<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

[x]     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                       For the quarter ended June 30, 2002
                                       or
  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                                   Act of 1934
               For the transition period from________ to_________


                        Commission File Number: 001-12403


                              SUSA PARTNERSHIP L.P.
             (Exact name of registrant as specified in its charter)

                                    Tennessee
                         (State or other jurisdiction of
                         incorporation or organization)

                                   62-1554135
                                  (IRS Employer
                             Identification Number)


                    175 Toyota Plaza, Suite 700, Memphis, TN
                    (Address of principal executive offices)

                                      38103
                                   (Zip Code)

Registrant's telephone number, including area code: (901) 252-2000

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. ( X) Yes ( ) NO

<PAGE>


                         PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

                             SUSA Partnership, L.P.
                      Consolidated Statements of Operations
                                   (unaudited)

                  (amounts in thousands, except per unit data)

<TABLE>
<CAPTION>

                                                         Three months   Three months       Six months      Six months
                                                                ended          ended            ended           ended
                                                        June 30, 2002  June 30, 2001    June 30, 2002   June 30, 2001
                                                         -------------  -------------   -------------- ---------------
<S><C>
Operating Revenues:
Rental and other property income                              $71,965        $70,698         $140,741        $137,252
Service and other income                                        1,367          1,934            2,672           2,800
                                                         -------------  -------------   -------------- ---------------
Total operating revenues                                       73,332         72,632          143,413         140,052
                                                         -------------  -------------   -------------- ---------------

Operating Expenses:
Cost of property operations & maintenance                      19,032         17,780           37,581          35,640
Taxes                                                           6,167          5,764           12,116          10,959
Costs of providing services                                     1,012          1,500            2,105           2,435
General & administrative                                        5,763          4,387           10,652           8,589
Legal and other fees associated with the activities of
 the Special Committee of the Board of Directors                7,537              -            9,520               -
Acquisition/merger costs                                       37,826              -           37,826               -
Loss on extinguishment of of debt                               4,684              -            4,684               -
Depreciation & amortization                                    10,401         10,238           21,157          20,115
                                                         -------------  -------------   -------------- ---------------
Total operating expenses                                       92,422         39,669          135,641          77,738
                                                         -------------  -------------   -------------- ---------------
Income (loss) from operations                                (19,090)         32,963            7,772          62,314

Other expense - interest expense, net                        (11,321)       (12,076)         (23,692)        (24,057)
                                                         -------------  -------------   -------------- ---------------
Income (loss) before minority interest                       (30,411)         20,887         (15,920)          38,257

Minority interest                                                (19)           (20)             (39)            (40)
Minority interest - joint ventures                              (639)          (321)            (971)           (587)

                                                         -------------  -------------   -------------- ---------------

Net Income (loss) from continuing operations                 (31,069)         20,546         (16,930)          37,630

Gain/(loss) from operations of discontinued components          (345)             85            (141)             163
Gain/(loss) on disposal of discontinued components              6,943              -            6,943               -
                                                         -------------  -------------   -------------- ---------------
Gain on discontinued operations                                 6,598             85            6,802             163
                                                         -------------  -------------   -------------- ---------------

Net Income (loss)                                            (24,471)         20,631         (10,128)          37,793

Distributions to Preferred Unitholders                        (1,442)        (1,442)          (2,884)         (2,884)
                                                         -------------  -------------   -------------- ---------------

Net Income attributable to common unitholders               ($25,913)        $19,189        ($13,012)         $34,909
                                                         -------------  -------------   -------------- ---------------

Basic net income per unit                                     ($0.75)          $0.63          ($0.40)           $1.15
                                                         -------------  -------------   -------------- ---------------

Diluted net income per unit                                   ($0.74)          $0.62          ($0.39)           $1.13
                                                         -------------  -------------   -------------- ---------------

</TABLE>



                 See Notes to Consolidated Financial Statements

                                       2

<PAGE>



                             SUSA Partnership, L.P.
                           Consolidated Balance Sheets

                    (amounts in thousands, except unit data)

<TABLE>
<CAPTION>
                                                                   as of               as of
                                                           June 30, 2002   December 31, 2001
                                                       ------------------ -------------------
                                                             (unaudited)
<S><C>
Assets

Investments in storage facilities, at cost:
Land                                                             430,091            $435,561
Buildings and equipment                                        1,341,340           1,336,961
                                                       ------------------ -------------------
                                                               1,771,431           1,772,522

Accumulated depreciation                                       (191,341)           (172,291)
                                                       ------------------ -------------------
                                                               1,580,090           1,600,231

Cash & cash equivalents                                            2,821               3,164
Advances and investments in real estate                          112,126             116,880
Other assets                                                      40,620              36,059
                                                       ------------------ -------------------

     Total assets                                             $1,735,657          $1,756,334
                                                       ================== ===================

Liabilities & partners' capital
Notes payable                                                   $600,000            $600,000
Line of credit borrowings                                              -             158,900
Mortgage notes payable                                             3,251              64,351
Other borrowings                                                  23,651              30,923
Accounts payable & accrued expenses                               25,944              30,067
Dividends payable                                                 25,897              19,997
Rents received in advance                                         10,585              11,308
Deferred gain from contribution of self-storage
 facilities                                                       37,163              37,175
Minority Interest                                                    465                 521
                                                       ------------------ -------------------

     Total liabilities                                           726,956             953,242
                                                       ------------------ -------------------

Limited common partnership units
  1,763,485 and 2,666,388 outstanding
  at redemption value                                             74,084             112,255

Commitments and contingencies

Partners' capital:
Preferred Partnership units
  650,000 outstanding                                             65,000              65,000
Deferred compensation                                                  -               (122)
General Common Partnership units
 34,711,174 and 28,278,104 outstanding                           869,617             634,354
Notes receivable - officers                                            -             (8,395)
                                                       ------------------ -------------------

     Total partners' capital                                     934,617             690,837
                                                       ------------------ -------------------

     Total liabilities & partners' capital                    $1,735,657          $1,756,334
                                                       ------------------ -------------------

</TABLE>




                 See Notes to Consolidated Financial Statements


                                       3

<PAGE>


                             SUSA Partnership, L.P.
                      Consolidated Statements of Cash Flows
                                   (unaudited)

                             (amounts in thousands)

<TABLE>
<CAPTION>

                                                                          Six months ended   Six months ended
                                                                             June 30, 2002      June 30, 2001
                                                                         ------------------ ------------------
<S><C>
Operating activities:
Net income attributable to common unitholders                                    ($13,012)            $34,909

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

     Depreciation and amortization                                                  21,157             20,115
     Minority interest and preferred unit dividends                                  3,894              3,511
     Gain on disposal of discontinued components                                   (6,943)                  -
     Changes in assets and liabilities:
          Other assets                                                             (9,769)              3,263
          Other liabilities                                                        (5,576)              2,782
                                                                         ------------------ ------------------
Net cash provided by/(used in) operating activities                               (10,249)             64,580
                                                                         ------------------ ------------------

Investing activities:
Acquisition and improvements of storage facilities                                 (6,863)            (9,389)
Proceeds from sale of discontinued operations                                       23,512                  -
Development of storage facilities                                                  (9,090)           (18,379)
Advances and investments in real estate                                            (2,788)            (8,147)
Proceeds from liquidation advances and  investments in real estate                   6,234             16,040
Issuances of notes receivable                                                      (1,013)               (26)
Payments on notes receivable                                                           224              5,172
                                                                         ------------------ ------------------
Net cash provided by/(used in) investing activities                                 10,216           (14,729)
                                                                         ------------------ ------------------

Financing activities:
Net (repayments)/borrowings under line of credit                                 (158,738)            (8,395)
Mortgage principal payments                                                       (57,250)              (689)
Other borrowings principal payments/payoffs                                        (7,355)              (250)
Payment of debt issuance costs                                                       (354)              (374)
Distributions to general partner                                                  (40,340)           (37,819)
Distributions to limited partners                                                  (3,646)            (4,546)
Distribution to minority interests                                                    (43)               (48)
Preferred unit dividends                                                           (3,328)            (2,884)
Payments on notes receivable - officers                                              8,401                543
Proceeds from issuance of GP units (Security Capital)                              257,934                  -
Capital contributions - GP (Security Capital)                                       26,385                  -
Repurchase of LP units from limited partners                                      (24,511)                  -
Proceeds from issuance of Storage USA stock                                          2,535              1,891
                                                                         ------------------ ------------------
Net cash used in financing activities                                                (310)           (52,571)
                                                                         ------------------ ------------------

Net decrease in cash and equivalents                                                 (343)            (2,720)
Cash and equivalents, beginning of period                                            3,164              5,045
                                                                         ------------------ ------------------
Cash and equivalents, end of period                                                $ 2,821            $ 2,325
                                                                         ------------------ ------------------


Supplemental schedule of non-cash activities:
 Partnership units exchanged for shares of Storage USA common stock               $ 11,610           $ 11,424
 Partnership units received in payment of notes receivable                               -                952
 Storage USA common stock issued to Directors and contributed to
    Partnership in exchange for Partnership units                                        -                160
                                                                         ------------------ ------------------


</TABLE>



                 See Notes to Consolidated Financial Statements


                                       4

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2002

1.       Unaudited Interim Financial Statements

         References to the "Company" and the "Partnership" refer to SUSA
         Partnership, L.P. References to "Storage USA" refer to Storage USA,
         Inc., general partner of SUSA Partnership, L.P. through April 25, 2002.
         References to "SCSSI" refer to Security Capital Self Storage
         Incorporated, a wholly-owned subsidiary of Security Capital Group
         Incorporated ("Security Capital"), general partner and holder of
         approximately 95.3% of the interest in the Partnership  as of June 30,
         2002, following its April 26, 2002 acquisition of Storage USA. Interim
         consolidated financial statements of the Company are prepared pursuant
         to the requirements for reporting on Form 10-Q. Accordingly, certain
         disclosures accompanying annual financial statements prepared in
         accordance with accounting principles generally accepted in the United
         States of America are omitted. In the opinion of management, all
         adjustments, consisting solely of normal recurring adjustments,
         necessary for the fair presentation of consolidated financial
         statements for the interim periods have been included. The current
         period's results of operations are not necessarily indicative of
         results that ultimately may be achieved for the year. The interim
         consolidated financial statements and notes thereto should be read in
         conjunction with the financial statements and notes thereto included in
         the Company's Form 10-K for the year ended December 31, 2001 as filed
         with the Securities and Exchange Commission.

         The preparation of financial statements in accordance with accounting
         principles generally accepted in the United States of America requires
         management to make estimates and assumptions that affect the amount
         reported in the financial statements and accompanying notes. Actual
         results could vary from these estimates.

2.       Organization

         The Company was formed by Storage USA in 1985 to acquire, develop,
         construct, franchise, own and operate self-storage facilities
         throughout the United States. On March 23, 1994, Storage USA completed
         an initial public offering (the "IPO") of 6,325,000 shares of common
         stock at $21.75 per share. Storage USA was structured as an umbrella
         partnership real estate investment trust ("UPREIT") in which
         substantially all of its business was conducted through the
         Partnership.

         In 1996, the Company formed Storage USA Franchise Corp ("Franchise"), a
         Tennessee corporation, and initially owned 100% of its non-voting
         common stock. On January 2, 2001, the Company acquired all of the
         outstanding voting stock of Franchise for total consideration of $203
         thousand. The transaction was accounted for under the purchase method.
         The voting stock was acquired from the Company's Chief Executive
         Officer and President in a Board approved transaction. Also effective
         as of January 2, 2001 was the Company's election of Franchise as a
         taxable REIT subsidiary ("TRS") under the REIT provisions of the Ticket
         to Work and Work Incentives Improvement Act of 1999 ("the Act").

         On April 26, 2002, Security Capital completed its acquisition of
         Storage USA. The acquisition was made through transactions in which
         Security Capital acquired all of the assets of Storage USA, including
         all of its partnership interests in the Partnership, and assumed all of
         its liabilities, after which Storage USA was merged into the
         Partnership. SCSSI, a wholly-owned subsidiary of Security Capital, is
         now the general partner of Partnership. At April 25, 2002 and December
         31, 2001, respectively, Storage USA owned approximately 92.5% and 91.4%
         of the partnership interest in the Partnership. SCSSI owned
         approximately 95.3% of the partnership interest in the Partnership as
         of June 30, 2002.

         As a part of the acquisition, Security Capital purchased Franchise from
         the Company for $15.9 million, as well as SUSA Management Corp for
         approximately $1 thousand. Both are now wholly-owned subsidiaries of
         SCSSI.


                                       5

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

         On May 14, 2002, General Electric Capital Corporation ("GE Capital")
         completed its acquisition of Security Capital. See Note 12, Activities
         of the Special Committee of the Board of Directors, for further
         details.

3.       Summary of Significant Accounting Policies

         Rental and Other Property Income
         Rental and Other Property Income consists of rental income plus other
         income from property specific activities (income associated with the
         sale of locks and packaging material, truck rentals and ground rents
         for cellular telephone antenna towers and billboards). Following is a
         summary of rental and other property income for the three months and
         six months ended June 30, 2002 and 2001.

