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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

Commission File Number: 0-24071

Sovran Acquisition Limited Partnership
(Exact name of Registrant as specified in its charter)

                Delaware                
(State or other jurisdiction of
incorporation or organization)

         16-1481551          
(I.R.S. Employer
Identification No.)

 

               6467 Main Street
               Buffalo, NY 14221
(Address of principal executive offices)
                     (Zip code)

                 (716) 633-1850

 


(Registrant's telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Securities
Not Applicable

Exchanges on which Registered
Not Applicable


   Securities registered pursuant to section 12(g) of the Act:

Units of Limited Partnership Interest
(Title of Class)

 

 

 

 

 

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          Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  [ X ]     No  [   ]

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ]

          Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No ____

          As of March 1, 2004, 15,218,309 Units of Limited Partnership Interest were outstanding.

Exhibit Index is on Pages 70-72

 

DOCUMENTS INCORPORATED BY REFERENCE

          Portions of the Proxy Statement for Annual Meeting of Shareholders of the Company to be held on May 13, 2004 (Part III).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Part I

          When used in this discussion and elsewhere in this document, the words "intends," "believes," "expects," "anticipates," and similar expressions are intended to identify "forward-looking statements" within the meaning of that term in Section 27A of the Securities Exchange Act of 1933 and in Section 21F of the Securities Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Operating Partnership to be materially different from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the effect of competition from new self-storage facilities, which would cause rents and occupancy rates to decline; the Operating Partnership's ability to evaluate, finance and integrate acquired businesses into the Operating Partnership's existing business and operations; the Opera ting Partnership's ability to form joint ventures and sell existing properties to those joint ventures and others; the Operating Partnership's ability to effectively compete in the industry in which it does business; the Operating Partnership's existing indebtedness may mature in an unfavorable credit environment, preventing refinancing or forcing refinancing of the indebtedness on terms that are not as favorable as the existing terms; interest rates may fluctuate, impacting costs associated with the Operating Partnership's outstanding floating rate debt; the Operating Partnership's ability to successfully extend its truck leasing program and Dri-Guard product roll-out; the Operating Partnership's reliance on its call center; the Operating Partnership's cash flow may be insufficient to meet required payments of principal and interest; and tax law changes that may change the taxability of future income.

ITEM 1.

BUSINESS

General

          Sovran Acquisition Limited Partnership (the "Operating Partnership") is the entity through which Sovran Self Storage, Inc. (the "Company"), a self-administered and self-managed real estate investment trust ("REIT"), conducts substantially all of the Company's business and owns substantially all of the Company's assets. The Operating Partnership is one of the largest owners and operators of self-storage properties in the Eastern United States and Texas. In 1995, the Company was formed under Maryland law and the Operating Partnership was organized as a Delaware limited partnership to continue and to expand the self-storage operations of the Company's privately owned predecessor organizations. The term "Company" as used herein means Sovran Self Storage, Inc. and its subsidiaries on a consolidated basis (including the Operating Partnership) or, where the context so requires, Sovran Self Storage, Inc. only. The term "Operating Partnership" as used herein means Sovran Acquisition Limited Partnership.

          At December 31, 2003, the Company is a 96.35% economic owner of the Operating Partnership and controls it through Sovran Holdings, Inc. ("Holdings"), a wholly owned subsidiary of the Company incorporated in Delaware and the sole general partner of the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT or "UPREIT." The Board of Directors of Holdings, the members of which are the same as the members of the Board of Directors of the Company, manages the affairs of the Operating Partnership by directing the affairs of Holdings. The Company's limited partner and indirect

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general partner interests in the Operating Partnership entitle it to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to its ownership interest therein and entitle the Company to vote on all matters requiring a vote of the limited partners.

          The Operating Partnership's other limited partners are persons who contributed their direct or indirect interests in certain self-storage properties to the Operating Partnership. The Operating Partnership is obligated to redeem each unit of limited partnership ("Unit") at the request of the holder thereof for cash equal to the fair market value of a share of the Company's common stock, par value $.01 per share ("Common Shares"), at the time of such redemption, provided that the Company at its option may elect to acquire any such Unit presented for redemption for one Common Share or cash. With each such redemption or acquisition by the Company, the Company's percentage ownership interest in the Operating Partnership will increase. In addition, whenever the Company issues Common Shares, the Company is obligated to contribute any net proceeds therefrom to the Operating Partnership and the Operating Partnership is obligated to issue an equivalent number of Units to the Company.

          The Operating Partnership may issue additional Units to acquire additional self-storage properties in transactions that in certain circumstances defer some or all of the sellers' tax consequences. The Operating Partnership believes that many potential sellers of self-storage properties have a low tax basis in their properties and would be more willing to sell the properties in transactions that defer Federal income taxes. Offering Units instead of cash for properties may provide potential sellers partial Federal income tax deferral.

          At March 1, 2004, the Operating Partnership owned and/or managed 265 Properties consisting of approximately 15.5 million net rentable square feet, situated in 21 states. Eleven of the Properties are managed under an agreement with an unconsolidated joint venture that is 45% owned by the Operating Partnership. The Operating Partnership is the 5th largest operator of self-storage properties in the United States based on facilities owned and/or managed. The Properties conduct business under the user-friendly trade name "Uncle Bob's Self-Storage."

          The Operating Partnership seeks to enhance shareholder value through internal growth and acquisition of additional storage properties. Internal growth is achieved through aggressive property management: increasing rents, increasing occupancy levels, controlling costs, maximizing collections and strategically expanding and improving the Properties. Should economic conditions warrant, the Operating Partnership may develop new properties. The Operating Partnership believes that there continues to be opportunities for growth through acquisitions, and constantly seeks to acquire self-storage properties that are susceptible to realization of increased economies of scale and enhanced performance through application of its expertise.

The Operating Partnership's principal executive offices are located at 6467 Main Street, Buffalo, New York 14221, our telephone number is (716) 633-1850 and the Operating Partnership's web site is www.sovranss.com.

 

 

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Industry Overview

          We believe that self-storage facilities offer inexpensive storage space to residential and commercial users. In addition to fully enclosed and secure storage space, many facilities also offer outside storage for automobiles, recreational vehicles and boats. Better facilities are usually fenced and well lighted with gates that are either manually operated or automated and have a full-time manager/leasing agent. Customers have access to their storage area during business hours and in certain circumstances are provided with 24-hour access. Individual storage units are secured by the customer's lock, and the customer has sole control of access to the unit.

          According to published data, of the approximately 37,000 facilities in the United States, less than 13% are managed by the ten largest operators. The remainder of the industry is characterized by numerous small, local operators. The shortage of skilled operators, the scarcity of equity capital available to small operators for acquisitions and expansions, and the potential for savings through economies of scale are factors that are leading to a consolidation in the industry. We believe that, as a result of this trend, significant growth opportunities exist for operators with proven management systems and sufficient capital resources.

Property Management

         We believe that we have developed substantial expertise in managing self-storage facilities. Key elements of our management system include the following:

Personnel:

          Property managers attend a thorough orientation program and undergo continuous training that emphasizes closing techniques, identification of selected marketing opportunities, networking with possible referral sources, and familiarization with our customized management information system. In addition to frequent contact with Regional Team Leaders and other Company personnel, property managers receive periodic newsletters regarding a variety of operational issues, and from time to time attend "roundtable" seminars with other property managers.

Marketing and Sales:

          Responding to the increased customer demand for services, we have initiated several programs expected to increase occupancy and profitability. These programs include:

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A Customer Care Center (call center) that services new and existing customers' inquiries and facilitates the capture of sales leads that were previously lost;

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Internet marketing, providing information about all of our stores via numerous portals and e-mail;

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Dri-guard, providing humidity-controlled spaces. We became the first self-storage operator to utilize this humidity protection technology. These environmental control systems are a premium storage feature intended to protect metal, electronics, furniture, fabrics and paper from moisture;

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Uncle Bob's Trucks, provide customers with convenient, affordable access to vehicles to help move their goods, while serving as moving billboards to help advertise our storage facilities; and

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Flex-a-Space, an innovative construction design that allows us to easily reconfigure walls by using a track and roller mechanism, enabling customized storage space to fit the individual needs of the customer.

Ancillary Income:

          Our stores are essentially retail operations and we have in excess of 100,000 customers. As a convenience to those customers, we sell items, such as locks, boxes, tarps, etc. to make their storage experience easier. We also offer renters insurance through a third party carrier, on which we earn a commission. Income from truck rentals, billboards and cell towers is also earned by us.

Information Systems:

          Our customized computer system performs billing, collections and reservation functions for each Property, and also tracks information used in developing marketing plans based on occupancy levels, and tenant demographics and histories. The system generates daily, weekly and monthly financial reports for each Property that are transmitted to our principal office each night. The system also requires a property manager to input a descriptive explanation for all debit and credit transactions, paid-to-date changes, and all other discretionary activities, which allows the accounting staff at our principal office to promptly review all such transactions. Late charges are automatically imposed. More sensitive activities, such as rental rate changes and unit size or number changes, are completed only by Regional Team Leaders. Our customized management information system permits us to add new facilities to our portfolio with minimal additional over head expense.

Property maintenance:

          All of our properties are subject to regular and routine maintenance procedures, designed to maintain the structure and appearance of our buildings and grounds. A staff headquartered in our principal office is responsible for the upkeep of the properties, and all maintenance service is contracted through local providers, such as lawn service, snowplowing, pest control, gate maintenance, HVAC repairs, paving, painting, roofing, etc. A codified set of specifications has been designed and is applied to all work performed on our Uncle Bob's stores. As with many other aspects of our Company, our size has allowed us to enjoy relatively low maintenance costs because we have the benefit of economies of scale in purchasing, travel and overhead absorption.

Environmental and Other Regulations

          We are subject to federal, state, and local environmental regulations that apply generally to the ownership of real property and the operation of self-storage facilities. We have not received notice from any governmental authority or private party of any material environmental noncompliance, claim, or liability in connection with any of the Properties, and are not aware of any environmental condition with respect to any of the Properties that could have a material adverse effect on our financial condition or results of operations.

 

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          The Properties are also generally subject to the same types of local regulations governing other real property, including zoning ordinances. We believe that the Properties are in substantial compliance with all such regulations.

Insurance

          Each of the Properties is covered by fire, property insurance, including comprehensive liability, and all-risk property insurance policies, which are provided by reputable companies and on commercially reasonable terms. In addition, we maintain a policy insuring against environmental liabilities resulting from tenant storage on terms customary for the industry, and title insurance insuring free title to the Company-owned Properties in an aggregate amount believed to be adequate.

Income Taxes

          The Operating Partnership does not pay federal income taxes because we qualify as a partnership for federal and state income tax purposes and our partners are required to include their respective shares of profits and losses in their income tax returns.

Competition

          The primary factors upon which competition in the self-storage industry is based are location, rental rates, suitability of the property's design to prospective customers' needs, and the manner in which the property is operated and marketed. We believe we compete successfully on these bases. The extent of competition depends in significant part on local market conditions. We seek to locate facilities so as not to cause our Properties to compete with one another for customers, but the number of self-storage facilities in a particular area could have a material adverse effect on the performance of any of the Properties.

          Several of our competitors, including Public Storage Management, Inc., Shurgard Incorporated, U-Haul International, and Storage USA, Inc., are larger and have substantially greater financial resources than we do. These larger operators may, among other possible advantages, be capable of greater leverage and the payment of higher prices for acquisitions.

Investment Policy

          While we emphasize equity real estate investments, we may, at our discretion, invest in mortgage and other real estate interests related to self-storage properties in a manner consistent with the Company's qualification as a REIT. We may also retain a purchase money mortgage for a portion of the sale price in connection with the disposition of Properties from time to time. Should investment opportunities become available, we may look to acquire self-storage properties via a joint-venture partnership or similar entity. We may or may not have a significant investment in such a venture, but would use such an opportunity to expand our portfolio of branded and managed properties.

 

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          Subject to the percentage of ownership limitations and gross income tests necessary for the Company's REIT qualification, we also may invest in securities of entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over such entities.

Disposition Policy

          We periodically review the assets comprising our portfolio. Any disposition decision will be based on a variety of factors, including, but not limited to, the (i) potential to continue to increase cash flow and value, (ii) sale price, (iii) strategic fit with the rest of our portfolio, (iv) potential for, or existence of, environmental or regulatory issues, (v) alternative uses of capital, and (vi) the Company maintaining qualification as a REIT.

          As part of an asset management program, we have begun to "spin-off" non-core, slow-growth properties, into joint ventures. In cases where we have a less than 50% controlling interest in a joint venture, the Properties of that joint venture are removed from our balance sheet and an investment in the joint venture is recorded. We record only our percentage share of the operating results of unconsolidated joint ventures. These ventures may allow us to (i) increase incremental revenues through management fees, (ii) provide strong returns on our equity in the joint venture, and (iii) increase liquidity to allow redeployment of equity to repay debt, acquire stock, or buy higher growth properties. In 2000, we sold seven facilities for approximately $20 million to an unconsolidated joint venture in which we retained a 45% interest. All eleven properties in the unconsolidated joint venture are managed by us under an agreement. In cases where we are deemed to have a greater than 50% controlling interest, the joint venture is consolidated with our financial statements and a minority interest is recorded on the balance sheet and statement of operations for the portion of the joint venture not owned by us. On February 20, 2004, we sold our facility in Allentown, PA to an independent operator.

Distribution Policy

          We intend to pay regular quarterly distributions to our unitholders. However, future distributions by us will be at the discretion of the Board of Directors and will depend on the actual cash available for distribution, our financial condition and capital requirements, the Company's annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Directors deems relevant. In order to maintain its qualification as a REIT, the Company must make annual distributions to shareholders of at least 90% of its REIT taxable income (which does not include capital gains). Under certain circumstances, the Company may be required to make distributions in excess of cash available for distribution in order to meet this requirement.

Borrowing Policy

          Our Board of Directors currently limit the amount of debt that may be incurred by us to less than 50% of the sum of market value of the issued and outstanding Common and Preferred Stock plus the Company's debt (Market Capitalization). We, however, may from time to time re-evaluate and modify our borrowing policy in light of then current economic conditions, relative

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costs of debt and equity capital, market values of properties, growth and acquisition opportunities and other factors.

          On September 4, 2003, we entered into agreements relating to new unsecured credit arrangements, and received funds under those arrangements. The new agreements provide for a $75 million (expandable to $100 million) revolving line of credit maturing September 2006 bearing interest at a variable rate equal to LIBOR plus 1.375%, a $100 million term note maturing September 2008 bearing interest at a variable rate equal to LIBOR plus 1.50%, a $80 million term note maturing September 2013 bearing interest at a fixed rate of 6.26% and a $20 million term note maturing September 2013 bearing interest at a variable rate equal to LIBOR plus 1.5%.

          To the extent that we desire to obtain additional capital to pay distributions, to provide working capital, to pay existing indebtedness or to finance acquisitions, expansions or development of new properties, we may utilize amounts available under the revolving line of credit, preferred stock offerings, floating or fixed rate debt financing, retention of cash flow (subject to satisfying the Company's distribution requirements under the REIT rules) or a combination of these methods. Additional debt financing may also be obtained through mortgages on our Properties, which may be recourse, non-recourse, or cross-collateralized and may contain cross-default provisions. We have not established any limit on the number or amount of mortgages that may be placed on any single Property or on our portfolio as a whole. For additional information regarding borrowings, see Item 7, "Management's Discussion and Analysis of Financial Condition and Result s of Operations - Liquidity and Capital Resources" and Note 5 to the Consolidated Financial Statements filed herewith.

Employees

          We currently employ a total of 824 employees, including 265 Property Managers, 17 Regional Team Leaders, and 449 assistant managers and part-time employees. At our headquarters, in addition to the 3 executive officers, we employ 90 people engaged in various support activities, including accounting, customer care, and management information systems. None of our employees are covered by a collective bargaining agreement. We consider our employee relations to be excellent.

Available Information

          The Company files with the U.S. Securities and Exchange Commission quarterly and annual reports on Forms 10-Q and 10-K, respectively, current reports on Form 8-K, and proxy statements pursuant to the Securities Exchange Act of 1934, in addition to other information as required. The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1 (800) SEC-0330. We file this information with the SEC electronically, and the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. In addition, our code of ethics is available free of charge at our website http://www.sovranss.com.

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Item 2.

Properties

          At December 31, 2003, we owned and/or managed a total of 266 Properties situated in twenty-one states in the Eastern and Midwestern United States, Arizona and Texas. Eleven of the Properties are managed under an agreement with an unconsolidated joint venture that is 45% owned by us.

          Our self-storage facilities offer inexpensive, easily accessible, enclosed storage space to residential and commercial users on a month-to-month basis. Most of our Properties are fenced with computerized gates and are well lighted. All but thirty-six of the Properties are single-story, thereby providing customers with the convenience of direct vehicle access to their storage units. All Properties have a Property Manager on-site during business hours. Customers have access to their storage areas during business hours, and some commercial customers are provided 24-hour access. Individual storage units are secured by a lock furnished by the customer to provide the customer with control of access to the unit.

          At March 1, 2004, all but two of the Properties conduct business under the user-friendly trade name "Uncle Bob's Self-Storage" and we intend to convert those to the "Uncle Bob's" name on or before September 1, 2004.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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          The table below provides certain information regarding the Properties included in the Operating Partnership's consolidated financial statements:




Location



Year
Built




Sq. Ft.

Uncle
Bob's
Trade
Name

State
Occupancy
at
12/31/03




Acres




Units




Bldgs.




Floors



Mgr.
Apt.




Construction

  Alabama

     

90%

           

Birmingham I

1990

  36,775

Y

 

  2.7

   288

   9

    1

Y

Masonry/Steel Roof

Birmingham II

1990

  52,135

Y

 

  4.7

   388

   8

    1

Y

Masonry/Steel Roof

Montgomery I

1982

  74,119

Y

 

  5.0

   614

  16

    1

Y

Masonry/Steel Roof

Birmingham III

1970

  72,290

Y

 

  4.3

   402

   6

    1

N

Masonry/Steel Roof

Montgomery II

1984

  42,166

Y

 

  2.7

   294

  10

    1

N

Masonry/Steel Roof

Montgomery III

1988

  41,610

Y

 

  2.4

   381

   9

    1

Y

Steel Bldg./Steel Roof

Birmingham-Walt

1984

  64,580

Y

 

  3.3

   293

   6

    1

Y

Masonry Wall/Metal Roof

Birmingham-Bessemer

1998

  44,070

Y

 

  5.6

   345

   8

    1

N

Metal Wall/Metal Roof

  Arizona

     

79%

           

Gilbert-Elliot Rd.

1995

  66,845

Y

 

  3.3

   679

   9

    1

Y

Masonry Wall/Metal Roof

Glendale-59th Ave.

1997

  67,076

Y

 

  4.6

   632

   7

    1

Y

Masonry Wall/Metal Roof

Mesa-Baseline

1986

  39,100

Y

 

  1.8

   388

  11

    1

Y

Masonry Wall/Metal Roof

Mesa-E. Broadway

1986

  38,825

Y

 

  1.8

   368

   5

    1

Y

Masonry Wall/Metal Roof

Mesa-W. Broadway

1976

  36,655

Y

 

  1.9

   369

   5

    1

Y

Masonry Wall/Metal Roof

Mesa-Greenfield

1986

  48,343

Y

 

  2.1

   407

   8

    1

N

Masonry Wall/Metal Roof

Phoenix-Camelback

1984

  43,355

Y

 

  2.0

   526

   7

    1

Y

Masonry Wall/Metal Roof

Phoenix-Bell

1984

  96,630

Y

 

  4.6

   915

   7

    1

Y

Metal Wall/Metal Roof

Phoenix-35th Ave.

