-----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, SBe+zfhNCMuqRxR5+GtX1ZX+t/k8Sz/0bJBofhCo6V4Vg/+rxpsLaA6m9nbaivew RkTcpts/2UYeU2Gq3GmkwA== 0000741513-99-000012.txt : 19990517 0000741513-99-000012.hdr.sgml : 19990517 ACCESSION NUMBER: 0000741513-99-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PS PARTNERS III LTD CENTRAL INDEX KEY: 0000741513 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 953920904 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13479 FILM NUMBER: 99623870 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 March 31, 1999 -------------- or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the transition period from to ---------------- ---------------- Commission File Number 0-13479 ------- PS PARTNERS III, LTD. --------------------------------------------------------- (Exact name of registrant as specified in its charter) California 95-3920904 - ---------------------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 701 Western Avenue Glendale, California 91201-2394 - ---------------------------------------------- ---------------------- (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 March 31, 1999 and December 31, 1998 2 Condensed statements of income for the three months ended March 31, 1999 and 1998 3 Condensed statements of cash flows for the three months ended March 31, 1999 and 1998 4 Notes to condensed financial statements 5-6 Management's discussion and analysis of financial condition and results of operations 7-9 PART II. OTHER INFORMATION (Items 1 through 5 are not applicable) Item 6 - Exhibits and Reports on Form 8-K 10 PS PARTNERS III, LTD. CONDENSED BALANCE SHEETS
March 31, December 31, 1999 1998 ----------------- ----------------- (Unaudited) ASSETS ------ Cash and cash equivalents $1,005,000 $3,122,000 Rent and other receivables 13,000 16,000 Real estate facilities, at cost: Land 3,558,000 3,558,000 Buildings and equipment 13,096,000 13,062,000 ----------------- ----------------- 16,654,000 16,620,000 Less accumulated depreciation (7,519,000) (7,339,000) ----------------- ----------------- 9,135,000 9,281,000 Investment in real estate entities 13,640,000 13,897,000 Other assets 59,000 21,000 ----------------- ----------------- $23,852,000 $26,337,000 ================= ================= LIABILITIES AND PARTNERS' EQUITY -------------------------------- Accounts payable $348,000 $228,000 Advance payments from renters 101,000 82,000 Partners' equity: Limited partners' equity, $500 per unit, 128,000 units authorized, issued and outstanding 23,085,000 25,683,000 General partner's equity 318,000 344,000 ----------------- ----------------- Total partners' equity 23,403,000 26,027,000 ----------------- ----------------- $23,852,000 $26,337,000 ================= =================
See accompanying notes. 2 PS PARTNERS III, LTD. CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended March 31, ----------------------------------- 1999 1998 ----------------- ----------------- REVENUE: Rental income $685,000 $682,000 Equity in earnings of real estate entities 1,350,000 669,000 Interest income 40,000 20,000 ----------------- ----------------- 2,075,000 1,371,000 ----------------- ----------------- COSTS AND EXPENSES: Cost of operations 252,000 231,000 Management fees 41,000 41,000 Depreciation and amortization 180,000 165,000 Administrative 26,000 22,000 ----------------- ----------------- 499,000 459,000 ----------------- ----------------- NET INCOME $1,576,000 $912,000 ================= ================= Limited partners' share of net income ($8.95 per unit in 1999 and $6.28 per unit in 1998) $1,145,000 $804,000 General partner's share of net income 431,000 108,000 ----------------- ----------------- $1,576,000 $912,000 ================= =================
See accompanying notes. 3 PS PARTNERS III, LTD. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, ------------------------------------ 1999 1998 ------------------ ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,576,000 $912,000 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 180,000 165,000 Decrease in rent and other receivables 3,000 48,000 Increase in other assets (38,000) (5,000) Increase (decrease) in accounts payable 120,000 (81,000) Increase in advance payments from renters 19,000 5,000 Equity in earnings of real estate entities (1,350,000) (669,000) ------------------ ----------------- Total adjustments (1,066,000) (537,000) ------------------ ----------------- Net cash provided by operating activities 510,000 375,000 ------------------ ----------------- CASH FLOWS PROVIDED BY INVESTING ACTIVITIES: Distributions from real estate entities 1,607,000 1,026,000 Additions to real estate facilities (34,000) (71,000) ------------------ ----------------- Net cash provided by investing activities 1,573,000 955,000 ------------------ ----------------- CASH FLOWS USED IN FINANCING ACTIVITIES: Distributions to partners (4,200,000) (1,000,000) ------------------ ----------------- Net cash used in financing activities (4,200,000) (1,000,000) ------------------ ----------------- Net (decrease) increase in cash and cash equivalents (2,117,000) 330,000 Cash and cash equivalents at the beginning of the period 3,122,000 1,222,000 ------------------ ----------------- Cash and cash equivalents at the end of the period $1,005,000 $1,552,000 ================== =================
