FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended June 30, 1996
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Commission file number 33-11096
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CRI HOTEL INCOME PARTNERS, L.P.
- -------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 52-1500621
- ---------------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11200 Rockville Pike, Rockville, Maryland 20852
- ----------------------------------------- ---------------------------
(Address of principal executive offices) (Zip Code)
(301) 468-9200
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(Registrant's telephone number, including area code)
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at June 30, 1996
- --------------------------------- --------------------------------------
(Not applicable) (Not applicable)
CRI HOTEL INCOME PARTNERS, L.P.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
Page
----
PART I. Financial Information (Unaudited)
Item 1. Financial Statements
Balance Sheets - June 30, 1996
and December 31, 1995 . . . . . . . . . . . . . . . . 1
Statements of Income - for the three and six months
ended June 30, 1996 and 1995 . . . . . . . . . . . . 2
Statement of Changes in Partners' Capital (Deficit)
- for the six months ended June 30, 1996 . . . . . . 3
Statements of Cash Flows - for the six months
ended June 30, 1996 and 1995 . . . . . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . 8
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 12
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
---------------------
CRI HOTEL INCOME PARTNERS, L.P.
BALANCE SHEETS
ASSETS
June 30, December 31,
1996 1995
------------ ------------
(Unaudited)
Property and equipment - at cost
Land $ 1,574,490 $ 1,574,490
Buildings and site improvements 13,112,968 13,112,968
Furniture, fixtures and equipment 4,670,363 4,501,971
Leasehold improvements 1,382,000 1,382,000
------------ ------------
20,739,821 20,571,429
Less: accumulated depreciation and amortization (8,116,569) (7,700,997)
------------ ------------
12,623,252 12,870,432
Cash and cash equivalents 590,341 677,454
Working capital reserve 225,000 225,000
Receivables, reserve for replacements and other assets 939,928 700,722
Acquisition fees, principally paid to related parties,
net of accumulated amortization of $286,928 and $269,926,
respectively 733,176 750,178
Property purchase costs, net of accumulated amortization
of $50,917 and $47,880, respectively 131,349 134,387
------------ ------------
Total assets $ 15,243,046 $ 15,358,173
============ ============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Distributions payable $ 495,285 $ 549,562
Hotel trade payables 398,698 305,473
Accounts payable and accrued expenses 255,043 306,592
Building lease payable 109,327 38,596
Accrued property taxes 42,261 64,183
Accrued salaries and wages 78,660 71,767
Sales tax payable 67,665 62,268
Accrued management fees 34,846 107,804
------------ ------------
1,481,785 1,506,245
Notes payable 6,907,827 6,604,974
------------ ------------
Total liabilities 8,389,612 8,111,219
------------ ------------
Commitments and contingencies
The accompanying notes are an integral part
of these financial statements.
-1-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
---------------------
CRI HOTEL INCOME PARTNERS, L.P.
BALANCE SHEETS
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) - Continued
June 30, December 31,
1996 1995
------------ ------------
(Unaudited)
Partners' capital (deficit):
General Partner (251,736) (243,841)
Beneficial Assignee Certificates (BACs) Series A; 868,662 BACs
issued and outstanding 7,105,170 7,490,795
------------ ------------
Total partners' capital 6,853,434 7,246,954
------------ ------------
Total liabilities and partners' capital $ 15,243,046 $ 15,358,173
============ ============
The accompanying notes are an integral part
of these financial statements.
-2-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
---------------------
CRI HOTEL INCOME PARTNERS, L.P.