1996

  70,050

Y

 

  4.3

   659

   8

    1

Y

Masonry Wall/Metal Roof

  Connecticut

     

73%

           

New Haven

1985

  47,680

Y

 

  3.9

   392

   5

    1

N

Masonry Wall/Steel Roof

Hartford-Metro I

1988

  56,570

Y

 

10.0

   354

  10

    1

N

Steel Bldg./Steel Roof

Hartford-Metro II

1992

  39,190

Y

 

  6.0

   323

   7

    1

N

Steel Bldg./Steel Roof

  Florida

     

91%

           

Lakeland 1

1985

  47,985

Y

 

  3.5

   434

  11

    1

Y

Masonry Wall/Steel Roof

Tallahassee I

1973

139,880

Y

 

18.7

   710

  21

    1

Y

Masonry Wall/Tar & Gravel Roof

Tallahassee II

1975

  51,270

Y

 

  4.0

   274

   7

    1

Y

Masonry Wall/Tar & Gravel Roof

Port St. Lucie

1985

  55,842

Y

 

  4.0

   531

  12

    1

N

Steel Bldg./Steel Roof

Deltona

1984

  63,602

Y

 

  5.0

   449

   5

    1

Y

Masonry Wall/Shingle Roof

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Jacksonville I

1985

  40,032

Y

 

  2.7

   294

  14

    1

Y

Masonry Wall/Tar & Gravel Roof

Orlando I

1988

  50,520

Y

 

  2.8

   591

   3

    2

Y

Steel Bldg./Steel Roof

Ft. Lauderdale

1985

101,085

Y

 

  7.6

   638

   7

    1

Y

Steel Bldg./Steel Roof

West Palm 1

1985

  45,569

Y

 

  3.2

   406

   6

    1

N

Steel Bldg./Steel Roof

Melbourne I

1986

  83,539

Y

 

  8.3

   746

  11

    1

Y

Masonry Wall/Shingled Roof

Pensacola I

1983

119,405

Y

 

  7.5

   855

13

    1

Y

Steel Bldg./Steel Roof

Pensacola II

1986

  58,204

Y

 

  3.4

   505

9

    1

Y

Steel Bldg./Steel Roof

Melbourne II

1986

  56,031

Y

 

  3.4

   610

11

    1

N

Steel Bldg./Steel Roof

Jacksonville II

1987

  53,855

Y

 

  4.4

   471

11

    1

Y

Masonry/Steel Roof

Pensacola III

1986

  84,380

Y

 

  6.1

   600

14

    1

N

Steel Bldg./Steel Roof

Pensacola IV

1990

  38,850

Y

 

  2.7

   275

9

    1

Y

Masonry/Steel Roof

Pensacola V

1990

  39,125

Y

 

  2.6

   318

4

    1

Y

Masonry/Steel Roof

Tampa I

1989

  65,425

Y

 

  3.3

   863

6

    1

N

Masonry/Steel Roof

Tampa II

1985

  60,470

Y

 

  2.9

   665

10

    1

N

Masonry/Steel Roof

Tampa III

1988

  50,251

Y

 

  2.2

   635

14

    1

N

Masonry/Steel Roof

Orlando II

1986

133,935

Y

 

  8.5

1,309

  20

    1

Y

Masonry Wall/Steel Roof

Ft. Myers I

1988

  27,724

Y

 

  1.1

   253

   6

    2

Y

Steel Bldg./Steel Roof

Ft. Myers II

1991/94

  23,043

Y

 

  1.9

   299

   2

    1

Y

Masonry/Steel Roof

Tampa IV

1985

  58,215

Y

 

  4.0

   525

  10

    1

N

Masonry/Steel Roof

West Palm II

1986

  30,937

Y

 

  2.3

   363

   9

    1

Y

Masonry/Steel Roof

Ft. Myers III

1986

  36,052

Y

 

  2.4

   257

   9

    1

Y

Masonry/Steel Roof

Lakeland II

1988

  59,950

Y

 

  4.0

   581

   9

    1

N

Masonry Wall/Steel Roof

Ft. Myers IV

1987

  59,624

Y

 

  4.5

   262

   4

    1

Y

Masonry/Steel Roof

Jacksonville III

1987

102,430

Y

 

  5.9

   734

  13

    1

Y

Masonry Wall/Shingle Roof

Jacksonville IV

1985

  38,205

Y

 

  2.7

   349

   7

    1

Y

Steel Bldg./Steel Roof

Jacksonville V

1987/92

  54,037

Y

 

  2.9

   501

  13

    2

Y

Steel Bldg./Masonry Wall/Steel Roof

Orlando III

1975

  54,388

Y

 

  3.2

   503

   8

    2

N

Masonry Wall/Steel Roof

Orlando IV-W 25th St.

1984

  38,354

Y

 

  2.8

   326

   6

    1

Y

Steel Bldg/Steel Roof

Delray I-Mini

1969

  49,549

Y

 

  3.5

   441

   3

    1

Y

Masonry Wall/Concrete Roof

Delray II-Safeway

1980

  69,760

Y

 

  4.3

   696

  17

    1

Y

Masonry Wall/Concrete Roof

Tampa-E. Hillborough

1985

  84,470

Y

 

  5.3

   687

  16

    1

Y

Masonry Wall/Metal Roof

Ft. Myers-Mall

1991/94

  22,211

Y

 

  1.3

   223

   4

    1

Y

Masonry/Steel Roof

Indian Harbor-Beach

1985

  66,211

Y

 

  4.0

   716

  15

    1

N

Masonry Wall/Metal Roof

Hollywood-Sheridan

1988

130,733

Y

 

  7.0

1,172

  21

    1

Y

Masonry Wall/Concrete Roof

Pompano Beach-Atlantic

1985

  75,222

Y

 

  4.0

   925

  17

    1

N

Masonry Wall/Concrete Roof

Pompano Beach-Sample

1988

  64,117

Y

  3.6

   793

  14

    1

N

Masonry Wall/Metal Roof

-12-

<Page>

Boca Raton-18th St.

1991

  87,782

Y

 

  6.2

   990

   8

    1

N

Masonry Wall/Metal Roof

Vero Beach

1997

  34,450

Y

 

  1.9

   321

   2

    1

N

Masonry Wall/Metal Roof

Hollywood-N. 21st

1987

  58,881

Y

 

  3.1

   711

  11

    1

Y

Masonry Wall/Metal Roof

Cocoa

1982

  75,115

Y

 

  2.5

   689

  12

    1

Y

Masonry Wall/Metal Roof

Plantation

1982

  42,171

Y

 

  2.9

   503

   4

1&2

Y

Masonry Wall/Metal Roof

  Georgia

     

85%

           

Savannah

1981

  73,480

Y

 

  5.4

   606

  11

    1

Y

Masonry Wall/Steel Roof

Atlanta-Metro I

1988

  69,890

Y

 

  3.9

   537

   5

    1

Y

Steel Bldg./Steel Roof

Atlanta-Metro II

1988

  45,300

Y

 

  3.9

   371

   6

    1

Y

Steel Bldg./Steel Roof

Atlanta-Metro III

1988

  57,035

Y

 

  5.3

   410

   9

    1

Y

Steel Bldg./Steel Roof

Atlanta-Metro IV

1989

  42,220

Y

 

  3.5

   307

   7

    1

Y

Steel Bldg./Steel Roof

Atlanta-Metro V

1988

  44,165

Y

 

  4.2

   283

   3

    1

Y

Masonry Wall/Tar & Gravel Roof

Atlanta-Metro VI

1986

  50,775

Y

 

  3.6

   444

   7

    1

Y

Steel Bldg./Steel Roof

Atlanta-Metro VII

1981

  38,900

Y

 

  2.5

   327

   9

    2

Y

Masonry Wall/Tar & Gravel Roof

Atlanta-Metro VIII

1975

  46,914

Y

 

  3.3

   432

   6

    2

Y

Masonry Wall/Tar & Gravel Roof

Augusta I

1988

  52,000

Y

 

  4.0

   398

  13

    1

Y

Steel Bldg./Steel Roof

Macon I

1989

  41,030

Y

 

  3.2

   353

  14

    1

Y

Steel Bldg./Steel Roof

Augusta II

1987

  46,325

Y

 

  3.5

   361

   4

    1

N

Masonry Wall/Steel Roof

Atlanta-Metro IX

1988

  56,196

Y

 

  4.6

   411

   6

    1

Y

Steel Bldg./Steel Roof

Atlanta-Metro X

1988

  46,815

Y

 

  6.8

   376

   9

    1

N

Steel Bldg./Steel Roof

Macon II

1989/94

  67,670

Y

 

14.0

   574

  12

    1

Y

Steel Bldg./Steel Roof

Savannah II

1988

  49,365

Y

 

  2.6

   456

   8

    1

Y

Masonry Wall/Steel Roof

Atlanta-Alpharetta

1994

  80,790

Y

 

  5.8

   559

   8

1&2

Y

Steel Bldg./Steel Roof

Atlanta-Marietta-Roswell

1996

  59,475

Y

 

  6.0

   447

   8

1&2

Y

Steel Bldg./Steel Roof

Atlanta-Doraville

1995

  68,820

Y

 

  4.9

   638

   8

1&2

Y

Steel & Masonry Bldg./Steel Roof

Ft. Oglethorpe

1989

  45,642

Y

 

  3.3

   453

   6

    1

Y

Masonry Wall/Metal Roof

Kingsland

1989

  66,885

Y

 

  4.1

   547

   12

    1

N

Masonry Wall/Metal Roof

  Louisiana

     

84%

           

Baton Rouge-Airline

1982

  71,720

Y

 

  2.5

   432

  12

    1

N

Masonry Wall/Metal Roof

Baton Rouge-Airline 2

1985

  44,895

Y

 

  2.8

   437

   9

    1

N

Masonry Wall/Steel Roof

Lafayette-Pinhook 1

1980

  56,625

Y

 

  3.2

   485

   7

    1

N

Masonry Wall/Metal Roof

Lafayette-Pinhook 2

1992/94

  47,025

Y

 

  2.4

   432

   2

    1

Y

Metal Wall/Metal Roof

Lafayette-Ambassador

1975

  33,835

Y

 

  2.0

   413

   3

    1

N

Masonry Wall/Shingle Roof

Lafayette-Evangeline

1977

  34,630

Y

 

  3.1

   346

   3

    1

Y

Masonry Wall/Metal Roof

Lafayette-Guilbeau

1994

  63,685

Y

 

  3.4

   593

   1

    1

N

Metal Wall/Metal Roof

-13-

<Page>

  Maine

     

92%

           

Westbrook

1988

  45,820

Y

 

  5.9

   471

   7

    1

Y

Metal Wall/Metal Roof

Saco

1988

  53,750

Y

 

  4.2

   416

 12

    1

N

Masonry Wall/Metal Roof

  Maryland

     

90%

           

Salisbury

1979

  33,585

Y

 

  3.0

   416

  10

    1

N

Masonry Wall/Tar & Gravel Roof

Baltimore I-Frederick

1984

  21,233

Y

 

  1.9

   341

   2

    3

N

Masonry Wall/Shingled Roof

Baltimore II-Gaithersburg

1988

  60,595

Y

 

  2.2

   534

   2

    4

Y

Masonry Wall/Tar & Gravel Roof

Baltimore III-Landover

1990

  51,226

Y

 

  3.1

   666

   8

    1

Y

Steel Bldg./Steel Roof

  Massachusetts

     

82%

           

New Bedford

1982

  42,308

Y

 

  3.4

   375

   7

    1

N

Steel Bldg./Steel Roof

Springfield

1986

  53,614

Y

 

  4.7

   399

  10

1&2

N

Masonry Wall/Shingle Roof

Salem

1979

  53,325

Y

 

  2.0

   496

   2

    2

Y

Steel Wall/Metal Roof

Boston-Metro I

1980

  37,815

Y

 

  2.0

   403

   3

    2

Y

Masonry Wall/Tar & Gravel Roof

Boston-Metro II

1986

  38,575

Y

 

  3.6

   452

   8

    2

N

Masonry Wall/Tar & Gravel Roof

N. Andover

1989

  44,555

Y

 

  3.0

   533

   1

    3

N

Masonry & Metal Wall/Metal Roof

Dracut

1986

  45,926

Y

 

  5.0

   403

  11

    1

N

Masonry Wall/Metal Roof

Methuen

1984

  50,400

Y

 

  3.4

   383

   6

    1

N

Masonry Wall/Metal Roof

Plymouth

1996

  92,127

Y

 

  7.7

   753

 14

    1

N

Metal Wall/Metal Roof

Sandwich

1984

  47,970

Y

 

  4.9

   361

   8

    1

N

Metal Wall/Metal Roof

  Michigan

     

78%

           

Grand Rapids II

1983

  43,500

Y

 

  8.0

   387

   6

    1

N

Masonry & Steel Walls

Holland

1978

  58,735

Y

 

13.6

   429

  18

    1

Y

Masonry Wall/Steel Roof

Holland-Paw Paw

1978

  53,610

Y

 

  5.3

   369

   9

    1

Y

Masonry Wall/Steel Roof

Waterford-Highland

1978

136,316

Y

 

16.6

1,648

  16

    1

Y

Masonry Wall/Metal Roof

  Mississippi

     

92%

           

Jackson I

1990

  42,100

Y

 

  2.0

   351

   6

    1

Y

Masonry/Steel Roof

Jackson II

1990

  38,761

Y

 

  2.1

   306

   9

    1

Y

Masonry/Steel Roof

Jackson III-155

1995

  61,948

Y

 

  1.3

   420

   2

    1

N

Metal Wall/Metal Roof

Jackson-N. West

1984

  57,497

Y

 

  5.2

   477

  13

    1

Y

Masonry Wall/Metal Roof

  New Hampshire

     

87%

           

Salem-Policy

1980

  62,955

Y

 

  8.7

   547

   9

    1

Y

Masonry Wall/Metal Roof

  New York

     

84%

           

Middletown

1988

  33,865

Y

 

  2.8

   337

   4

    1

N

Steel Bldg./Steel Roof

Buffalo I

1981

  83,865

Y

 

  5.1

   600

  10

    1

Y

Steel Bldg./Steel Roof

Rochester I

1981

  41,834

Y

 

  2.9

   406

   5

    1

Y

Steel Bldg./Steel Roof

Rochester II

1980

  29,510

Y

 

  3.5

   242

   9

    1

N

Masonry Wall/Shingle Roof

-14-

<Page>

Buffalo II

1984

  62,025

Y

 

  6.2

   495

  12

    1

Y

Steel Bldg./Steel Roof

Syracuse 1

1987

  77,715

Y

 

  7.5

   677

  17

    1

N

Steel Bldg./Steel Roof

Syracuse II

1983

  78,279

Y

 

  3.6

   632

  10

    1

Y

Steel Bldg./Shingled Roof

Rochester III

1990

  66,639

Y

 

  2.7

   493

   1

    1

N

Masonry Wall/Shingle Roof

Harriman

1989/95

  74,340

Y

 

  6.1

   638

  10

    1

Y

Metal Wall/Metal Roof

Monroe

1998

  36,240

Y

 

13.3

   312

   4

    1

N

Metal Wall/Metal Roof

Syracuse

1987

  35,060

Y

 

  2.2

   287

  12

    1

N

Metal Wall/Metal Roof

The Hamptons

1989/95

  64,885

Y

 

  3.2

   775

   5

    2

N

Metal Wall/Metal Roof

The Hamptons

1998

  33,150

Y

 

  1.1

   317

   1

    2

N

Metal Wall/Metal Roof

The Hamptons

1997

  35,210

Y

 

  1.9

   429

   2

    2

N

Metal Wall/Metal Roof

The Hamptons

1994/98

  64,900

Y

 

  3.7

   718

   4

    2

N

Metal Wall/Metal Roof

  North Carolina

     

80%

           

Charlotte

1986

  37,815

Y

 

  2.9

   332

   6

    1

Y

Steel Bldg./Steel Roof

Fayetteville

1980

  84,228

Y

 

  6.2

   859

  12

    1

Y

Steel Bldg./Steel Roof

Greensboro

1986

  45,180

Y

 

  3.4

   404

   5

    1

Y

Steel Bldg./Mas. Wall/Steel Roof

Raleigh I

1985

  58,410

Y

 

  5.0

   540

   8

    2

Y

Steel Bldg./Steel Roof

Raleigh II

1985

  33,125

Y

 

  2.5

   318

   8

    1

Y

Steel Bldg./Steel Roof

Charlotte II

1995

  49,006

Y

 

  5.6

   400

   7

    1

Y

Masonry Wall/Steel Roof

Charlotte III

1995

  30,920

Y

 

  2.9

   314

   6

    1

Y

Masonry Wall/Steel Roof

Greensboro-Hilltop

1995

  32,153

Y

 

  1.0

   292

   7

    1

N

Metal Wall/Metal Roof

Greensboro-StageCoach

1997

  36,125

Y

 

  2.5

   233

   3

    1

N

Metal Wall/Metal Roof

Greensboro-High Point

1993

  57,567

Y

 

  2.5

   492

   9

    1

N

Steel Wall/Metal Roof

Durham-Hillborough

1988/91

  68,031

Y

 

  5.0

   600

   5

    1

Y

Metal Wall/Metal Roof

Durham-Cornwallis

1990/96

  78,645

Y

 

  4.7

   662

   9

    1

Y

Masonry Wall/Metal Roof

Jacksonville-Center

1995

  52,000

Y

 

  5.0

   396

  11

    1

Y

Metal Wall/Metal Roof

Jacksonville-Gum Branch

1989

  62,900

Y

 

  5.0

   475

  14

    1

Y

Metal Wall/Metal Roof

Jacksonville-N. Marine

1985

  47,810

Y

 

  8.4

   379

   6

    1

Y

Masonry Wall/Shingle Roof

  Ohio

     

89%

           

Youngstown

1980

  54,830

Y

 

  5.8

   357

   5

    1

Y

Steel Bldg./Steel Roof

Cleveland-Metro I

1980

  49,200

Y

 

  6.4

   358

   9

    1

N

Steel Bldg./Steel Roof

Cleveland-Metro II

1987

  65,900

Y

 

  4.8

   489

   4

    1

Y

Steel Bldg./Steel Roof

Youngstown

1988

  55,750

Y

 

  3.9

   495

   7

    1

Y

Masonry Wall/Steel Roof

Akron

1990

  38,320

Y

 

  3.4

   296

  12

    1

N

Masonry Wall/Steel Roof

Cleveland III

1986

  68,535

Y

 

  3.4

   586

  12

    1

N

Masonry Wall/Steel Roof

Cleveland IV

1978

  72,750

Y

 

  3.5

   643

   5

    1

Y

Masonry Wall/Steel Roof

Cleveland V

1979

  75,212

Y

 

  3.1

   638

   9

1&2

Y

Masonry Wall/Steel Roof

-15-

<Page>

Cleveland VI

1979

  47,221

Y

 

  2.6

   379

   8

    1

Y

Masonry Wall/Steel Roof

Cleveland VII

1977

  70,170

Y

 

  4.3

   591

  13

    1

Y

Masonry Wall/Steel Roof

Cleveland VIII

1970

  47,605

Y

 

  5.7

   438

   6

    1

N

Masonry Wall/Steel Roof

Cleveland IX

1982

  54,880

Y

 

  4.4

   297

   5

    1

N

Masonry Wall/Steel Roof

Cleveland 10-Avon

1989

  46,898

Y

 

  5.8

   374

   6

    1

N

Metal Wall/Metal Roof

Warren-Elm

1986

  60,200

Y

 

  7.3

   477

   8

    1

Y

Masonry Wall/Metal Roof

Warren-Youngstown

1986

  58,987

Y

 

  5.0

   521

  11

    1

N

Masonry Wall/Metal Roof

Batavia

1988

  61,818

Y

 

  5.5

   547

   9

    1

N

Metal Wall/Steel Roof

  Pennsylvania

     

94%

           

Allentown

1983

  40,800

Y

 

  6.3

   341

   7

    1

Y

Masonry Wall/Shingle Roof

Sharon

1975

  37,940

Y

 

  3.0

   294

   5

    1

Y

Steel Bldg./Steel Roof

Harrisburg I

1983

  49,120

Y

 

  4.1

   444

   9

    1

Y

Masonry Wall/Steel Roof

Harrisburg II

1985

  59,365

Y

 

  9.2

   292

  10

    1

Y

Masonry Wall/Steel Roof

Pittsburgh

1990

  57,365

Y

 

  3.4

   504

   6

    1

Y

Steel Bldg./Steel Roof

Pittsburgh II

1983

102,330

Y

 

  4.8

   746

   4

    2

Y

Masonry Wall/Shingled Roof

Harrisburg-Peiffers

1984

  63,740

Y

 

  4.1

   604

   9

    1

Y

Masonry Wall/Metal Roof

  Rhode Island

     

89%

           

East Greenwich

1984

  45,600

Y

 

  2.9

   411

   9

    1

Y

Metal Wall/Metal Roof

Frenchtown

1988

  31,310

Y

 

  2.0

   309

   4

    1

N

Metal Wall/Metal Roof

W. Warwick

1986/94

  52,376

Y

 

  2.3

   484

   4

    1

N

Metal Wall/Steel Roof

Providence

1984

  38,550

Y

 

  3.7

   386

   7

    1

Y

Masonry Wall/Tar & Gravel Roof

  South Carolina

     

82%

           

Charleston I

1985

  49,654

Y

 

  3.3

   397

  11

    1

Y

Steel Bldg./Mas. Wall/Steel Roof

Columbia I

1985

  47,800

Y

 

  3.3

   393

   7

    1

Y

Steel Bldg./Steel Roof

Columbia II

1987

  58,480

Y

 

  6.0

   444

   8

    1

N

Steel Bldg./Steel Roof

Columbia III

1989

  41,390

Y

 

  3.5

   329

   5

    2

Y

Steel Bldg./Steel Roof

Columbia IV

1986

  57,360

Y

 

