-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LAq6oDaUv9GWgJLi69OfzLjAHUEycEMQ9WLvqzp3DKRAAOIcdkPVCFWu/DsqawOd n3Ul9pNGb+HwdXSMRW0+Qg== 0000928790-97-000009.txt : 19970303 0000928790-97-000009.hdr.sgml : 19970303 ACCESSION NUMBER: 0000928790-97-000009 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961130 FILED AS OF DATE: 19970228 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN STORAGE PROPERTIES LP CENTRAL INDEX KEY: 0000769330 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 112741889 STATE OF INCORPORATION: VA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15550 FILM NUMBER: 97547040 BUSINESS ADDRESS: STREET 1: 3 WORLD FINANCIAL CNTR 29TH FLR CITY: NEW YORK STATE: NY ZIP: 10285 BUSINESS PHONE: 2125263237 MAIL ADDRESS: STREET 1: 3 WORLD FINANCIAL CENTER STREET 2: 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10285 FORMER COMPANY: FORMER CONFORMED NAME: HUTTON GSH AMERICAN STORAGE PROPERTIES LP DATE OF NAME CHANGE: 19920703 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) of THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended November 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 0-15550 AMERICAN STORAGE PROPERTIES, L.P. (formerly Hutton/GSH American Storage Properties, L.P.) Exact name of registrant as specified in its charter Virginia 11-2741889 State or other jurisdiction of incorporation I.R.S. Employer Identification No. ATTN: Andre Anderson 3 World Financial Center, 29th Floor, New York, New York Address of principal executive offices 10285 zip code Registrant's telephone number, including area code: (212) 526-3237 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: UNITS OF LIMITED PARTNERSHIP INTEREST Title of Class 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 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 the 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) Documents Incorporated by Reference: The Prospectus of the Registrant dated September 9, 1985, as supplemented by the Prospectus Supplement dated May 16, 1986, filed pursuant to Rules 424(b) and 424(c), respectively, is incorporated by reference in Part III of this Annual Report on Form 10-K. Portions of Parts I, II, III and IV are incorporated by reference to the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, filed as an exhibit under Item 14. PART I Item 1. Business (a) General American Storage Properties, L.P. (the "Registrant" or "Partnership"), formerly Hutton/GSH American Storage Properties, L.P. (see Item 10. "Certain Matters Involving Affiliates"), is a Virginia limited partnership organized pursuant to a Certificate and Agreement of Limited Partnership dated May 15, 1985 (the "Partnership Agreement"), of which Storage Services, Inc. ("Storage Services"), formerly Hutton Storage Services, Inc. (see Item 10. "Certain Matters Involving Affiliates"), and Goodman Segar Hogan/American Storage Properties Associates, a California Limited Partnership ("ASP Associates") are the general partners (together, the "General Partners"). The Registrant was engaged in the business of acquiring, operating and holding for investment self-service storage facilities (the "Properties"),including all necessary or appropriate ancillary or appurtenant properties and facilities, and any and all other activities related, necessary, appropriate or incidental thereto. As of November 30, 1996, all nine of the Registrant's Properties were sold, and consequently, the Registrant is expected to dissolve during 1997. For further information concerning the sale of the Properties, please refer to Item 7."Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein, and to Note 5 "Self-service Storage Facilities" of the Notes to the Consolidated Financial Statements contained in the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, filed as an exhibit under Item 14. A description of the Properties is incorporated by reference to Note 5 "Self-service Storage Facilities" of the Notes to the Consolidated Financial Statements contained in the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, filed as an exhibit under Item 14. Commencing September 9, 1985, the Registrant began the offering of Partnership units (the "Units") with two separate closings occurring on May 6, 1986 and July 22, 1986. Upon termination of the offering, the Registrant had accepted subscriptions for 50,132 Units for aggregate gross proceeds of $25,066,000. After deducting organization and offering expenses and initial working capital reserves, approximately $21,450,000 was available for investment in self- service storage facilities. $19,500,000 of such proceeds was invested in seven self-service storage facilities and in two limited partnerships, each of which owned a self-service storage facility. The Registrant's commitments for the purchase of the Properties were fully funded by November 30, 1986. Funds held as a working capital reserve were invested in bank certificates of deposit, money market funds or other similar highly liquid, short-term investments where there was appropriate safety of principal, in accordance with the Registrant's investment objectives and policies. The Registrant's principal investment objectives with respect to the Properties (in no particular order of priority) have been: (1) Distributions of Net Cash From Operations derived from rental income; (2) Capital appreciation; and (3) Preservation and protection of capital. Distribution of Net Cash From Operations was the Registrant's objective during its operational phase, while preservation and appreciation of capital were the Registrant's long-term objectives. The attainment of the Registrant's investment objectives was dependent on many factors, including the successful management of the operations of its Properties and economic conditions in the United States and in the localities in which the Registrant's Properties were located. Users of self-storage facilities are primarily individuals, large and small businesses and professional offices. Spaces are usually rented on a month-to-month basis, although business tenants often have longer-term leases. The typical occupancy period for a tenant is less than one year. Rental periods tend to be longer in successful facilities that have been in operation for a number of years than in newer facilities. (b) Employees The Registrant's business is managed by the General Partners and the Registrant has no employees. Item 2. Properties A description of the Properties formerly owned by the Registrant is incorporated by reference to Note 5 "Self-Service Storage Facilities" of the Notes to the Consolidated Financial Statements contained in the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, filed as an exhibit under Item 14. Item 3. Legal Proceedings Neither the Registrant nor any of the Properties is subject to any material pending legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders To obtain approval for the sale of the Partnership's nine storage properties (the "Sale"), a proxy solicitation describing the terms of the Sale was mailed to Limited Partners on September 10, 1996. Limited Partners were required to submit executed ballots ("Ballots") by October 10, 1996. As of the date of the proxy solicitation, the purchaser, Public Storage, Inc., a California corporation ("Public Storage"), owned approximately 29.1% of the outstanding Units. Pursuant to a letter agreement with the Partnership dated February 9, 1997, Public Storage agreed that prior to August 9, 1997, it would vote all its Units on all issues in the same manner as by the majority of all other Unitholders who voted on any such proposal. On October 10, 1996 the Partnership announced the approval by Limited Partners holding a majority of the outstanding Units. As of that date, Ballots representing 36,448 Units or 72.704% of the outstanding Units, were received. Of this amount, Ballots representing 35,616.905 Units or 71.046% of outstanding Units, approved the Sale, Ballots representing 669.215 Units or 1.335% of the outstanding