UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 Commission file number: 0-24071
 SOVRAN ACQUISITION LIMITED PARTNERSHIP
  Delaware
    
    16-1481551(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 
 
 þ o
  o o
  Large Accelerated Filer þ
    
    Accelerated Filer o
    
    Non-accelerated Filer o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ




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##### 



Part I. Financial Information
 Item 1. Financial Statements
 SOVRAN ACQUISITION LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
 March 31,2010
    
    
    December 31,(dollars in thousands, except unit data)
    
    (unaudited)
    
    
    2009AssetsInvestment in storage facilities:Land
    
    $
    237,233
    
    
    $
    237,233Building, equipment, and construction in progress
    
    
    1,148,589
    
    
    
    1,146,1691,385,822
    
    
    
    1,383,402Less: accumulated depreciation
    
    
    (252,336
    )
    
    
    (244,035
    )Investment in storage facilities, net
    
    
    1,133,486
    
    
    
    1,139,367Cash and cash equivalents
    
    
    7,365
    
    
    
    10,710Accounts receivable
    
    
    1,846
    
    
    
    2,401Receivable from unconsolidated joint venture
    
    
    210
    
    
    
    173Investment in unconsolidated joint venture
    
    
    19,839
    
    
    
    19,944Prepaid expenses
    
    
    5,869
    
    
    
    4,220Other assets
    
    
    5,082
    
    
    
    5,314Net assets of discontinued operations
    
    
    2,438
    
    
    
    3,047Total Assets
    
    $
    1,176,135
    
    
    $
    1,185,176LiabilitiesLine of credit
    
    $
    
    
    
    $
    Term notes
    
    
    400,000
    
    
    
    400,000Accounts payable and accrued liabilities
    
    
    19,040
    
    
    
    22,338Deferred revenue
    
    
    5,240
    
    
    
    5,036Fair value of interest rate swap agreements
    
    
    11,953
    
    
    
    11,524Mortgages payable
    
    
    80,648
    
    
    
    81,219Total Liabilities
    
    
    516,881
    
    
    
    520,117Limited partners redeemable capital interest (384,952
units in 2010 and 419,952 in 2009)
    
    
    13,419
    
    
    
    15,005Partners CapitalGeneral partner (219,567 units outstanding in 2010 and 2009)
    
    
    3,461
    
    
    
    3,495Limited partner (27,347,438 and 27,327,460 units
outstanding in 2010 and
2009, respectively)
    
    
    641,166
    
    
    
    644,742Accumulated other comprehensive income
    
    
    (11,874
    )
    
    
    (11,265
    )Total Controlling Partners Capital
    
    
    632,753
    
    
    
    636,972Noncontrolling interest- consolidated joint venture
    
    
    13,082
    
    
    
    13,082Total Partners Capital
    
    
    645,835
    
    
    
    650,054Total Liabilities and Partners Capital
    
    $
    1,176,135
    
    
    $
    1,185,176
  - 2 -




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##### 



SOVRAN ACQUISITION LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 January 1, 2010
    
    
    January 1, 2009to
    
    
    to(dollars in thousands, except per unit data)
    
    March 31, 2010
    
    
    March 31, 2009RevenuesRental income
    
    $
    46,176
    
    
    $
    46,837Other operating income
    
    
    1,970
    
    
    
    1,867Total operating revenues
    
    
    48,146
    
    
    
    48,704ExpensesProperty operations and maintenance
    
    
    13,194
    
    
    
    13,134Real estate taxes
    
    
    5,253
    
    
    
    5,048General and administrative
    
    
    5,139
    
    
    
    4,387Depreciation and amortization
    
    
    8,332
    
    
    
    8,369Total operating expenses
    
    
    31,918
    
    
    
    30,938Income from operations
    
    
    16,228
    
    
    
    17,766Other income (expenses)Interest expense
    
    
    (7,878
    )
    
    
    (9,979
    )Interest income
    
    
    20
    
    
    
    33Equity in income of joint ventures
    
    
    70
    
    
    
    30Income from continuing operations
    
    
    8,440
    
    
    
    7,850(Loss) income from discontinued operations (including
loss on disposal of $580 in 2010)
    