  5.6

   441

   7

    1

Y

Steel Bldg./Steel Roof

Spartanburg

1989

  40,450

Y

 

  3.6

   341

   6

    1

Y

Steel Bldg./Steel Roof

Charlestown II

1985

  40,318

Y

 

  2.2

   331

  10

    1

Y

Masonry Wall/Steel Roof

Columbia

1985

  73,550

Y

 

  5.0

   777

  17

    1

Y

Masonry Wall/Steel Roof

Myrtle Beach

1984

  62,087

Y

 

  4.8

   588

  12

    1

N

Masonry Wall/Steel Roof

  Tennessee

     

78%

           

Chattanooga-Lee Hwy

1987

  37,937

Y

 

  3.3

   393

   6

    1

N

Masonry Wall/Metal Roof

Chattanooga-Hwy 58

1985

  35,460

Y

 

  2.4

   295

   4

    1

Y

Masonry Wall/Metal Roof

Hendersonville

1986/97

  93,955

Y

 

  5.7

   651

  16

    1

Y

Masonry Wall/Metal Roof

-16-

<Page>

  Texas

     

78%

           

Arlington I

1987

  45,815

Y

 

  2.3

   382

   7

    1

Y

Masonry Wall/Steel Roof

Arlington II

1986

  67,220

Y

 

  3.8

   280

  11

    1

Y

Masonry Wall/Steel Roof

Ft. Worth

1986

  40,850

Y

 

  2.4

   333

   3

    1

Y

Masonry Wall/Asphalt Roof

San Antonio I

1986

  48,200

Y

 

  3.9

   414

  12

    1

Y

Masonry Wall/Steel Roof

San Antonio II

1986

  39,870

Y

 

  1.9

   283

   7

    1

Y

Masonry Wall/Steel Roof

San Antonio III

1981

  48,782

Y

 

  2.6

   469

   5

    1

Y

Masonry Wall/Steel Roof

Universal

1985

  35,160

Y

 

  2.4

   375

   8

    1

Y

Masonry Wall/Steel Roof

San Antonio IV

1995

  62,870

Y

 

  5.4

   592

  11

    1

Y

Steel Bldg./Steel Roof

Houston-Eastex

1993/95

  83,650

Y

 

  6.4

   660

   6

    1

Y

Metal Wall/Steel Roof

Houston-Nederland

1995

  61,731

Y

 

  6.3

   531

   1

    1

Y

Metal Wall/Steel Roof

Houston-College

1995

  35,650

Y

 

  1.8

   316

   1

    1

Y

Metal Wall/Steel Roof

Dallas-Skillman

1975

121,026

Y

 

  5.9

1,080

   8

1&2

Y

Masonry Wall/Steel Roof

Dallas-Centennial

1977

102,637

Y

 

  6.7

   994

   8

1&2

Y

Masonry Wall/Steel Roof

Dallas-Samuell

1975

  79,046

Y

 

  3.8

   784

   6

1&2

Y

Masonry Wall/Steel Roof

Dallas-Hargrove

1975

  71,879

Y

 

  3.1

   734

   5

1&2

Y

Masonry Wall/Steel Roof

Houston-Antoine

1984

  76,620

Y

 

  4.1

   657

   9

    1

Y

Metal Wall/Metal Roof

Katy

1994

  43,995

Y

 

  8.6

   437

  10

    1

Y

Metal Wall/Metal Roof

Humble

1986

  63,599

Y

 

  2.3

   583

   6

    1

Y

Masonry Wall/Metal Roof

Houston-Old Katy

1996

  52,860

Y

 

  3.0

   490

  19

    1

Y

Masonry Wall/Shingle Roof

Webster-Hwy 3

1997

  55,350

Y

 

  3.3

   536

   6

    1

Y

Masonry Wall/Metal Roof

Carrollton

1997

  51,315

Y

 

  3.2

   490

   5

    1

Y

Masonry Wall/Metal Roof

San Marcos

1994

  61,590

Y

 

  5.0

   428

  18

    1

N

Metal Wall/Metal Roof

Austin-McNeil

1994

  73,115

Y

 

  7.0

   561

  19

    1

Y

Metal Wall/Metal Roof

Austin-FM

1996

  59,910

Y

 

  4.9

   388

   9

    1

Y

Metal Wall/Metal Roof

Euless

1996

  93,480

Y

 

  7.5

   517

   9

    1

Y

Metal Wall/Metal Roof

N. Richland Hills

1996

  86,890

Y

 

  7.4

   613

  11

    1

Y

Metal Wall/Metal Roof

Katy-Franz

1993

  67,235

Y

 

  7.2

   531

  10

    1

Y

Metal Wall/Metal Roof

Cedar Hill

1985

  52,735

Y

 

  3.0

   410

  16

    1

Y

Metal Wall/Metal Roof

Seabrook

1996

  61,225

Y

 

  4.3

   511

   5

    1

Y

Metal Wall/Metal Roof

Houston-Westward

1996

125,844  

Y

 

  6.1

1,160

11

1&2

Y

Masonry Wall/Tar-Gravel Roof

Houston-Boone

1996

  45,460

Y

 

  2.3

   430

   4

    1

Y

Masonry Wall/Metal Roof

Houston-Cook

1996

  60,455

Y

 

  3.0

   490

   7

    1

Y

Masonry Wall/Metal Roof

Houston-Harwin

1996

  77,454

Y

 

  2.8

   650

   3

1&2

Y

Masonry Wall/Tar-Gravel Roof

Houston-Hempstead

1996

  99,153

Y

 

  3.5

   888

   10

1&2

Y

Masonry Wall/Metal Roof

Houston-Kuykendahl

1996

102,550

Y

 

  4.8

   789

   12

    1

Y

Masonry Wall/Metal Roof

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<Page>

Houston-Hwy 249

1996

  54,996

Y

 

  2.9

   537

   4

    1

Y

Masonry Wall/Metal Roof

Mesquite-Hwy 80

1996

  63,440

Y

 

  6.1

   640

   6

1&2

Y

Masonry Wall/Tar-Gravel Roof

Mesquite-Franklin

1996

  83,705

Y

 

  3.2

   753

   13

    1

Y

Masonry Wall/Metal Roof

Dallas-Plantation

1996

  61,865

Y

 

  2.4

   507

   10

1&2

Y

Masonry Wall/Metal Roof

San Antonio-Hunt

1996

  63,645

Y

 

  4.1

   579

   15

    1

Y

Masonry Wall/Metal Roof

Humble

1996

115,595

Y

 

  5.9

   802

   4

    1

N

Metal Wall/Metal Roof

Pasadena

1996

  55,360

Y

 

  3.2

   500

   1

    1

N

Metal & MasonryWall/Metal Roof

League City

1996

  72,070

Y

 

  4.4

   552

   6

1&2

N

Metal & MasonryWall/Metal Roof

Montgomery

1996

  44,400

Y

 

  2.5

   391

   1

    1

N

Metal Wall/Metal Roof

Texas City

1996

  55,700

Y

 

  3.4

   466

   3

    1

N

Metal & Masonry Wall/Metal Roof

Houston-Hwy 6

1996

  47,475

Y

 

  2.6

   432

   1

    1

N

Metal Wall/Metal Roof

Lumberton

1996

  45,040

Y

 

  4.1

   386

   5

    1

N

Metal Wall/Metal Roof

Dallas-Duncanville

1995/99

  81,735

N

 

  5.0

   635

   16

    1

Y

Masonry Wall/Metal Roof

Dallas-Harry Hines

1998/01

  66,363

N

 

  2.5

   480

   1

    1

Y

Masonry Wall/Metal Roof

  Virginia

     

87%

           

Newport News I

1988

  58,305

Y

 

  3.2

   476

   7

    1

Y

Steel Bldg./Steel Roof

Alexandria

1984

  76,240

Y

 

  3.2

1,142

   4

    2

Y

Masonry Wall/Tar & Gravel Roof

Norfolk I

1984

  50,430

Y

 

  2.7

   379

   7

    1

Y

Steel Bldg./Steel Roof

Norfolk II

1989

  45,275

Y

 

  2.1

   351

   4

    1

Y

Masonry Wall/Steel Roof

Richmond

1987

  51,615

Y

 

  2.7

   523

   5

    1

Y

Masonry Wall/Steel Roof

Newport News II

1988/93

  63,535

Y

 

  4.7

   412

   8

    1

Y

Steel Bldg./Steel Roof

Lynchburg-Lakeside

1982

  58,278

Y

 

  5.3

   533

  10

    1

N

Masonry Wall/Steel Roof

Lynchburg-Timberlake

1985

  43,830

Y

 

  2.3

   353

   4

    1

N

Masonry Wall/Steel Roof

Lynchburg-Amherst

1987

  23,618

Y

 

  1.5

   208

   3

    1

N

Masonry Wall/Metal Roof

Christiansburg

1985/90

  37,468

Y

 

  3.2

   345

   6

    1

Y

Masonry Wall/Metal Roof

Chesapeake

1988/95

  43,225

Y

 

12.0

   395

   8

    1

Y

Metal Wall/Steel Roof

Danville

1988

  49,792

Y

 

  3.2

   408

   8

    1

N

Steel Wall/Metal Roof

Chesapeake-Military

1996

  58,505

Y

 

  3.0

   526

   3

    1

N

Masonry Wall/Metal Roof

Chesapeake-Volvo

1995

  73,975

Y

 

  4.0

   630

   4

    1

N

Masonry Wall/Metal Roof

Virginia Beach-Shell

1991

  52,626

Y

 

  2.5

   553

   5

    1

N

Masonry Wall/Metal Roof

Virginia Beach-Central

1993/95

  96,031

Y

 

  5.0

   881

   6

    1

N

Masonry Wall/Metal Roof

Norfolk-Naval Base

1975

 126,358

Y

 

  5.2

1,244

  11

    1

N

Masonry Wall/Metal Roof

Lynchburg-Timberlake

1990/96

  50,165

Y

 

  5.2

   472

   7

    1

N

Masonry Wall/Metal Roof

               Total for all Properties                          14,853,829                        85%              1,085       128,792         2,054

-18-

<Page>

Item 3.

Legal Proceedings

          In the normal course of business, the Company is subject to various claims and litigation. While the outcome of any litigation is inherently unpredictable, the Company does not believe that any of these matters will have a material adverse impact on the financial condition, results of operations or cash flows of the Company.

Item 4.

Submission of Matters to a Vote of Security Holders

          No matters were submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise.

Part II

Item 5.

Market for Registrant's Common Equity and Related Stockholder Matters

          There is no established public trading market for Units. As of March 1, 2004, there were 12 holders of record of Units.

          The following table sets forth the quarterly distributions per Unit paid by the Operating Partnership to holders of its Units with respect to each such period.

History of Distributions Declared on Units

1st Quarter, 2002

$0.5900 per unit

2nd Quarter, 2002

$0.5900 per unit

3rd Quarter, 2002

$0.6000 per unit

4th Quarter, 2002

$0.6000 per unit

1st Quarter, 2003

$0.6000 per unit

2nd Quarter, 2003

$0.6000 per unit

3rd Quarter, 2003

$0.6025 per unit

4th Quarter, 2003

$0.6025 per unit

          The partnership agreement of the Operating Partnership (the "Partnership Agreement") provides that the Operating Partnership will distribute all available cash (as defined in the Partnership Agreement) on at least a quarterly basis, in amounts determined by the general partner in its sole discretion, to the partners in accordance with their respective percentage interest in the Operating Partnership. Distributions are declared at the discretion of the Board of Directors of Holdings, the general partner of the Operating Partnership and a wholly-owned subsidiary of the Company, and will depend on actual funds from operations of the Operating Partnership, its financial condition, capital requirements, the annual distribution requirements

-19-

<Page>

under the REIT provisions of the Internal Revenue Code of 1986, as amended, and such other factors as the Board of Directors may deem relevant. The Board of Directors of Holdings may modify the Operating Partnership's distribution policy from time to time, subject to the terms of the Partnership Agreement.

          The Operating Partnership's line of credit contains customary representations, covenants and events of default, including covenants which restrict the ability of the Operating Partnership to make distributions in excess of stated amounts. In general, during any four consecutive fiscal quarters the Operating Partnership may only distribute up to 105% of the Operating Partnership's funds from operations (as defined in the related agreement). The line of credit contains exceptions to these limitations to allow the Operating Partnership to make any distributions necessary to allow the Company to maintain its status as a REIT. The Operating Partnership does not anticipate that this provision will adversely affect the ability of the Operating Partnership to make distributions, as currently anticipated.

Item 6.

Selected Financial Data

 

                    At or For Year Ended December 31,                   

(dollars in thousands,
except per unit data)


2003


2002


2001


2000


1999

           

Operating Data

         

Operating revenues

$ 113,161 

$ 102,141 

$  91,012 

$  90,152 

$  84,078 

Net income

29,599 

27,481 

25,731 

27,519 

27,347 

Net income per common unit - basic

1.49 

1.67 

1.75 

1.90 

1.97 

Net income per common unit - diluted

1.48 

1.65 

1.74 

1.90 

1.97 

Distributions declared per common unit

2.41 

2.38 

2.34 

2.30 

2.26 

           

Balance Sheet Data

Investment in storage facilities at cost


$739,836 


$710,841 


$611,289 


$562,721 


$556,473 

Total assets

683,457 

652,337 

567,838 

547,139 

529,719 

Total debt

255,819 

252,452 

241,190 

231,223 

203,253 

Total liabilities

285,876 

278,755 

255,999 

246,309 

218,281 

Limited partners' capital interest at redemption value


20,089 


15,736 


20,584 


16,954 


15,888 

Partners' capital

361,779 

341,315 

274,170 

283,876 

295,550 

           

Other Data

         

Net cash provided by operating activities

$  52,073 

$  45,610 

$  40,922 

$  39,428 

$  41,001 

Net cash used in investing activities

(31,271)

(99,244)

(17,751)

(25,274)

(51,335)

Net cash (used in)provided by
  financing activities


(2,764) 


53,814 


(22,709)


(13,765)


8,382 

Funds from operations available to common unitholders (1)


 39,178 


 38,680 


37,481 


36,051 


37,815 

(1) We believe that Funds from Operations ("FFO") provides relevant and meaningful information about our operating performance that is necessary, along with net earnings and cash

-20-

<Page>

flows, for an understanding of our operating results.  Funds from operations is defined by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT") as net income computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains or losses on sales of properties, plus depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis.  We believe that to further understand our performance, FFO should be considered along with our reported net income and cash flows in accordance with GAAP, as presented in our consolidated financial statements.

Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, or as an indicator of our ability to make cash distributions. See the reconciliation of net income to FFO in Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

          The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the financial statements and notes thereto included elsewhere in this report.

          When used in this discussion and elsewhere in this document, the words "intends," "believes," "expects," "anticipates," and similar expressions are intended to identify "forward-looking statements" within the meaning of that term in Section 27A of the Securities Exchange Act of 1933 and in Section 21F of the Securities Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Operating Partnership to be materially different from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the effect of competition from new self-storage facilities, which would cause rents and occupancy rates to decline; the Operating Partnership's ability to evaluate, finance and integrate acquired businesses into the Operating Partnership's existing business and operations; the Oper ating Partnership's ability to form joint ventures and sell existing properties to those joint ventures and others; the Operating Partnership's ability to effectively compete in the industry in which it does business; the Operating Partnership's existing indebtedness may mature in an unfavorable credit environment, preventing refinancing or forcing refinancing of the indebtedness on terms that are not as favorable as the existing terms; interest rates may fluctuate, impacting costs associated with the Operating Partnership's outstanding floating rate debt; the Operating Partnership's ability to successfully extend its truck leasing program and Dri-Guard product roll-out; the Operating Partnership's reliance on its call center; the Operating

-21-

<Page>

Partnership's cash flow may be insufficient to meet required payments of principal and interest; and tax law changes that may change the taxability of future income.

Critical Accounting Policies and Estimates

          The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in our financial statements and the accompanying notes. On an on-going basis, we evaluate our estimates and judgments, including those related to carrying values of storage facilities, bad debts, and contingencies and litigation. We base these estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumpti ons or conditions.

          Carrying value of storage facilities: We believe our judgment regarding the impairment of the carrying value of our storage facilities is a critical accounting policy. Our policy is to assess any impairment of value whenever events or circumstances indicate that the carrying value of our storage facility may not be recoverable. Such events or circumstances would include negative operating cash flow or significant declining revenue per storage facility. Impairment is evaluated based upon comparing the sum of the expected undiscounted future cash flows to the carrying value of the storage facility, on a property by property basis. If the sum of the undiscounted cash flow is less than the carrying amount, an impairment loss is recognized for the amount by which the carrying amount exceeds the fair value of the asset. If cash flow projections are inaccurate and in the future it is determined that storage facility carrying values are not recover able, impairment charges may be required at that time and could materially affect our operating results and financial position. At December 31, 2003 and 2002, no assets had been determined to be impaired under this policy, and, accordingly, this policy had no impact on our financial position or results of operations.

          Estimated useful lives of long-lived assets: We believe that the estimated lives used for our depreciable, long-lived assets is a critical accounting policy. Changes in estimated useful lives of these assets could have a material adverse impact on our financial condition or results of operations.

          Qualification as a REIT: The Company operates, and intends to continue to operate, as a REIT under the Internal Revenue Code of 1986 (the Code), but no assurance can be given that it will at all times so qualify. To the extent that the Company continues to qualify as a REIT, it will not be taxed, with certain limited exceptions, on the taxable income that is distributed to its shareholders. If the Company fails to qualify as a REIT, any requirement to pay federal income taxes could have a material adverse impact on our financial conditions and results of operations.

-22-

<Page>

YEAR ENDED DECEMBER 31, 2003 COMPARED TO
YEAR ENDED DECEMBER 31, 2002

          We recorded rental revenues of $110.2 million for the year ended December 31, 2003, an increase of $10.2 million or 10.2% when compared to 2002 rental revenues of $100.0 million. Of this increase, $4.8 million resulted from a 5% increase in rental revenues at the 230 core properties considered in same store sales (those properties included in the consolidated results of operations since January 1, 2002). The increase in same store rental revenues was achieved primarily through rate increases on select units, and improved responsiveness to customer demand created by our centralized call center and the availability of rental trucks at 158 of our stores. Occupancy levels grew slightly, and while the extensive discounting and promotional advertising seen in 2002 diminished, the storage industry as a whole was affected by a sluggish economy and a steady increase in supply of new storage units. The remaining $5.4  million increase in rental revenues resulted from the acquisition of two stores during 2003 and from having the 2002 acquisitions included for a full year of operations. Other income increased $0.8 million due to increased insurance sales and the additional revenue generated by truck rentals.

          Property operating and real estate tax expense increased $5.6 million or 16.7% in 2003 compared to 2002. Of this, $1.7 million was incurred by the facilities acquired in 2003 and from having the 2002 acquisitions included for a full year of operations. The remaining $3.9 million increase was due to increased insurance, personnel, truck expense, maintenance, and increased property taxes at the 230 core properties considered same stores. While the trend of the past three years has been one of increasing operating costs, we expect this to subside in 2004 and 2005, as many of the new initiatives (increased store hours, truck availability and enhanced security and communication technologies) are now in place and related costs should not increase significantly. Nonetheless, the expenses related to operating a self-storage facility have increased substantially since 2001, and while current operating margins are expected to be sustaine d, it is not likely that much improvement will be seen in the coming years as a result of cost reductions.

          General and administrative expenses increased $1.0 million or 12.0%. The increase primarily resulted from increased cost in our call center, new training center, and the increased costs associated with operating the properties acquired in 2003 and 2002.

          Depreciation and amortization expense increased to $19.0 million from $17.4 million, primarily as a result of additional depreciation taken on real estate assets acquired in 2003 and a full year of depreciation on 2002 acquisitions.

          Income from operations increased from $42.6 million in 2002 to $45.4 million in 2003 as a result of the aforementioned items.

          Interest expense increased from $14.7 million to $15.1 million as a result of higher interest rates associated with the fixed rate debt entered into in September 2003.

-23-

<Page>

YEAR ENDED DECEMBER 31, 2002 COMPARED TO
YEAR ENDED DECEMBER 31, 2001

          Rental revenues were $100.0 million for the year ended December 31, 2002, an increase of $10.9 million or 12.2% when compared to 2001 rental revenues of $89.1 million. Of this increase, $1.2 million resulted from a 1.3% increase in revenues at the 222 core properties considered in same store sales. The remaining $9.7 million increase in rental revenues resulted from the acquisition of 23 stores during 2002 and from having the 2001 acquisitions included for a full year of operations. Other income increased $0.2 million due to increased insurance sales and the additional revenue generated by truck rentals.

          Property operating and real estate tax expense increased $5.1 million or 17.7% in 2002 compared to 2001. Of this, $3.5 million was incurred by the facilities acquired in 2002 and from having the 2001 acquisitions included for a full year of operations. The remaining $1.6 million increase was due to increased insurance, personnel, truck expense, and increased property taxes at the 222 core properties considered same stores.

