SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------------------
FORM 11-K/A
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
- ----- OF 1934 (NO FEE REQUIRED) for the year ended December 31, 1998.
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
- ----- ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____________ to __________.
Commission file number: [ ]
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
STORAGE USA, INC. PROFIT SHARING 401 (K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
STORAGE USA, INC.
165 Madison Avenue, Suite 1300
Memphis, Tennessee 38103
Required Information
1. Audited Statements of Net Assets Available for Plan Benefits
- December 31, 1998 and 1997 (attached).
2. Audited Statements of Changes in Net Assets Available for Plan Benefits
- For the year ended December 31, 1998 (attached).
The purpose of this Form 11K/A is to amend the Form 11K filed July 15, 1999.
This 11-K/A is being filed to include restated financial statements.
STORAGE USA, INC.
401(k) PLAN
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
for the year ended
December 31, 1998
Storage USA, Inc. 401(k) Plan
Index to Financial Statements and Supplemental Schedules
- --------------------------------------------------------------------------------
Page(s)
Report of Independent Accountants 1-2
Financial Statements:
Statements of Net Assets Available for Plan
Benefits with Fund Information as of
December 31, 1998 and 1997 3
Statements of Changes in Net Assets Available
For Plan Benefits with Fund Information
For the Year Ended December 31, 1998 4
Notes to Financial Statements 5-8
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1998 9
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1998 10
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of
Storage USA, Inc. 401(k) Plan
We have audited the accompanying statements of net assets available for plan
benefits with fund information of Storage USA, Inc. 401(k) Plan (the Plan) as of
December 31, 1998 and 1997, and the related statement of changes in net assets
available for plan benefits with fund information for the year ended December
31, 1998. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
Except as discussed in the following paragraph, 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 financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts of disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As discussed in Note 5, the financial statements referred to above as of
December 31, 1998 and 1997 and for the year ended December 31, 1998 include a
receivable from Storage USA, Inc., the plan sponsor, the sufficiency of which
has not yet been determined. The potential insufficiency of this receivable
could result in an understatement of total assets and total contributions as of
December 31, 1998 and 1997 and for the year ended December 31, 1998 by such an
amount. In our report dated June 18, 1998, we expressed an opinion that the 1997
financial statements presented fairly net assets available for plan benefits
with fund information and changes in net assets available for plan benefits with
fund information in conformity with generally accepted accounting principles.
Because of the effects of the potential adjustments described above, our present
opinion on the statement of net assets available for plan benefits with fund
information as of December 31, 1997, as presented herein, is different from that
expressed in our previous report.
In our opinion, except for the effects of potential adjustments described above,
the financial statements referred to in the first paragraph above present
fairly, in all material respects, the net assets available for plan benefits
with fund information of the Plan as of Decembers 31, 1998 and 1997, and the
changes in net assets available for plan benefits with fund information for the
year ended December 31, 1998, in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules on pages 9 and
10, are presented for the purpose of additional analysis and are not a required
part of the basic financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The fund
information in the statement of net assets available for benefits and the
statement of changes in net assets available for plan benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. These supplemental schedules and fund information are the responsibility
of the Plan's management. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, except for the effects of potential
adjustments described in the third paragraph, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Memphis, Tennessee
September 13, 1999
2
Storage USA, Inc. 401(k) Plan
Statement of Net Assets Available for Plan Benefits with Fund Information
December 31, 1998 and 1997
- --------------------------------------------------------------------------------
1998 Equity Global U.S. Growth and
Income Growth Government Income Voyager
Fund Fund Fund Fund Fund
------------- ------------- ------------- ----------------- ---------------
Investments, at fair value $667,973 * $668,623 * $151,717 $ 977,617 * $1,104,708 *
------------- ------------- ------------- ----------------- ---------------
Contributions receivable:
