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)
March 25, 1998 (February 19,1998)
001-12910
(Commission File Number)
Storage USA, Inc.
(Exact name of registrant as specified in its charter)
Tennessee 62-1251239
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
Storage USA, Inc., (the "Company") consummated during the period February 19,
1998 through March 10, 1998, the acquisition of seven self-storage facilities
(the "Acquired Facilities") through SUSA Partnership, L.P. (the "Partnership"),
a limited partnership in which the Company is the sole general partner and owns
approximately a 91% interest as of the date of this report. The Acquired
Facilities contain approximately 436,531 square feet, are located in three
states and were purchased for approximately $22,950,000 in aggregate
consideration.
The acquisition of the Acquired Facilities was funded by cash generated from
operations, borrowings under the Company's lines of credit with The First
National Bank of Chicago and First Tennessee, and the assumption of two
mortgages. 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:
<TABLE>
<CAPTION>
Location Seller Date of Acquisition
- -------- ------ -------------------
<S> <C>
Collierville, TN Collierville Mini Storage, L.L.C. 2/19/98
Cordova, TN Cordova Mini Storage, L.L.C. 2/19/98
Cordova, TN Cordova Villiage Mini Storage, L.L.C. 2/19/98
Memphis, TN Germantown Parkway Mini Storage, L.L.C. 2/19/98
Las Vegas, NV BHP Investors, A limited Liability Company 2/24/98
Germantown, MD Wisteria Storage Limited Partnership 3/10/98
Columbia, MD Columbia Vault Limited Partnership 3/10/98
</TABLE>
In addition, the Company has five facilities under contract (the "Acquisition
Facilities") with an anticipated closing date of March 30, 1998. These
facilities, containing approximately 285,671 square feet, are located in New
York State and have an estimated cost of $36,965,000. The acquisition of the
Acquisition Facilities will be funded by cash generated from operations,
borrowings under the Company's lines of credit with The First National Bank of
Chicago and First Tennessee, and units of limited partnership interest in the
Partnership, ("Units"). The following provides certain additional information
concerning the five pending acquisitions:
<TABLE>
<CAPTION>
Anticipated
Location Seller Date of Acquisition
- -------- ------ -------------------
<S> <C>
Vernon, NY Metro Self Storage Bronx, Inc. 3/30/98
New Rochelle, NY Metro Self Storage Bronx, Inc. 3/30/98
Bronx, NY Metro Self Storage Bronx, Inc. 3/30/98
Bronx, NY Metro Self Storage Bronx, Inc. 3/30/98
Bronx, NY Metro Self Storage Bronx, Inc. 3/30/98
</TABLE>
<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:
Collierville, TN 27,283 $8.18 65% 95% 245 $850,000
Cordova, TN 72,020 $8.13 78% 98% 622 $3,650,000
Cordova, TN 53,270 $8.11 77% 96% 404 $2,800,000
Memphis, TN 54,425 $7.58 70% 96% 398 $2,500,000
Las Vegas, NV 93,650 $4.99 81% 90% 567 $2,900,000
Germantown, MD 69,208 $13.37 87% 95% 889 $5,500,000
Columbia, MD 66,675 $13.14 84% 85% 640 $4,750,000
----------------------------------------------------------------------------------------------
436,531 $8.98 80% 93% 3,765 $22,950,000
============= ===============================
Acquisition Facilities:
Vernon, NY 47,898 $17.08 79% 88% 788 $5,241,000
New Rochelle, NY 48,510 $15.96 89% 94% 746 $5,010,000
Bronx, NY 29,971 $17.42 89% 95% 591 $2,820,000
Bronx, NY 46,643 $17.60 99% 97% 806 $6,780,000
Bronx, NY 112,649 $17.04 87% 95% 1,994 $17,114,000
----------------------------------------------------------------------------------------------
285,671 $17.00 88% 94% 4,925 $36,965,000
============= ===============================
</TABLE>
<PAGE>
Item 7: Financial Statements and Exhibits
(a) Financial Statements Applicable to Real Estate Properties Acquired
* Report of Independent Accountants.