    
    (552
    )
    
    
    270Net income
    
    
    7,888
    
    
    
    8,120Net income attributable to noncontrolling interest
    
    
    (340
    )
    
    
    (340
    )Net income attributable to common unitholders
    
    $
    7,548
    
    
    $
    7,780Earnings per common unit attributable to common
unitholders  basicContinuing operations
    
    $
    0.29
    
    
    $
    0.34Discontinued operations
    
    
    (0.02
    )
    
    
    0.01Earnings per unit  basic
    
    $
    0.27
    
    
    $
    0.35Earnings per common unit attributable to common
unitholders  dilutedContinuing operations
    
    $
    0.29
    
    
    $
    0.34Discontinued operations
    
    
    (0.02
    )
    
    
    0.01Earnings per unit  diluted
    
    $
    0.27
    
    
    $
    0.35Common units used in basic earnings per unit calculation
    
    
    27,860,886
    
    
    
    22,389,017Common units used in diluted earnings per unit calculation
    
    
    27,894,933
    
    
    
    22,392,312Distributions declared per common unit
    
    $
    0.45
    
    
    $
    0.64
  - 3 -




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##### 



SOVRAN ACQUISITION LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 January 1, 2010
    
    
    January 1, 2009to
    
    
    to(dollars in thousands)
    
    March 31, 2010
    
    
    March 31, 2009Operating ActivitiesNet income
    
    $
    7,888
    
    
    $
    8,120Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    8,621
    
    
    
    8,856Loss on sale of storage facilities
    
    
    580
    
    
    
    Equity in (income) losses of joint ventures
    
    
    (70
    )
    
    
    (30
    )Distributions from unconsolidated joint venture
    
    
    150
    
    
    
    205Non-vested stock earned
    
    
    346
    
    
    
    365Stock option expense
    
    
    72
    
    
    
    71Changes in assets and liabilities:Accounts receivable
    
    
    555
    
    
    
    1,129Prepaid expenses
    
    
    (1,633
    )
    
    
    1,078Accounts payable and other liabilities
    
    
    (2,857
    )
    
    
    (5,383
    )Deferred revenue
    
    
    205
    
    
    
    88Net cash provided by operating activities
    
    
    13,857
    
    
    
    14,499Investing ActivitiesAcquisitions of storage facilities
    
    
    
    
    
    
    Improvements, equipment additions, and construction in progress
    
    
    (2,450
    )
    
    
    (6,810
    )Investment in unconsolidated joint venture
    
    
    
    
    
    
    (75
    )(Advances) reimbursement of advances to joint ventures
    
    
    (37
    )
    
    
    153Property deposits
    
    
    (25
    )
    
    
    Receipts from related parties
    
    
    
    
    
    
    14Net cash used in investing activities
    
    
    (2,512
    )
    
    
    (6,718
    )Financing ActivitiesNet proceeds from sale of common stock
    
    
    54
    
    
    
    1,334Proceeds from borrowings on line of credit
    
    
    7,000
    
    
    
    9,000Repayments of borrowings on line of credit
    
    
    (7,000
    )
    
    
    Distributions paid
    
    
    (12,925
    )
    
    
    (14,701
    )Redemption of operating partnership units
    
    
    (1,248
    )
    
    
    Mortgage principal and capital lease payments
    
    
    (571
    )
    
    
    (484
    )Net cash used in financing activities
    
    
    (14,690
    )
    
    
    (4,851
    )Net (decrease) increase in cash
    
    
    (3,345
    )
    
    
    2,930Cash at beginning of period
    
    
    10,710
    
    
    
    4,486Cash at end of period
    
    $
    7,365
    
    
    $
    7,416Supplemental cash flow informationCash paid for interest
    
    $
    6,613
    
    
    $
    8,786
   - 4 -




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##### 



SOVRAN ACQUISITION LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
 Jan. 1, 2010
    
    
    Jan. 1, 2009to
    
    
    to(dollars in thousands)
    
    Mar. 31, 2010
    
    
    Mar. 31, 2009Net income
    
    $
    7,888
    
    
    $
    8,120Other comprehensive income:Change in fair value of derivatives
    
    
    (609
    )
    
