FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended March 31, 1996 Commission file number 0-17682
IDS/SHURGARD INCOME GROWTH PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1393767
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201-3RD AVENUE, SUITE 2200, SEATTLE, WASHINGTON 98101
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code)206-624-8100
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
PART I, ITEM 1 FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
Mar. 31, Dec. 31,
Unaudited 1996 1995
------------ -------
Assets:
Cash and cash equivalents $ 702,060 $ 668,672
Storage centers, net 28,500,759 28,760,097
Other assets 400,139 309,911
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Total Assets $29,602,958 $29,738,680
=========== ===========
Liabilities and Partners' Equity (Deficit):
Liabilities
Accounts payable $ 36,644 $105,669
Other accrued expenses 56,051 43,910
Due to affiliates 39,694 39,082
Accrued real estate taxes 59,629 1,043
Unearned rent and tenant deposits 168,288 174,935
---------- ---------
Total Liabilities 360,306 364,639
---------- ---------
Minority interest in joint partnership 2,472,065 2,481,862
---------- ---------
Partners' equity (deficit)
Limited partners 27,070,724 27,186,240
General partner (300,137) (294,061)
---------- ----------
Total Partners' Equity (Deficit) 26,770,587 26,892,179
---------- ----------
Total Liabilities and Partners'
Equity (Deficit) $29,602,958 $29,738,680
=========== ===========
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended Mar.31,
Unaudited 1996 1995
---------- -----------
Revenue:
Rental $1,622,101 $1,540,861
Interest income 10,257 22,022
---------- -----------
Total Revenue 1,632,358 1,562,883
---------- -----------
Expenses:
Operating and administrative 448,834 441,921
Property management fees 97,345 92,396
Depreciation and amortization 260,382 285,866
Real estate taxes 126,550 119,936
Interest 33,091
---------- ----------
Total Expenses 933,111 973,210
---------- ----------
Minority interest in joint partnership earnings 65,203 54,828
---------- -----------
Earnings $ 634,044 $ 534,845
========== ===========
Earnings per unit of limited partnership interest $ 4.06 $ 3.43
========== ===========
Distributions per unit of limited
partnership interest $ 4.84 $ 4.69
========== ===========
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended Mar.31,
Unaudited 1996 1995
---------- -----------
Operating activities:
Earnings $ 634,044 $ 534,845
Adjustments to reconcile earnings to net cash:
provided by operating activities
Minority interest in joint
partnership earnings 65,203 54,828
Depreciation and amortization 260,382 285,866
Changes in operating accounts:
Other assets (91,272) 15,856
Accounts payable (69,025) (41,310)
Other accrued expenses 12,141 747
Due to affiliates 612 725
Accrued real estate taxes 58,586 54,755
Unearned rent and tenant deposits (6,647) 9,314
--------- ----------
Net cash provided by operating activities 864,024 915,626
--------- ----------
Financing activities:
Payments on note payable (6,085)
Distributions to minority partner
in joint partnership (75,000) (160,500)
Distributions to partners (755,636) (731,261)
--------- ----------
Net cash used in financing activities (830,636) (897,846)
--------- ----------
Increase in cash and cash equivalents 33,388 17,780
Cash and cash equivalents at beginning of year 668,672 1,877,311
--------- ----------
Cash and cash equivalents at end of period $702,060 $1,895,091
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during period for interest $ _ $ 33,091
========== ==========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A Financial Statements Preparation:
The interim financial statements are unaudited but reflect all
adjustments that are, in the opinion of management, necessary to a
fair statement of the results for the interim periods presented.
These adjustments consist primarily of normal recurring accruals. The
interim financial statements should be read in conjunction with the
audited financial statements contained in the 1995 Annual Report. The
results of operations for interim periods will not necessarily be
indicative of the operating results for the fiscal year. The
consolidated financial statements include the accounts of the
Partnership and Shurgard Joint Partners II (SJP II) in which the
Partnership has a 70 percent interest. All minority partners'
interest in the joint partnership are shown separately on the
accompanying financial statements.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenue
and expenses during the reporting period. Actual results can differ
from those estimates.
Certain items in the 1995 financial statements have been
reclassified to conform with the current year presentation.
Distributions and earnings per unit of limited partnership
interest are based on the total amounts distributed and allocated to
limited partners divided by the number of units outstanding during the
period (148,202 for the three months ended March 31, 1996 and 1995).
PART I, ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results. The Partnership's performance continues to
improve with earnings up $99,000 or 19% over the same quarter last
year. Rental revenue in turn increased $81,200 or 5% due to an 6%
increase in the average rental rate per square foot and stable
occupancies throughout the Partnership. Morgan Falls, Ontario and
Midlothian storage centers contributed the largest revenue gains for
the quarter of $23,000, $10,000 and $9,000, respectively. The joint
partnership, in which your Partnership owns a 70% interest, had
$33,000 in additional rental revenue compared to last year. Canton
and Warren storage centers had the largest revenue contributions for
the joint partnership of $13,300 and $12,600, respectively.
Occupancies remained stable at an average of 89% at March 31, 1996
compared to 88% one year ago.
First quarter expenses decreased 4% or $40,000 compared to the
same quarter last year. The majority of this decrease is due to the
elimination of interest expense resulting from the payoff of the
Partnership's bank note last quarter. Additionally, depreciation
expense declined as certain assets became fully depreciated; this
decrease does not affect the Partnership's cash flow. Operating and
administrative expenses, however, increased 2% over last year
primarily due to the increased cost in snow removal at the Warren
storage center as well as an overall increase in advertising expense
at all of the Partnership's storage centers.
Cash Activities. The Partnership continues to investigate various
alternatives to provide the limited partners with greater liquidity.
Costs incurred by the Partnership in exploring various alternative
transactions totaled approximately $91,000. Whether and when the
Partnership will reach agreement regarding the implementation of any
of the various alternatives will depend on a number of factors. There
can be no assurance that any agreement will be reached, or if reached,
that the transactions contemplated thereby will be consummated.
Capital investments planned for the remaining three quarters of
1996 total approximately $63,000 and include roofing at the Burke
storage center as well as paving at the Canton and Fraser storage
centers. These improvements are important to maintaining the value of
your investment as well as its ability to generate revenue.
If you have any questions regarding your investment, please contact
your American Express Financial Advisor or call Shurgard Investor
Relations at 800-955-2235.
SIGNATURE
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.
IDS/SHURGARD INCOME GROWTH PARTNERS, L.P.
Date: May 07, 1996 By: HARRELL BECK
------------------------------------
Harrell Beck
Treasurer and Authorized Signatory
Shurgard General Partner, Inc.
General Partner