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 December 31, 1995
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
DECEMBER 31, 1995 AND 1994
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
INDEX
Financial Statements: PAGE
Balance Sheet - December 31, 1995 and September 30, 1995 2
Statement of Operations - Three Months Ended
December 31, 1995 and 1994 3
Statement of Changes in Partners' Equity -
Three Months Ended December 31, 1995 and 1994 4
Statement of Cash Flows - Three Months Ended
December 31, 1995 and 1994 5
Notes to Financial Statements 6
Management Discussion and Analysis 7 - 8
Other Information and Signatures 9 - 10
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
BALANCE SHEET
DECEMBER 31, 1995 AND SEPTEMBER 30,1995
---------------------------------------
12/31/95 9/30/95
-------- -------
ASSETS
------
Current Assets:
Cash and temporary investments $ 777,457 $ 794,899
Accounts receivable 20,898 22,343
Prepaid expenses 7,328 11,934
------- -------
Total Current Assets 805,683 829,176
Property and Equipment:
Land 799,311 799,311
Buildings 2,226,531 2,226,531
Furniture and equipment 567,906 548,367
--------- ---------
3,593,748 3,574,209
Accumulated depreciation and amortization (1,699,898)(1,672,013)
--------- ---------
Property and Equipment, Net 1,893,850 1,902,196
Other assets 38,097 38,097
--------- ---------
Total Assets $2,737,630 $2,769,469
========= =========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 90,605 $ 111,441
------ -------
Total Liabilities 90,605 111,441
Partners' Equity:
General Partners (16,103) (17,358)
Limited Partners 2,663,128 2,675,386
--------- ---------
Total Partners' Equity 2,647,025 2,658,028
--------- ---------
Total Liabilities and Partners' Equity $2,737,630 $2,769,469
========= =========
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
FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
-----------------------------------------------------
12/31/95 12/31/94
Income: -------- --------
Guest room $ 363,178 $ 323,354
Telephone and vending 8,822 8,496
Interest 6,073 4,889
Other 1,264 988
------- -------
Total Income 379,337 337,727
Expenses:
Motel operating expenses (Note 2) 190,920 190,675
General and administrative 16,426 16,697
Depreciation and amortization 27,885 26,095
Property management fees 18,609 16,674
------- -------
Total Expenses 253,840 250,141
------- -------
Net Income (Loss) $ 125,497 $ 87,586
======= =======
Net Income (Loss) Allocable to General
Partners $1,255 $876
====== =======
Net Income (Loss) Allocable to Limited
Partners $124,242 $86,710
======== =======
Net Income (Loss) per Partnership Unit $12.42 $8.67
====== =====
Distributions to Limited Partners per
Partnership Unit $13.65 $13.65
====== ======
The accompanying notes are an integral part of the financial statements.
-3-
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
-----------------------------------------------------
12/31/95 12/31/94
General Partners: -------- --------
Balance, beginning of year $ (17,358)$ (22,492)
Net income (loss) 1,255 876
------ ------
Balance, End of period (16,103) (21,616)
Limited Partners:
Balance, beginning of year 2,675,386 2,713,084
Net income (loss) 124,242 86,710
Distributions to Limited Partners (136,500) (136,500)
--------- ---------
Balance, End of Period 2,663,128 2,663,294
--------- ---------
Total Partners' Equity $2,647,025 $2,641,678
========= =========
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
FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
-----------------------------------------------------
12/31/95 12/31/94
-------- --------
Cash Flows from Operating Activities:
Received from motel revenues $ 373,392 $ 332,142
Expended for motel operations and
general and administrative expenses (242,185) (224,155)
Interest received 7,390 5,432
------- -------
Net Cash Provided (Used) by Operating Activities 138,597 113,419
Cash Flows from Investing Activities:
Purchases of property and equipment (19,539) (7,847)
------ -----
Net Cash Provided (Used) by Investing Activities (19,539) (7,847)
Cash Flows from Financing Activities:
Distributions to limited partners (136,500) (136,500)
------- -------
Net Cash Provided (Used) by Financing Activities (136,500) (136,500)
Net Increase (Decrease) in Cash and Temporary
Investments (17,442) (30,928)
Cash and Temporary Investments:
Beginning of period 794,899 763,487
------- -------
End of period $ 777,457 $ 732,559
======= =======
Reconciliation of Net Income (Loss) to Net Cash Provided (Used) by
Operating Activities:
Net Income (Loss) $ 125,497 $ 87,586
Adjustments to reconcile net income to