          General and administrative expenses increased $0.6 million or 7.0%. The increase includes additional costs of approximately $2.3 million, which primarily resulted from increased cost in our call center and the increased costs associated with operating the properties acquired in 2002. The 2001 general and administrative expenses included a $1.7 million expense in connection with the lawsuit settlement - see Note 15 of the financial statements. There was no such charge in 2002.

          Depreciation and amortization expense increased to $17.4 million from $15.0 million, primarily as a result of additional depreciation taken on real estate assets acquired in 2002 and a full year of depreciation on 2001 acquisitions.

          Income from operations increased from $39.5 million in 2001 to $42.6 million in 2002 as a result of the aforementioned items.

          Interest expense increased from $13.9 million to $14.7 million as a result of higher rates associated with the mortgage debt incurred on the consolidated joint venture properties and the effect of interest rate swap agreements entered into during 2001.

RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS

 

For Year Ended December 31,

(dollars in thousands)


2003


2002


2001


2000


1999

           

Net income

$ 29,599 

$ 27,481 

$  25,721 

$  27,519 

$  27,347 

Minority interest in income

614 

810 

85 

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Depreciation of real estate and
   amortization of intangible assets
   exclusive of deferred financing fees



18,149 



16,497 



14,122 



13,446 



12,359 

Gain on sale of real estate

(2,161)

(652)

Depreciation and amortization from
   unconsolidated joint ventures


460 


400 


633 


202 


- - 

Preferred stock dividends

713 

Preferred stock dividends

(8,818)

(4,863)

(2,955)

(2,955)

(1,239)

Funds from operations allocable to
    minority interest in Locke Sovran II


(1,539)


(1,645)


       (125)


            - 


          - 

Funds from operations available to
   common unitholders


$ 39,178 


$ 38,680 


$ 37,481 


$ 36,051 


$ 37,815 

          We believe that Funds from Operations ("FFO") provides relevant and meaningful information about our operating performance that is necessary, along with net earnings and cash flows, for an understanding of our operating results.  Funds from operations is defined by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT") as net income computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains or losses on sales of properties, plus depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis.  We believe that to further understand our performance, FFO should be considered along with our reported net income and cash flows in accordance with GAAP, as presented in our consolidated financial statements.

          Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, or as an indicator of our ability to make cash distributions.

LIQUIDITY AND CAPITAL RESOURCES

          Our ability to retain cash flow is limited because the Company operates as a REIT. In order for the Company to maintain its REIT status, a substantial portion of our operating cash flow must be used to pay distributions to our unitholders. We believe that our internally generated net cash provided by operating activities will continue to be sufficient to fund ongoing operations, capital improvements, distributions and debt service requirements through September 2006, at which time our revolving line of credit matures.

          Cash flows from operating activities were $52.1 million, $45.6 million and $40.9 million for the years ended December 31, 2003, 2002, and 2001, respectively. The increase for each year is primarily attributable to increased net income and increased non-cash charges for depreciation and amortization.

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          On September 4, 2003, we entered into agreements relating to new unsecured credit arrangements, and received funds under those arrangements. Our new unsecured line of credit provides availability up to $75 million (expandable to $100 million), of which $9 million was drawn on December 31, 2003. The revolving line of credit facility matures in September 2006 and bears interest at a variable rate equal to LIBOR plus 1.375%. We also entered into a $100 million term note through September 2008 at a variable rate equal to LIBOR plus 1.50%.

          In addition to the line of credit and term note mentioned above, we also issued a $80 million unsecured term note bearing interest at a fixed rate of 6.26% and a $20 million unsecured term note bearing interest at a variable rate equal to LIBOR plus 1.50%. The term notes mature September 2013.

          The line of credit facility and term notes currently have investment grade ratings from Standard and Poor's (BBB-), Moody's (Baa3), and Fitch (BBB-).

          In February 2002, the consolidated joint venture (Locke Sovran II, LLC) entered into a mortgage note of $48 million. The note is secured by the 27 properties owned by the joint venture with a cost of $79 million. The 10-year note bears interest at a fixed rate of 7.19%.

          Principal maturities of the mortgage for the next five years are as follows: 2004, $0.7 million; 2005, $0.8 million; 2006, $0.9 million; 2007, $0.9 million; and 2008, $1.0 million.

          In July 1999, the Company issued 1,200,000 shares of 9.85% Series B Cumulative Redeemable Preferred Stock. The Series B Preferred Stock is currently rated by Standard and Poor's (BB+), Moody's (Ba2) and Fitch (BB+). The Company has the ability to retire its Series B Preferred Stock issue at any time after July 31, 2004. Should market conditions be favorable, and if by so doing our capital position would be enhanced, it is expected that this issue would be redeemed at a total cost of $30 million. If the Company elects to redeem this stock, the Company would use the proceeds from its Dividend Reinvestment and Direct Stock Purchase Plan to fund the redemption. In accordance with Emerging Issues Task Force ("EITF") Topic D-42, "The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock", we would expect to record a reduction of approximately $1.4 million from net inco me to arrive at net income available to common unitholders relating to the difference between the Series B Preferred Stock carrying value and the expected redemption amount should the issue be redeemed.

          On July 3, 2002, the Company entered into an agreement providing for the issuance of 2,800,000 shares of 8.375% Series C Convertible Cumulative Preferred Stock and warrants to purchase 379,166 shares of common stock at $32.60 per share in a privately negotiated transaction. We immediately issued 1,600,000 shares of the Series C Preferred and issued the remaining 1,200,000 shares on November 27, 2002. The offering price was $25.00 per share and the net proceeds of $67.9 million were used to reduce indebtedness that was incurred in the June 2002 acquisition of seven self-storage properties and to repay a portion of the line of credit.

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          From January 1, 2003 through December 31, 2003, the Company acquired 145,816 shares of its common stock via the Share Repurchase Program authorized by the Board of Directors. From the inception of the Share Repurchase Program through December 31, 2003, the Company has reacquired a total of 1,171,886 shares pursuant to this program. From time to time, subject to market price and certain loan covenants, we may reacquire additional shares.

          During 2003, the Company issued approximately 1,421,000 shares via our Dividend Reinvestment and Stock Purchase Plan and Employee Stock Option Plan. We realized $42 million from the sale of such shares. We expect to issue shares when our share price and capital needs warrant such issuance.

          Future acquisitions, share repurchases and repayment of the credit line are expected to be funded with the revolving line of credit, issuance of secured or unsecured term notes, issuance of common or preferred stock, sale of properties, private placement solicitation of joint venture equity and other sources of capital.

CONTRACTUAL OBLIGATIONS

          The following table summarizes our future contractual obligations:

                          Payments due by period                        

Contractual obligations  

Total      

2004     

2005-2006  

2007-2008  

2009 and    
thereafter   

Line of credit

$    9.0 million 

$9.0 million 

Term notes

$200.0 million 

$100.0 million 

$100.0 million 

Building lease

$    2.8 million 

$0.4 million 

$0.8 million 

$    0.8 million 

$    0.8 million 

Total

$211.8 million 

$0.4 million 

$9.8 million 

$100.8 million 

$100.8 million 

          The above amounts for the line of credit and term notes exclude interest.

ACQUISITION OF PROPERTIES

          During 2003, we used operating cash flow and borrowings pursuant to the line of credit to acquire two Properties in Texas comprising 148,098 square feet from unaffiliated storage operators. In 2002, we along with the consolidated joint venture used borrowings pursuant to the line of credit and a mortgage to acquire 23 Properties comprising 1.5 million square feet. At December 31, 2003, we owned and/or operated 266 self-storage facilities in 21 states. Of these facilities, 11 are managed by us for Locke Sovran I, LLC, an unconsolidated joint venture.

 

 

 

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FUTURE ACQUISITION AND DEVELOPMENT PLANS

          Our external growth strategy is to increase the number of facilities we own by acquiring suitable facilities in markets in which we already have operations, or to expand in new markets by acquiring several facilities at once in those new markets.

          At December 31, 2003, we had no contracts to acquire additional properties.

          We also intend to expand and enhance certain of our existing facilities by building additional storage buildings on presently vacant land and by installing climate control and enhanced security systems at selected sites.

DISPOSITION OF PROPERTIES

          During 2001, we sold eight Properties for approximately $24.5 million to Locke Sovran II, LLC. Because Locke Sovran II, LLC is a consolidated joint venture, no gain was recognized on the sale.

          In 2000, we sold seven Properties for approximately $20 million, recognizing a gain of $2.1 million. The gain recognized represents the proportion of the total gain not related to our ongoing ownership interest. The Properties were sold to an unconsolidated joint venture in which we retained a 45% interest and whose properties we manage for an ongoing fee. We invested $5 million of the proceeds to fund our 45% interest in the venture and received a short-term promissory note of approximately $15 million. The note was repaid in 2001 and we used the proceeds to pay down our outstanding line of credit, freeing up working capital for acquisitions and expansions done in 2001.

          We may seek to sell additional Properties to similar joint venture programs or third parties in 2004. On February 20, 2004, we sold our facility in Allentown, PA to an independent operator resulting in a gain of approximately $0.9 million and, at March 1, 2004, have negotiated agreements to sell two of our properties in Ohio to another independent operator.

INVESTMENT IN JOINT VENTURES

          Investment in joint ventures includes an ownership interest in Locke Sovran I, LLC, which operates 11 self storage facilities throughout the United States, and an ownership interest in Iskalo Office Holdings, LLC, which owns the building that houses our headquarters and other tenants.

          In December 2000, we contributed seven self-storage properties to Locke Sovran I, LLC with a fair market value of $19.8 million, in exchange for a $15 million one year note receivable bearing interest at LIBOR plus 1.75% that was repaid in 2001, and a 45% interest in Locke

-28-

<Page>

Sovran I, LLC. For the year ended December 31, 2003, our share of Locke Sovran I, LLC's income was $86,000, which is recorded as equity in income of joint ventures on the consolidated statements of income. We manage the storage facilities for Locke Sovran I, LLC and received fees of $311,000, $290,000, and $413,000, for the years ended 2003, 2002, and 2001, respectively.

          We also have a 49% ownership interest in Iskalo Office Holdings, LLC at December 31, 2003. The majority of the $1.0 million investment relates to interest bearing loans made by us to the joint venture. For the year ended December 31, 2003, our share of Iskalo Office Holdings, LLC's income was $59,000. We paid rent to Iskalo Office Holdings, LLC of $393,000 in 2003 and $225,000 in 2002 and 2001. Also, during 2003 we purchased a tract of land from Iskalo Office Holdings, LLC for $1.2 million.

          A summary of the unconsolidated joint ventures' financial statements as of and for the year ended December 31, 2003 is as follows:

(dollars in thousands)

Locke Sovran I,
        LLC        

Iskalo Office 
Holdings, LLC

Balance Sheet Data:

   

Investment in storage facilities, net

$ 39,333     

$           -     

Investment in office building

-     

6,051     

Other assets

     1,691     

         392     

  Total Assets

$ 41,024     

$    6,443     


Due to the Company


$   2,133     


$    1,418     

Mortgage payable

30,018     

5,800     

Other liabilities

        692     

         90     

  Total Liabilities

32,843     

7,308     


Unaffiliated partners' equity (deficiency)


4,445     


(458)    

Company equity (deficiency)

      3,736     

        (407)    

  Total Liabilities and Partners' Equity (Deficiency)

$  41,024     

$   6,443     


Income Statement Data:

   

Total revenues

$    6,224     

$       994     

Total expenses

      6,032     

         873     

  Net income

$       192     

$       121     

     

          We do not expect to have material future cash outlays relating to these joint ventures and we do not guarantee the debt of Locke Sovran I, LLC or Iskalo Office Holdings, LLC.

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DISTRIBUTION REQUIREMENTS OF THE COMPANY AND
IMPACT ON THE OPERATING PARTNERSHIP

          As a REIT, the Company is not required to pay federal income tax on income that it distributes to its shareholders, provided that the amount distributed is equal to at least 90% of its taxable income. These distributions must be made in the year to which they relate, or in the following year if declared before the Company files its federal income tax return, and if it is paid before the first regular dividend of the following year. The first distribution of 2004 may be applied toward the Company's 2003 distribution requirement. The Company's source of funds for such distributions is solely and directly from the Operating Partnership.

          As a REIT, the Company must derive at least 95% of its total gross income from income related to real property, interest and dividends. In 2003, the Company's percentage of revenue from such sources exceeded 97%, thereby passing the 95% test, and no special measures are expected to be required to enable the Company to maintain its REIT designation.

INTEREST RATE RISK

          At December 31, 2003, we have three outstanding interest rate swap agreements. The first, entered into in March 2001, effectively fixes the LIBOR base rate at 5.36% through November 2005 on $50 million notional amount. The second, entered in September 2001, effectively fixes the LIBOR base rate at 4.485% through October 2006 on another $50 million notional amount. The third, also entered in September 2001, effectively fixes the LIBOR base rate at 4.805% through September 2008 on $30 million notional amount. We have an unsecured credit facility in place through September 2006 enabling us to borrow funds at rates of LIBOR plus 1.375%, an unsecured term note at rates of LIBOR plus 1.5% through September 2008, and an unsecured term note at rates of LIBOR plus 1.5% through September 2013. As a result of the above described interest rate swap agreements, we have fixed our interest rate through November 2005 on $9 million at 6.735%, and $41 mi llion at 6.86%, through October 2006 on $50 million at 5.985%, and through September 2008 on $29 million at 6.305%. Upon renewal or replacement of the credit facility, our total interest may change dependent on the terms we negotiate with the lenders; however, the LIBOR base rates have been contractually fixed on $129 million of our debt through the interest rate swap termination dates.

          Through November 2005, all of our $209 million of unsecured debt is on a fixed rate basis after taking into account the interest rate swaps noted above. Based on our outstanding debt of $209 million at December 31, 2003, a 1% increase in interest rates would have no effect on our interest expense.

 

 

 

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INFLATION

          We do not believe that inflation has had or will have a direct effect on our operations. Substantially all of the leases at the facilities are on a month-to-month basis which provides us with the opportunity to increase rental rates as each lease matures.

SEASONALITY

          Our revenues typically have been higher in the third and fourth quarters, primarily because we increase rental rates on most of our storage units at the beginning of May and because self-storage facilities tend to experience greater occupancy during the late spring, summer and early fall months due to the greater incidence of residential moves during these periods. However, we believe that our tenant mix, diverse geographic locations, rental structure and expense structure provide adequate protection against undue fluctuations in cash flows and net revenues during off-peak seasons. Thus, we do not expect seasonality to affect materially distributions to shareholders.

RECENT ACCOUNTING PRONOUNCEMENT

In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities, an interpretation of ARB 51." The primary objectives of this interpretation are to provide guidance on the identification of entities for which control is achieved through means other than through voting rights ("variable interest entities") and how to determine when and which business enterprise (the "primary beneficiary") should consolidate the variable interest entity. This new model for consolidation applies to an entity in which either (i) the equity investors (if any) do not have a controlling financial interest; or (ii) the equity investment at risk is insufficient to finance that entity's activities without receiving additional subordinated financial support from other parties. In addition, FIN 46 requires that the primary beneficiary, as well as all other enterprises with a significant variable interest in a variable interest entity, make additional disclosures. Certain d isclosure requirements of FIN 46 were effective for financial statements issued after January 31, 2003.

          In December 2003, the FASB issued FIN No. 46 (revised December 2003), "Consolidation of Variable Interest Entities" ("FIN 46-R") to address certain FIN 46 implementation issues. We are currently evaluating the impact of adopting FIN 46-R applicable to Non-Special Purpose Entities created prior to February 1, 2003, but do not expect a material impact to our financial position, results of operations, and cash flows.

          Effective June 2003, we adopted FASB Statement No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity" (Statement No. 150). Statement No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer

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<Page>

classify a financial instrument within its scope as a liability. Many of these instruments were previously classified as equity. Statement No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. In October 2003, the FASB issued FASB Staff Position (FSP) SFAS 150-3, "Effective Date for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests under SFAS 150", which defers certain provisions of Statement No. 150 as they apply to mandatorily redeemable noncontrolling interests. The deferral is expected to remain in effect while those issues are addressed in either Phase II of the FASB's Liabilities and Equity project or Phase II of the Business Combination project. Adoption of Statement No. 150 did not have a material effect on our consolidated financial statements.

UNITHOLDER INFORMATION

CORPORATE HEADQUARTERS
6467 Main Street
Buffalo, New York 14221
716-633-1850

SOVRAN'S WEBSITE
http://www.sovranss.com

FORM 10-K REPORT

A copy of the Operating Partnership's Annual Report on Form 10-K for the year ended December 31, 2003, filed with the Securities Exchange Commission, will be furnished to unitholders without charge upon written request. Please contact Christine M. Aguglia, 716-633-1850

INVESTOR RELATIONS

For more information or to receive Sovran's quarterly reports, please contact Diane M. Piegza, 716-633-1850

 

 

 

INDEPENDENT AUDITORS
Ernst & Young LLP
1400 Key Tower
Buffalo, New York 14202

 

 

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Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

          The information required is incorporated by reference to the information appearing under the caption "Interest Rate Risk" in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" above.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Item 8.

Financial Statements and Supplementary Data

SOVRAN ACQUISITION LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS

 

                             December 31,              

(dollars in thousands, except unit data)

   2003   

   2002   

Assets

   

Investment in storage facilities:

   

 Land

$ 136,424 

$ 132,853 

 Building and equipment

   603,412 

   577,988 

 

739,836 

710,841 

 Less: accumulated depreciation

   (92,498)

   (75,344)

Investment in storage facilities, net

647,338 

635,497 

Cash and cash equivalents

20,101 

2,063 

Accounts receivable

1,641 

1,785 

Receivable from related parties

95 

98 

Receivable from joint ventures

2,133 

2,023 

Investment in joint ventures

2,926 

3,386 

Prepaid expenses

3,144 

2,719 

Other assets

     6,079 

     4,766 

  Total Assets

$ 683,457 

$ 652,337 

Liabilities

   

Line of credit

$9,000 

$128,000 

Term notes

200,000 

75,000 

Accounts payable and accrued liabilities

9,806 

4,455 

Deferred revenue

3,498 

3,468 

Fair value of interest rate swap agreements

7,835 

10,256 

Accrued distributions

8,918 

8,124 

Capital lease obligations

1,933 

Mortgage payable

     46,819 

     47,519 

  Total Liabilities

285,876 

278,755 

Minority interest - consolidated joint venture

15,713 

16,531 


Limited partners' capital interest (540,745
  units in 2003 and 554,865 in 2002) at
  redemption  value




20,089 




15,736 

Partners' Capital

   

General partner (219,567 units outstanding
  in 2003 and 2002)


4,436 


4,729 

Limited partner (14,040,296 and
  12,764,772 units issued and
  outstanding in 2003 and 2002, respectively)



264,923 



246,606 

Preferred partners (1,200,000 Series B
  Preferred Units, at $25 liquidation preference)


30,000 


30,000 

Preferred partners (2,800,000 Series C
  Preferred Units, at $25 liquidation preference)


70,000 


70,000 

Accumulated other comprehensive income

 (7,580)

 (10,020)

  Total Partners' Capital

 361,779 

 341,315 

  Total Liabilities and Partners' Capital

$683,457 

$652,337 

See notes to financial statements.

   

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SOVRAN ACQUISITION LIMITED PARTNERSHIP CONSOLIDATED
STATEMENTS OF OPERATIONS

 

                           Year Ended December 31,                   

(dollars in thousands, except per unit data)

  2003 

  2002  

  2001  

       

Revenues

     

 Rental income

$ 110,223 

$ 99,987 

$ 89,116 

 Other operating income

     2,938 

     2,154 

     1,896 

  Total operating revenues

113,161 

102,141 

91,012 

       

Expenses

     

 Property operations and maintenance

29,021 

24,284 

20,517 

 Real estate taxes

10,118 

9,265 

7,981 

 General and administrative

9,616 

8,586 

8,026 

 Depreciation and amortization

18,980 

17,392 

15,035 

   Total operating expenses

67,735 

59,527 

51,559 

       

 Income from operations

45,426 

42,614 

39,453 

       

Other income (expenses)

     

Interest expense

(15,102)

(14,664)

(13,940)

Interest income

416 

356 

395 

Write-off of unamortized financing fees

(713)

     -    

       -    

Minority interest - consolidated joint venture

  (614)

  (810)

  (75)

Equity in income (losses) of joint ventures

     186 

      (15)

     (102)

       

Net Income

 29,599 

 27,481 

 25,731 

Preferred unit distributions

   (8,818)

   (5,093)

   (2,955)

Net income available to common unitholders

$ 20,781 

$ 22,388 

$ 22,776 

       

Per Common Unit:

     

Earnings per common unit - basic

$  1.49 

$  1.67 

$  1.75 

Earnings per common unit - diluted

$  1.48 

$  1.65 

$  1.74 

       

Distributions declared per common unit

$  2.41 

$  2.38 

$  2.34 

See notes to financial statements.

