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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
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FORM 10-Q
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QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 30,JULY 31, 2000
Commission File Number 1-7062
INNSUITES HOSPITALITY TRUST
(Exact
(Exact name of registrant as specified in its charter)
|
Ohio 34-6647590
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
InnSuites Hotels Centre
1625 E. Northern Ave., Suite 201
Phoenix, AZ 85020(Address
(Address of principal executive offices)
Registrant's telephone number, including area code (602) 944-1500
Indicate by check mark whether the registrant: (l) has filed all
reports required to be filed by Section 13 or l5(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X [X] No
[ ]
Number of outstanding Shares of Beneficial Interest, without par value, as of
June 5,September 1, 2000: 2,448,657.
2,170,569
1
I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INNSUITES HOSPITALITY TRUST
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
| APRIL 30, 2000 | JANUARY 31, 2000 | ||||||
|---|---|---|---|---|---|---|---|
| ASSETS | (UNAUDITED) | (AUDITED) | |||||
| Hotel properties, net | $ | 64,125,135 | $ | 64,479,187 | |||
| Cash and cash equivalents | 225,846 | 208,109 | |||||
| Rent receivable from affiliate, | |||||||
| net of $3,100,890 and $2,845,732 allowance respectively | — | — | |||||
| Interest receivable and other assets | 595,715 | 618,063 | |||||
| TOTAL ASSETS | $ | 64,946,696 | $ | 65,305,519 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES | |||||||
| Mortgage notes payable | $ | 24,071,090 | $ | 24,251,662 | |||
| Notes payable to banks | 11,300,000 | 11,300,000 | |||||
| Other notes payable | — | 225,000 | |||||
| Advances payable to related parties | 2,625,000 | 2,970,000 | |||||
| Accounts payable and accrued expenses | 780,364 | 1,138,168 | |||||
| TOTAL LIABILITIES | $ | 38,776,455 | 39,884,830 | ||||
| MINORITY INTEREST IN PARTNERSHIP | 17,293,861 | 16,789,423 | |||||
| SHAREHOLDERS' EQUITY | |||||||
| Shares of beneficial interest, without par value; unlimited | |||||||
| authorization; 2,441,449 and 2,507,949 shares issued and | |||||||
| outstanding at April 30 and January 31, 2000, respectively | 9,488,256 | 9,093,020 | |||||
| Treasury stock | (611,875 | ) | (461,754 | ) | |||
| TOTAL SHAREHOLDERS' EQUITY | $ | 8,876,381 | 8,631,266 | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 64,946,696 | $ | 65,305,519 | |||
AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED APRIL 30, | |||||
|---|---|---|---|---|---|
2000 | 1999 | ||||
| (Restated) | |||||
| REVENUES | |||||
| Rent revenue from affiliate | $ | 3,319,046 | 3,255,511 | ||
| Interest income | 2,263 | 19,876 | |||
| Other income | — | 9,591 | |||
| TOTAL REVENUES | $ | 3,321,309 | 3,284,978 | ||
| EXPENSES | |||||
| Real estate depreciation | $ | 665,706 | 618,363 | ||
| Real estate and personal property taxes | |||||
| insurance and ground rent, | 342,852 | 375,727 | |||
| General and administrative | 468,886 | 517,376 | |||
| Interest on mortgage notes payable | 545,100 | 503,550 | |||
| Interest on notes payable to banks | 245,897 | 251,206 | |||
| Interest on note payable to related party | 49,830 | 25,211 | |||
| Amortization of loan fees | 16,265 | 257 | |||
| TOTAL EXPENSES | $ | 2,334,537 | 2,291,690 | ||
| INCOME BEFORE MINORITY INTEREST | $ | 986,773 | 993,288 | ||
| LESS: MINORITY INTEREST | $ | 594,284 | 613,981 | ||
| NET INCOME ATTRIBUTABLE TO SHARES OF BENEFICIAL INTEREST | $ | 392,489 | 379,307 | ||
| EARNINGS PER SHARE — basic | $ | .16 | .16 | ||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING — basic | 2,474,377 | 2,321,133 | |||
| EARNINGS PER SHARE — diluted | $ | .10 | .10 | ||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING — diluted | 9,733,222 | 10,090,213 | |||
INCOME
AND SUBSIDARY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED APRIL 30, | ||||||
2000 | 1999 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| Net income | $ | 392,489 | 379,307 | |||
| Adjustments to reconcile net income to net | ||||||
| cash provided by operating activities: | ||||||
| Stock option compensation expense | 13,129 | — | ||||
| Depreciation and amortization | 681,971 | 618,620 | ||||
| Minority interest | 594,284 | 613,981 | ||||
| (Increase) Decrease in interest receivable and other assets | 6,084 | (364,822 | ) | |||
| Increase in percentage rent receivable | (255,158 | ) | (331,474 | ) | ||
| Provision for uncollectible receivable from affiliate | 255,158 | — | ||||
| Decrease in accounts payable and accrued expenses | (357,805 | ) | (409,938 | ) | ||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | $ | 1,330,152 | 505,674 | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
| Improvements and additions to hotel properties | (311,494 | ) | (615,940 | ) | ||
| NET CASH (USED IN) INVESTING ACTIVITIES | $ | (311,494 | ) | (615,940 | ) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
| Payments on mortgage notes payable | $ | (180,572 | ) | (699,341 | ) | |
| Issuance (Repurchase) of shares | (150,120 | ) | 177,573 | |||
| Refinancing of mortgage notes payable | — | 1,751,920 | ||||
| Payments on other notes payable | (225,000 | ) | (450,000 | ) | ||
| Repurchase of partnership units | (73,822 | ) | (269,183 | ) | ||
| Payment of dividends | (26,407 | ) | — | |||
| Advances from related parties | — | 2,000,000 | ||||
| Payments on advances from related parties | (345,000 | ) | (1,982,782 | ) | ||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | $ | (1,000,921 | ) | 528,187 | ||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | $ | 17,737 | 417,921 | |||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | $ | 208,109 | 420,935 | |||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 225,846 | 838,856 | |||
INCOME
See accompanying notes to unaudited financial statements.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
As
of and for the threesix months ended APRIL 30,July 31, 2000 and 1999
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION:
InnSuites Hospitality Trust (the "Trust") is a real estate investment trustReal Estate Investment
Trust ("REIT"), which owns directly or indirectly, ten hotels with 1,665 suites
in Arizona and southern California. The hotels operate as InnSuites Hotels.
