SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report(Date of earliest event reported): July 6, 1998 (June 19,
1998)
SOVRAN ACQUISITION LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Charter)
Maryland 0-24071 16-1481551
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
5166 Main Street
Williamsville, NY 14221
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (716) 633-1850
NOT APPLICABLE
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
Sovran Acquisition Limited Partnership (the "Operating
Partnership") is the entity through which Sovran Self Storage,
Inc. (the "Company") conducts substantially all of the Company's
business and owns substantially all of the Company's assets. The
Operating Partnership consummated during the period June 19,
1998, through July 2, 1998, the acquisition of 10 self-storage
facilities (the "Acquired Facilities"). The 10 facilities
totaling approximately 670,000 square feet are located in 2
states and were purchased for approximately $38 million.
The details of the 10 Acquired Properties are incorporated by
reference from Item 2 of the Company's Form 8-K Current Report
filed on July 6, 1998.
Item 7. Financial Statements and Exhibits
Page
(a) Financial Statements Applicable to Real Estate
Properties Acquired
The historical financial statements of the 10 facilities
acquired by Sovran Acquisition Limited Partnership during
the period June 19, 1998, through July 2, 1998, are
incorporated by reference herein from Item 7 of Form 8-K
Current Report of Sovran Self Storage, Inc. (the "Company")
filed on July 6, 1998.
(b) Pro Forma Financial Information
* Sovran Acquisition Limited Partnership Pro Forma
Combined Financial Information 4
* Sovran Acquisition Limited Partnership Pro Forma
Combined Balance Sheet as of March 31, 1998 5
* Sovran Acquisition Limited Partnership Pro Forma
Combined Statement of Operations For
the three months ended March 31, 1998 6
* Sovran Acquisition Limited Partnership Pro Forma
Combined Statement of Operations For
the Year ended December 31, 1997 7
* Sovran Acquisition Limited Partnership Notes
to Pro Forma Combined Financial Statements 8
(c) Exhibits
Exhibit No. Description
----------- -----------
None
Sovran Acquisition Limited Partnership
Pro Forma Combined Financial Information
The following unaudited Pro Forma Combined Balance Sheet as of
March 31, 1998 and unaudited Pro Forma Combined Statement of
Operations for the three months ended March 31, 1998 and the year
ended December 31, 1997, have been prepared to reflect the
Operating Partnership's acquisition of self storage facilities
and the adjustments described in the accompanying notes. The pro
forma combined financial information is based on the historical
financial statements of Sovran Self Storage, Inc. included in
(i.) the Company's 10-Q for the three months ended March 31,
1998, (ii) the Company's 10-K for the year ended December 31,
1997, (iii) the historical summaries of combined gross revenue
and direct operating expenses included in the Company's 8-K
Report dated June 10, 1998 and 8-K/A Report dated April 17, 1998,
(iv) the other financial information in the Company's 1997 Annual
Report to Shareholders and (v) the Operating Partnership's
General Form for Registration of Securities Form 10, and should
be read in conjunction with those financial statements and notes
thereto. The Pro Forma Combined Balance Sheet was prepared as if
the 22 facilities that were purchased after March 31, 1998, were
acquired at that date. The Pro Forma Combined Statements of
Operations were prepared as if the 44 self storage facilities
acquired in 1997 and the 40 facilities acquired in 1998 were
purchased at the beginning of 1997. The combined 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 Operating
Partnership's future financial position or results of operations.
