UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(b) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 25, 1997 (October 29,
1997)
333-03344
(Commission File Number)
SUSA Partnership, L.P.
(Exact name of registrant as specified in its charter)
Tennessee 62-1554135
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
10440 Little Patuxent Parkway, Columbia, Maryland 21044
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 730-9500
<PAGE>
Item 2: Acquisition or Disposition of Assets
SUSA Partnership. L.P. (the "Company"), a limited partnership controlled by
Storage USA, Inc. (the "REIT"), consummated during the period October 29, 1997
through November 19, 1997, the acquisition of 37 self-storage facilities (the
"Acquired Facilities"). The Acquired Facilities contain approximately 1,996,000
square feet, are located in eight states and were purchased for approximately
$90,817,000 in aggregate consideration.
The acquisition of the Acquired Facilities was funded by cash generated from
operations, the issuance of units of limited partnership interest in the
Partnership, borrowings under the Company's lines of credit with The First
National Bank of Chicago and First Tennessee Bank and a bridge loan with First
National Bank of Chicago. Each of the Acquired Facilities was used by the seller
as a self-storage facility prior to its acquisition by the Company, and the
Company intends to continue such use of all the Acquired Facilities. The
Company's management determined the contract price of each facility through
arms-length negotiations, after taking into consideration such factors as: the
age and condition of the facility; the projected amount of maintenance costs;
anticipated capital improvements; the facility's current revenues; comparable
facilities competing in the applicable market; market rental rates for
comparable facilities; the occupancy rate of the facility; and the estimated
amount of taxes, utility costs, personnel costs, and other anticipated expenses
associated with the facility. Other than changes in these factors, the Company,
after reasonable inquiry, is not aware of any material factors relating to the
properties that would cause the historical financial information provided in
Item 7 not to be necessarily indicative of future operating results for the
applicable facilities.
The following provides certain additional information concerning the Acquired
Facilities:
Location Seller Date of Acquisition
- -------- ------ -------------------
Acquired Facilities:
Roseville, CA Michael & Lisa Douglas 10/29/97
Phoenix, AZ The Holding Company 11/1/97
Phoenix, AZ The Holding Company 11/1/97
Phoenix, AZ The Holding Company 11/1/97
Phoenix, AZ The Holding Company 11/1/97
Phoenix, AZ The Holding Company 11/1/97
Clarksville, IN The Holding Company 11/1/97
Clarksville, IN The Holding Company 11/1/97
Columbus, IN The Holding Company 11/1/97
Greenwood, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Jeffersonville, IN The Holding Company 11/1/97
New Albany, IN The Holding Company 11/1/97
Louisville, KY The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
<PAGE>
<TABLE>
<CAPTION>
Location Seller Date of Acquisition
- -------- ------ -------------------
<S> <C>
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Trotwood, OH The Holding Company 11/1/97
Memphis, TN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Stamford, CT Access Self Storage of Stamford, L.P. 11/4/97
Millville, NJ A.M.C. Self-Service Storage Co. and The Space Place, Inc. 11/6/97
Williamstown, NJ A.M.C. Self-Service Storage Co. and The Space Place, Inc. 11/6/97
Roseville, CA GUAT Warehouse, Limited Partnership, A Massachusetts Partnership 11/7/97
Spring Valley, CA ACC Storage Partners Limited 11/19/97
</TABLE>
In addition, the Company has eight facilities under contract (the "Acquisition
Facilities") with anticipated closing dates ranging from November 25, 1997, to
January 6, 1998. These facilities, containing approximately 567,000 square feet
are located in four states and have an estimated cost of $43,287,000. The
following provides certain additional information concerning the eight pending
acquisitions:
Anticipated
Location Seller Date of Acquisition
- -------- ------ -------------------
Pending Acquisitions:
Clute, TX Brazosport Investments, Inc. 11/25/97
Pasadena, TX B.S.S. Pasadena, L.L.C. 12/1/97
Alexandria, VA Arlington Storage Fund Ltd. 12/1/97
Falls Church, VA Arlington Storage Fund Ltd. 12/1/97
Wheaton, MD Arlington Storage Fund Ltd. 12/1/97
Houston, TX Lone Star Mini Storage, Inc. 12/9/97
Santa Fe, NM ABC Self Storage Limited Co. 12/16/97
Dallas, TX Uptown Storage, L.P. 1/6/98
In addition, the Company has acquired seven other facilities on November 1, 1997
containing approximately 299,000 square feet, located in two states for a cost
of approximately $12,224,000 that are not included in the Historical Summaries
and are not deemed to be significant either individually or in the aggregate.
The following table provides certain additional information concerning the seven
other facilities.