Until January 31, 1998, the Trust, formerly known as Realty ReFund Trust, specialized in mortgage financing as its investment vehicle, refinancing existing income producing commercial, industrial and multi-unit residential real property by supplementing or replacing existing financing. The primary refinancing technique, which the Trust employed, was wrap-around mortgage lending.
On January 31, 1998, the Trust contributed $2,081,000 to RRF Limited
Partnership (the "Partnership"), a Delaware limited partnership, in exchange for
a 13.6% general partnership interest therein. The Trust is the sole general
partner of the Partnership. The Partnership issued limited partnership interests
representing 86.4% of the Partnership to acquire six hotel properties from
various entities. In addition, in order to acquire a seventh hotel property,
through a wholly-owned subsidiary, RRF Sub Corp., the Trust issued 647,231
shares of beneficial interest in exchange for all of the outstanding shares of
Buenaventura Properties, Inc. (BPI), which owned a hotel located in Scottsdale,
Arizona (InnSuites Hotels Scottsdale). These seven hotels are collectively
referred to as the "Initial Hotels." The Initial Hotels, together with
the hotels described in Note 4,subsequent hotel acquisitions, are referred to herein as the "Hotels". The
Hotels are leased to InnSuites Hotels, Inc., formerly known as Realty Hotel
Lessee Corp. (the "Lessee"), pursuant to leases, which contain provisions for
rent based on the revenues of the Hotels (the "Percentage Leases"). Each
Percentage Lease obligates the Lessee to pay rent equal to the greater of the
minimum rent (Base Rent) or a percentage rent based on the gross revenues of
each Hotel. The Lessee holds the franchise agreement for each Hotel. The Lessee
is owned 9.8% by InnSuites Innternational Hotels, Inc., an entity owned by James
F. Wirth, Chairman, President and Chief Executive Officer of the Trust ("Wirth")
and his spouse.
As of and for the 3 month period ended April 30, 2000, the
The Trust's general partnership interest in the Partnership was 45.1%47.75%
on July 31, 2000, and 45.0%45.13% (weighted average), respectively.
for the six months ended July 31, 2000. Partnership Agreement
The Partnership Agreement provides for the issuance of two classes of
limited partnership units, Class A and Class B. Such classes are identical in
all respects, except that each Class A limited partnership unit in the
Partnership shall be convertible into a like number of shares of beneficial
interest of the Trust, at any time at the option of the particular limited
partner, if the Trust determines that such conversion would not cause the Trust
to fail to qualify as a REIT. As of April 30,July 31, 2000, a total of 2,032,4811,676,835 Class A
limited partnership units were issued and outstanding. Additionally a total of
5,226,364 Class B limited partnership units were outstanding to Wirth and his
affiliates, in lieu of the issuance of Class A limited partnership units. If all
of the Class A and B limited partnership units were to be converted, the limited
partners in the Partnership would receive 7,258,8456,903,199 shares of beneficial
interest of the Trust. The Class B limited partnership units may only become
convertible with the approval of the Board of Trustees, in its sole discretion.
Basis of Presentation
As sole general partner, the Trust exercises unilateral control over the Partnership. Therefore, the financial statements of the Partnership are consolidated with the Trust. All significant intercompany transactions and balances have been eliminated.
three-monthsix-month period ended April 30,July 31, 2000
are not necessarily indicative of the results that may be expected for the year
ended January 31, 2001. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Trust's Annual Report
on Form 10-K/A as of and for the year ended January 31, 2000.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
2. REVENUE RECOGNITION:
Trust revenues are earned monthly as per the Percentage Leases and recognized when earned.
3. EARNINGS PER SHARE:
SFAS No. 128, "Earnings per Share" eliminates the concept of common stock equivalents and replaces "primary" and "fully diluted" earnings per share with "basic" and "diluted" earnings per share. Basic and diluted earnings per share have been computed based on the weighted-average number of shares outstanding during the periods.
For the quarterssix months ended April 30,July 31, 2000 and 1999, there were Class A and
Class B partnership units outstanding, which are convertible to shares of
beneficial interest of the Trust. Assuming conversion, the aggregated
weighted-average of these shares of beneficial interest would be 7,258,8457,257,319 in
the first quartersix months of fiscal 2001 and 7,769,0807,736,086 in the first quartersix months of
fiscal 2000. These shares are anti-dilutive due to the loses for the first six
months of fiscal year 2001 and are dilutive due to the earnings for the first
quarterssix months of fiscal years 20012000.
For the six months ended July 31, 2000 and 2000.
1999, 357,600 and 402,400 stock options, respectively, are not included in the computation of diluted earnings per share since the option exercise prices were greater than the average market price of the shares of beneficial interest. 4. ACQUISITIONS:
There were no hotel acquisitions during the first quartersix months of fiscal
2001.
5. CREDIT FACILITY:
During the first quarter of fiscal 1999,
On April 16, 1998, the Trust establishedobtained a $12,000,000 revolving$12 million Credit Facility
(the "Credit Facility") from Pacific Century Bank to assist it in its funding of
the acquisition and development of additional hotels and for certain other
business purposes. Borrowings under the Credit Facility are secured by first
mortgages on three of the Hotels. The Trust has drawn $11.3 million from its
line of credit, with Pacific Century Bank.which charges interest at a variable interest rate (LIBOR +
2.75%). By its terms, the Credit Facility will expire in approximately nine
months on April 16, 2001, subject to renewal. The credit facility requiresterms of the Credit Facility
require the Trust among other things, to maintain a minimum net worth (combined with minority interest) of
not less than $15 million and, as of the end of each fiscal quarter, maintain a
specified coveragedebt to net worth ratio of earnings before interest, taxes, depreciation, and amortization (EBITDA)not greater than 1.75 to 1.0 (renegotiated), a net
operating income
specified coverage ratio of EBITDAnet operating income to debt service and fixed charges. Further,ratio of not less than 1.25 to
1.0. The Trust may prepay the Credit Facility, subject to a prepayment penalty
of $250 plus a yield-maintenance penalty. During the term of the Credit Facility
the Trust is required to maintainmay not further encumber its franchise agreement at eachcollateral, sell its collateral, change
the nature of the hotel properties and to maintain its REIT status.