<TABLE>
<CAPTION>


                                                          Three months    Three months     Six months     Six months
                                                                 ended           ended          ended          ended
                                                         June 30, 2002   June 30, 2001  June 30, 2002  June 30, 2001
                    -------------------------------------------------------------------------------------------------
<S>     <C>
                    (in thousands)

                    Rental Income:                           $  70,717        $ 69,584      $ 138,426      $ 135,128
                    Other property specific income               1,248           1,114          2,315          2,124
                                                        -------------------------------------------------------------
                    Rental and other property income         $  71,965        $ 70,698      $ 140,741      $ 137,252
                                                        =============================================================
</TABLE>



     Service and Other Income Due to the sale of Franchise to Security Capital,
     and the implementation of Statement of Financial Accounting No. 144,
     "Accounting for the Impairment or Disposal of Long-lived Assets" ("SFAS
     144"), beginning in 2002, the Company's definition of service and other
     income service has changed. As a discontinued component of the Company,
     income previously defined as service and other income from Franchise will
     now be presented as a portion of the gain or loss from the operations of
     discontinued components. Previously reported Franchise service and other
     income included: general contractor services provided to the GE Capital
     Development Venture, premiums earned on tenant insurance offered to the
     Company's customers by Franchise, royalty fees from franchisees,
     Franchise's proportionate share of the net income or loss of equity
     investments, and gains from the liquidation of Franchise's equity
     participations. More information regarding SFAS 144 can be found in Note 10
     Recent Accounting Developments, and Note 14 Gain on Discontinued
     Operations.

     Service and other income now consists of revenue derived from the Company
     providing services to third parties, and related unconsolidated joint
     ventures, plus the Company's proportionate share of the net income or loss
     of equity investments. The services provided by the Company include the
     management of self-storage facilities, and development and acquisition
     services provided to the GE Capital Development and Acquisition Ventures
     (the "GE Capital Ventures"). The Company is reimbursed a fixed percentage
     of facility revenues for providing management services to third parties and
     related unconsolidated joint ventures. Below is a summary of service and
     other income for the three months and six months ended June 30, 2002 and
     2001.

<TABLE>
<CAPTION>


                                                         Three months     Three months     Six months      Six months
                                                                ended            ended          ended           ended
                                                        June 30, 2002    June 30, 2001  June 30, 2002   June 30, 2001
                   ---------------------------------------------------------------------------------------------------
<S>     <C>
                   (in thousands)

                   Management fees                           $    953         $    982       $  1,944        $  1,838
                   Acquisition, development and
                     general contractor fees                        -               43              -             277
                   Income/(loss) from equity
                   investments and other                          414              909            728             685
                                                        --------------------------------------------------------------
                   Total service and other income:           $  1,367         $  1,934       $  2,672        $  2,800
                                                        ==============================================================

</TABLE>



                                       6

<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

         Interest Expense, net
         Interest income and expense are netted together and the breakout of
         income and expense is as follows:

<TABLE>
<CAPTION>


                              Three months     Three months      Six months       Six months
                                     ended            ended           ended            ended
                             June 30, 2002    June 30, 2001   June 30, 2002    June 30, 2001
                             ----------------------------------------------------------------
<S>     <C>
(in thousands)

Interest expense                 $  12,799        $  14,616       $  26,870        $  29,674
Interest income                     (1,478)          (2,540)         (3,178)          (5,617)
                             ----------------------------------------------------------------
  Net interest expense           $  11,321        $  12,076       $  23,692        $  24,057
                             ================================================================
</TABLE>



         Reclassifications
         Certain previously reported amounts have been reclassified to conform
         to the current financial statement presentation with no impact on
         previously reported net income or partners' capital.

4.       Investment in Storage Facilities

         Investments in storage facilities consisted of the following at June
         30, 2002 and December 31, 2001:

<TABLE>
<CAPTION>


                                                                         June 30, 2002     December 31, 2001
                                                                    -----------------------------------------
                    (in thousands)
<S>     <C>
                    Land                                                  $    426,194          $    427,939
                    Buildings and improvements                               1,273,620             1,251,544
                    Tenant improvements                                          7,588                 7,725
                    Furniture, fixtures and equipment                           51,798                48,877
                    Development in progress, including land                     12,231                36,437
                                                                    -----------------------------------------
                    Total                                                    1,771,431             1,772,522
                    Less: accumulated depreciation                            (191,341)             (172,291)
                                                                    -----------------------------------------
                                                                          $  1,580,090          $  1,600,231
                                                                    =========================================


</TABLE>



         The preceding cost balances include facilities acquired through capital
         leases of $32.7 million at June 30, 2002 and $32.5 million at December
         31, 2001. Also included above are $28.6 million at June 30, 2002 and
         $26.7 million at December 31, 2001 of corporate office furniture and
         fixtures. Accumulated depreciation associated with the facilities
         acquired through capital leases was $2.7 million at June 30, 2002 and
         $2.3 million at December 31, 2001. Accumulated depreciation associated
         with corporate furniture and fixtures was $11.5 million at June 30,
         2002 and $10.3 million at December 31, 2001.

         There were no acquisitions of self-storage facilities during the first
         six months of 2002. The Company did, however, place into service three
         internally developed facilities at a total cost of approximately $28
         million. The Company sold six Indiana self-storage facilities on June
         13, 2002 for $7.5 million, realizing a gain from disposal of
         discontinued operations of $1.6 million.


                                       7

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

5.       Advances and Investments in Real Estate

         Advances and investments in real estate consisted of the following at
         June 30, 2002 and December 31, 2001:

<TABLE>
<CAPTION>

                                                             June 30, 2002     December 31, 2001
                                                           -------------------------------------
                    (in thousands)
<S>     <C>
                    Advances to Franchisees                     $   91,393            $  98,552
                    Fidelity joint venture                           (224)                (557)
                    GE joint ventures                               19,950               19,274
                    Other joint ventures                             1,007                (389)
                                                           -------------------------------------
                    Total advances & investments                $  112,126            $ 116,880
                                                           =====================================
</TABLE>



         Advances

         As of June 30, 2002 and December 31, 2001, $91.4 million and $98.6
         million respectively of advances had been made by the Company to
         franchisees of Franchise to fund the development and construction of
         franchised self-storage facilities. The loans are collateralized by the
         properties. The Company advances the funds for construction and
         start-up costs at an interest rate based on a spread over LIBOR, or the
         prime rate.

         Joint Ventures

         Fidelity Venture
         On June 7, 1999, the Company formed a joint venture with Fidelity
         Management Trust Company (the "Fidelity Venture"). The Company
         contributed 32 self-storage facilities with a fair value of $144.0
         million to the Fidelity Venture in return for a 25% interest and cash
         proceeds of approximately $131.0 million. The Company accounts for its
         investment in the Fidelity Venture under the equity method.

         The Company recognized $350 thousand in equity earnings from the
         Fidelity Venture and $365 thousand in management fees for operating the
         venture's properties in the second quarter of 2002, compared to $371
         for each of these items during the second quarter of 2001. For the six
         months ended June 30, 2002, the Company recognized $667 thousand in
         equity earnings and $714 thousand in management fees, compared to $700
         thousand and $720 thousand, respectively, for the same period in 2001.
         As of June 30, 2002 and December 31, 2001, the Company had recorded
         negative investment balances in the Fidelity Venture of $224 thousand
         and $557 thousand, respectively. The following table summarizes certain
         financial information related to the Fidelity Venture:

<TABLE>
<CAPTION>


                                           Three months    Three months     Six months      Six months
                                                  ended           ended          ended           ended
                                          June 30, 2002   June 30, 2001  June 30, 2002   June 30, 2001
             ------------------------------------------------------------------------------------------
<S>     <C>
             (in thousands)

             Income Statement:
             Property revenues                   $6,083          $6,176        $11,901         $12,004
             Property expenses                    2,165           2,176          4,174           4,184
             Net operating income                 3,918           4,000          7,727           7,820
             Net income                           1,401           1,486          2,686           2,798

             Balance Sheet:
             Total assets                                                     $142,116        $146,365
             Total third party debt                                             89,467          90,953

</TABLE>



                                       8

<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

         GE Capital Ventures
         On December 1, 1999, the Company formed two joint ventures with GE
         Capital providing for a total investment capacity of $400 million for
         acquisitions and development of self-storage facilities (the GE Capital
         Ventures"). The Company has a 25% interest in the $160 million
         Development Venture and a 16.7% interest in the $240 million
         Acquisition Venture. All of the properties acquired and developed by
         the ventures are operated by the Company under a management contract.
         In addition to the property management, the Company provides certain
         fee-based services for the ventures, including identifying suitable
         development and acquisition opportunities and general contractor
         services. The Company accounts for these joint ventures under the
         equity method of accounting.

         The Company transferred nine projects in various stages of development
         into the Development Venture during the first quarter of 2000. These
         projects had a total projected cost of $53.0 million, $26.0 million of
         which represented the Company's total costs as of March 31, 2000. The
         Company received $19.9 million in cash, and recorded an investment in
         the venture of $6.5 million, representing a 25% interest. As of June
         30, 2002, eight properties were open and operating and one remained in
         design and construction within the Development Venture. During the
         first quarter of 2002, the Acquisition Venture acquired one property in
         Rhode Island for a cost of approximately $3.8 million, bringing the
         total number of operating properties within the Acquisition Venture to
         15 as of June 30, 2002.

         The Company has recognized certain fees related to the GE Capital
         Ventures as summarized below. General contractor fees for GE Capital
         Ventures were reclassified to discontinued operations in accordance
         with SFAS 144. These fees totaled $79 thousand for the second quarter
         of 2002 and $251 thousand for the six months ended June 30, 2002. For
         the same periods in 2001, general contractor fees totaled $251
         thousand and $182 thousand.

<TABLE>
<CAPTION>


                                                      Three months     Three months     Six months     Six months
                                                             ended            ended          ended          ended
                                                     June 30, 2002    June 30, 2001  June 30, 2002  June 30, 2001
                                                    --------------------------------------------------------------
             (in thousands)
<S>     <C>

             Acquisition and development fees              $     -          $    43        $     -        $   277
             Management fees                                   165              191            398            354
                                                    --------------------------------------------------------------
               Total fees from GE Capital Ventures         $   165          $   234        $   398        $   631
                                                    ==============================================================

</TABLE>



         In 2001, the Company recognized $48 thousand in equity earnings from
         the GE Capital Ventures in the second quarter, and a $201 thousand loss
         in equity earnings for the six months ended June 30. Included in these
         equity earnings losses is amortization relating to the difference
         between the Company's cost and the underlying equity in the Ventures'
         net assets. In 2002, the Company has recognized a $115 thousand loss in
         equity earnings from the GE Capital Ventures for the second quarter,
         including related amortization, and a like $266 thousand loss in equity
         earnings for the six months ended June 30, 2002.

         As of June 30, 2002 and December 31, 2001, the Company had combined
         recorded investments of $20.0 million and $19.3 million, respectively,
         in the GE Capital Ventures. The following table summarizes certain
         financial information related to the Ventures for the second quarter of
         2002 and 2001, and for the six months ended June 30, 2002 and 2001.


                                       9

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

<TABLE>
<CAPTION>


                                                     Three months ended June 30, 2002            Six months ended June 30, 2002
                                                Development    Acquisition                 Development  Acquisition
                                                    Venture        Venture         Total       Venture      Venture       Total
     ---------------------------------------------------------------------------------------------------------------------------
     (in thousands, except number of properties)
<S>     <C>
     Income Statement:
     Property revenues                             $    939       $  3,268     $   4,207       $ 1,745      $ 6,334     $ 8,079
     Property expenses                                  662          1,518         2,180         1,292        2,989       4,281
     Net operating income                               277          1,750         2,027           453        3,345       3,798
     Net income (loss)                                (184)            634           450         (507)        1,146         639
     Balance Sheet (as of June 30, 2002):
     Total assets                                  $ 49,729       $ 91,130     $ 140,859
     Total debt                                      25,168         33,543        42,396
     Number of Operational Properties:                    8             15          23




                                                     Three months ended June 30, 2001            Six months ended June 30, 2001
                                                Development    Acquisition                 Development  Acquisition
                                                    Venture        Venture         Total       Venture      Venture       Total
   --------------------------------------------------------------------------------------------------------------------------------
   (in thousands, except number of properties)
   Income Statement:
   Property revenues                               $    504       $  2,820     $   3,324       $   865      $ 5,062     $ 5,927
   Property expenses                                    502          1,576         2,078           981        2,681       3,662
   Net operating income                                   2          1,244         1,246         (116)        2,381       2,265
   Net income (loss)                                  (509)            226         (283)       (1,176)          388       (788)
   Balance Sheet (as of June 30, 2001):
   Total assets                                    $ 47,534       $ 76,568     $ 124,102
   Total debt                                        22,703         29,462        52,165
   Number of Operational Properties:                      6             13            19

</TABLE>



         Other Ventures
         The Company has equity interests in several single facility joint
         ventures. Several of these interests were held through the company's
         ownership in Franchise. In the past, before the sale of Franchise to
         Security Capital, several of these interests were through the Company's
         ownership, and consolidation, of Franchise. The Company had aggregate
         recorded investment balances in these other ventures of $1.0 million as
         of June 30, 2002, and negative $389 as of December 31, 2001.

6.       Other Assets

<TABLE>
<CAPTION>


                                                                            As of                     As of
                                                                    June 30, 2002         December 31, 2001
                                                                 -------------------------------------------
             (in thousands)
<S>     <C>
             Deposits                                                   $   4,773                 $   2,710
             Accounts receivable                                            3,615                     3,977
             Mortgages receivable                                             517                       520
             Notes receivable                                               4,303                     3,921
             Other receivables                                              5,699                     9,505
             Deferred costs of issuances of unsecured notes
             (net of amortization)                                          6,158                     7,729
             Receivables from related subsidiaries                          6,796                         -
             Other                                                          8,759                     7,697
                                                                 -------------------------------------------
             Total Other Assets                                         $  40,620                 $  36,059
                                                                 ===========================================

</TABLE>

                                       10

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

7.       Borrowings

         Through March 31, 2002, SUSA Partnership could borrow up to $225
         million under a line of credit with a group of commercial banks and
         borrow up to $40 million under a line of credit with a commercial bank.
         Through March 31, 2002, Franchise could borrow under a $10 million line
         of credit with a commercial bank. Interest rates on all three lines
         were based on LIBOR. As part of its April 26, 2002 acquisition of
         Storage USA, Security Capital repaid all existing credit lines in full.
         Funding is now available to the Company in the form of two
         inter-company lines of credit with Security Capital: a $50 million
         revolving line of credit which bears interest at 140 basis points over
         LIBOR; and a $5 million cash pool line of credit which bears interest
         at 120 basis points over LIBOR. As of June 30, 2002, there were no
         borrowings on these lines of credit.

