0000898430-95-001403.txt : 19950809 0000898430-95-001403.hdr.sgml : 19950809 ACCESSION NUMBER: 0000898430-95-001403 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950808 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC STORAGE PARTNERS II LTD CENTRAL INDEX KEY: 0000275915 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING & COURIER SERVICES (NO AIR) [4210] IRS NUMBER: 953146963 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08676 FILM NUMBER: 95559483 BUSINESS ADDRESS: STREET 1: 600 N BRAND BLVD CITY: GLENDALE STATE: CA ZIP: 91203 BUSINESS PHONE: 8182448080 MAIL ADDRESS: STREET 1: 600 NORTH BRAND BLVD STREET 2: SUITE 300 CITY: GLENDALE STATE: CA ZIP: 91203 10-Q 1 FORM 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, 1995 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 0-8676 ------ PUBLIC STORAGE PARTNERS II, LTD. ------------------------------------------------------- (Exact name of registrant as specified in its charter) California 95-3146963 ---------------------------------------- ---------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 600 N. Brand Boulevard Glendale, California 91203 ---------------------------------------- ---------------------------- (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, 1995 and December 31, 1994 2 Condensed statements of operations for the three and six months ended June 30, 1995 and 1994 3 Condensed statement of partners' deficit for the six months ended June 30, 1995 4 Condensed statements of cash flows for the three and six months ended June 30, 1995 and 1994 5 Notes to condensed financial statements 6-7 Management's discussion and analysis of financial condition and results of operations 8-10 PART II. OTHER INFORMATION 11
PUBLIC STORAGE PARTNERS II, LTD. CONDENSED BALANCE SHEETS
June 30, December 31, 1995 1994 ----------- ----------- ASSETS ------ Cash and cash equivalents $ 195,000 $ 159,000 Marketable securities of affiliate at market value (cost of $68,000) 82,000 72,000 Rent and other receivables 38,000 32,000 Real estate facilities at cost: Building, land improvements and equipment 3,197,000 3,194,000 Land 1,267,000 1,267,000 ----------- ----------- 4,464,000 4,461,000 Less accumulated depreciation (2,189,000) (2,117,000) ----------- ----------- 2,275,000 2,344,000 ----------- ----------- Other assets 202,000 206,000 ----------- ----------- Total assets $ 2,792,000 $ 2,813,000 =========== ===========
LIABILITIES AND PARTNERS' DEFICIT --------------------------------- Accounts payable $ 1,000 $ 10,000 Deferred revenue 77,000 74,000 Notes payable 9,122,000 9,384,000 Partners' deficit: Limited partners' deficit, $500 per unit, 10,000 units authorized, 9,890 issued and outstanding (4,753,000) (4,939,000) General partners' deficit (1,669,000) (1,720,000) Unrealized gain on marketable securities 14,000 4,000 ----------- ----------- Total partners' deficit (6,408,000) (6,655,000) ----------- ----------- Total liabilities and partners' deficit $ 2,792,000 $ 2,813,000 =========== ===========
See accompanying notes. 2 PUBLIC STORAGE PARTNERS II, LTD. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, -------------------- ------------------------ 1995 1994 1995 1994 -------- -------- ---------- ---------- REVENUE: Rental income $558,000 $541,000 $1,088,000 $1,091,000 Dividends and other income (including dividends from marketable securities of affiliate) 2,000 - 5,000 - -------- -------- ---------- ---------- 560,000 541,000 1,093,000 1,091,000 -------- -------- ---------- ---------- COSTS AND EXPENSES: Costs of operations 97,000 108,000 208,000 205,000 Management fees paid to affiliate 34,000 32,000 66,000 65,000 Depreciation and amortization 36,000 33,000 72,000 67,000 Administrative 9,000 7,000 28,000 19,000 Interest expense 239,000 257,000 482,000 526,000 -------- -------- ---------- ---------- 415,000 437,000 856,000 882,000 -------- -------- ---------- ---------- NET INCOME $145,000 $104,000 $ 237,000 $ 209,000 ======== ======== ========== ========== Limited partners' share of net income ($23.76 per unit in 1995 and $20.93 per unit in 1994) $ 235,000 $ 207,000 General partner's share of net income 2,000 2,000 ---------- ---------- $ 237,000 $ 209,000 ========== ==========
See accompanying notes. 3 PUBLIC STORAGE PARTNERS II, LTD. CONDENSED STATEMENT OF PARTNERS' DEFICIT (UNAUDITED)
Unrealized Gain on Total Limited General Marketable Partners Partners Partners Securities Deficit ------------ ------------- ---------- ------------ Balance at December 31, 1994 $(4,939,000) $(1,720,000) $ 4,000 $(6,655,000) Unrealized gain on marketable Securities - - 10,000 10,000 Net income 235,000 2,000 - 237,000 Equity transfer (49,000) 49,000 - - ----------- ----------- ------- ----------- Balance at June 30, 1995 $(4,753,000) $(1,669,000) $14,000 $(6,408,000) =========== =========== ======= ===========
See accompanying notes. 4 PUBLIC STORAGE PARTNERS II, LTD. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED June 30, ----------------------- 1995 1994 ---------- ---------- Cash flows from operating activities: Net income $ 237,000 $ 209,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 72,000 67,000 Increase in rent and other receivables (6,000) (4,000) Decrease in prepaid loan fees 5,000 5,000 (Increase) decrease in other assets (1,000) 27,000 Decrease in accounts payable (9,000) (7,000) Increase (decrease) in deferred revenue 3,000 (11,000) --------- --------- Total adjustments 64,000 77,000 --------- --------- Net cash provided by operating activities 301,000 286,000 --------- --------- Cash flows from investing activities: Additions to real estate facilities (3,000) (20,000) --------- --------- Net cash used in investing activities (3,000) (20,000) --------- --------- Cash flows from financing activities: Proceeds from note payable - 850,000 Principal payment on note payable to affiliate - (850,000) Principal payments on note payable (262,000) (177,000) --------- --------- Net cash used in financing activities (262,000) (177,000) --------- --------- Net increase in cash and cash equivalents 36,000 89,000 Cash and cash equivalents at the beginning of the period 159,000 90,000 --------- --------- Cash and cash equivalents at the end of the period $ 195,000 $ 179,000 ========= ========= SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Increase in fair value of marketable securities $ (10,000) $ - ========= ========= Unrealized gain on marketable securities 10,000 - ========= =========