business, or unreasonably suspend its business. 6. PERCENTAGE LEASE AGREEMENTS:
Effective August 1, 1998, the Trust amended its Percentage Leases modifying the interim calculations of percentage rent and the expiration dates of the agreements. The Percentage Leases have non-cancelable terms, which expire on January 31, 2008, subject to earlier termination on the occurrence of certain contingencies, as defined. The rent due under each Percentage Lease is the greater of minimum rent, as defined, or percentage rent. Percentage rent applicable to room and other hotel revenue varies by lease and is calculated on a quarterly basis by multiplying fixed percentages by the actual quarterly amounts of such gross revenues in excess of specified threshold amounts. Both the minimum rent and the revenue thresholds used in computing percentage rents are subject to annual adjustments beginning January 1, 1999, based on increases in the United States Consumer Price Index. Percentage rent applicable to food and beverage revenues is calculated as 5% of such revenue over a minimum threshold.
Future minimum rentals (ignoring CPI increases) to be received by the Trust from the Lessee pursuant to the Percentage Leases for each of the next five years and in total thereafter are as follows:
Fiscal | |||
| 2001 | $ | 5,137,500 | |
| 2002 | 6,850,000 | ||
| 2003 | 6,850,000 | ||
| 2004 | 6,850,000 | ||
| 2005 | 6,850,000 | ||
| Thereafter | 20,550,000 | ||
| $ | 53,087,500 | ||
Fiscal Year
---------
2001 $ 3,425,000
2002 6,850,000
2003 6,850,000
2004 6,850,000
2005 6,850,000
Thereafter 20,550,000
----------------
$ 51,375,000
================
The Trust earned approximately $3.3$5.4 million in rent revenue during both the
first quartersix months of fiscal 2001 and 2000, of which approximately $1.6$2.0 million
and $1.5$1.9 million, respectively, was in excess of base rent. After a review of
projected cash flows to assess the future collectiblity of current rents, the
Trust recorded a provision for uncollectible rent receivables of $255,158$919,947 for
the first quartersix months of fiscal 2001.
7. RELATED PARTY TRANSACTIONS:
The Partnership is responsible for all expenses incurred by the Trust in accordance with the Partnership Agreement.
Wirth is a 9.8% indirect shareholder of the Lessee. At April 30,July 31, 2000
the Trust had an $185,000a $215,000 receivable from the Lessee.
The Initial Hotels were acquired by the Partnership from entities in
which Wirth and his affiliates had substantial ownership interests. Wirth and
his affiliates received 4,017,361 Class B limited partnership units and 647,231
shares of Beneficial Interestbeneficial interest in the Trust in exchange for their interests in
the Initial Hotels. As of April 30,July 31, 2000, Wirth and his affiliates held 5,226,364
Class B limited partnership units. As of April 30,July 31, 2000 Wirth and his affiliates
held 834,613572,813 shares of beneficial interest in the Trust.
At April 30,July 31, 2000, the Trust owned a 45.1%47.75% interest in the ten hotels
(the "Hotels") through its sole general partner's interest in the Partnership.
This change in ownership resulted primarily from the following transactions:
On April 2, 1999, the Partnership made an unsecured loan to the Trust in the amount of $2.6 million. Annual interest only payments are due on March 1 of each year and are based on a 7% interest rate. The unpaid principal balance is due at maturity on April 2, 2006. The Trust used the proceeds of that loan to purchase 1.3 million general partner units in the Partnership. The money loaned by the Partnership was generated by refinancing the Northern Phoenix hotel and borrowing an additional $1.8 million that was secured by a mortgage on that property. The original mortgage note was restructured to match the terms of the refinanced note, which bears interest at 8.25% and matures on April 1, 2014. Monthly principal and interest payments began on April 1, 1999.
As of April 2, 1999, the Trust transferred, at historical cost of approximately $7 million, its interest in the Scottsdale property to the Partnership in exchange for 1.6 million general partner units.
The Trust repurchased 36,911348,237 in the first quartersix months of fiscal 2001
and 131,493 in all of fiscal 2000 of the Partnership's Class A units at
a weighted average price per unit of $2.00$2.37 and $4.10, respectively. TheseOf
these units 148,237 were retired and 300,000 units were retired.
reclassified
from Class A units to General Partner units.
The Trust paid interest on related party notes to James Wirth in the
amount of $143,597 for the threesix months ended April 30,July 31, 2000.
The expenses of the Trust consist primarily of property taxes,
insurance, corporate overhead, interest on mortgage debt and depreciation of the
Hotels. Under the terms of the Partnership agreement,Agreement, the Partnership is
required to reimburse the Trust for all suchcash expenses.
Loans payable to related parties consists of funds provided by James F.
Wirth to repurchase Partnership units and to fund working capital and capital
improvement needs.needs and a note payable to Steve Robson to repurchase Partnership
Class A units. The aggregate amounts outstanding were approximately $2.6$4.4 million
and $3.0 million as of April 30July 31 and January 31, 2000, respectively. The loans
payable to related parties are as follows:
Wirth received an unsecured promissory note that consolidated four
outstanding unsecured loans to the Trust totaling $600,000. The loan
amounts consolidated were $200,000, $120,000, $30,000 and $250,000, all
bearing interest at 7% per year with varying maturities. Interest on
these four notes through July 31, 2000 was approximately $41,999 which
was subsequently paid on August 15, 2000 according to the unsecured
consolidated promissory note. The loans were used to fund operations,
to pay down the outstanding loan to the Partnership and to pay
dividends declared October 12, 1999. The unsecured consolidated
promissory note from the Trust in the amount of $600,000, bearing
interest at 7% per year, became effective August 1, 2000. The unpaid
principal balance and accrued interest on the unsecured consolidated
promissory note is due on May 15, 2001.