         Upon GE Capital's May 14, 2002 purchase of Security Capital, GE Capital
         purchased all of the preferred units of SUSA Partnership for $65
         million. These units remained outstanding as of June 30, 2002. On
         August 7, 2002, GE Capital agreed to guarantee the $600 million of
         notes payable previously issued by the Company in exchange for debt
         holders relinquishing the Company from financial reporting obligations
         and other restrictive covenants found in the corresponding indentures.

         The Company from time to time assumes mortgages on facilities it
         acquires. Certain mortgages were assumed at above market interest
         rates. Premiums were recorded upon assumption and amortized using the
         interest method over the terms of the related debt. On May 13, 2002,
         the Company repaid thirteen mortgage notes payable for $24.2 million.
         On June 3, 2002, the Company repaid an additional eight mortgage notes
         payable for $32.5 million. The following table provides information
         about the mortgages as of June 30, 2002 and December 31, 2001.

<TABLE>
<CAPTION>


                                                               As of                As of
                                                       June 30, 2002    December 31, 2001
                                                      -----------------------------------
             (in thousands)
<S>     <C>
             Conventional fixed rate                       $   2,887           $   54,889
             Conventional variable rate                            -                5,082
                                                      -----------------------------------
                                                           $   2,887           $   59,971
             Premiums                                            364                4,380
                                                      -----------------------------------
               Mortgage notes payable                      $   3,251           $   64,351
                                                      ===================================

</TABLE>



         Losses on the early extinguishment of the Company's lines of credit and
         certain mortgages total $4.7 million, which included prepayment
         penalties and the write-offs of deferred financing costs.

         The Company has other borrowings used in the financing of property
         acquisitions. The Company entered into a lease agreement on several
         self-storage facilities. The leases are being accounted for as capital
         leases. As of June 30, 2002, the carry value of these lease obligations
         was approximately $23.7 million.

         The Company also consummated deferred unit agreements totaling $13.0
         million in exchange for interest in self-storage facilities. These
         agreements contained various maturities through 2002, at which time
         Limited Partnership Units ("Units") were to be issued to satisfy the
         agreements. In February 2002, the issuers accepted early payment of the
         balance of the debt, and elected to receive cash instead of Units. The
         early payment, originally due September 2002, totaled $7.2 million.

         During the six months ended June 30, 2002, total interest paid on all
         debt was $23.1 million and total interest capitalized for construction
         costs was $651 thousand.

                                       11

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

8.       Income per Unit

         Basic and diluted income per unit is calculated as presented in the
         following table. There is no dilution at June 30, 2002, as all existing
         Storage USA stock options, and restricted stock and all existing SUSA
         Partnership restricted units were paid out as part of the April 26,
         2002 acquisition of Storage USA by Security Capital.

<TABLE>
<CAPTION>


                                                                 Three months     Three months     Six months     Six months
                                                                        ended            ended          ended          ended
                                                                June 30, 2002    June 30, 2001  June 30, 2002  June 30, 2001
                                                               -------------------------------------------------------------
              (in thousands except per unit amounts)
<S>     <C>
              Basic net income per Unit:
                  Net income (loss) attributable to common
                    unitholders                                    $ (25,913)        $  19,189       $(13,012)      $ 34,909
                  Basic weighted average Units outstanding             34,485           30,463          32,743        30,451
                                                               -------------------------------------------------------------
                  Basic net income (loss) per Unit                 $   (0.75)        $    0.63       $  (0.40)      $   1.15

              Diluted net income per Unit:
                  Net income (loss) attributable to common
                    unitholders                                    $ (25,913)        $  19,189       $(13,012)      $ 34,909

                  Basic weighted average Units outstanding             34,485           30,463          32,743        30,451
                  Dilutive effect of stock options                        156              362             361           316
                                                               -------------------------------------------------------------
                  Diluted weighted average Units outstanding           34,641           30,825          33,104        30,767
                                                               -------------------------------------------------------------
                  Diluted net income (loss) per Unit               $   (0.74)        $    0.62       $  (0.39)      $   1.13
                                                               =============================================================
</TABLE>




9.       Commitments

         As of June 30, 2002, the Company is committed to advance an additional
         $350 thousand to franchisees of Franchise for the construction of
         self-storage facilities. These advances are collateralized by the
         facility. The Company is a limited guarantor on $6.4 of loan
         commitments made by third party lenders to franchisees of Franchise,
         of which $373 thousand was outstanding as of June 30, 2002.

10.      Recent Accounting Developments

         The FASB has recently issued Statements of Financial Accounting
         Standards No. 141, "Business Combinations", and No. 142, "Goodwill and
         Other Intangible Assets". Both of these statements have been adopted by
         the Company, commencing January 1, 2002. Due to the limited amount of
         goodwill and other intangibles that have been previously recorded by
         the Company, the adoption of these statements did not have a material
         impact on the Company's financial position or results of operations.

         The FASB issued Statements of Financial Accounting No. 144, "Accounting
         for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS
         144 addresses financial accounting and reporting for the impairment or
         disposal of long-lived assets. SFAS became effective and was adopted by
         the Company January 1, 2002. Under this statement, the Company accounts
         for the sale of long-lives assets as discontinued operations, and not
         as part of ongoing operations. The sale of Franchise and SUSA
         Management Corp. to Security Capital, as well as the sale of six
         Indiana self-storage facilities to an unrelated third party, were
         transactions that required SFAS 144 treatment. See Note 14 Gain on
         Discontinued Operations for further information.

         In April of 2002, the FASB issued Statement of Financial Accounting No.
         145 ("SFAS 145"), "Rescission of FASB Statements No. 4, 44 and 64,
         Amendment of FASB Statement No. 13, and Technical Corrections".

                                       12

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

         The Company has elected to adopt the guidance set forth in the SFAS for
         fiscal year 2002. Accordingly, the losses on the early extinguishment
         of debt discussed in Note 7 is classified as part of operating
         expenses. Under previous guidance, these losses would have been
         classified as an extraordinary item.

         In July 2002, the FASB issued SFAS No. 146 ("SFAS 146"), "Accounting
         for Costs Associated with Exit or Disposal Activities." SFAS 146
         requires all companies to recognize costs associated with exit or
         disposal activities when they are incurred rather than at the date of a
         commitment to an exit or disposal plan. SFAS 146 is to be applied
         prospectively to exit or disposal activities after December 31, 2002.
         The impact of adopting SFAS 146 is not expected to be material.

11.      Legal Proceedings

         Grunewald v. Storage USA, Inc. On July 22, 1999, a purported statewide
         class action was filed against the GP and Partnership in the Circuit
         Court of Montgomery County, Maryland, under the style Ralph Grunewald
         v. Storage USA, Inc. and SUSA Partnership, L.P., case no. 201546V,
         seeking recovery of certain late fees paid by tenants and an injunction
         against further assessment of similar fees. The Company filed a
         responsive pleading on September 17, 1999, setting out its answer and
         affirmative defenses. The Company believes that it has defenses to the
         claims in the suit and intends to vigorously defend it. The Plaintiff
         filed a Motion for Partial Summary Judgment and a Motion for Class
         Certification, but before the GP was required to respond to these
         motions, the case was stayed until 30 days after the conclusion of
         appellate proceedings in an unrelated case, not involving the Company,
         challenging the constitutionality of a new statute passed by the
         Maryland legislature relating to late fees. While an estimate of the
         possible loss or range of losses cannot be currently made, we do not
         believe this case will have any material adverse effect upon the
         Company's financial position. However, if, during any period, the
         potential contingency should become probable, the results of operations
         in such period could be materially affected.

         In Re Storage USA, Inc. Shareholder Litigation. Seven putative class
         action lawsuits were filed on or about November 6 and 8, 2001, by
         alleged shareholders of the GP in the Chancery Court of Memphis,
         Tennessee. An additional suit was filed in the Chancery Court of
         Davidson County. On December 14, 2001, a Consent Order was entered
         providing for the consolidation of the Shelby County actions and
         similar actions thereafter filed, the designation of lead plaintiffs'
         counsel and the filing of a Consolidated and Amended Class Action
         Complaint. The Order further provides that upon transfer of the
         Davidson County action to Shelby County, that action will be
         consolidated with those in Shelby County.

         On December 17, 2001, lead plaintiffs' counsel filed a putative
         Consolidated and Amended Class Action Complaint in the Chancery Court
         of Shelby County. The defendants named in that complaint are the GP,
         each of the Directors of the GP, Security Capital, Storage USA Trust
         and the Partnership. The complaint alleges, among other things, that
         the individual defendants have breached their fiduciary duties to
         shareholders by structuring the purchase and sale agreement so as to
         deprive themselves of the ability to consider certain possible
         competing proposals and by delegating to Security Capital the authority
         to set the parameters for acceptance or rejection of any offer of
         superior value for the GP, thereby depriving plaintiffs of the true
         value of their investment in the GP. The complaint also alleges that
         Security Capital breached fiduciary duties to other shareholders of
         Storage USA and failed to treat those shareholders with entire
         fairness. On December 19, 2001, plaintiffs filed a Motion for
         Preliminary Injunction seeking, among other things, to enjoin the
         proposed transactions between Security Capital and the GP, or in the
         alternative, to declare certain sections of the purchase and sale
         agreement between Security Capital and the GP invalid and void, and if
         the transactions are consummated, to rescind them and recover
         rescissionary and other damages suffered by the plaintiffs as a result
         of the transactions.

         Following negotiations subsequent to the announcement of the
         transactions, on January 17, 2002, the parties to the litigation
         entered into a memorandum of understanding setting forth an agreement
         in principle with respect to the settlement of the purported class
         actions. As part of the settlement, Security Capital agreed to increase
         the consideration to be paid in the transactions to the GP's
         shareholders from $42.00 to $42.50 per share.

         In the memorandum of understanding the parties to the litigation agreed
         to use their best efforts to execute as soon as practicable final
         settlement documentation as may be required in order to obtain final
         court approval of the settlement, the dismissal of the actions and the
         release of all claims against the defendants, in accordance with the
         terms of the memorandum of understanding. In addition to court
         approval, consummation of the settlement is subject to the completion
         by the plaintiffs of confirmatory discovery reasonably satisfactory to
         plaintiffs' counsel and to consummation of the transactions.

         The increase from $42.00 to $42.50 in the cash consideration payable to
         the GP's shareholders and limited partners of the Partnership was
         negotiated at arm's length in a series of discussions between
         representatives of plaintiffs' counsel and counsel for Security
         Capital, in which a financial expert retained by plaintiffs' counsel
         and representatives of Security Capital's financial advisor also
         participated.

         In connection with the settlement, the parties to the purchase and sale
         agreement entered into the letter agreement amending the purchase and
         sale agreement to provide that all references in the purchase and sale
         agreement to $42.00 will for all purposes be deemed references to
         $42.50. The GP's shareholders received the increased consideration when
         the transaction was consummated on April 26, 2002.

         In the event that the court approves the proposed settlement in
         accordance with its terms, members of the class defined in the
         settlement will be deemed to have released all claims they had or may
         have had with respect to the transactions and related matters as
         reflected in the settlement agreement and proposed final judgment, and
         will accordingly be barred from asserting any such claims in judicial
         proceedings. Members of the class defined in the settlement consist of
         public shareholders of the GP (other than Security Capital and its
         affiliates) at any time during the period from September 10, 2001 (the
         date on which the GP announced that it had modified its standstill
         arrangement with Security Capital to permit Security Capital to engage
         in discussions with the special committee concerning Security Capital's
         intentions relating to its investment in the GP) through and including
         the date of completion of the transactions.

         In connection with the litigation, each of our directors and executive
         officers who are parties to indemnification agreements with the GP have
         submitted claims to us for reimbursement of indemnifiable expenses
         under such indemnification agreements.