STATEMENTS OF INCOME
(Unaudited)
For the three months ended For the six months ended
June 30, June 30,
---------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
Revenue:
Rooms $ 2,303,013 $ 2,399,635 $ 4,887,891 $ 4,981,482
Rental and other 87,208 98,133 178,197 194,995
Telephone 87,283 112,751 179,918 217,600
Food and beverage 32,162 18,721 43,548 32,514
------------ ------------ ------------ ------------
2,509,666 2,629,240 5,289,554 5,426,591
------------ ------------ ------------ ------------
Departmental expenses:
Rooms (713,213) (706,363) (1,384,719) (1,392,389)
Telephone (25,593) (43,427) (56,551) (78,225)
Rental and other (20,858) (35,822) (42,602) (72,076)
Food and beverage (24,820) (19,393) (36,813) (33,491)
------------ ------------ ------------ ------------
(784,484) (805,005) (1,520,685) (1,576,181)
------------ ------------ ------------ ------------
Gross operating income 1,725,182 1,824,235 3,768,869 3,850,410
------------ ------------ ------------ ------------
Unallocated operating income (expenses):
Interest and other income 18,332 18,729 38,576 44,546
General and administrative (235,904) (283,843) (528,943) (603,011)
Building lease expense (153,555) (149,255) (404,650) (378,732)
Marketing (247,955) (232,086) (473,332) (479,764)
Depreciation and amortization (222,371) (215,152) (443,520) (428,141)
Energy (120,639) (113,128) (260,470) (257,937)
Property taxes (128,010) (172,874) (266,124) (323,242)
Property operations and maintenance (148,841) (163,711) (279,223) (315,677)
Management fees (87,747) (91,806) (184,916) (189,738)
Base asset management fee, paid to related
parties (23,438) (26,250) (46,876) (52,500)
Professional fees (9,051) (12,426) (19,603) (22,790)
------------ ------------ ------------ ------------
(1,359,179) (1,441,802) (2,869,081) (3,006,986)
------------ ------------ ------------ ------------
Operating income 366,003 382,433 899,788 843,424
Other income (expenses):
Interest expense (153,124) (159,163) (302,853) (314,798)
Cash flow guarantees/(recoveries) -- -- --
------------ ------------ ------------ ------------
Net income $ 212,879 $ 223,270 $ 596,935 $ 528,626
============ ============ ============ ============
The accompanying notes are an integral part
of these financial statements.
-3-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
---------------------
CRI HOTEL INCOME PARTNERS, L.P.
STATEMENTS OF INCOME - Continued
(Unaudited)
For the three months ended For the six months ended
June 30, June 30,
---------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
Net income allocated to General Partner (2%) $ 4,258 $ 4,466 $ 11,939 $ 10,573
============ ============ ============ ============
Net income allocated to BAC Holders (98%) $ 208,621 $ 218,804 $ 584,996 $ 518,053
============ ============ ============ ============
Net income per BAC based on 868,662 BACs outstanding $ 0.24 $ 0.26 $ 0.67 $ .60
============ ============ ============ ============
The accompanying notes are an integral part
of these financial statements.
-4-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
---------------------
CRI HOTEL INCOME PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
For the six months ended June 30, 1996
(Unaudited)
Beneficial
Assignee
General Certificate
Partner Holders Total
--------- ------------ ------------
Balance, December 31, 1995 $(243,841) $ 7,490,795 $ 7,246,954
Distributions paid or accrued of $1.12 per BAC (19,834) (970,621) (990,455)
Net income 11,939 584,996 596,935
--------- ------------ ------------
Balance, June 30, 1996 $(251,736) $ 7,105,170 $ 6,853,434
========= ============ ============
The accompanying notes are an integral part
of these financial statements.
-5-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
---------------------
CRI HOTEL INCOME PARTNERS, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the six months ended
June 30,
------------------------------
1996 1995
------------ ------------
Cash flows from operating activities:
Net income $ 596,935 $ 528,626
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 443,520 428,141
Accrued interest on notes payable 302,853 314,798
Changes in assets and liabilities:
Increase in receivables and other assets, net (129,118) (4,970)
(Decrease) increase in accounts payable and accrued expenses (51,549) 30,521
Increase (decrease) in hotel trade payables 93,225 (124,607)
Increase (decrease) in accrued salaries and wages 6,893 (7,713)
Increase (decrease) in building lease payable 70,731 (24,951)
Increase in sales tax payable 5,397 10,210
(Decrease) increase in accrued property taxes (21,922) 39,404
Decrease in accrued management fees (72,958) (64,601)
------------ ------------
Net cash provided by operating activities 1,244,007 1,124,858
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (168,392) (173,033)
Net (deposits to) withdrawals from reserve for replacements (117,997) 20,730
Decrease in working capital reserves -- 77,000
------------ ------------
Net cash used in investing activities (286,389) (75,303)
------------ ------------
Cash flows from financing activities:
Distributions paid to BAC Holders and General Partner (1,044,731) (904,118)
------------ ------------
Net (decrease) increase in cash and cash equivalents (87,113) 145,437
Cash and cash equivalents, beginning of period 677,454 537,352
------------ ------------
Cash and cash equivalents, end of period $ 590,341 $ 682,789
============ ============
The accompanying notes are an integral part
of these financial statements.
-6-
CRI HOTEL INCOME PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
In the opinion of CRICO Hotel Associates I, L.P. (the General Partner), the
accompanying unaudited financial statements of CRI Hotel Income Partners, L.P.