* Acquired and Acquisition 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 Acquired and Acquisition Facilities 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
23.1 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 "Acquired and Acquisition
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 Acquired and Acquisition 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/A of Storage USA, Inc.) as
described in Note 1 to the Historical Summaries, and are not intended to be a
complete presentation of the Acquired and Acquisition 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 Acquired and
Acquisition Facilities for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
March 25, 1998
<PAGE>
ACQUIRED AND ACQUISITION 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 $6,253 $5,468
Other revenue 318 318
------------ -----------
Total gross revenue 6,571 5,786
------------ -----------
Direct Operating Expenses:
Property operations and maintenance 1,083 921
Real estate taxes 577 410
------------ -----------
Total direct operating expenses 1,660 1,331
------------ -----------
Gross revenue in excess of direct operating expenses $4,911 $4,455
============ ===========
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO ACQUIRED AND ACQUISITION 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 ("Acquired and Acquisition Facilities") which have been
acquired or are under contract to be acquired by Storage USA, Inc. (the
"Company").
Acquired and Acquisition Facilities
-----------------------------------
Number of
Location Facilities
------------------------------------------
Collierville, TN 1
Cordova, TN 2
Memphis, TN 1
Germantown, MD 1
Columbia, MD 1
Las Vegas, NV 1
Vernon, NY 1
New Rochelle, NY 1
Bronx, NY 3
The Historical Summaries for the Acquired and Acquisition Facilities
with a total acquisition cost of $60,612 have been prepared pursuant to the
Rules and Regulations of the Securities and Exchange Commission for real estate
operations 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 Acquired and Acquisition 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 Acquired and Acquisition Facilities. Rental income
is recognized when due from occupants. Expenses are recognized on the accrual
basis.
2. Interim Periods
The unaudited interim Historical Summaries for the Acquired and
Acquisition Facilities 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>
STORAGE USA, INC.
PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following unaudited Pro Forma Combined Condensed Balance Sheet was
prepared as if the Acquired and 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 Acquired
and Acquisition Facilities as if the Acquired and Acquisition 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>
STORAGE USA, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
as of September 30, 1997
(Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION>
Historical Acquired and Pro Forma
Storage Acquisition Pro Forma Storage
USA, Inc. Facilities Adjustments USA, Inc.
---------------- -------------- --------------- ---------------
<S> <C>
Assets:
Investment in storage facilities, net $1,026,303 $ 60,612 $ 164,807 (a) $ 1,251,722
Cash and equivalents 4,103 4,103
Other assets 41,450 41,450
---------------- -------------- --------------- ---------------
Total assets $1,071,856 $ 60,612 $ 164,807 $ 1,297,275
================ ============== =============== ===============
Liabilities and shareholders' equity
Line of credit borrowings $ 34,929 $ 30,740 $ (43,532) (b) $ 22,137
Mortgage notes payable 39,864 4,872 44,736
Notes payable 200,000 200,000 (c) 400,000
Accounts payable and accrued expenses 14,471 14,471
Rents received in advance 6,553 6,553
Dividend payable 16,445 16,445
Minority interest 90,989 25,000 4,791 (d) 120,780
---------------- -------------- --------------- ---------------
Total liabilities 403,251 60,612 161,259 625,122
---------------- -------------- --------------- ---------------
Shareholders' equity
Common stock 274 1 (e) 275
Paid-in capital 705,319 3,547 (f) 708,866
Notes receivable - officers (8,817) (8,817)
Accumulated deficit (15,831) (15,831)
Distributions in excess of net income (12,340) (12,340)
---------------- -------------- --------------- ---------------
Total shareholders' equity 668,605 - 3,548 672,153
---------------- -------------- --------------- ---------------
Total liabilities and shareholders'
equity $1,071,856 $ 60,612 $ 164,807 $ 1,297,275
================ ============== =============== ===============
</TABLE>
See accompanying notes.
<PAGE>
STORAGE USA, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF
OPERATIONS For the nine months ended
September 30, 1997
(Unaudited)
(thousands, except per share data)
<TABLE>
<CAPTION>
Historical Acquired and Pro Forma
Storage Acquisition Pro Forma Storage
USA, Inc. Facilities Adjustments USA, Inc.