Employee 13,055 17,347 2,473 26,037 35,982
Employer (Note 5) 1,890 2,321 479 3,496 4,624
------------- ------------- ------------- ----------------- ---------------
14,945 19,668 2,952 29,533 40,606
------------- ------------- ------------- ----------------- ---------------
Net assets available for plan
benefits $682,918 $688,291 $154,669 $ 1,007,150 $1,145,314
============= ============= ============= ================= ===============
Money Storage
Market USA
Fund Stock Total
---------------- ------------- ----------------
Investments, at fair value $ 566,366 * $407,945 * $ 4,544,949
---------------- ------------- ----------------
Contributions receivable:
Employee 7,997 13,271 116,162
Employer (Note 5) 662,395 1,781 676,986
---------------- ------------- ----------------
670,392 15,052 793,148
---------------- ------------- ----------------
Net assets available for plan
benefits $ 1,236,758 $422,997 $ 5,338,097
================ ============= ================
1997 Equity Global U.S. Growth and
Income Growth Government Income Voyager
Fund Fund Fund Fund Fund
------------- ------------- ------------- ------------- -------------
Investments, at fair value $453,067 * $443,962 * $119,922 $664,896 * $664,060 *
------------- ------------- ------------- ------------- -------------
Contributions receivable:
Employee 11,341 12,168 2,151 15,204 20,177
Employer (Note 5) 45,285 50,398 10,876 64,855 81,369
------------- ------------- ------------- ------------- -------------
56,626 62,566 13,027 80,059 101,546
------------- ------------- ------------- ------------- -------------
Net assets available for plan
benefits $509,693 $506,528 $132,949 $744,955 $765,606
============= ============= ============= ============= =============
1997 Money Storage
Market USA
Fund Stock Total
------------- ------------- ----------------
Investments, at fair value $351,530 * $110,582 $ 2,808,019
------------- ------------- ----------------
Contributions receivable:
Employee 4,475 6,152 71,668
Employer (Note 5) 150,570 32,228 435,581
------------- ------------- ----------------
155,045 38,380 507,249
------------- ------------- ----------------
Net assets available for plan
benefits $506,575 $148,962 $ 3,315,268
------------- ------------- ----------------
* Investments at current value that represent 5% or more of net assets available
for plan benefits at December 31, 1998 and 1997.
The accompanying notes are an integral part of the financial statements.
3
Storage USA, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information
For the year ended December 31, 1998
- --------------------------------------------------------------------------------
Equity Global U.S. Growth and Money
Income Growth Government Income Voyager Market
Fund Fund Fund Fund Fund Fund
------------ ------------ ------------ ------------- ------------ -------------
Additions to net assets attributed to:
Employee contributions $ 138,041 $ 152,906 $ 28,406 $ 236,915 $ 301,840 $ 81,810
Employer contributions (Note 5) 15,228 20,187 4,196 27,899 35,962 690,208
Interest and dividends 67,604 18,794 8,300 82,311 75,286 24,303
Net realized and unrealized appreciation
(depreciation) in fair value of
investments (2,119) 119,303 337 31,590 114,362 -
------------ ------------ ------------ ------------- ------------ -------------
Total additions 218,754 311,190 41,239 378,715 527,450 796,321
Deductions from net assets attributable to:
Benefits paid to participants 47,030 26,499 13,736 50,650 70,440 25,529
Other 7,798 6,412 1,498 8,250 14,155 53,444
------------ ------------ ------------ ------------- ------------ -------------
Total deductions 54,828 32,911 15,234 58,900 84,595 78,973
Net increase prior to interfund transfers 163,926 278,279 26,005 319,815 442,855 717,348
Interfund transfers 9,299 (96,516) (4,285) (57,620) (63,147) 12,835
------------ ------------ ------------ ------------- ------------ -------------
Net increase 173,225 181,763 21,720 262,195 379,708 730,183
Net assets available for plan benefits:
Beginning of year 509,693 506,528 132,949 744,955 765,606 506,575
------------ ------------ ------------ ------------- ------------ -------------
End of year $ 682,918 $ 688,291 $ 154,669 $ 1,007,150 $ 1,145,314 $ 1,236,758
============ ============ ============ ============= ============ =============
Storage
USA
Stock Total
----------- -------------
Additions to net assets attributed to:
Employee contributions $ 96,446 $ 1,036,364
Employer contributions (Note 5) 14,286 807,966
Interest and dividends 12,642 289,240
Net realized and unrealized appreciation
(depreciation) in fair value of
investments (35,148) 228,325
----------- -------------
Total additions 88,226 2,361,895
Deductions from net assets attributable to:
Benefits paid to participants 9,681 243,565
Other 3,944 95,501
----------- -------------
Total deductions 13,625 339,066
Net increase prior to interfund transfers 74,601 2,022,829
Interfund transfers 199,434 -
----------- -------------
Net increase 274,035 2,022,829
Net assets available for plan benefits:
Beginning of year 148,962 3,315,268
----------- -------------
End of year $ 422,997 $ 5,338,097
=========== =============
The accompanying notes are an integral part of the financial statements.
