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):
September 24, 1998 (August 3, 1998)
Sovran Acquisition Limited Partnership
(Exact name of Registrant as specified in its charter)
Delaware 16-1481551
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5166 Main St.,
Williamsville, NY 14221
(Address of principal executive offices) (Zip code)
716-633-1850
(Registrant's telephone number including area code)
Not applicable
(Former name and former address, if changed since last report)
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 August
3, 1998, through September 24, 1998, the acquisition of 4 self-storage
facilities (the "Acquired Facilities"). The 4 facilities totaling approximately
214,000 square feet are located in 2 states and were purchased for approximately
$9 million.
The details of the 4 Acquired Properties are incorporated by reference from Item
2 of the Company's Form 8-K Current Report filed on September 25, 1998.
Item 5. Other Events
The update of the Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses of 4 properties reported in a previous 8-K are incorporated
by reference from Item 5 of the Company's Form 8-K Current Report filed on
September 25, 1998.
Item 7. Financial Statements and Exhibits
Page
Financial Statements Applicable to Real Estate Properties Acquired
The historical financial statements of the 4 facilities acquired by
Sovran Acquisition Limited Partnership during the period August 3,
1998, through September 24, 1998, are incorporated by reference herein
from Item 7 of Form 8-K Current Report of Sovran Self Storage, Inc.
(the "Company") filed on September 25, 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 June 30, 1998 5
* Sovran Acquisition Limited Partnership Pro Forma Combined
Statement of Operation For the six months ended June 30, 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
None
Sovran Acquisition Limited Partnership
Pro Forma Combined Financial Information
The following unaudited Pro Forma Combined Balance Sheet as of June 30, 1998 and
unaudited Pro Forma Combined Statement of Operations for the six months ended
June 30, 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 six months ended
June 30, 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 Reports dated July 6, 1998, June, 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 1010, and should
be read in conjunction with those financial statements and notes thereto. The
Pro Forma Combined Balance Sheet was prepared as if the 8 facilities that were
purchased after June 30, 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 44 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
June 30, 1998
(in thousands)
(unaudited)
Pro Forma Adjustments
Sovran
Acquisition Previously Sovran
Limited Reported Acquired Acquisition
Partnership 4 4 Limited
Historical Facilities Facilities Partnership
(Note 1) (Note 2) (Note 3) Pro Forma
-------- -------- -------- ---------
Assets
Investment in storage facilities,
net $436,218 $ 22,700 $ 9,051 $467,969
Cash and cash equivalents ....... 2,695 - - 2,695
Accounts receivable ............. 1,335 - 13 1,348
Prepaid expenses and other assets 3,030 - - 3,030
----- -----
Total assets ................ $443,278 $ 22,700 $ 9,064 $475,042
======== ======== ======== ========
Liabilities
Line of credit .................. $148,000 $ 11,300 $ 8,968 $168,268
Accounts payable and
accrued liabilities 4,591 - 37 4,628
Deferred revenue ................ 2,934 - 59 2,993
Accrued distributions ........... 6,882 - - 6,882
Mortgage payable ................ 3,059 - - 3,059
----- -----
Total liabilities ........... 165,466 11,300 9,064 185,830
Limited partners' capital interest . 12,814 11,400 - 24,214
Partners' Capital
General partner ................. 5,244 - - 5,244
Limited partner ................. 259,754 - - 259,754
------- -------
Total partners' capital ..... 264,998 - - 264,998
------- -------
Total liabilities and
partners' capital $443,278 $ 22,700 $ 9,064 $475,042
======== ======== ======== ========
See notes to pro forma combined financial information
Sovran Acquisition Limited Partnership
Pro Forma Combined Statement of Operations
For the Six Months ended June 30, 1998
(in thousands, except per unit data) (unaudited)
36 4 4
Sovran Acquisitions Acquisitions Acquired
Acquisition Prior to Subsequent to Facilities Sovran
Limited June 30, 199 June 30, 1998 Incorporated Acquisition
Partnership Preacquisition Previously by Pro Forma Limited
Historical Pro forma Reported reference Adjustments Partnership
(Note 1) (Note 4) (Note 4) (Note 4) (Note 6) Pro Forma
-------- -------- -------- -------- -------- ---------
Revenues:
Rental income ..................... $ 30,347 $ 3,664 $ 1,668 $ 629 $ - $ 36,308
Interest and other income ......... 470 65 8 40 - 583