         Winnerman et. al. v. Storage USA, Inc. On March 12, 2002, a group of
         limited partners of the Partnership owning in the aggregate 463,732
         limited partnership units filed suit in the Chancery Court of Tennessee
         for the Thirtieth Judicial District at Memphis against the GP, the
         Partnership and Security Capital. The plaintiffs purport to bring the
         action individually on their own behalf and as a class action on behalf
         of all limited partners of the Partnership and on behalf of a subclass
         of those limited partners who are parties to tax deferral agreements
         with the Partnership. The plaintiffs seek to enjoin the transactions on
         the grounds that the transactions are in violation of the existing
         partnership agreement of the Partnership, of the Tennessee Revised
         Uniform Limited Partnership Act and of the tax deferral agreements. The
         plaintiffs allege in the complaint that they seek to prevent the
         plaintiffs and other limited partners of the Partnership from being
         cashed out from the Partnership without a vote and without appraisal
         rights and at an unfair price and from being coerced to give up their
         existing contractual rights under the existing partnership agreement
         and the tax deferral agreements. The complaint purports to state causes
         of action against all of the defendants for alleged breach of fiduciary
         duty on the grounds that the vote of the minority limited partners is
         not being sought for the transactions, the limited partners are not
         being offered appraisal rights in the Transactions and the special
         committee did not contain any limited partners or representatives of
         the limited partners. The complaint further purports to state causes of
         action against all defendants for violation of the Tennessee Revised
         Uniform Limited Partnership Act by asserting that the GP's ownership of
         both general and limited partnership interests amounts to a conflict of
         interest and that therefore the limited partners, other than the GP,
         should be offered the opportunity to vote on the transactions. The
         complaint purports to state an additional cause of action against both
         the GP and the Partnership for breach of the existing partnership
         agreement because the minority limited partners are not being afforded
         the right to vote on the transactions or the proposed amendment and
         restatement of the Partnership's partnership agreement. The plaintiffs
         further assert that the consummation of the Transactions will trigger
         adverse tax consequences for them contrary to the provisions of their
         tax deferral agreements. The complaint alleges that Security Capital
         was aware of the contractual relationships between the plaintiffs and
         the GP and the Partnership under the tax deferral agreements and that
         Security Capital caused and aided and abetted the breaches of, and
         interfered with, these contractual relationships. The relief sought in
         the complaint includes preliminarily and permanently enjoining the
         transactions, rescinding and setting aside the proposed transactions in
         the event they are consummated, ordering the appointment of a special
         committee comprised of limited partners and the plaintiff class
         representatives and their attorneys to insure fair protection and
         adequate procedural safeguards in connection with any transaction for
         the buyout of the limited partners' units of the Partnership,
         specifically enforcing the existing partnership agreement and the tax
         deferral agreements, and awarding compensatory damages, prejudgment
         interest, and attorneys' and experts' fees and expenses. On April 18,
         2002, the parties to the Winnerman litigation entered into a memorandum
         of understanding with respect to the settlement of this case. As part
         of the settlement, defendants agreed to amend (regardless of whether
         the proposed settlement is ultimately approved by the court) the form
         of Restated Partnership Agreement to provide, among other things, that
         for a period of three years after the Merger, the general partner will
         consider, in good faith, proposals made by one or more limited partners
         to redeem limited partnership units with property designated by such
         limited partner or partners, subject to certain conditions. If the
         settlement is approved by the court after notice and hearing, the
         claims that were or could have been brought in Winnerman will
         effectively be barred.

         Bender et al. v. SUSA Partnership, L.P. The GP, the Partnership and
         Security Capital have been named as defendants in a lawsuit captioned
         Bender et al. v. SUSA Partnership, L.P., et al., No. CH-02-0843-2,
         filed on May 2, 2002 in the Chancery Court for the Thirtieth Judicial
         District at Memphis, State of Tennessee. The plaintiffs, who purport to
         be "joint venturers" with the Partnership and limited partners of the
         Partnership, allege a variety of claims against the defendants arising
         out of the acquisition by Security Capital of all of the assets of the
         GP, including all of the interests owned by the GP in the Partnership,
         and the subsequent merger of the GP into the Partnership (the
         "Transaction"). In connection with the Transaction, which was completed
         on April 26, 2002, eligible limited partners of the Partnership were
         given the opportunity to elect to remain as limited partners of the
         Partnership, after completion of the Transaction, instead of being
         cashed out. Among other things, the complaint alleges that the
         Transaction violates a June 22, 1996 Agreement between the Partnership
         and one of the plaintiffs, the Second Amended and Restated Agreement of
         Limited Partnership of the Partnership (which agreement was amended and
         restated in connection with the Transaction as the Third Amended and
         Restated Agreement of Limited Partnership of the Partnership), and
         certain agreements referred to as "Assignment of Rights" agreements to
         which the Partnership and one of the plaintiffs are allegedly parties.
         The complaint asserts claims based on theories of breach of contract,
         breach of fiduciary duty and violation of the Tennessee Revised Uniform
         Limited Partnership Act. The complaint also alleges that certain of the
         claims asserted by plaintiffs are subject to arbitration, and the
         plaintiffs have concurrently filed a demand for arbitration on the
         defendants under the rules of the American Arbitration Association. The
         complaint in Bender seeks, as relief, preliminary and permanent
         injunctive relief restraining the defendants from requiring the
         plaintiffs from having to make an election to remain as limited
         partners of the Partnership in connection with the Transaction; an
         order enjoining consummation of the Transaction; damages in an
         unspecified amount; and statutory treble damages in an unspecified
         amount.

         Plaintiffs have obtained a temporary restraining order ("TRO")
         prohibiting defendants, for the duration of the order, which was
         originally scheduled to expire on May 30, 2002, from, among other
         things, requiring plaintiffs to make the election with respect to their
         interests, and preventing defendants from foreclosing on loans to
         defendants. The Company and Security Capital believe that the
         allegations of the complaint are without merit.

         The parties have been in negotiation and the TRO, and the hearing on
         the temporary injunction, has been continued until August 8, 2002, at
         which time the Defendants were to submit an answer and advise the
         plaintiffs as to whether they were agreeable to arbitration. Due to the
         untimely and sudden death of the Chancellor in charge of the
         litigation, the matter has again been put off by informal agreement of
         the parties. The defendants will be filing their answer shortly, as
         well as responding to the demand for arbitration. No hearing is
         currently scheduled on the petition for temporary injunction and a new
         hearing date will be obtained at such time as is mutually convenient to
         the parties.

         Esquivel v. SUSA, LP. On June 17, 2002, a purported nationwide class
         action was filed in the Orange County, California Superior Court
         entitled Fausto Esquivel v. GE Capital Real Estate d/b/a Storage USA,
         case no 02C00153, seeking injunctive relief, restitution and damages
         based upon alleged unfair and misleading advertising practices
         concerning the dimensions of storage units leased by the Company to its
         customers. Plaintiff alleges that the actual size of the storage units
         leased was less than the size of the units as advertised by the
         Company. On July 24, 2002, Plaintiff filed a First Amended Complaint
         which named SUSA, LP as the sole defendant in the lawsuit. The response
         to the Complaint is due on or before September 19, 2002. The Company is
         currently investigating the allegations in the Complaint. Based upon
         its preliminary investigation, the Company believes that it has
         defenses to the claims in the suit and intends to vigorously defend it.

         While the ultimate resolution of the cases discussed above will not
         have a material adverse effect on the Company's financial position, if
         during any period the potential contingency should become probable and
         quantifiable, the results of operations in such period could be
         materially affected.





                                      13

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

12.      Activities of the Special Committee of the Board of Directors

         On September 10, 2001, Storage USA announced that its Board of
         Directors had unanimously approved the formation of a Special Committee
         of five independent directors, to explore the intentions of Security
         Capital with respect to its equity ownership in Storage USA, given
         Security Capital's prior public announcements. Security Capital had
         previously announced its plan to reposition or sell its investment in
         several of its portfolio companies and focus its attention on certain
         key businesses where it owns, or plans to own, all of the equity
         securities in those businesses.

         On December 5, 2001, Storage USA and the Partnership entered into a
         definitive purchase and sale agreement with Security Capital, providing
         for a transaction in which all of the holders of Storage USA's common
         stock would be entitled to receive $42.00 in cash per share in exchange
         for the cancellation of their shares. Holders of limited partnership
         interests in the Partnership would also be entitled to receive $42.00
         per limited partnership unit in cash, unless they elected, under the
         conditions and limitations relating to such an election as provided in
         the purchase and sale agreement, to continue as limited partners in the
         surviving partnership. Directors of Storage USA unaffiliated with
         Security Capital unanimously approved the purchase and sale
         transaction, and the transactions contemplated thereby, upon unanimous
         recommendation and approval by the Special Committee.

         On December 14, 2001, Security Capital announced a definitive agreement
         for its acquisition by GE Capital Real Estate. On April 16, 2002,
         Security Capital announced that a special meeting of its shareholders
         would be held on May 14, 2002 to vote on the proposal to approve and
         adopt the agreement and plan of merger.

         On January 17, 2002, Storage USA announced that the members of its
         Board of Directors unaffiliated with Security Capital unanimously
         approved the increase from $42.00 to $42.50 in the per share and per
         unit consideration payable to Storage USA shareholders and limited
         partners of the Partnership, respectively, agreed to by Security
         Capital in connection with the settlement of class action litigation,
         relating to the initial purchase and sale agreement.

         As discussed in Note 11, Legal Proceedings, on March 12, 2002, a group
         of limited partners of the Partnership filed suit against Storage USA,
         the Partnership and Security Capital. They were seeking to enjoin the
         transactions on the grounds that the transactions were in violation of
         the existing partnership agreement of the Partnership, of the Tennessee
         Revised Uniform Limited Partnership Act and of the tax deferral
         agreements. This lawsuit was settled on April 19, 2002, subject to
         court approval. As a condition to the settlement, Security Capital,
         Storage USA and the Partnership agreed to certain changes to the
         agreement of limited partnership to govern the Partnership following
         consummation of the acquisition.

         On April 26, 2002, Security Capital completed its acquisition of
         Storage USA. The acquisition was made through transactions in which
         Security Capital acquired all of Storage USA's assets, including all of
         the partnership interests owned Storage USA in the Partnership, and
         assumed all of Storage USA's liabilities, after which Storage USA was
         merged into the Partnership. Completion of the transactions followed
         the approval by holders of a majority of outstanding shares of Storage
         USA's common stock at a special meeting of shareholders held April 26,
         2002. In the merger, each share of Storage USA's common stock issued
         and outstanding immediately prior to the effective time of the merger
         was converted into the right to receive $42.70 in cash, which included
         consideration of $42.50 per share plus $0.20 per share in lieu of a
         dividend for the portion of the second quarter through April 26, 2002.
         The same treatment was given Storage USA stock options. As part of the
         transactions, holders of limited partnership units in the Partnership,
         other than the general partner, also became entitled to receive the
         same consideration payable to Storage USA's shareholders, or $42.70
         cash per unit, unless they were eligible and elected to remain as
         limited partners in the Partnership. Also, as part of the transactions,
         Security Capital purchased Franchise and SUSA Management Corp. from the
         Partnership.

                                       14

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)
                                  June 30, 2002

         On May 14, 2002, GE Capital completed its acquisition of Security
         Capital.

         The general partner of the Partnership is now SCSSI, a Delaware
         Corporation, an indirect wholly owned subsidiary of Security Capital
         which is, in turn, an indirect wholly owned subsidiary of GE Capital.

         Expenses related to the activities of the Special Committee, including
         legal and accounting fees, investment banking services and other
         charges, totaled $7.5 million for the second quarter of 2002, and $9.5
         million for the six months ended June 30, 2002.

13.      Acquisition/Merger Costs

         Costs related to the acquisition of the Company by Security Capital are
         summarized in the below table.

<TABLE>
<CAPTION>
<S>     <C>

               Payments in accordance with change-in-control agreements               $   12,511
               Payment of unvested Storage USA stock options                              21,392
               Payment of unvested restricted Storage USA stock                              270
               Payment of unvested restricted units                                        1,299
               Payment of bonuses under Shareholder Value Plan                               126
               Related payroll taxes                                                       2,228
                                                                                  --------------
                                                                                      $   37,826
                                                                                  ==============

</TABLE>


14.      Gain on Discontinued Operations

         On April 26, 2002 the Company sold Franchise and SUSA Management Corp.
         to Security Capital as part of the transactions discussed in Note 12,
         Activities of the Special Committee of the Board of Directors. The
         Company received approximately $15.9 million and $1 thousand for these
         entities, respectively. On June 13, 2002, the Company sold six Indiana
         self-storage facilities to an unrelated third party for $7.5 million.
         In accordance with SFAS 144, those discontinued components are now
         reported separately from the continuing operations of the Company. The
         table below outlines the results for the discontinued components for
         the second quarter of 2002 and 2001 and for the six months ended June
         30, 2002 and 2001.

<TABLE>
<CAPTION>


                                                                       Three months   Three months      Six months     Six months
                                                                              ended          ended           ended          ended
                                                                      June 30, 2002  June 30, 2001   June 30, 2002  June 30, 2001
                                                                     -------------------------------------------------------------
<S>     <C>
            Gain on operations - six Indiana facilities                   $      57        $    18        $    115         $    6
            Gain/(loss) on operations - Franchise                             (418)             67           (273)            157
            Gain on operations - SUSA Management Corp.                           16              -              17              -
                                                                     -------------------------------------------------------------
            Total gain/(loss) on operations of discontinued
            operations                                                        (345)             85           (141)            163
                                                                     -------------------------------------------------------------

            Gain on disposal - six Indiana facilities                         1,635              -           1,635              -
            Gain on disposal - Franchise                                      4,182              -           4,182              -
            Gain on disposal - SUSA Management Corp.                          1,126              -           1,126              -
                                                                     -------------------------------------------------------------
            Total gain on disposal of discontinued operations                 6,943              -           6,943              -
                                                                     -------------------------------------------------------------
            Total gain on discontinued operations                         $   6,598        $    85        $  6,802            163
                                                                     =============================================================

</TABLE>


                                       15

<PAGE>

 ITEM 2. 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 together with the Consolidated
Financial Statements and Notes thereto. References to "we," "our" or "the
Company" refer to SUSA Partnership, L.P. (the "Partnership"). References to
"Storage USA" refer to Storage USA, Inc., general partner of SUSA Partnership,
L.P. through April 25, 2002. References to "SCSSI" refer to Security Capital
Self Storage Incorporated, a wholly-owned subsidiary of Security Capital Group
Incorporated ("Security Capital"), general partner and holder of approximately
95.3% of the interest therein as of June 30, 2002, following its April 26, 2002
acquisition of Storage USA.