 

 

 

 

 

 

 

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<Page>

Sovran Acquisition Limited Partnership
Statements of Partners' Capital



(Dollars in thousands)

Sovran
Holdings, Inc.
General Partner


Sovran Self
Storage Inc.
Limited Partner



Preferred B
Partners



Preferred C
Partners


Accumulated     
Other Comprehensive
Income        


Total
Partners'
Capital


Limited Partners'
Capital Interest

               

Balance January 1, 2001

    5,171 

 248,705 

 30,000 

-    

-     

 283,876 

  16,954 


Proceeds from issuance of Partnership Units


- -   


5,209 


- -     


- -     


- -     


5,209 


- -     

Redemption of Partnership Units

-   

1,868 

-     

-     

-     

1,868 

(5,646)

Exercise of stock options

-   

1,096 

-     

-     

-     

1,096 

-     

Earned portion of restricted stock

-   

424 

-     

-     

-     

424 

-     

Purchase of treasury shares

-   

(1,809)

-     

-     

-     

(1,809)

-     

Deferred compensation

-   

69 

-     

-     

-     

69 

-     

Net income

429 

23,760 

-     

-     

-     

24,189 

1,532 

Increase in fair value of derivatives

-   

-   

-     

-     

373 

     373 

     -     

Total comprehensive income

-   

-   

-     

-     

-     

24,562 

1,532 

Distributions

(560)

(31,093)

-     

-     

-     

(31,653)

(1,728)

Adjustment to reflect limited partners'
  redeemable capital at balance sheet date


       (167)


     (9,305)


      -     


      -     

        -     


     (9,472)


     9,472 

Balance December 31, 2001

$   4,873 

$ 238,924 

$  30,000 

$-     

$      373 

$ 274,170 

$  20,584 

 


Proceeds from issuance of Partnership Units


- -   


16,446 


- -     


- -     


- -     


16,446 


- -     

Redemption of Partnership Units

-   

(150)

-     

-     

-     

(150)

(3,163)

Issuance of 8.375% Series C Units

-   

(2,124)

-     

70,000  

-     

67,876 

-     

Exercise of stock options

-   

5,648 

-     

-     

-     

5,648 

-     

Earned portion of restricted stock

-   

430 

-     

-     

-     

430 

-     

Purchase of treasury shares

-   

(5,188)

-     

-     

-     

(5,188)

-     

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Deferred compensation

-   

89 

-     

-     

-     

89 

-     

Net income

433 

25,868 

-     

-     

-     

26,301 

1,180 

Decrease in fair value of derivatives

-   

-   

-     

-     

(10,393)

 (10,393)

         -     

Total comprehensive income

-   

-   

-     

-     

-     

15,908 

1,180 

Distributions

(603)

(34,847)

-     

-     

-     

(35,450)

(1,329)

Adjustment to reflect limited partners'
  redeemable capital at balance sheet date


          26 


      1,510 


         -     


           -     


              -     


      1,536 


    (1,536)

Balance December 31, 2002

$    4,729 

$ 246,606 

$  30,000 

$  70,000   

$      (10,020)

$ 341,315 

$  15,736 


Proceeds from issuance of Partnership Units


- -   


34,599 


- -     


- -     


- -     


34,599 


- -     

Redemption of Partnership Units

-   

-   

-     

-     

-     

-   

(462)

Exercise of stock options

-   

7,729 

-     

-     

-     

7,729 

-     

Earned portion of restricted stock

-   

412 

-     

-     

-     

412 

-     

Purchase of treasury shares

-   

(3,950)

-     

-     

-     

(3,950)

-     

Deferred compensation

-   

96 

-     

-     

-     

96 

-     

Series C placement certificate value

-   

(2,958)

-     

-     

-     

(2,958)

-     

Net income

449 

27,974 

-     

-     

-     

28,423 

1,176 

Decrease in fair value of derivatives

-   

-   

-     

-     

2,440 

     2,440 

      -     

Total comprehensive income

-   

-   

-     

-     

-     

30,863 

1,176 

Distributions

(668)

(40,700)

-     

-     

-     

(41,368)

(1,320)

Adjustment to reflect limited partners'
  redeemable capital at balance sheet date


          (74)


     (4,885)


         -     


           -     


              -     


    (4,959)


      4,959 

Balance December 31, 2003

$    4,436 

$ 264,923 

$  30,000 

$  70,000   

$      (7,580)

$ 361,779 

$  20,089 

 

See notes to financial statements.

 

 

 

 

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SOVRAN ACQUISITION LIMITED PARTNERSHIP CONSOLIDATED
STATEMENTS OF CASH FLOWS

 

Year Ended December 31,       

(dollars in thousands)

  2003  

  2002  

  2001  

       

Operating Activities

     

Net income

$ 29,599 

$ 27,481 

$ 25,731 

Adjustments to reconcile net income to net cash
  provided by operating activities:

     

Write-off of deferred financing costs

713 

-    

-    

Depreciation and amortization

18,980 

17,392 

15,035 

Equity in losses of joint ventures

(186)

15 

102 

Minority interest

614 

810 

75 

Restricted stock earned

411 

430 

424 

Changes in assets and liabilities:

     

 Accounts receivable

144 

(587)

91 

 Fees receivable from joint ventures

-    

-    

711 

 Prepaid expenses

(420)

13 

(472)

 Accounts payable and other liabilities

2,310 

220 

(626)

 Deferred revenue

     (92)

    (164)

    (149)

Net cash provided by operating activities

52,073 

45,610 

40,922 

       

Investing Activities

     

 Acquisition of storage facilities

(8,187)

(79,216)

(12,956)

 Improvements and equipment additions

(22,977)

(17,934)

(18,527)

 (Advances) reimbursement of advances to joint
    ventures


(110)


(2,118)


14,654 

 Receipts from (advances to) related parties

24 

1,885 

 Other assets

        -    

        -    

     (2,807)

Net cash used in investing activities

(31,271)

(99,244)

(17,751)

       

Financing Activities

     

 Net proceeds from sale of partnership units

42,425 

22,034 

6,374 

 Net proceeds from sale of preferred units and
   common unit warrants


- -    


67,876 


- -    

 Proceeds from line of credit

9,000 

-    

10,000 

 Paydown of line of credit

(128,000)

(6,000)

-    

 Proceeds from term notes

200,000 

-    

-    

 Paydown of term notes

(75,000)

(30,000)

-    

 Proceeds from mortgage financing

-    

48,000 

-    

 Financing costs

(2,927)

(460)

(398)

 Distributions paid

(43,320)

(37,646)

(33,065)

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 Distributions from unconsolidated joint venture

646 

1,032 

-    

 Purchase of treasury stock

(3,950)

(5,188)

(1,809)

 Redemption of operating partnership units

(462)

(3,163)

(3,778)

 Mortgage principal payments

    (1,176)

     (2,671)

          (33)


Net cash (used in) provided by financing activities

    (2,764)

    53,814 

   (22,709)

Net increase in cash

18,038 

180 

462 

Cash at beginning of period

      2,063 

      1,883 

      1,421 

Cash at end of period

$   20,101 

$   2,063 

$   1,883 

 

 

Year Ended December 31,

(dollars in thousands)

  2003  

  2002  

  2001  

Supplemental cash flow information

     

Cash paid for interest

$ 13,344 

$ 14,465 

$ 14,416 

       

Capital lease obligations incurred

 1,529 

 2,183 

-    

Capital lease obligations discharged

 (2,986)

-    

-    

Storage facilities acquired through issuance of
  an ownership interest in the consolidated joint venture


- -    


- -    


17,000 

Fair value of net liabilities assumed on the acquisition
  of storage facilities


212 


559 


165 

Distributions declared but unpaid at December 31, 2003, 2002 and 2001 were $8,918, $8,124, and $7,683, respectively.

See notes to financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sovran Acquisition Limited Partnership - December 31, 2003

1.  ORGANIZATION

          Sovran Acquisition Limited Partnership (the "Operating Partnership") is the entity through which Sovran Self Storage, Inc. (the "Company"), a self-administered and self-managed real estate investment trust ("REIT"), conducts substantially all of its business and owns substantially all of its assets. On June 26, 1995, the Company commenced operations, through the Operating Partnership, effective with the completion of its initial public offering of 5,890,000 shares. At December 31, 2003, the Operating Partnership owned and/or managed 266 self-storage properties under the "Uncle Bob's Self Storage" registered trade name in 21 states.

          As of December 31, 2003, the Company was a 96.35% economic owner of the Operating Partnership and controls it through Sovran Holdings, Inc. ("Holdings"), a wholly owned subsidiary of the Company incorporated in Delaware and the sole general partner of the Operating Partnership (this structure is commonly referred to as an umbrella partnership REIT or "UPREIT"). The board of directors of Holdings, the members of which are also members of the Board of Directors of the Company, manages the affairs of the Operating Partnership by directing the affairs of Holdings. The Company's limited partner and indirect general partner interests in the Operating Partnership entitle it to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to its ownership interest therein and entitle the Company to vote on all matters requiring a vote of the limited partners.

         The other limited partners of the Operating Partnership are persons who contributed their direct or indirect interests in certain self-storage properties to the Operating Partnership. The Operating Partnership is obligated to redeem each unit of limited partnership ("Unit") at the request of the holder thereof for cash equal to the fair market value of a share of the Company's common stock ("Common Shares") at the time of such redemption, provided that the Company at its option may elect to acquire any Unit presented for redemption for one Common Share or cash. The Company presently anticipates that it will elect to issue Common Shares to acquire Units presented for redemption, rather than paying cash. With each such redemption the Company's percentage ownership interest in the Operating Partnership will increase. In addition, whenever the Company issues Common Shares, the Company is obligated to contribute any net proceeds therefrom to the Operati ng Partnership and the Operating Partnership is obligated to issue an equivalent number of Units to the Company. Such limited partners' redemption rights are reflected in "limited partners' capital interest" in the accompanying balance sheets at the cash redemption amount at the balance sheet date. Capital activity with regard to such limited partners' redemption rights is reflected in the accompanying statements of partners' capital.

 

 

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2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Basis of Presentation: The consolidated financial statements of the Operating Partnership include the accounts of the Operating Partnership and Locke Sovran II, LLC, which is a majority controlled joint venture. All intercompany transactions and balances have been eliminated. Investments in joint ventures which are not majority owned are reported using the equity method.

          Cash and Cash Equivalents: The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.

          Revenue and Expense Recognition: Rental income is recorded when earned. Rental income received prior to the start of the rental period is included in deferred revenue. Advertising costs are expensed as incurred and for the years ended December 31, 2003, 2002, and 2001 were $0.6 million, $0.6 million, and $0.4 million, respectively.

          Other Income: Consists primarily of sales of storage-related merchandise (locks and packing supplies), management fees, insurance commissions, and truck rentals.

          Investment in Storage Facilities: Storage facilities are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of forty years for buildings and improvements, and five to twenty years for furniture, fixtures and equipment. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Repair and maintenance costs are expensed as incurred.

          Whenever events or changes in circumstances indicate that the basis of the Company's property may not be recoverable, the Company's policy is to assess any impairment of value. Impairment is evaluated based upon comparing the sum of the expected undiscounted future cash flows to the carrying value of the property, on a property by property basis. If the sum of the undiscounted cash flow is less than the carrying amount, an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. At December 31, 2003 and 2002, no assets had been determined to be impaired under this policy and, accordingly, this policy had no impact on the Company's financial position or results of operations.

          Other Assets: Included in other assets are intangible assets of $3.3 million and a note receivable of $2.8 million. The intangible assets at December 31, 2003, consist primarily of loan acquisition costs of approximately $3.6 million, net of accumulated amortization of approximately $0.3 million. Loan acquisition costs are amortized over the terms of the related debt. Amortization expense was $0.9 million, $1.0 million and $1.1 million for the periods ended December 31, 2003, 2002 and 2001, respectively. The note receivable of $2.8 million represents a note from certain investors of Locke Sovran II, LLC. The note bears interest at LIBOR plus 2.4% and matures upon the dissolution of Locke Sovran II, LLC.

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          Stock-Based Compensation: In accordance with the provisions of SFAS No. 123 "Accounting for Stock-Based Compensation," the Operating Partnership has elected to continue applying the provisions of Accounting Principles Board Opinion No. 25 (APB 25) and related interpretations in accounting for its stock-based compensation plans. Accordingly, the Operating Partnership does not recognize compensation expense for stock options when the stock option price at the grant date is equal to or greater than the fair market value of the stock at that date. The following illustrates the pro forma effect on net income and earnings per unit if the Operating Partnership had applied the fair value recognition provisions of SFAS No. 123 (in thousands, except for earnings per unit information):

 

                      Pro Forma                   

(dollars in thousands, except per share data)

  2003  

  2002  

  2001  

Net income available to common unitholders
  as reported


$ 20,781


$ 22,388


$ 22,776

Deduct: Total stock-based employee compensation
  Expense determined under fair value method for
  all awards



   (200)



   (202)



   (188)

Pro forma net income available to common
  unitholders


$  20,581


$  22,186


$  22,588

Earnings per common unit

     

   Basic - as reported

$      1.49

$      1.67

$      1.75

   Basic - pro forma

$      1.48

$      1.66

$      1.74

   Diluted - as reported

$      1.48

$      1.65

$      1.74

   Diluted - pro forma

$      1.47

$      1.64

$      1.72

           Pro forma information regarding net income and earnings per unit is required by SFAS No. 123, and has been determined as if the Operating Partnership had accounted for its stock options under the fair value method of SFAS No. 123. The fair value for the stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions: risk-free interest rate of 3.5% for 2003, 4.0% for 2002, and 5.0% for 2001; dividend yield of 7.0% for 2003, 8.0% for 2002, and 10.7% for 2001; volatility factor of the expected market price of the Company's common stock of .19 for 2003, and .21 for 2002 and .23 for 2001. The average fair value of options granted was $2.21 in 2003, $1.98 in 2002, and $.93 in 2001.

           The Black-Scholes options valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Operating Partnership's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's

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<Page>

opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period.

          Minority Interest:  The minority interest reflects the joint venture partner's interest in Locke Sovran II, LLC. Amounts allocated to the joint venture partners are reflected as an expense in the income statement and increase the minority interest in the balance sheet. Distributions to these partners reduce this balance.

          Income Taxes:  No provision has been made for income taxes in the accompanying financial statements since the Operating Partnership qualifies as a partnership for federal and state income tax purposes and its partners are required to include their respective shares of profits and losses in their income tax returns.

          Comprehensive Income: Comprehensive income consists of net income and the change in value of derivatives used for hedging purposes and is reported in the consolidated statements of partners' capital. Comprehensive income was $30.9 million and $15.9 million and $24.6 million for the years ended December 31, 2003, 2002, and 2001, respectively.

          Derivative Financial Instruments: On January 1, 2001, the Operating Partnership adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended, which requires companies to carry all derivatives on the balance sheet at fair value. The Operating Partnership determines the fair value of derivatives by reference to quoted market prices. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. The Operating Partnership's use of derivative instruments is limited to cash flow hedges, as defined in SFAS No. 133, of certain interest rate risks.

          Recent Accounting Pronouncements: In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities, an interpretation of ARB 51." The primary objectives of this interpretation are to provide guidance on the identification of entities for which control is achieved through means other than through voting rights ("variable interest entities") and how to determine when and which business enterprise (the "primary beneficiary") should consolidate the variable interest entity. This new model for consolidation applies to an entity in which either (i) the equity investors (if any) do not have a controlling financial interest; or (ii) the equity investment at risk is insufficient to finance that entity's activities without receiving additional subordinated financial support from other parties. In addition, FIN 46 requires that the primary beneficiary, as well as all other enterprises wit h a significant variable interest in a variable interest entity, make additional disclosures. Certain disclosure requirements of FIN 46 were effective for financial statements issued after January 31, 2003. In December 2003, the FASB issued FIN No. 46 (revised December 2003), "Consolidation of Variable Interest Entities" ("FIN 46-R") to address certain FIN 46

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<Page>

implementation issues. The Operating Partnership is currently evaluating the impact of adopting FIN 46-R applicable to Non-Special Purpose Entities created prior to February 1, 2003 but does not expect a material impact.

          Effective June 2003, the Operating Partnership adopted FASB Statement No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity" (Statement No. 150). Statement No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument within its scope as a liability. Many of these instruments were previously classified as equity. Statement No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. In October 2003, the FASB issued FASB Staff Position (FSP) SFAS 150-3, "Effective Date for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests under SFAS 150", which defers certain provisions of Statement No. 150 as they apply to mandatorily redeemable noncontrolling interests. The deferral is expected to remain in effect while those issues are addressed in either Phase II of the FASB's Liabilities and Equity project or Phase II of the Business Combination project. Adoption of Statement No. 150 did not have a material effect on the Operating Partnership's consolidated financial statements.

          Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

3.  EARNINGS PER UNIT

          The Operating Partnership reports earnings per unit data in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share." In computing earnings per unit, the Operating Partnership excludes preferred unit distributions from net income to arrive at net income available to common unitholders. The following table sets forth the computation of basic and diluted earnings per common unit.


(Amounts in thousands,
except per unit data)                                          

Year Ended  
December 31,
       2003       

Year Ended  
December 31,
       2002       

Year Ended  
December 31,
        2001      


Numerator:
                                                                          
  Net income available to common unitholders




$ 20,781 




$ 22,388 




$ 22,776 

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<Page>

Denominator
  Denominator for basic earnings per unit -
  weighted average units



13,898 



13,376 



12,991 


Effect of Dilutive Securities:
  Stock options                                                 



       127 



       179 



        101 

  Denominator for diluted earnings per unit -
    adjusted weighted - average units and     assumed conversion                                    



  14,025 



  13,555 



  13,092 


Basic Earnings per Common Unit                  


$    1.49 


$    1.67 


$    1.75 


Diluted Earnings per Common Unit               


$    1.48 


$    1.65 


$    1.74 

          Potential common units from the Series C Convertible Cumulative Preferred Stock, see Note 12, were excluded from the 2003 and 2002 diluted earnings per unit calculation because their inclusion would have had an antidilutive effect on earnings per unit.

4.  INVESTMENT IN STORAGE FACILITIES

          The following summarizes activity in storage facilities during the years ended December 31, 2003 and December 31, 2002.

(Dollars in thousands)                                    

   2003   

   2002   

Cost:

   

  Beginning balance

$710,841 

$611,289 

  Acquisition of storage facilities

11,007 

81,819 

  Improvements and equipment additions

21,812 

17,934 

  Dispositions                                           

    (3,824)

      (201)


Ending balance                                        


$739,836 


$710,841 


Accumulated Depreciation:

   

  Beginning balance

$ 75,344 

$ 59,091 

  Additions during the year

18,079 

16,344 

  Dispositions                                          

       (925)

        (91)

 

Ending balance                                       

$ 92,498 

$ 75,344 

          During 2003 the Operating Partnership acquired two storage facilities, one in August for $5.2 million and one in October for $4.6 million. Substantially all of the purchase price of these two facilities was allocated to land and building and the operating results of the acquired

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facilities have been included in the Operating Partnership's operations since the respective acquisition dates.

5.  UNSECURED LINE OF CREDIT AND TERM NOTE

          The Operating Partnership had a $150 million revolving line of credit at LIBOR plus 1.375% and a $75 million term loan due November 2003 at LIBOR plus 1.75%. The facility was scheduled to mature November 2003; the facility was paid off in 2003 with the proceeds of the new debt agreements described below.

          On September 4, 2003, the Operating Partnership entered into agreements relating to new unsecured credit arrangements, and received funds under those arrangements. The new agreements provide for a $75 million (expandable to $100 million) revolving line of credit maturing September 2006 bearing interest at a variable rate equal to LIBOR plus 1.375%, a $100 million term note maturing September 2008 bearing interest at a variable rate equal to LIBOR plus 1.50%, a $80 million term note maturing September 2013 bearing interest at a fixed rate of 6.26% and a $20 million term note maturing September 2013 bearing interest at a variable rate equal to LIBOR plus 1.5%. The weighted average interest rate at December 31, 2003 on the Operating Partnership's line of credit before the effect of interest rate swaps was approximately 2.5% (3.0% at December 31, 2002). At December 31, 2003, there was $66 million available on the revolving line of credit excl uding the amount available on the expansion feature.

          The Operating Partnership recorded an expense of $713,000 during 2003, representing the unamortized financing costs relating to the credit facilities that were replaced by the new credit arrangements.

          The net carrying amount of the Operating Partnership's debt instruments approximates fair value.

