FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended June 30, 1995 Commission file number 0-18494
IDS/SHURGARD INCOME GROWTH PARTNERS, L.P. II
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1436174
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201-3RD AVENUE, SUITE 2200, SEATTLE, WASHINGTON 98101
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code)206-624-8100
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>
PART I ITEM I FANANCIAL STATEMENTS
<TABLE>
BALANCE SHEETS
<CAPTION>
June 30, December 31,
Unaudited 1995 1994
------------- -------------
<S> <C> <C>
Assets:
Cash and cash equivalents $ 146,525 $ 384,867
Storage centers, net 25,260,049 25,126,512
Other assets 141,137 174,768
Amortizable assets 144,425 179,874
------------- -------------
Total Assets $ 25,692,136 $25,866,021
============= =============
Liabilities and Partners' Equity (Deficit):
Liabilities
Accounts payable and other accrued expenses $ 265,682 $ 287,165
Construction payable 5,000 173,572
Line of credit 415,000
Notes payable 2,906,126 2,938,331
------------- -------------
Total Liabilities 3,591,808 3,399,068
------------- -------------
Partners' equity (deficit)
Limited partners 22,274,923 22,623,217
General partner (174,595) (156,264)
------------- -------------
Total Partners' Equity (Deficit) 22,100,328 22,466,953
------------- -------------
Total Liabilities and Partners'
Equity (Deficit) $ 25,692,136 $25,866,021
============= =============
</TABLE>
<TABLE>
STATEMENTS OF EARNINGS
<CAPTION>
Three Months Ended June 30,Six Months Ended June 30,
---------------------------------------------------
Unaudited 1995 1994 1995 1994
----------------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Rental $1,050,894 $ 999,967 $2,064,659 $1,949,170
Interest income 1,732 4,431 3,773 8,108
----------- ----------- ----------- -----------
Total Revenues 1,052,626 1,004,398 2,068,432 1,957,278
----------- ----------- ----------- -----------
Expenses:
Operating and administrative 284,589 249,644 559,991 485,777
Property management fees 63,088 60,119 123,879 117,067
Depreciation 205,848 208,000 415,166 416,105
Real estate taxes 88,190 83,595 180,558 170,170
Interest 70,419 63,791 135,522 119,165
Amortization 17,724 16,413 35,449 34,076
----------- ----------- ----------- -----------
Total Expenses 729,858 681,562 1,450,565 1,342,360
----------- ----------- ----------- -----------
Earnings $ 322,768 $ 322,836 $ 617,867 $ 614,918
=========== =========== =========== ===========
Earnings per unit of limited
partnership interest $ 2.66 $ 2.66 $ 5.10 $ 5.07
=========== =========== =========== ===========
Distributions per unit of limited
partnership interest $ 4.06 $ 3.91 $ 8.13 $ 7.81
=========== =========== =========== ===========
</TABLE>
<TABLE>
STATEMENTS OF CASH FLOWS
<CAPTION>
Six Months Ended June 30,
-----------------------------
Unaudited 1995 1994
------------- -------------
<S> <C> <C>
Operating activities:
Earnings $ 617,867 $ 614,918
Adjustments to reconcile earnings to net cash
provided by operating activities:
Depreciation and amortization 450,615 450,181
Changes in operating accounts:
Other assets 33,631 (14,562)
Accounts payable and other accrued expenses (16,483) (39,087)
------------- -------------
Net cash provided by operating activities 1,085,630 1,011,450
------------- -------------
Investing activities:
Construction of and improvements to storage centers (722,275) (42,954)
------------- -------------
Financing activities:
Payment of loan costs (38,021)
Proceeds from line of credit 415,000
Payments on notes payable (32,205) (32,963)
Distributions to partners (984,492) (946,628)
------------- -------------
Net cash used in financing activities (601,697) (1,017,612)
------------- -------------
Decrease in cash and cash equivalents (238,342) (49,116)
Cash and cash equivalents at beginning of year 384,867 621,073
------------- -------------
Cash and cash equivalents at end of period $ 146,525 $ 571,957
============= =============
Supplemental disclosures of cash flow information:
Cash paid during period for interest $ 135,522 $ 119,165
============= =============
</TABLE>
NOTES TO FINANCIAL STATEMENTS
Note A -- Financial Statements Preparation
The interim financial statements are unaudited but reflect all
adjustments that are, in the opinion of management, necessary to a
fair statement of the results for the interim periods presented.
