-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PRBzecB5PCzwcWMtJuGQRVq1xTdVPWDkuqENAHAYHY+ILyPPsvUGaz2vu4kfv1PS Hhu6qxwndO+cSibaC/3Mqw== 0000202953-01-500010.txt : 20020410 0000202953-01-500010.hdr.sgml : 20020410 ACCESSION NUMBER: 0000202953-01-500010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC STORAGE PROPERTIES LTD CENTRAL INDEX KEY: 0000202953 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 953196921 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08667 FILM NUMBER: 1783265 BUSINESS ADDRESS: STREET 1: 701 WESTERN AVE STREET 2: SUITE 200 CITY: GLENDALE STATE: CA ZIP: 91201-2397 BUSINESS PHONE: (818) 244-8080 MAIL ADDRESS: STREET 1: 701 WESTERN AVE STREET 2: SUITE 200 CITY: GLENDALE STATE: CA ZIP: 91201 10-Q 1 prop3.txt PUBLIC STORAGE PROPERTIES, LTD. 10-Q 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, 2001 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to --------------- --------------- Commission File Number 0-8667 ------ PUBLIC STORAGE PROPERTIES, LTD. ------------------------------- (Exact name of registrant as specified in its charter) California 95-3196921 - ---------------------------------------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 701 Western Ave. Glendale, California 91201-2349 - -------------------------------------- ---------- (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 --- --- INDEX PART I. FINANCIAL INFORMATION Condensed balance sheets at September 30, 2001 and December 31, 2000 2 Condensed statements of income for the three and nine months ended September 30, 2001 and 2000 3 Condensed statement of partners' equity for the nine months ended September 30, 2001 4 Condensed statements of cash flows for the nine months ended September 30, 2001 and 2000 5 Notes to condensed financial statements 6-7 Management's discussion and analysis of financial condition and results of operations 8-9 PART II. OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K 10 PUBLIC STORAGE PROPERTIES, LTD. CONDENSED BALANCE SHEETS
September 30, December 31, 2001 2000 --------------- ---------------- (Unaudited) ASSETS ------ Cash and cash equivalents $ 260,000 $ 324,000 Rent and other receivables 103,000 74,000 Real estate facilities, at cost: Building, land improvements and equipment 8,977,000 8,814,000 Land 2,476,000 2,476,000 --------------- ---------------- 11,453,000 11,290,000 Less accumulated depreciation (7,503,000) (7,103,000) --------------- ---------------- 3,950,000 4,187,000 Other assets 52,000 79,000 --------------- ---------------- Total assets $ 4,365,000 $ 4,664,000 =============== ================ LIABILITIES AND PARTNERS' EQUITY (DEFICIT) ------------------------------------------ Accounts payable $ 163,000 $ 77,000 Deferred revenue 121,000 151,000 Note payable to commercial bank 3,025,000 6,025,000 Partners' equity (deficit): Limited partners' equity (deficit), $500 per unit, 20,000 units authorized, issued and outstanding 784,000 (1,180,000) General partners' equity (deficit) 272,000 (409,000) --------------- ---------------- Total partners' equity (deficit) 1,056,000 (1,589,000) --------------- ---------------- Total liabilities and partners' equity (deficit) $ 4,365,000 $ 4,664,000 =============== ================
See accompanying notes. 2 PUBLIC STORAGE PROPERTIES, LTD. CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------------- ------------------------------- 2001 2000 2001 2000 ------------- ------------- ------------- ------------- REVENUES: Rental income $ 1,532,000 $ 1,371,000 $ 4,441,000 $ 4,005,000 Gain on sale of land - 1,000 - 136,000 Other income 2,000 2,000 7,000 7,000 ------------- ------------- ------------- ------------- 1,534,000 1,374,000 4,448,000 4,148,000 ------------- ------------- ------------- ------------- COSTS AND EXPENSES: Cost of operations 304,000 293,000 879,000 864,000 Management fees paid to affiliate 91,000 82,000 266,000 240,000 Depreciation 133,000 130,000 400,000 401,000 Administrative 19,000 16,000 63,000 71,000 Interest expense 47,000 98,000 195,000 318,000 ------------- ------------- ------------- ------------- 594,000 619,000 1,803,000 1,894,000 ------------- ------------- ------------- ------------- NET INCOME $ 940,000 $ 755,000 $ 2,645,000 $ 2,254,000 ============= ============= ============= ============= Limited partners' share of net income ($130.95 per unit in 2001 and $111.55 per unit in 2000) $ 2,619,000 $ 2,231,000 General partners' share of net income 26,000 23,000 ------------- ------------- $ 2,645,000 $ 2,254,000 ============= =============
See accompanying notes. 3 PUBLIC STORAGE PROPERTIES, LTD. CONDENSED STATEMENT OF PARTNERS' EQUITY (UNAUDITED)
Total Limited General Partners' Partners Partners Equity (Deficit) ----------------- ----------------- ----------------- Balance at December 31, 2000 $ (1,180,000) $ (409,000) $ (1,589,000) Net income 2,619,000 26,000 2,645,000 Equity transfer (655,000) 655,000 - ----------------- ----------------- ----------------- Balance at September 30, 2001 $ 784,000 $ 272,000 $ 1,056,000 ================= ================= =================