The following are definitions of terms used throughout this discussion that will
be helpful in understanding our business.


o  Physical Occupancy means the total net rentable square feet rented as of the
   date (or period if indicated) divided by the total net rentable square feet
   available.

o  Scheduled Rent Per Square Foot means the average market rate per square foot
   of rentable space.

o  Net Rental Income means income from self-storage rentals less discounts.

o  Realized Rent Per Square Foot means the annualized result of dividing rental
   income, less discounts by total square feet rented.

o  Direct Property Operating Cost means the costs incurred in the operation of
   a facility, such as utilities, real estate taxes, and on-site personnel.
   Costs incurred in the management of all facilities, such as accounting
   personnel and management level operations personnel are excluded.

o  Net Operating Income ("NOI") means total property revenues less Direct
   Property Operating Costs.

o  Annual Capitalization Rate ("Cap Rate")/ Yield means NOI of a facility
   divided by the total capitalized costs of the facility.

o  Funds from Operations ("FFO") means net income, computed in accordance with
   generally accepted accounting principles ("GAAP"), excluding gains
   (losses) from sales of property and extraordinary gain (losses)from debt
   restructuring, plus depreciation and amortization of revenue-producing
   property, and after adjustments for unconsolidated partnerships and joint
   ventures.

o  Same-Store Facilities include all facilities that we owned for the entire
   period of both comparison periods. Development properties and expansions  are
   removed from these groups to avoid skewing the results.

Overview

As of June 30, 2002, we owned, managed and franchised 555 facilities containing
36.6 million square feet in 33 states and the District of Columbia.

In December of 2001, the Partnership and the Storage USA entered into a
definitive purchase and sale agreement with Security Capital, which, as amended,
provided for a series of transactions in which all of the holders of Storage
USA's common stock would be entitled to receive $42.50 per share in cash in
exchange for the cancellation of their shares, and all holders of limited
partnership interests in the Partnership would be entitled to receive, at their
option, $42.50 per limited partnership unit. Unitholders were permitted to
elect, under the conditions and limitations relating to such an election as
provided in the purchase and sale agreement, to continue as limited partners in
the surviving partnership. Consummation of the transactions contemplated by the
purchase and sale agreement was subject shareholder approval.

On April 26, 2002, Security Capital completed its acquisition of Storage USA.
The acquisition was made through transactions in which Security Capital acquired
all of Storage USA's assets, including all of the partnership interests owned by
Storage USA in the Partnership, and assumed all of Storage USA's liabilities,
after which the Storage USA was merged into the Partnership. Completion of the
transactions followed the approval by holders of a majority of outstanding
shares of Storage USA's common stock at a special meeting of shareholders held
April 26, 2002. As part of the acquisition, Security Capital purchased Franchise
from the Company for $15.9 million, as well as SUSA Management Corp for
approximately $1 thousand. Both, like the Partnership, are now wholly owned
subsidiaries of SCSSI.

On May 14, 2002, General Electric Capital Corporation ("GE Capital") completed
its acquisition of Security Capital.

                                       16

<PAGE>


Internal Growth

The following table compares Same-Store Facilities (361 properties owned since
January 1, 2001) for the second quarter of 2002 and 2001 and for the six months
ended June 30, 2002 and 2001. Newly developed and expanded facilities are
removed from the same-store pool to avoid skewing the results.

<TABLE>
<CAPTION>


                                           Quarter Ended   Quarter Ended              Six months ended   Six months ended
            Same-Store Results             June 30, 2002   June 30, 2001    Growth %     June 30, 2002      June 30, 2001   Growth %
            ------------------------------------------------------------------------------------------------------------------------
            (amounts in thousands except occupancy and per square foot figures)
<S>     <C>
            Revenues                             $64,272         $63,778        0.8%          $125,570           $123,838      1.4%

            Expenses
            Personnel - salaries                   4,575           4,378      (4.5%)             9,136              8,700     (5.0%)
            Repairs and maintenance                1,514           1,326     (14.2%)             1,514              2,799       2.9%
            Utilities and trash                    1,672           1,637      (2.1%)             3,458             3,616        4.4%
            Insurance                                610             432     (41.2%)             1,219                868    (40.4%)
            Taxes                                  5,207           5,022      (3.7%)            10,094              9,689     (4.2%)
            All other                              5,547           5,369      (3.3%)            12,235             11,521     (4.9%)
                                           -----------------------------------------------------------------------------------------
            Total Expenses                        19,125          18,164      (5.3%)            37,656             36,193     (4.0%)
                                           -----------------------------------------------------------------------------------------
            Net Operating Income                 $45,147         $45,614      (1.0%)          $ 87,914           $ 87,645       0.3%
                                           -----------------------------------------------------------------------------------------
            Physical Occupancy                     81.5%           84.2%      (2.7%)             81.3%               83.4%    (2.1%)
            Scheduled Rent per Square Foot       $ 13.02         $ 12.72        2.3%          $  12.95           $  12.61      2.7%
            Realized Rent per Square Foot        $ 12.24         $ 11.76        4.1%          $  12.03           $  11.55      4.1%

</TABLE>



o    Our Same-Store Facilities experienced a decline of 1.0% in NOI in the
     second quarter of 2002 as compared to the second quarter of 2001. This NOI
     reduction resulted from revenue increases of 0.8%, offset by expense growth
     of 5.3%. The Same-Store Facilities achieved 0.3% NOI growth through the
     first six months of 2002, as compared to the same period in 2001, due to
     revenue increases of 1.4% offset by expense growth of 4.0%.

o    The revenue increase of 0.8% for the second quarter of 2002, as compared to
     the first quarter of 2001, and 1.4% for the six months ended June 30, 2002,
     as compared to the same period in 2001, is primarily due to our ability to
     optimize rental income, by raising rates (realized a 4.1% increase from the
     second quarter of 2001 to the same period in 2002), while attempting to
     limit the downward pressure on occupancy. Physical occupancy did decrease,
     dropping from 84.2% in the second quarter of 2001 to 81.5% in 2002, and
     dropping from 83.4% for the first six months of 2001 to 81.3% for the same
     time span in 2002. We are anticipating that this trend will remain in place
     throughout the rest of 2002, as we continue to experience increased
     competition in our key markets and overall demand remains negatively
     impacted by the national economic downturn.

o    Our operating expenses grew 5.3% from the second quarter of 2001 to the
     second quarter of 2002, and 4.0% from the first six months of 2001 to the
     same six months in 2002, due to a number of factors. There was a 4.5%
     increase in salaries from the second quarter of 2001 to the second quarter
     of 2002, as annual pay increases approximated 5% while personnel turnover
     slowed. For the six months ended June 30, 2002 salaries showed a 5%
     increased from the same period in 2001. The cost of property, liability and
     other insurance increased 41.2% from the second quarter of 2001 to the same
     quarter in 2002, and increased 40.4% from the six months ended June 30,
     2001 to the same six months in 2002. This escalation was due to premium
     increases across all policies effective in July of 2001. The 3.7% increase
     in taxes from the second quarter of 2001 to the same quarter in 2001, and
     the 4.2% increase from the six months ended June 30, 2001 to the same
     period in 2002, was due to property reassessments in a number of our
     markets. Although there was growth from the second quarter of 2001 to
     second quarter of 2002 in repairs and maintenance, 14.2%, and utilities,
     2.1%, year to date reductions in these expense categories helped to offset
     a portion of the other growth. From the six months ended June 30, 2001 to
     the same period in 2002, repairs and maintenance decreased 2.9%, due to
     less first quarter snow removal and the timing of capital projects.
     Utilities decreased 4.4% from the first six months of 2001 to the same
     period in 2002 due to a combination of mild winter weather in the first
     quarter and decreased utility rates in a number of markets. We anticipate
     expense growth remaining in the 5-5.5% range during the remainder of 2002.

                                       17

<PAGE>


The following table lists changes in the 10 largest same-store markets on a rent
per square foot basis and occupied square foot basis, and the resulting change
in net rental income, for the second quarter of 2002 over the second quarter of
2001, and for the six months ended June 30, 2002 as compared to the same period
in 2001. The largest 10 markets in total represent 67.5% of the same-store NOI.

<TABLE>
<CAPTION>


                                                          % of     Change in Net Rental      % Change in         % Change in
                                              # of   YTD same-         Income (1)         Realized RPSF (2)    Occupied sq. ft.
Market                                  Facilities   store NOI       QTD         YTD        QTD       YTD       QTD       YTD
-----------------------------------------------------------------------------------------------------------------------------
<S>     <C>
Los Angeles-Riverside-Orange County, CA         46       17.8%      2.3%        3.5%       6.8%      7.4%    (3.5%)    (3.2%)
New York-N. New Jersey-Long Island, NY          28       15.9%    (2.1%)      (0.9%)       3.8%      4.6%    (4.9%)    (4.6%)
Washington-Baltimore, DC-MD-VA-WV               23        9.9%    (4.0%)      (1.7%)       0.3%      1.8%    (4.2%)    (3.2%)
Miami-Fort Lauderdale, FL                       16        6.4%      2.0%        3.5%       4.9%      4.4%    (2.1%)    (0.6%)
Dallas-Forth Worth, TX                          13        3.4%      0.5%        0.3%       4.3%      3.0%    (3.1%)    (2.2%)
Philadelphia-Wilm-Atlantic City, PA-NJ          13        3.0%      1.4%        2.1%       5.8%      6.1%    (3.3%)    (2.9%)
San Francisco-Oakland-San Jose, CA               9        2.9%    (7.9%)      (6.4%)       0.9%      2.0%    (7.3%)    (7.0%)
Memphis, TN-AR-MS                               23        2.8%      2.5%        2.4%       1.1%      1.0%      1.1%      1.0%
Phoenix,-Mesa, AZ                               15        2.8%    (0.0%)        1.2%       0.4%      0.3%    (0.3%)      0.7%
Las Vegas, NV                                   11        2.6%      9.7%       10.9%       9.2%      7.3%      0.7%      3.0%

</TABLE>


(1)   The percentage change in Realized Rent per Square Foot plus the percent
      change in occupied square feet approximates the percentage change in net
      rental income.
(2)   Rent Per Square Foot.


External Growth

Historically, our external growth strategies focused on a combination of wholly
owned and joint venture activity to facilitate the acquisition of existing
facilities and the development of new properties. With the acquisition of SUSA
Partnership by Security Capital, and the subsequent acquisition of Security
Capital by GE Capital, we are not anticipating a significant level of
acquisition or development activity through SUSA Partnership going forward.

Wholly Owned

Within the Partnership, there were no acquisitions of self-storage facilities
during the six months of 2002, and we anticipate limited additional acquisition
activity for the remainder of the year. Three newly developed facilities,
however, were opened within the Partnership during the six months ended June 30,
2002, as were three expansions of existing facilities. Year to date 2002
development and expansion activity is summarized below.

<TABLE>
<CAPTION>


                                                           Developments                           Expansions
                                         ------------------------------------------------------------------------------------
                                          Number of      Expected    Net Rentable    Number of      Expected     Net Rentable
               Quarter ended             Facilities    Investment     Square Feet   Facilities    Investment      Square Feet
               --------------------------------------------------------------------------------------------------------------
               (amounts in thousands except number of facilities)
<S>     <C>
               March 31, 2002                     2      $ 23,971             202            2       $ 2,112               29
               June 30, 2002                      1         4,385              72            1         2,282               25
                                         ------------------------------------------------------------------------------------
               Total year-to-date                 3      $ 28,356             274            3       $ 4,394               54
                                         ====================================================================================

</TABLE>



We plan to continue the development of eight new facilities within the
Partnership, as well as the expansion of nine existing facilities. The
following chart summarizes the details of these seventeen projects as of June
30, 2002:

                                       18

<PAGE>

<TABLE>
<CAPTION>



                                                                 # of     Square       Expected    Investment     Remaining
                                                           Properties       Feet     Investment       to Date    Investment
               -------------------------------------------------------------------------------------------------------------
               (amounts in thousands except for number of facilities)
<S>     <C>
               Total development in process                         8        645       $ 46,726       $ 1,264      $ 45,462
               Total expansions in process                          9        235         22,054         9,797        12,257
                                                           -----------------------------------------------------------------
                 Total developments and expansions                 17        880       $ 68,780       $11,061      $ 57,719
                                                           =================================================================

</TABLE>



Off-Balance Sheet Ventures

As of June 30, 2002, the GE Capital Development Venture discussed in previous
filings had invested $49.7 million, $9.8 million of which represents our
advances and investments. Eight properties are open and operating and one
property remains in design and construction.

During the first six months of 2002, the GE Capital Acquisition Venture acquired
one property in Rhode Island for a cost of approximately $3.8 million. Two
expansions of existing facilities within the GE Acquisition Venture were
completed in the first six months of 2002. These expansions cost approximately
$4.0 million and contributed an additional 67 thousand rentable square feet. The
GE Acquisition Venture had invested a total of $91.1 million as of June 30,
2002, $10.2 million of which was funded through our advances and investments.