--------------- -------------- -------------- --------------
<S> <C>
Property Revenues:
Rental income $ 113,267 $ 5,468 $ 22,803 (g) $ 141,538
Management income - -
Other income 2,213 318 375 (h) 2,906
--------------- -------------- -------------- --------------
Total revenues $ 115,480 $ 5,786 $ 23,178 $ 144,444
--------------- -------------- -------------- --------------
Property Expenses:
Cost of property operations
and maintenance 28,359 921 5,042 (i) 34,322
Taxes 9,403 410 1,840 (j) 11,653
General & administrative 4,656 1,168 (k) 5,824
Depreciation & amortization 14,002 4,286 (l) 18,288
--------------- -------------- -------------- --------------
Total expenses 56,420 1,331 12,336 70,087
--------------- -------------- -------------- --------------
Income from property operations 59,060 4,455 10,842 74,357
Other Income (expenses):
Interest expense (11,604) (12,618) (m) (24,222)
Interest income 880 880
--------------- -------------- -------------- --------------
Income before gain and minority interest 48,336 4,455 (1,776) 51,015
Gain on exchange of self-storage facilities 2,569 (2,569) (n) 0
--------------- -------------- -------------- --------------
Income before minority interest 50,905 4,455 (4,345) 51,015
Minority interest (4,115) (1,618) (o) (5,733)
--------------- -------------- -------------- --------------
Net income $ 46,790 $ 4,455 $ (5,963) $ 45,282
=============== ============== ============== ==============
Net income per share $ 1.76 $ 1.65
=============== ==============
Weighted average shares outstanding 26,638 27,501
=============== ==============
</TABLE>
See accompanying notes.
<PAGE>
STORAGE USA, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the year ended December 31, 1996
(Unaudited)
(thousands, except per share data)
<TABLE>
<CAPTION>
Initial
Pro Forma Acquired and Pro Forma
Storage Acquisition Pro Forma Storage
USA, Inc. Facilities Adjustments USA, Inc.
--------------- --------------- ------------- -------------
<S> <C>
Property Revenues:
Rental income $ 130,839 $ 6,253 $ 40,321 (p) $ 177,413
Management income 485 485
Other income 1,715 318 959 (q) 2,992
--------------- --------------- ------------- -------------
Total revenues 133,039 6,571 41,280 180,890
--------------- --------------- ------------- -------------
Property Expenses:
Cost of property operations
and maintenance 33,530 1,083 9,626 (r) 44,239
Taxes 10,827 577 2,689 (s) 14,093
General & administrative 4,722 1,698 (t) 6,420
Depreciation & amortization 16,097 7,327 (u) 23,424
--------------- --------------- ------------- -------------
Total expenses 65,176 1,660 21,340 88,176
--------------- --------------- ------------- -------------
Income from property operations 67,863 4,911 19,940 92,714
Other Income (expenses):
Interest expense (12,885) (19,413) (v) (32,298)
Interest income 687 687
--------------- --------------- ------------- -------------
Income before gain and minority interest 55,665 4,911 527 61,103
Gain on exchange of self-storage facilities 288 (288) (w) 0
--------------- --------------- ------------- -------------
Income before minority interest 55,953 4,911 239 61,103
Minority interest (3,870) (2,997) (x) (6,867)
--------------- --------------- ------------- -------------
Net income $ 52,083 $ 4,911 $(2,758) $ 54,236
=============== =============== ============= =============
Net income per share $ 2.11 $ 1.97
=============== =============
Weighted average shares outstanding 24,723 27,501
=============== =============
</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. Storage USA, Inc.
The historical financial information of Storage USA, Inc. (the
"Company") includes SUSA Partnership, L.P. (the "Partnership"), Storage USA,
Trust (the "Trust") and SUSA Management, Inc. ("SUSA Management").