net cash used by operating activities:
Depreciation and amortization 27,885 26,095
(Increase) decrease in accounts receivable 1,444 (153)
(Increase) decrease in prepaid expenses 4,606 4,415
Increase (decrease) in accounts payable (20,835) (4,524)
Total Adjustments 13,100 25,833
------- --------
Net Cash Provided (Used) by Operating Activities $ 138,597 $ 113,419
======= =======
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
DECEMBER 31, 1995
-----------------------------------
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,
1995 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 $ 18,609
Franchise Fees $ 7,268
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 Three
Months Months
Ended Ended
12/31/95 12/31/94
-------- --------
Salaries and related costs $ 71,705 $ 72,141
Utilities 16,420 17,587
Allocated costs, mainly indirect
salaries 24,870 23,394
Replacements and renovations 5,090 6,141
Other operating expenses 72,835 71,412
------- -------
Total Motel Operating Expenses $ 190,920 $ 190,675
======= =======
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
DECEMBER 31, 1995
-----------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnership's current assets of $805,683 exceeded its
current liabilities of $90,564 providing an operating reserve of
$715,119, which is greater than the $455,000 target set by the
General Partners. The General Partners authorized increases in
the quarterly distribution twice during the previous fiscal
year. Any further increases will be contingent on the continued
improved performance of the property.
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 three months of the
fiscal year which will end on September 30, 1996, were $24,629
($19,539 was capitalized) or 6.8% of room revenues. Annual
expenditures of this type are not expected to exceed the General
Partners' 3% guideline. The renovation and replacement
expenditures for the period covered by this report is higher
than the General Partners' guidelines as this calendar quarter
generally has the lowest occupancy. The low occupancy allows
the renovations to be performed with the least disturbance to
our guests.
NEW ACCOUNTING STANDARDS
- ------------------------
SFAS No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed OF, requires
the Partnership to disclose information about potential
impairment to the value of long-lived assets. The Partnership
is not required to adopt and does not currently plan to adopt
SFAS No. 121 until its fiscal year ending September 30, 1997.
The Partnership does not expect to make any disclosures about
impairment of long-lived assets under SFAS No. 121.
-7-
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(Continued)
DECEMBER 31, 1995
-----------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
The following is a comparison of operating results for the three month
periods ended December 31, 1995 and December 31, 1994.
1995 1994
---- ----
Occupancy 71.0% 68.7%
Average Room Rate $54.48 $50.17
Total revenues increased $41,610 (12.3%) for the three months
ended December 31, 1995 as compared to the corresponding period
of the preceding fiscal year. Guest room revenue increased
$39,824 (12.3%) for the current period due to substantial
increases in both the occupancy rate and the average room rate.
The Partnership achieved significant increases in the relatively
high room rate corporate and leisure market segments with a
corresponding decrease in the discount and group
market segments, which generally have lower room rates.
Total expenditures increased by $3,658 (1.5%) during the period
covered by this report as compared to the corresponding period
of the previous fiscal year. The Partnership, through
cost-cutting measures, was able to keep expenditures essentially
unchanged during the period covered by this report as compared
to the previous fiscal year. Property management fees, which
are a function of the gross revenues, was the only expense
component to realize a significant increase.
FUTURE TRENDS
- -------------
The General Partners expect the Pleasanton motel to continue
its improved performance if the current improvement in the
general economic climate continues.
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.
-8-
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
-9-
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
2-14-96 By /S/ David P. Grotewohl
-------------------------
Date David P. Grotewohl,
President of Grotewohl
Management Services, Inc.,
Managing General Partner
2-14-96 By /S/ David P. Grotewohl
-------------------------
Date David P. Grotewohl,
Chief Financial Officer
-10-