6.  MORTGAGE PAYABLE AND CAPITAL LEASE OBLIGATIONS

          In February 2002, the consolidated joint venture (Locke Sovran II, LLC) entered into a mortgage note of $48 million. The note is secured by the 27 properties owned by the joint venture with a cost of $79 million. The 10-year mortgage bears interest at the fixed rate of 7.19%. The outstanding balance on the mortgage is $46.8 million at December 31, 2003. Principal maturities of the mortgage for the next five years are as follows: 2004, $0.7 million; 2005, $0.8 million; 2006, $0.9 million; 2007, $0.9 million; and 2008, $1.0 million.

          During 2002, the Operating Partnership entered into lease agreements, qualifying as capital leases, for trucks to be used at its storage facilities. On December 31, 2003, the Operating Partnership purchased the entity from which it was leasing the trucks. The purchase price of $3.3 million was allocated to the cost of the trucks. This purchase resulted in the discharge of the capital lease obligations.

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7.  DERIVATIVE FINANCIAL INSTRUMENTS

          Interest rate swaps are used to adjust the proportion of total debt that is subject to variable and fixed interest rates. The interest rate swaps require the Operating Partnership to pay an amount equal to a specific fixed rate of interest times a notional principal amount and to receive in return an amount equal to a variable rate of interest times the same notional amount. The notional amounts are not exchanged. No other cash payments are made unless the contract is terminated prior to its maturity, in which case the contract would likely be settled for an amount equal to its fair value. The Operating Partnership enters interest rate swaps with a number of major financial institutions to minimize counterparty credit risk.

          The interest rate swaps qualify and are designated as hedges of the amount of future cash flows related to interest payments on variable rate debt. Therefore, the interest rate swaps are recorded in the consolidated balance sheet at fair value and the related gains or losses are deferred in shareholders' equity as Accumulated Other Comprehensive Income ("AOCI"). These deferred gains and losses are amortized into interest expense during the period or periods in which the related interest payments affect earnings. However, to the extent that the interest rate swaps are not perfectly effective in offsetting the change in value of the interest payments being hedged, the ineffective portion of these contracts is recognized in earnings immediately. Ineffectiveness was immaterial in 2003 and 2002.

          The Operating Partnership has entered into three interest rate swap agreements, one in March 2001 for $50 million and two in September 2001 for $50 million and $30 million, to effectively convert a total of $130 million of variable-rate debt to fixed-rate debt. One of the $50 million interest rate swap agreements matures in November 2005, the other matures in October 2006, and the $30 million swap agreement matures in September 2008.

          The 2001 interest rate swap agreements are the only derivative instruments, as defined by SFAS No. 133, held by the Operating Partnership; as such, there was no impact upon adoption of SFAS No. 133 at January 1, 2001. During 2003, 2002, and 2001, the net reclassification from AOCI to interest expense was $4.8 million, $4.0 million and $1.1 million, respectively, based on payments made under the swap agreements. Based on current interest rates, the Operating Partnership estimates that payments under the interest rate swaps will be approximately $4.8 million in 2004. Payments made under the interest rate swap agreements will be reclassified to interest expense as settlements occur. The fair value of the swap agreements including accrued interest was a liability of $7.8 million and $10.3 million at December 31, 2003, and 2002 respectively.

8.  STOCK OPTIONS

          The Company established the 1995 Award and Option Plan (the "Plan") for the purpose of attracting and retaining the Company's executive officers and other key employees. 1,500,000 shares were authorized for issuance under the Plan. The options vest ratably over four and five

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years, and must be exercised within ten years from the date of grant. The exercise price for qualified incentive stock options must be at least equal to the fair market value at the date of grant. As of December 31, 2003, options for 368,165 shares were outstanding under the Plan and options for 365,360 shares of common stock were available for future issuance.

          The Company also established the 1995 Outside Directors' Stock Option Plan (the Non-employee Plan) for the purpose of attracting and retaining the services of experienced and knowledgeable outside directors. The Non-employee Plan provides for the annual granting of options to purchase 3,500 shares of common stock to each eligible director. Such options vest over a one-year period for initial awards and immediately upon subsequent grants. The total shares reserved under the Non-employee Plan is 150,000. The exercise price for options granted under the Non-employee Plan is equal to fair market value at date of grant. As of December 31, 2003, options for 75,500 shares were outstanding under the Non-employee Plan and options for 48,500 shares of common stock were available for future issuance.

          The Company has also issued 132,340 shares of restricted stock to employees which vest over four to nine year periods. The fair market value of the restricted stock on the date of grant ranged from $20.38 to $31.65. The Company charges unearned restricted stock, a component of shareholders' equity, for the market value of shares as they are issued. The unearned portion is then amortized and charged to expense over the vesting period.

          A summary of the Company's stock option activity and related information for the years ended December 31 follows:

 

2003

2002

2001

                                                                       

 




Options 

Weighted
average 
exercise 
price    




Options 

Weighted
average 
exercise 
price    




Options 

Weighted
average 
exercise 
price    

                                                                                               

Outstanding at beginning of year:


734,775 


$   23.08 


902,550 


$   23.14 


639,050 


$   23.67 

             

Granted

32,000 

30.42 

80,000 

30.92 

329,500 

21.71 

Exercised

(323,110)

23.92 

(247,775)

22.80 

(52,500)

20.77 

Forfeited

-    

-    

-    

-    

(13,500)

20.75 

                                                                                               

 

 

 

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Outstanding at end of
year


443,665 


$    24.71 


734,775 


$    23.08 


902,550 


$    23.14 

                                                                                              

Exercisable at end of
year


174,415 


$    26.27 


317,030 


$    25.39 


417,370 


$    24.55 

________________________________________________________________________________

          At December 31, 2003, there were 245,500 options outstanding at exercise prices ranging from $19.07 to $24.99 and 198,165 options outstanding at exercise prices ranging from $25.00 to $33.40. The weighted average remaining contractual life of those options is 6.67 years. As disclosed further in Note 12, warrants to purchase 379,166 common shares of the Company at a price of $32.60 per share are outstanding at December 31, 2003.

9.  RETIREMENT PLAN

          Employees of the Operating Partnership qualifying under certain age and service requirements are eligible to be a participant in a 401(k) Plan. The Operating Partnership contributes to the Plan at the rate of 50% of the first 4% of gross wages that the employee contributes. Total expense to the Operating Partnership was approximately $119,000, $92,000, and $63,000 for the years ended December 31, 2003, 2002 and 2001, respectively.

10.  SHAREHOLDER RIGHTS PLAN

          In November 1996, the Company adopted a Shareholder Rights Plan and declared a dividend distribution of one Right for each outstanding share of common stock. Under certain conditions, each Right may be exercised to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock at a purchase price of $75, subject to adjustment. The Rights will be exercisable only if a person or group has acquired 10% or more of the outstanding shares of common stock, or following the commencement of a tender or exchange offer for 10% or more of such outstanding shares of the Company's common stock. If a person or group acquires more than 10% of the then outstanding shares of the Company's common stock, each Right will entitle its holder to receive, upon exercise, common stock having a value equal to two times the exercise price of the Right. In addition, if the Company is acquired in a merger or other business combination transacti on, each Right will entitle its holder to purchase that number of the acquiring Company's common shares having a market value of twice the Right's exercise price. The Company will be entitled to redeem the Rights at $.01 per Right at any time prior to the earlier of the expiration of the Rights in November 2006 or the time that a person has acquired a 10% position. The Rights do not have voting or dividend rights, and until they become exercisable, have no dilutive effect on the Company's earnings.

 

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<Page>

11.  INVESTMENT IN JOINT VENTURES

          Investment in joint ventures includes an ownership interest in Locke Sovran I, LLC, which operates 11 self-storage facilities throughout the United States, and an ownership interest in Iskalo Office Holdings, LLC, which owns the building that houses the Operating Partnership's headquarters and other tenants.

          In December 2000, the Operating Partnership contributed seven self-storage properties to Locke Sovran I, LLC with a fair market value of $19.8 million, in exchange for a $15 million 1 year note receivable bearing interest at LIBOR plus 1.75% that was repaid in 2001, and a 45% interest in Locke Sovran I, LLC. This transaction resulted in a gain on the disposal of the properties of approximately $4.3 million; $1.9 million of this gain was deferred as a result of the Operating Partnership's continuing ownership interest in Locke Sovran I, LLC, as such the initial investment, including cash funding, was recorded at $3.1 million. The deferred gain is being amortized over the life of the properties, consistent with the depreciation expense recorded by Locke Sovran I, LLC. For the year ended December 31, 2003, the Operating Partnership's share of Locke Sovran I, LLC's income was $86,000 and the amortization of the deferred gain was $40,000, bot h of which are recorded as equity in income of joint ventures on the consolidated statements of income. The Operating Partnership manages the storage facilities for Locke Sovran I, LLC and received fees of $311,000, $290,000, and $413,000, for the years ended 2003, 2002, and 2001, respectively.

          The Operating Partnership also has a 49% ownership interest in Iskalo Office Holdings, LLC at December 31, 2003. The $1.0 million investment relates to interest bearing loans made by the Operating Partnership to the joint venture less the Operating Partnership's share of losses incurred to date. For the year ended December 31, 2003, the Operating Partnership's share of Iskalo Office Holdings, LLC's income was $59,000. The Operating Partnership paid rent to Iskalo Office Holdings, LLC of $393,000 in 2003 and $255,000 in 2002 and 2001. Also, during 2003 the Operating Partnership purchased a tract of land from Iskalo Office Holdings, LLC for $1.2 million.

          A summary of the unconsolidated joint ventures' financial statements as of and for the year ended December 31, 2003 is as follows:

(dollars in thousands)

Locke Sovran I,
        LLC        

Iskalo Office 
Holdings, LLC

Balance Sheet Data:

   

Investment in storage facilities, net

$ 39,333     

$           -     

Investment in office building

-     

6,051     

Other assets

     1,691     

         392     

  Total Assets

$ 41,024     

$    6,443     


Due to the Operating Partnership


$   2,133     


$    1,418     

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<Page>

Mortgage payable

30,018     

5,800     

Other liabilities

        692     

         90     

  Total Liabilities

32,843     

7,308     


Unaffiliated partners' equity (deficiency)


4,445     


(458)    

Operating Partnership equity (deficiency)

      3,736     

        (407)    

  Total Liabilities and Partners' Equity (Deficiency)

$  41,024     

$   6,443     


Income Statement Data:

   

Total revenues

$    6,224     

$       994     

Total expenses

      6,032     

         873     

  Net income

$       192     

$       121     

     

          The Operating Partnership does not guarantee the debt of Locke Sovran I, LLC or Iskalo Office Holdings, LLC.

12.  PREFERRED STOCK

Series A

         The Company has authorized 10,000,000 shares of preferred stock, of which 250,000 shares have been designated as Series A Junior Participating Cumulative Preferred Stock with a $.01 par value. Upon issuance pursuant to the Shareholder Rights Plan (see note 10), the Series A Junior Preferred Stock will have certain voting, dividend and liquidation preferences over common stock, as described in the Form 8-K filed December 3, 1996.

Series B

         On July 30, 1999, the Company issued 1,200,000 shares of 9.85% Series B Cumulative Redeemable Preferred Stock. The offering price was $25 per share resulting in net proceeds of $28.6 million after expenses. The Series B Preferred Stock is not redeemable until on or after July 30, 2004, at which time the Company may redeem the shares at $25.00 per share ($30,000,000 aggregate), plus any accrued and unpaid dividends. The shares may be redeemed only with the proceeds of certain sales of equity securities. Dividends on the Series B Preferred Stock are cumulative from the date of original issue and are payable quarterly in arrears on the last day of each March, June, September, and December at a rate of $2.4625 per annum per share.

         Holders of the Series B Preferred Stock generally have no voting rights. However, if the Company does not pay dividends on the Series B shares for six or more quarterly periods (whether or not consecutive), the holders of the shares, voting as a class with the holders of any other class or series of stock with similar voting rights, will be entitled to vote for the election of two additional directors to serve on the Board of Directors until all Series B dividends that have accrued are paid.

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<Page>

Series C

         On July 3, 2002, the Company entered into an agreement providing for the issuance of 2,800,000 shares of 8.375% Series C Convertible Cumulative Preferred Stock ("Series C Preferred") in a privately negotiated transaction. The Company immediately issued 1,600,000 shares of the Series C Preferred and issued the remaining 1,200,000 shares on November 27, 2002. The offering price was $25.00 per share resulting in net proceeds for the Series C Preferred and related common stock warrants of $67.9 million after expenses.

         The Series C Preferred has a fixed annual dividend rate equal to the greater of 8.375% or the actual dividend paid on the number of the Company's common shares into which the Series C Preferred is convertible. The Series C Preferred is convertible at a ratio of .76687 common shares for each Series C Preferred share and can be redeemed at the Company's option on or after November 30, 2007 at $25.00 per share ($70,000,000 aggregate) plus accrued and unpaid dividends. Dividends on the Series C Preferred are cumulative from the date of original issue and are payable quarterly in arrears on the last day of each March, June, September, and December at a rate of $2.09375 per annum per share.

         Holders of the Series C Preferred generally have no voting rights. However, if the Company does not pay dividends on the Series C Preferred shares for six or more quarterly periods (whether or not consecutive), the holders of the shares, voting as a class with the holders of any other class or series of stock with similar voting rights, will be entitled to vote for the election of two additional directors to serve on the Board of Directors until the Series C Preferred dividends are paid.

         In addition, the Company issued warrants to the Series C Preferred investors to purchase 379,166 common shares of the Company at a price of $32.60 per share that expire November 30, 2007. Using the Black-Scholes method, the warrants had a fair value at the issue date of $1.97 per common share covered by the warrants. Also, an entity related to one of the investors received a placement certificate that entitles it to receive cash from the Company in the amount of 650,000 multiplied by the excess of the fair market value of the Company's common stock over $32.60 on the date the certificate is exercised. This arrangement expires on November 30, 2007. Based upon the Company's common stock price at December 31, 2003, the Company has recorded a $3.0 million liability relating to the placement certificate arrangement.

         The Company recorded a deemed dividend of $0.2 million in 2002 in connection with the issuance of the Series C Preferred. The deemed dividend represents the calculated value of the beneficial conversion feature that existed on July 3, 2002, the date of issuance of the Series C Preferred. The beneficial conversion feature is calculated as the excess of, on the date of issuance of the Series C Preferred, the fair value of the common stock into which the Series C Preferred is convertible, over the issuance amount allocated to the Series C Preferred.

          The Series B and C Preferred Stock are recorded as Preferred Partners' Units in the Operating Partnership's balance sheet

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<Page>

13.  SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)

          The following is a summary of quarterly results of operations for the years ended December 31, 2003 and 2002 (dollars in thousands, except per unit data).

 

2003 Quarter Ended

 

March 31  

June 30  

Sept. 30  

Dec. 31  

Operating revenue

$ 27,055 

$ 27,921 

$ 29,190 

$ 28,995 

Net Income

$   6,971 

$   7,883 

$   7,299 

$   7,446 

Net income available to common
  unitholders


$   4,767 


$   5,679 


$   5,095 


$   5,240 

Net Income Per Common Unit

       

  Basic

$     0.35 

$     0.42 

$     0.36 

$     0.36 

  Diluted

$     0.35 

$     0.41 

$     0.36 

$     0.36 

 

2002 Quarter Ended

 

March 31  

June 30  

Sept. 30  

Dec. 31  

Operating revenue

$ 24,167 

$ 25,177 

$ 26,249 

$ 26,548 

Net Income

$   6,411 

$   6,956 

$   7,117 

$   6,997 

Net income available to common
  unitholders


$   5,670 


$   6,217 


$   5,329 


$   5,172 

Net Income Per Common Unit

       

  Basic

$     0.43 

$     0.47 

$     0.39 

$     0.38 

  Diluted

$     0.43 

$     0.47 

$     0.39 

$     0.37 

14.  COMMITMENTS AND CONTINGENCIES

          The Operating Partnership's current practice is to conduct environmental investigations in connection with property acquisitions. At this time, the Operating Partnership is not aware of any environmental contamination of any of its facilities that individually or in the aggregate would be material to the Operating Partnership's overall business, financial condition, or results of operations.

15.  LEGAL PROCEEDINGS

          A former business associate (the "Plaintiff") of certain officers and directors of the Company, including Robert J. Attea, Kenneth F. Myszka, David L. Rogers and Charles E. Lannon (the "Founding Shareholders"), commenced a lawsuit against the Company on June 13, 1995 in the United States District Court for the Northern District of Ohio. The Plaintiff subsequently amended the complaint in the lawsuit alleging breach of fiduciary duty, breach of contract, breach of general partnership/joint venture arrangement, breach of duty of good faith, fraud and deceit, and other causes of action including declaratory judgment as to the Plaintiff's

- 53 -

<Page>

continuing interest in the Company. The parties agreed to settle the lawsuit and the Company paid $2,359,174 to the Plaintiff in settlement of all claims. In addition, legal fees and related expenses totaling $1,686,000 were paid by the Company in connection with the lawsuit, and $781,000 was paid in connection with its own counterclaim against the Plaintiff. Pursuant to their agreement with the Company to pay certain costs and losses arising from the lawsuit, the Founding Shareholders made payment to the Company in April 2001 of $1,785,000 and in November 2001 by the redemption of 46,528 shares of the Company's common stock owned by them having a market value of approximately $1,360,000. The cost to the Operating Partnership, after indemnification by the Founding Shareholders, was $1.7 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-54-

<Page>

Report of Independent Auditors

The Board of Directors and Partners
Sovran Acquisition Limited Partnership

          We have audited the accompanying consolidated balance sheets of Sovran Acquisition Limited Partnership as of December 31, 2003 and 2002 and the related consolidated statements of operations, partners' capital and cash flows for each of the three years in the period ended December 31, 2003. Our audit also included the financial statement schedule listed in the index at Item 15(a). These financial statements and schedule are the responsibility of the management of Sovran Acquisition Limited Partnership. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

          We conducted our audits in accordance with auditing standards generally accepted in the United States. 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 and 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.

          In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Sovran Acquisition Limited Partnership as of December 31, 2003 and 2002, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

 

Ernst & Young LLP
Buffalo, New York
January 28, 2004

 

 

 

 

 

 

 

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<Page>

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

          None.

Item 9a.

Controls and Procedures

         The Operating Partnership's chief executive officer and chief financial officer have evaluated the Operating Partnership's disclosure controls and procedures as of December 31, 2003. Based on that evaluation, these officers have concluded that the Operating Partnership's disclosure controls and procedures are effective for the purpose of ensuring that material information required to be in this annual report is made known to them by others on a timely basis. There have not been changes in the Operating Partnership's internal controls or in other factors that could significantly affect these controls subsequent to the date of this evaluation.

Part III

Item 10.

Directors and Executive Officers of the Registrant

          Through Holdings, a wholly-owned subsidiary of the Company and the sole general partner of the Operating Partnership, the Company controls the Operating Partnership. The Board of Directors of Holdings, the members of which are the same as the members of the Board of Directors of the Company, manages the affairs of the Operating Partnership by directing the affairs of the general partner of the Operating Partnership. The Operating Partnership has no directors, or executive officers. Consequently, this information incorporated by reference reflects information with respect to the directors and executive officers of the Company and Holdings.

          The information contained in the Proxy Statement for the Annual Meeting of Shareholders of the Company to be held on May 13, 2004, with respect to directors, executive officers, audit committee, and audit committee financial experts of the Company and Section 16(a) beneficial ownership reporting compliance, is incorporated herein by reference in response to this item.

          The Operating Partnership has adopted a code of ethics that applies to all of its directors, officers, and employees. The Operating Partnership has made the Code of Ethics available on its website at http://www.sovranss.com.

Item 11.

Executive Compensation

          Through Holdings, a wholly-owned subsidiary of the Company and the sole general partner of the Operating Partnership, the Company controls the Operating Partnership. The Board of Directors of Holdings, the members of which are the same as the members of the Board of Directors of the Company, manages the affairs of the Operating Partnership by directing the

-56-

<Page>

affairs of the general partner of the Operating Partnership. The Directors and Officers of Holdings receive their compensation from the Company and are not separately compensated by Holdings. Consequently, the information incorporated by reference reflects compensation paid to the Directors and executive officers of the Company.

          The information required is incorporated by reference to "Executive Compensation" and "Compensation of Directors" in the Company's Proxy Statement for Annual Meeting of Shareholders of the Company to be held on May 13, 2004.

Item 12.

Security Ownership of Certain Beneficial Owners and Management

          The Operating Partnership has no directors or officers. No director or officer of the Company or Holdings beneficially owns any Units.

          At December 31, 2003, the Company beneficially owns 14,259,863 Units which constitute 96.35% of all outstanding Units. No other person holds more than a 5% beneficial ownership in the Operating Partnership.

          The information required herein for the Company is incorporated by reference to "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement for Annual Meeting of Shareholders of the Company to be held on May 13, 2004.

