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
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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 September 30, 1996
and December 31, 1995 2
Condensed statements of income for the three and nine
months ended September 30, 1996 and 1995 3
Condensed statements of cash flows for the nine
months ended September 30, 1996 and 1995 4
Notes to condensed 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 VIII, LTD.,
a California Limited Partnership
CONDENSED BALANCE SHEETS
<CAPTION>
September 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 16,331,000 16,213,000
------------------- ------------------
23,792,000 23,674,000
Less accumulated depreciation (6,105,000) (5,501,000)
------------------- ------------------
17,687,000 18,173,000
Other assets 36,000 27,000
------------------- ------------------
$ 18,017,000 $ 18,426,000
=================== ==================
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 333,000 $ 324,000
Advance payments from renters 113,000 112,000
Partners' equity:
Limited partners' equity,
$500 per unit, 150,000 units authorized,
52,751 issued and outstanding 17,361,000 17,776,000
General partners' equity 210,000 214,000
------------------- ------------------
Total partners' equity 17,571,000 17,990,000
------------------- ------------------
$ 18,017,000 $ 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 Nine Months Ended
September 30, September 30,
--------------------------------- --------------------------------------
1996 1995 1996 1995
---------------- --------------- ------------------- ------------------
REVENUE:
<S> <C> <C> <C> <C>
Rental income $ 729,000 $ 704,000 $ 2,153,000 $ 2,092,000
Interest income 4,000 12,000 11,000 40,000
---------------- --------------- ------------------- ------------------
733,000 716,000 2,164,000 2,132,000
---------------- --------------- ------------------- ------------------
COSTS AND EXPENSES:
Cost of operations 191,000 189,000 593,000 580,000
Management fees 42,000 41,000 125,000 122,000
Depreciation and amortization 204,000 193,000 604,000 562,000
Administrative 24,000 19,000 60,000 58,000
---------------- --------------- ------------------- ------------------
461,000 442,000 1,382,000 1,322,000
---------------- --------------- ------------------- ------------------
NET INCOME $ 272,000 $ 274,000 $ 782,000 $ 810,000
================ =============== =================== ==================
Limited partners' share of net income
($12.42 per unit in 1996 and $11.83
per unit in 1995) $ 655,000 $ 624,000
General partners' share of net income 127,000 186,000
------------------ ------------------
$ 782,000 $ 810,000
=================== ==================
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
PS PARTNERS VIII, LTD.,
a California Limited Partnership
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Nine Months Ended
September 30,
---------------------------------------
1996 1995
------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 782,000 $ 810,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 604,000 562,000
(Increase) decrease in rent and other receivables (3,000) 4,000
(Increase) decrease in other assets (9,000) 1,000
Increase in accounts payable 9,000 35,000
Increase (decrease) in advance payments from renters 1,000 (12,000)
------------------ ------------------
Total adjustments 602,000 590,000
------------------ ------------------
Net cash provided by operating activities 1,384,000 1,400,000
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate facilities (118,000) (201,000)
------------------ ------------------
Net cash used in investing activities (118,000) (201,000)
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (1,201,000) (1,800,000)
------------------ ------------------
Net cash used in financing activities (1,201,000) (1,800,000)
------------------ ------------------
Net increase (decrease) in cash and cash equivalents 65,000 (601,000)
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 $ 287,000
================== ==================
</TABLE>
See accompanying notes.
4
<PAGE>
PS PARTNERS VIII, LTD.,
a California Limited Partnership
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 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 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 VIII, 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 $272,000 and $274,000 for the three months
ended September 30, 1996 and 1995, respectively, representing a decrease of
$2,000. This decrease was primarily due to increases in depreciation and
administrative expenses, combined with a decrease in interest income, partially
offset by improved operating results at the Partnership's facilities.
Interest income decreased for the three months ended September 30, 1996
over the same period in 1995 as a result of a decrease in average invested cash
balances.
Net property income (rental income less cost of operations and management
fees and excluding depreciation) for the three months ended September 30, 1996
increased $22,000, or 5%, as rental income increased $25,000, or 4%, and costs
of operations (including management fees and excluding depreciation expense)
increased $3,000, or 1%, compared to the same period in 1995. These improvements
are due to improved operations at the Partnership's mini-warehouse and business
park facilities.
Rental income for the Partnership's mini-warehouse operations was $606,000
compared to $575,000 for the three months ended September 30, 1996 and 1995,
respectively, representing an increase of $31,000, 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 September 30,
1996 and 1995, respectively. The weighted average occupancy levels at the
mini-warehouse facilities were 92% and 90% for the three months ended September
30, 1996 and 1995, respectively. Cost of operations (including management fees)
for the mini-warehouses increased $11,000, or 6%, to $190,000 from $179,000 for
the three months ended September 30, 1996 and 1995, respectively. This increase
was primarily attributable to increases in advertising and repairs and
maintenance expenses. Accordingly, for the Partnership's mini-warehouse
operations, property net operating income increased $20,000, or 5%, from
$396,000 to $416,000 for the three months ended September 30, 1995 and 1996,
respectively.
Rental income for the Partnership's business park operations decreased
$6,000, or 5%, to $123,000 from $129,000 for the three months ended September
30, 1996 and 1995, respectively. This decrease was primarily attributable to a
decrease in rental rates, partially offset by an increase in average occupancy.