These adjustments consist primarily of normal recurring accruals. The
interim financial statements should be read in conjunction with the
audited financial statements contained in the 1994 Annual Report. The
results of operations for interim periods will not necessarily be
indicative of the operating results for the fiscal year.
Distributions and earnings per unit of limited partnership
interest are based on the total amounts distributed and allocated to
limited partners divided by the number of units outstanding during the
period (115,110 for the three and six months ended June 30, 1995 and
1994).
Note B _- Line of Credit
As of May 1, 1995, the Partnership converted the $1,500,000 line of
credit to an $850,000 non-revolving line of credit with an interest
rate of prime plus one half, maturing May 1, 1997. During the
quarter, the Partnership drew $230,000 on the line of credit in order
to fund the Chesapeake buildout. The Partnership plans to pay off
this line of credit from operating cashflow over the next two years.
PART 1, ITEM 2 MANAGEMENTS' DISCUSSION AND ANALYSIS
Operating Results - The Partnership's rental revenues for the
second quarter increased 5% to $1,050,894 from $999,967 for the
corresponding quarter of 1994. The increase resulted primarily from a
6% increase in the average rental rate per square foot. Although the
average occupancy for the Partnership decreased from 94% at June 30,
1994 to 89% at June 30, 1995, this decrease reflects only the
increased space available due to the expansion at the Chesapeake
Storage center, which opened April 1, 1995. The remaining storage
centers in your Partnership on average remained stable compared to
last quarter at this time. Orange, Kennydale and Newport News North
storage centers contributed the largest revenue gains in your
Partnership of $25,000 $17,000 and 11,000, respectively.
Earnings for the quarter remained stable compared with last quarter
at this time, as expense increases offset the revenue gains. Total
expenses rose 7% for the quarter compared to 1994. Operating and
administrative expenses increased 14% primarily due to 1) the timing
of investor service expenses and the increase in printing costs for
the Partnership's quarterly and annual reports and 2) increased
personnel costs due to additional hours worked by managers.
Additionally, interest rates rose from 7.125% at June 30, 1994 to
9.625% at June 30, 1995 on a commercial bank note totaling
approximately $1,215,000, causing a $6,600 increase in interest
expense.
Investing Activities - The Partnership invested approximately
$213,000 during the second quarter of 1995 to expand the Chesapeake
center. This project entailed the construction of two, one-story
buildings totaling approximately 26,000 square feet of storage space,
as well as the addition of 2,400 square feet of RV parking. The total
cost of this project was approximately $1,200,000. The expansion
opened the beginning of April and is currently 41% occupied.
Additionally, other capital improvements planned for the remaining
two quarters total approximately $51,000 including pavement, ground,
and building improvements at the Bellefield center as well as pavement
work at the Sterling Heights center. These improvements are important
to maintaining the value of your investment as well as its ability to
generate revenue.
Financing Activities - As of May 1, 1995, the Partnership converted
the $1,500,000 line of credit to an $850,000 non-revolving line of
credit with an interest rate of prime plus one half, maturing May 1,
1997. During the quarter, the Partnership drew $230,000 on the line
of credit in order to fund the Chesapeake buildout. The Partnership
plans to pay off this line of credit from operating cashflow over the
next two years.
SIGNATURE
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.
IDS/SHURGARD INCOME GROWTH PARTNERS, L.P. II
Date: August 31, 1995 By: HARRELL BECK
--------------------------------------
Harrell Beck
Treasurer and Authorized Signatory
Shurgard General Partner, Inc.
General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 146,525
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 29,568,991
<DEPRECIATION> 4,251,038
<TOTAL-ASSETS> 25,692,136
<CURRENT-LIABILITIES> 0
<BONDS> 2,906,126
<COMMON> 0
0
0
<OTHER-SE> 22,100,328
<TOTAL-LIABILITY-AND-EQUITY> 25,692,136
<SALES> 0
<TOTAL-REVENUES> 2,068,432
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,315,043
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 135,522
<INCOME-PRETAX> 617,867
<INCOME-TAX> 0
<INCOME-CONTINUING> 617,867
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 617,867
<EPS-PRIMARY> 5.10
<EPS-DILUTED> 5.10
</TABLE>