 

RECENT SALES OF UNREGISTERED SECURITIES

          During 2003, the Operating Partnership issued Units in private placements in reliance on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, in the amounts and for the consideration set forth below:

-

On January 22, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $1,575,804 to the Operating Partnership in exchange for 58,848 Units.

-

On January 31, 2003, the Operating Partnership redeemed 63,390 Units from a partner.

-

On February 24, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $528,483 to the Operating Partnership in exchange for 20,663 Units.

-

On February 27, 2003, the Operating Partnership redeemed 26,572 Units from a partner.

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<Page>

-

On February 28, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 11,000 Units to the Company.

-

On March 20, 2003, the Operating Partnership redeemed 55,854 Units from a partner.

-

On March 24, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $549,974 to the Operating Partnership in exchange for 20,522 Units.

-

On March 31, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 6,000 Units to the Company.

-

On April 17, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 1,500 Units to the Company.

-

On April 23, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $1,255,960 to the Operating Partnership in exchange for 44,875 Units.

-

On May 22, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $723,988 to the Operating Partnership in exchange for 24,490 Units.

-

On May 30, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 105,625 Units to the Company.

-

On June 23, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $1,944,753 to the Operating Partnership in exchange for 64,576 Units.

-

On June 30, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 24,350 Units to the Company.

-

On July 22, 2003, the Operating Partnership redeemed 10,000 Units from a partner.

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<Page>

-

On July 23, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $4,362,134 to the Operating Partnership in exchange for 141,025 Units.

-

On July 30, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 29,050 Units to the Company.

-

On August 20, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 2,000 Units to the Company.

-

On August 22, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $3,563,215 to the Operating Partnership in exchange for 116,904 Units.

-

On September 22, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $4,528,352 to the Operating Partnership in exchange for 144,872 Units.

-

On September 30, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 11,950 Units to the Company.

-

On October 22, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $5,407,426 to the Operating Partnership in exchange for 165,006 Units.

-

On October 31, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 7,500 Units to the Company.

-

On November 22, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $4,795,515 to the Operating Partnership in exchange for 141,591 Units.

-

On November 28, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 92,000 Units to the Company.

-

On December 18, 2003, the Operating Partnership redeemed 4,120 Units from a partner.

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<Page>

-

On December 23, 2003, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $5,399,975 to the Operating Partnership in exchange for 154,853 Units.

   

-

On December 23, 2003, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 32,140 Units to the Company.

   

Item 13.

Certain Relationships and Related Transactions

          The information required herein is incorporated by reference to "Certain Transactions" in the Company's Proxy Statement for the Annual Meeting of Shareholders to be held on May 13, 2004.

Item 14.

Principal Accountant Fees and Services

         The information required herein is incorporated by reference to "Appointment of Independent Accountants" in the Company's Proxy Statement for the Annual Meeting of Shareholders to be held on May 13, 2004.

Part IV

Item 15.

Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)

Documents filed as part of this Annual Report on Form 10-K:

1.

The following consolidated financial statements of Sovran Acquisition Limited Partnership are included in Item 8.

 

(i)

Consolidated Balance Sheets as of December 31, 2003 and 2002.

 

(ii)

Consolidated Statements of Operations for Years Ended December 31, 2003, 2002, and 2001.

 

(iii)

Consolidated Statements of Partners' Capital for Years Ended December 31, 2003, 2002, and 2001.

 

(iv)

Consolidated Statements of Cash Flows for Years Ended December 31, 2003, 2002, and 2001.

 

(v)

Notes to Consolidated Financial Statements.

 

 

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2.

The following financial statement Schedule as of the period ended December 31, 2003 is included in this Annual Report on Form 10-K.

Schedule III Real Estate and Accumulated Depreciation.

          All other Consolidated financial schedules are omitted because they are inapplicable, not required, or the information is included elsewhere in the consolidated financial statements or the notes thereto.

3.

(a) Exhibits - See the Exhibit Index beginning on page 66 of this Annual Report on Form 10-K.

 

(b)

Reports on Form 8-K.
    None.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Sovran Self Storage, Inc.

Schedule III
Combined Real Estate and Accumulated Depreciation
(in thousands)
December 31, 2003

 



Initial
                      Cost to Company               

Cost
Capitalized
Subsequent to
Acquisition



Gross Amount at Which
               Carried at Close of Period              

   
                     



Description



ST


Encum
brance



Land  

Building,    
Equipment and
Improvements 

Building,    
Equipment and
Improvements 



Land  

Building,    
Equipment and
Improvements 



Total  


Accumulated
Depreciation



Acquired

                     

Boston-Metro I

MA

 

$    363

$  1,679       

$   329          

$   363

$  2,008       

$  2,371

$   420       

6/26/95

Boston-Metro II

MA

 

680

1,616       

223          

680

1,839       

2,519

389       

6/26/95

E. Providence

RI

 

345

1,268       

216          

344

1,485       

1,829

322       

6/26/95

Charleston I

SC

 

416

1,516       

294          

416

1,810       

2,226

416       

6/26/95

Lakeland I

FL

 

397

1,424       

193          

397

1,617       

2,014

363       

6/26/95

Charlotte

NC

 

308

1,102       

424          

308

1,526       

1,834

292       

6/26/95

Tallahassee I

FL

 

770

2,734       

1,693          

770

4,427       

5,197

814       

6/26/95

Youngstown

OH

 

239

1,110       

301          

239

1,411       

1,650

342       

6/26/95

Cleveland-Metro I

OH

 

179

836       

409          

179

1,245       

1,424

260       

6/26/95

Cleveland-Metro II

OH

 

701

1,659       

530          

701

2,189       

2,890

436       

6/26/95

Tallahassee II

FL

 

204

734       

689          

204

1,423       

1,627

244       

6/26/95

Pt. St. Lucie

FL

 

395

1,501       

305          

395

1,806       

2,201

428       

6/26/95

Deltona

FL

 

483

1,752       

445          

483

2,197       

2,680

465       

6/26/95

Middletown

NY

 

224

808       

707          

224

1,515       

1,739

309       

6/26/95

Buffalo I

NY

 

423

1,531       

1,443          

497

2,900       

3,397

561       

6/26/95

Rochester I

NY

 

395

1,404       

193          

395

1,597       

1,992

340       

6/26/95

Salisbury

MD

 

164

760       

243          

164

1,003       

1,167

209       

6/26/95

New Bedford

MA

 

367

1,325       

321          

367

1,646       

2,013

398       

6/26/95

Fayetteville

NC

 

853

3,057       

370          

853

3,427       

4,280

711       

6/26/95

Allentown

PA

 

199

921       

868          

203

1,785       

1,988

317       

6/26/95

Jacksonville I

FL

 

152

728       

267          

152

995       

1,147

254       

6/26/95

Columbia I

SC

 

268

1,248       

232          

268

1,480       

1,748

349       

6/26/95

Rochester II

NY

 

230

847       

238          

234

1,081       

1,315

234       

6/26/95

Savannah I

GA

 

463

1,684       

1,330          

463

3,014       

3,477

534       

6/26/95

Greensboro

NC

 

444

1,613       

381          

444

1,994       

2,438

453       

6/26/95

-62-

<Page>

Raleigh I

NC

 

649

2,329       

391          

649

2,720       

3,369

598       

6/26/95

New Haven

CT

 

387

1,402       

433          

387

1,835       

2,222

363       

6/26/95

Atlanta-Metro I

GA

 

844

2,021       

356          

844

2,377       

3,221

513       

6/26/95

Atlanta-Metro II

GA

 

302

1,103       

175          

303

1,277       

1,580

322       

6/26/95

Buffalo II

NY

 

315

745       

793          

315

1,538       

1,853

238       

6/26/95

Raleigh II

NC

 

321

1,150       

277          

321

1,427       

1,748

320       

6/26/95

Columbia II

SC

 

361

1,331       

309          

374

1,627       

2,001

372       

6/26/95

Columbia III

SC

 

189

719       

319          

189

1,038       

1,227

249       

6/26/95

Columbia IV

SC

 

488

1,188       

314          

488

1,502       

1,990

357       

6/26/95

Atlanta-Metro III

GA

 

430

1,579       

199          

430

1,778       

2,208

439       

6/26/95

Orlando I

FL

 

513

1,930       

283          

513

2,213       

2,726

517       

6/26/95

Spartanburg

SC

 

331

1,209       

153          

331

1,362       

1,693

333       

6/26/95

Sharon

PA

 

194

912       

255          

194

1,167       

1,361

264       

6/26/95

Ft. Lauderdale

FL

 

1,503

3,619       

426          

1,503

4,045       

5,548

893       

6/26/95

West Palm I

FL

 

398

1,035       

161          

398

1,196       

1,594

300       

6/26/95

Atlanta-Metro IV

GA

 

423

1,015       

251          

424

1,265       

1,689

297       

6/26/95

Atlanta-Metro V

GA

 

483

1,166       

194          

483

1,360       

1,843

321       

6/26/95

Atlanta-Metro VI

GA

 

308

1,116       

335          

308

1,451       

1,759

367       

6/26/95

Atlanta-Metro VII

GA

 

170

786       

285          

174

1,067       

1,241

259       

6/26/95

Atlanta-Metro VIII

GA

 

413

999       

433          

413

1,432       

1,845

354       

6/26/95

Baltimore I

MD

 

154

555       

239          

155

793       

948

180       

6/26/95

Baltimore II

MD

 

479

1,742       

801          

479

2,543       

3,022

478       

6/26/95

Augusta I

GA

 

357

1,296       

409          

357

1,705       

2,062

349       

6/26/95

Macon I

GA

 

231

1,081       

229          

231

1,310       

1,541

292       

6/26/95

Melbourne I

FL

 

883

2,104       

1,369          

883

3,473       

4,356

666       

6/26/95

Newport News

VA

 

316

1,471       

544          

316

2,015       

2,331

450       

6/26/95

Pensacola I

FL

 

632

2,962       

758          

651

3,701       

4,352

824       

6/26/95

Augusta II

GA

 

315

1,139       

411          

315

1,550       

1,865

326       

6/26/95

Hartford-Metro I

CT

 

715

1,695       

418          

715

2,113       

2,828

434       

6/26/95

Atlanta-Metro IX

GA

 

304

1,118       

519          

304

1,637       

1,941

341       

6/26/95

Alexandria

VA

 

1,375

3,220       

794          

1,376

4,013       

5,389

816       

6/26/95

Pensacola II

FL

 

244

901       

232          

244

1,133       

1,377

310       

6/26/95

Melbourne II

FL

 

834

2,066       

177          

835

2,242       

3,077

579       

6/26/95

Hartford-Metro II

CT

 

234

861       

1,044          

612

1,527       

2,139

246       

6/26/95

Atlanta-Metro X

GA

 

256

1,244       

250          

256

1,494       

1,750

349       

6/26/95

Norfolk I

VA

 

313

1,462       

551          

313

2,013       

2,326

411       

6/26/95

Norfolk II

VA

 

278

1,004       

221          

278

1,225       

1,503

315       

6/26/95

Birmingham I

AL

 

307

1,415       

324          

307

1,739       

2,046

374       

6/26/95

Birmingham II

AL

 

730

1,725       

392          

730

2,117       

2,847

465       

6/26/95

Montgomery I

AL

 

863

2,041       

421          

863

2,462       

3,325

525       

6/26/95

Jacksonville II

FL

 

326

1,515       

286          

326

1,801       

2,127

386       

6/26/95

-63-

<Page>

Pensacola II

FL

 

369

1,358       

1,056          

369

2,414       

2,783

460       

6/26/95

Pensacola IV

FL

 

244

1,128       

143          

244

1,271       

1,515

320       

6/26/95

Pensacola V

FL

 

226

1,046       

452          

226

1,498       

1,724

341       

6/26/95

Tampa I

FL

 

1,088

2,597       

670          

1,088

3,267       

4,355

712       

6/26/95

Tampa II

FL

 

526

1,958       

542          

526

2,500       

3,026

582       

6/26/95

Tampa III

FL

 

672

2,439       

428          

672

2,867       

3,539

636       

6/26/95

Jackson I

MS

 

343

1,580       

192          

343

1,772       

2,115

425       

6/26/95

Jackson II

MS

 

209

964       

402          

209

1,366       

1,575

337       

6/26/95

Richmond

VA

 

443

1,602       

537          

443

2,139       

2,582

460       

8/25/95

Orlando II

FL

 

1,161

2,755       

699          

1,162

3,453       

4,615

717       

9/29/95

Birmingham III

AL

 

424

1,506       

497          

424

2,003       

2,427

511       

1/16/96

Macon II

GA

 

431

1,567       

521          

431

2,088       

2,519

395       

12/1/95

Harrisburg I

PA

 

360

1,641       

352          

360

1,993       

2,353

435       

12/29/95

Harrisburg II

PA

(1)

627

2,224       

553          

648

2,756       

3,404

548       

12/29/95

Syracuse I

NY

 

470

1,712       

925          

472

2,635       

3,107

413       

12/27/95

Ft. Myers

FL

 

205

912       

148          

206

1,059       

1,265

303       

12/28/95

Ft. Myers II

FL

 

412

1,703       

319          

413

2,021       

2,434

557       

12/28/95

Newport News II

VA

 

442

1,592       

129          

442

1,721       

2,163

361       

1/5/96

Montgomery II

AL

 

353

1,299       

213          

353

1,512       

1,865

337       

1/23/96

Charlestown II

SC

 

237

858       

356          

232

1,219       

1,451

256       

3/1/96

Tampa IV

FL

 

766

1,800       

528          

766

2,328       

3,094

409       

3/28/96

Arlington I

TX

 

442

1,767       

234          

442

2,001       

2,443

385       

3/29/96

Arlington II

TX

 

408

1,662       

384          

408

2,046       

2,454

464       

3/29/96

Ft. Worth

TX

 

328

1,324       

171          

328

1,495       

1,823

296       

3/29/96

San Antonio I

TX

 

436

1,759       

840          

436

2,599       

3,035

465       

3/29/96

San Antonio II

TX

 

289

1,161       

333          

289

1,494       

1,783

331       

3/29/96

Syracuse II

NY

 

481

1,559       

1,557          

671

2,926       

3,597

417       

6/5/96

Montgomery III

AL

 

279

1,014       

350          

433

1,210       

1,643

283       

5/21/96

West Palm II

FL

 

345

1,262       

178          

345

1,440       

1,785

291       

5/29/96

Ft. Myers III

FL

 

229

884       

265          

229

1,149       

1,378

211       

5/29/96

Pittsburgh

PA

 

545

1,940       

200          

545

2,140       

2,685

412       

6/19/96

Lakeland II

FL

 

359

1,287       

929          

359

2,216       

2,575

382       

6/26/96

Springfield

MA

 

251

917       

1,387          

297

2,258       

2,555

364       

6/28/96

Ft. Myers IV

FL

 

344

1,254       

220          

344

1,474       

1,818

289       

6/28/96

Baltimore III

MD

 

777

2,770       

134          

777

2,904       

3,681

550       

7/26/96

Jacksonville III

FL

 

568

2,028       

722          

568

2,750       

3,318

499       

8/23/96

Jacksonville IV

FL

 

436

1,635       

397          

436

2,032       

2,468

416       

8/26/96

Pittsburgh II

PA

 

627

2,257       

748          

631

3,001       

3,632

588       

8/28/96

Jacksonville V

FL

 

535

2,033       

184          

538

2,214       

2,752

485       

8/30/96

Charlotte II

NC

 

487

1,754       

92          

487

1,846       

2,333

345       

9/16/96

Charlotte III

NC

 

315

1,131       

239          

315

1,370       

1,685

243       

9/16/96

-64-

<Page>

Orlando III

FL

 

314

1,113       

566          

314

1,679       

1,993

297       

10/30/96

Rochester III

NY

 

704

2,496       

476          

707

2,969       

3,676

473       

12/20/96

Youngstown II

OH

 

600

2,142       

175          

600

2,317       

2,917

407       

1/10/97

Akron

OH

 

413

1,478       

130          

413

1,608       

2,021

280       

1/10/97

Cleveland III

OH

 

751

2,676       

548          

751

3,224       

3,975

560       

1/10/97

Cleveland IV

OH

 

725

2,586       

829          

725

3,415       

4,140

585       

1/10/97

Cleveland V

OH

(1)

637

2,918       

710          

641

3,624       

4,265

684       

1/10/97

Cleveland VI

OH

 

495

1,781       

401          

495

2,182       

2,677

392       

1/10/97

Cleveland VII

OH

 

761

2,714       

590          

761

3,304       

4,065

617       

1/10/97

Cleveland VIII

OH

 

418

1,921       

985          

418

2,906       

3,324

512       

1/10/97

Cleveland IX

OH

 

606

2,164       

271          

606

2,435       

3,041

439       

1/10/97

Grand Rapids II

MI

 

219

790       

633          

219

1,423       

1,642

251       

1/17/97

Holland

MI

 

451

1,830       

1,027          

451

2,857       

3,308

545       

1/17/97

San Antonio III

TX

(1)

474

1,686       

161          

474

1,847       

2,321

322       

1/30/97

Universal

TX

 

346

1,236       

140          

346

1,376       

1,722

247       

1/30/97

San Antonio IV

TX

 

432

1,560       

1,391          

432

2,951       

3,383

375       

1/30/97

Houston-Eastex

TX

 

634

2,565       

890          

634

3,455       

4,089

501       

3/26/97

Houston-Nederland

TX

 

566

2,279       

155          

566

2,434       

3,000

414       

3/26/97

Houston-College

TX

 

293

1,357       

195          

293

1,552       

1,845

268       

3/26/97

Lynchburg-Lakeside

VA

 

335

1,342       

819          

335

2,161       

2,496

330       

3/31/97

Lynchburg-Timberlake

VA

 

328

1,315       

572          

328

1,887       

2,215

333       

3/31/97

Lynchburg-Amherst

VA

 

155

710       

206          

152

919       

1,071

186       

3/31/97

Christiansburg

VA

 

245

1,120       

142          

245

1,262       

1,507

218       

3/31/97

Chesapeake

VA

 

260

1,043       

474          

260

1,517       

1,777

230       

3/31/97

Danville

VA

 

326

1,488       

47          

326

1,535       

1,861

263       

3/31/97

Orlando-W 25th St.

FL

 

289

1,160       

322          

290

1,481       

1,771

240       

3/31/97

Delray I-Mini

FL

 

491

1,756       

510          

491

2,266       

2,757

405       

4/11/97

Savannah II

GA

 

296

1,196       

135          

296

1,331       

1,627

241       

5/8/97

Delray II-Safeway

FL

 

921

3,282       

313          

921

3,595       

4,516

612       

5/21/97

Cleveland X-Avon

OH

 

301

1,214       

869          

304

2,080       

2,384

267       

6/4/97

Dallas-Skillman

TX

 

960

3,847       

891          

960

4,738       

5,698

872       

6/30/97

Dallas-Centennial

TX

 

965

3,864       

940          

943

4,826       

5,769

856       

6/30/97

Dallas-Samuell

TX

(1)

570

2,285       

431          

570

2,716       

3,286

524       

6/30/97

Dallas-Hargrove

TX

 

370

1,486       

294          

370

1,780       

2,150

388       

6/30/97

Houston-Antione

TX

 

515

2,074       

316          

515

2,390       

2,905

465       

6/30/97

Atlanta-Alpharetta

GA

 

1,033

3,753       

291          

1,033

4,044       

5,077

728       

7/24/97

Atlanta-Marietta

GA

(1)

769

2,788       

87          

771

2,873       

3,644

490       

7/24/97

Atlanta-Doraville

GA

 

735

3,429       

131          

735

3,560       

4,295

591       

8/21/97

Greensboro-Hilltop

NC

 

268

1,097       

144          

268

1,241       

1,509

207       

9/25/97

GreensboroStgCch

NC

 

89

376       

930          

89

1,306       

1,395

154       

9/25/97

Baton Rouge-Airline

LA

(1)

396

1,831       

290          

396

2,121       

2,517

365       

10/9/97

-65-

<Page>

Baton Rouge-Airline2

LA

 

282

1,303       

131          

282

1,434       

1,716

271       

11/21/97

Harrisburg-Peiffers

PA

 

635

2,550       

122          

637

2,670       

3,307

413       

12/3/97

Chesapeake-Military

VA

 

542

2,210       

160          

542

2,370       

2,912

376       

2/5/98

Chesapeake-Volvo

VA

 

620

2,532       

755          

620

3,287       

3,907

446       

2/5/98

Virginia Beach Shell

VA

 

540

2,211       

136          

540

2,347       

2,887

375       

2/5/98

Virginia Beach Central

VA

 

864

3,994       

512          

864

4,506       

5,370

679       

2/5/98

Norfolk-Naval Base

VA

 

1,243

5,019       

555          

1,243

5,574       

6,817

808       

2/5/98

Tampa-E. Hillsborough

FL

 

709

3,235       

589          

709

3,824       

4,533

686       

2/4/98

Harriman

NY

 

843

3,394       

263          

843

3,657       

4,500

560       

2/4/98

Greenboro-High Point

NC

 

397

1,834       

355          

397

2,189       

2,586

332       

2/10/98

Lynchburg-Timberlake

VA

 

488

1,746       

275          

488

2,021       

2,509

289       

2/18/98

Salem

MA

 

733

2,941       

628          

733

3,569       

4,302

544       

3/3/98

Chattanooga-Lee Hwy.