Suite Hotels Limited Liability Company, owned directly or indirectly by
Wirth, made an unsecured loan to the Trust in the amount of $200,000,$180,000,
bearing interest at 7% per year, effective June 14, 1999.8, 2000. The unpaid
principal balanceJune 14, 2000.May 15, 2001. The Trust used the
proceeds to fund operations.
InnSuites Innternational Hotels, Inc., owned directly or indirectly by
Wirth, made an unsecured loan to the Trust in the amount of $120,000,$100,000,
bearing interest at 7% per year, effective July 27, 1999.6, 2000. The unpaid
principal balance and accrued interest is due on July 27, 2000.May 15, 2001. The
Trust used the proceeds to fund operations.
Pepper Tree/Freeway Community Limited Partnership, owned directly or
indirectly by Wirth, made an unsecured loan to the Trust in the amount
of $30,000,$50,000, bearing interest at 7% per year, effective August 17, 1999.July 28, 2000.
The unpaid principal balance and accrued interest is due on August 17, 2000.May 15,
2001. The Trust used the proceeds to pay downfund operations.
On July 27, 2000, the outstanding loanTrust repurchased 300,00 of its shares from the Partnership.
Wirth
made an unsecured loan to the Trustand/or affiliates, owned directly or indirectly by Wirth, issuing 10
secured promissory notes in the amount of $250,000, bearing$723,000. The promissory
notes are secured by the repurchased shares. The secured promissory
notes in the aggregate amount of $723,000 bear interest at 7% per year,
effective October 12, 1999.July 27, 2000. The unpaid principal balances and accrued
interest are due at various dates ranging from August 27, 2000 to July
27, 2003.
On July 27, 2000, the Trust purchased 311,326 of the Partnership's
Class A units from Steve Robson, Trustee of the Trust, for $750,000.
The Trust made an initial payment of $5,000 and issued a secured
promissory note in the amount of $745,000. The promissory note is
secured by the purchased Partnership units. The secured promissory in
the amount of $745,000 bears interest at 7% per year, effective July
27, 2000. The unpaid principal balance and accrued interest is due on June 1, 2000.to be
amortized over 36 months. The Trust used the proceeds to pay dividends declared on October 12, 1999 and to pay down the outstanding loan from the Partnership.
Wirth made an unsecured loan to the Trust in the amount of $250,000, bearing interest at 7% per year effective October 14, 1999. The unpaid principal balance and accrued interestfinal payment is due on March 1, 2000. The Trust used the proceeds to pay down the outstanding loan from the Partnership, which then was used by the Partnership to pay deposits and other fees related to the pending refinancing of the San Diego Hotel. At April 30, 2000, the unpaid balance on this note was $25,000. Subsequently, on May 17, 2000, the loan was paid in full.
InnSuites Innternational Hotels made an unsecured loan in the amount of $120,000 to the Trust bearing no stated interest rate or maturity date on January 12, 2000. Subsequently on March 8, 2000, the loan was paid in full.
August 27, 2003. 8. STATEMENTS OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES:
The Trust issued 3,00047,320 shares of beneficial interest during the quartersix
months ended April 30,July 31, 2000 valued at $6,375$102,285 in exchange for Class A limited
partnership units.
The Trust paid $99,394$125,244 in dividends and distributions in the quartersix
months ended April 30,July 31, 2000.
9. STATEMENTS OF OPERATIONS OF INNSUITES HOTELS, INC. (LESSEE)
Certain condensed financial information related to the Lessee's operations is as follows:
INNSUITES HOTELS, INC.UNAUDITED STATEMENTS
10. SUBSEQUENT EVENTS:
On August 30, 2000, Albuquerque Suite Hospitality, LLC, a 100% owned
subsidiary of the Partnership, purchased the 122 suite Albuquerque Best Western
Airport Inn located in Albuquerque, New Mexico for $2.1 million. See
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS(AMOUNTS IN THOUSANDS)
THREE MONTHS ENDED APRIL 30, | |||||
|---|---|---|---|---|---|
2000 | 1999 | ||||
| REVENUES FROM HOTEL OPERATIONS | |||||
| Room, food and beverage | $ | 8,912 | 8,866 | ||
| Other | 295 | 383 | |||
| TOTAL REVENUES | $ | 9,207 | 9,249 | ||
| EXPENSES | |||||
| Departmental | $ | 2,430 | 2,482 | ||
| Percentage rent | 3,319 | 3,256 | |||
| Advertising | 585 | 597 | |||
| Other | 2,471 | 2,442 | |||
| TOTAL EXPENSES | $ | 8,805 | 8,777 | ||
| NET INCOME | $ | 402 | 473 | ||
FINANCIAL CONDITION AND RESULTS OF OPERATIONS. GENERAL
The following discussion should be read in conjunction with the InnSuites Hospitality Trust condensed consolidated financial statements and notes thereto and the InnSuites Hotels, Inc. (the "Lessee") unaudited condensed statements of operations appearing elsewhere in this quarterly report.
The Trust is a real estate investment trust, which owns the sole
general partner interest in the Partnership. In order for the Trust to qualify
as a REIT under the Code, neither the Trust nor the Partnership can operate the
Hotels. Therefore, each of the Hotelshotels is leased to, and operated by, the Lessee
pursuant to a Percentage Lease. Each Percentage Lease obligates the Lessee to
pay rent equal to the greater of a minimum rent or a percentage rent based on
the gross revenues of each hotel. The Lessee also holds the franchise agreement
for each of the Hotels.hotel. The Lessee is owned 9.8% by InnSuites Innternational Hotels,
Inc., an entity owned by James F. Wirth and his wife. The Trust's principal
source of cash flows is distributions from the Partnership, which are dependent
upon lease payments from the Lessee pursuant to the Percentage Leases. The
Lessee's ability to make payments to the Partnership pursuant to the Percentage
Leases is dependent primarily upon the operations of the Hotels.
The Trust's Management intends tomanagement may restructure and acquire the Lessee in
January 2001 following the guidelines of the REIT Modernization Act.