Units, withheld consent, and holders of 161.880 Units, or 0.323% of the outstanding Units, abstained. PART II Item 5. Market for Registrant's Limited Partnership Units and Related Stockholder Matters (a) Market Information - No public trading market developed for the Units. The transfer of Units is subject to significant restrictions. Given the impending liquidation of the Partnership, all discretionary trading has been suspended by the General Partner. (b) Number of Unitholders - As of November 30, 1996, the number of holders of Units was 2,284. (c) Dividends - Distributions of Net Cash From Operations have been made quarterly, from rentalincome with respect to the Registrant's investment in the Properties, as well as from interest on short-term investments. Information regarding quarterly cash distributions and distributions from Property sales is incorporated by reference to the section entitled Message to Investors of the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, filed as an exhibit under Item 14. Item 6. Selected Financial Data Selected Partnership financial data for the years ended November 30, 1996, 1995, 1994, 1993 and 1992 are shown below. This data should be read in conjunction with the Partnership's financial statements included in the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, filed as an exhibit under Item 14. For the periods ended November 30, 1996 1995 1994 1993 1992 (dollars in thousands, except per Unit data) Total income $ 3,367(1) $ 3,620 $ 3,420 $ 3,147 $ 2,952 Net income 14,808(2) 1,638 1,553 1,399 1,129 Total assets at period-end 2,882 16,625 16,556 16,629 16,875 Net income per Limited Partnership Unit 287.40 32.81 31.11 28.04 22.65 Cash distributions per Limited Partnership Unit(3) 567.90(4) 33.75 32.60 32.60 32.60 (1) Total income for the 1996 period includes property operations through October 11, 1996, the date the properties were sold. (2) Net income for the 1996 period includes a gain on the sale of the properties in the amount of $13,606,741. (3) As approved for payment during the 12 months ended November 30. (4) Includes special distribution of $540 per Unit representing the majority of the proceeds from the Sale and fourth quarter 1996 net cash from operations. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources At November 30, 1996, the Partnership had cash and cash equivalents of $2,770,939 which were invested in money market accounts. The increase of $103,587 from November 30, 1995 is attributable to net cash provided by operating activities and net proceeds from the sale of the Partnership's nine self-storage facilities exceeding amounts used to fund cash distributions to the Limited Partners. The Partnership acquired an interest in the Fern Park property and the Oak Ridge property through two Limited Partnerships with affiliates of the seller of the facilities (the "Limited Partner"). The Limited Partnership agreements provide that net cash from operations of these two properties be distributed each quarter 100% to the Partnership until the Partnership has received an amount equal to a cumulative annual 12% return ("Preferred Return") on its capital contribution, as adjusted. The balance of any net cash from operations was to be distributed 85% to the Partnership and 15% to the Limited Partner. The Preferred Return for Fern Park was satisfied during the third quarter of fiscal 1996 and the balance of net cash from operations was distributed according to the guidelines stated above. The minority share is recorded as minority interest in the Partnership's financial statements. Minority interest payable increased to $382,816 at November 30, 1996 from $13,985 at November 30, 1995. The 1996 balance primarily consists of accruals estimating the Limited Partners'share of the liquidating distribution. The 1995 balance primarily consists of the minority share of 1995 operations, which was paid to the Limited Partner during the first half of 1996. In response to a request from an unaffiliated third party, Public Storage, Inc., a California corporation ("Public Storage"), to receive a list of the Partnership's Unitholders, the Partnership entered into a letter agreement, dated February 9, 1996, pursuant to which the Partnership furnished the list and such third party agreed not to purchase more than 5% of the outstanding Units on the open market or more than 25% of the outstanding Units pursuant to a tender offer filed with the Securities and Exchange Commission. On March 1, 1996, Public Storage commenced a tender offer to purchase up to 12,533 outstanding Units at a net cash price of $419 per Unit. On April 2, 1996, the tender offer expired with Public Storage accepting for purchase 13,516 Units, or approximately 26.97% of the outstanding Units. Given the improvement of the self-storage industry in recent years, combined with the strong performance of the Partnership's nine storage facilities, the General Partners began marketing the facilities for sale during the first quarter of 1996. The objective was to maximize the selling price of the properties and distribute the net sales proceeds to Limited Partners. The General Partners engaged in discussions with several potential buyers who expressed an interest in acquiring one or more of the Partnership's properties. On May 17, 1996 the Partnership entered into three substantially identical Contracts of Sale (together, the "Contracts of Sale") with Public Storage, one for the Virginia properties and two as general partner of the Florida limited partnerships, pursuant to which the Partnership agreed to sell substantially all its assets to Public Storage for an aggregate price of $27,500,000, subject to adjustment, in cash (the "Sale"). The Sale price was the highest offer received by the Partnership. The Sale was conditioned upon, among other things, the simultaneous closing of all three Contracts of Sale, except under certain circumstances, and the approval of the Sale by holders of a majority of the outstanding Units of limited partnership interests of the Partnership. To obtain such approval, a proxy solicitation describing the terms of the Sale was mailed to Limited Partners on September 10, 1996. Limited Partners were required to submit executed ballots ("Ballots") by October 10, 1996. On October 10, 1996 the Partnership announced the approval by Limited Partners holding a majority of the outstanding Units. In accordance with Sections 16.a.(iii) and (iv) of the Amended and Restated Certificate and Agreement of Limited Partnership of the Partnership (the "Partnership Agreement, as Amended"), approval of the Sale will result in the dissolution of the Partnership. The Sale was consummated on October 11, 1996. The Properties were sold for $27,500,000 and the transaction resulted in a gain on sale of $13,606,741. A special cash distribution of $540 per Unit, representing the majority of the net proceeds from the Sale and fourth quarter cash from operations, was distributed to the Limited Partners on November 25, 1996. On January 2, 1997, $270,642 was distributed to the General Partners representing their portion of the net proceeds from the Sale. As of November 30, 1996, this amount was reflected as "Distribution Payable" on the Partnership's consolidated balance sheet. The remaining proceeds from the Sale and cash reserves will be first used to pay the Partnership's remaining obligations and costs of liquidation. Any remaining balance will be distributed to the Partners in accordance with the Partnership Agreement, as Amended. The General Partners intend to wind up the affairs of the Partnership and subsequently liquidate the Partnership in accordance with the terms of the Partnership Agreement in 1997. The Partnership currently expects that such subsequent distribution will approximate a minimum of $25 per Unit. Net cash from operations was distributed to the Limited Partners on a quarterly basis in proportion to the number of units held by each Limited Partner. In view of the sale of the Partnership's assets and