4
Storage USA, Inc. 401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 1 - Description of Plan
The following description of the Storage USA, Inc. 401(k) Plan (the "Plan")
provides only general information. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
General
- -------
The Plan commenced its operations effective January 1, 1994. The Plan is a
defined contribution plan covering all eligible full time employees of Storage
USA, Inc. (the "Company") who have completed six months of service. The Plan
allows participants to make contributions to the following Putnam Investment's
mutual fund options: Equity income, Global growth, U.S. Government, Growth and
Income, Voyager, Money Market; and, in addition, Company Stock. The participant
may direct employee contributions in 5 percent increments in any or all of the
available options and may change their investment options at any time. The Plan
is subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Contributions
- -------------
Employee contributions are voluntary and are allowed up to a maximum of 15% of
their compensation. Each year the Company is obligated to make a matching
contribution on the employee's behalf equal to 50% of the participant's
contribution to the Plan, up to 2% of the participant's compensation.
Additionally, the employer can elect to make a discretionary contribution on an
annual basis. In the previous plan years, the discretionary contribution has
generally been 3% of the participant's annual compensation. As a result of the
Voluntary Compliance Resolution Application filed with the Internal Revenue
Service discussed in Note 5, a discretionary contribution amount, if any, has
not yet been determined for 1998.
Vesting
- -------
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company's matching and discretionary contributions plus
actual earnings thereon is based on years of continuous service. An eligible
employee is 100 percent vested after 6 years of service. Prior to 6 years of
service, vesting occurs at 20 percent per year, beginning in the second year of
service.
Participant's Accounts
- ----------------------
Earnings are allocated to the account of each participant in the ratio of each
participant's account balance to the total of all participant account balances
for such year.
5
Storage USA, Inc. 401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
Payment of Benefits
- -------------------
Participants shall receive, at retirement age, the amount equal to the vested
value of their account in a lump-sum or in equal annual installments. In the
event of financial hardship, earlier withdrawals may be granted. Benefits are
recorded when paid.
Forfeited Accounts
- ------------------
At December 31, 1998 and 1997, forfeited nonvested accounts totaled
approximately $62,169 and $66,119, respectively, and were invested in the Money
Market Fund. Forfeited nonvested accounts are used to reduce future employer
contributions.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
- -------------------
The financial statements of the Plan are prepared under the accrual method of
accounting.
Use of Estimates in Preparing Financial Statements
In preparing the financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and assumptions
that affect the reported amount of assets and liabilities as of the date of the
balance sheet and revenues and expenses for the period. Actual results could
differ significantly from those estimates.
Investment Valuation
- --------------------
The Plan's investments are held by a third party custodian. Mutual funds
investments are valued at the net asset value reported for the last day of the
year. The Company stock is valued at its quoted market price.