At April 30,July 31, 2000, the Trust owned a 45.1%47.75% interest in the Hotels
through its sole general partner's interest in the Partnership. This change in ownership resulted primarily from the following transactions occurring between February 1, 1999 and April 2, 1999:
On March 15, 1999, the Trust purchased 1 million additional general partner units in the Partnership for $2 million. This transaction was fully funded by Wirth who provided an unsecured loan to the Trust at 7% interest payable annually beginning March 15, 2000. The unpaid principal balance and accrued interest is due on March 15, 2004.
On April 2, 1999, the Partnership made an unsecured loan to the Trust in the amount of $2.6 million. Annual interest only payments are due on March 1 of each year and are based on a 7% interest rate. The unpaid principal balance is due at maturity on April 2, 2006. The Trust used the proceeds of that loan to purchase 1.3 million general partner units in the Partnership. The money loaned by the Partnership was generated by refinancing the Northern Phoenix hotel and borrowing an additional $1.8 million that was secured by a mortgage on that property. The original mortgage note was restructured to match the terms of the refinanced note, which bears interest at 8.25% and matures on April 1, 2014. Monthly principal and interest payments began on April 1, 1999.
As of April 2, 1999, the Trust transferred, at historical cost, its interest in the Scottsdale property to the Partnership (approximately $7 million) in exchange for 1.6 million general partner units.
As a result of the aforementioned transactions, the Trust increased its ownership interest in the Partnership from approximately 18% to approximately 42% as of April 2, 1999.
The expenses of the Trust consist primarily of property taxes,
insurance, corporate overhead, interest on mortgage debt and depreciation of the
Hotels. Under the terms of its Partnership Agreement, the Partnership is
required to reimburse the Trust for all suchcash expenses. The Percentage Leases
provide for the payment of base rent and percentage rent. For the three monthsix-month
period ended April 30,July 31, 2000, base rent$3.3$5.4 million was earned by the
Trust. The principal determinant of percentage rent is the Lessee's room
revenues at the Hotels, as defined by the Percentage Leases. Therefore,
management believes that a
review of the historical performance of the
operations of the Hotels, particularly with respect to occupancy, average daily
rate ("ADR"), calculated as total room revenue divided by number of rooms sold,
and revenue per available room, calculated as total room revenue divided by
number of rooms available (known as "REVPAR"), is appropriate for understanding
revenue from the Percentage Leases. In comparing the first quarterssix months of fiscal
2001 and 2000, ADR decreased $2.13$0.82 or 2.76%1.16% to $74.99$69.80 in the first quartersix months of
fiscal 2001 from $77.12$70.62 in the first quartersix months of fiscal 2000, primarily due to
a conscious effort to drive additional occupancy by managing down the ADR.
Occupancy increased by 5.63%3.5% to 75.0%68.1% in the first quartersix months of fiscal 2001 from
71.0%64.6% in the first quartersix months of fiscal 2000 primarily as the result of the rate
management activity. Increased occupancy ratesThis resulted in an increase in REVPAR of $1.52$1.92 or 2.78%4.21% to
$56.27$47.53 in the first quartersix months of fiscal 2001 from $54.75$45.61 in the first quartersix
months of fiscal 2000.
The following table shows certain historical financial and other information for the periods indicated.
| FOR THE THREE MONTHS ENDED APRIL 30, | |||||||
|---|---|---|---|---|---|---|---|
| 2000 | 1999 | ||||||
| Occupancy | 75.00 | % | 71.00 | % | |||
| Average Daily Rate (ADR) | $ | 74.99 | $ | 77.12 | |||
| Revenue Per Available Room (REVPAR) | $ | 56.27 | $ | 54.75 | |||
New Accounting Pronouncements
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 - "REVENUE RECOGNITION IN FINANCIAL STATEMENTS" (SAB
No. 101) which was subsequently amended by SAB No. 101A and 101B in March and
June 2000, respectively. These amendments delayed the implementation date of SAB
No. 101 until no later than the fourth fiscal quarter of fiscal years beginning
after December 15, 1999. SAB No. 101 provides the staff's views in applying
generally accepted accounting principles to selected revenue recognition issues.
The Trust's management believes that the implementation of SAB No. 101 will not
have a material effect on the financial statements.
Results of Operations of the Trust for the threesix months ended April 30,July 31, 2000
compared to the threesix months ended April 30,July 31, 1999
For the threesix months ended April 30,July 31, 2000, the Trust had revenues of
approximately $3.3$5.4 million compared to a similar amount for the threesix months ended
April 30,July 31, 1999. Total expenses increased approximately $43,000$149,000 or 1.9% from2.9% primarily
due to a combination of the reduction in variable expenses by approximately
$2,292,000 for the three months ended April 30, 1999.
$39,000 or 1.8% and an increase in fixed expenses by approximately $188,000 or
6.4%. Variable expenses are general and administrative costs, as well as real
estate and personal property taxes, property and casualty insurance and ground
rent. Fixed expenses are depreciation and amortization and interest expense.
Real estate depreciation for the threesix months ended April 30,July 31, 2000
compared to the threesix months ended April 30,July 31, 1999 increased approximately $48,000$74,000
or 7.7%5.8% to approximately $666,000$1,351,000 from approximately $618,000,$1,277,000, respectively.
The increase was primarily due to an increase in capitalized refurbishment costs in
the first quarter of fiscal 2001.
periods after July 31, 1999.
Real estate and personal property taxes, insurance and ground rent
decreasedincreased approximately $33,000$36,000 or 8.7%5.6% to approximately $343,000$680,000 from
approximately $376,000$644,000 in comparing the threesix months ended April 30,July 31, 2000 and 1999,
respectively. The decreaseincrease was primarily due to successful and ongoing efforts to reduce real and personalincreased property tax
assessments made by local and state governments.
governments on our San Diego and Tucson
Oracle properties.
General and administrative expenses include overhead charges for
management, accounting, shareholder and legal services for the Trust. In
comparing general and administrative expenses for the quarterssix months ended April 30,July 31,
2000 and 1999, general and administrative expenses decreased approximately
$48,000$75,000 or 9.4%5.1% to approximately $469,000$1,408,000 from approximately $517,000,$1,483,000,
respectively. The decrease of approximately $48,000$75,000 was primarily due to a
combination of the final settlement of accounting and legal charges of
approximately $300,000 associated with the Trust's closing of the Cleveland
office and the write off of approximately
first quartersix months ended April 30,July 31, 1999
and the provision of approximately $255,000provisions for uncollectible rent in the first quartersix months ended April 30, 2000.