impending liquidation of the Partnership, there will be no more regular quarterly distributions to Limited Partners. Rent receivable decreased from $108,596 at November 30, 1995 to $77,344 at November 30, 1996, primarily due to the collection in early 1996 of a portion of outstanding rents. Accounts payable and accrued expenses increased from $120,589 at November 30, 1995 to $269,458 at November 30, 1996. The increase is primarily attributable to the timing of payments for legal fees and administrative fees and for the accrual of costs associated with the proxy solicitation. Results of Operations 1996 versus 1995 Partnership operations resulted in operating income of $1,201,028 for the year ended November 30, 1996, compared with $1,638,214 for the year ended November 30, 1995. The decrease is primarily due to a decrease in rental income as a result of the Sale, and an increase in general and administrative expenses. The higher net income of $14,807,769 in 1996 is primarily attributable to the gain on the Sale of $13,606,741. Rental income totaled $3,066,939 for the year ended November 30, 1996, compared to $3,494,224 for the year ended November 30, 1995. The decrease in rental income is due to the Sale on October 11, 1996, when operations ceased. Interest income totaled $299,858 for the year ended November 30, 1996, compared to $126,270 for the year ended November 30, 1995. The increase is primarily due to interest earned on the Sale proceeds prior to the distribution to Limited Partners in November 1996. Property operating expenses totaled $1,136,797 for the year ended November 30, 1996, compared with $1,153,216 for the year ended November 30, 1995. The decrease is primarily due to the Sale in the fourth quarter of 1996. General and administrative expenses totaled $317,077 for the year ended November 30, 1996 compared with $155,796 for the year ended November 30, 1995. The increase is primarily due to an increase in legal, audit, printing and postage and other professional fees due to the costs incurred in connection with the Sale and preparation of solicitation materials. The increase is also due in part to higher salary reimbursements in 1996. These increases were partially offset by a decrease in appraisal fees. 1995 versus 1994 Partnership operations resulted in net income of $1,638,214 for the year ended November 30, 1995, compared with $1,553,098 for the year ended November 30, 1994. The higher net income in 1995 was primarily attributable to an increase in rental and interest income partially offset by higher property operating expenses. Rental income totaled $3,494,224 for the year ended November 30, 1995, compared to $3,363,560 for the year ended November 30, 1994. The increase in rental income can be attributed in part to increased rental rates at several of the Partnership's properties, particularly the Mechanicsville and Midlothian facilities, as well as higher occupancy levels at certain properties, particularly Hampton, Mechanicsville and Widgeon. Interest income totaled $126,270 for the year ended November 30, 1995, compared to $56,620 for the year ended November 30, 1994. The increase was primarily due to higher interest rates earned in 1995 as well as higher cash balances maintained by the Partnership in 1995 compared to 1994. Property operating expenses totaled $1,153,216 for the year ended November 30, 1995, compared with $1,066,654 for the year ended November 30, 1994. The increase was primarily due to higher costs for routine repairs and maintenance, and higher payroll costs incurred at the Virginia properties. In addition, the Partnership recognized higher real estate tax expense in 1995. General and administrative expenses totaled $155,796 for the year ended November 30, 1995, largely unchanged from $149,076 for the year ended November 30, 1994. Average Occupancy Average Rental Rate 1996(1) 1995 1994 1996(1) 1995 1994 Chesapeake _ 88% 94% $ _ $5.76 $5.28 Fern Park _ 86 90 _ 7.39 7.32 Hampton _ 93 89 _ 7.19 6.65 Norfolk (Widgeon) _ 97 95 _ 6.62 6.07 Oak Ridge _ 91 90 _ 6.28 6.03 Richmond (Mechanicsville) _ 95 91 _ 7.65 6.43 Richmond (Midlothian) _ 78 78 _ 6.45 4.94 Roanoke _ 93 94 _ 6.47 5.72 Virginia Beach (Arrowhead) _ 95 97 _ 6.61 6.84 Weighted Average _ 91% 90% $ _ $6.71 $6.16 (1) As of November 30, 1996, all nine of the Partnership's Properties were sold. Occupancy rates have been determined by dividing actual rental income received by scheduled rental income (assuming full occupancy at full scheduled rates) for the indicated calendar period. Average effective annual rent per square foot for the facilities is determined by dividing actual rental income received by net rentable area (in square feet). Item 8. Financial Statements and Supplementary Data Incorporated by reference to the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, filed as an exhibit under Item 14. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III Item 10. Directors and Executive Officers of the Registrant Storage Services Inc. Storage Services Inc. ("Storage Services"), formerly Hutton Storage Services, Inc., is a Delaware corporation formed on April 29, 1985. The names of and the positions held by the directors and executive officers of Storage Services are set forth below. There are no family relationships between any officers and directors listed below. Certain officers and directors of Storage Services are now serving (or in the past have served) as officers or directors of entities which act as general partners of a number of real estate limited partnerships which have sought protection under the provisions of the Federal Bankruptcy Code. The partnerships which have filed bankruptcy petitions own real estate which has been adversely affected by the economic conditions in the markets in which that real estate is located and, consequently, the partnerships sought the protection of the bankruptcy laws to protect the partnerships' assets from losses through foreclosure. Name Office Paul L. Abbott Director, President, Chief Executive Officer and Chief Financial Officer James L. Greig Vice President Robert J. Hellman Vice President Paul L. Abbott, 51, is a Managing Director of Lehman Brothers. Mr. Abbott joined Lehman Brothers in August 1988, and is responsible for investment management of residential, commercial and retail real estate. Prior to joining Lehman Brothers, Mr. Abbott was a real estate consultant and a senior officer of a privately held company specializing in the syndication of private real estate limited partnerships. From 1974 through 1983, Mr. Abbott was an officer of two life insurance companies and a director of an insurance agency subsidiary. Mr. Abbott received his formal education in the undergraduate and graduate schools of Washington University in St. Louis. James L. Greig, 48, Vice President, joined Lehman Brothers in 1987, and is engaged in asset management for commercial and residential real estate. From 1984 to 1987, Mr. Greig was a Regional Vice President of the asset management arm of Integrated Resources, Inc. From 1980 to 1984, he was a Vice President of Landauer Associates, Inc., real estate consultants, where he managed the real property investments of overseas and domestic pension funds and was involved in various assignments for major mortgage lenders. He was employed in the real estate and mortgage loan area of New York Life Insurance Company from 1978 to 1980, and with Helmsley-Spear, Inc. from 1973 to 1978. Mr. Greig received a B.A. degree from Syracuse University, and an M.A. from New York University. He holds a Certified Property Manager (CPM) designation from the Institute of Real Estate Management. Robert J. Hellman, 42, is a Senior Vice President of Lehman Brothers and is responsible for investment management of retail, commercial and residential real estate. Since joining Lehman Brothers in 1983, Mr. Hellman has been involved in a wide range of activities involving real estate and direct investments including origination of new investment products, restructurings, asset