Net Appreciation (Depreciation) of Investments
- ----------------------------------------------
The Plan presents in the statement of changes in net assets available for plan
benefits with fund information the net appreciation (depreciation) in the fair
value of its investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Interest and Dividend Income
- ----------------------------
Purchases and sales of investments are recorded on a trade-date basis. Dividend
income is recorded on the ex-dividend date. Interest income is recorded as
earned on an accrual basis.
6
Storage USA, Inc. 401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
Other Deductions from Net Assets
- --------------------------------
These amounts represent forfeitures of participants' nonvested account balances.
Administrative Expenses
- -----------------------
During 1998, administrative expenses of approximately $16,123, were paid by the
Company.
NOTE 3 - RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Putnam
Investments. Putnam Fiduciary Trust Company is the trustee as defined by the
Plan and, therefore, these transactions qualify as party-in-interest.
NOTE 4 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants will become 100 percent vested in their accounts.
NOTE 5 - TAX STATUS
The Plan qualifies under Sections 401(a) and 501(a) of the Internal Revenue Code
and is, therefore, not subject to tax under present income tax regulations. The
Company has submitted to the Internal Revenue Service a Voluntary Compliance
Resolution application with respect to certain failures in the Plan's operation
for Plan years 1994 through 1998 which may jeopardize the tax qualified status
of the Plan. The Company expects to correct such failures by making a
contribution to the Plan and also expects to receive a compliance statement from
the Internal Revenue Service, thereby relieving the Plan of any risk in losing
its tax qualified status as a result of such operational failure. Accordingly,
the Company has elected to contribute $661,000 to the Plan, although the amount
necessary to correct the failures and the Plan years to which it relates, has
not been determined as of the date of this report. The $661,000 has been
included in the Money Market Fund. In the event that this contribution exceeds
the amount necessary to correct the failures, the excess amount will be
considered a discretionary contribution to the Plan. If the contribution
necessary to correct the failures exceeds $661,000, the Company will make an
additional contribution to the Plan sufficient to correct the failures upon
completion of the Voluntary Compliance Resolution. The Company does not expect
the outcome to result in any penalties or fines being assessed against the Plan
or the Company. Other than the matters being addressed in the Voluntary
Compliance Resolution application, the Company is not aware of any course of
action or series of events that have occurred that might adversely affect the
Plan's qualified status.
7
Storage USA, Inc. 401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 6 - CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Plan to concentration of
credit risk are the Putnam Investments mutual funds. The plan has no formal
policy requiring collateral to support the financial instruments subject to
credit risk.
NOTE 7 - OBLIGATIONS FOR TERMINATED PARTICIPANTS
Net assets available for Plan benefits as of December 31, 1998 and 1997 included
$143,452 and $106,752, respectively, due to terminated participants.
NOTE 8 - PLAN AMENDMENT
The Plan was amended on September 15, 1998 to allow the Company to make
qualified non-elective contributions to the Plan. The amendment allows the
Company to make contributions necessary to meet certain IRS regulations and
maintain the tax exempt status of the Plan.
NOTE 9 - VARIANCES BETWEEN THE FINANCIAL STATEMENTS AND FORM 5500:
Form 5500, "Annual Return Report of Employee Benefit Plan" was completed for the
years ended December 31, 1998 and 1997 on a modified cash basis based upon
information from the Plan's trustee. The 1998 and 1997 Forms 5500 varied from
these financial statements due to the accrual for the employer contribution
receivable of $676,986 and $435,581 at December 31, 1998 and 1997, respectively,
and for the employee contribution receivable of $116,162 and $71,668 at December
31, 1998 and 1997, respectively.