See accompanying notes. 4 PUBLIC STORAGE PROPERTIES, LTD. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30, ------------------------------------- 2001 2000 ---------------- --------------- Cash flows from operating activities: Net income $ 2,645,000 $ 2,254,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 400,000 401,000 Gain on sale of land - (136,000) (Increase) decrease in rent and other receivables (29,000) 36,000 Decrease in other assets 27,000 10,000 Increase in accounts payable 86,000 1,000 Decrease in deferred revenue (30,000) (9,000) ---------------- --------------- Total adjustments 454,000 303,000 ---------------- --------------- Net cash provided by operating activities 3,099,000 2,557,000 ---------------- --------------- Cash flows from investing activities: Proceeds from sale of land - 172,000 Additions to real estate facilities (163,000) (173,000) ---------------- --------------- Net cash used in investing activities (163,000) (1,000) ---------------- --------------- Cash flows from financing activities: Principal payments on note payable to commercial bank (3,000,000) (2,550,000) ---------------- --------------- Net cash used in financing activities (3,000,000) (2,550,000) ---------------- --------------- Net (decrease) increase in cash and cash equivalents (64,000) 6,000 Cash and cash equivalents at the beginning of the period 324,000 153,000 ---------------- --------------- Cash and cash equivalents at the end of the period $ 260,000 $ 159,000 ================ ===============
See accompanying notes. 5 PUBLIC STORAGE PROPERTIES, LTD. NOTES TO CONDENSED FINANCIAL STATEMENTS (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, 2000. 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, 2001, the results of its operations for the three and nine months ended September 30, 2001 and 2000 and its cash flows for the nine months then ended. 3. The results of operations for the three and nine months ended September 30, 2001 are not necessarily indicative of the results expected for the full year. 4. During October 1998, we borrowed $12,400,000 from a commercial bank. The loan is unsecured and bears interest at the London Interbank Offering Rate ("LIBOR") plus 0.55% (3.187% as of September 30, 2001). The loan requires monthly payments of interest and matures October 2002. Principal may be paid, in whole or in part, at any time without penalty or premium. 5. We also entered into interest rate swap agreements to reduce the impact of changes in interest rates on a portion of its floating rate debt. The agreement, which covers $5,000,000 of debt through October 2000, effectively changes the interest rate exposure from floating rate to a fixed rate of 5.205%. The second agreement, which covers $2,500,000 of debt through October 2001 and effectively changes the interest rate exposure from floating rate to a fixed rate of 5.33%. Market gains and losses on the value of the swap are deferred and included in income over the life of the contract. We record the differences paid or received on the interest rate swap in interest expense as payments are made or received. 6 6. In June 1998, the FASB issued Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities," as amended in June 2000 by Statement of Financial Accounting Standards No. 138 ("SFAS 138"), "Accounting for Certain Derivative Instruments and Certain Hedging Activities," which requires companies to recognize all derivatives as either assets or liabilities in the balance sheet and measure such instruments at fair value. As amended by Statement of Financial Accounting Standards No. 137 ("SFAS 137"), "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133," the provisions of SFAS 133 will require adoption by the Partnership on January 1, 2001. The Partnership adopted SFAS 133, as amended by SFAS 138, on January 1, 2001, and the adoption had no material impact on the Partnership's consolidated financial statements. 7. During the third quarter of 2001, the property manager changed its lease agreements in regards to collecting rent. New tenants are now required to pay rent in arrears as opposed to paying in advance. Primarily as a result of this change, rent and other receivables increased $29,000 and deferred revenue decreased $30,000 from December 31, 2000. 