management and the sale of commercial, retail and residential properties. Prior to joining Lehman Brothers, Mr. Hellman worked in strategic planning for Mobil Oil Corporation and was an associate with an international consulting firm. Mr. Hellman received a bachelor's degree from Cornell University, a master's degree from Columbia University, and a law degree from Fordham University. ASP Associates ASP Associates is a California limited partnership formed on May 14, 1985, the sole general partner of which is American Storage Properties, Inc. ("ASP, Inc."), a wholly-owned subsidiary of Goodman Segar Hogan, Inc. ("GSH"). The names of and the positions held by the directors and executive officers of ASP, Inc. are as set forth below. Name Office Robert M. Stanton Chairman of the Board Mark P. Mikuta President Julie R. Adie Vice President and Secretary Robert M. Stanton, 58, is the retired Chairman and Chief Executive Officer of GSH, a diversified commercial real estate company headquartered in Norfolk, Virginia. Mr. Stanton joined GSH in 1966 and retired from the company in 1993. He is currently President of Stanton Partners, Inc., a real estate investment and advisory firm. Mr. Stanton serves as a Trustee of the Urban Land Institute (ULI) and is a past Trusted and State Director of the International Council of Shopping Centers (ICSC). He was chairman of the 1981 edition of The Dollars and Cents of Shopping Centers, published by ULI. Mr. Stanton co-authored The Valuation of Shopping Centers, published by the American Institute of Real Estate Appraisers. Currently, he serves on the advisory board of Norfolk Southern Corporation and is Chairman of the Greater Norfolk Corporation. He holds the Certified Property Manager (CPM) designation conferred by the Institute of Real Estate Management. Mr. Stanton also serves as Chairman of American Storage Properties, L.P. A graduate of Old Dominion University with a B.A. Degree in Banking and Finance, he has served as Rector of the Board of Visitors. Mark P. Mikuta, 43, is Senior Vice President of Goodman Segar Hogan, Inc. and is Vice President and Controller of Dominion Capital, Inc., a wholly-owned subsidiary of Dominion Resources. Mr. Mikuta joined Dominion Resources in 1987. Prior to joining Dominion Resources, he was an internal auditor with Virginia Commonwealth University in Richmond, Virginia from 1980 - 1987 and an accountant with Coopers & Lybrand from 1977 - 1980. Mr. Mikuta earned a bachelor of science degree in accounting from the University of Richmond in 1977. He is a Certified Public Accountant (CPA) and Certified Financial Planner (CFP) in the state of Virginia and a member of the American Institute of Certified Public Accountants. Julie R. Adie, 42, is a Vice President of Goodman Segar Hogan, Inc. and Senior Vice President of Goodman Segar Hogan Hoffler, L.P. ("GSHH"). She is responsible for investment management of a commercial real estate portfolio for the company's Asset Management Division. Prior to GSHH, Ms. Adie was an asset manager with Aetna Real Estate Investors from 1986 to 1988. Ms. Adie practiced as an attorney from 1978 through 1984 and is currently a member of the Virginia Bar Association. She holds a B.A. Degree from Duke University, a Juris Doctor from University of Virginia and an M.B.A. from Dartmouth College. Certain Matters Involving Affiliates On July 31, 1993, Shearson Lehman Brothers Inc. ("Shearson") sold certain of its domestic retail brokerage and asset management businesses to Smith Barney, Harris Upham & Co. Incorporated ("Smith Barney"). Subsequent to this sale, Shearson changed its name to Lehman Brothers Inc. ("Lehman"). The transaction did not affect the ownership of the Partnership or the Partnership's General Partners. However, the assets acquired by Smith Barney included the name "Hutton." Consequently, effective August 3, 1995, the name of the Partnership was changed to American Storage Properties, L.P. to delete any reference to "Hutton." Additionally, effective July 31, 1993, the Hutton Storage Services, Inc. general partner changed its name to Storage Services Inc. to delete any reference to "Hutton." On August 1, 1993, Goodman Segar Hogan, Incorporated ("GSH") transferred all of its leasing, management and sales operations to Goodman Segar Hogan Hoffler, L.P., a Virginia limited partnership ("GSHH"). On that date, the leasing, management and sales operations of a portfolio of properties owned by the principals of Armada/Hoffler were also obtained by GSHH. The general partner of GSHH is Goodman Segar Hogan Hoffler, Inc., a Virginia corporation ("GSHH Inc."), which has a one percent interest in GSHH. The stockholders of GSHH Inc. are GSH with a sixty-two percent stock interest and H.K. Associates, L.P., an affiliate of Armada/Hoffler ("HK"), with a thirty-eight percent stock interest. The remaining ninety-nine percentage interests in GSHH are limited partnership interests owned fifty percent by GSH and forty-nine percent by HK. The transaction did not affect the ownership of the ASP, Inc. general partner. Item 11. Executive Compensation Neither of the General Partners of the Registrant nor any of the directors and officers of the General Partners or their affiliates received any compensation from the Registrant during 1996. See Item 13 below with respect to a description of certain costs of the General Partners and their affiliates reimbursed by the Registrant. Item 12. Security Ownership of Certain Beneficial Owners and Management (a) Beneficial owners of 5% or more of Registrant's Securities Amount and Nature of Beneficial Percent Title of Class Beneficial Owner Ownership of Class Limited Partnership Public Storage, Inc. 14,608 Units 29.13% Interest, $500 701 Western Ave (owned beneficially per Interest Glendale, CA 91202 and of record) (b) Neither of the General Partners of the Registrant nor any of the directors and officers of their Affiliates owns any Units. Item 13. Certain Relationships and Related Transactions The General Partners and their Affiliates have received substantial fees and compensation for managing the Properties pursuant to the Partnership Agreement. Such fees and compensation were not determined in arm's-length negotiations. For a description of all the types of compensation, fees, or other distributions that may or will be paid by the Registrant or others to the General Partners or their Affiliates in connection with the operations of the Registrant, reference is made to the material contained on pages 13 through 17 of the Prospectus, under the section captioned "Compensation and Fees", and pages 77 through 79 of the Prospectus under the section captioned "Offering and Sale of the Units" which sections are incorporated herein by reference thereto. Storage Services and ASP Associates did not receive any cash distributions from Net Cash From Operations during fiscal year 1996 in accordance with the terms of the Partnership Agreement. On January 2, 1997, $270,642 was distributed to the General Partners representing a portion of their net proceeds from the Sale. As of November 30, 1996, this amount was reflected as "Distribution Payable" on the Partnership's consolidated balance sheet. The remaining proceeds from the Sale and cash reserves will be first used to pay the Partnership's remaining obligations and costs of liquidation. Any remaining balance will be distributed to the Partners in accordance with the Partnership Agreement. Please refer to Note 3 "Partnership Agreement" of the Notes to the Consolidated Financial Statements contained in the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, filed as an exhibit under Item 14. Pursuant to Section 12(g) of Registrant's Certificate and Agreement of Limited Partnership, the General Partners may be reimbursed by the Registrant for certain of their costs as described on page A-19 of the Prospectus, which description is incorporated herein by reference thereto. First Data Investor Services Group (formerly The Shareholder Services Group) provides partnership