Sovran Acquisition Limited Partnership
Pro Forma Combined Balance Sheet
March 31, 1998
(in thousands)
(unaudited)
Pro Forma Adjustments
Sovran
Acquisition Sovran
Limited Previously Acquisition
Partnership Reported Acquired Limited
Historical 12 Facilities 10 Facilities Partnership
(Note 1) (Note 2) (Note 3) Pro Forma
----------------------------------------------------
Assets
Investment in storage
facilities, net $ 376,792 $ 42,046 $ 38,000 $ 456,838
Cash and cash
equivalents 2,987 - - 2,987
Accounts receivable 1,204 5 8 1,217
Prepaid expenses and
other assets 3,484 19 - 3,503
-------------------------------------------------
Total assets $ 384,467 $ 42,070 $ 38,008 $ 464,545
==================================================
Liabilities
Line of credit $ 88,000 $ 41,288 $ 26,467 $ 155,755
Accounts payable and
accrued liabilities 4,955 173 69 5,197
Deferred revenue 2,506 336 72 2,914
Accrued distributions 6,899 - - 6,899
Mortgage payable 3,059 - - 3,059
--------------------------------------------------
Total liabilities 105,419 41,797 26,608 173,824
Limited partners'
capital interest 13,170 273 11,400 24,843
Partners' Capital
General partner 5,244 - - 5,244
Limited partner 260,634 - - 260,634
--------------------------------------------------
Total partners'
capital 265,878 - - 265,878
--------------------------------------------------
Total liabilities and
partners' capital $ 384,467 $ 42,070 $ 38,008 $ 464,545
===================================================
See notes to pro forma combined financial information
Sovran Acquisition Limited Partnership
Pro Forma Combined Statement of Operations
For the Three Months ended March 31, 1998
(in thousands, except per unit data) (unaudited)
Sovran 18 Acquisitions 12 Acquisitions
Acquisition Prior to Subsequent to 10 Acquired Sovran
Limited March 31, 1998 March 31, 1998 Facilities Acquisition
Partnership Preacquisition Previously Incorporated Pro Forma Limited
Historical Pro forma Reported by reference Adjustments Partnership
(Note 1) (Note 4) (Note 4) (Note 4) (Note 6) Pro Forma
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Revenues:
Rental income $ 14,175 $ 950 $ 1,401 $ 1,282 $ - $ 17,808
Interest and other income 200 28 21 13 - 262
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Total revenue 14,375 978 1,422 1,295 - 18,070
Expenses:
Property operations and
maintenance 2,818 223 286 303 - 3,630
Real estate taxes 1,188 76 87 144 - 1,495
General and administrative 854 43 - - 12 (a) 909
Interest 1,215 435 - - 1,102 (b) 2,752
Depreciation and
amortization 2,097 146 - - 405 (c) 2,648
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Total expenses 8,172 923 373 447 1,519 11,434
-------------------------------------------------------------------------------------------------
Income before extraordinary
item 6,203 55 1,049 848 (1,519) 6,636
Extraordinary item - loss
on extinguishment of debt (350) - - - - (350)
-------------------------------------------------------------------------------------------------
Net income $ 5,853 $ 55 $ 1,049 $ 848 $ (1,519) $ 6,286
=================================================================================================
Earnings per unit before
extraordinary item - basic $ 0.49 $ 0.50(d)
Extraordinary item (0.03) (0.02)
-------- -------
Earnings per unit - basic $ 0.46 $ 0.48
======== =======
Earnings per unit - diluted $ 0.46 $ 0.47
======== =======
Dividends declared per unit $ 0.54 $ 0.54
======== =======
Units used in basic per
unit calculation 12,733,076 13,206,794
See notes to pro forma combined financial information
Sovran Acquisition Limited Partnership
Pro Forma Combined Statement of Operations
For the Year ended December 31, 1997
(in thousands, except per unit data) (unaudited)
Sovran
Acquisition 1997 Sovran
Limited Acquisitions 1998 Acquisition
Partnership Preacquisition 40 Acquired Pro Forma Limited
Historical Pro forma Facilities Adjustments Partnership
(Note 1) (Note 5) Pro forma (Note 5) Pro Forma
-------------------------------------------------------------------------
Revenues:
Rental income $ 48,584 $ 4,680 $ 16,758 $ - $ 70,022
Interest and other income 770 51 263 - 1,084
----------------------------------------------------------------------
Total revenue 49,354 4,731 17,021 - 71,106
Expenses:
Property operations and
maintenance 9,708 1,020 3,673 - 14,401
Real estate taxes 3,955 397 1,376 - 5,728
General and administrative 2,757 43 - 178 (a) 2,978
Interest 2,166 1,001 - 7,670 (b) 10,837
Depreciation and
amortization 7,005 737 - 2,707 (c) 10,449
