-----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, TVKRihwSBivWAd426tkWjl7KfeDD1xHFPfMK8ogUUqyC9DfCm/FpkLVD266oEjxi JNKiUGcO85l6g8nRW3dkEA== 0000225775-01-500009.txt : 20020410 0000225775-01-500009.hdr.sgml : 20020410 ACCESSION NUMBER: 0000225775-01-500009 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 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: 1934 Act SEC FILE NUMBER: 000-08908 FILM NUMBER: 1783271 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 prop4.txt PUBLIC STORAGE PROPERTIES V, 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 0-8908 ------ 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 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 IV, LTD. CONDENSED BALANCE SHEETS
September 30, December 31, 2001 2000 ---------------- ---------------- (Unaudited) ASSETS ------ Cash and cash equivalents $ 594,000 $ 525,000 Marketable securities of affiliate (cost of $6,340,000) 13,084,000 9,566,000 Rent and other receivables 413,000 151,000 Real estate facilities, at cost: Buildings and equipment 17,515,000 17,087,000 Land 5,021,000 5,021,000 ---------------- ---------------- 22,536,000 22,108,000 Less accumulated depreciation (14,502,000) (13,777,000) ---------------- ---------------- 8,034,000 8,331,000 Other assets 79,000 102,000 ---------------- ---------------- Total assets $ 22,204,000 $ 18,675,000 ================ ================ LIABILITIES AND PARTNERS' EQUITY -------------------------------- Accounts payable $ 488,000 $ 169,000 Deferred revenue 225,000 262,000 Note payable to commercial bank 2,075,000 7,750,000 Partners' equity: Limited partners' equity, $500 per unit, 40,000 units authorized, issued and outstanding 9,399,000 5,391,000 General partners' equity 3,273,000 1,877,000 Other comprehensive income 6,744,000 3,226,000 ---------------- ---------------- Total partners' equity 19,416,000 10,494,000 ---------------- ---------------- Total liabilities and partners' equity $ 22,204,000 $ 18,675,000 ================ ================
See accompanying notes. 2 PUBLIC STORAGE PROPERTIES IV, LTD. CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------------ ------------------------------ 2001 2000 2001 2000 ------------- ------------- ------------- ------------- REVENUES: Rental income $ 3,206,000 $ 2,422,000 $ 8,447,000 $ 7,114,000 Dividends from marketable securities of affiliate 314,000 321,000 497,000 503,000 Gain on sale of land - - - 61,000 Other income 2,000 4,000 30,000 6,000 ------------- ------------- ------------- ------------- 3,522,000 2,747,000 8,974,000 7,684,000 ------------- ------------- ------------- ------------- COSTS AND EXPENSES: Cost of operations 965,000 539,000 2,077,000 1,641,000 Management fees paid to affiliate 167,000 146,000 476,000 427,000 Depreciation 245,000 241,000 725,000 724,000 Administrative 24,000 17,000 74,000 80,000 Interest expense 35,000 164,000 218,000 552,000 ------------- ------------- ------------- ------------- 1,436,000 1,107,000 3,570,000 3,424,000 ------------- ------------- ------------- ------------- NET INCOME $ 2,086,000 $ 1,640,000 $ 5,404,000 $ 4,260,000 ============= ============= ============= ============= Limited partners' share of net income ($133.60 per unit in 2001 and $105.33 per unit in 2000) $ 5,344,000 $ 4,213,000 General partners' share of net income 60,000 47,000 ------------- ------------- $ 5,404,000 $ 4,260,000 ============= =============
See accompanying notes. 3 PUBLIC STORAGE PROPERTIES IV, LTD. CONDENSED STATEMENT OF PARTNERS' EQUITY (UNAUDITED)
Other Limited General Comprehensive Total Partners' Partners Partners Income Equity ----------------- ----------------- ----------------- ----------------- Balance at December 31, 2000 $ 5,391,000 $ 1,877,000 $ 3,226,000 $ 10,494,000 Change in unrealized gain of marketable equity securities - - 3,518,000 3,518,000 Net income 5,344,000 60,000 - 5,404,000 Equity transfer (1,336,000) 1,336,000 - - ----------------- ----------------- ----------------- ----------------- Balance at September 30, 2001 $ 9,399,000 $ 3,273,000 $ 6,744,000 $ 19,416,000 ================= ================= ================= =================
See accompanying notes. 4 PUBLIC STORAGE PROPERTIES IV, LTD. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30, -------------------------------- 2001 2000 ------------- ------------- Cash flows from operating activities: Net income $ 5,404,000 $ 4,260,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 725,000 721,000 Gain on sale of land - (61,000) Increase in rent and other receivables (262,000) (184,000) Amortization of prepaid loan fees 10,000 3,000 Decrease in other assets 13,000 7,000 Increase in accounts payable 319,000 187,000 (Decrease) increase in deferred revenue (37,000) 39,000 ------------- ------------- Total adjustments 768,000 712,000 ------------- ------------- Net cash provided by operating activities 6,172,000 4,972,000 ------------- ------------- Cash flows from investing activities: Proceeds from sale of land - 305,000 Additions to real estate facilities (428,000) (244,000) ------------- ------------- Net cash (used in) provided by investing activities (428,000) 61,000 ------------- ------------- Cash flows from financing activities: Principal payments on note payable to commercial bank (5,675,000) (4,375,000) ------------- ------------- Net cash used in financing activities (5,675,000) (4,375,000) ------------- ------------- Net increase in cash and cash equivalents 69,000 658,000 Cash and cash equivalents at beginning of period 525,000 249,000 ------------- ------------- Cash and cash equivalents at end of period $ 594,000 $ 907,000 ============= ============= Supplemental schedule of non-cash activities: Receipt of stock dividend: Marketable securities $ - $ 249,000 ============= ============= Rent and other receivables $ - $ (249,000) ============= ============= Increase in fair market value of marketable securities: Marketable securities $ 3,518,000 $ 516,000 ============= ============= Other comprehensive income $ 3,518,000 $ 516,000 ============= =============
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, 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. Marketable securities at September 30, 2001 consist of 381,980 shares of common stock and 12,412 shares of Equity Stock, Series A of Public Storage, Inc., a publicly traded real estate investment trust and a general partner of the Partnership. We have designated our portfolio of marketable securities as available for sale. Accordingly, at September 30, 2001, we have recorded the marketable securities at fair value, based upon the closing quoted prices of the securities at September 28, 2001. 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. During September 1998, we borrowed $21,000,000 from a commercial bank. The loan is unsecured and bears interest at the London Interbank Offering Rate, ("LIBOR") rounded up to the nearest .125% plus 0.60% to 1.20% depending on our interest coverage ratio (3.35% at September 30, 2001). The loan requires monthly payments of interest and matures September 2002. Principal may be paid, in whole or in part, at any time without penalty or premium. 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 $262,000 and deferred revenue decreased $37,000 from December 31, 2000. 7 PUBLIC STORAGE PROPERTIES IV, 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 $5,404,000 compared to $4,260,000 for the nine months ended September 30, 2000, representing an increase of $1,144,000 or 27%. Our net income for the three months ended September 30, 2001 was $2,086,000 compared to $1,640,000 for the three months ended September 30, 2000, representing an increase of $446,000 or 27%. 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 $8,447,000 compared to $7,114,000 for the nine months ended September 30, 2000, representing an increase of $1,333,000 or 19%. Rental income for the three months ended September 30, 2001 was $3,206,000 compared to $2,422,000 for the three months ended September 30, 2000, representing an increase of $784,000 or 32%. These increases are primarily attributable to higher rental rates. The weighted average occupancy levels at the mini-warehouse facilities were 92% and 94% for the nine months ended September 30, 2001 and 2000, respectively. Annual realized rent for the nine months ended September 30, 2001 increased to $14.09 per occupied square foot from $11.69 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 $2,553,000 compared to $2,068,000 for the nine months ended September 30, 2000, representing an increase of $485,000 or 23%. Cost of operations (including management fees paid to an affiliate) for the three months ended September 30, 2001 was $1,132,000 compared to $685,000 for the three months ended September 30, 2000, representing an increase of $447,000 or 65%. This increase is mainly attributable to increases in advertising and promotion expense, and payroll expense. During 2001, we began offering containerized storage at one of our facilities. As a result, we have experienced an increase in both rental income and cost of operations, however, there has been no material impact to net operating income contribution from this property. Interest expense was $218,000 in the nine months ended September 30, 2001 compared to $552,000 in the same period in 2000, a $334,000 or 61% decrease. This decrease is mainly attributable to a lower outstanding principal balance. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash flows from operating activities ($6,172,000 for the nine months ended September 30, 2001) have been sufficient to meet all current obligations of the Partnership. During September 1998, we borrowed $21,000,000 from a commercial bank. The loan is unsecured and bears interest at the London Interbank Offering Rate ("LIBOR") rounded up to the nearest .125% plus 0.60% to 1.20% depending on our interest coverage ratio (3.35% at September 30, 2001). The loan requires monthly payments of interest and matures September 2002. Principal may be paid, in whole or in part, at any time without penalty or premium. 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 $262,000 and deferred revenue decreased $37,000 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 IV, 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-----