(the Partnership) contain all adjustments of a normal recurring nature necessary
to present fairly the Partnership's financial position as of June 30, 1996 and
December 31, 1995, and the results of its operations for the three and six
months ended June 30, 1996 and 1995 and its cash flows for the six months ended
June 30, 1996 and 1995.
These unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. While the General Partner believes that the disclosures
presented are adequate to make the information not misleading, it is suggested
that these financial statements be read in conjunction with the financial
statements and the notes included in the Partnership's Annual Report filed on
Form 10-K for the year ended December 31, 1995.
Certain amounts in the 1995 financial statements have been reclassified to
conform to the 1996 presentation.
2. COMMITMENTS
a. Hotel operations management agreements
--------------------------------------
The Partnership entered into management agreements with Buckhead Hotel
Management Company, Inc. (Buckhead) in connection with operations of the
hotels. Each agreement is for an initial term of twelve to fifteen years,
with a five-year renewal option. The agreements call for a base management
fee of 3.5% of gross revenue from operations, a marketing fee of 1.5% of
net room revenues, and a reservation fee of 2.3% of gross revenues from
rental of hotel guest rooms. The agreements also call for incentive
management fees generally equal to 25% of net cash flow available after
payment of a preferred cash flow return to the Partnership equal to 11% of
the aggregate purchase price for the hotels owned by the Partnership. No
incentive management fees were earned for the first two quarters of 1996 or
1995.
b. Ground lease agreement
----------------------
The Partnership entered into a lease with Vicorp Restaurants, Inc.
(Vicorp) effective January 1991, for a portion of the Minneapolis Days Inn
property to operate a restaurant (Baker's Square). Gross rental income
pursuant to the lease agreement was $12,619 and $25,238 for the three and
six months ended June 30, 1996, respectively and $12,193 and $24,385 for
the three and six months ended June 30, 1995, respectively.
3. DISTRIBUTIONS TO BAC HOLDERS
The following distributions were paid or accrued to BAC Holders of record
during the first and second quarters of 1996 and 1995:
-7-
CRI HOTEL INCOME PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. DISTRIBUTIONS TO BAC HOLDERS - Continued
1996 1995
Distributions to Distributions to
BAC Holders BAC Holders
-------------------- --------------------
Quarter Ended Total Per BAC Total Per BAC
------------- ---------- ------- ---------- -------
March 31 $ 485,242 $ 0.56 $ 443,018 $ 0.51
June 30 485,379 0.56 469,077 0.54
---------- ------- ---------- -------
$ 970,621 $ 1.12 $ 912,095 $ 1.05
========== ======= ========== =======
Distributions are dependent on the net cash flow produced from hotel
operations, net of Partnership expenses. The cash flow from certain hotels may
be materially affected by changing market conditions and by seasonality.
4. RELATED-PARTY TRANSACTIONS
The Partnership, in accordance with the terms of the Partnership Agreement,
is obligated to reimburse the General Partner or its affiliates for their direct
expenses in connection with managing the Partnership. The Partnership paid or
accrued $11,900 and $22,093 for the three and six months ended June 30, 1996,
respectively, and $14,606 and $26,141 for the three and six months ended June
30, 1995, respectively, to the General Partner or its affiliates as direct
reimbursement of expenses incurred on behalf of the Partnership. Such
reimbursements are included in general and administrative expense on the
statements of income.
The amount of the base asset management fee earned by the General Partner
or its affiliates is equal to 0.50% of the weighted average balance of the
adjusted partnership investment during the period, as defined in the Partnership
Agreement. The Partnership paid or accrued a base asset management fee of
$23,438 and $46,876, during the three and six months ended June 30, 1996, and
$26,250 and $52,500 for the three and six months ended June 30, 1995.
5. HOTELS OWNED BY THE PARTNERSHIP
On October 20, 1994, a contract for the sale of the Kankakee hotel was
signed. The sale was completed on July 19, 1995. The sale price of the
property of $1.2 million generated sufficient proceeds to the Partnership to
retire the purchase money note obligation of the Partnership with respect to
such property.
The Partnership is investigating the extent of building damage to the
foundation at the Roseville hotel. Erosion and settlement have caused some of
the walls to buckle and the hotel concrete floor to crack and sink. Excavation
to determine the severity of the problem is expected to begin during September
1996. All repair work is expected to be completed this fall. As of August 5,
1996, there is no estimate of the total expected costs to be incurred.