Location Seller Date of Acquisition
- -------- ------ -------------------
Indianapolis, IN The Holding Company 11/1/97
Jeffersonville, IN The Holding Company 11/1/97
Jeffersonville, IN The Holding Company 11/1/97
New Albany, IN The Holding Company 11/1/97
Louisville, KY The Holding Company 11/1/97
Louisville, KY The Holding Company 11/1/97
Louisville, KY The Holding Company 11/1/97
<PAGE>
The following unaudited data related to the Acquired and Acquisition Facilities
is derived from the Company's internal records as of the last day of the month
following closing, or the most current information available:
<TABLE>
<CAPTION>
Square Rent per Economic Physical Total Contract
Location Feet Square Foot Occupancy Occupancy Units Price
-------- ---- ------------ --------- --------- ----- -----
<S> <C>
Acquired Facilities:
Roseville, CA (1) 70,010 $5.96 81% 87% 597 $2,850,000
Phoenix, AZ (1) 102,397 $6.49 78% 78% 894 $4,700,000
Phoenix, AZ (1) 52,575 $5.98 80% 82% 579 $1,634,000
Phoenix, AZ (1) 47,510 $6.64 80% 81% 405 $1,889,000
Phoenix, AZ (1) 35,519 $9.44 72% 73% 425 $1,932,000
Phoenix, AZ (1) 32,860 $9.55 88% 89% 422 $1,933,000
Clarksville, IN (1) 45,080 $5.77 77% 84% 415 $1,030,000
Clarksville, IN (1)(3) 39,880 $5.64 61% 68% 352 $193,000
Columbus, IN (2) 49,094 $5.76 68% 80% 383 $513,000
Greenwood, IN (1) 75,515 $5.99 83% 85% 476 $2,855,000
Indianapolis, IN (1) 38,893 $7.62 83% 82% 324 $1,314,000
Indianapolis, IN (1) 50,200 $8.22 65% 69% 576 $2,151,000
Indianapolis, IN (1) 95,540 $7.78 72% 74% 848 $4,519,000
Indianapolis, IN (1) 55,636 $9.26 87% 91% 470 $3,785,000
Indianapolis, IN (1) 60,825 $8.14 67% 73% 573 $2,392,000
Indianapolis, IN (1) 30,575 $9.90 69% 75% 294 $1,427,000
Indianapolis, IN (1) 38,305 $6.60 79% 87% 430 $960,000
Indianapolis, IN (1) 63,332 $6.15 73% 80% 578 $2,219,000
Indianapolis, IN (1) 39,045 $5.87 91% 96% 328 $1,162,000
Jeffersonville, IN (1) 42,820 $6.31 80% 88% 403 $1,183,000
New Albany, IN (1) 52,525 $5.51 81% 87% 403 $1,394,000
Louisville, KY (1) 28,000 $6.49 90% 96% 300 $751,000
Columbus, OH (1) 84,000 $7.10 76% 82% 776 $3,205,000
Columbus, OH (1) 59,825 $6.85 85% 92% 466 $2,822,000
Columbus, OH (1) 49,850 $8.19 84% 93% 413 $6,094,000
Columbus, OH (1) 61,700 $6.37 82% 87% 461 $2,392,000
Columbus, OH (1) 23,000 $6.32 71% 73% 178 $275,000
Columbus, OH (1) 75,950 $6.34 73% 78% 605 $3,204,000
Columbus, OH (1) 57,940 $6.32 65% 72% 322 $1,866,000
Trotwood, OH (1) 73,760 $7.66 78% 83% 551 $3,743,000
Memphis, TN (1) 54,200 $5.54 87% 92% 434 $1,604,500
Indianapolis, IN (1)(3) 20,274 $10.34 3% 9% 220 $2,000,000
Stamford, CT (1) 65,514 $21.82 89% 90% 728 $11,550,000
Millville, NJ (1) 50,750 $7.67 75% 75% 416 $1,412,500
Williamstown, NJ (1) 38,900 $9.75 82% 80% 341 $1,412,500
Roseville, CA (1) 79,025 $7.36 85% 95% 660 $3,400,000
Spring Valley, CA (1) 55,214 $8.73 65% 99% 745 $3,050,000
----------------------------------------------------------------------------------------------
Total Acquired Facilities 1,996,038 $7.41 78% 83% 17,791 $90,816,500
============== ==============================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Square Rent per Economic Physical Total Contract
Location Feet Square Foot Occupancy Occupancy Units Price
-------- ---- ------------ --------- --------- ----- -----
<S> <C>
Acquisition Facilities:
Clute, TX (2)(3) 72,044 $6.98 49% 93% 583 $2,300,000
Pasadena, TX (1)(3) 47,916 $8.15 56% 70% 529 $2,375,000
Alexandria, VA (2) 69,175 $14.96 79% 96% 869 $9,208,000
Falls Church, VA (2) 73,425 $13.92 66% 94% 701 $7,539,000
Wheaton, MD (2) 92,925 $12.73 71% 92% 872 $9,365,000
Houston, TX (2)(3) 57,175 $12.42 27% 74% 503 $4,100,000
Santa Fe, NM (2) 84,554 $7.62 65% 89% 614 $3,900,000
Dallas, TX (2)(3) 69,755 $12.74 64% 48% 594 $4,500,000
----------------------------------------------------------------------------------------------
Total Acquisition Facilities 566,969 $11.25 62% 83% 5,265 $43,287,000
============== ==============================
</TABLE>
(1) These facilities are included in the Group 1 Facilities Historical Summaries
of Combined Gross Revenue and Direct Operating Expenses, which facilities
financial information is audited for the year ended December 31, 1996.