See accompanying notes. 4 PS PARTNERS III, LTD. NOTES TO CONDENSED FINANCIAL STATEMENTS MARCH 31, 1999 (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, 1998. 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 March 31, 1999, the results of operations for the three months ended March 31, 1999 and 1998 and cash flows for the three months then ended. 3. The results of operations for the three months ended March 31, 1999 are not necessarily indicative of the results to be expected for the full year. 4. In January 1997, the Joint Venture, PSI, and other related partnerships transferred a total of 35 business parks to PS Business Parks, LP ("PSBPLP"), an operating partnership formed to own and operate business parks in which PSI has a significant interest. Included among the properties transferred was the Joint Venture's business park in exchange for a partnership interest in PSBPLP. The general partner of PSBPLP is PS Business Parks, Inc. 5. Summarized combined financial data with respect to the Real Estate Entities is as follows: Three Months Ended March 31, ------------------------------------- 1999 1998 ----------------- ------------------ Total revenues......................... $32,566,000 $18,056,000 Minority interest in income............ $2,966,000 $2,814,000 Net income............................. $10,809,000 $4,999,000 6. During the first quarter of 1999, the Joint Venture and the State of Texas ("Texas") reached agreement on the terms of a conveyance, in lieu of an exercise of the State's right of eminent domain, of a parcel of land with improvements at the Joint Venture's East Ben White, Austin, Texas property. Texas intends to use the parcel of land for road expansion. As a result of the agreement, the Joint Venture received net 5 settlement proceeds of approximately $771,000. The Joint Venture recognized a gain on the partial disposition of the property of approximately $533,000, the Partnership's portion of which was approximately $438,000. In March 1999, the Joint Venture and the City of Manchester, Airport Authority ("Airport Authority") reached agreement on the terms of an acquisition by termination, in lieu of an exercise of the City's right of eminent domain, of the Joint Venture's Manchester, New Hampshire property. The Airport Authority intends to use the land for the construction of an extension of its runways and for the relocation of an adjoining road. According to the terms of the agreement of acquisition, the Airport Authority will acquire the property at the purchase price $2,250,000. The Joint Venture expects the receipt of net proceeds and the close of transaction to be completed during the second quarter of 1999. 6 PS PARTNERS III, LTD. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD LOOKING STATEMENTS - -------------------------- Management's Discussion and Analysis of Financial Condition and Results of Operations contains "forward looking" statements that involve risks and uncertainties and are based upon a number of assumptions. Actual results and trends may differ materially depending upon a number of factors. Information regarding these factors is contained in the Partnership's Annual Report on Form 10-K for the fiscal year ended December 31, 1998. RESULTS OF OPERATIONS - --------------------- THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998: The Partnership's net income for the three months ended March 31, 1999 was $1,576,000 compared to $912,000 for the three months ended March 31, 1998, representing an increase of $664,000, or 73%. The increase was primarily due to the Partnership's share of the gain on the disposition of a portion of the Joint Venture's East Ben White property of $438,000, combined with a decrease in depreciation allocated to the Partnership with respect to the Joint Venture, partially offset by a decrease in the Partnership's share of property operations at the real estate facilities in which the Partnership has an interest. Excluding the effect of the partial disposition of the property, the Partnership's net income for the three months ended March 31, 1999 was $1,138,000 compared to $912,000 for the three months ended March 31, 1998, representing an increase of $226,000, or 25%. Rental income for the Partnership's wholly-owned mini-warehouse properties was $685,000 compared to $682,000 for the three months ended March 31, 1999 and 1998, respectively, representing an increase of $3,000. Cost of operations (including management fees) increased $21,000, or 8%, to $293,000 from $272,000 for the three months ended March 31, 1999 and 1998, respectively. Accordingly, for the Partnership's wholly-owned mini-warehouse properties, property net operating income decreased by $18,000, or 5%, from $410,000 to $392,000 for the three months ended March 31, 1998 and 1999, respectively. Equity in Earnings of Real Estate Entities - ------------------------------------------ Equity in earnings of real estate entities was $1,350,000 in the three