accounting and investor relations services for the Partnership. Prior to May 1993, these services were provided by a former subsidiary of Lehman. Pursuant to such provision, during the year ended November 30, 1996, the General Partners and their affiliates were entitled to receive reimbursements aggregating $122,825. As of November 30, 1996, $72,628 of this amount had been paid to the General Partners with the remaining $50,197 still to be paid. Please refer to Note 4 "Transactions with Related Parties" of the Notes to the Consolidated Financial Statements contained in the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, filed as an exhibit under Item 14. PART IV Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K (a)(1) Financial Statements: Page Independent Auditors' Report Report of Arthur Andersen LLP. (1) Consolidated Balance Sheets - At November 30, 1996 and 1995 (1) Consolidated Statements of Income - For the years ended November 30, 1996, 1995 and 1994 (1) Consolidated Statements of Partners' Capital (Deficit) - For the years ended November 30, 1996, 1995 and 1994 (1) Consolidated Statements of Cash Flows - For the years ended November 30, 1996, 1995 and 1994 (1) Notes to the Consolidated Financial Statements (1) (1)Incorporated by reference to the Partnership's Annual Report to Unitholders for the year ended November 30, 1996, which is filed as an exhibit under Item 14. (a) (2) Financial Statement Schedules: Schedule III - Real Estate and Accumulated Depreciation and Independent Auditors' Report thereon F-1 - F-3 No other schedules are presented because the information is not applicable or is included in the financial statements or notes thereto. (a) (3) Exhibit Index 3.1 Form of Amended and Restated Certificate and Agreement of Limited Partnership (incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form S-11, File No. 2-98071) 3.2 First Amendment to Amended and Restated Certificate and Agreement of Limited Partnership (incorporated by reference to Exhibit 3.3 to Post-Effective Amendment No. 2 to Registrant's Registration Statement on Form S-11, File No. 2-98071) 3.3 Second Amendment to Amended and Restated Certificate and Agreement of Limited Partnership (incorporated by reference to Exhibit 3.4 to Post-Effective Amendment No. 2 to Registrant's Registration Statement on Form S-11, File No. 2-98071) 10.1 Form of Management Agreement to be entered into between the Registrant and any Affiliate providing certain services to the Registrant (incorporated by reference to Exhibit 10.4 to the Registrant's Registration Statement on Form S-11, File No. 2-98071) 10.2 Contract of Sale (Virginia) dated May 17, 1996 between American Storage Properties, L.P. and Public Storage, Inc. (Incorporated by reference from Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended August 31, 1996). 10.3 Contract of Sale (Fern Park) dated May 17, 1996 between Hutton/GSH American Storage Properties, L.P. (Fern Park) and Public Storage, Inc. (Incorporated by reference from Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended August 31, 1996). 10.4 Contract of Sale (Oak Ridge) dated May 17, 1996 between Hutton/GSH American Storage Properties, L.P. (Oak Ridge) and Public Storage, Inc. (Incorporated by reference from Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended August 31, 1996). 13.1 Annual Report to Unitholders for the year ended November 30, 1996 27.1 Financial Data Schedule 99.1 Portions of the prospectus of the Registrant dated September 9, 1985, as supplemented by the Prospectus Supplement dated May 16, 1986, files pursuant to Rules 424(b) and 424(c), respectively (b) Reports on Form 8-K filed in the fourth quarter of fiscal 1996: None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN STORAGE PROPERTIES, L.P. BY: Goodman Segar Hogan/American Storage Properties Associates, a California Limited Partnership General Partner BY: American Storage Properties, Inc. General Partner Date: February 28, 1997 BY: s/Robert M. Stanton/ Name: Robert M. Stanton Title: Chairman of the Board BY: Storage Services, Inc. General Partner BY: s/Paul L. Abbott/ Name: Paul L. Abbott Title: Director, President, Chief Executive Officer and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. STORAGE SERVICES, INC. A General Partner Date: February 28, 1997 BY: s/Paul L. Abbott/ Name: Paul L. Abbott Title: Director, President, Chief Executive Officer and Chief Financial Officer Date: February 28, 1997 BY: s/James L. Greig/ Name: James L. Greig Title: Vice President Date: February 28, 1997 BY: s/Robert J. Hellman/ Name: Robert J. Hellman Title: Vice President Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GOODMAN SEGAR HOGAN/AMERICAN STORAGE PROPERTIES ASSOCIATES A California Limited Partnership A General Partner BY: American Storage Properties, Inc. General Partner Date: February 28, 1997 BY: s/Robert M. Stanton/ Name: Robert M. Stanton Title: Chairman of the Board Date: February 28, 1997 BY: s/Mark P. Mikuta/ Name: Mark P. Mikuta Title: President Date: February 28, 1997 BY: s/Julie R. Adie/ Name: Julie R. Adie Title: Vice President and Secretary EX-13 2 ASP EXHIBIT 13 - 1996 ANNUAL REPORT EXHIBIT 13.1 AMERICAN STORAGE PROPERTIES, L.P. 1996 ANNUAL REPORT TO UNITHOLDERS Message to Investors Presented for your review is the 1996 Annual Report for American Storage Properties, L.P. (the "Partnership"). Included in this report is an update on the liquidation of the Partnership and timing of the final cash distribution to Limited Partners. Also included are the Partnership's audited financial statements for the year ended December 31, 1996. Overview As you are aware, on October 11, 1996 the Partnership completed the sale of its nine self-storage facilities to Public Storage, Inc. for $27,500,000 in cash (the "Sale"). The majority of the proceeds from the Sale were distributed to Limited Partners during the fourth quarter of 1996, and the remaining proceeds were set aside to provide for, along with the Partnership's cash reserves, all liabilities and other obligations of the Partnership through liquidation. The General Partners intend to utilize any cash after payment of these items to make a final liquidating distribution to the Limited Partners. We currently expect this distribution will approximate a minimum of $25 per Unit. As a result of the Sale, the Partnership is expected to be dissolved during the second quarter of 1997. Cash Distributions The Partnership paid total cash distributions of $567.90 per $465 Unit for the year ended November 30, 1996, including a special distribution in the amount of $540 per Unit paid to Limited Partners on November 25, 1996, representing the majority of the net proceeds from the Sale and fourth quarter cash from operations. Since inception, the Partnership has paid cumulative cash distributions totaling $935.12 and $926.75 per original $500 Unit for first and second close investors, respectively. These amounts include return of capital payments totaling $575 per Unit. In view of the Sale of the Partnership's assets, there will be no additional quarterly distributions to Limited Partners. Quarterly Cash Distributions Per Limited Partnership Unit First Second Third Fourth Quarter Quarter Quarter Quarter Total 1995 $ 8.15 $ 8.15 $ 8.15 $ 9.30 $ 33.75 1996 $ 9.30 $ 9.30 $ 9.30 $ 540.00* $ 567.90 * Special distribution representing majority of the net proceeds from the Sale of the Partnership's assets and fourth quarter cash from operations. Summary We are pleased to have successfully completed the Sale of the Partnership's assets. As a result of the Sale, the Partnership is expected to be dissolved during the second quarter of 1997, at which time a final liquidating distribution will be made to Limited Partners. In the interim, any questions regarding the Partnership should be directed to your Financial Consultant or First Data Investor Services Group. All requests for a change of address should be submitted in writing to the Partnership's transfer agent, Service Data Corporation, 2424 South 