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Total expenses 25,591 3,198 5,049 10,555 44,393
---------------------------------------------------------------------
Net income $ 23,763 $ 1,533 $ 11,972 $(10,555) $ 26,713
=====================================================================
Earnings per unit - basic $ 1.97 $ 2.02 (d)
- diluted$ 1.96 $ 2.01
Dividends declared
per unit $ 2.12 $ 2.12
Units used in basic per
unit calculation 12,090,141 13,206,794
See notes to pro forma combined financial information
Sovran Acquisition Limited Partnership
Notes to Pro Forma Combined Financial Statements
(in thousands, except per unit data)
(unaudited)
1. Sovran Acquisition Limited Partnership Historical
The balance sheet and statement of operations as of and for the
three months ended March 31, 1998 and the year ended December 31,
1997, include the accounts of Sovran Acquisition Limited
Partnership (the "Operating Partnership"). Sovran Acquisition
Limited Partnership is the entity through which Sovran Self
Storage, Inc. (the "Company") conducts substantially all of the
Company's business and owns substantially all of the Company's
assets
2. Balance Sheet - Pro Forma Adjustments - Previously Reported
12 Facilities
These adjustments reflect the 12 acquisitions that occurred
subsequent to March 31, 1998, that were reported in the Company's
8-K Report filed June 10, 1998 and 8-K/A Report filed April 17,
1998, and were not included in the Sovran Acquisition Limited
Partnership Historical March 31, 1998 balance sheet. The cash
portion of the purchase price is considered to be an increase in
the amounts outstanding under the Operating Partnership's line of
credit.
3. Balance Sheet - Pro Forma Adjustments - 10 facilities
This adjustment reflects the acquisition of the 10 facilities
detailed in Item 2 of this 8-K that have been purchased
subsequent to March 31, 1998. The cash portion of the purchase
price is considered to be an increase in the amounts outstanding
under the Operating Partnership's line of credit. The
partnership units issued in connection with certain of these
facilities are recorded as limited partners' capital interest.
4. Statement of Operations March 31, 1998
18 Acquisitions Prior to March 31, 1998
The statements of operations for the 18 acquisitions prior to
March 31, 1998 reflect the results of operations for these
facilities for the period not owned by the Operating Partnership
during the three months ended March 31, 1998.
12 Acquisitions Subsequent to March 31, 1998 Reported in
Previous 8-K
The statements of operations for the 12 acquisitions subsequent
to March 31, 1998 reflect the results of operations for these
facilities for the period March 31, 1998 which are detailed in
the Company's 8-K Report filed June 10, 1998 and 8-K/A Report
filed April 17, 1998.
10 Acquired Facilities
The statements of operations for the 10 Acquired Facilities
reflect the results of operations for these facilities for the
three months ended March 31, 1998, which are reported in the
Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses incorporated by reference herein.
Sovran Acquisition Limited Partnership
Notes to Pro Forma Combined Financial Statements
(in thousands, except per unit data)
(unaudited)
5. Statement of Operations December 31, 1997
1997 Acquisitions Preacquisition Pro forma
The statements of operations for the 44 acquisitions prior to
December 31, 1997 reflect the results of operations for these
facilities for the period not owned by the Operating Partnership
during the year ended December 31, 1997.
1998 40 Acquired Facilities
The statements of operations for the 40 Acquired Facilities
reflect the results of operations for these facilities for the
three months ended March 31, 1998, which are reported in the
Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses included elsewhere herein (10 facilities) and
in the Company's 8-K filed June 10, 1998 and 8-K/A filed
April 17, 1998.
6. Pro Forma Adjustments - Statement of Operations
(a) To reflect an estimated increase in general and
administrative expenses based on results subsequent to
acquisition.
(b) To reflect interest expense on the line of credit utilized
to fund the purchase of the acquired or acquisition
facilities.
(c) To record additional depreciation expense related to the
facilities based on a 39 year life.
(d) Pro forma earnings per unit calculated as if the units
outstanding at March 31, 1998 plus the additional units
issued in connection with the Acquired Facilities had been
outstanding for the entire period presented.