July 31, 2000
of approximately $920,000.
Total interest expense increased approximately $61,000$110,000 or 7.8%6.9% to
approximately $841,000$1,720,000 from approximately $780,000$1,610,000 in comparing the threesix
months ended April 30,July 31, 2000 and 1999, respectively. Interest on mortgage notes
payable increased approximately $41,000$66,000 or 8.3%6.3% to approximately $545,000$1,106,000 from
approximately $504,000$1,040,000 in comparing the threesix months ended April 30,July 31, 2000 and
1999, respectively. The increase was primarily due to net additional borrowings
of approximately $2.3 million during fiscal 2000 for a loan modification
relating to the Northern Phoenix property and the refinancing of the San Diego
property. Interest on notes payable to related parties increased approximately
$25,000$16,000 or 97.7%18.2% to approximately $50,000$101,000 from approximately $25,000$85,000 due to
additional loans from Wirth during the second half of fiscal 2000. These were partially offset byInterest on
notes payable to banks increased approximately $29,000 or 6.0% to approximately
$513,000 from approximately $484,000 in comparing the six months ended July 31,
2000 and 1999, respectively. The increase was primarily due to a slight decreaseincrease
in the variable rate paid on the $12 million credit facility.
Amortization of loan fees was approximately $16,000$48,000 for the six months
ended July 31, 2000.
Results of Operations of the Trust for the three months ended April 30,July 31, 2000
compared to the three months ended July 31, 1999
For the three months ended July 31, 2000, the Trust had revenues of
approximately $2.1 million compared to a similar amount for the three months
ended July 31, 1999. Total expenses increased approximately $106,000 or 3.8%
primarily due to a combination of an increase in variable expenses by
approximately $42,000 or 3.5% and an increase in fixed expenses by approximately
$64,000 or 4.1%. Variable expenses are general and administrative costs, as well
as real estate and personal property taxes, property and casualty insurance and
ground rent. Fixed expenses are depreciation and amortization and interest
expense.
Real estate depreciation for the three months ended July 31, 2000
compared to the three months ended July 31, 1999 increased approximately $26,000
or 4.0% to approximately $685,000 from approximately $659,000, respectively. The
increase was primarily due to an increase in capitalized refurbishment costs in
fiscal 2001 and the latter half of fiscal 2000.
Real estate and personal property taxes, insurance and ground rent
increased approximately $69,000 or 25.8% to approximately $337,000 from
approximately $268,000 in comparing the three months ended July 31, 2000 and
1999, respectively. The increase was primarily due to increased property tax
assessments made by local and state governments on our San Diego and Tucson
Oracle properties.
General and administrative expenses include overhead charges for
management, accounting, shareholder and legal services for the Trust. In
comparing general and administrative expenses for the quarters ended July 31,
2000 and 1999, general and administrative expenses decreased approximately
$27,000 or 2.8% to approximately $939,000 from approximately $966,000,
respectively. The decrease of approximately $27,000 was primarily due to a
combination of the write off of $575,000 for a withdrawn public offering in the
three months ended July 31, 1999 and the provision of approximately $665,000 for
uncollected rent in the three months ended July 31,2000 partially offset by the
elimination of a complimentary rooms program which reduced expenses by
approximately $135,000 in the three months ended July 31, 2000.
Total interest expense increased approximately $49,000 or 6.0% to
approximately $879,000 from approximately $830,000 in comparing the three months
ended July 31, 2000 and 1999, respectively. Interest on mortgage notes payable
increased approximately $25,000 or 4.6% to approximately $561,000 from
approximately $536,000 in comparing the three months ended July 31, 2000 and
1999, respectively.
The Trust notes that industry analysts and investors use Funds From Operations (FFO) as another tool to evaluate and compare equity REITs. The Trust also believes it is meaningful as an indicator of net income excluding most non-cash items and provides information about the Trust's cash available for distributions, debt service and capital expenditures. The Trust follows the March 1995 interpretation of the National Association of Real Estate Investment Trusts ("NAREIT") definition of FFO, as amended January 1, 2000, which is calculated (in the Trust's case) as net income plus depreciation and amortization, and loss on disposals and extraordinary items, if applicable. FFO does not represent cash flow from operating activities in accordance with generally accepted accounting principles ("GAAP") and is not indicative of cash available to fund all of the Trust's cash needs. FFO should not be considered as an alternative to net income or any other GAAP measure as an indicator of performance and should not be considered as an alternative to cash flows as a measure of liquidity. In addition, the Trust's FFO may not be comparable to other companies' FFO due to differing methods of calculating FFO and varying interpretations of the NAREIT definition.
| FUNDS FROM OPERATIONS FOR THE THREE MONTHS ENDED APRIL 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
(amounts in thousands) | ||||||||
| 2000 | 1999 | |||||||
| Net income attributable to common stockholders | $ | 392 | 379 | |||||
| Depreciation | 666 | 618 | ||||||
| Minority interest share of depreciation | (366 | ) | (398 | ) | ||||
| Funds from Operations (FFO) | $ | 692 | 599 | |||||
Results of Operations of InnSuitesthe Innsuites Hotels Inc., the Lessee, for the threesix
months ended April 30,July 31, 2000 compared to the threesix months ended April 30,July 31, 1999
For the threesix months ended April 30,July 31, 2000, the Lessee had total revenues
of approximately $9.2$15.6 million compared to approximately the same amount$15.5 for the threesix
months ended April 30,July 31, 1999. Although ADR decreasedThis slight increase in total revenue was primarily
due to a decrease in room, food and beverage revenue of approximately $49,000
offset by $2.13an increase of approximately $86,000 or 2.76% to $74.99 from $77.12 when comparing the three months ended April 30, 2000 and 1999, respectively, occupancy increased 5.63% to 75.0% from 71.0%. Total expenses increased approximately $28,000 or less than 1%, remaining at approximately $8.8 million.