(2) These facilities are included in the Group 2 Facilities Historical Summaries
of Combined Gross Revenue and Direct Operating Expenses, which facilities
financial information is unaudited for the year ended December 31, 1996.
(3) These facilities were developed properties that opened in 1995, 1996 or
1997.
In addition the Company has acquired seven other facilities. Financial data
other than that presented is not available for these facilities. The Company
believes that these facilities are not deemed to be material either individually
or in the aggregate.
<TABLE>
<CAPTION>
Square Rent per Economic Physical Total Contract
Location Feet Square Foot Occupancy Occupancy Units Price
-------- ---- ------------ --------- --------- ----- -----
<S><C>
Indianapolis, IN 49,222 $6.11 88% 90% 364 $1,891,000
Jeffersonville, IN 43,467 $6.10 81% 84% 399 $1,084,000
Jeffersonville, IN 39,450 $6.13 63% 67% 392 $524,000
New Albany, IN 33,250 $5.80 84% 94% 275 $678,000
Louisville, KY 27,760 $7.43 75% 78% 281 $2,242,000
Louisville, KY 29,784 $8.03 88% 95% 314 $3,102,000
Louisville, KY 75,715 $6.20 85% 92% 512 $2,703,000
----------------------------------------------------------------------------------------------
298,648 $7.10 76% 82% 2,537 $12,224,000
============== ==============================
</TABLE>
Certain facilities acquired or under contract to be acquired identified in Item
2 of this Form 8-K/A are not included in the Historical Summaries of Combined
Gross Revenue and Direct Operating Expenses ("Historical Summaries"). These
facilities and other unaudited facilities acquired during the year do not
individually constitute acquisitions of a "significant amount of assets" as
defined under Item 2 of Form 8-K or Rule 3-14 of Regulation S-X.
The audited Historical Summaries included in this Form 8-K/A when aggregated
with all other audited Historical Summaries for 1997, included in previous Forms
8-K, cover a mathematical majority of all individually insignificant 1997
acquisitions, which audited Historical Summaries satisfy the requirements of
Rule 3-14 of Regulation S-X.
Item 7: Financial Statements and Exhibits
(a) Financial Statements Applicable to Real Estate Properties Acquired
* Report of Independent Accountants.
* Group 1 Facilities Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses for the year ended
December 31, 1996 (Audited), and for the nine months ended
September 30, 1997 (Unaudited).
* Notes to Group 1 Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses.
* Group 2 Facilities Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses for the year ended
December 31, 1996 (Unaudited), and for the nine months ended
September 30, 1997 (Unaudited).
* Notes to Group 2 Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses.
(b) Pro Forma Financial Information
* Unaudited Pro Forma Combined Condensed Balance Sheet as of
September 30, 1997.
* Unaudited Pro Forma Combined Condensed Statement of Operations
for the nine months ended September 30, 1997.
* Unaudited Pro Forma Combined Condensed Statement of Operations
for the year ended December 31, 1996.
* Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
(c) Exhibits
Exhibit Description
23.0 Consent of Independent Accountants.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Storage USA, Inc.
We have audited the accompanying Historical Summaries of
Combined Gross Revenue and Direct Operating Expenses (the "Historical
Summaries") for certain self-storage facilities (the "Group 1 Facilities")
described in Note 1 to the Historical Summaries for the year ended December 31,
1996. These Historical Summaries are the responsibility of the management of the
Group 1 Facilities. Our responsibility is to express an opinion on these
Historical Summaries based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the Historical Summaries are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summaries. An audit
also includes assessing the accounting principles used and the significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summaries. We believe that our audits provide a reasonable basis
for our opinion.
The accompanying Historical Summaries were prepared for the
purposes of complying with the Rules and Regulations of the Securities and
Exchange Commission (for inclusion in the Form 8-K of SUSA Partnership, L.P.) as
described in Note 1 to the Historical Summaries, and are not intended to be a
complete presentation of the Group 1 Facilities' revenues and expenses.
