,000 or 4%, to $189,000 from $181,000 for the
three months ended June 30, 1996 and 1995, respectively. This increase was
primarily attributable to increases in payroll and property tax expenses.
Accordingly, for the Partnership's mini-warehouse operations, property net
operating income increased $21,000 or 6%, from $384,000 to $405,000 for the
three months ended June 30, 1995 and 1996, respectively.
Rental income for the Partnership's business park operations decreased
$6,000 or 4%, to $133,000 from $139,000 for the three months ended June 30, 1996
and 1995, respectively. The weighted average occupancy levels at the business
park facilities was 95% compared to 97% for the three months ended June 30, 1996
and 1995, respectively. The monthly average realized rent per square foot for
the business park facility was $.60 compared to $.65 for the three months ended
June 30, 1996 and 1995, respectively. Cost of operations (including management
fees) for the business parks decreased $1,000 or 2%, to $52,000 from $53,000 for
the three months ended June 30, 1996 and 1995, respectively. Accordingly, for
the Partnership's business park facilities, property net operating income
decreased $5,000 or 6%, to $81,000 from $86,000 for the three months ended June
30, 1996 and 1995, respectively.
Depreciation and amortization expense increased $16,000 from $185,000 for
the three months ended June 30, 1995 to $201,000 for the same period in 1996.
This increase is due to the depreciation of capital expenditures made during
1995 and 1996.
Six months ended June 30, 1996 compared to six months ended June 30, 1995:
The Partnership's net income was $510,000 and $536,000 for the six months
ended June 30, 1996 and 1995, respectively, representing a decrease of $26,000,
or 5%. This decrease was primarily due to increases in depreciation expense,
partially offset by improved operating results at the Partnership's facilities.
6
<PAGE>
PS PARTNERS VIII, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net property income (rental income less cost of operations and management
fees and excluding depreciation) for the six months ended June 30, 1996
increased $23,000 or 3%, as rental income increased $36,000 or 3%, and costs of
operations (including management fees and excluding depreciation expense)
increased $13,000 or 3%, compared to the same period in 1995.
Rental income for the Partnership's mini-warehouse operations was
$1,162,000 compared to $1,121,000 for the six months ended June 30, 1996 and
1995, respectively, representing an increase of $41,000, or 4%. This increase
was primarily attributable to increased rental rates. The weighted average
occupancy levels at the mini-warehouse facilities was 89% for both the six
months ended June 30, 1996 and 1995. The monthly average realized rent per
square foot for the mini-warehouse facilities was $.75 compared to $.72 for the
six months ended June 30, 1996 and 1995, respectively. Costs of operations
(including management fees) for the mini-warehouses increased $20,000 or 6%, to
$381,000 from $361,000 for the six months ended June 30, 1996 and 1995,
respectively. These increases were primarily attributable to increases in
payroll and property tax expenses. Accordingly, for the Partnership's
mini-warehouse operations, property net operating income increased $21,000 or
3%, from $760,000 to $781,000 for the six months ended June 30, 1995 and 1996,
respectively.
Rental income for the Partnership's business park operations decreased
$5,000 or 2%, to $262,000 from $267,000 for the six months ended June 30, 1996
and 1995, respectively. The weighted average occupancy levels at the business
park facilities was 96% compared to 95% for the six months ended June 30, 1996
and 1995, respectively. The monthly average realized rent per square foot for
the business park facilities was $.59 compared to $.64 for the six months ended
June 30, 1996 and 1995, respectively. Cost of operations (including management
fees) for the business parks decreased $7,000 or 6%, to $104,000 from $111,000
for the six months ended June 30, 1996 and 1995, respectively. Accordingly, for
the Partnership's business park facilities, property net operating income
increased by $2,000 or 1%, from $156,000 to $158,000 for the six months ended
June 30, 1995 and 1996, respectively.
Depreciation and amortization expense increased $31,000 from $369,000 for
the six months ended June 30, 1995 to $400,000 for the same period in 1996. This
increase is due to the depreciation of capital expenditures made during 1995 and
1996.
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
($958,000 for the six months ended June 30, 1996) has been sufficient to meet
all current obligations of the Partnership.
During 1996, the Partnership anticipates approximately $249,000 of capital
improvements. Total capital improvements were $92,000 for the six months ended
June 30, 1996.
The Partnership paid distributions to the limited and general partners
totaling $713,000 ($13.52 per unit) and $88,000, respectively, during the first
six 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.
7
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1 through 4 are not applicable.
Item 5 Other Information
-----------------
In July 1996, Public Storage, Inc. commenced a cash tender offer to
purchase up to 15,825 limited partnership units in the Partnership at $320 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: August 13, 1996
PS PARTNERS VIII, 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)
8
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000793934
<NAME> PS PARTNERS VIII, LTD.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 282,000
<SECURITIES> 0
<RECEIVABLES> 12,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 294,000
<PP&E> 23,766,000
<DEPRECIATION> (5,901,000)
<TOTAL-ASSETS> 18,191,000
<CURRENT-LIABILITIES> 495,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 17,696,000
<TOTAL-LIABILITY-AND-EQUITY> 18,191,000
<SALES> 0
<TOTAL-REVENUES> 1,431,000
<CGS> 0
<TOTAL-COSTS> 485,000
<OTHER-EXPENSES> 436,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 510,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 510,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 510,000
<EPS-PRIMARY> 8.06
<EPS-DILUTED> 8.06
</TABLE>
