-----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, Liv24b+GjH3K3epiwsqQiitFnq1fG1ZX5QQ6jULT1OALQ93ZrXYLZM0InvOTjhc3 Ee7kYMq7FwSof5VMMkM1XQ== 0000793934-97-000002.txt : 19970814 0000793934-97-000002.hdr.sgml : 19970814 ACCESSION NUMBER: 0000793934-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PS PARTNERS VIII LTD CENTRAL INDEX KEY: 0000793934 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 954029178 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16876 FILM NUMBER: 97658552 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, 1997 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 0-16876 ------- PS PARTNERS VIII, LTD., a California Limited Partnership ------------------------------------------------------------------ (Exact name of registrant as specified in its charter) California 95-4029178 - ---------------------------------------- -------------------------------- (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 June 30, 1997 and December 31, 1996 2 Condensed statements of income for the three and six months ended June 30, 1997 and 1996 3 Condensed statements of cash flows for the six months ended June 30, 1997 and 1996 4-5 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 (Items 1 through 5 are not applicable) Item 6 - Exhibits and Reports on Form 8-K 11
PS PARTNERS VIII, LTD., a California Limited Partnership CONDENSED BALANCE SHEETS June 30, December 31, 1997 1996 --------------------------------- (Unaudited) ASSETS Cash and cash equivalents $ 191,000 $ 209,000 Rent and other receivables 11,000 10,000 Real estate facilities, at cost: Land 4,925,000 7,461,000 Buildings and equipment 12,212,000 16,442,000 --------------------------------- 17,137,000 23,903,000 Less accumulated depreciation (4,800,000) (6,309,000) --------------------------------- 12,337,000 17,594,000 Investment in real estate entity 5,121,000 - Other assets 30,000 45,000 --------------------------------- $ 17,690,000 $ 17,858,000 ================================= LIABILITIES AND PARTNERS' EQUITY Accounts payable $ 251,000 $ 259,000 Advance payments from renters 114,000 110,000 Partners' equity: Limited partners' equity, $500 per unit, 150,000 units authorized, 52,751 issued and outstanding 17,117,000 17,279,000 General partners' equity 208,000 210,000 --------------------------------- Total partners' equity 17,325,000 17,489,000 --------------------------------- $ 17,690,000 $ 17,858,000 =================================
See accompanying notes. 2
PS PARTNERS VIII, LTD., a California Limited Partnership CONDENSED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Six Months Ended June 30, June 30, ------------------------------------------------------------- 1997 1996 1997 1996 ------------------------------------------------------------- REVENUE: Rental income $ 645,000 $ 727,000 $ 1,266,000 $ 1,424,000 Equity in income of real estate entity 59,000 - 102,000 - Interest income 3,000 4,000 6,000 7,000 ------------------------------------------------------------- 707,000 731,000 1,374,000 1,431,000 ------------------------------------------------------------- COSTS AND EXPENSES: Cost of operations 176,000 199,000 348,000 402,000 Management fees 39,000 42,000 76,000 83,000 Depreciation and amortization 139,000 201,000 278,000 400,000 Administrative 23,000 23,000 36,000 36,000 ------------------------------------------------------------- 377,000 465,000 738,000 921,000 ------------------------------------------------------------- NET INCOME $ 330,000 $ 266,000 $ 636,000 $ 510,000 ============================================================= Limited partners' share of net income ($10.43 per unit in 1997 and $8.06 per unit in 1996) $ 550,000 $ 425,000 General partners' share of net income 86,000 85,000 ------------------------------- $ 636,000 $ 510,000 ===============================
See accompanying notes. 3
PS PARTNERS VIII, LTD., a California Limited Partnership CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, ------------------------------------ 1997 1996 ------------------------------------ Cash flows from operating activities: Net income $ 636,000 $ 510,000 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 278,000 400,000 Increase in rent and other receivables (1,000) (3,000) Decrease (increase) in other assets 15,000 (5,000) (Decrease) increase in accounts payable (8,000) 53,000 Increase in advance payments from renters 4,000 3,000 Equity in income of real estate entity (102,000) - ------------------------------------ Total adjustments 186,000 448,000 ------------------------------------ Net cash provided by operating activities 822,000 958,000 ------------------------------------ Cash flows from investing activities: Investment in real estate entity (2,000) - Additions to real estate facilities (38,000) (92,000) ------------------------------------ Net cash used in investing activities (40,000) (92,000) ------------------------------------ Cash flows from financing activities: Distributions to partners (800,000) (801,000) ------------------------------------ Net cash used in financing activities (800,000) (801,000) ------------------------------------ Net (decrease) increase in cash and cash equivalents (18,000) 65,000 Cash and cash equivalents at the beginning of the period 209,000 217,000 ------------------------------------ Cash and cash equivalents at the end of the period $ 191,000 $ 282,000 ====================================
See accompanying notes. 4