In our opinion, based on our audits, the Historical Summaries
referred to above present fairly, in all material respects, the combined gross
revenue and direct operating expenses described in Note 1 of the Group 1
Facilities for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
November 24, 1997
<PAGE>
GROUP 1 FACILITIES
HISTORICAL SUMMARIES OF COMBINED GROSS
REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
For the For the
year ended nine months ended
December 31, September 30,
1996 1997
-------------------- -----------------------
(unaudited)
(note 2)
<S> <C>
Gross Revenue:
Rental revenue $12,183 $8,945
Other revenue 252 58
-------------------- -----------------------
Total gross revenue 12,435 9,003
-------------------- -----------------------
Direct Operating Expenses:
Property operations and maintenance 2,782 1,896
Real estate taxes 1,029 810
-------------------- -----------------------
Total direct operating expenses 3,811 2,706
-------------------- -----------------------
Gross revenue in excess of direct operating expenses $8,624 $6,297
==================== =======================
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO GROUP 1 FACILITIES
HISTORICAL SUMMARIES OF COMBINED
GROSS REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
1. Basis of Presentation
The Historical Summaries of Combined Gross Revenue and Direct Operating
Expenses (the "Historical Summaries") relate to the operation of the following
self-storage facilities ("Group 1 Facilities") which have been acquired or are
under contract to be acquired by SUSA Partnership, L.P. (the "Company").
Group 1 Facilities
Number of Number of
Location Facilities Location Facilities
- ------------------------------------- --------------------------------------
Roseville, CA 2 Columbus, OH 7
Phoenix, AZ 5 Trotwood, OH 1
Clarksville, IN 2 Memphis, TN 1
Greenwood, IN 1 Stamford, CT 1
Indianapolis, IN 10 Millville, NJ 1
Jeffersonville, IN 1 Williamstown, NJ 1
New Albany, IN 1 Spring Valley, CA 1
Louisville, KY 1 Pasadena, TX 1
The Historical Summaries for the Group 1 Facilities with a total
acquisition cost of $92,679 have been prepared pursuant to the Rules and
Regulations of the Securities and Exchange Commission for real estate operations
to be acquired. The Historical Summaries are not representative of the actual
operations for the periods presented, as certain expenses which may not be
comparable to the expenses expected to be incurred by the Company in the future
operations of the Group 1 Facilities have been excluded. Expenses excluded
consist of management fees, interest, depreciation and amortization,
professional fees and other indirect costs not directly related to the future
operations of the Group 1 Facilities. Rental income is recognized when due from
occupants. Expenses are recognized on the accrual basis.
2. Interim Periods
The unaudited interim Historical Summaries have been prepared on a
basis consistent with the audited Historical Summaries. In the opinion of
management, all adjustments considered necessary for a fair presentation are of
a normal recurring nature and have been included. Operating results for the nine
months ended September 30, 1997 are not necessarily indicative of future
operating results.
<PAGE>
GROUP 2 FACILITIES
UNAUDITED HISTORICAL SUMMARIES OF COMBINED GROSS
REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
For the For the
year ended nine months ended
December 31, September 30,
1996 1997
-------------------------- -------------------------
(note 2)
<S> <C>
Gross Revenue:
Rental revenue $3,977 $3,184
Other revenue 33 19
-------------------------- -------------------------
Total gross revenue 4,010 3,203
-------------------------- -------------------------
Direct Operating Expenses:
Property operations and maintenance 818 608
Real estate taxes 256 192
-------------------------- -------------------------
Total direct operating expenses 1,074 800
-------------------------- -------------------------
Gross revenue in excess of direct operating expenses $2,936 $2,403
========================== =========================
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO GROUP 2 FACILITIES
UNAUDITED HISTORICAL SUMMARIES OF COMBINED
GROSS REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
1. Basis of Presentation
The Unaudited Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses (the "Historical Summaries") relate to the operation of the
following self-storage facilities ("Group 2 Facilities") which have been
acquired or are under contract to be acquired by SUSA Partnership, L.P. (the
"Company").
Group 2 Facilities - Locations
Columbus, IN Falls Church, VA Sante Fe, NM
Clute, TX Wheaton, MD Dallas, TX
Alexandria, VA Houston, TX
The Historical Summaries for the Group 2 Facilities, with a total
acquisition cost of $41,425 have been prepared pursuant to the Rules and
Regulations of the Securities and Exchange Commission for real estate operations
acquired or to be acquired. The Historical Summaries are not representative of
the actual operations for the periods presented, as certain expenses which may
not be comparable to the expenses expected to be incurred by the Company in the
future operations of the Group 2 Facilities have been excluded. Expenses
excluded consist of management fees, interest, depreciation and amortization,
professional fees and other indirect costs not directly related to the future
operations of the Group 2 Facilities. Rental Income is recognized when due from
occupants. Expenses are recognized on the accrual basis.
2. Interim Periods
The unaudited interim Historical Summaries have been prepared on a
basis consistent with the unaudited Historical Summaries for the year ended
December 31, 1996. In the opinion of management, all adjustments considered
necessary for a fair presentation are of a normal recurring nature and have been
included. Operating results for the nine months ended September 30, 1997 are not
necessarily indicative of future operating results.
<PAGE>
SUSA PARTNERSHIP, L.P.
PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following unaudited Pro Forma Combined Condensed Balance Sheet was
prepared as if the Acquired and the Acquisition Facilities were purchased on
September 30, 1997. The unaudited Pro Forma Combined Condensed Statements of
Operations for the nine months ended September 30, 1997, and for the year ended
December 31, 1996 have been prepared to reflect the acquisition of the Group 1
and Group 2 Facilities as if the Group 1 and Group 2 Facilities and other
previously reported transactions had been consummated at the beginning of the
respective periods shown. The Pro Forma Combined Condensed Financial Information
is based on the historical financial statements included in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 and the
pro forma financial information set forth in the footnotes to the financial
statements included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, and should be read in conjunction with those financial
statements and the notes thereto. The Combined Condensed Pro Forma Financial
Information is not necessarily indicative of the financial position or results
of operations which actually would have occurred if such transactions had been
consummated on the dates described, nor does it purport to represent the
Company's future financial position or results of operations.
<PAGE>
SUSA PARTNERSHIP, L.P.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
as of September 30, 1997
(Unaudited)
(amounts in thousands, except unit data)
<TABLE>
<CAPTION>
Historical Acquired and Pro Forma
SUSA Acquisition Pro Forma SUSA
Partnership, L.P. Facilities Adjustments Partnership, L.P.
------------------ ----------------- -------------- --------------------
<S> <C>
Assets:
Investment in storage facilities, net $1,026,303 $ 135,482 $1,161,785
Cash and equivalents 3,905 3,905
Other assets 41,841 41,841
------------------ ----------------- -------------- --------------------
Total assets $1,072,049 $ 135,482 $ - $1,207,531
================== ================= ============== ====================
Liabilities and partners' capital
Line of credit borrowings $ 34,929 $ 127,143 $ 162,072
Mortgage notes payable 39,864 39,864
Notes payable 200,000 200,000
Accounts payable and accrued expenses 14,667 14,667
Rents received in advance 6,553 6,553
Distribution payable 16,445 16,445
Minority interest 1,986 1,986
------------------ ----------------- -------------- --------------------
Total liabilities 314,444 127,143 - 441,587
------------------ ----------------- -------------- --------------------
Partners' capital
General partnership units 677,419 3,548 680,967
Limited partnership units 89,002 4,791 93,793
Notes receivable - employees (8,816) (8,816)
------------------ ----------------- -------------- --------------------
Total partners' capital 757,605 8,339 - 765,944
------------------ ----------------- -------------- --------------------
Total liabilities and partners' capital
$1,072,049 $ 135,482 $ $1,207,531
================== ================= ============== ====================
</TABLE>
See accompanying notes.
<PAGE>
SUSA PARTNERSHIP, L.P.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the nine months ended September 30, 1997
(Unaudited)
(thousands, except per unit data)
<TABLE>
<CAPTION>
Historical Group 1 Group 2 Pro Forma
SUSA Audited Unaudited Pro Forma SUSA
Partnership, L.P. Facilities Facilities Adjustments Partnership, L.P.
-------------------- ------------- -------------- -------------- -------------------
<S> <C>
Property Revenues:
Rental income $ 113,267 $ 8,945 $ 3,184 $ 8,442 (a) $ 133,838
Management income - -
Other income 2,213 58 19 194 (b) 2,484
-------------------- ------------- -------------- -------------- ------------------
Total revenues 115,480 9,003 3,203 8,636 136,322
-------------------- ------------- -------------- -------------- ------------------
Property Expenses:
Cost of property operations
and maintenance 28,359 1,896 608 1,798 (c) 32,661
Taxes 9,403 810 192 635 (d) 11,040
General & administrative 4,656 840 (e) 5,496
Depreciation & amortization 14,002 3,055 (f) 17,057
-------------------- ------------- -------------- -------------- ------------------
Total expenses 56,420 2,706 800 6,328 66,254
-------------------- ------------- -------------- -------------- ------------------
Income from property operations 59,060 6,297 2,403 2,308 70,068
Other Income (expenses):
Interest expense (11,604) (8,614) (g) (20,218)
Interest income 880 880
-------------------- ------------- -------------- -------------- ------------------
Income before minority interest and
gain on exchange of storage facilities 48,336 6,297 2,403 (6,306) 50,730
Gain on exchange of storage facilities 2,569 (2,569) (h) 0
-------------------- ------------- -------------- -------------- ------------------
Income before minority interest 50,905 6,297 2,403 (8,875) 50,730
Minority interest (250) (250)
-------------------- ------------- -------------- -------------- ------------------
Net income $ 50,655 $ 6,297 $ 2,403 $ (8,875) $ 50,480
==================== ============= ============== ============== ==================
Net income per unit $ 1.76 $ 1.66
==================== ==================
Weighted average units outstanding 28,848 30,357
==================== ==================
See accompanying notes.
</TABLE>
<PAGE>
SUSA PARTNERSHIP, L.P.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the year ended December 31, 1996
(Unaudited)
(thousands, except per unit data)
<TABLE>
<CAPTION>
Initial
Pro Forma Group 1 Group 2 Pro Forma
SUSA Audited Unaudited Pro Forma SUSA
Partnership, L.P. Facilities Facilities Adjustments Partnership, L.P.