The monthly average realized rent per square foot for the business park facility
was $.59 compared to $.61 for the three months ended September 30, 1996 and
1995, respectively. The weighted average occupancy levels at the business park
facilities were 93% compared to 92% for the three months ended September 30,
1996 and 1995, respectively. Cost of operations (including management fees) for
the business parks decreased $8,000, or 16%, to $43,000 from $51,000 for the
three months ended September 30, 1996 and 1995, respectively. This decrease was
primarily attributable to a decrease in property tax expense, partially offset
by an increase in repairs and maintenance expense. Accordingly, for the
Partnership's business park facilities, property net operating income increased
$2,000, or 3%, to $80,000 from $78,000 for the three months ended September 30,
1996 and 1995, respectively.
Depreciation and amortization expense increased $11,000 from $193,000 for
the three months ended September 30, 1995 to $204,000 for the same period in
1996. This increase is due to the depreciation of capital expenditures made
during 1995 and 1996.
Administrative expenses increased $5,000 from $19,000 to $24,000 for the
three months ended September 30, 1996 and 1995, respectively. This increase is
primarily a result of an increase in accounting fees.
6
<PAGE>
PS PARTNERS VIII, 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 $782,000 and $810,000 for the nine months
ended September 30, 1996 and 1995, respectively, representing a decrease of
$28,000, or 3%. This decrease was primarily due to an increase in depreciation
expense, combined with a decrease in interest income, partially offset by
improved operating results at the Partnership's facilities.
Interest income decreased for the nine months ended September 30, 1996 over
the same period in 1995 as a result of a decrease in average invested cash
balances.
Net property income (rental income less cost of operations and management
fees and excluding depreciation) for the nine months ended September 30, 1996
increased $45,000, or 3%, as rental income increased $61,000, or 3%, and costs
of operations (including management fees and excluding depreciation expense)
increased $16,000, or 2%, compared to the same period in 1995.
Rental income for the Partnership's mini-warehouse operations was
$1,769,000 compared to $1,697,000 for the nine months ended September 30, 1996
and 1995, respectively, representing an increase of $72,000, or 4%. This
increase was primarily attributable to increased rental rates and average
occupancy. The weighted average occupancy levels at the mini-warehouse
facilities were 90% and 89% 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 $.75 compared to $.72 for the nine months ended
September 30, 1996 and 1995, respectively. Costs of operations (including
management fees) for the mini-warehouses increased $31,000, or 6%, to $571,000
from $540,000 for the nine months ended September 30, 1996 and 1995,
respectively. This increase was primarily attributable to increases in repairs
and maintenance, property tax, advertising, and management expenses.
Accordingly, for the Partnership's mini-warehouse operations, property net
operating income increased $41,000, or 4%, from $1,157,000 to $1,198,000 for the
nine months ended September 30, 1995 and 1996, respectively.
Rental income for the Partnership's business park operations decreased
$11,000, or 3%, to $384,000 from $395,000 for the nine months ended September
30, 1996 and 1995, respectively. This decrease was primarily attributable to
decreased rental rates, partially offset by an increase in average occupancy.
The monthly average realized rent per square foot for the business park
facilities was $.59 compared to $.63 for the nine months ended September 30,
1996 and 1995, respectively. The weighted average occupancy levels at the
business park facilities were 95% compared to 94% for the nine months ended
September 30, 1996 and 1995, respectively. Cost of operations (including
management fees) for the business parks decreased $15,000, or 9%, to $147,000
from $162,000 for the nine months ended September 30, 1996 and 1995,
respectively. This decrease was primarily attributable to a decrease in property
tax expense. Accordingly, for the Partnership's business park facilities,
property net operating income increased by $4,000, or 2%, from $233,000 to
$237,000 for the nine months ended September 30, 1995 and 1996, respectively.
Depreciation and amortization expense increased $42,000 from $562,000 for
the nine months ended September 30, 1995 to $604,000 for the same period in
1996. This increase is primarily 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
7
<PAGE>
PS PARTNERS VIII, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
($1,384,000 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 $249,000 of capital
improvements. Total capital improvements were $118,000 for the nine months ended
September 30, 1996.
The Partnership paid distributions to the limited and general partners
totaling $1,070,000 ($20.28 per unit) and $131,000, 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 August 1996, PSI completed a cash tender offer, which had commenced in
July 1996, pursuant to which PSI acquired a total of 6,537 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: November 12, 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)
9
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000793934
<NAME> PS PARTNERS VIII, 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> 282,000
<SECURITIES> 0
<RECEIVABLES> 12,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 294,000
<PP&E> 23,792,000
<DEPRECIATION> (6,105,000)
<TOTAL-ASSETS> 18,017,000
<CURRENT-LIABILITIES> 446,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 17,571,000
<TOTAL-LIABILITY-AND-EQUITY> 18,017,000
<SALES> 0
<TOTAL-REVENUES> 2,164,000
<CGS> 0
<TOTAL-COSTS> 718,000
<OTHER-EXPENSES> 664,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 782,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 782,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 782,000
<EPS-PRIMARY> 12.42
<EPS-DILUTED> 12.42
</TABLE>