7 PUBLIC STORAGE PROPERTIES, LTD., MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD LOOKING STATEMENTS - -------------------------- When used within this document, the words "expects," "believes," "anticipates," "should," "estimates," and similar expressions are intended to identify "forward-looking statements" within the meaning of that term in Section 27A of the Securities Exchange Act of 1933, as amended, and in Section 21F of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results and performance of the Partnership to be materially different from those expressed or implied in the forward looking statements. Such factors include the impact of competition from new and existing real estate facilities which could impact rents and occupancy levels at the real estate facilities that the Partnership has an interest in; the Partnership's ability to effectively compete in the markets that it does business in; the impact of the regulatory environment as well as national, state, and local laws and regulations including, without limitation, those governing Partnerships; and the impact of general economic conditions upon rental rates and occupancy levels at the real estate facilities that the Partnership has an interest in. RESULTS OF OPERATIONS - --------------------- THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000: Our net income for the nine months ended September 30, 2001 was $2,645,000 compared to $2,254,000 for the nine months ended September 30, 2000, representing an increase of $391,000 or 17%. Our net income for the three months ended September 30, 2001 was $940,000 compared to $755,000 for the three months ended September 30, 2000, representing an increase of $185,000 or 25%. These increases are primarily a result of increased operating results at our real estate facilities and a decrease in interest expense. Rental income for the nine months ended September 30, 2001 was $4,441,000 compared to $4,005,000 for the nine months ended September 30, 2000, representing an increase of $436,000 or 11%. Rental income for the three months ended September 30, 2001 was $1,532,000 compared to $1,371,000 for the three months ended September 30, 2000, representing an increase of $161,000 or 12%. These increases are attributable to higher rental rates. The weighted average occupancy levels at the mini-warehouse facilities were 92% and 96% for the nine months ended September 30, 2001 and 2000, respectively. Annual realized rent for the nine months ended September 30, 2001 increased to $12.63 per occupied square foot from $10.97 per occupied square foot for the nine months ended September 30, 2000. 8 Cost of operations (including management fees paid to an affiliate) for the nine months ended September 30, 2001 was $1,145,000 compared to $1,104,000 for the nine months ended September 30, 2000, representing an increase of $41,000 or 4%. Cost of operations (including management fees paid to an affiliate) for the three months ended September 30, 2001 was $395,000 compared to $375,000 for the three months ended September 30, 2000, representing a increase of $20,000 or 5%. This increase is attributable to increases in management fees which are based on property revenues of the Partnership, and advertising and promotion expense. Interest expense was $195,000 for the nine months ended September 30, 2001 from $318,000 for the same period in 2000, a $123,000 or 39% decrease. This decrease is mainly attributable to a lower outstanding principal balance. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash generated from operations ($3,099,000 for the nine months ended September 30, 2001) has been sufficient to meet all current obligations of the Partnership. During October 1998, we borrowed $12,400,000 from a commercial bank to payoff other loans. The loan is unsecured and bears interest at the London Interbank Offering Rate ("LIBOR") plus 0.55% (3.187% as of September 30, 2001). The loan requires monthly payments of interest and mature October 2002. Principal may be paid, in whole or in part, at any time without penalty or premium. We have also entered into interest rate swap agreements to reduce the impact of changes in interest rates on a portion of its floating rate debt. The agreement, which covers $5,000,000 of debt through October 2000, effectively changes the interest rate exposure from floating rate to a fixed rate of 5.205%. The second agreement, which covers $2,500,000 of debt through October 2001 and effectively changes the interest rate exposure from floating rate to a fixed rate of 5.33%. Market gains and losses on the value of the swap are deferred and included in income over the life of the contract. We record the differences paid or received on the interest rate swap in interest expense as payments are made or received. During the third quarter of 2001, the property manager changed its lease agreements in regards to collecting rent. New tenants are now required to pay rent in arrears as opposed to paying in advance. Primarily as a result of this change, rent and other receivables increased $29,000 and deferred revenue decreased $30,000 from December 31, 2000. 9 PART II. OTHER INFORMATION ITEMS 1 through 5 are inapplicable. ITEM 6 Exhibits and Reports on Form 8-K -------------------------------- (a) The following Exhibits are included herein: None (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 13, 2001 PUBLIC STORAGE PROPERTIES, LTD. BY: Public Storage, Inc. General Partner BY: /s/ John Reyes ------------- John Reyes Senior Vice President and Chief Financial Officer 10 -----END PRIVACY-ENHANCED MESSAGE-----