2. Acquired and Acquisition Facilities- Balance Sheet
Amounts reflect the acquisition of seven facilities acquired from
February 19, 1998 through March 10, 1998 for a price of $23,497 and five
facilities under contract for a price of $37,115. The total acquisition price
includes the purchase price of the facilities ($59,915) plus the Company's
estimated average cost of $30 per property for capital improvements ($360) and
other closing costs ($337). The total acquisition price was assumed to be funded
with borrowings under the Company's lines of credit, the issuance of $25,000 of
Units and the assumption of two mortgages with a combined principal balance of
$4,872.
3. Storage USA, Inc. - 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 for net proceeds of
approximately $220,528 and (c) the issuance of $100,000 of 7.125% notes payable
had occurred on January 1, 1996.
4. Acquired and Acquisition Facilities - Statement of Operations
The statements of operations for the Acquired and Acquisition
Facilities reflects the results of operations of the Acquired and Acquisition
Facilities for the year ended December 31, 1996, and the results of operations
of the Acquired and Acquisition Facilities for the nine months ended September
30, 1997, which are included in the Acquired and Acquisition 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)
5. Pro Forma Adjustments - Balance Sheet
<TABLE>
<CAPTION>
As of September 30, 1997
--------------------------
<S> <C>
(a) To record the acquisition of the 49 facilities purchased between October
29, 1997 and January 30, 1998 (the "January 8-K/A Facilities"). $ 145,422
To record the acquisition of the six facilities purchased between
January 9, 1998 and January 23, 1998 (the "February 8-K/A Facilities"). $ 19,385
-----------------
Pro forma adjustment $ 164,807
(b) To record the pro forma payoff of the line of credit with funds received
from the issuance of the $200,000 of notes payable after covering the
costs of the acquisition of the January 8-K/A Facilities and the
February 8-K/A Facilities. $ (43,532)
(c) To record the issuance of the $100,000, 7.0% notes payable and the $100,000,
7.5% notes payable issued December 5, 1997. $ 200,000
(d) To record the issuance of 125 Units in exchange for facilities acquired. $ 4,791
(e) To record the issuance of 92 shares of common stock in exchange for
facilities acquired. $ 1
(f) To record the issuance of 92 shares of common stock in exchange for
facilities acquired. $ 3,547
</TABLE>
6. Pro Forma Adjustments - Statement of Operations
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
------------------
<S> <C>
(g) 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
<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>
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
------------------
<S> <C>
To reduce rental income for six facilities that are included in the Storage USA,
Inc. 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
To record rental income for the January 8-K/A Facilities. $ 13,077
To record rental income for the February 8-K/A Facilities. $ 1,284
------------------
Pro forma adjustment $ 22,803
(h) 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 record other income for the January 8-K/A Facilities. $ 127
To record other income for the February 8-K/A Facilities. $ 54
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 $ 375
(i) 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
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)
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
6. Pro Forma Adjustments - Statement of Operations - continued
Nine Months Ended
September 30, 1997
------------------
<S> <C>
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
To record cost of property operations for the January 8-K/A Facilities. $ 2,753
To record cost of property operations for the February 8-K/A Facilities. $ 491
----------------
Pro forma adjustment $ 5,042
(j) 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 for the nine facilities acquired during the third quarter of
1997 from January 1, 1997 to the date acquired $ 193
To record taxes for the January 8-K/A Facilities. $ 1,083
To record taxes for the February 8-K/A Facilities. $ 122
----------------
Pro forma adjustment $ 1,840
(k) To reflect an estimated increase in general and administrative expense based on
results subsequent to acquisition. $ 1,168
(l) 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
</TABLE>
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 record depreciation for the January 8-K/A Facilities based on
approximately $106,158 of the purchase price being allocated to
depreciable assets, based on a 40 year life. $ 1,990
To record depreciation for the February 8-K/A Facilities based on approximately
$14,151 of the purchase price being allocated to depreciable assets, based on a
40 year life. $ 265
To record depreciation for the Acquired and Acquisition Facilities based on
$44,247 of the purchase price being allocated to depreciable assets, based on a
40 year life. $ 830
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. $ (140)
---------------
Pro forma adjustment $ 4,286
(m) To reflect the reduction in interest expense from the pro forma line of
