SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
---------------------------------------------
For the Period ended June 30, 1997
Commission File 0-11512
SUPER 8 ECONOMY LODGING IV, LTD
-----------------------------------------------------
(Exact name of registrant as specified in its charter
CALIFORNIA 94 - 2827163
------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2030 J Street
Sacramento, California 95814
-------------------------------------- --------------
Address of principal executive offices Zip Code
Registrant's telephone number,
including area code (916) 442 - 9183
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes XX No
---- ----
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
INDEX
Financial Statements: PAGE
Balance Sheet - Juen 30, 1997 and September 30, 1996 2
Statement of Operations - Nine Months Ended
June 30, 1997 and 1996 3
Statement of Changes in Partners' Equity -
Nine Months Ended June 30, 1997 and 1996 4
Statement of Cash Flows - Nine Months Ended
June 30, 1997 and 1996 5
Notes to Financial Statements 6
Management Discussion and Analysis 7
Other Information and Signatures 8 - 9
Super 8 Economy Lodging IV, Ltd.
(A California Limited Partnership)
Balance Sheet
June 30, 1997 and September 30, 1996
6/30/97 9/30/96
----------- -----------
ASSETS
Current Assets:
Cash and temporary investments $ 986,698 $ 938,477
Accounts receivable 49,533 21,563
Prepaid expenses 9,091 12,789
---------- ----------
Total current assets 1,045,322 972,829
---------- ----------
Property and Equipment:
Land 799,312 799,312
Buildings 2,226,530 2,226,530
Furniture and equipment 537,685 550,209
---------- ----------
3,563,527 3,576,051
Accumulated depreciation (1,796,331) (1,755,449)
---------- ----------
Property and equipment, net 1,767,196 1,820,602
---------- ----------
Other Assets: 63,975 48,141
---------- ----------
Total Assets $ 2,876,493 $ 2,841,572
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 113,756 $ 111,444
---------- ----------
Total current liabilities 113,756 111,444
---------- ----------
Total liabilities 113,756 111,444
---------- ----------
Contingent Liabilities (See Note 1)
Partners' Equity:
General Partners (4,756) (10,707)
Limited Partners 2,767,493 2,740,835
---------- ----------
Total partners' equity 2,762,737 2,730,128
---------- ----------
Total Liabilities and Partners' Equity $ 2,876,493 $ 2,841,572
========== ==========
The accompanying notes are an integral part of the financial statements.
- 2 -
Super 8 Economy Lodging IV, Ltd.
(A California Limited Partnership)
Statement of Operations
Nine Months Ended June 30, 1997 and 1996
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
6/30/97 6/30/97 6/30/96 6/30/96
---------- ---------- ---------- ----------
Income:
Guest room $ 495,468 $1,338,430 $ 417,702 $1,131,932
Telephone and vending 9,955 32,642 10,196 29,924
Interest 8,611 26,252 6,852 20,465
Other 1,746 2,279 817 2,975
--------- --------- --------- ---------
Total Income 515,780 1,399,603 435,567 1,185,296
--------- --------- --------- ---------
Expenses:
Motel operating expenses
(Note 2) 222,444 613,443 198,870 575,892
General and administrative 3,152 37,766 5,322 27,355
Depreciation and
amortization 28,050 84,692 28,183 84,931
Property management fees 25,286 68,593 21,428 58,234
--------- --------- --------- ---------
Total Expenses 278,932 804,494 253,803 746,412
--------- --------- --------- ---------
Net Income (Loss) $ 236,848 $ 595,109 $ 181,764 $ 438,884
========= ========= ========= =========
Net Income (Loss) Allocable
to General Partners $2,368 $5,951 $1,818 $4,389
========= ========= ========= =========
Net Income (Loss) Allocable
to Limited Partners $234,480 $589,158 $179,946 $434,495
========= ========= ========= =========
Net Income (Loss)
per Partnership Unit $23.45 $58.92 $17.99 $43.45
========= ========= ========= =========
Distribution to Limited
Partners per Partnership
Unit $18.75 $56.25 $16.00 $43.30
========= ========= ========= =========
The accompanying notes are an integral part of the financial statements.
- 3 -
Super 8 Economy Lodging IV, Ltd.
(A California Limited Partnership)
Statement of Partners' Equity
Nine Months Ended June 30, 1997 and 1996
6/30/97 6/30/96
---------- -----------
General Partners:
Balance, beginning of year $ (10,707) $ (17,358)
Net income (loss) 5,951 4,389
---------- ----------
Balance, End of period (4,756) (12,969)
---------- ----------
Limited Partners:
Balance, beginning of year 2,740,835 2,675,386
Net income (loss) 589,158 434,495
Distributions to Limited Partners (562,500) (433,000)
---------- ----------
Balance, End of Period 2,767,493 2,676,881
---------- ----------
Total Partners' Equity $ 2,762,737 $ 2,663,912
========== ==========
The accompanying notes are an integral part of the financial statements.
- 4 -
Super 8 Economy Lodging IV, Ltd.
