-----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, VWC9Rjn+AFMVwTz0vWr0ZEhWID+rHPJXb/rO/u5FUlXuRmCqR586a3fPhxr6BZxg 3ybGXqzG0d2VDsms9g3qpw== 0000225775-98-000005.txt : 19980813 0000225775-98-000005.hdr.sgml : 19980813 ACCESSION NUMBER: 0000225775-98-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC STORAGE PROPERTIES IV LTD CENTRAL INDEX KEY: 0000225775 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 953192402 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08908 FILM NUMBER: 98684056 BUSINESS ADDRESS: STREET 1: 701 WESTERN AVE STREET 2: SUITE 200 CITY: GLENDALE STATE: CA ZIP: 91201-2397 BUSINESS PHONE: 8182448080 MAIL ADDRESS: STREET 1: 701 WESTERN AVE STREET 2: SUITE 200 CITY: GLENDALE STATE: CA ZIP: 91201 10-Q 1 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 June 30, 1998 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 0-8908 ------ PUBLIC STORAGE PROPERTIES IV, LTD. ---------------------------------- (Exact name of registrant as specified in its charter) California 95-3192402 - ----------------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 701 Western Avenue Glendale, California 91201 - ----------------------------------------- ---------------- (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 Page ---- PART I. FINANCIAL INFORMATION Condensed balance sheets at June 30, 1998 and December 31, 1997 2 Condensed statements of income for the three and six months ended June 30, 1998 and 1997 3 Condensed statement of partners' deficit for the six months ended June 30, 1998 4 Condensed statements of cash flows for the six months ended June 30, 1998 and 1997 5 Notes to condensed financial statements 6 Management's discussion and analysis of financial condition and results of operations 7-8 PART II. OTHER INFORMATION 9 PUBLIC STORAGE PROPERTIES IV, LTD. CONDENSED BALANCE SHEETS
June 30, December 31, 1998 1997 ---------------------- ---------------------- (Unaudited) ASSETS ------ Cash and cash equivalents $ 3,663,000 $ 1,911,000 Marketable securities of affiliate (cost of $6,091,000) 10,743,000 11,220,000 Rent and other receivables 162,000 166,000 Real estate facilities, at cost: Buildings and equipment 16,172,000 16,031,000 Land 5,244,000 5,244,000 ---------------------- ---------------------- 21,416,000 21,275,000 Less accumulated depreciation (11,358,000) (10,898,000) ---------------------- ---------------------- 10,058,000 10,377,000 ---------------------- ---------------------- Other assets 101,000 144,000 ---------------------- ---------------------- Total assets $ 24,727,000 $ 23,818,000 ====================== ======================== LIABILITIES AND PARTNERS' DEFICIT --------------------------------- Accounts payable $ 438,000 $ 65,000 Deferred revenue 286,000 230,000 Mortgage note payable 24,986,000 25,405,000 Partners' deficit: Limited partners' deficit, $500 per unit, 40,000 units authorized, issued and outstanding (4,180,000) (5,200,000) General partners' deficit (1,455,000) (1,811,000) Unrealized gain on marketable securities 4,652,000 5,129,000 ---------------------- ---------------------- Total partners' deficit (983,000) (1,882,000) ---------------------- ---------------------- Total liabilities and partners' deficit $ 24,727,000 $ 23,818,000 ====================== ========================
See accompanying notes. 2 PUBLIC STORAGE PROPERTIES IV, LTD. CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, --------------------------------- --------------------------------- 1998 1997 1998 1997 --------------- ---------------- --------------- ---------------- REVENUES: Rental income $ 2,194,000 $ 1,954,000 $ 4,304,000 $ 3,871,000 Dividends from marketable securities of affiliate 84,000 76,000 168,000 141,000 Other income 41,000 33,000 71,000 68,000 --------------- ---------------- --------------- ---------------- 2,319,000 2,063,000 4,543,000 4,080,000 --------------- ---------------- --------------- ---------------- COSTS AND EXPENSES: Cost of operations 515,000 463,000 1,037,000 953,000 Management fees paid to affiliate 133,000 117,000 260,000 232,000 Depreciation 230,000 217,000 460,000 432,000 Administrative 26,000 20,000 41,000 31,000 Interest expense 683,000 705,000 1,369,000 1,415,000 --------------- ---------------- --------------- ---------------- 1,587,000 1,522,000 3,167,000 3,063,000 --------------- ---------------- --------------- ---------------- NET INCOME $ 732,000 $ 541,000 $ 1,376,000 $ 1,017,000 =============== ================ =============== ================ Limited partners' share of net income ($34.03 per unit in 1998 and $25.13 per unit in $ 1,361,000 $ 1,005,000 1997) General partners' share of net income 15,000 12,000 --------------- ---------------- $ 1,376,000 $ 1,017,000 =============== ================