PS PARTNERS VIII, LTD., a California Limited Partnership CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued) Six Months Ended June 30, ------------------------------------ 1997 1996 ------------------------------------ Supplemental schedule of noncash investing and financing activities: Investment in real estate entity $ (5,016,000) $ - Transfer of real estate facilities for interest in real estate entity 5,016,000 -
See accompanying notes. 4 PS PARTNERS VIII, LTD., a California Limited Partnership NOTES TO CONDENSED FINANCIAL STATEMENTS JUNE 30, 1997 (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, 1996. 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, 1997, the results of operations for the three and six months ended June 30, 1997 and 1996 and cash flows for the six months then ended. 3. The results of operations for the three and six months ended June 30, 1997 are not necessarily indicative of the results to be expected for the full year. 4. Effective January 2, 1997, Public Storage, Inc. ("PSI"), the Partnership's general partner, formed a new private real estate investment trust named American Office Park Properties, Inc. ("AOPP") which will focus its investment efforts on the ownership and management of commercial properties (also referred to as business park facilities). In connection with the formation of AOPP, PSI and affiliated partnerships transferred commercial properties to a newly created partnership underlying AOPP in exchange for limited partnership interests (AOPP and the underlying partnership collectively referred to as the "New REIT"). The Partnership participated in the initial transaction by exchanging its commercial property for 165,000 limited partnership units, which represented approximately 2.5% of the initial capitalization of the partnership underlying AOPP. The number of limited partnership units received by the Partnership was based on the relative fair market value of the Partnership's commercial property exchanged compared to the aggregate of all other 6 real estate assets exchanged for limited partnership units in the underlying partnership. The Partnership's limited partnership units, pursuant to the terms and conditions of the governing documents, are convertible into shares of common stock of AOPP. 4. (Continued) The general partners believe that the concentration of PSI's, the Partnership's and affiliate entities' commercial properties into a single entity will create a vehicle which should facilitate future growth in this segment of the real estate industry. PSI, the Partnership and the affiliates transferring real estate assets to the New REIT will participate in the growth through their ownership interests in the New REIT. The Partnership accounts for its investment in New REIT using the equity method of accounting; accordingly, equity in earnings of real estate entity, as reflected on the Partnership's statement of income for the three and six months ended June 30, 1997, reflects the Partnership's pro rata share of the earnings of the New REIT. The investment was initially recorded at the Partnership's net book value of its property exchanged for limited partnership units. The investment is subsequently adjusted for the Partnership's pro rata share of income and distributions from the underlying partnership of the New REIT. 7 PS PARTNERS VIII, LTD., a California Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations: - ---------------------- THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996: The Partnership's net income for the three months ended June 30, 1997 was $330,000 compared to $266,000 for the same period in 1996, representing an increase of $64,000, or 24%. Excluding the 1996 operations for the Partnership's business park facility as compared to the 1997 equity in income of real estate entity, the increase is primarily attributable to an increase in the Partnership's mini-warehouse operations. Rental income for the Partnership's mini-warehouse operations was $645,000 compared to $594,000 for the three months ended June 30, 1997 and 1996, respectively, representing an increase of $51,000, or 9%. The increase in rental income was primarily attributable to increased rental rates at the mini-warehouse facilities, combined with increased occupancy levels. The monthly average realized rent per square foot for the mini-warehouse facilities was $.80 compared to $.75 for the three months ended June 30, 1997 and 1996, respectively. The weighted average occupancy levels at the mini-warehouse facilities increased from 90% to 93% for the three months ended June 30, 1996 and 1997, respectively. Cost of operations (including management fees) increased $26,000, or 14%, to $215,000 from $189,000 for the three months ended June 30, 1997 and 1996, respectively. This increase was primarily attributable to increases in property tax and payroll expenses. Accordingly, for the Partnership's mini-warehouse operations, property net operating income increased $25,000, or 6%, from $405,000 to $430,000 for the three months ended June 30, 1996 and 1997, respectively. Effective January 2, 1997, Public Storage, Inc. ("PSI"), the Partnership's general partner, formed a new private real estate investment trust named American Office Park Properties, Inc. ("AOPP") which will focus its investment efforts on the ownership and management of commercial properties. In connection with the formation of AOPP, PSI and affiliated partnerships transferred commercial properties to a newly created partnership underlying AOPP in exchange for limited partnership interests (AOPP and the underlying partnership collectively referred to as the "New REIT"). The Partnership participated in the initial transaction by exchanging its commercial property for 165,000 limited partnership units, which represented approximately 2.5% of the initial capitalization of the partnership underlying AOPP. The Partnership accounts for its investment in New REIT using the equity method of accounting. The following table summarizes the Partnership's equity in 8 PS PARTNERS VIII, LTD., a California Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS earnings from its investment in the New REIT for the three months ended June 30, 1997 compared to the operation of the exchanged business park facility for the three months ended June 30, 1996: Three Months Ended June 30, -------------------------------- 1997 1996 ------------- ------------- Equity in earnings of real estate entity $ 59,000 $ - Rental income - 133,000 Cost of operations - 52,000 ------------- ------------- Net operating income 59,000 81,000 Depreciation - 65,000 ------------- ------------- $ 59,000 $ 16,000 ============= ============= Depreciation and amortization attributable to the Partnership's mini-warehouse facilities increased $3,000 from $136,000 to $139,000 for the three months ended June 30, 1996 and 1997, respectively. This increase was primarily attributable to the depreciation of capital expenditures made during 1996 and 1997. SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996: The Partnership's net income for the six months ended June 30, 1997 was $636,000 compared to $510,000 for the same period in 1996, representing an increase of $126,000, or 25%. Excluding the 1996 operations for the Partnership's business park facility as compared to the 1997 equity in income of real estate entity, the increase is primarily attributable to an increase in the Partnership's mini-warehouse operations. Rental income for the Partnership's mini-warehouse operations was $1,266,000 compared to $1,162,000 for the six months ended June 30, 1997 and 1996, respectively, representing an increase of $104,000, or 9%. The increase in rental income was primarily attributable to increased rental rates at the mini-warehouse facilities, combined with increased occupancy levels. The monthly average realized rent per square foot for the mini-warehouse facilities was $.79 compared to $.75 for the six months ended June 30, 1997 and 1996, respectively. The weighted average occupancy levels at the mini-warehouse facilities increased from 89% to 92% for the six months ended June 30, 1996 and 1997, respectively. Cost of operations (including management fees) increased $43,000, or 11%, to $424,000 from $381,000 for the six months ended June 30, 1997 and 1996, respectively. This increase was primarily attributable to increases in property tax, advertising, and payroll expenses. Accordingly, for the Partnership's mini-warehouse operations, property net operating income increased $61,000, or 8%, from $781,000 to $842,000 for the six months ended June 30, 1996 and 1997, respectively. 9 PS PARTNERS VIII, LTD., a California Limited Partnership MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table summarizes the Partnership's equity in earnings from its investment in the New REIT for the six months ended June 30, 1997 compared to the operation of the exchanged business park facility for the six months ended June 30, 1996: Six Months Ended June 30, -------------------------------- 1997 1996 ------------- --------------- Equity in earnings of real estate entity $ 102,000 $ - Rental income - 262,000 Cost of operations - 104,000 ------------- --------------- Net operating income 102,000 158,000 Depreciation - 131,000 ------------- --------------- $ 102,000 $ 27,000 ------------- --------------- Depreciation and amortization attributable to the Partnership's mini-warehouse facilities increased $9,000 from $269,000 to $278,000 for the six months ended June 30, 1996 and 1997, respectively. This increase was primarily attributable to the depreciation of capital expenditures made during 1996 and 1997. 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 ($822,000 for the six months ended June 30, 1997) has been sufficient to meet all current obligations of the Partnership. During 1997, the Partnership anticipates approximately $120,000 of capital improvements. Total capital improvements were $38,000 for the six months ended June 30, 1997. The Partnership paid distributions to the limited and general partners totaling $712,000 ($13.52 per02 unit) and $88,000, respectively, during the first six months of 1997. Future distribution rates may be adjusted to levels which are supported by operating cash flow after capital improvements and any other necessary obligations. 10 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) 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, 1997 PS PARTNERS VIII, LTD., a California Limited Partnership BY: Public Storage, Inc. General Partner BY: /s/ John Reyes --------------------------------------------- Senior Vice President and Chief Financial Officer of Public Storage, Inc. (principal financial and accounting officer) 11 EX-27 2 FDS -- ARTICLE 5
5 0000793934 PS PARTNERS VIII, LTD., 1 U.S. $ 6-MOS DEC-31-1997 JAN-1-1997 JUN-30-1997 1 191,000 0 11,000 0 0 202,000 17,137,000 (4,800,000) 17,690,000 365,000 0 0 0 0 17,325,000 17,690,000 0 1,374,000 0 424,000 314,000 0 0 636,000 0 636,000 0 0 0 636,000 10.43 10.43
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