-8-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Financial Condition/Liquidity
------------------------------
CRI Hotel Income Partners, L.P. (the Partnership) expects that the hotels
in the aggregate will generate sufficient cash flow to achieve a positive cash
flow after operating expenses. During the six months ended June 30 1996,
certain hotels retained aggregate additional replacement reserves of
approximately $176,700 for the purpose of funding the purchase of electronic
door locks. The installation of these electronic door locks is a franchise
requirement imposed by Days Inn. As of June 30, 1996, $85,000 was paid relating
to the lock replacements. Other than the purchase of electronic door locks and
the periodic replacement of fixed assets, which are funded from the replacement
reserves, and the Roseville excavation and repair work, as discussed below,
there are no material commitments for capital expenditures.
The Partnership's liquidity and future results of operations are primarily
dependent upon the performance of the underlying hotels. Hotel operations may
be materially affected by changing market conditions and by seasonality caused
by variables such as vacations, holidays and climate. The Partnership closely
monitors its cash flow position in an effort to ensure that sufficient cash is
available for operating requirements and distributions to BAC Holders. The
Partnership's net cash provided by operating activities for the six months ended
June 30, 1996, along with existing cash resources, was adequate to support
operating, investing and financing requirements and declared distributions to
BAC Holders and the General Partner. Cash and cash equivalents decreased in
1996 principally due to deposits to replacement reserves. The Partnership
estimates that existing cash and cash equivalents along with future cash flows
from the hotels' operations, in the aggregate, will be sufficient to pay
operating expenses and short term commitments, fund replacement reserves, and
make distributions to BAC Holders. Short-term liabilities of $1,481,785
decreased slightly from 1995. This resulted primarily from a decrease in
accrued management fees payable at two hotels as well as a decrease in
distributions payable.
The Partnership's notes payable, including accrued interest, are scheduled
to mature in 1997 and 1998. The Kankakee note payable of $434,925 plus accrued
interest of $440,746 was retired on July 19, 1995 in connection with the sale of
the hotel, as discussed below. The Managing General Partner is currently
investigating refinancing options for the remaining notes. There is no
assurance that a refinancing or refinancings will be completed.
On October 20, 1994, a contract for the sale of the Kankakee hotel was
signed. The sale was completed on July 19, 1995. The sale price of the
property of $1.2 million generated sufficient proceeds to the Partnership to
retire the purchase money note obligation of the Partnership with respect to
such property.
The following distributions were paid or accrued to BAC Holders of record
during the first and second quarters of 1996 and 1995:
-9-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------
1996 1995
Distributions to Distributions to
BAC Holders BAC Holders
-------------------- --------------------
Quarter Ended Total Per BAC Total Per BAC
------------- ---------- ------- ---------- -------
March 31 $ 485,242 $ 0.56 $ 443,018 $ 0.51
June 30 485,379 0.56 469,077 0.54
---------- ------- ---------- -------
$ 970,621 $ 1.12 $ 912,095 $ 1.05
========== ======= ========== =======
Distributions are dependent on the net cash flow produced from hotel
operations, net of Partnership expenses. The cash flow from certain hotels may
be materially affected by changing market conditions and by seasonality.
Results of Operations
---------------------
The Partnership's net income, which consists principally of revenues form
hotel operations, decreased $10,391 during the three months ended June 30, 1996
from the comparable period in 1995 primarily due to a $96,622 decrease in room
revenue. Room revenue decreased $114,744 due to the sale of the Kankakee hotel
which was partially offset by a $18,122 increase in room revenues at the
remaining hotels resulting from an increase in room rates. Partially offsetting
the decrease in net income was a $103,144 decrease in departmental expenses and
unallocated operating expenses resulting from a $180,797 decrease due to the
sale of the Kankakee hotel partially offset by a $77,653 increase at the
remaining hotels primarily due to an increase in air conditioning and utilities
for the Scottsdale hotel, along with an increase of sales and marketing costs
for the Clearwater and Scottsdale hotels.
The Partnership's net income increased $68,309 during the six months ended
June 30, 1996 from the comparable period in 1995 primarily due to a $193,401
decrease in unallocated operating expenses and departmental expenses. These
expenses decreased $332,362 due to the sale of the Kankakee hotel in July 1995
and was partially offset by a $138,961 increase at the remaining hotels
primarily due to an increase in air conditioning and utilities for the
Scottsdale hotel, along with an increase of sales and marketing costs for the
Clearwater and Scottsdale hotels. Partially offsetting the increase in net
income was a $93,591 decrease in room revenue. Room revenue decreased $189,882
due to the sale of the Kankakee hotel which was partially offset by $96,291
increase in room revenues at the remaining hotels resulting from an increase in
room rates.