------------------ ----------- ------------ -------------- -----------------
<S> <C>
Property Revenues:
Rental income $ 130,839 $ 12,183 $ 3,977 $ 21,968 (i) $ 168,967
Management income 485 485
Other income 1,715 252 33 581 (j) 2,581
------------------ ----------- ------------ -------------- -----------------
Total revenues 133,039 12,435 4,010 22,549 172,033
------------------ ----------- ------------ -------------- -----------------
Property Expenses:
Cost of property operations
and maintenance 33,530 2,782 818 5,340 (k) 42,470
Taxes 10,827 1,029 256 1,256 (l) 13,368
General & administrative 4,722 1,384 (m) 6,106
Depreciation & amortization 16,097 5,686 (n) 21,783
------------------ ----------- ------------ -------------- -----------------
Total expenses 65,176 3,811 1,074 13,666 83,727
------------------ ----------- ------------ -------------- -----------------
Income from property operations 67,863 8,624 2,936 8,883 88,306
Other Income (expenses):
Interest expense (12,885) (13,919) (o) (26,804)
Interest income 687 687
------------------ ----------- ------------ -------------- -----------------
Income before gain and minority interest 55,665 8,624 2,936 (5,036) 62,189
Gain on exchange of storage facilities 288 (288) (p) 0
------------------ ----------- ------------ -------------- -----------------
Income before minority interest 55,953 8,624 2,936 (5,324) 62,189
Minority interest (157) (157)
------------------ ----------- ------------ -------------- -----------------
Net income $ 55,796 $ 8,624 $ 2,936 $ (5,324) $ 62,032
================== =========== ============ ============== =================
Net income per unit 2.10 2.04
================== =================
Weighted average units outstanding 26,627 30,357
================== =================
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except share/unit and per share/unit data)
(Unaudited)
1. SUSA Partnership, L.P.
The historical financial information of SUSA Partnership, L.P. includes
SUSA Management, Inc. ("SUSA Management").
2. Group 1 and Group 2 Facilities- Balance Sheet
Amounts reflect the acquisition of 37 facilities acquired from October
29, 1997 to November 19, 1997 and eight facilities with anticipated closing
dates from November 25, 1997 to January 6, 1998 for a price of $135,482. The
total acquisition price includes the purchase price of the facilities ($134,104)
plus the Company's estimated average cost of $30 per property for capital
improvements ($1,350) and other closing costs ($28). The total acquisition price
was assumed to be funded with borrowings under the Company's lines of credit,
including a $75,000 bridge loan, the issuance of approximately 92,000 shares of
common stock for approximately $3,500 and the issuance of approximately 125,000
units of limited partnership interest in the Company ("Units") for approximately
$4,800.
3. SUSA Partnership, L.P. - Initial Pro Forma Statement of Operations
The Initial Pro Forma Statement of Operations for the year ended
December 31, 1996 is presented as if (a) the acquisition during 1996 of 82
facilities totaling 5,400 square feet for a cost of approximately $304,000, (b)
the issuance of 7,029,000 shares of common stock by the Storage USA, Inc. (the
"REIT") for net proceeds of approximately $220,528 which was contributed to the
Company in exchange for additional general partnership units and (c) the
issuance of $100,000 of 7.125% notes payable had occurred on January 1, 1996
4. Group 1 Facilities - Statement of Operations
The statements of operations for the Group 1 Facilities reflects the
results of operations of the Group 1 Facilities for the year ended December 31,
1996, and the results of operations of the Group 1 Facilities for the nine
months ended September 30, 1997, which are included in the Group 1 Facilities
Historical Summaries of Combined Gross Revenue and Direct Operating Expenses
included in this Form 8-K/A.
5. Group 2 Facilities - Statement of Operations
The statements of operations for the Group 2 Facilities reflects the
results of operations of the Group 2 Facilities for the year ended December 31,
1996, and the results of operations of the Group 2 Facilities for the nine
months ended September 30, 1997, which are included in the Group 2 Facilities
Historical Summaries of Combined Gross Revenue and Direct Operating Expenses
included in this Form 8-K/A.