130th Circle, Omaha, NE 68144-2596. Both First Data Investor Services Group and Service Data Corporation can be reached at (800) 223-3464. Very truly yours, s/Paul L. Abbott/ s/Robert M. Stanton/ Paul L. Abbott Robert M. Stanton President Chairman Storage Services Inc. American Storage Properties, Inc. General Partner of Goodman Segar Hogan/ American Storage Properties Associates February 28, 1997 Consolidated Balance Sheets At November 30, At November 30, 1996 1995 Assets Self-service storage facilities, at cost: Land $ _ $ 3,756,319 Buildings and improvements _ 16,061,509 19,817,828 Less accumulated depreciation _ (6,010,342) _ 13,807,486 Cash and cash equivalents 2,770,939 2,667,352 Rent receivable 77,344 108,596 Other assets 34,187 41,327 Total Assets $ 2,882,470 $16,624,761 Liabilities and Partners' Capital (Deficit) Liabilities: Accounts payable and accrued expenses $ 269,458 $ 120,589 Due to affiliates 50,197 53,522 Security deposits _ 13,050 Advance rent _ 115,194 Distribution payable 270,642 466,228 Minority interest payable 382,816 13,985 Total Liabilities 973,113 782,568 Partners' Capital (Deficit): General Partners 3,188 (125,793) Limited Partners 1,906,169 15,967,986 Total Partners' Capital 1,909,357 15,842,193 Total Liabilities and Partners' Capital $ 2,882,470 $16,624,761 Consolidated Statement of Partners' Capital (Deficit) For the years ended November 30, 1996, 1995 and 1994 General Limited Partners Partners Total Balance at November 30, 1993 $(112,707) $16,089,847 $15,977,140 Net Income (Loss) (6,514) 1,559,612 1,553,098 Cash distributions - (1,634,304) (1,634,304) Balance at November 30, 1994 $(119,221) $16,015,155 $15,895,934 Net Income (Loss) (6,572) 1,644,786 1,638,214 Cash distributions - (1,691,955) (1,691,955) Balance at November 30, 1995 $(125,793) $15,967,986 $15,842,193 Net Income 399,623 14,408,146 14,807,769 Cash distributions (270,642) (28,469,963) (28,740,605) Balance at November 30, 1996 $ 3,188 $ 1,906,169 $ 1,909,357 Consolidated Statements of Operations For the years ended November 30, 1996 1995 1994 Income Rental $ 3,066,939 $ 3,494,224 $ 3,363,560 Interest 299,858 126,270 56,620 Total Income 3,366,797 3,620,494 3,420,180 Expenses Property operating 1,136,797 1,153,216 1,066,654 Depreciation 329,079 657,210 651,352 General and administrative 317,077 155,796 149,076 Total Expenses 1,782,953 1,966,222 1,867,082 Income before minority interest 1,583,844 1,654,272 1,553,098 Minority interest (382,816) (16,058) - Income from operations 1,201,028 1,638,214 1,553,098 Gain on sale of properties 13,606,741 - - Net Income $14,807,769 $1,638,214 $ 1,553,098 Net Income (Loss) Allocated: To the General Partners $ 399,623 $ (6,572) $ (6,514) To the Limited Partners 14,408,146 1,644,786 1,559,612 $14,807,769 $1,638,214 $ 1,553,098 Per limited partnership unit (50,132 outstanding) $287.40 $ 32.81 $ 31.11 Consolidated Statements of Cash Flows For the years ended November 30, 1996 1995 1994 Cash Flows From Operating Activities: Net Income $14,807,769 $1,638,214 $1,553,098 Adjustments to reconcile net income to net cash provided by operating activities: Minority interest 382,816 16,058 - Depreciation 329,079 657,210 651,352 Gain on sale of properties (13,606,741) - - Increase (decrease) in cash arising from changes in operating assets and liabilities: Rent receivable 31,252 549 (23,607) Other assets 7,140 (4,239) (18,160) Accounts payable and accrued expenses 148,869 34,104 296 Due to affiliates (3,325) 18,365 16,603 Security deposits (13,050) (2,754) (5,149) Advance rent (115,194) 670 (3,252) Net cash provided by operating activities 1,968,615 2,358,177 2,171,181 Cash Flows From Investing Activities: Net proceeds from sale of properties 27,085,148 - - Additions to real estate - (55,984) (97,794) Net cash provided by (used for) investing activities 27,085,148 (55,984) (97,794) Cash Flows From Financing Activities: Distributions paid - Minority interest (13,985) (2,073) - Distributions paid - Limited Partners (28,936,191) (1,634,303) (1,634,304) Net cash used for financing activities (28,950,176) (1,636,376) (1,634,304) Net increase in cash and cash equivalents 103,587 665,817 439,083 Cash and cash equivalents, beginning of year 2,667,352 2,001,535 1,562,452 Cash and cash equivalents, end of year $2,770,939 $2,667,352 $2,001,535 Notes to the Consolidated Financial Statements November 30, 1996, 1995 and 1994 1. Organization American Storage Properties, L.P. (the "Partnership") was organized as a Limited Partnership under the laws of the Commonwealth of Virginia pursuant to a Certificate and Agreement of Limited Partnership dated and filed May 15, 1985 (the "Partnership Agreement"). The Partnership was formed for the purpose of acquiring and operating self-service storage facilities. The General Partners of the Partnership are Storage Services Inc., an affiliate of Lehman Brothers (see below), and Goodman Segar Hogan/American Storage Properties, a California Limited Partnership ("ASP Associates"), an affiliate of Goodman Segar Hogan Hoffler, L.P. (see below). On July 31, 1993, Shearson Lehman Brothers Inc. ("Shearson") sold certain of its domestic retail brokerage and asset management businesses to Smith Barney, Harris Upham & Co. Incorporated ("Smith Barney"). Subsequent to the sale, Shearson changed its name to Lehman Brothers Inc. ("Lehman Brothers"). The transaction did not affect the ownership of the General Partner. However, the assets acquired by Smith Barney included the name "Hutton." Consequently, effective August 3, 1995, the name of the Partnership was changed to American Storage Properties, L.P. to delete any reference to "Hutton." Additionally, effective July 31, 1993, the Hutton Storage Services, Inc. general partner changed its name to Storage Services Inc. to delete any references to "Hutton". On August 1, 1993, Goodman Segar Hogan Incorporated ("GSH") transferred all of its leasing, management and sales operations to Goodman Segar Hogan Hoffler, L.P., a Virginia limited partnership ("GSHH"). On that date, the leasing, management and sales operations of a portfolio of properties owned by the principals of Armada/Hoffler were also obtained by GSHH. The General Partner of GSHH is Goodman Segar Hogan Hoffler, Inc., a Virginia corporation ("GSHH Inc."), which has a one percent interest in GSHH. The stockholders of GSHH Inc. are GSH with a 62% stock interest and H.K. Associates, L.P., an affiliate of Armada/Hoffler ("HK"), with a 38% stock interest. The remaining 99% interests in GSHH are limited partnership interests owned 50% by GSH and 49% by HK. The transaction did not affect the ownership of the General Partner. On March 1, 1996, Public Storage, Inc., a California corporation ("Public Storage") commenced a tender offer to purchase up to 12,533 outstanding Units at a net cash price of $419 per unit. On April 2, 1996, the tender offer expired with Public Storage accepting for purchase 13,516 Units, or approximately 26.97% of the outstanding Units. On October 11, 1996, the Partnership sold its nine properties. It is anticipated that the Partnership will liquidate and settle its remaining assets and liabilities and consequently dissolve in 1997. 2. Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of the Partnership and its ventures, American Storage Properties, (Fern Park) L.P. ("Fern Park") and American Storage Properties (Oak Ridge) L.P. ("Oak Ridge"). Intercompany accounts and transactions between the Partnership and the ventures have been eliminated in consolidation. As discussed in Notes 1 and 5, it is anticipated that the Partnership will liquidate in 1997. Accordingly, the carrying values of the remaining assets at November 30, 1996, are presented at estimated realizable values and all liabilities are presented at estimated settlement amounts. Additionally, the statements of operations and cash flows represent the operations of the Partnership for the year ended November 30, 1996, including the operations of the nine properties through October 10, 1996. Operating activities of the Partnership subsequent to the sale of the properties on October 11, 1996, were limited. Self-Service Storage Facilities Self-service storage facilities were recorded at cost less accumulated depreciation, which included the initial purchase price of the property plus closing costs, acquisition and legal fees and other miscellaneous acquisition costs. Depreciation Depreciation was computed using the straight-line method over the estimated useful lives of 20 to 25 years for Buildings and Improvements and five years for Furniture and Fixtures. Depreciation expense for 1996 was only recorded through May 1996, which is when the Partnership entered into three contracts of sale, pursuant to which the Partnership agreed to sell its nine properties (see Note 5). Included in the cost basis of Buildings and Improvements at November 30, 1995 was $156,995 of Furniture and Fixtures. Leases Leases were generally on a month-to-month basis and were accounted for as operating leases. Cash and Cash Equivalents Cash and cash equivalents consist of short-term, highly liquid investments that have original maturities of three months or less. The carrying amount approximates fair value because of the short maturity of these investments. Income Taxes No provision for income taxes has been made in the financial statements since such taxes are the responsibility of the individual partners rather than that of the Partnership. 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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Certain prior year amounts have been reclassified in order to conform to the current year's presentation. 3. Partnership Agreement The Partnership Agreement provides that the net cash from operations, as defined, for each fiscal year will be distributed on a quarterly basis, first to the Limited Partners until each Limited Partner has received an 8% annual cumulative return based on contributed capital. The net cash from operations will then be distributed to the General Partners until the General Partners have received an amount equal to 4% of the net cash from operations distributed to all partners. The balance of net cash from operations will then be distributed 96% to the Limited Partners and 4% to the General Partners. As the 8% cumulative return has not been satisfied as of November 30, 1996, substantially all of the income of the Partnership has been allocated to the Limited Partners. Net proceeds from sales or refinancings will generally be distributed 99% to the Limited Partners and 1% to the General Partners until each Limited Partner has received an amount equal to his adjusted capital investment, as defined, and an 11% cumulative annual return thereon. The balance of the net proceeds will then be distributed 85% to the Limited Partners and 15% to the General Partners. Income before depreciation and amortization for any fiscal year will be allocated in substantially the same manner as net cash from operations. Losses and depreciation and amortization for any fiscal year will be allocated 99% to the Limited Partners and 1% to the General Partners. 4. Transactions with Related Parties The following is a summary of the amounts paid or accrued to the General Partners and their affiliates during the years ended November 30, 1996, 1995 and 1994: Unpaid at November 30, Earned ----------- -------------------------------- 1996 1996 1995 1994 Reimbursement of: Out-of-pocket expenses $ - $ 5,383 $ 3,088 $ 5,420 Administrative salaries and expenses 50,197 117,442 75,627 57,572 Total $50,197 $122,825 $78,715 $62,992 The above amounts have been paid and/or accrued to the General Partners and affiliates as follows: Unpaid at November 30, Earned ----------- ------------------------------ 1996 1996 1995 1994 Storage Services, Inc. and affiliates $35,210 $ 74,763 $45,914 $29,292 ASP Associates and affiliates 14,987 48,062 32,801 33,700 Total $50,197 $122,825 $78,715 $62,992 5. Self-service Storage Facilities The self-service storage facilities consisted of nine properties acquired either directly or, in two cases, through investments in other limited partnerships. On October 11, 1996, the Partnership sold all nine self-service storage facilities. A description of each property is as follows: Number of Date of Number of Rentable Rentable Purchase Property Location Purchase Buildings Sq. Ft. Spaces Price - ----------------- ----------- --------- ------ ------ ---------- 880 Widgeon Road May 6, 1986 11 70,430 518 $2,465,000 Norfolk, VA 5728 Southern Blvd. May 6, 1986 5 25,749 228 $ 800,000 Virginia Beach, VA 1205 W. Pembroke Ave. May 6, 1986 7 59,680 657 $2,640,000 Hampton, VA 1430 S. Military Hwy. May 6, 1986 5 75,015 439 $2,200,000 Chesapeake, VA 1717 Bloom Lane May 6, 1986 6 61,603 604 $2,250,000 Richmond, VA 8226 South Hwy 17-92 Dec. 9, 1986 8 69,280 761 $2,129,829 Fern Park, FL 235 East Oak Ridge Rd. Dec. 9, 1986 5 56,410 589 $1,658,250 Orlando, FL 5440 Midlothian Trnpk. Dec. 29, 1986 10 65,600 651 $1,843,150 Richmond, VA 2918 Peter's Creek Rd. Dec. 29, 1986 5 56,524 449 $2,000,000 Roanoke, VA Sale of Properties On May 17, 1996, the Partnership, entered into three Contracts of Sale (together, the "Contracts of Sale") dated as of May 17, 1996, one for the Virginia properties and two as general partner of Fern Park and Oak Ridge, with Public Storage, pursuant to which the Partnership agreed to sell substantially all its assets to Public Storage for an aggregate price of $27,500,000, subject to adjustment, in cash (the "Sale"). The Sale was conditioned upon, among other things, the simultaneous closing of all three Contracts of Sale, except under certain circumstances, and the approval of the Sale by holders of a majority of the outstanding units of limited partnership interests of the Partnership. To obtain approval for the Sale, a proxy solicitation describing the terms of the Sale was mailed to Limited Partners on September 10, 1996. Limited Partners were required to submit executed ballots by October 10, 1996. On October 10, 1996, the Partnership announced the approval by Limited Partners holding a majority of the outstanding Units. In accordance with Sections 16.a.(iii) and (iv) of the Partnership Agreement, approval of the Sale will result in the dissolution of the Partnership. The Sale of the Partnership's nine properties (the "Properties") was consummated on October 11, 1996. The Properties were sold for $27,500,000. The Partnership received net sales proceeds of $27,085,148 and the transaction resulted in a gain on sale of $13,606,741. A special cash distribution of $27,071,280, or $540 per Unit, representing the majority of the net proceeds from the Sale and fourth quarter net cash from operations, was distributed to the Limited Partners on November 25, 1996. On January 2, 1997, $270,642 was distributed to the General Partners representing their portion of the net proceeds from the Sale. As of November 30, 1996, this amount was reflected as "Distribution Payable" on the Partnership's consolidated balance sheet. The remaining proceeds from the Sale and cash reserves will be first used to pay the Partnership's remaining obligations and costs of liquidation. Any remaining balance will be distributed to the Partners in accordance with the Partnership Agreement. The General Partners intend to wind up the affairs of the Partnership and subsequently liquidate the Partnership in accordance with the terms of the Partnership Agreement in 1997. Investment in Limited Partnership On December 9, 1986, the Partnership executed a purchase agreement to acquire an interest in two self-service storage facilities located in Fern Park, Florida, and Orlando, Florida, through two Limited Partnerships, Fern Park and Oak Ridge, with affiliates of the seller of the facilities. The two facilities were acquired for initial purchase prices of $2,026,750 and $1,658,250, respectively, and future additional contingent amounts of up to $173,250 and $141,750, respectively, based upon the achievement of certain cash flow levels. These amounts were