TN

 

384

1,371       

241          

384

1,612       

1,996

290       

3/27/98

Chattanooga-Hwy. 58

TN

 

296

1,198       

557          

296

1,755       

2,051

242       

3/27/98

Ft. Oglethorpe

GA

 

349

1,250       

267          

349

1,517       

1,866

215       

3/27/98

Birmingham-Walt

AL

 

544

1,942       

563          

544

2,505       

3,049

445       

3/27/98

East Greenwich

RI

 

702

2,821       

609          

702

3,430       

4,132

464       

3/26/98

Durham-Hillborough

NC

 

775

3,103       

466          

775

3,569       

4,344

502       

4/9/98

Durham-Cornwallis

NC

 

940

3,763       

390          

940

4,153       

5,093

585       

4/9/98

Hendersonville

TN

 

1,050

4,203       

168          

1,050

4,371       

5,421

626       

4/9/98

Salem-Policy

NH

 

742

2,977       

75          

742

3,052       

3,794

440       

4/7/98

Warren-Elm

OH

(1)

522

1,864       

174          

532

2,028       

2,560

324       

4/22/98

Warren-Youngstown

OH

 

512

1,829       

124          

512

1,953       

2,465

275       

4/22/98

Waterford-Highland

MI

 

1,487

5,306       

588          

1,487

5,894       

7,381

857       

4/28/98

Indian Harbor

FL

 

662

2,654       

199          

662

2,853       

3,515

412       

6/2/98

Jackson 3 - I55

MS

 

744

3,021       

59          

744

3,080       

3,824

460       

5/13/98

Katy-N. Fry

TX

 

419

1,524       

509          

419

2,033       

2,452

241       

5/20/98

Hollywood-Sheridan

FL

 

1,208

4,854       

171          

1,208

5,025       

6,233

730       

7/1/98

Pompano Beach - Atlantic

FL

 

944

3,803       

200          

944

4,003       

4,947

577       

7/1/98

Pompano Beach - Sample

FL

 

903

3,643       

296          

903

3,939       

4,842

559       

7/1/98

Boca Raton-18th St.

FL

 

1,503

6,059       

461          

1,503

6,520       

8,023

917       

7/1/98

Vero Beach

FL

 

489

1,813       

40          

489

1,853       

2,342

290       

6/12/98

Humble

TX

 

447

1,790       

545          

447

2,335       

2,782

313       

6/16/98

Houston-Old Katy

TX

(1)

659

2,680       

59          

659

2,739       

3,398

380       

6/19/98

Webster

TX

 

635

2,302       

55          

635

2,357       

2,992

341       

6/19/98

Carrollton

TX

 

548

1,988       

246          

548

2,234       

2,782

305       

6/19/98

Hollywood-N. 21st.

FL

 

840

3,373       

218          

840

3,591       

4,431

514       

8/3/98

San Marcos

TX

 

324

1,493       

307          

324

1,800       

2,124

259       

6/30/98

Austin-McNeil

TX

 

492

1,995       

189          

510

2,166       

2,676

313       

6/30/98

Austin-FM

TX

 

484

1,951       

146          

481

2,100       

2,581

305       

6/30/98

Jacksonville-Center

NC

 

327

1,329       

63          

327

1,392       

1,719

202       

8/6/98

-66-

<Page>

Jacksonville-Gum Branch

NC

 

508

1,815       

169          

508

1,984       

2,492

280       

8/17/98

Jacksonville-N. Marine

NC

 

216

782       

342          

216

1,124       

1,340

205       

9/24/98

Euless

TX

 

550

1,998       

119          

550

2,117       

2,667

291       

9/29/98

N. Richland Hills

TX

 

670

2,407       

779          

670

3,186       

3,856

343       

10/9/98

Batavia

OH

 

390

1,570       

152          

390

1,722       

2,112

251       

11/19/98

Jackson-N. West

MS

 

460

1,642       

310          

460

1,952       

2,412

361       

12/1/98

Katy-Franz

TX

 

507

2,058       

88          

507

2,146       

2,653

282       

12/15/98

W. Warwick

RI

 

447

1,776       

644          

447

2,420       

2,867

282       

2/2/99

Lafayette-Pinhook 1

LA

 

556

1,951       

750          

556

2,701       

3,257

451       

2/17/99

Lafayette-Pinhook 2

LA

 

708

2,860       

139          

708

2,999       

3,707

380       

2/17/99

Lafayette-Ambassador

LA

 

314

1,095       

455          

314

1,550       

1,864

287       

2/17/99

Lafayette-Evangeline

LA

 

188

652       

615          

188

1,267       

1,455

225       

2/17/99

Lafayette-Guilbeau

LA

 

963

3,896       

108          

963

4,004       

4,967

505       

2/17/99

Gilbert-Elliott Rd.

AZ

 

651

2,600       

603          

772

3,082       

3,854

338       

5/18/99

Glendale-59th Ave.

AZ

 

565

2,596       

122          

565

2,718       

3,283

326       

5/18/99

Mesa-Baseline

AZ

 

330

1,309       

81          

330

1,390       

1,720

169       

5/18/99

Mesa-E. Broadway

AZ

 

339

1,346       

128          

339

1,474       

1,813

177       

5/18/99

Mesa-W. Broadway

AZ

 

291

1,026       

152          

291

1,178       

1,469

141       

5/18/99

Mesa-Greenfield

AZ

 

354

1,405       

114          

354

1,519       

1,873

181       

5/18/99

Phoenix-Camelback

AZ

 

453

1,610       

160          

453

1,770       

2,223

212       

5/18/99

Phoenix-Bell

AZ

 

872

3,476       

274          

872

3,750       

4,622

499       

5/18/99

Phoenix-35th Ave.

AZ

 

849

3,401       

351          

849

3,752       

4,601

422       

5/21/99

Westbrook

ME

 

410

1,626       

345          

410

1,971       

2,381

225       

8/2/99

Cocoa

FL

 

667

2,373       

496          

667

2,869       

3,536

328       

9/29/99

Cedar Hill

TX

 

335

1,521       

186          

335

1,707       

2,042

206       

11/9/99

Monroe

NY

 

276

1,312       

40          

276

1,352       

1,628

142       

2/2/00

N. Andover

MA

 

633

2,573       

93          

633

2,666       

3,299

265       

2/15/00

Seabrook

TX

 

633

2,617       

88          

633

2,705       

3,338

281       

3/1/00

Plantation

FL

 

384

1,422       

90          

384

1,512       

1,896

158       

5/2/00

Birmingham-Bessemer

AL

 

254

1,059       

75          

254

1,134       

1,388

97       

11/15/00

Dracut

MA

(1)

1,035

3,737       

102          

1,035

3,839       

4,874

206       

12/1/01

Methuen

MA

(1)

1,024

3,649       

67          

1,024

3,716       

4,740

197       

12/1/01

Columbia

SC

(1)

883

3,139       

104          

883

3,243       

4,126

182       

12/1/01

Myrtle Beach

SC

(1)

552

1,970       

205          

552

2,175       

2,727

126       

12/1/01

Kingsland

GA

(1)

470

1,902       

400          

470

2,302       

2,772

135       

12/1/01

Saco

ME

(1)

534

1,914       

60          

534

1,974       

2,508

105       

12/3/01

Plymouth

MA

 

1,004

4,584       

131          

1,004

4,715       

5,719

235       

12/19/01

Sandwich

MA

(1)

670

3,060       

135          

670

3,195       

3,865

165       

12/19/01

Syracuse

NY

(1)

294

1,203       

173          

294

1,376       

1,670

78       

2/5/02

Houston-Westward

TX

(1)

853

3,434       

337          

855

3,769       

4,624

180       

2/13/02

Houston-Boone

TX

(1)

250

1,020       

36          

252

1,054       

1,306

54       

2/13/02

-67-

<Page>

Houston-Cook

TX

(1)

285

1,160       

48          

287

1,206       

1,493

63       

2/13/02

Houston-Harwin

TX

(1)

449

1,816       

50          

451

1,864       

2,315

93       

2/13/02

Houston-Hempstead

TX

(1)

545

2,200       

102          

546

2,301       

2,847

113       

2/13/02

Houston-Kuykendahl

TX

(1)

517

2,090       

369          

519

2,457       

2,976

122       

2/13/02

Houston-Hwy 249

TX

(1)

299

1,216       

236          

301

1,450       

1,751

70       

2/13/02

Mesquite-Hwy 80

TX

(1)

463

1,873       

103          

465

1,974       

2,439

97       

2/13/02

Mesquite-Franklin

TX

(1)

734

2,956       

56          

736

3,010       

3,746

148       

2/13/02

Dallas-Plantation

TX

(1)

394

1,595       

48          

395

1,642       

2,037

84       

2/13/02

San Antonio-Hunt

TX

(1)

381

1,545       

41          

383

1,584       

1,967

81       

2/13/02

Humble-5250 FM

TX

 

919

3,696       

222          

919

3,918       

4,837

147       

6/19/02

Pasadena

TX

 

612

2,468       

23          

612

2,491       

3,103

96       

6/19/02

League City

TX

 

689

3,159       

27          

689

3,186       

3,875

122       

6/19/02

Montgomery

TX

 

817

3,286       

19          

817

3,305       

4,122

127       

6/19/02

Texas City

TX

 

817

3,286       

45          

817

3,331       

4,148

127       

6/19/02

Houston-Hwy 6

TX

 

407

1,650       

76          

407

1,726       

2,133

65       

6/19/02

Lumberton

TX

 

817

3,287       

75          

817

3,362       

4,179

128       

6/19/02

The Hamptons

NY

 

2,207

8,866       

197          

2,207

9,063       

11,270

225       

12/16/02

The Hamptons

NY

 

1,131

4,564       

303          

1,131

4,867       

5,998

119       

12/16/02

The Hamptons

NY

 

635

2,918       

132          

635

3,050       

3,685

76       

12/16/02

The Hamptons

NY

 

1,251

5,744       

199          

1,252

5,942       

7,194

148       

12/16/02

Dallas

TX

 

1,039

4,201       

8          

1,039

4,209       

5,248

36       

8/26/03

Dallas

TX

 

827

3,776       

5          

827

3,781       

4,608

24       

10/1/03

Corporate Office

NY

 

           0

            68       

       7,072          

         1,170

       5,970       

       7,140

 1,035       

1/1/95

     

$134,179

$505,889

$  99,768          

$136,424

$603,412

$739,836

$  92,498       

 

(1) These properties are encumbered through one mortgage loan with an outstanding balance of $46.8 million at December 31, 2003.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-68-

<Page>

 

December 31, 2003

December 31, 2002

December 31, 2001

Cost:

           

Balance at beginning of period

 

$ 710,841 

 

$ 611,289 

 

$ 562,721 

  Additions during period:
    Acquisitions through foreclosure
       Other acquisitions
       Improvements, etc.


$      -       
11,007 
   21,812 

 


$      -       
81,819 
   17,934 

 


$      -       
30,269 
   18,527 

 
   

32,819 

 

99,753 

 

48,796 

Deductions during period:
  Cost of real estate sold


   (3,824
)


    (3,824
)


      (201
)


       (201
)


      (228
)


   (228
)

             

Balance at close of period

 

$739,836 

 

$710,841 

 

$611,289 

             

Accumulated Depreciation:

           

Balance at beginning of period

 

$   75,344 

 

$   59,091 

 

$   45,253 

  Additions during period:
    Depreciation expense


$  18,079
 


18,079 


$  16,344
 


16,344 


$  13,918
 


13,918 

             

Deductions during period:

           

  Accumulated depreciation of real
  estate sold


         (925
)


          (925
)


         (91
)


          (91
)


         (80
)


          (80
)

Balance at close of period

 

$   92,498 

 

$   75,344 

 

$   59,091 

 

 

 

 

 

 

 

 

 

 

 

-69-

<Page>

Exhibit No.

Description

   

3.1

Agreement of Limited Partnership of the Operating Partnership, as amended. (Incorporated by reference to Exhibit 3.1 of the General Form for Registration of Securities of the Operating Partnership on Form 10.)

   

3.2*

Amended and Restated Articles of Incorporation of the Company

   

3.3**

By-laws of the Company

   

3.4

Articles Supplementary to the Amended and Restated Articles of Incorporation of the Company classifying and designating the Company's Series A Junior Participating Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Company's Form 8A filed December 3, 1996)

   

3.5

Articles Supplementary to the Amended and Restated Articles of Incorporation of the Company classifying and designating the 9.85% Series B Cumulative Redeemable Preferred Stock. (Incorporated by reference to Exhibit 1.6 to the Company's Form 8-A filed July 29, 1999)

   

3.6**

Articles Supplementary to the Amended and Restated Articles of Incorporation of the Company classifying and designating the 8.375% Series C Convertible Cumulative Redeemable Preferred Stock

   

10.2*

Form of Non-competition Agreement between the Company and Charles E. Lannon

   

10.3*

Form of Non-competition Agreement between the Company and Robert J. Attea

   

10.4*

Form of Non-competition Agreement between the Company and Kenneth F. Myszka

   

10.5*

Form of Non-competition Agreement between the Company and David L. Rogers

   

10.6

Sovran Self Storage, Inc. 1995 Award and Option Plan, as Amended (Incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 2001.)

   

 

-70-

<Page>

10.7

Sovran Self Storage, Inc. 1995 Outside Directors' Option Plan, as Amended (Incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 2001.)

   

10.8*

Sovran Self Storage Incentive Compensation Plan for Executive Officer

   

10.9*

Restricted Stock Agreement between the Company and David L. Rogers

   

10.10*

Form of Supplemental Representations, Warranties and Indemnification Agreement among the Company and Robert J. Attea, Charles E. Lannon, Kenneth F. Myszka and David L. Rogers

   

10.11*

Form of Pledge Agreement among the Company and Robert J. Attea, Charles E. Lannon, Kenneth F. Myszka and David L. Rogers

   

10.12*

Form of Indemnification Agreement between the Company and certain Officers and Directors of the Company

   

10.13*

Form of Subscription Agreement (including Registration Rights Statement) among the Company and subscribers for 422,171 Common Shares

   

10.14*

Form of Registration Rights and Lock-Up Agreement among the Company and Robert J. Attea, Charles E. Lannon, Kenneth F. Myszka and David L. Rogers

   

10.15*

Form of Facilities Services Agreement between the Company and Williamsville Properties, Inc.

   

10.16

Sovran Self Storage, Inc. Deferred Compensation Plan for Directors (Incorporated by reference to Appendix A to the Company's Proxy Statement for the 1999 Annual Meeting of Shareholders)

   

10.17

First Amendment to Revolving Credit and Term Loan Agreement among the Company, the Operating Partnership, Fleet National Bank and other lenders named therein. (Incorporated by reference to Exhibit 10.18 to the Company's Annual Report on From 10-K for the year ended December 31, 2001.)

   

10.18**

Securities Purchase Agreement among Registrant, Sovran Acquisition Limited Partnership, The Prudential Insurance Company of America, Teachers Insurance and Annuity Association of America and other institutional investors

   

-71-

<Page>

10.19**

Amendments to Agreement of Limited Partnership of Sovran Acquisition Limited Partnership

   

10.20**

Registration Rights Agreement

   

10.21

Promissory Note between Locke Sovran II, LLC and PNC Bank, National Association. (Incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year ended December 31, 2002.)

10.23

Amended and Restated Revolving Credit and Term Loan Agreement among Registrant, the Partnership, Fleet National Bank and other lenders named therein. (Incorporated by reference to Exhibit 10.23 to the Company's Annual Report on From 10-K for the year ended December 31, 2003.)

   

10.24

Note Purchase Agreement among Registrant, the Partnership and the purchaser named therein. (Incorporated by reference to Exhibit 10.24 to the Company's Annual Report on From 10-K for the year ended December 31, 2003.)

   

12.1

Statement Re: Computation of Earnings to Fixed Charges

   

23

Consent of Independent Auditors

   

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

   

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

   

32

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

_________________

     *     Incorporated by reference to the exhibits as filed with the Company's Registration Statement on Form S-11 (File No. 33-91422) filed June 19, 1995.

     * *  Incorporated by reference to the exhibits as filed in the Company's current report on Form 8-K, filed July 12, 2002.

 

 

-72-

<Page>

SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Sovran Holdings Inc., as general partner of registrant, certifies that it has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 







March 12, 2004

SOVRAN ACQUISITION LIMITED PARTNERSHIP

By:  Sovran Holdings, Inc.
Its:  General Partner


By:   /s/ David L. Rogers                       
           David L. Rogers,
           Chief Financial Officer

   

          Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Sovran Holdings Inc., as general partner of registrant, and in the capacities and on the dates indicated.

     

Signature

Title

Date

     


  /s/ Robert J. Attea        
   Robert J. Attea

Chairman of the Board of Directors, Chief Executive Officer and Director (Principal Executive Officer)



March 12, 2004

     

  /s/ Kenneth F. Myszka    
   Kenneth F. Myszka

President, Chief Operating
Officer and Director


March 12, 2004

     

  /s/ David L. Rogers       
   David L. Rogers

Chief Financial Officer (Principal Financial and Accounting Officer)


March 12, 2004

     

  /s/ Michael A. Elia        
   Michael A. Elia


Director


March 12, 2004

     

  /s/ Anthony P. Gammie   
   Anthony P. Gammie


Director


March 12, 2004

     

  /s/ Charles E. Lannon    
   Charles E. Lannon


Director


March 12, 2004

-73-

<Page>

Sovran Acquisition Limited Partnership

Exhibit (12.1) Statement

Re: Computation of Earnings to Combined Fixed Charges and Preferred Stock Dividends

Amounts in thousands

 

                                Year ended December 31,                                 

 

2003

2002

2001

2000

1999

Earnings:

         

  Net income available to common unitholders

$20,781

$22,388

$22,776

$24,564

$26,108

  Fixed charges

  25,534

  20,805

  17,955

  21,279

  15,944

Earnings (1)

46,315

43,193

40,731

45,843

42,052

           

Fixed charges:

         

  Interest expense

15,102

14,664

13,940

17,497

13,927

  Preferred stock dividends

8,818

5,093

2,955

2,955

1,239

  Amortization of financing fees

   1,614

  1,048

  1,060

    827

    778

Fixed charges (2)

$25,534

$20,805

$17,955

$21,279

$15,944

           

Ratio of earnings to combined fixed charges and preferred stock dividends
  (1)/(2)



1.81



2.08



2.27



2.15



2.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 23

Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement (Form S-3, No. 333-51169) of Sovran Self Storage, Inc. and Sovran Acquisition Limited Partnership and in the related Prospectus of our report dated January 28, 2004, with respect to the financial statements and schedule of Sovran Acquisition Limited Partnership included in this Annual Report (Form 10-K) for the year ended December 31, 2003.

 

 

/s/ Ernst & Young LLP

 

Buffalo, New York
March 11, 2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended

I, Robert J. Attea, certify that:

1.

I have reviewed this annual report on Form 10-K of Sovran Acquisition LP;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

b)

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as the end of the period covered by this report based on such evaluation; and

 

c)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date:          March 12, 2004

 

   / S / Robert J. Attea                          
Robert J. Attea
Chairman of the Board and Chief Executive Officer of Sovran Holdings, Inc., the Sole General Partner of the Operating Partnership

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<Page>

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended

I, David L. Rogers, certify that:

1.

I have reviewed this annual report on Form 10-K of Sovran Acquisition LP;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

b)

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as the end of the period covered by this report based on such evaluation; and

 

c)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date:          March 12, 2004

 

   / S / David L. Rogers                         
David L. Rogers
Secretary, Chief Financial Officer of Sovran Holdings, Inc., the Sole General Partner of the Operating Partnership

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Exhibit 32

 

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

               Each of the undersigned of Sovran Acquisition LP (the "Operating Partnership") does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1)

The Annual Report on Form 10-K of the Operating Partnership for the annual period ended December 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

   

2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.

Dated:          March 12, 2004

 

   / S / Robert J. Attea                          
Robert J. Attea
Chairman of the Board
Chief Executive Officer of Sovran Holdings, Inc., the Sole General Partner of the Operating Partnership

 



   / S / David L. Rogers                       
 
David L. Rogers
Chief Financial Officer of Sovran Holdings, Inc., the Sole General Partner of the Operating Partnership

 

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