(A California Limited Partnership)
Statement of Cash Flows
Nine Months Ended June 30, 1997 and 1996
6/30/97 6/30/96
----------- -----------
Cash Flows from Operating Activities:
Received from motel revenues $ 1,345,755 $ 1,158,433
Expended for motel operations and
general and administrative expenses (730,126) (679,459)
Interest received 25,878 21,819
---------- ----------
Net Cash Provided (Used) by
Operating Activities 641,507 500,793
---------- ----------
Cash Flows from Investing Activities:
Purchases of property and equipment (31,286) (32,738)
Proceeds from sale of land 500 -
---------- ----------
Net Cash Provided (Used) by
Investing Activities (30,786) (32,738)
---------- ----------
Cash Flows from Financing Activities:
Distributions to limited partners (562,500) (433,000)
---------- ----------
Net Cash Provided (Used) by
Financing Activities (562,500) (433,000)
---------- ----------
Net Increase (Decrease) in Cash
and Temporary Investments 48,221 35,055
Cash and Temporary Investments:
Beginning of period 938,477 794,899
---------- ----------
End of period $ 986,698 $ 829,954
========== ==========
Reconciliation of Net Income (Loss) to Net Cash Provided (Used) by
Operating Activities:
Net Income (Loss) $ 595,109 $ 438,884
---------- ----------
Adjustments to reconcile net income to net cash used by operating
activities:
Depreciation and amortization 84,692 84,931
(Gain) loss on disposition of property
and equipment (500) -
(Increase) decrease in accounts receivable (27,970) (5,044)
(Increase) decrease in prepaid expenses 3,698 (1,396)
(Increase) decrease in other assets (15,834) -
Increase (decrease) in accounts payable 2,312 (16,582)
---------- ----------
Total Adjustments 46,398 61,909
Net Cash Provided (Used) by
Operating Activities $ 641,507 $ 500,793
========== ==========
The accompanying notes are an integral part of the financial statements.
- 5 -
Super 8 Economy Lodging IV, Ltd.
(A California Limited Partnership)
Notes to Financial Statements
June 30, 1997
Note 1:
The attached interim financial statements include all adjustments which are, in
the opinion of management, necessary to a fair statement of the results for the
period presented.
Users of these interim financial statements should refer to the audited
financial statements for the year ended September 30, 1996 for a complete
disclosure of significant accounting policies and practices and other detail
necessary for a fair presentation of the financial statements.
In accordance with the partnership agreement, the following information is
presented related to fees paid to the General Partners or affiliates for the
period.
Property Management Fees $68,593
Franchise Fees $26,790
Partnership management fees and subordinated incentive distributions are
contingent in nature and none have been accrued or paid during the current
period.
Note 2:
The following table summarizes the major components of motel operating expenses
for the following periods:
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
6/30/97 6/30/97 6/30/96 6/30/96
---------- ---------- ---------- ----------
Salaries and related costs $ 79,487 $ 230,643 $ 76,031 $ 225,891
Franchise and advertising fees 24,778 66,975 20,905 56,648
Utilities 16,805 47,817 15,796 45,338
Allocated costs,
mainly indirect salaries 22,157 68,759 23,816 71,595
Replacements and renovations 9,509 17,774 7,694 13,212
Other operating expenses 69,708 181,475 54,628 163,208
--------- --------- --------- ---------
Total motel operating
expenses $ 222,444 $ 613,443 $ 198,870 $ 575,892
========= ========= ========= =========
The following additional material contingencies are required to be stated in the
interim reports under federal securities law: None.
- 6 -
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
JUNE 30, 1997 _
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's current assets of $1,045,322 exceeded its current liabilities
of $113,756 providing an operating reserve of $931,566, which is greater than
the $455,000 target set by the General Partners.
In the unlikely event that the Partnership's reserves do not meet operating
needs, the Partnership's Pleasanton, California motel will provide substantial
collateral against additional debt.
The Partnership has no material commitments for capital expenditures. The
Partnership's guideline for replacements and renovation expenditures is
approximately 3% of room revenues. Applicable expenditures during the first nine
months of the fiscal year which will end on September 30, 1996, were $49,062 or
3.7% of room revenues. Expenditures of this type are not expected to exceed the
General Partners' 3% guideline on a yearly basis.
RESULTS OF OPERATIONS
The following is a comparison of operating results for the nine month periods
ended June 30, 1997 and June 30, 1996.
Total revenues increased $214,307 or 18.1%. Guest room revenue increased
$206,498 or 18.2% for the current period due to an increase in the occupancy
rate to 78.0% (as compared with 73.6% for the corresponding period of the
preceding fiscal year) and an increase in average room rate from $55.05 in 1996
to $61.65 in 1997 for the comparative periods.
Total expenditures increased $58,082 or 7.8% during the nine months covered by
this report as compared to the previous fiscal year. The expenditure increase is
associated with the improved occupancy.
FUTURE TRENDS
The General Partners expect the Pleasanton motel to continue its improved
performance if the current improvement in the general economic climate
continues. Two additional competitive properties are expected to during 1997.
The economic impact on the Pleasanton motel is undetermined.
In the opinion of management, these financial statements reflect all adjustments
which were necessary to a fair statement of results for the interim periods
presented. All adjustments are of a normal recurring nature.
- 7 -
PART II. OTHER INFORMATION
----------------------------
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters
---------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
None
- 8 -
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SUPER 8 ECONOMY LODGING IV, LTD
8-12-97 By /S/ David P. Grotewohl
------- -------------------------
Date David P. Grotewohl,
President of Grotewohl
Management Services, Inc.,
Managing General Partner
8-12-97 By /S/ David P. Grotewohl
------- -------------------------
Date David P. Grotewohl,
Chief Financial Officer
- 9 -