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 0-19197
IDS/SHURGARD INCOME GROWTH PARTNERS, L.P. III
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1435854
(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>
BALANCE SHEETS
<TABLE>
Mar. 31, Dec.31,
Unaudited 1996 1995
--------- -----------
<CAPTION>
<S> <C> <C>
Assets:
Cash and cash equivalents $ 395,166 $ 673,130
Storage centers, net 33,903,059 34,146,500
Other assets 358,552 250,621
Amortizable asset, net 305,533 364,101
Land held for resale 201,835 201,835
--------- -----------
Total Assets $ 35,164,145 $35,636,187
============ ============
Liabilities and Partners' Equity (Deficit):
Liabilities
Accounts payable and other accrued expenses $ 422,533 $ 476,306
Notes payable 10,384,296 10,745,854
---------- -----------
Total Liabilities 10,806,829 11,222,160
=========== ===========
Partners' equity (deficit)
Limited partners 24,464,765 24,518,638
General partner (107,449) (104,611)
--------- -----------
Total Partner's Equity (Deficit) 24,357,316 24,414,027
----------- -----------
Total Liabilities and Partners'
Equity (Deficit) $ 35,164,145 $ 35,636,187
============ ===========
</TABLE>
<TABLE>
STATEMENTS OF EARNINGS
<CAPTIOM>
Three Months Ended Mar.31,
Unaudited 1996 1995
--------- -------
<S> <C> <C>
Revenue:
Rental $1,806,553 $1,720,373
Interest income 9,343 6,928
--------- -----------
Total Revenue 1,815,896 1,727,301
--------- -----------
Expenses:
Operating and administrative 506,828 497,994
Property management fees 108,093 103,223
Depreciation 282,034 280,622
Real estate taxes 134,821 126,333
Interest 194,032 214,039
Amortization 58,568 118,821
--------- -----------
Total Expenses 1,284,376 1,341,032
--------- -----------
Earnings $ 531,520 $ 386,269
========= ===========
Earnings per unit of limited partnership interest $ 4.24 $ 3.08
========== ==========
Distributions per unit of limited
partnership interest $ 4.69 $ 4.69
========== ==========
</TABLE>
<TABLE>
STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended Mar.31,
Unaudited 1996 1995
--------- -----------
<S> <C> <C>
Operating activities:
Earnings $ 531,520 $ 386,269
Adjustments to reconcile earnings to net
cash provided by operating activities:
Depreciation and amortization 340,602 399,443
Changes in operating accounts:
Other assets (107,931) (4,414)
Accounts payable and other accrued expenses (53,773) (42,628)
----------- -----------
Net cash provided by operating activities 710,418 738,670
----------- -----------
Investing activities:
Improvements to storage centers (38,593) (7,659)
----------- -----------
Financing activities:
Proceeds from notes payable 600,000
Payments on notes payable (961,558) (429,333)
Distributions to partners (588,231) (588,231)
----------- -----------
Net cash used in financing activities (949,789) (1,017,564)
----------- -----------
Decrease in cash and cash equivalents (277,964) (286,553)
Cash and cash equivalents at beginning of year 673,130 602,285
----------- -----------
Cash and cash equivalents at end of period $ 395,166 $ 315,732
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during period for interest $ 194,032 $ 214,039
=========== ===========
</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
(119,215 for the three months ended March 31, 1996 and 1995).
Note B _ Notes Payable:
During the quarter, the Partnership borrowed $600,000 on its bank
note in order to make final payment of $909,653 on the seller's note
that originated with the purchase of the Castro Valley storage center.
PART I ITEM 2 MANAGEMENT'S' DISCUSSION AND ANALYSIS
We are pleased to provide you with the financial reports for
IDS/Shurgard Income Growth Partners L.P. III for the quarter ended
March 31, 1996.
Operating Results. The Partnership's performance continues to
improve with earnings up $145,000 or 38% over the same quarter last
year. Rental revenue increased $86,000 or 5% in the first quarter of
1996 compared to the corresponding quarter of 1995. The increase
resulted primarily from a 10% increase in the average rental rate per
square foot. Stone Mountain, Tracy, and Castro Valley storage centers
contributed the largest revenue gain in your Partnership of $21,300
$19,500, and $18,300, respectively. During the month of March the
Partnership lost its only tenant in the Castro Valley office building
representing approximately $5,000 per month in rent. Management is
currently making efforts to fill the office space; however, it has
impacted average occupancies at quarter end. Average occupancies
decreased eight percentage points from 89% at March 31, 1995 to 81% at
March 31, 1996.
Total expenses decreased 4% for the quarter compared to 1995. The
majority of this decrease is due to the drop in amortization expense
which does not affect the Partnership's cash flow. Additionally,
interest expense decreased as a result of the final payment on the
seller's note which originated with the purchase of the Castro Valley
storage center. Operating and administrative expenses increased 2%
over the same quarter last year due to additional hours worked by the
store mangers as well as increased salaries. Real estate taxes
increased 7% over the same quarter due to a refund received in March
1995 for the successful appeal of San Lorenzo's 1994 real estate
taxes.
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 $82,000. 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 for the quarter totaled $38,600 which
represents the conversion of storage units at the Dobson Ranch storage
center. Improvements planned for the remaining three quarters of 1996
total approximately $150,000 and include roofing and paving at the
Windcrest, Allen Boulevard and Stone Mountain storage centers as well
as new lighting at the Tracy storage center and security upgrades at
the Gilbert and San Lorenzo storage centers. These improvements are
important to maintaining the value of your investment as well as its
ability to generate revenue.
During the quarter, the Partnership borrowed $600,000 on its bank
note in order to make final payment of $909,653 on the seller's note
that originated with the purchase of the Castro Valley storage center.
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. III
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> 395,166
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 37,480,443
<DEPRECIATION> 3,577,384
<TOTAL-ASSETS> 35,164,145
<CURRENT-LIABILITIES> 422,533
<BONDS> 10,384,296
0
0
<COMMON> 0
<OTHER-SE> 24,357,316
<TOTAL-LIABILITY-AND-EQUITY> 35,164,145
<SALES> 0
<TOTAL-REVENUES> 1,815,896
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,090,344
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 194,032
<INCOME-PRETAX> 531,520
<INCOME-TAX> 0
<INCOME-CONTINUING> 531,520
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 531,520
<EPS-PRIMARY> 4.24
<EPS-DILUTED> 4.24
</TABLE>