Results of Operations

The following table reflects the profit and loss statement for the three months
ended June 30, 2002 and June 30, 2001 based on a percentage of total revenues
and is used in the discussion that follows:

<TABLE>
<CAPTION>


                                                                       Three months ended    Six months ended
                                                                            June 30,              June 30,
                                                                          2002     2001        2002      2001
               -----------------------------------------------------------------------------------------------
<S>     <C>
               Revenue
               Rental and other property income                          98.1%    97.3%       98.1%     98.0%
               Service and other income                                   1.9%     2.7%        1.9%      2.0%
                                                                    ------------------------------------------
               Total Income                                             100.0%   100.0%      100.0%    100.0%
                                                                    ------------------------------------------

               Expenses
               Property operations                                       26.0%    24.5%       26.2%     25.4%
               Taxes                                                      8.4%     7.9%        8.4%      7.8%
               Cost of Providing Services                                 1.4%     2.1%        1.5%      1.7%
               General and administrative                                 7.9%     6.0%        7.4%      6.1%
               Legal and other fees associated with the activities
                 of the Special Committee of the Board of Directors      10.3%     0.0%        6.6%      0.0%
               Acquisition/merger costs                                  41.0%     0.0%       21.0%      0.0%
               Loss on extinguishment of debt                             6.4%     0.0%        3.3%      0.0%

</TABLE>



Rental and other property income increased $1.3 million, or 1.8%, in the second
quarter of 2002 as compared to the same quarter in 2001, and increased $3.5
million, or 2.5% for the six months ended June 30, 2002 as compared to the same
period in 2001. The primary contributors to the rise in rental and other
property income are summarized in the following table.

                                       19

<PAGE>


<TABLE>
<CAPTION>

               Rental and Other Property Income Growth in 2002 over 2001
               for Comparable Periods Ended
               June 30

                                                      Three months       Six months
                                                     ended June 30    ended June 30
                                                    --------------------------------
               (in thousands)
<S>     <C>
               Same-store facilities                      $    494        $   1,732
               Preceding year acquisitions                     172              361
               Preceding year developments                     385              728
               Current year developments                       158              194
               Other                                            58              474
                                                    --------------------------------
               Total income growth                        $  1,267        $   3,489
                                                    ================================
</TABLE>



The largest contributor to the $3.5 million increase in rental and other
property income from the six months ended June 30, 2001 to the same period in
2002 was the Same-Store group of properties, with growth of $1.7 million. For
the second quarter ended June 30, Same-Store growth amounted to $494 thousand
between 2001 and 2002. In both instances, the increases were due to growth in
realized rent per square foot, partially offset by declining occupancies.
Realized rent per square foot increased 4.1% from the second quarter of 2001 to
the second quarter of 2002, while occupancy declined 2.7%. For the six months
ended June 30, 2002 compared to the same period in 2001, realized rent per
square foot increased 4.1% while occupancy dropped 2.1%.

Rental and other property income from the three newly developed facilities we
opened during 2002 yielded another $158 thousand in growth from the second
quarter of 2001 to the same quarter in 2002, and yielded another $194 thousand
from the six months ended June 30, 2001 to the same period in 2002. The timing
of 2001 acquisitions and the opening of 2001 developments produced corresponding
rental and other property income growth of $172 thousand and $385 thousand from
the second quarter of 2001 to the same three months in 2002. For the six months
ended June 30, 2001 to the same period in 2002, 2001 acquisitions produced $361
thousand in growth and 2001 developments another $728 thousand. In both cases, a
full period's rental and other property income in 2002 is being compared to no
corresponding income, or a partial period's income, in 2001. Growth in rental
and other property income also occurred due to occupancy increases at our
facilities currently in lease-up (including pre-2001 acquisitions and developed
facilities); a total of $58 thousand from the second quarter of 2001 to the same
quarter in 2002; and $474 thousand from the first six months of 2001 to the same
period in 2002.

Service and other income decreased $567 thousand from the second quarter of 2001
to the same quarter in 2002, and decreased $128 thousand from the six months
ended June 30, 2001 to the same period in 2002. It also increased as a
percentage of revenue: from 2.7% in second quarter 2001 to 1.9% in the same
period in 2002. Management fees increased $50 thousand from the first quarter of
2001 to the same quarter in 2002, and $106 thousand from the six months ended
June 30, 2001 to the same period in 2002, due to an increased number of managed
and franchised facilities paying fees to us. There were 137 such properties as
of June 30, 2001, versus 147 as of June 30, 2002. Acquisition, development and
general contractor fees decreased $43 thousand from the second quarter of 2001
to the same quarter in 2002, and $277 from the first six months of 2001 to the
same six months in 2002, as activity within the GE Acquisition and Development
Ventures slowed between 2001 and 2002. Eight of the nine development properties
were completed and opened in 2001; and only one new property was acquired in
2002 compared to seven in 2001. Income from equity investments and other
decreased $495 thousand from the second quarter of 2001 to the same three months
in 2002, but increased $43 thousand from the six months ended June 30, 2001 to
the same six months in 2002. The quarterly decrease is primarily due to the
recognition of $357 thousand in revenue associated with a purchase option in the
second quarter of 2001. The six-month growth from 2001 to 2002 is largely
attributable to better performance from single facility joint ventures.
Facilities within these ventures are maturing, and rents are stabilizing.

                                       20

<PAGE>


<TABLE>
<CAPTION>



                                                     Three months     Three months     Six months      Six months
                                                            ended            ended          ended           ended
                                                    June 30, 2002    June 30, 2001  June 30, 2002   June 30, 2001
               ---------------------------------------------------------------------------------------------------
               (in thousands)
<S>     <C>
               Management fees                            $   953          $   982       $  1,944        $  1,838
               Acquisition, development and
                 general contractor fees                       -                43             -              277
               Income/(loss) from equity
                 investments and other                        414              909            728             685
                                                    --------------------------------------------------------------
               Total service and other income:            $ 1,367          $ 1,934       $  2,672        $  2,800
                                                    ==============================================================
</TABLE>



As a percentage of revenues, cost of property operations and maintenance
increased from the second quarter of 2001 to 2002, 24.5% to 26.0%, and increased
from the six months ended June 30, 2001 to the same period in 2002, 25.4% to
26.2%. The trend for the cost of property operations as a percentage of revenues
is to decrease over time due to Same-Store Facility revenue growth outpacing
expense growth, and that was generally the case here. Several expense categories
proved to be exceptions, however, with the most notable being insurance. Our
renewal of property and liability coverage in July 2001 yielded a 60% premium
increase. Although we attempted to mitigate costs by opting for higher
deductibles, we experienced another 97% increase in finalizing our July 2002
renewal. Health insurance expense grew 20% from 2000 to 2001 due to increased
claims and participants. This trend in claims continued in the first six months
of 2002, as costs rose 17.4% compared to the same period in 2001. Salaries also
showed growth from the first six months of 2001 to the same period in 2002, as
our number of owned facilities grew, and annual pay increases approximated 5%
while personnel turnover slowed. Offsetting some of the above expense growth
were decreases in repairs and maintenance and utility expense. This was due to
very mild winter weather in the first quarter of 2002 as compared to 2001, and
corresponding reductions in energy usage as well as snow removal costs.

Tax expense as a percentage of revenues was 8.4% for the second quarter of 2002
compared to 7.9% for the same period in 2001. For the six months ended June 30,
2002, tax expense as a percentage of revenues was again 8.4%, compared to 7.8%
for the same period in 2001. Tax expense as a percentage of revenues has
historically tended to trend down as a result of Same-Store Facility revenue
growth outpacing tax expense growth. This has not been the case for the first
six months of 2002, however, as a number of taxing authorities chose to reassess
our properties, while valuations, hence taxes, increased on developments and
expansions placed in service in 2001.

Costs of providing services decreased from $1.5 million in the second quarter of
2001 to $1.0 million in the same period in 2002, and decreased as a percentage
of revenues from 2.1% to 1.4%. For the six months ended June 30, costs of
providing services decreased from $2.4 million in 2001 to $2.1 million in 2002,
and decreased as a percentage of revenues from 1.7% to 1.5%. The reductions here
are in costs of providing services to the GE Development and Acquisition
Ventures. Acquisition and development costs have decreased as the activity
within these ventures has slowed from the first six months of 2001 to the same
period in 2002.

General and administrative expenses ("G&A") as a percentage of revenues
increased from 6.0% in the second quarter of 2001 to 7.9% for the same quarter
in 2002, and increased from 6.1% during the first six months of 2001 to 7.4% for
the same period in 2002. This was indicative of a G&A expense increase of $1.4
million from the second quarter of 2001 to the second quarter of 2002, and an
increase of 2.1 million from the first six months of 2001 to the same period in
2002. As with property operations and maintenance, a sizeable portion of the G&A
growth was caused by increases in health insurance costs. We experienced
increased claims relating to our corporate staff, and additionally increased our
reserve for unreported claims. Corporate bonuses and other personnel costs also
increased from the first six months of 2001 to the same period in 2002.
Additionally, costs were incurred relating to our integration with our parent
company, SCSSI, and GE Capital. $660 thousand in costs were recognized in the
first six months of 2002.

Expenses related to the activities of the Special Committee of the Board of
Directors, including legal and accounting fees, investment banking services and
other charges, totaled $7.5 million for the second quarter of 2002, and $9.5
million for the six months ended June 30, 2002. As the Special Committee was
formed in September 2001, there are no corresponding prior year expenses.
Further details regarding the activities of the Special Committee of the Board
of Directors are included in Note 12 to the Consolidated Financial Statements.

We also incurred $37.8 million of costs associated with the actual closing of
the transaction with Security Capital. See Note 13 Acquisition/Merger Costs for
a summary of the costs related to the acquisition of Storage USA by Security
Capital.

                                       21

<PAGE>


Losses on the early extinguishment of the Company's lines of credit and certain
mortgages total $4.7 million, which included prepayment penalties and the
write-offs of deferred financing costs.

Depreciation and amortization expense increased from $10.2 million in the second
quarter of 2001 to $10.4 million for the same period in 2002. This expense also
increased from $20.1 million for the six months ended June 30, 2001 to $21.2
million for the same period in 2002. These increases occurred as there were more
depreciable assets during the first six months of 2002 than in 2001. Our balance
for building and equipment averaged $1,338 million during the first six months
of 2002, as compared to $1,294 million in 2001.

Interest income and expense are netted together and the breakout of income and
expense is as follows:

<TABLE>
<CAPTION>


                                              Three months     Three months      Six months       Six months
                                                     ended            ended           ended            ended
                                             June 30, 2002    June 30, 2001   June 30, 2002    June 30, 2001
                                             ----------------------------------------------------------------
                (in thousands)
<S>     <C>
                Interest expense                 $  12,799        $  14,616       $  26,870        $  29,674
                Interest income                    (1,478)          (2,540)         (3,178)          (5,617)
                                             ----------------------------------------------------------------
                  Net interest expense           $  11,321        $  12,076       $  23,692        $  24,057
                                             ================================================================
</TABLE>



Interest expense decreased from $14.6 million in the second quarter of 2001 to
$12.8 million during the same period in 2002. Interest expense also decreased
from $29.7 million for the first six months of 2001 to $26.9 million for the
same period in 2002. These substantial reductions correspond to like decreases
in debt. As part of its April 26, 2002 acquisition of the Storage USA, Security
Capital repaid all existing credit lines in full (approximately $169.0 million).
The Company also repaid $57 million of outstanding mortgage notes payable, using
proceeds from the issuance of GP Partnership units to SCSSI. The interest
expense increase was primarily from the sources listed in the following table
and was offset by capitalized interest of: $297 thousand in the second quarter
of 2002; $1.0 million in the second quarter of 2001; $651 thousand during the
first six months of 2002; and $2.1 million during the first six months of 2001.

<TABLE>
<CAPTION>


                                        Three months ended June 30,                    Six months ended June 30,
                                ------------------------------------------------------------------------------------------
                                        2002                   2001                   2002                  2001
                                ------------------------------------------------------------------------------------------
                                              Wtd Avg                Wtd Avg                Wtd Avg               Wtd Avg
                                   Wtd Avg   Interest     Wtd Avg   Interest      Wtd Avg  Interest     Wtd Avg  Interest
Debt                             Borrowing       Rate   Borrowing       Rate    Borrowing      Rate   Borrowing      Rate
--------------------------------------------------------------------------------------------------------------------------
<S>     <C>
Notes payable                     $600,000      7.37%    $600,000      7.37%     $600,000     7.37%    $600,000     7.37%
Lines of credit                     47,238      3.03%     165,206      5.80%      107,127     3.01%     171,342     6.50%
Mortgages payable                   45,330      7.50%      65,922      7.50%       54,676     7.50%      66,231     7.50%
Leases & other borrowings           23,658      7.50%      39,069      7.50%       26,687     7.50%      38,985     7.50%

</TABLE>



Interest income decreased $1.0 million in the second quarter, from $2.5 million
in 2001 to $1.5 million in 2002, and decreased $2.4 million for the six months
ended June 30, from $5.6 million in 2001 to $3.2 million in 2002. The overall
decreases in advances to franchisees and the decline of interest rates on those
loans, reflecting the change in the prime rate since the beginning of 2001, were
the primary causes of the reduction in interest income. On June 30, 2002,
advances to franchisees totaled $91.4 million, compared to $109.9 million on
June 30, 2001.

Both minority interest expense and distributions to preferred unitholders
remained relatively constant for the quarters ended June 31, 2002 and 2001, as
well as for the six month period ended June 30, 2001 and 2002. Minority interest
remained relatively unchanged due to similar performance in the underlying
properties, wherein the interests are held, between comparable periods in 2001
and 2002. Distributions to preferred unitholders also remained unchanged as the
number of units and rate remained unchanged between the comparable periods.

                                       22

<PAGE>


Liquidity and Capital Resources

Cash used in operating activities was $10.2 million during the six months ended
June 30, 2002 as compared to $64.6 million provided by operating activities
during the same period in 2001. Significant items affecting the operating cash
flows are discussed more fully in the "Results of Operations" section.

