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 March 31, 1996
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 March 31, 1996 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 FINANCIAL STATEMENTS
<TABLE>
BALANCE SHEETS
<CAPTION>
Mar. 31, Dec. 31,
Unaudited 1996 1995
--------- -----------
<S> <C> <C>
Assets:
Cash and cash equivalents $367,914 $ 455,167
Storage centers, net 24,748,826 24,965,503
Other assets 193,561 155,712
Amortizable assets 91,253 108,977
---------- -----------
Total Assets $25,401,554 $25,685,359
============ ============
Liabilities and Partners' Equity (Deficit):
Liabilities
Accounts payable and other accrued expenses $ 270,026 $ 388,930
Line of credit 470,000 470,000
Notes payable 2,849,503 2,867,661
---------- -----------
Total Liabilities 3,589,529 3,726,591
---------- -----------
Partners' equity (deficit)
Limited partners 22,001,034 22,140,440
General partner (189,009) (181,672)
---------- -----------
Total Partners' Equity (Deficit) 21,812,025 21,958,768
---------- -----------
Total Liabilities and Partners'
Equity (Deficit) $ 25,401,554 $ 25,685,359
============ ===========
</TABLE>
<TABLE>
STATEMENTS OF EARNINGS
<CAPTION>
Three Months Ended Mar.31,
Unaudited 1996 1995
--------- ----------
<S> <C> <C>
Revenue:
Rental $1,092,790 $1,013,765
Interest income 5,234 2,041
---------- ------------
Total Revenue 1,098,024 1,015,806
---------- ------------
Expenses:
Operating and administrative 293,068 275,402
Property management fees 65,568 60,791
Depreciation 216,677 209,318
Real estate taxes 89,667 92,368
Interest 69,817 65,103
Amortization 17,724 17,725
---------- ------------
Total Expenses 752,521 720,707
---------- ------------
Earnings $ 345,503 $ 295,099
=========== ===========
Earnings per unit of limited partnership interest $ 2.85 $ 2.44
=========== ===========
Distributions per unit of limited
partnership interest $ 4.06 $ 4.06
=========== ===========
</TABLE>
<TABLE>
STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended Mar.31,
Unaudited 1996 1995
---------- ----------
<S> <C> <C>
Operating activities:
Earnings $345,503 $ 295,099
Adjustments to reconcile earnings to
net cash provided by operating activities:
Depreciation and amortization 234,401 227,043
Changes in operating accounts:
Other assets (37,849) 17,474
Accounts payable and other accrued expenses (118,904) 18,881
---------- ----------
Net cash provided by operating activities 423,151 558,497
---------- ----------
Investing activities:
Construction of and improvements to
storage centers --- (497,809)
---------- ----------
Financing activities:
Proceeds from line of credit 185,000
Payments on notes payable (18,158) (16,318)
Distributions to partners (492,246) (492,246)
---------- ----------
Net cash used in financing activities (510,404) (323,564)
---------- ----------
Decrease in cash and cash equivalents (87,253) (262,876)
Cash and cash equivalents at beginning of year 455,167 384,867
---------- ----------
Cash and cash equivalents at end of period $367,914 $ 121,991
========== ===========
Supplemental disclosures of cash flow information:
Cash paid during period for interest $ 69,817 $65,103
========== ===========
</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 1995 Annual Report. The
results of operations for interim periods will not necessarily be
indicative of the operating results for the fiscal year.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenue
and expenses during the reporting period. Actual results can differ
from those estimates.
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 months ended March 31, 1996 and 1995).
PART 1, ITEM 2 MANAGEMENTS' DISCUSSION AND ANALYSIS
Operating Results. The Partnership's performance continues to
improve with earnings up $50,400 or 17% over the same quarter last
year. Rental revenue increased $79,000 or 8% in the first quarter of
1996 compared to the corresponding quarter of 1995. The increase
resulted primarily from a 6% increase in the average rental rate per
square foot as well as the increase in revenue from storage center
expansions. Kennydale, Newport News North and Leesburg storage
centers contributed the largest revenue gains in your Partnership of
$25,800 $15,600, and $12,500, respectively. Occupancies decreased two
percentage points from 89% at March 31, 1995 to 87% at March 31, 1996.
Total expenses rose 4% for the quarter compared to 1995. Operating
and administrative expenses increased 6% over last year at this same
time. The majority of this increase resulted from additional hours
worked by the store mangers and increased salaries. Interest expense
also rose 7% due to the additional borrowings on the Partnership's
line of credit since March 31, 1995.
Cash Activities. The Partnership continues to investigate various
alternatives to provide the limited partners with greater liquidity.
Costs incurred by the Partnership in exploring various alternative
transactions totaled approximately $61,000. Whether and when the
Partnership will reach agreement regarding the implementation of any
of the various alternatives will depend on a number of factors. There
can be no assurance that any agreement will be reached, or if reached,
that the transactions contemplated thereby will be consummated.
Capital improvements planned for the remaining three quarters of
1996 total approximately $91,000 and include pavement, lighting and
security upgrades at the Orange storage center as well as pavement
work at the Sterling Heights, Kennydale and Bellefield storage
centers. These improvements are important to maintaining the value of
your investment as well as its ability to generate revenue.
If you have any questions regarding your investment, please contact
your American Express Financial Advisor or call Shurgard Investor
Relations at 800-955-2235.
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: May 07, 1996 By: HARRELL BECK
--------------------------------------
Harrell Beck
Treasurer and Authorized Signatory
Shurgard General Partner, Inc.
General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 367,914
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 29,649,739
<DEPRECIATION> 4,900,913
<TOTAL-ASSETS> 25,401,554
<CURRENT-LIABILITIES> 270,026
<BONDS> 3,319,503
0
0
<COMMON> 0
<OTHER-SE> 21,812,025
<TOTAL-LIABILITY-AND-EQUITY> 25,401,554
<SALES> 0
<TOTAL-REVENUES> 1,098,024
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 682,704
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 69,817
<INCOME-PRETAX> 345,503
<INCOME-TAX> 0
<INCOME-CONTINUING> 345,503
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 345,503
<EPS-PRIMARY> 2.85
<EPS-DILUTED> 2.85
</TABLE>