--- -- - -- ---
Total revenue ................. 30,817 3,729 1,676 669 - 36,891
Expenses:
Property operations and maintenance 5,983 853 356 165 - 7,357
Real estate taxes ................. 2,498 302 95 36 - 2,931
General and administrative ........ 1,947 48 - - 10(a) 2,005
Interest .......................... 3,368 1,868 - - 699(b) 5,935
Depreciation and amortization ..... 4,547 392 - - 367(c) 5,306
----- --- --- -----
Total expenses ................ 18,343 3,463 451 201 1,076 23,534
------ ----- --- --- ----- ------
Income before extraordinary item ....... 12,474 266 1,225 468 (1,076) 13,357
Extraordinary item - loss on
extinguishment of debt ......... (350) - - - - (350)
---- ----
Net income ............................. $ 12,124 $ 266 $ 1,225 $ 468 $ (1,076) $ 13,007
======== ======== ======== ======== ============ ========
Earnings per unit before
extraordinary item - basic $ 0.98 $ 1.02(d)
Extraordinary item (0.03) (0.03)
----- -----
Earnings per unit - basic $ 0.95 $ 0.99
======== ========
Earnings per unit - diluted $ 0.95 $ 0.99
======== ========
Dividends declared per unit $ 1.08 $ 1.08
======== ========
Units used in basic per unit
calculation 12,754,524 13,161,250
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 44 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 $ 18,001 $ - $ 71,265
Interest and other income ......... 770 51 334 - 1,155
--- -- --- -----
Total revenue ................. 49,354 4,731 18,335 - 72,420
Expenses:
Property operations and maintenance 9,708 1,020 4,001 - 14,729
Real estate taxes ................. 3,955 397 1,445 - 5,797
General and administrative ........ 2,757 43 - 188(a) 2,988
Interest .......................... 2,166 1,001 - 8,291(b) 11,458
Depreciation and amortization ..... 7,005 737 - 2,892(c) 10,634
----- --- ----- ------
Total expenses ................ 25,591 3,198 5,446 11,371 45,606
------ ----- ----- ------ ------
Net income ............................. $ 23,763 $ 1,533 $ 12,889 $ (11,371) $ 26,814
=========== =========== =========== ============= ==============
Earnings per unit - basic $ 1.97 $ 2.04 (d)
=========== ===========
Earnings per unit - diluted $ 1.96 $ 2.03
=========== ===========
Dividends declared per unit $ 2.12 $ 2.12
=========== ===========
Units used in basic per unit calculation 12,090,141 13,161,250
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 six months ended
June 30, 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 4 Facilities
These adjustments reflect the 4 acquisitions that occurred subsequent to June
30, 1998, that were reported in the Company's 8-K Report filed July 6, 1998, and
were not included in the Sovran Acquisition Limited Partnership Historical June
30, 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. The partnership units issued in connection with certain of these
facilities are recorded as limited partners' capital interest.
3. Balance Sheet - Pro Forma Adjustments -4 facilities
This adjustment reflects the acquisition of the 4 facilities detailed in Item 2
of this 8-K that have been purchased subsequent to June 30, 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.
4. Statement of Operations June 30, 1998
36 Acquisitions Prior to June 30, 1998
The statements of operations for the 36 acquisitions prior to June 30, 1998
reflect the results of operations for these facilities for the period not owned
by the Operating Partnership during the six months ended June 30, 1998.
4 Acquisitions Subsequent to June 30, 1998 Reported in Previous 8-K
The statements of operations for the 4 acquisitions subsequent to June 30, 1998
reflect the results of operations for these facilities for the period June 30,
1998 which are detailed in Item 5 of this 8-K.
4 Acquired Facilities
The statements of operations for the 4 Acquired Facilities reflect the results
of operations for these facilities for the six months ended June 30, 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 44 Acquired Facilities
The statements of operations for the 44 Acquired Facilities reflect the results
of operations for these facilities for the six months ended June 30, 1998, which
are reported in the Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses included incorporated by reference herein (4 facilities) and
in the Company's 8-Ks filed July 6, 1998, 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
June 30, 1998 plus the additional units issued in connection with the Acquired
Facilities had been outstanding for the entire period presented.
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.
Sovran Acquisition Limited Partnership
September 25, 1998 By: /S/
----------------------------
Date David L. Rogers
Chief Financial Officer of
Sovran Holdings, Inc. General Partner