months ended March 31, 1999 as compared to $669,000 during the three months ended March 31, 1998, representing an increase of $681,000, or 102%. This increase was due primarily to the Partnership's share of the gain on the disposition of a portion of the Joint Venture's East Ben White property of $438,000, combined with a decrease in depreciation allocated to the Partnership with respect to the Joint Venture, partially offset by a decrease in the Partnership's share of operating results at the Joint Venture's mini-warehouse properties. Excluding the effect of the partial disposition of the property, 7 equity in earnings of real estate entities was $912,000 compared to $669,000 for the three months ended March 31, 1999 and 1998, respectively, representing an increase of $243,000, or 36%. Depreciation and Amortization - ----------------------------- Depreciation and amortization increased $15,000, or 9%, from $165,000 to $180,000 for the three months ended March 31, 1998 and 1999, respectively. This increase was primarily attributable to the depreciation of capital expenditures made during 1998 and 1999. SUPPLEMENTAL PROPERTY DATA - -------------------------- Most of the Partnership's net income is from the Partnership's share of the operating results of the Mini-Warehouse Properties. Therefore, in order to evaluate the Partnership's operating results, the General Partners analyze the operating performance of the Mini-Warehouse Properties. Because of the partial condemnation of the Joint Venture's East Ben White facility, the operating results of the East Ben White property are not comparable on a 1999 to 1998 basis. Consequently, the amounts described below exclude the operations of the East Ben White property. THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998: Rental income for the Mini-Warehouse Properties was $3,864,000 compared to $3,801,000 for the three months ended March 31, 1999 and 1998, respectively, representing an increase of $63,000, or 2%. The increase in rental income was primarily attributable to increased rental rates, partially offset by a decrease in average occupancy rates. The monthly average realized rent per square foot for the Mini-Warehouse Properties was $.62 compared to $.59 for the three months ended March 31, 1999 and 1998, respectively. The weighted average occupancy levels at the Mini-Warehouse Properties decreased from 89% to 87% for the three months ended March 31, 1998 and 1999, respectively. Cost of operations (including management fees) increased $161,000, or 11%, to $1,642,000 from $1,481,000 for the three months ended March 31, 1999 and 1998, respectively. This increase was primarily attributable to increases in advertising, payroll, repairs and maintenance, and property tax expenses. Accordingly, for the Mini-Warehouse Properties, property net operating income decreased by $98,000, or 4%, from $2,320,000 to $2,222,000 for the three months ended March 31, 1998 and 1999, respectively. 8 Liquidity and Capital Resources - ------------------------------- The Partnership has adequate sources of cash to finance its operations, both on a short-term and long-term basis, primarily from internally generated cash from property operations and cash reserves. Cash generated from operations and distributions from real estate entities ($2,117,000 for the three months ended March 31, 1999) has been sufficient to meet all current obligations of the Partnership. During 1999, the Partnership anticipates approximately $194,000 of capital improvements with respect to the Partnership's wholly-owned facilities. Total capital improvements were $34,000 for the three months ended March 31, 1999 with respect to these properties. The Partnership paid distributions to the limited and general partners totaling $3,742,000 ($29.23 per unit) and $458,000, respectively, during the first three months of 1999. Included in these distributions were special distributions of a portion of the Partnership's operating reserve to the limited and general partners totaling approximately $2,851,000 ($22.27 per unit) and $349,000, respectively. Future distribution rates may be adjusted to levels which are supported by operating cash flow after capital improvements and any other necessary obligations. 9 PART II. OTHER INFORMATION ITEMS 1 through 5 are not applicable. Item 6 Exhibits and Reports on Form 8-K -------------------------------- (a) The following Exhibits are included herein: (27) Financial Data Schedule (b) Reports on Form 8-K None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DATED: May 14, 1999 PS PARTNERS III, LTD. BY: Public Storage, Inc. General Partner BY: /s/ John Reyes --------------------------------------------- John Reyes Senior Vice President and Chief Financial Officer of Public Storage, Inc. (principal financial and accounting officer) 10 EX-27 2 FDS --
5 0000741513 PS PARTNERS III, LTD. 1 U.S.$ 3-MOS DEC-31-1999 JAN-1-1999 MAR-31-1999 1 1,005,000 0 13,000 0 0 1,018,000 16,654,000 (7,519,000) 23,852,000 449,000 0 0 0 0 23,403,000 23,852,000 0 2,075,000 0 293,000 206,000 0 0 1,576,000 0 1,576,000 0 0 0 1,576,000 8.95 8.95
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