See accompanying notes. 3 PUBLIC STORAGE PROPERTIES IV, LTD. CONDENSED STATEMENT OF PARTNERS' DEFICIT (UNAUDITED)
Unrealized Gain on Total Limited General Marketable Partners' Partners Partners Securities Deficit ----------------- ----------------- ----------------- ----------------- Balance at December 31, 1997 $ (5,200,000) $ (1,811,000) $ 5,129,000 $ (1,882,000) Unrealized loss marketable securities - - (477,000) (477,000) Net income 1,361,000 15,000 - 1,376,000 Equity transfer (341,000) 341,000 - - ----------------- ----------------- ----------------- ----------------- Balance at June 30, 1998 $ (4,180,000) $ (1,455,000) $ 4,652,000 $ (983,000) ================= ================= ================= =================
See accompanying notes. 4 PUBLIC STORAGE PROPERTIES IV, LTD. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, ----------------------------------------- 1998 1997 -------------------- ------------------- Cash flows from operating activities: Net income $ 1,376,000 $ 1,017,000 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 460,000 432,000 Decrease (increase) in rent and other receivables 4,000 (22,000) Amortization of prepaid loan fees 46,000 46,000 (Increase) decrease in other assets (3,000) 24,000 Increase in accounts payable 373,000 41,000 Increase in deferred revenue 56,000 20,000 -------------------- ------------------- Total adjustments 936,000 541,000 -------------------- ------------------- Net cash provided by operating activities 2,312,000 1,558,000 -------------------- ------------------- Cash flows from investing activities: Purchase of marketable securities of affiliate - (1,289,000) Additions to real estate facilities (141,000) (275,000) -------------------- ------------------- Net cash used in investing activities (141,000) (1,564,000) -------------------- ------------------- Cash flows from financing activities: Principal payments on mortgage note payable (419,000) (454,000) -------------------- ------------------- Net cash used in financing activities (419,000) (454,000) -------------------- ------------------- Net increase (decrease) in cash and cash equivalents 1,752,000 (460,000) Cash and cash equivalents at beginning of period 1,911,000 2,440,000 -------------------- ------------------- Cash and cash equivalents at end of period $ 3,663,000 $ 1,980,000 ==================== =================== Supplemental schedule of non-cash investing and financing activities: Decrease in fair market value of marketable securities $ 477,000 $ 424,000 ==================== =================== Unrealized loss on marketable securities $ (477,000) $ (424,000) ==================== ===================
See accompanying notes. 5 PUBLIC STORAGE PROPERTIES IV, 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, 1997. 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 June 30, 1998, the results of its operations for the six months ended June 30, 1998 and 1997 and its cash flows for the three months then ended. 3. The results of operations for the six months ended June 30, 1998 are not necessarily indicative of the results expected for the full year. 4. Marketable securities at June 30, 1998 consist of 381,980 shares of common stock of Public Storage, Inc., a publicly traded real estate investment trust and a general partner of the Partnership. The Partnership has designated its portfolio of marketable securities as available for sale. Accordingly, at June 30, 1998, the Partnership has recorded the marketable securities at fair value, based upon the closing quoted prices of the securities at June 30, 1998. Changes in market value of marketable securities are reflected as unrealized gains or losses directly in Partners' Equity and accordingly have no effect on net income. 5. The Partnership's mortgage note payable matures on October 1, 1998. On July 1, 1998, the Partnership paid off the mortgage note payable with cash reserves and with the proceeds of a $22,000,000 loan from Public Storage, Inc. The loan from Public Storage, Inc. bears interest at the fixed rate of 7.2% and matures June 30, 1999. The loan calls for monthly payments of interest only. Principal may be paid at any time without penalty. Public Storage, Inc. has also provided the Partnership with options to extend the loan term through June 2003. 6 PUBLIC STORAGE PROPERTIES IV, LTD. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - --------------------- THREE AND SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE AND SIX MONTHS ENDED JUNE 30, 1997: The Partnership's net income for the six months ended June 30, 1998 was $1,376,000 compared to $1,017,000 for the six months ended June 30, 1997, representing an increase of $359,000 or 35%. The Partnership's net income for the three months ended June 30, 1998 was $732,000 compared to $541,000 for the three months ended June 30, 1997, representing an increase of $191,000 or 35%. These increases are primarily a result of increased operating results at the Partnership's real estate facilities combined with a decrease in interest expense. Rental income for the six months ended June 30, 1998 was $4,304,000 compared to $3,871,000 for the six months ended June 30, 1997 representing an increase of $433,000 or 11%. Rental income for the three months ended June 30, 1998 was $2,194,000 compared to $1,954,000 for the three months ended June 30, 1997, representing an increase of $240,000 or 12%. These increases are primarily attributable to higher rental rates and occupancy levels at the Partnership's mini-warehouse facilities. The weighted average occupancy levels at the mini-warehouse facilities were 94% and 91% for the six months ended June 30, 1998 and 1997, respectively. Realized rent for the six months ended June 30, 1998 increased to $.87 per occupied square foot from $.81 per occupied square foot for the six months ended June 30, 1997. Other income increased $3,000 for the six months ended June 30, 1998 compared to the same period in 1997. This increase is primarily due to an increase in invested cash balances. Dividend income from marketable securities of affiliate increased $27,000 for the six months ended June 30, 1998 compared to the same period in 1997 due to an increase in the number of shares owned in 1998 compared to the same period in 1997. Cost of operations (including management fees paid to affiliate) for the six months ended June 30, 1998 was $1,297,000 compared to $1,185,000 for the six months ended June 30, 1997, representing an increase of $112,000 or 9%. Cost of operations (including management fees paid to affiliate) for the three months ended June 30, 1998 was $648,000 compared to $580,000 for the three months ended June 30, 1997, representing an increase of $68,000 or 12%. This increase is mainly attributable to increases in management fees, property taxes and payroll expenses. Property taxes increased due to an increase in property tax rates at some of the Partnership's mini-warehouse facilities. 7 Interest expense decreased $46,000 to $1,369,000 in the six months ended June 30, 1998 from $1,415,000 in the same period in 1997. This decrease is mainly attributable to a lower outstanding principal balances on the Partnership's notes payable. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash flows from operating activities ($2,312,000 for the six months ended June 30, 1998) have been sufficient to meet all current obligations of the Partnership. At June 30, 1998, the Partnership held 381,980 shares of common stock (marketable securities) with a fair value totaling $10,743,000 (cost basis of $6,091,000 at June 30, 1998) in Public Storage, Inc. The Partnership recognized $168,000 in dividends for the six months ended June 30, 1998. In the third quarter of 1991, quarterly distributions were discontinued to enable the Partnership to make principal payments that commenced in 1990 and to increase cash reserves in subsequent years through 1998, at which time the remaining principal balance is due. On July 1, 1998, the Partnership paid off the mortgage note payable with cash reserves and with the proceeds of a $22,000,000 loan from Public Storage, Inc. The loan from Public Storage, Inc. bears interest at the fixed rate of 7.2% and matures June 30, 1999. The loan calls for monthly payments of interest only. Principal may be paid at any time without penalty. Public Storage, Inc. has also provided the Partnership with options to extend the loan term through June 2003. 8 PART II. OTHER INFORMATION Items 1 through 5 are inapplicable. Item 6 Exhibits and Reports on Form 8-K. (a) The following exhibit is 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: August 12, 1998 PUBLIC STORAGE PROPERTIES IV, LTD. BY: Public Storage, Inc. General Partner BY: /s/ John Reyes ------------------------- John Reyes Senior Vice President and Chief Financial Officer 9 EX-27 2 FDS -- WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 000022577 Public Storage Properties IV, Ltd. 1 US 6-MOS Dec-31-1998 Jan-01-1998 Jun-30-1998 1 3,663,000 10,743,000 162,000 0 0 14,669,000 21,416,000 (11,358,000) 24,727,000 724,000 24,986,000 0 0 0 (983,000) 24,727,000 0 4,543,000 0 1,297,000 501,000 0 1,369,000 1,376,000 0 1,376,000 0 0 0 1,376,000 34.03 34.03
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