placed in an escrow account. In 1988, upon the expiration of the contingency period, the cash flow level required for a partial payment was achieved by the Fern Park property, and as a result, $103,079 was released as an addition to the original purchase price of the property. The remaining amounts of $70,171 and $141,750 for Fern Park and Oak Ridge, respectively, were returned to the Partnership. The initial purchase price of each property was disbursed by the Partnership to the respective Limited Partnerships as a capital contribution. The Limited Partnership agreements substantially provide that: i. Net cash from operations will be distributed each quarter 100% to the Partnership until the Partnership has received an amount equal to a cumulative annual 12% return ("Preferred Return") on its capital contribution, as adjusted. The balance of any net cash from operations will be distributed 85% to the Partnership and 15% to the Limited Partner. The Preferred Return for Fern Park was satisfied during 1996 and 1995. The balance of net cash from operations was distributed according to the guidelines stated above. The minority share of $10,744 and $16,058 is recorded within minority interest expense for the years ended November 30, 1996 and 1995, respectively in the financial statements. As of November 30, 1996 and 1995, $10,744 and $13,985 of the minority share of net cash from operations were payable to the Limited Partner respectively. As the Preferred Return for Oak Ridge has not been satisfied as of November 30, 1996 and 1995, substantially all of the income of the Limited Partnership has been allocated to the Partnership. ii. Cash proceeds from interim capital transactions will be distributed 100% to the Partnership until the Partnership has received any shortfalls in its preferred return as well as 125% of its aggregate cash investment. The remaining cash will be distributed 85% to the Partnership and 15% to the Limited Partner. iii. Cash proceeds from a terminating capital transaction will be distributed to the Partners, pro-rata in accordance with each Partner's capital account balance, to the extent thereof, after allocation of gain from sale in connection with such terminating capital transaction. Any remaining proceeds will be distributed 85% to the Partnership and 15% to the Limited Partners. As of November 30, 1996, $208,214 and $163,858 for Fern Park and Oak Ridge, respectively were payable to the Limited Partner in connection with the terminating capital transaction. iv. Taxable income will be allocated in substantially the same manner as net cash from operations. Tax losses will generally be allocated 85% to the Partnership and 15% to the Limited Partner. 6. Reconciliation of Net Income to Taxable Income For the year ended November 30, 1996, taxable income exceeded net income reported in the consolidated financial statements by $313,836. For the years ending November 30, 1995 and 1994, net income reported in the consolidated financial statements exceeded taxable income by $54,705 and $43,260 respectively. As of November 30, 1996, the tax basis of total assets and liabilities is $11,910,410 and $7,364,636, respectively. These differences are a result of differences between the tax basis and financial statement reporting requirements. Different methods of depreciating real estate are used for tax purposes as compared to those used for financial statement purposes. Report of Independent Public Accountants To the Partners of American Storage Properties, L.P.: We have audited the accompanying consolidated balance sheets of American Storage Properties, L.P. (a Virginia limited partnership), and consolidated ventures, as of November 30, 1996 and 1995, and the related consolidated statements of operations, partners' capital and cash flows for each of the three years in the period ended November 30, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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. As described in Note 5 to the financial statements, the Partnership sold all of its properties on October 11, 1996. The Partnership anticipates settling and liquidating its remaining assets and liabilities and consequently will dissolve the Partnership in 1997. The balance sheet presented herein represents the general partners' estimated net realizable value of all assets and liabilities as of November 30, 1996 and the statements of operations and cash flows represent the operations of the Partnership for the year ended November 30, 1996, including the operations of the properties through October 11, 1996. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of American Storage Properties, L.P. and consolidated ventures as of November 30, 1996 and 1995, and the results of their operations and their cash flows for each of the three years in the period ended November 30, 1996, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Boston, Massachusetts January 8, 1997 AMERICAN STORAGE PROPERTIES, L.P. Schedule III - Real Estate and Accumulated Depreciation November 30, 1996 Cost Capitalized Subsequent Initial Cost to Partnership To Acquisition Land, Buildings and Buildings and Description Encumbrances Land Improvements Improvements Self service storage facilities: Virginia Beach $ - $ 151,165 $ 722,441 $ 125,706 Hampton - 306,343 2,553,577 36,738 Chesapeake - 327,656 2,076,833 82,779 Richmond - Bloom Ln. - 340,017 2,113,107 12,211 Norfolk - 302,270 2,371,404 74,584 Richmond - Midlothian - 553,763 1,453,322 68,779 Roanoke - 640,485 1,481,025 2,179 - 2,621,699 12,771,709 402,976 Consolidated Ventures: Oak Ridge - 488,836 1,269,919 14,593 Fern Park - 645,784 1,499,232 103,079 $ - $3,756,319 $15,540,860 $ 520,648 F-1 AMERICAN STORAGE PROPERTIES, L.P. Schedule III - Real Estate and Accumulated Depreciation (continued) November 30, 1996 Gross Amount at Which Carried at Close of Period Land, Buildings and Accumulated Description Improvements Disposals Total Depreciation Self service storage facilities: Virginia Beach $ 999,312 $ (999,312) - - Hampton 2,896,658 (2,896,658) - - Chesapeake 2,487,268 (2,487,268) - - Richmond - Bloom Ln. 2,465,335 (2,465,335) - - Norfolk 2,748,258 (2,748,258) - - Richmond - Midlothian 2,075,864 (2,075,864) - - Roanoke 2,123,690 (2,123,690) - - 15,796,385 (15,796,385) - - Consolidated Ventures: Oak Ridge 1,773,348 (1,773,348) - - Fern Park 2,248,095 (2,248,095) - - $ 19,817,828 $ (19,817,828) - - A reconciliation of the carrying amount of real estate and accumulated depreciation for the years ended November 30, 1996, 1995 and 1994: Real Estate investments: 1996 1995 1994 Beginning of year $ 19,817,828 $ 19,761,844 $ 19,664,050 Additions - 55,984 97,794 Disposals (19,817,828) - - End of year $ - $ 19,817,828 $ 19,761,844 Accumulated Depreciation: Beginning of year $ 6,010,342 $ 5,353,132 $ 4,701,780 Depreciation expense 329,079 657,210 651,352 Disposals (6,339,421) - - End of year $ - $ 6,010,342 $ 5,353,132 F-2 Report of Independent Public Accountants On Schedule To Consolidated Financial Statements To the Partners of American Storage Properties, L.P.: We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in American Storage Properties, L.P.'s annual report to unitholders, incorporated by reference in this Form 10-K, and have issued our report theron dated January 8, 1997. Our audit was made for the purpose of forming an opinion on those consolidated financial statements taken as a whole. Schedule III is the responsibility of the Partnership's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly states, in all material respects, the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole. ARTHUR ANDERSEN LLP Boston, Massachusetts January 8, 1997 F-3 EX-27 3 ASP FINANCIAL DATA SCHEDULE FOR 1996 FORM 10-K
5 12-MOS NOV-30-1996 NOV-30-1996 2,770,939 000 77,344 000 000 000 000 000 2,882,470 973,113 000 000 000 000 1,909,357 2,882,470 3,066,939 3,366,797 000 1,136,797 646,156 000 000 14,807,769 000 14,807,769 000 000 000 14,807,769 287.40 287.40
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