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations
<TABLE>
<CAPTION>
Nine Months
Ended
September 30, 1997
------------------
<S> <C>
(a) To record rental income for the 39 audited facilities acquired during
the first six months of 1997 from January 1, 1997 to the date acquired. $ 6,086
To record rental income for the 14 unaudited facilities acquired during
the first six months of 1997 from January 1, 1997 to the date acquired. $ 1,155
To reduce rental income for six facilities that are included in the SUSA
Partnership, L.P. historical balances (the "Historical Balances") and were
exchanged for eight facilities on May 20, 1997. $ (1,375)
To record rental income for the nine facilities acquired during the third
quarter of 1997 from January 1, 1997 to the date acquired $ 2,576
-------------------------
Pro forma adjustment $ 8,442
(b) To record other income for the 39 audited facilities acquired during the
first six months of 1997 from January 1, 1997 to the date acquired. $ 101
To record other income for the 14 unaudited facilities acquired during
the first six months of 1997 from January 1, 1997 to the date acquired. $ 43
To reduce other income for six facilities that are included in the
Historical Balances and were exchanged for eight facilities on May 20,
1997. $ (3)
To record other income for the nine facilities acquired during the third quarter
of 1997 from January 1, 1997 to the date acquired $ 63
To reduce management income for the managed property acquired on May 15, 1997,
based on actual management fees earned by the company from January 1, 1997 to
the acquisition date. $ (10)
-------------------------
Pro forma adjustment $ 194
(c) To record cost of property operations and maintenance for the 39 audited
facilities acquired during the first six months of 1997 from January 1,
1997 to the date acquired. $ 1,362
To record cost of property operations and maintenance for the 14 unaudited
facilities acquired during the first six months of 1997 from January 1, 1997 to
the date acquired. $ 280
</TABLE>
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations - continued
<TABLE>
<CAPTION>
Nine Months
Ended
September 30, 1997
------------------
<S> <C>
To reduce cost of property operations and maintenance for six facilities
that are included in the Historical Balances and were exchanged for
eight facilities on May 20, 1997. $ (383)
To record cost of property operations and maintenance for the nine facilities
acquired during the third quarter of 1997 from January 1, 1997 to the date
acquired $ 539
-----------------------
Pro forma adjustment $ 1,798
(d) To record taxes for the 39 audited facilities acquired during the first six
months of 1997 from January 1, 1997 to the date acquired. $ 519
To record taxes for the 14 unaudited facilities acquired during the first six
months of 1997 from January 1, 1997 to the date acquired. $ 129
To reduce taxes for six facilities that are included in the Historical Balances
and were exchanged for eight facilities on May 20, 1997. $ (206)
To record taxes income for the nine facilities acquired during the third quarter
of 1997 from January 1, 1997 to the date acquired $ 193
------------------------
Pro forma adjustment $ 635
(e) To reflect an estimated increase in general and administrative expense based on
results subsequent to acquisition. $ 840
(f) To record depreciation for the 39 audited facilities acquired during the
first six months of 1997, based on approximately $94,047 of the purchase
price being allocated to depreciable assets, based on a 40 year life. $ 1,763
To record depreciation for the 14 unaudited facilities acquired during
the first six months of 1997, based on approximately $18,888 of the
purchase price being allocated to depreciable assets, based on a 40 year
life. $ 354
To record depreciation for the nine facilities acquired during the third
quarter of 1997 based on approximately $27,664 of the purchase price
being allocated to depreciable assets, based on a 40-year life. $ 519
To record depreciation for the 45 Group 1 and Group 2 Facilities based on
approximately $98,902 of the purchase price being allocated to depreciable
assets, based on a 40 year life. $ 1,855
</TABLE>
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
6. Pro Forma Adjustments - Statement of Operations - continued
Nine Months
Ended
September 30, 1997
------------------
<S> <C>
Less: Depreciation included in the Historical balance relating to the facilities
acquired during the first nine months of 1997. $ (1,295)
To reduce depreciation for six facilities that are included in the Historical
Balances and were exchanged for eight facilities on May 20, 1997. $ (141)
------------------------
Pro forma adjustment $ 3,055
(g) To reflect the interest expense on the pro forma line of credit balance of
$139,043 at a weighted average interest rate of 7.10% after assuming all
financing transactions to occur on January 1, 1997. $ (7,404)
To remove historical line of credit interest expense. $ 2,218
To reflect the pro forma effect of additional interest expense and
amortization of discount due to the issuance of $100,000 of 8.20% notes
payable assumed to occur on January 1, 1997. $ (3,473)
To reflect interest expense on mortgage notes payable from January 1, 1997 to
the date of acquisition for the $4,409 mortgages assumed during the period
January 1, 1997 to September 3, 1997. $ (140)
To reflect the pro forma effect on interest of assuming the payoff of all
mortgages that were paid off during the first nine months of 1997 occurred on
January 1, 1997. $ 185
---- -------------------
Pro forma adjustment $ (8,614)
(h) To remove gain on exchange of self-storage facilities $ (2,569)
Year ended
December 31, 1996
------------------
(i) To record rental income for the 39 audited facilities acquired during the first
six months of 1997. $ 16,664
To record rental income for the 14 unaudited facilities acquired during the
first six months of 1997 . $ 3,306
To record rental income for the nine facilities acquired during the third
quarter of 1997. $ 5,215
</TABLE>
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations - continued
<TABLE>
<CAPTION>
Year ended
December 31, 1996
------------------
<S> <C>
To reduce rental income for six facilities that are included in the
Initial Pro Forma balances and were exchanged for eight facilities on
May 20, 1997. $ (3,217)
--------------------------------
Pro forma adjustment $ 21,968
(j) To record other income for the 39 audited facilities acquired during the first
six months of 1997. $ 313
To record other income for the 14 unaudited facilities acquired during the first
six months of 1997. $ 95
To record other income for the nine facilities acquired during the third quarter
of 1997. $ 210
To reduce other income for six facilities that are included in the Initial Pro
Forma balances and were exchanged for eight facilities on May 20, 1997.