    
    59Total comprehensive income
    
    $
    7,279
    
    
    $
    8,179
 - 5 -




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. BASIS OF PRESENTATION
   2. ORGANIZATION
 ®
   - 6 -




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##### 



Consolidation Noncontrolling Interests in
Consolidated Financial Statements
   (Dollars in thousands)
    
    2010Beginning balance limited partners redeemable capital interest
    
    $
    15,005Redemption of Operating Partnership Units
    
    
    (772
    )Net income attributable to limited partners redeemable capital interests
    
    
    121Distributions
    
    
    (189
    )Adjustment to redemption value
    
    
    (746
    )Ending balance limited partners redeemable capital interest
    
    $
    13,419
 - 7 -




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##### 



Noncontrolling(dollars in thousands)
    
    Parent
    
    
    Interests
    
    
    TotalBalance at December 31, 2009
    
    $
    636,972
    
    
    $
    13,082
    
    
    $
    650,054Net income attributable to the parent
    
    
    7,427
    
    
    
    
    
    
    
    7,427Net income attributable to noncontrolling interest holders
    
    
    
    
    
    
    340
    
    
    
    340Change in fair value of derivatives
    
    
    (609
    )
    
    
    
    
    
    
    (609
    )Distributions
    
    
    (12,396
    )
    
    
    
    
    
    
    (12,396
    )Distributions to noncontrolling interest holders
    
    
    
    
    
    
    (340
    )
    
    
    (340
    )Adjustment of noncontrolling redeemable Operating
Partnership units to carrying value
    
    
    746
    
    
    
    
    
    
    
    746Net proceeds from issuance of stock through Dividend
Reinvestment and Stock Purchase Plan
    
    
    9
    
    
    
    
    
    
    
    9Other
    
    
    604
    
    
    
    
    
    
    
    604Balance at March 31, 2010
    
    $
    632,753
    
    
    $
    13,082
    
    
    $
    645,835
 3. STOCK BASED COMPENSATION
 Compensation  Stock Compensation
   - 8 -




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##### 



4. INVESTMENT IN STORAGE FACILITIES
  (dollars in thousands)Cost:Beginning balance
    
    $
    1,383,402Improvements and equipment additions
    
    
    4,136Net decrease in construction in progress
    
    
    (1,678
    )Dispositions
    
    
    (38
    )Ending balance
    
    $
    1,385,822Accumulated Depreciation:Beginning balance
    
    $
    244,035Depreciation expense during the period
    
    
    8,332Dispositions
    
    
    (31
    )Ending balance
    
    $
    252,336
  5. DISCONTINUED OPERATIONS
  - 9 -




---



##### 



Jan. 1, 2010
    
    
    Jan. 1, 2009to
    
    
    to(dollars in thousands)
    
    Mar. 31, 2010
    
    
    Mar. 31, 2009Total revenue
    
    $
    151
    
    
    $
    842Property operations and maintenance expense
    
    
    (76
    )
    
    
    (303
    )Real estate tax expense
    
    
    (16
    )
    
    
    (97
    )Depreciation and amortization expense
    
    
    (31
    )
    
    
    (172
    )Net loss on sale of property
    
    
    (580
    )
    
    
    Total (loss) income from discontinued operations
    
    $
    (552
    )
    
    $
    270
 6. UNSECURED LINE OF CREDIT AND TERM NOTES
     - 10 -




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##### 



7. MORTGAGES PAYABLE
  March 31,
    
    
    December 31,(dollars in thousands)
    
    2010
    
    
    20097.80% mortgage note due December 2011, secured
by 11 self-storage facilities (Locke Sovran I)
with an aggregate net book value of $42.4
million, principal and interest paid monthly
    
    $
    28,286
    
    
    $
    28,4477.19% mortgage note due March 2012, secured by
27 self-storage facilities (Locke Sovran II)
with an aggregate net book value of $79.8
million, principal and interest paid monthly
    
    
    41,170
    
    
    
    41,4757.25% mortgage note due December 2011, secured
by 1 self-storage facility with an aggregate
net book value of $5.6 million, principal and
interest paid monthly. Estimated market rate
at time of acquisition 5.40%
    