18.4% in other revenue.
decreasedincreased
approximately $52,000$163,000 or 2.1%3.5% to approximately $2.4$4.8 million from approximately
$2.5$4.6 million for the threesix months ended April 30,July 31, 2000 and 1999, respectively. This decrease was primarily due to management's efforts to increase operational efficiency to reduce costs per occupied room.
Percentage lease expense increased by approximately $63,000 or 2.0% remaining at approximately $3.3 million for the three month periods ended April 30, 2000 and 1999. The
increase was primarily due to an overall increase in operating expenses in all
departments consistent with the rate of inflation.
Percentage lease expense decreased by approximately $26,000 or less
than 1.0% remaining at approximately $5.4 million for the six month periods
ended July 31, 2000 and 1999. The slight decrease was primarily due to a
decrease in room revenues, which the percentage lease expenses are primarily
based on, for the threesix months ended April 30,July 31, 2000.
Advertising expense for the threesix months ended April 30,July 31, 2000 wasincreased
approximately $585,000.
$36,000 or approximately 3.3%.
Other expenses includinginclude general and administrative, maintenance,
hospitality, utility, and insurance expenses. These expenses waswere approximately
$2.5$4.9 million for the threesix months ended April 30,July 31, 2000 compared to approximately
$2.4$4.4 million for the threesix months ended April 30,July 31, 1999. The increase of
approximately $29,000$510,000 or 1.2%11.5% was primarily due to increased general and
administrative expenses of approximately $320,000 and inflationary increases in
utility, hospitality maintenance and hospitality expenses resulting from the 5.63% increase in occupancy.
insurances expenses. LIQUIDITY AND CAPITAL RESOURCES
The Trust, through its ownership interest in the Partnership, will havehas its
proportionate share of the benefits and obligations of the Partnership's
ownership interests in the Hotels. The Trust's principal sources of cash to meet
its cash requirements, including distributions to its shareholders, is its share
of the Partnership's cash flow. The Partnership's principal source of revenue is
rent payments under the Percentage Leases. The Lessee's obligations under the
Percentage Leases are unsecured and its ability to make rent payments to the
Partnership under the Percentage Leases, and the Trust's liquidity, including
its ability to make distributions to its shareholders, will depend upon the
ability of the Lessee to generate sufficient cash flow from hotel operations.
For the threesix months ended April 30,July 31, 2000 and 1999, the Trust recorded a provision
of approximately $255,000$920,000 and $0 for uncollectible receivables, respectively.
These charges reflect the Trust's assessment of the collectibility of its
receivables, which primarily consists of rent receivable from the Lessee, based
on an evaluation of the Lessee's estimated future cash flows. The Trust's
management may restructure and acquire the Lessee in January 2001 following the
guidelines of the REIT Modernization Act.
As of April 30,July 31, 2000, the Trust has no commitments for capital
expenditures beyond a 4% reserve for refurbishment and replacements set aside
annually, as described below.
The Trust intends to acquire and develop additional hotels and expects to incur indebtedness to fund those acquisitions and developments. The Trust may also incur indebtedness to meet distribution requirements imposed on a REIT under the Code to the extent that working capital and cash flow from the Trust's investments are insufficient to make the required distributions. The terms of the line of credit discussed below permit borrowings for that purpose, but impose certain limitations on the Trust's ability to engage in other borrowings.
On April 16, 1998, the Trust obtained a $12 million Credit Facility
(the "Credit Facility") from Pacific Century Bank to assist it in its funding of
the acquisition and development of additional hotels and for certain other
business purposes. Borrowings under the Credit Facility are secured by first
mortgages on three of the Hotels. The Trust has drawn $11.3 million from its
line of credit, which charges interest at a variable interest rate. By its
terms, the Credit Facility will expire in approximately one yearnine months on April 16,
2001, subject to renewal. The terms of the Credit Facility require the Trust to
maintain a net worth (combined with minority interest) of not less than $15
million and, as of the end of each fiscal quarter, maintain a debt to net worth
ratio of not greater than 1.75 to 1.0 (renegotiated), a net operating income to
debt service relating to encumbered properties ratio of not less than 1.30 to
1.0, and a net operating income to debt
The Trust may seek to increase the amount of its Credit Facility, negotiate additional credit facilities, or issue debt instruments. Any debt incurred or issued by the Trust may be secured or unsecured, long-term, medium-term or short-term, bear interest at a fixed or variable rate and be subject to such other terms as the Trust considers prudent.
The Trust will acquire or develop additional hotels only as suitable opportunities arise, and the Trust will not undertake acquisition or redevelopment of properties unless adequate sources of financing are available. Funds for future acquisitions or development of hotels are expected to be derived, in whole or in part, from borrowings under the Credit Facility or other borrowings or from the proceeds of additional issuances of shares of beneficial interest or other securities. However, there can be no assurance that the Trust will successfully acquire or develop additional hotels.
Subsequent to July 31, 2000, on August 30, 2000, Albuquerque Suite
Hospitality, LLC, a 100% owned subsidiary of the Partnership, purchased the 122
suite Albuquerque Best Western Airport Inn located in Albuquerque, New Mexico
for $2.1 million. The funds utilized for the purchase price were secured by a
first mortgage in the amount of $1,575,000 and the remaining amount was loaned
by Wirth.
The Partnership willcontinues to contribute to a Capital Expenditures Fund
(the "Fund") on a continuing basis, from the rent paid under the Percentage Leases, an amount equal to
4% of the Lessee's revenues from operation of the Hotels. The Fund is intended
to be used for capital improvements to the Hotels and refurbishment and
replacement of furniture, fixtures and equipment, in addition to other uses of
amounts in the Fund considered appropriate from time to time. The Partnership
anticipates making similar arrangements with respect to future hotels that it
may acquire or develop. During fiscal quarterthe six months ended April 30,July 31, 2000, the Hotels
spent approximately $311,494$790,000 for capital expenditures. The Trust considers the
majority of these improvements to be revenue-producing. Therefore, these amounts
have been capitalized and are being depreciated over their estimated useful
lives. The LesseeHotels (Lessee) also spent $444,215$899,604 during the first fiscal quartersix months ended April 30,July
31, 2000 on repairs and maintenance to the Hotels and these amounts have been charged to
expense as incurred.
