-----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, SWt9gKfrHALLl+1SUR33ySyEZvBiPioANRLoOytqBWQQnb5CHS8iJ2WKtPqJ6Zc6 CwTJVadRojVkYbbj1z3Srw== 0000277925-01-500007.txt : 20010815 0000277925-01-500007.hdr.sgml : 20010815 ACCESSION NUMBER: 0000277925-01-500007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC STORAGE PROPERTIES V LTD CENTRAL INDEX KEY: 0000277925 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 953292068 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09208 FILM NUMBER: 1707857 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 prop5.txt PUBLIC STORAGE PROPERTIES 5 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, 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 0-9208 ------ PUBLIC STORAGE PROPERTIES V, LTD. --------------------------------- (Exact name of registrant as specified in its charter) California 95-3292068 - ---------------------------------------- ---------------------- (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, 2001 and December 31, 2000 2 Condensed statements of income for the three and six months ended June 30, 2001 and 2000 3 Condensed statement of partners' equity for the six months ended June 30, 2001 4 Condensed statements of cash flows for the six months ended June 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 10 PUBLIC STORAGE PROPERTIES V, LTD. CONDENSED BALANCE SHEETS
June 30, December 31, 2001 2000 ---------------- ---------------- (Unaudited) ASSETS ------ Cash and cash equivalents $ 389,000 $ 410,000 Marketable securities of affiliate (cost of $8,181,000) 16,238,000 13,357,000 Rent and other receivables 219,000 136,000 Real estate facilities, at cost: Buildings and equipment 16,690,000 16,546,000 Land 4,714,000 4,714,000 ---------------- ---------------- 21,404,000 21,260,000 Less accumulated depreciation (13,159,000) (12,661,000) ---------------- ---------------- 8,245,000 8,599,000 Other assets 90,000 95,000 ---------------- ---------------- Total assets $ 25,181,000 $ 22,597,000 ================ ================ LIABILITIES AND PARTNERS' EQUITY -------------------------------- Accounts payable $ 322,000 $ 176,000 Deferred revenue 234,000 232,000 Note payable to commercial bank 4,500,000 7,600,000 Partners' equity: Limited partners' equity, $500 per unit, 44,000 units authorized, issued and outstanding 8,961,000 6,989,000 General partners' equity 3,107,000 2,424,000 Other comprehensive income 8,057,000 5,176,000 ---------------- ---------------- Total partners' equity 20,125,000 14,589,000 ---------------- ---------------- Total liabilities and partners' equity $ 25,181,000 $ 22,597,000 ================ ================
See accompanying notes. 2 PUBLIC STORAGE PROPERTIES V, LTD. CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, ------------------------------- ------------------------------- 2001 2000 2001 2000 ------------- ------------- ------------- ------------- REVENUES: Rental income $ 2,202,000 $ 2,018,000 $ 4,347,000 $ 3,974,000 Dividends from marketable securities of affiliate 128,000 128,000 256,000 254,000 Other income 2,000 2,000 4,000 4,000 ------------- ------------- ------------- ------------- 2,332,000 2,148,000 4,607,000 4,232,000 ------------- ------------- ------------- ------------- COSTS AND EXPENSES: Cost of operations 470,000 521,000 947,000 990,000 Management fees paid to affiliates 131,000 120,000 259,000 237,000 Depreciation and amortization 244,000 241,000 498,000 481,000 Administrative 17,000 29,000 49,000 53,000 Interest expense 92,000 166,000 199,000 365,000 ------------- ------------- ------------- ------------- 954,000 1,077,000 1,952,000 2,126,000 ------------- ------------- ------------- ------------- NET INCOME $ 1,378,000 $ 1,071,000 $ 2,655,000 $ 2,106,000 ============= ============= ============= ============= Limited partners' share of net income ($59.75 per unit in 2001 and $47.39 per unit in 2000) $ 2,629,000 $ 2,085,000 General partners' share of net income 26,000 21,000 ------------- ------------- $ 2,655,000 $ 2,106,000 ============= =============
See accompanying notes. 3 PUBLIC STORAGE PROPERTIES V, LTD. CONDENSED STATEMENT OF PARTNERS' EQUITY (UNAUDITED)
Other Limited General Comprehensive Total Partners' Partners Partners Income Equity ----------------- ----------------- ----------------- ----------------- Balance at December 31, 2000 $ 6,989,000 $ 2,424,000 $ 5,176,000 $ 14,589,000 Change in unrealized gain of marketable equity securities - - 2,881,000 2,881,000 Net income 2,629,000 26,000 - 2,655,000 Equity transfer (657,000) 657,000 - - ----------------- ----------------- ----------------- ----------------- Balance at June 30, 2001 $ 8,961,000 $ 3,107,000 $ 8,057,000 $ 20,125,000 ================= ================= ================= =================
See accompanying notes. 4 PUBLIC STORAGE PROPERTIES V, LTD. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, ------------------------------------ 2001 2000 --------------- --------------- Cash flows from operating activities: Net income $ 2,655,000 $ 2,106,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 498,000 475,000 Increase in rent and other receivables (83,000) (25,000) Amortization of prepaid loan fees 5,000 6,000 Increase in accounts payable 146,000 89,000 Increase (decrease) in deferred revenue 2,000 (10,000) --------------- --------------- Total adjustments 568,000 535,000 --------------- --------------- Net cash provided by operating activities 3,223,000 2,641,000 --------------- --------------- Cash flow from investing activities: Additions to real estate facilities (144,000) (117,000) --------------- --------------- Net cash used in investing activities (144,000) (117,000) --------------- --------------- Cash flow from financing activities: Principal payments on note to commercial bank (3,100,000) (2,420,000) --------------- --------------- Net cash used in financing activities (3,100,000) (2,420,000) --------------- --------------- Net (decrease) increase in cash and cash equivalents (21,000) 104,000 Cash and cash equivalents at beginning of period 410,000 302,000 --------------- --------------- Cash and cash equivalents at end of period $ 389,000 $ 406,000 =============== =============== Supplemental schedule of non-cash activities: Receipt of stock dividend: Marketable securities $ - $ 347,000 =============== =============== Rent and other receivables $ - $ (347,000) =============== =============== Increase in fair market value of marketable securities: Marketable securities $ 2,881,000 $ 413,000 =============== =============== Other comprehensive income $ 2,881,000 $ 413,000 =============== ===============