    
    3,332
    
    
    
    3,3696.76% mortgage note due September 2013,
secured by 1 self-storage facility with an
aggregate net book value of $1.9 million,
principal and interest paid monthly
    
    
    971
    
    
    
    9776.35% mortgage note due March 2014, secured by
1 self-storage facility with an aggregate net
book value of $3.7 million, principal and
interest paid monthly
    
    
    1,065
    
    
    
    1,0727.50% mortgage notes due August 2011, secured
by 3 self-storage facilities with an aggregate
net book value of $13.9 million, principal and
interest paid monthly. Estimated market rate
at time of acquisition 6.42%
    
    
    5,824
    
    
    
    5,879Total mortgages payable
    
    $
    80,648
    
    
    $
    81,219
   - 11 -




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##### 







Expected Maturity Date Including DiscountFair(dollars in thousands)
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    Total
    
    
    ValueLine of credit  variable rate LIBOR + 1.375
(1.62% at March 31, 2010)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Notes Payable:Term note  variable rate LIBOR+1.625%
(1.87% at March 31, 2010)
    
    
    
    
    
    
    
    
    
    $
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    150,000
    
    
    $
    150,000Term note  variable rate LIBOR+1.50%
(1.88% at March 31, 2010)
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    20,000
    
    
    
    
    
    
    
    
    
    
    $
    20,000
    
    
    $
    20,000Term note  fixed rate 6.26%
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    80,000
    
    
    
    
    
    
    
    
    
    
    $
    80,000
    
    
    $
    77,292Term note  fixed rate 6.38%
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    150,000
    
    
    $
    150,000
    
    
    $
    136,630Mortgage note  fixed rate 7.80%
    
    $
    469
    
    
    $
    27,817
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    28,286
    
    
    $
    29,230Mortgage note  fixed rate 7.19%
    
    $
    906
    
    
    $
    1,301
    
    
    $
    38,963
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    41,170
    
    
    $
    42,744Mortgage note  fixed rate 7.25%
    
    $
    112
    
    
    $
    3,220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,332
    
    
    $
    3,352Mortgage note  fixed rate 6.76%
    
    $
    19
    
    
    $
    27
    
    
    $
    29
    
    
    $
    896
    
    
    
    
    
    
    
    
    
    
    $
    971
    
    
    $
    1,005Mortgage note  fixed rate 6.35%
    
    $
    21
    
    
    $
    30
    
    
    $
    31
    
    
    $
    34
    
    
    $
    949
    
    
    
    
    
    
    $
    1,065
    
    
    $
    1,057Mortgage notes  fixed rate 7.50%
    
    $
    167
    
    
    $
    5,657
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,824
    
    
    $
    5,992Interest rate derivatives  liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    11,953


8. DERIVATIVE FINANCIAL INSTRUMENTS








- 12 -



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##### 



Fixed
    
    
    Floating RateNotional Amount
    
    Effective Date
    
    
    Expiration Date
    
    
    Rate Paid
    
    
    Received$20 Million
    
    
    9/4/05
    
    
    
    9/4/13
    
    
    
    4.4350
    %
    
    6 month LIBOR$50 Million
    
    
    7/1/08
    
    
    
    6/25/12
    
    
    
    4.2825
    %
    
    1 month LIBOR$100 Million
    
    
    7/1/08
    
    
    
    6/22/12
    
    
    
    4.2965
    %
    
    1 month LIBOR
  Jan. 1, 2010
    
    
    Jan. 1, 2009to
    
    
    to(dollars in thousands)
    
    Mar. 31, 2010
    
    
    Mar. 31, 2009Adjustments to interest expense:Realized loss reclassified from accumulated other comprehensive
loss to interest expense
    
    $
    (1,896
    )
    
    $
    (2,454
    )Adjustments to other comprehensive income (loss):Realized loss reclassified to interest expense for 2010 and 2009,
respectively
    
    
    1,896
    
    
    
    2,454Unrealized loss from changes in the fair value of the effective
portion of the interest rate swaps for 2010 and 2009, respectively
    
    
    (2,505
    )
    