INFLATION
The Trust's revenues initially will be based on the Percentage Leases which will result in changes in the Trust's revenues based on changes in the underlying Hotel revenues. Therefore, the Trust initially will be relying entirely on the performance of the Hotels and the Lessee's ability to increase revenues to keep pace with inflation. Operators of hotels in general, and the Lessee in particular, can change room rates quickly, but competitive pressures may limit the Lessee's ability to raise rates faster than inflation.
The Trust's largest fixed expense is the depreciation of the investment
in Hotel properties. The Trust's variable expenses, which are subject to
inflation, represented approximately 24.4%38.6% of revenues for the fiscal quartersix months ended
April 30,July 31, 2000. These variable expenses (general and administrative costs, as
well as real estate and personal property taxes, property and casualty insurance
and ground rent) are expected to grow with the general rate of inflation.
SEASONALITY
The Hotels' operations historically have been seasonal. The six
southern Arizona hotels experience their highest occupancy in the first fiscal
quarter and, to a lesser extent, the fourth fiscal quarter. The second fiscal
quarter tends to be the lowest occupancy period at those six southern Arizona
hotels. This seasonality pattern can be expected to cause fluctuations in the
Trust's quarterly lease revenue
YEAR 2000 COMPLIANCE
The Trust and the Lessee have upgraded their computer accounting programs and the Lessee upgraded its computerized property management system along with necessary hardware. The new systems have been warranted to be Year 2000 compliant. As of June 14, 2000, no computer or software problems relating to the Year 2000 have been discovered. However, problems relating to the Year 2000 could still arise.
FORWARD-LOOKING STATEMENTS
Certain statements in this Form 10-Q constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The Trust intends that such
forward-looking statements be subject to the safe harbors created by such Acts.
Those forward-looking statements include statements regarding the intent, belief
or current expectations of the Trust, its Trustees or its officers in respect of
(i) the declaration or payment of dividends; (ii) the leasing, management or
operation of the Hotels; (iii) the adequacy of reserves for renovation and
refurbishment; (iv) the Trust's financing plans; (v) the Trust's position
regarding investments, acquisitions, developments, financings, conflicts of
interest and other matters; (vi) the Trust's continued qualification as a REIT;
and (vii) trends affecting the Trust's or any hotel'sHotel's financial condition or
results of operations. The words and phrases "looking ahead", "we are
confident", "should be", "will be", "predicted", "believe", "expect"expect",
"anticipate" and similar expressions identify forward-looking statements.
These forward-looking statements reflect the Trust's current views in
respect of future events and financial performance, but are subject to many
uncertainties and factors relating to the operations and business environment of
the hotelsHotels which may cause the actual results of the Trust to differ materially
from any future results expressed or implied by such forward-looking statements.
Examples of such uncertainties include, but are not limited to: fluctuations in
hotel occupancy rates; changes in room rental rates which may be charged by the
Lessee in response to market rental rate changes or otherwise; interest rate
fluctuations; changes in federal income tax laws and regulations; competition;
any changes in the Trust's financial condition or operating results due to
acquisitions or dispositions of hotel properties; real estate and hospitality
market conditions; hospitality industry factors; and local or national economic
and business conditions, including, without limitation, conditions which may
affect public securities markets generally, the hospitality industry, or the
markets in which the Trust operates or will operate. The Trust does not
undertake any obligation to update publicly or revise any forward-looking
statements whether as a result of new information, future events or otherwise.
Pursuant to Section 21E(b)(2)(E) of the Securities Exchange Act of 1934, the
qualifications set forth hereinabove are inapplicable to any forward-looking
statements in this Form 10-Q relating to the operations of the Partnership.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Trust is exposed to interest rate risk primarily as a result of its
mortgage notes payable, notes payable to banks and other notes payable. Proceeds
from these loans arewere used to maintain liquidity, fund capital expenditures and
expand the Trust's real estate investment portfolio and operations. The Trust's
interest rate risk management objective is to limit the impact of interest rate
changes on earnings and cash flows and to lower its overall borrowing costs. To
achieve its objectives, the Trust borrows using fixed rate debt, when possible.
There have been no significant changes in the Trust's debt structure during the
quartersix months ended April 30,July 31, 2000.
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. On July 17, 2000, the Trust held its Annual Meeting of Shareholders to consider the election of Trustees. Prior to such meeting, the Trust provided notice of the Annual Meeting and solicited proxies through the Trust's definitive Proxy Statement, dated June 16, 2000, wherein the considered transactions were described to the shareholders. Shareholders representing 2,320,488 of the voting shares of the Trust were present at the Annual Meeting, in person or by proxy, representing a quorum for such Annual Meeting. The considered transactions were properly placed before the shareholders for adoption and approval. Following the votes of the shareholders, such votes were certified by the Inspector of Election of the Annual Meeting as follows:
(a)
EXHIBITNUMBEREXHIBIT27.1Financial Data Schedule.(1)
EXHIBIT
NUMBER EXHIBIT
------ -------
10.1 Promissory Note dated June 8, 2000 by RRF Limited
Partnership in favor of Suite Hotels Limited
Liability Company.
10.2 Promissory Note dated July 6, 2000 by InnSuites
Hospitality Trust in favor of InnSuites
Innternational Hotels, Inc.
10.3 Promissory Note dated July 27, 2000 by RRF Limited
Partnership in favor of Hulsey Hotels Corporation.
10.4 Promissory Note dated July 27, 2000 by RRF Limited
Partnership in favor of Hotels America Limited
Liability Company.
10.5 Promissory Note dated July 27, 2000 by RRF Limited
Partnership in favor of Innternational Suites
Corporation.
10.6 Promissory Note dated July 27, 2000 by RRF Limited
Partnership in favor of InnSuites Innternational
Inns & Resorts, Inc. (Az).
10.7 Promissory Note dated July 27, 2000 by RRF Limited
Partnership in favor of Trust FBO Eric Wirth.
(b) REPORTS ON FORM 8-K.
No Current Reports on Form 8-K were filed by the Trust during the
fiscal quarter ended April 30,July 31, 2000.
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.