See accompanying notes. 5 PUBLIC STORAGE PARTNERS II, 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, 1994. 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, 1995, the results of its operations for the three and six months ended June 30, 1995 and 1994 and its cash flows for the six months then ended. 3. The results of operations for the three and six months ended June 30, 1995 are not necessarily indicative of the results expected for the full year. 4. Marketable securities at June 30, 1995 consist of 5,000 common shares of Storage Equities, Inc. ("SEI"), a publicly traded real estate investment trust, whose investment advisor is an affiliate of Public Storage, Inc. (a general partner of the Partnership). FASB Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities," requires marketable securities to be classified as trading or available for sale. The Partnership has designated its portfolio of marketable securities as available for sale. Accordingly, at June 30, 1995, the Partnership has recorded the marketable securities at fair value and, based upon the closing quoted price of the securities at June 30, 1995, recorded a corresponding unrealized gain totaling $14,000 as a credit to Partnership equity. 6 5. Substantially all of the Partnership's facilities were acquired prior to the time that it was customary to conduct environmental investigations in connection with property acquisitions. During the first quarter of 1995, the Partnership commenced environmental assessments on its properties. The results of those assessments have been completed. The Partnership is not presently aware of any significant environmental matters with respect to any of its properties which would have a materially adverse effect on the Company's financial position. Included in administrative expenses on the statements of operations for six months ended June 30, 1995 is approximately $9,000 incurred in connection with the environmental assessments. 7 PUBLIC STORAGE PARTNERS II, LTD. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS --------------------- THREE AND SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO THREE AND SIX MONTHS ENDED JUNE 30, 1994: The Partnership's net income for the six months ended June 30, 1995 was $237,000 compared to $209,000 for the six months ended June 30, 1994, representing an increase of $28,000, or 13%. The Partnership's net income for the three months ended June 30, 1995 was $145,000 compared to $104,000 for the three months ended June 30, 1994, representing an increase of $41,000, or 39%. These increases are primarily a result of decreased interest expense due to lower outstanding loan balances in 1995 compared to 1994. Rental income was $1,088,000 compared to $1,091,000 for the six months ended June 30, 1995 and 1994, respectively, representing a decrease of $3,000. Rental income was $558,000 compared to $541,000 for the three months ended June 30, 1995 and 1994, respectively, representing an increase of $17,000. The slight decrease for the six months ended is primarily attributable to lower rental rates which effected an increase in occupancy levels at the Partnership's mini-warehouse facilities. The weighted average occupancy levels at the mini-warehouse facilities were 82% and 80% for the six months ended June 30, 1995 and 1994, respectively. Realized rent for the six months ended June 30, 1995 decreased to $.87 per occupied square foot from $.90 per occupied square foot for the six months ended June 30, 1994. Cost of operations (including management fees paid to an affiliate) increased $4,000 to $274,000 from $270,000 for the six months ended June 30, 1995 and 1994, respectively. This increase is mainly attributable to increases in payroll offset by a decrease in advertising cost. Cost of operations (including management fees paid to an affiliate) decreased $9,000 to $131,000 from $140,000 for the three months ended June 30, 1995 and 1994 respectively. This decrease is mainly attributable to a decrease in repairs and maintenance. Administrative expenses increased $9,000 for the six months ended June 30, 1995 compared to the same period in 1994 primarily as the result of cost incurred on environmental assessments on the Partnership's properties. Substantially all of the Partnership's facilities were acquired prior to the time that it was customary to conduct extensive environmental investigations in connection with the property 8 acquisitions. During the first quarter of 1995, the Partnership commenced environmental assessments on its properties. The result of those assessments have been completed. However, the Partnership is not presently aware of any significant environmental matters with respect to any of its properties which would have a materially adverse effect on the Company's financial position. LIQUIDITY AND CAPITAL RESOURCES ------------------------------- Cash generated from operations ($301,000 for the six months ended June 30, 1995) has been sufficient to meet all current obligations of the Partnership. In the fourth quarter of 1990, quarterly distributions were discontinued to enable the Partnership to make principal repayments that commenced in 1990 and will continue through 1996, at which time the remaining principal balance is due. 9 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. 10 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 4, 1995 PUBLIC STORAGE PARTNERS II, LTD. BY: Public Storage, Inc. General Partner BY: /s/ Ronald L. Havner, Jr. ---------------------------- Ronald L. Havner, Jr. Vice President and Chief Financial Officer (principal accounting and financial officer) 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1994 JUN-30-1995 195,000 82,000 38,000 0 0 315,000 4,464,000 (2,189,000) 2,792,000 78,000 9,122,000 0 0 0 (6,422,000) 2,792,000 0 1,093,000 0 346,000 28,000 0 482,000 237,000 0 237,000 0 0 0 237,000 23.76 0.000