    
    (2,395
    )(Loss) gain included in other comprehensive income (loss)
    
    $
    (609
    )
    
    $
    59
 9. FAIR VALUE MEASUREMENTS
  - 13 -




---



##### 



Asset(Liability)
    
    Level 1
    
    Level 2
    
    Level 3Interest rate swaps
    
    
    (11,953
    )
    
    
    
    
    
    
    (11,953
    )
    
    
    Storage facilities held for sale
    
    
    2,438
    
    
    
    
    
    
    
    
    
    
    
    2,438
   10. INVESTMENT IN JOINT VENTURES
    - 14 -




---



##### 



Sovran HHFStorage
    
    
    Iskalo Office(dollars in thousands)
    
    Holdings LLC
    
    
    Holdings, LLCBalance Sheet Data:Investment in storage facilities, net
    
    $
    167,441
    
    
    $
    Investment in office building
    
    
    
    
    
    
    5,274Other assets
    
    
    3,859
    
    
    
    746Total Assets
    
    $
    171,300
    
    
    $
    6,020Due to the Operating Partnership
    
    $
    210
    
    
    $
    Mortgages payable
    
    
    78,124
    
    
    
    7,004Other liabilities
    
    
    2,453
    
    
    
    238Total Liabilities
    
    
    80,787
    
    
    
    7,242Unaffiliated partners equity (deficiency)
    
    
    72,410
    
    
    
    (700
    )Operating Partnership equity (deficiency)
    
    
    18,103
    
    
    
    (522
    )Total Liabilities and Partners Equity (deficiency)
    
    $
    171,300
    
    
    $
    6,020Income Statement Data:Total revenues
    
    $
    4,436
    
    
    $
    302Total expenses
    
    
    4,214
    
    
    
    271Net income
    
    $
    222
    
    
    $
    31
  11. INCOME TAXES
   - 15 -




---



##### 



12. EARNINGS PER UNIT
 Earnings Per
Share Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities
  Three Months
    
    
    Three MonthsEnded
    
    
    Ended(in thousands except per unit data)
    
    Mar. 31, 2010
    
    
    Mar. 31, 2009Numerator:Net income from continuing operations attributable to
common unitholders
    
    $
    7,548
    
    
    $
    7,780Denominator:Denominator for basic earnings per unit  weighted average units
    
    
    27,861
    
    
    
    22,389Effect of Dilutive Securities:Stock options, warrants and non-vested stock
    
    
    34
    
    
    
    3Denominator for diluted earnings per unit  adjusted weighted
average
units and assumed conversion
    
    
    27,895
    
    
    
    22,392Basic earnings per common unit from continuing operations
attributable to common unitholders
    
    $
    0.29
    
    
    $
    0.34Basic earnings per common unit attributable to common unitholders
    
    $
    0.27
    
    
    $
    0.35Diluted earnings per common unit from continuing operations
attributable to common unitholders
    
    $
    0.29
    
    
    $
    0.34Diluted earnings per common unit attributable to common unitholders
    
    $
    0.27
    
    
    $
    0.35
  - 16 -




---



##### 



13. RECENT ACCOUNTING PRONOUNCEMENTS
 Amendments to FASB Interpretation No. 46(R) Variable Interest Entities
  14. COMMITMENT AND CONTINGENCIES
  - 17 -




---



##### 



15. SUBSEQUENT EVENTS
  - 18 -




---



##### 



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
  DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
  RESULTS OF OPERATIONS
   - 19 -




---



##### 



FUNDS FROM OPERATIONS
   - 20 -




---



##### 



Reconciliation of Net Income to Funds From Operations (unaudited)
 Three months ended(in thousands)
    
    March 31, 2010
    
    
    March 31, 2009Net income attributable to common unitholders
    
    $
    7,548
    
    
    $
    7,780Net income attributable to noncontrolling interest
    
    
    340
    
    
    
    340Depreciation of real estate and amortization
of intangible assets exclusive of deferred
financing fees
    
    
    8,332
    
    
    
    8,369Depreciation of real estate included in discontinued
operations
    
    
    31
    
    
    
    172Depreciation and amortization from
unconsolidated joint ventures
    
    
    194
    
    
    