We invested $6.9 million in the six months ended June 30, 2002 for the
acquisition and improvement of self-storage facilities compared to $9.4 million
during the same period in 2001. $4.6 million of the $9.4 million for 2001
reflects a single first quarter acquisition, with the remaining $4.8 million
representing improvements. For 2002, the entirety of the $6.9 million investment
represents improvements, as no self-storage facilities were acquired. We
received proceeds on the disposal of discontinued operations in the first six
months of 2002 totaling $23.5 million: $15.9 million for the sale of Franchise
and Management Corp. to Security Capital and $7.6 million for the sale of six
Indiana self-storage facilities to an unrelated third party.

In addition to improvements, we invested $9.1 million in the first six months of
2002 and $18.4 million in the first six months of 2001 for development and
construction of self-storage facilities. There were eight internally developed
facilities and nine expansions of existing facilities in process with $11.1
million cumulative invested at June 30, 2002. The total budget for these
facilities is $68.8 million, of which $57.7 million remains to be invested. We
also invested $2.8 million in advances and investments in real estate during the
first six months of 2002, compared to $8.1 million one year ago. In 2002, we
have invested approximately $2.1 million in the GE Capital Ventures, invested
$215 thousand in the Fidelity Venture for capital improvements and provided $473
thousand in financing to franchisees of Franchise. Proceeds were also received
from certain franchisees, as principal payments on franchisee loans totaled $4.6
million, with one loan paid in full for $3.5 million. We also received $1.6
million in distributions from joint ventures. We have $350 thousand of loan
commitments to franchisees to fund as of June 30, 2002.

In the past, we have acquired facilities in exchange for Units. Sellers taking
Units instead of cash have been able to defer recognizing a taxable gain on the
sale of their facilities until they sell or redeem their Units. At June 30,
2002, there were 2.4 million Units outstanding. During the second quarter of
2002, a number of limited Partnership Unit holders elected to have their
Partnership Units redeemed for cash primarily related to the Security Capital
transaction. 574 thousand units were redeemed at a cost of $24.5 million. The
Company funded these redemptions through the issuance of 574 thousand GP
Partnership Units to SCSSI. Fair market value of the Units was $74.1 million at
June 30, 2002, based upon a price per Unit of approximately $42.00.

The Partnership has issued $600 million of notes payable. The notes were
originally issued as unsecured obligations of the Partnership, and may be
redeemed at any time at the option of the Partnership, subject to a premium
payment and other terms and conditions. However, on August 7, 2002, GE Capital
agreed to guarantee the $600 million in notes payable in exchange for debt
holders relinquishing us from financial reporting obligations and other
restrictive covenants found in corresponding indentures. The combined notes
carry a weighted average interest rate of 7.37% and were issued at a price to
yield a weighted average interest rate of 7.42%. The terms of the notes are
staggered between seven and thirty years, maturing between 2003 and 2027.

We have historically funded our capital requirements through available lines of
credit with the intention of refinancing with long-term capital, in the form of
equity and debt securities, when we determine that market conditions are
favorable. We had net repayments in the six months ended June 30, 2002 of $158.7
million. For the same period in 2001, net repayments totaled $8.4 million. Prior
to the transaction with Security Capital, we had unsecured, revolving credit
lines in place totaling $275 million. As part of its April 26, 2002 acquisition
of the Company, Security Capital paid all existing credit lines in full
(approximately $169.0 million was repaid). Funding is now available to us in the
form of two inter-company lines of credit with Security Capital: a $50 million
revolving line at 140 basis points over LIBOR; and a $5 million cash pool line
at 120 basis points over LIBOR.

During the second quarter of 2002, the Company repaid $57.2 million of
outstanding mortgage notes payable. The Company funded the repayment through the
issuance of 1.5 million GP Partnership Units to SCSSI.

The various debt in place within the Fidelity and GE Capital joint ventures is
all non-recourse to the joint venture partners.

We paid approximately $44.0 million in distributions during the first six months
of 2002, $40.3 million to the general partner, $3.6 million to the limited
partners and $43 thousand to minority interests. This compares to a total $42.4
million in distributions for the same period in 2001, $37.8 million to the
general partner, $4.5 million to the limited partners and $48 thousand to
minority interests. Under the prior Partnership agreement, the general partner
in its sole discretion determined the amount of any distributions. Since the
former GP was a REIT, distributions were made quarterly to support the GP's REIT

                                       23

<PAGE>

requirement to distribute a substantial portion of its net taxable income as
dividends to its shareholders. The former GP declared a $.71 distribution during
the first quarter of 2002. Under the restated Partnership agreement, the Company
is required to make quarterly distributions equal to $.71 during the first year
after completion of the Security Capital transaction and thereafter, not less
than 70% of the excess of (a) the Partnership's net earnings before real estate
depreciation and amortization, unrealized gains (losses) on investment property
and deferred tax expense for the most recently completed fiscal quarter over (b)
the amount of funds used by the Partnership during such fiscal quarter to repay
debt that could not be refinanced on commercially reasonable terms or to repair
or replace property that sustained an uninsured casualty loss.

Much of the increase in General Partnership units is due to units issued to the
former GP for corresponding exercises of stock options within the former GP.
Another portion of the increase in GP units, and like reduction in Limited
Partnership Units, relates to limited Unitholders redeeming their Units for cash
in connection with the Security Capital transactions. We elected to convert
these redemptions into shares of the former GP's (Storage USA's) common stock,
and matching Units were issued to the former GP. Distributions to common
unitholders are made at the same rate used by the GP for common stock dividends,
which increased 3% between the two periods. Preferred unit dividends increased
from $2.9 million for the six months ended June 30, 2001 to $3.3 million for the
same period in 2002, growth of $443 thousand. This increase in payments was due
to change in ownership. In the second quarter of 2002, GE Capital purchased all
of the preferred units of SUSA Partnership for $65 million. At that time, the
former preferred unitholders were paid their partial quarter dividend of $443
thousand. The total numbers of units outstanding and rate remained unchanged
between the two periods.

We expect to incur approximately $5.1 million for scheduled maintenance and
repairs during 2002 and approximately $1.8 million to conform previously
acquired facilities to our standards, of which a combined $1.3 million has been
incurred to date.

We believe that borrowings under our inter-company line of credit with Security
Capital combined with cash from operations will provide us with necessary
liquidity and capital resources to meet the funding requirements of our
remaining development and expansion pipeline, commitments to provide financing
to franchisees, distribution requirements and scheduled property related capital
expenditures. Additionally, no significant maturities are scheduled under any of
our borrowings until 2003.

Qualitative and Quantitative Disclosure About Market Risk

We are exposed to certain financial market risks, the most predominant being
fluctuations in interest rates on existing variable rate debt and the repricing
of fixed rate debt upon maturity. We monitor interest rate fluctuations as an
integral part of our overall risk management program, which recognizes the
unpredictability of financial markets and seeks to reduce the potentially
adverse effect on our results. The effect of interest rate fluctuations
historically has been small relative to other factors affecting operating
results, such as rental rates and occupancy.

Our operating results are affected by changes in interest rates primarily as a
result of borrowing under our lines of credit. If interest rates increased by 25
basis points, our interest expense for the three months ended June 30,2002 would
have increased by approximately $134 thousand, based on average outstanding
balances during that period. That expense increase, however, would have been
partially offset by a corresponding increase of approximately $121 thousand in
interest income. Our line of credit borrowings are tied to LIBOR and our
advances to franchisees to the prime rate. Movement in these indices will not
necessarily parallel each other.

Legal Proceedings

Grunewald v. Storage USA, Inc. On July 22, 1999, a purported statewide class
action was filed against the GP and Partnership in the Circuit Court of
Montgomery County, Maryland, under the style Ralph Grunewald v. Storage USA,
Inc. and SUSA Partnership, L.P., case no. 201546V, seeking recovery of certain
late fees paid by tenants and an injunction against further assessment of
similar fees. The Company filed a responsive pleading on September 17, 1999,
setting out its answer and affirmative defenses. The Company believes that it
has defenses to the claims in the suit and intends to vigorously defend it. The
Plaintiff filed a Motion for Partial Summary Judgment and a Motion for Class
Certification, but before the GP was required to respond to these motions, the
case was stayed until 30 days after the conclusion of appellate proceedings in
an unrelated case, not involving the Company, challenging the constitutionality
of a new statute passed by the Maryland legislature relating to late fees. While
an estimate of the possible loss or range of losses cannot be currently made, we
do not believe this case will have any material adverse effect upon the
Company's financial position. However, if, during any period, the potential
contingency should become probable, the results of operations in such period
could be materially affected.

In Re Storage USA, Inc. Shareholder Litigation. Seven putative class action
lawsuits were filed on or about November 6 and 8, 2001, by alleged shareholders
of the GP in the Chancery Court of Memphis, Tennessee. An additional suit was
filed in the Chancery Court of Davidson County. On December 14, 2001, a Consent
Order was entered providing for the consolidation of the Shelby County actions
and similar actions thereafter filed, the designation of lead plaintiffs'
counsel and the filing of a Consolidated and Amended Class Action Complaint. The
Order further provides that upon transfer of the Davidson County action to
Shelby County, that action will be consolidated with those in Shelby County.

On December 17, 2001, lead plaintiffs' counsel filed a putative Consolidated and
Amended Class Action Complaint in the Chancery Court of Shelby County. The
defendants named in that complaint are the GP, each of the Directors of the GP,
Security Capital, Storage USA Trust and the Partnership. The complaint alleges,
among other things, that the individual defendants have breached their fiduciary
duties to shareholders by structuring the purchase and sale agreement so as to
deprive themselves of the ability to consider certain possible competing
proposals and by delegating to Security Capital the authority to set the
parameters for acceptance or rejection of any offer of superior value for the
GP, thereby depriving plaintiffs of the true value of their investment in the
GP. The complaint also alleges that Security Capital breached fiduciary duties
to other shareholders of Storage USA and failed to treat those shareholders with
entire fairness. On December 19, 2001, plaintiffs filed a Motion for Preliminary
Injunction seeking, among other things, to enjoin the proposed transactions
between Security Capital and the GP, or in the alternative, to declare certain
sections of the purchase and sale agreement between Security Capital and the GP
invalid and void, and if the transactions are consummated, to rescind them and
recover rescissionary and other damages suffered by the plaintiffs as a result
of the transactions.

Following negotiations subsequent to the announcement of the transactions, on
January 17, 2002, the parties to the litigation entered into a memorandum of
understanding setting forth an agreement in principle with respect to the
settlement of the purported class actions. As part of the settlement, Security
Capital agreed to increase the consideration to be paid in the transactions to
the GP's shareholders from $42.00 to $42.50 per share.

In the memorandum of understanding the parties to the litigation agreed to use
their best efforts to execute as soon as practicable final settlement
documentation as may be required in order to obtain final court approval of the
settlement, the dismissal of the actions and the release of all claims against
the defendants, in accordance with the terms of the memorandum of understanding.
In addition to court approval, consummation of the settlement is subject to the
completion by the plaintiffs of confirmatory discovery reasonably satisfactory
to plaintiffs' counsel and to consummation of the transactions.

The increase from $42.00 to $42.50 in the cash consideration payable to the GP's
shareholders and limited partners of the Partnership was negotiated at arm's
length in a series of discussions between representatives of plaintiffs' counsel
and counsel for Security Capital, in which a financial expert retained by
plaintiffs' counsel and representatives of Security Capital's financial advisor
also participated.

In connection with the settlement, the parties to the purchase and sale
agreement entered into the letter agreement amending the purchase and sale
agreement to provide that all references in the purchase and sale agreement to
$42.00 will for all purposes be deemed references to $42.50. The GP's
shareholders received the increased consideration when the transaction was
consummated on April 26, 2002.

In the event that the court approves the proposed settlement in accordance with
its terms, members of the class defined in the settlement will be deemed to have
released all claims they had or may have had with respect to the transactions
and related matters as reflected in the settlement agreement and proposed final
judgment, and will accordingly be barred from asserting any such claims in
judicial proceedings. Members of the class defined in the settlement consist of
public shareholders of the GP (other than Security Capital and its affiliates)
at any time during the period from September 10, 2001 (the date on which the GP
announced that it had modified its standstill arrangement with Security Capital
to permit Security Capital to engage in discussions with the special committee
concerning Security Capital's intentions relating to its investment in the GP)
through and including the date of completion of the transactions.

In connection with the litigation, each of our directors and executive officers
who are parties to indemnification agreements with the GP have submitted claims
to us for reimbursement of indemnifiable expenses under such indemnification
agreements.