credit reduction of $55,262 at a weighted average interest rate of 7.00%
after assuming all financing transactions to occur on January 1, 1997. $ 133
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 the pro forma effect of additional interest expense and amortization
of discount due to the issuance of $100,000 of 7.0% notes payable assumed to
occur on January 1, 1997. $ (5,334)
To reflect the pro forma effect of additional interest expense and amortization
of discount due to the issuance of $100,000 of 7.5% notes payable assumed to
occur on January 1, 1997. $ (5,738)
To reflect interest expense on mortgage notes payable from January 1, 1997 to
the date of acquisition for the $10,920 mortgages assumed during the period
January 1, 1997 to March 10, 1998. $ (609)
</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 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 $ (12,618)
(n) To remove gain on exchange of self-storage facilities $ (2,569)
(o) To reflect the pro forma effect on minority interest expense from the
income contributed from facilities acquired from January 1, 1997 to
January 30, 1998 and the Acquired and Acquisition Facilities assuming
those acquisitions and all equity offerings and Unit transactions
occurred on January 1, 1997. $ (1,618)
</TABLE>
<TABLE>
<CAPTION>
Year ended
December 31, 1996
------------------
<S> <C>
(p) 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
To record rental income for the January 8-K/A Facilities. $ 17,328
To record rental income for the February 8-K/A Facilities. $ 1,025
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 $ 40,321
(q) 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 record other income for the January 8-K/A Facilities. $ 338
To record other income for the February 8-K/A Facilities. $ 40
</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 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 $ 959
(r) 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 record cost of property operations and maintenance for the January 8-K/A
Facilities. $ 3,911
To record cost of property operations and maintenance for the February 8-K/A
Facilities. $ 375
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 $ 9,626
(s) 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
To record taxes for the January 8-K/A Facilities. $ 1,390
To record taxes for the February 8-K/A Facilities. $ 43
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 $ 2,689
</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>
(t) To reflect an estimated increase in general and administrative expense based on
results subsequent to acquisition. $ 1,698
(u) 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 January 8-K/A Facilities based on approximately
$106,158 of the purchase price being allocated to depreciable assets, based on
a 40 year life. $ 2,654
To record depreciation for the January 8-K/A Facilities based on approximately
$106,158 of the purchase price being allocated to depreciable assets, based on
a 40 year life. $ 354
To record depreciation for the Acquired and Acquisition Facilities based on
$44,247 of the purchase price being allocated to depreciable assets, based on
a 40 year life. $ 1,106
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 $ 7,327
(v) To reflect the interest expense on the pro forma line of credit balance
decrease of $55,262 at a weighted average interest rate of 6.99% after
effect of assuming all financing transactions to occur on January 1,
1996. $ 3,863
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)
</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 reflect the pro forma effect of additional interest expense and
amortization of discount due to the issuance of $100,000 of 7.0% notes
payable assumed to occur on January 1, 1996. $ (7,112)
To reflect the pro forma effect of additional interest expense and amortization
of discount due to the issuance of $100,000 of 7.5% notes payable assumed to
occur on January 1, 1996. $ (7,651)
To reflect interest expense on mortgage notes payable from the $10,920
of mortgages assumed during the period January 1, 1997 to March 10,
1998. $ (1,013)
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. $ 836
-------------------
Pro forma adjustment $ (19,413)
(w) To remove gain on exchange of self-storage facilities $ (288)
(x) To reflect the pro forma effect on minority interest expense from the
income contributed from facilities acquired from January 1, 1997 to
January 30, 1998 and the Acquired and Acquisition Facilities assuming
those acquisitions and all equity offerings and Unit transactions
occurred on January 1, 1997. $ (2,997)
</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: March 25, 1998
STORAGE USA, INC.
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, 333-31145 and 333-44641)
of Storage USA, Inc.; and (C) the Registration Statements on Forms S-3
(Commission File Nos. 333-3344, 333-21991 and 333-44641) of SUSA Partnership,
L. P. of our report dated March 25, 1998, on our audit of the Historical
Summaries of Combined Gross Revenue and Direct Operating Expenses of the
Acquired and Acquisition Facilities for the year ended December 31, 1996,
which report is included in this Form 8-K/A.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
March 25, 1998