    208Loss on sale of real estate
    
    
    580
    
    
    
    Funds from operations allocable to
noncontrolling interest in consolidated joint venture
    
    
    (340
    )
    
    
    (340
    )FFO available to common unitholders
    
    $
    16,685
    
    
    $
    16,529
 LIQUIDITY AND CAPITAL RESOURCES
  - 21 -




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- 22 -




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*
    
    7.80% mortgage note due December 2011, secured by 11 self-storage facilities
(Locke Sovran I) with an aggregate net book value of $42.4 million, principal
and interest paid monthly. The outstanding balance at March 31, 2010 on this
mortgage was $28.3 million.*
    
    7.19% mortgage note due March 2012, secured by 27 self-storage facilities
(Locke Sovran II) with an aggregate net book value of $79.8 million, principal
and interest paid monthly. The outstanding balance at March 31, 2010 on this
mortgage was $41.2 million.*
    
    7.25% mortgage note due December 2011, secured by 1 self-storage facility
with an aggregate net book value of $5.6 million, principal and interest paid
monthly. Estimated market rate at time of acquisition 5.40%. The outstanding
balance at March 31, 2010 on this mortgage was $3.3 million.*
    
    6.76% mortgage note due September 2013, secured by 1 self-storage facility
with an aggregate net book value of $1.9 million, principal and interest paid
monthly. The outstanding balance at March 31, 2010 on this mortgage was $1.0
million.
 - 23 -




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##### 



*
    
    6.35% mortgage note due March 2014, secured by 1 self-storage facility with
an aggregate net book value of $3.7 million, principal and interest paid
monthly. The outstanding balance at March 31, 2010 on this mortgage was $1.1
million.*
    
    7.50% mortgage notes due August 2011, secured by 3 self-storage facilities
with an aggregate net book value of $13.9 million, principal and interest paid
monthly. Estimated market rate at time of acquisition 6.42%. The outstanding
balance at March 31, 2010 on this mortgage was $5.8 million.
     ACQUISITION AND DISPOSITION OF PROPERTIES
     - 24 -




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FUTURE ACQUISITION AND DEVELOPMENT PLANS
    DISTRIBUTION REQUIREMENTS OF THE COMPANY AND IMPACT ON THE OPERATING PARTNERSHIP
   INTEREST RATE RISK
  Fixed
    
    Floating RateNotional Amount
    
    Effective Date
    
    Expiration Date
    
    Rate Paid
    
    Received$20 Million
    
    
    9/4/05
    
    
    
    9/4/13
    
    
    
    4.4350
    %
    
    6 month LIBOR$50 Million
    
    
    7/1/08
    
    
    
    6/25/12
    
    
    
    4.2825
    %
    
    1 month LIBOR$100 Million
    
    
    7/1/08
    
    
    
    6/22/12
    
    
    
    4.2965
    %
    
    1 month LIBOR
 - 25 -




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INFLATION
  SEASONALITY
  RECENT ACCOUNTING PRONOUNCEMENTS
  Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  Item 4.
    
    Controls and Procedures
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  - 26 -




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Changes in Internal Control over Financial Reporting
  PART II. Other Information
 Item 1. Legal Proceedings
  Item 1A.
    
    Risk Factors
  Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3.
    
    Defaults Upon Senior Securities
  Item 5.
    
    Other Information
  Item 6.
    
    Exhibits
 31.1
    
    Certification of Chief
Executive Officer
pursuant to Rule
13a-14(a) and Rule
15d-14(a) of the
Securities Exchange Act,
as amended.31.2
    
    Certification of Chief
Financial Officer
pursuant to Rule
13a-14(a) and Rule
15d-14(a) of the
Securities Exchange Act,
as amended.32
    
    Certification of Chief
Executive Officer and
Chief Financial Officer
Pursuant to 18 U.S.C.
Section 1350 as adopted
pursuant to Section 906
of the Sarbanes-Oxley Act
of 2002.
 - 27 -




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##### 



Sovran Acquisition Limited PartnershipBy:
    /S/ David L. RogersDavid L. RogersChief Financial Officer
(Principal Accounting Officer) May 7, 2010Date - 28 -