Winnerman et. al. v. Storage USA, Inc. On March 12, 2002, a group of limited
partners of the Partnership owning in the aggregate 463,732 limited partnership
units filed suit in the Chancery Court of Tennessee for the Thirtieth Judicial
District at Memphis against the GP, the Partnership and Security Capital. The
plaintiffs purport to bring the action individually on their own behalf and as a
class action on behalf of all limited partners of the Partnership and on behalf
of a subclass of those limited partners who are parties to tax deferral
agreements with the Partnership. The plaintiffs seek to enjoin the transactions
on the grounds that the transactions are in violation of the existing
partnership agreement of the Partnership, of the Tennessee Revised Uniform
Limited Partnership Act and of the tax deferral agreements. The plaintiffs
allege in the complaint that they seek to prevent the plaintiffs and other
limited partners of the Partnership from being cashed out from the Partnership
without a vote and without appraisal rights and at an unfair price and from
being coerced to give up their existing contractual rights under the existing
partnership agreement and the tax deferral agreements. The complaint purports to
state causes of action against all of the defendants for alleged breach of
fiduciary duty on the grounds that the vote of the minority limited partners is
not being sought for the transactions, the limited partners are not being
offered appraisal rights in the Transactions and the special committee did not
contain any limited partners or representatives of the limited partners. The
complaint further purports to state causes of action against all defendants for
violation of the Tennessee Revised Uniform Limited Partnership Act by asserting
that the GP's ownership of both general and limited partnership interests
amounts to a conflict of interest and that therefore the limited partners, other
than the GP, should be offered the opportunity to vote on the transactions. The
complaint purports to state an additional cause of action against both the GP
and the Partnership for breach of the existing partnership agreement because the
minority limited partners are not being afforded the right to vote on the
transactions or the proposed amendment and restatement of the Partnership's
partnership agreement. The plaintiffs further assert that the consummation of
the Transactions will trigger adverse tax consequences for them contrary to the
provisions of their tax deferral agreements. The complaint alleges that Security
Capital was aware of the contractual relationships between the plaintiffs and
the GP and the Partnership under the tax deferral agreements and that Security
Capital caused and aided and abetted the breaches of, and interfered with, these
contractual relationships. The relief sought in the complaint includes
preliminarily and permanently enjoining the transactions, rescinding and setting
aside the proposed transactions in the event they are consummated, ordering the
appointment of a special committee comprised of limited partners and the
plaintiff class representatives and their attorneys to insure fair protection
and adequate procedural safeguards in connection with any transaction for the
buyout of the limited partners' units of the Partnership, specifically enforcing
the existing partnership agreement and the tax deferral agreements, and awarding
compensatory damages, prejudgment interest, and attorneys' and experts' fees and
expenses. On April 18, 2002, the parties to the Winnerman litigation entered
into a memorandum of understanding with respect to the settlement of this case.
As part of the settlement, defendants agreed to amend (regardless of whether the
proposed settlement is ultimately approved by the court) the form of Restated
Partnership Agreement to provide, among other things, that for a period of three
years after the Merger, the general partner will consider, in good faith,
proposals made by one or more limited partners to redeem limited partnership
units with property designated by such limited partner or partners, subject to
certain conditions. If the settlement is approved by the court after notice and
hearing, the claims that were or could have been brought in Winnerman will
effectively be barred.

Bender et al. v. SUSA Partnership, L.P. The GP, the Partnership and Security
Capital have been named as defendants in a lawsuit captioned Bender et al. v.
SUSA Partnership, L.P., et al., No. CH-02-0843-2, filed on May 2, 2002 in the
Chancery Court for the Thirtieth Judicial District at Memphis, State of
Tennessee. The plaintiffs, who purport to be "joint venturers" with the
Partnership and limited partners of the Partnership, allege a variety of claims
against the defendants arising out of the acquisition by Security Capital of all
of the assets of the GP, including all of the interests owned by the GP in the
Partnership, and the subsequent merger of the GP into the Partnership (the
"Transaction"). In connection with the Transaction, which was completed on April
26, 2002, eligible limited partners of the Partnership were given the
opportunity to elect to remain as limited partners of the Partnership, after
completion of the Transaction, instead of being cashed out. Among other things,
the complaint alleges that the Transaction violates a June 22, 1996 Agreement
between the Partnership and one of the plaintiffs, the Second Amended and
Restated Agreement of Limited Partnership of the Partnership (which agreement
was amended and restated in connection with the Transaction as the Third Amended
and Restated Agreement of Limited Partnership of the Partnership), and certain
agreements referred to as "Assignment of Rights" agreements to which the
Partnership and one of the plaintiffs are allegedly parties. The complaint
asserts claims based on theories of breach of contract, breach of fiduciary duty
and violation of the Tennessee Revised Uniform Limited Partnership Act. The
complaint also alleges that certain of the claims asserted by plaintiffs are
subject to arbitration, and the plaintiffs have concurrently filed a demand for
arbitration on the defendants under the rules of the American Arbitration
Association. The complaint in Bender seeks, as relief, preliminary and permanent
injunctive relief restraining the defendants from requiring the plaintiffs from
having to make an election to remain as limited partners of the Partnership in
connection with the Transaction; an order enjoining consummation of the
Transaction; damages in an unspecified amount; and statutory treble damages in
an unspecified amount.

Plaintiffs have obtained a temporary restraining order ("TRO") prohibiting
defendants, for the duration of the order, which was originally scheduled to
expire on May 30, 2002, from, among other things, requiring plaintiffs to make
the election with respect to their interests, and preventing defendants from
foreclosing on loans to defendants. The Company and Security Capital believe
that the allegations of the complaint are without merit.

The parties have been in negotiation and the TRO, and the hearing on the
temporary injunction, has been continued until August 8, 2002, at which time the
Defendants were to submit an answer and advise the plaintiffs as to whether they
were agreeable to arbitration. Due to the untimely and sudden death of the
Chancellor in charge of the litigation, the matter has again been put off by
informal agreement of the parties. The defendants will be filing their answer
shortly, as well as responding to the demand for arbitration. No hearing is
currently scheduled on the petition for temporary injunction and a new hearing
date will be obtained at such time as is mutually convenient to the parties.

Esquivel v. SUSA, LP. On June 17, 2002, a purported nationwide class action was
filed in the Orange County, California Superior Court entitled Fausto Esquivel
v. GE Capital Real Estate d/b/a Storage USA, case no 02C00153, seeking
injunctive relief, restitution and damages based upon alleged unfair and
misleading advertising practices concerning the dimensions of storage units
leased by the Company to its customers. Plaintiff alleges that the actual size
of the storage units leased was less than the size of the units as advertised by
the Company. On July 24, 2002, Plaintiff filed a First Amended Complaint which
named SUSA, LP as the sole defendant in the lawsuit. The response to the
Complaint is due on or before September 19, 2002. The Company is currently
investigating the allegations in the Complaint. Based upon its preliminary
investigation, the Company believes that it has defenses to the claims in the
suit and intends to vigorously defend it.

While the ultimate resolution of the cases discussed above will not have a
material adverse effect on the Company's financial position, if during any
period the potential contingency should become probable and quantifiable, the
results of operations in such period could be materially affected.





                                       24

<PAGE>


Forward Looking Statements and Risk Factors

Certain information included in this Form 10-Q that is not historical fact is
based on our current expectations. This includes statements regarding
anticipated future development and acquisition activity, the impact of
anticipated rental rate increases on our revenue growth, our 2002 anticipated
revenues, expenses and returns, and future capital requirements, among others.
Words such as "believes", "expects", "anticipate", "intends", "plans" and
"estimates" and variations of such words and similar words also identify forward
looking statements. Such statements are forward looking in nature and involve a
number of risks and uncertainties and, accordingly, actual results may differ
materially. The following factors, among others, may affect the Company's future
financial performance and could cause actual results to differ materially from
the forward-looking statements:
o    Changes in the economic conditions in the markets in which we operate, such
     as unexpected increases in supply and competition, unexpected changes in
     financial resources of our customers, or unexpected increases in prevailing
     wage levels or in insurance, taxes or utilities, could negatively impact
     our ability to raise our rents or control our expenses, thus reducing our
     net income.
o    Competition for development or acquisition sites could drive up costs,
     making it unfeasible for us to develop or acquire properties in certain
     markets.
o    New development opportunities could be limited due to an inability to
     obtain zoning and other local approvals.
o    Amounts that we charge for late fees have been and are the subject of
     litigation against us and are, in some states, the subject of governmental
     regulation. Consequently, such amounts could decrease, materially affecting
     the results of operations.
o    The conditions affecting the bank, debt and equity markets could change,
     increasing our cost of capital (through our parent company) or reducing its
     availability on terms satisfactory to us either of which could reduce our
     returns or restrict our growth.
o    Costs related to compliance with laws, including environmental laws could
     increase, reducing our net income.
o    General business and economic conditions could change, adversely affecting
     occupancy and rental rates, thereby reducing our revenue.
o    Unfavorable outcome(s) in the pending litigation described in Item 2 of
     this Form 10-Q could ultimately reduce our net income.
o    Changes in tax laws or market conditions could make real estate investment
     less attractive relative to other investment opportunities. Such changes
     would reduce the number of buyers for real estate and adversely affect real
     estate asset values.
o    Construction costs and the timing of a development project may exceed our
     original estimates, resulting in reduced returns on investment and delayed
     realization of returns.
o    The level of on-balance sheet development could exceed current expectations
     resulting in higher than anticipated dilution to our earnings.
o    Our independent public accountant for 2001, Arthur Andersen, has been
     convicted, pending appeal, on federal obstruction of justice charges
     arising from the government's investigation of Enron. The SEC has said that
     it will continue accepting financial statements audited by Arthur Andersen
     so long as Arthur Andersen is able to make certain representations to its
     clients. Arthur Andersen has, in the past, made these representations to
     us. Our access to the capital markets and ability to make timely SEC
     filings could be impaired if the SEC ceases accepting prior financial
     statements audited by Arthur Andersen. In such a case, we would promptly
     seek to engage our current independent public accounting firm in auditing
     any of the relevant prior year financial statements previously audited by
     Arthur Andersen.

We caution you not to place undue reliance on any such forward-looking
statements. We assume no obligation to update any forward-looking statements as
a result of new information, subsequent events or any other circumstances. Such
statements speak only as of the date that they are made.


                                       25

<PAGE>

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

See disclosure in the section entitled "Qualitative and Quantitative Disclosure
About Market Risk" in Management's Discussion and Analysis of Financial
Condition and Results of Operations.

                                       26

<PAGE>


                           Part II- OTHER INFORMATION

Item 1. Legal Proceedings

See disclosure in the section entitled "Legal Proceedings" in Management's
Discussion and Analysis of Financial Condition and Results of Operations on page
22.

Item 2. Changes in Securities and Use of Proceeds

During the six months ended June 30, 2002, we issued units of general
partnership interest to our current General Partner in exchange for cash. We
used the cash proceeds to pay off existing lines of credit and certain mortgage
notes, and to redeem units of limited partnership interest. The date, amount and
issuances are summarized in the following table.

                           Date of           Units        Approximate
                          Issuance          Issued              Value
                   ---------------------------------------------------
                    April 26, 2002       3,956,887      $ 168,959,058
                      May 10, 2002         574,019         24,510,611
                      May 13, 2002         619,390         26,399,578
                      June 3, 2002         893,118         38,064,707
                                      --------------------------------
                             Total       6,043,414      $ 257,933,954
                                      ================================

On April 26, 2002, Security Capital completed its acquisition of Storage USA,
the former general partner of the Partnership. In connection with that
transaction, holders of limited partnership interests in the operating
partnership, other than Security Capital and its affiliates, were entitled to
receive $42.50 per unit in cash, unless such holders elect and are qualified to
continue as limited partners in the surviving partnership. 24 holders of limited
partnership interest elected to receive cash for their units, resulting in a
total redemption of 574,019 units for $24.5 million. 26 holders of limited
partnership have retained their ownership of approximately 1.8 million units. In
addition, the Partnership's Second Amended and Restated Agreement of Limited
Partnership was amended and restated by the Third Amended and Restated Agreement
of Limited Partnership.

The Partnership has issued $600 million of notes payable. The notes were
originally issued as unsecured obligations of the Partnership, and may be
redeemed at any time at the option of the Partnership, subject to a premium
payment and other terms and conditions. However, on August 7, 2002, GE Capital
agreed to guarantee the $600 million in notes payable in exchange for debt
holders relinquishing us from financial reporting obligations and other
restrictive covenants found in corresponding indentures (As a result, these
notes payable will no longer be traded on the New York Stock Exchange, and we
will no longer file periodic reports with the SEC).


Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders.

On April 26, 2002, at a special meeting called for that purpose, the
shareholders of our general partner at the time, Storage USA, approved the
acquisition of Storage USA by Security Capital. The acquisition was made through
transactions in which Security Capital acquired all of the assets of Storage
USA, including all of the partnership interests in the Partnership owned
directly or indirectly by Storage USA, and assumed all of the Storage USA's
liabilities, after which the Storage USA was merged into the Partnership. The
results of the vote at the special meeting was as follows:


<TABLE>
<CAPTION>

        Shares Present in
       Person or By Proxy            Votes For        Votes Against         Abstentions
       ------------------            ---------        -------------         -----------
<S>     <C>
           19,916,887                19,638,856         246,423               31,608
</TABLE>


Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K.

<TABLE>
<CAPTION>
<S>     <C>

a.       Exhibit 99.1     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
                          of the Sarbanes-Oxley Act of 2002 (for CEO or equivalent thereof).

         Exhibit 99.2     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                          906 of the Sarbanes-Oxley Act of 2002 (for CFO or equivalent thereof).
</TABLE>

b.      Reports on Form 8-K

        On April 22, 2002, we filed a Current Report on Form 8-K (which was
        amended by form 8-K/A filed on the same date). The filing contained
        information related to Security Capital's April 19, 2002 press release,
        relating to the settlement of a class action lawsuit brought by limited
        partners of SUSA Partnership against Security Capital, SUSA Partnership
        and Storage USA, Inc.

        On May 14, 2002, we filed a Current Report on Form 8-K. The filing
        contained information relating to our change in independent
        accountants, from Arthur Andersen LLP, to KPMG LLP, for the fiscal
        year ending December 31, 2002.

                                       27

<PAGE>


                                   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.

                        Dated:   August 14, 2002

                                 SUSA Partnership, L.P.
                                 By Security Capital Self Storage Incorporated,
                                 General Partner


                        By:      /s/ Mark E. Yale
                                 -----------------------
                                 Mark E. Yale
                                 Principal Financial Officer
                                 (Principal Financial and Accounting Officer)

                                       28

<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
<S>     <C>
Exhibit No.          Description
-----------          -----------


Exhibit 99.1         Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
                     of the Sarbanes-Oxley Act of 2002 (for CEO or equivalent thereof).

Exhibit 99.2         Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                     906 of the Sarbanes-Oxley Act of 2002 (for CFO or equivalent thereof).
</TABLE>



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