See accompanying notes. 5 PUBLIC STORAGE PROPERTIES V, 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 June 30, 2001 the results of its operations for the six months ended June 30, 2001 and 2000 and its cash flows for the six months then ended. 3. The results of operations for the three and six months ended June 30, 2001 are not necessarily indicative of the results expected for the full year. 4. Marketable securities at June 30, 2001 consist of 533,334 shares of common stock and 17,331 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 June 30, 2001, we have recorded the marketable securities at fair value, based upon the closing quoted prices of the securities at June 29, 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. On April 1, 1999, we borrowed $17,000,000 from a commercial bank. The proceeds of the loan were used to repay our mortgage debt. The loan is unsecured and bears interest at the London Interbank Offering Rate ("LIBOR") plus 0.60% to 1.20% depending on our interest coverage ratio (4.40% at June 30, 2001). The loan requires monthly payments of interest and matures April 2003. Principal may be paid, in whole or in part, at any time without penalty or premium. 6 5. (Continued) We have entered into an interest rate swap agreement to reduce the impact of changes in interest rates on a portion of our floating rate debt. The agreement, which covers $5,000,000 of debt through April, 2002 effectively changes the interest rate exposure from floating rate to a fixed rate of 5.64% plus 0.60% to 1.20% based on our interest coverage ratio (6.24% as of June 30, 2001). 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. As of June 30, 2001, the unrealized loss on the interest rate swap, if required to be liquidated, was approximately $70,000. 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 PUBLIC STORAGE PROPERTIES V, 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 SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE AND SIX MONTHS ENDED JUNE 30, 1999: Our net income for the six months ended June 30, 2001 was $2,655,000 compared to $2,106,000 for the six months ended June 30, 2000, representing an increase of $549,000 or 26%. Our net income for the three months ended June 30, 2001 was $1,378,000 compared to $1,071,000 for the three months ended June 30, 2000, representing an increase of $307,000 or 29%. 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 six months ended June 30, 2001 was $4,347,000 compared to $3,974,000 for the six months ended June 30, 2000, representing an increase of $373,000 or 9%. Rental income for the three months ended June 30, 2001 was $2,202,000 compared to $2,018,000 for the three months ended June 30, 2000, representing an increase of $184,000 or 9%. These increases are primarily attributable to higher rental rates. Weighted average occupancy levels at the mini-warehouse facility were 92% and 94% for the six months ended June 30, 2001 and 2000, respectively. Annual realized rent at the mini-warehouse facilities for the six months ended June 30, 2001 increased to $12.20 per occupied square foot from $11.02 per occupied square foot for the six months ended June 30, 2000. Weighted average occupancy levels at the business park facility were 98% and 99% for the six months ended June 30, 2001 and 2000, respectively. Annual realized rent at our business park facility for the six months ended June 30, 8 2001 increased to $21.78 per occupied square foot from $16.88 per occupied square foot for the six months ended June 30, 2000. Cost of operations (including management fees paid to affiliate) for the six months ended June 30, 2001 was $1,206,000 compared to $1,227,000 for the six months ended June 30, 2000, representing an decrease of $21,000 or 2%. Cost of operations (including management fees paid to affiliate) for the three months ended June 30, 2001 was $601,000 compared to $641,000 for the three months ended June 30, 2000, representing an decrease of $40,000 or 6%. This decrease is mainly attributable to decreases in payroll expenses. Interest expense was $199,000 in the six months ended June 30, 2001 from $365,000 in the same period in 2000, a $166,000 or 45% decrease. This decrease is mainly attributable to a lower outstanding principal balance. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash flows from operating activities ($3,223,000 for the six months ended June 30, 2001) have been sufficient to meet all current obligations of the Partnership. At June 30, 2001, we held 533,334 shares of common stock and 17,331 shares of Equity Stock, Series A of Public Storage, Inc. with a fair value totaling $16,238,000 (cost basis of $8,181,000 at June 30, 2001). We recognized $256,000 in dividends for the six months ended June 30, 2001. On April 1, 1999, we borrowed $17,000,000 from a commercial bank. The proceeds of the loan were used to repay our mortgage debt. The loan is unsecured and bears interest at the London Interbank Offering Rate ("LIBOR") .125% plus 0.60% to 1.20% depending on our interest coverage ratio (4.40% at June 30, 2001). The loan requires monthly payments of interest and matures April 2003. Principal may be paid, in whole or in part, at any time without penalty or premium. We have entered into an interest rate swap agreement to reduce the impact of changes in interest rates on a portion of our floating rate debt. The agreement, which covers $5,000,000 of debt through April, 2002 effectively changes the interest rate exposure from floating rate to a fixed rate of 5.64% plus 0.60% to 1.20% based on our interest coverage ratio (6.24% at June 30, 2001). 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. As of June 30, 2001, the unrealized loss on the interest rate swap, if required to be liquidated, was approximately $70,000. 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: 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: August 13, 2001 PUBLIC STORAGE PROPERTIES V, 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-----