8
Storage USA, Inc. 401(k) Plan
Line 27a - Schedule of Assets Held for Investment Purposes
Employer ID Number: 62-1251239
Plan Number: 001
December 31, 1998
- --------------------------------------------------------------------------------
Identity of Description Number of Current
Issuer of Investments Shares/Units Cost Value
------ -------------- ------------ ---- -----
*Putnam Mutual Fund Equity Income Fund 42,902 $ 589,105 $ 667,973
*Putnam Mutual Fund Global Growth Fund 54,324 587,809 668,623
*Putnam Mutual Fund U.S. Government Fund 11,580 148,407 151,717
*Putnam Mutual Fund Growth and Income Fund 47,911 900,288 977,617
*Putnam Mutual Fund Voyager Fund 51,271 924,572 1,104,708
*Putnam Mutual Fund Money Market Fund 566,366 566,366 566,366
*Storage USA, Inc. Common Stock 12,625 438,670 407,945
------- -------
$ 4,155,217 $ 4,544,949
=========== ===========
* Parties-in-interest
9
Storage USA, Inc. 401(k) Plan
Line 27d - Schedule of Reportable Transactions
Employer ID Number: 62-1251239
Plan Number: 001
For the year ended December 31, 1998
- --------------------------------------------------------------------------------
Identity of Description of Number of Purchase Selling
Party Involved Investment Transactions Price Price
-------------- ---------- ------------ ----- -----
I. Single transaction in excess of 5% of the Plan's
assets as of January 1, 1998
Storage USA, Inc.* Company Stock 1 $ 183,446
II. Series of transactions with respect to any
plan assets other than securities in excess of
5% of the Plan's assets as of January 1, 1998 None
III. Series of transactions with respect to
securities of the same issue in excess of 5%
of the Plan's assets as of January 1, 1998:
Putnam Mutual Fund* Equity Income Fund 72 $ 280,951
Putnam Mutual Fund* Global Growth Fund 68 247,411
Putnam Mutual Fund* Growth Income Fund 76 407,410
Putnam Mutual Fund* Voyager Fund 77 500,587
Putnam Mutual Fund* Voyager Fund 152 174,302
Putnam Mutual Fund* Money Market Fund 160 378,255
Storage USA, Inc.* Company Stock 38 356,261
IV. Any transaction with respect to securities
with a person if any prior or subsequent
transactions with such person exceeded 5%
of the Plan's assets of January 1, 1998 None
Current
Value of
Asset on
Identity of Cost of Transaction Net
Party Involved Asset Date Gain
-------------- ----- ---- ----
I. Single transaction in excess of 5% of the Plan's
assets as of January 1, 1998
Storage USA, Inc.* $ 183,446 $ 183,446
II. Series of transactions with respect to any
plan assets other than securities in excess of
5% of the Plan's assets as of January 1, 1998
III. Series of transactions with respect to
securities of the same issue in excess of 5%
of the Plan's assets as of January 1, 1998:
Putnam Mutual Fund* $ 280,951 $ 280,951
Putnam Mutual Fund* 247,411 247,411
Putnam Mutual Fund* 407,410 407,410
Putnam Mutual Fund* 500,587 500,587
Putnam Mutual Fund* 148,534 174,302 25,768
Putnam Mutual Fund* 378,255 378,255
Storage USA, Inc.* 356,261 356,261
IV. Any transaction with respect to securities
with a person if any prior or subsequent
transactions with such person exceeded 5%
of the Plan's assets of January 1, 1998
* Represents transactions with Party-In-Interest.
10
SIGNATURE
The Plan. Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Plan Administrator has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
STORAGE USA, INC. PROFIT SHARING 401(K) PLAN
By: STORAGE USA, INC.
By: Christopher P. Marr
By: /s/ Christopher P. Marr
--------------------------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Storage USA, Inc. on Form S-8 (File No. 33-80967) of our report dated September
13, 1999, on our audits of the financial statements and supplemental schedules
of Storage USA, Inc. 401(k) Plan as of December 31, 1998 and 1997, and for the
year ended December 31, 1998, which report is included in this Annual Report on
Form 11-K/A.
PRICEWATERHOUSECOOPERS LLP
Memphis, Tennessee
September 17, 1999