$ (10)
To reduce management income for the managed property acquired on May
15, 1997, based on actual management fees earned by the company during
the year ended December 31, 1996. $ (27)
-------------------------------
Pro forma adjustment $ 581
(k) To record cost of property operations and maintenance for the 39 audited
facilities acquired during the first six months of 1997. $ 3,863
To record cost of property operations and maintenance for the 14 unaudited
facilities acquired during the first six months of 1997. $ 1,061
To record cost of property operations and maintenance for the nine facilities
acquired during the third quarter of 1997. $ 1,146
To reduce cost of property operations and maintenance for six facilities that
are included in the Initial Pro Forma balances and were exchanged for eight
facilities on May 20, 1997. $ (730)
-------------------------------
Pro forma adjustment $ 5,340
(l) To record taxes for the 39 audited facilities acquired during the first six
months of 1997. $ 1,082
To record taxes for the 14 unaudited facilities acquired during the first six
months of 1997. $ 291
To record taxes for the nine facilities acquired during the third quarter of
1997. $ 460
</TABLE>
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations - continued
<TABLE>
<CAPTION>
<S> <C> Year ended
December 31, 1996
-----------------
To reduce taxes for six facilities that are included in the Initial Pro
Forma balances and were exchanged for eight facilities on May 20, 1997. $ (577)
-------------------------------
Pro forma adjustment $ 1,256
(m) To reflect an estimated increase in general and administrative expense based on
results subsequent to acquisition. $ 1,384
(n) To record depreciation for the 39 audited facilities acquired during
the first six months of 1997, based on approximately $94,047 of the
purchase price being allocated to depreciable assets, based on a 40
year life. $ 2,351
To record depreciation for the 14 unaudited facilities acquired during
the first six months of 1997, based on approximately $18,888 of the
purchase price being allocated to depreciable assets, based on a 40
year life. $ 472
To record depreciation for the nine facilities acquired during the
third quarter of 1997 based on approximately $27,664 of the purchase
price being allocated to depreciable assets, based on a 40-year life. $ 692
To record depreciation for the 45 Group 1 and Group 2 Facilities based on
approximately $98,902 of the purchase price being allocated to depreciable
assets, based on a 40 year life. $ 2,473
To reduce depreciation for six facilities that are included in the Initial Pro
Forma balances and were exchanged for eight facilities on May 20, 1997. $ (302)
-------------------------------
Pro forma adjustment $ 5,686
(o) To reflect the interest expense on the pro forma line of credit balance
increase of $86,313 at a weighted average interest rate of 6.99% after
effect of assuming all financing transactions to occur on January 1,
1996. $ (6,033)
To reflect the pro forma effect of additional interest expense and
amortization of discount due to the issuance of $100,000 of 8.20% notes
payable assumed to occur on January 1, 1996. $ (8,336)
To reflect interest expense on mortgage notes payable from the $4,409 of
mortgages assumed during the period January 1, 1997 to September 3, 1997. $ (387)
To reflect the pro forma effect on interest of assuming the payoff of
all mortgages that were paid off during the first nine months of 1997
occurred on January 1, 1996. $ 837
-------------------------------
Pro forma adjustment $ (13,919)
(p) To remove gain on exchange of self-storage facilities $ (288)
</TABLE>
<PAGE>
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: November 25, 1997
SUSA PARTNERSHIP, L.P.
By STORAGE USA, INC.,
General Partner
By: /s/ Dennis A. Reeve
--------------------
Dennis A. Reeve
Chief Financial Officer
(Principal Financial and Accounting Officer)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference into (A) the Registration
Statements on Forms S-8 (Commission File Nos. 33-80967, 33-93884, 33-93882,
33-86362, 333-29753 and 333-29773) of Storage USA, Inc.; (B) the Registration
Statements on Forms S-3 (Commission File Nos. 333-10903, 333-4556, 33-80965,
33-98142, 33-93886, 33-91302, 333-25821, 333-21991 and 333-31145) of Storage
USA, Inc.; and (C) the Registration Statements on Forms S-3 (Commission File
Nos. 333-3344 and 333-21991) of SUSA Partnership, L.P. of our report dated
November 24, 1997, on our audit of the HIstorical Summaries of Combined Gross
Revenue and Direct Operating Expenses of the Group 1 Facilities for the year
ended December 31, 1996, which report is included in this Form 8-K/A.
/s/ COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
November 24, 1997