-10-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------
Hotels' Results of Operations
-----------------------------
The hotels' results of operations are affected by changing market
conditions and by seasonality caused by variables such as vacations, holidays
and climate. Based on the hotels' operating budgets, the following months
should provide the highest gross operating income and net cash flow:
Hotel Location Peak Months
-------------- ---------------------
Clearwater, FL October through April
Minneapolis, MN May through October
Plymouth, MN June through October
Roseville, MN May through October
Scottsdale, AZ January through May
The Partnership's Statements of Income include operating results for each
of the hotels as outlined below. Gross Operating Income represents total
revenue from rooms, telephone, food and beverage, and rental and other, less the
related departmental expenses. Operating Income (Loss) represents Gross
Operating Income less unallocated operating income (expenses). The operating
results and average occupancy for the hotels for the three and six months ended
June 30, 1996 and 1995 are as follows:
-11-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------
Gross Operating Income Gross Operating Income
For the three months ended For the six months ended
June 30, June 30,
---------------------------- ----------------------------
Hotel Location 1996 1995 1996 1995
- -------------- ------------ ------------ ------------ ------------
Clearwater, FL $ 276,782 $ 300,935 $ 666,923 $ 663,392
Minneapolis, MN 414,722 415,510 729,886 771,157
Plymouth, MN 213,895 216,777 367,924 388,640
Roseville, MN 242,750 246,157 431,439 438,770
Scottsdale, AZ 577,033 567,935 1,572,697 1,473,323
------------ ------------ ------------ ------------
Total from continuing operations 1,725,182 1,747,314 3,768,869 3,735,282
Kankakee, IL (1) -- 76,921 -- 115,128
------------ ------------ ------------ ------------
Total $ 1,725,182 $ 1,824,235 $ 3,768,869 $ 3,850,410
============ ============ ============ ============
Operating Income (Loss) Operating Income (Loss)
For the three months ended For the six months ended
June 30, June 30,
---------------------------- ----------------------------
Hotel Location 1996 1995 1996 1995
- -------------- ------------ ------------ ------------ ------------
Clearwater, FL $ 113,337 $ 141,192 $ 322,948 $ 353,475
Minneapolis, MN 212,221 215,708 315,008 353,502
Plymouth, MN 63,287 82,091 74,022 109,370
Roseville, MN 100,831 105,021 125,219 136,829
Scottsdale, AZ 133,847 155,868 577,831 522,056
Depreciation and Partnership operating expenses (257,520) (266,801) (515,240) (507,776)
------------ ------------ ------------ ------------
Total from continuing operations $ 366,003 $ 433,079 $ 899,788 $ 967,456
Kankakee, IL (1) -- (50,646) -- (124,032)
------------ ------------ ------------ ------------
Total $ 366,003 $ 382,433 $ 899,788 $ 843,424
============ ============ ============ ============
-12-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------
Average Occupancy Average Occupancy
For the three months ended For the six months ended
June 30, June 30,
---------------------------- ----------------------------
Hotel Location 1996 1995 1996 1995
- -------------- ------------ ------------ ------------ ------------
Clearwater, FL 75% 84% 79% 85%
Minneapolis, MN 91% 91% 83% 87%
Plymouth, MN 86% 84% 77% 78%
Roseville, MN 94% 93% 87% 89%
Scottsdale, AZ 96% 96% 95% 97%
------ ------- ------ ------
Total from continuing operations (2) 89% 90% 85% 87%
Kankakee, IL(1) -- 33% -- 29%
------ ------ ------ ------
Total (2) 89% 82% 85% 80%
====== ====== ====== ======
(1) The 1995 operating results presented for the Kankakee hotel are through
July 19, 1995, the date of sale.
(2) The sub-totals and totals for average occupancy are based on a weighted
average taking into consideration the number of rooms at each location.
Gross operating income for the Clearwater hotel for the three months ended
June 30, 1996 decreased from the same period in 1995 primarily due to the loss
of a major client in the fourth quarter of 1995. Gross operating income for the
Clearwater hotel for the six months ended June 30, 1996 increased from the same
period in 1995 primarily due to strong sales department generated business and
record breaking results from the corporate connection program. Operating income
for the Clearwater hotel for the three and six months ended June 30, 1996
decreased from the same period in 1995 primarily due to the lost room nights
previously generated by a major client that was lost during the fourth quarter
of 1995 and increased marketing and advertising expenses incurred as a result of
increased sales efforts. Gross operating income and operating income for the
Minneapolis hotel for the three and six months ended June 30, 1996 decreased
from the same periods in 1995 primarily due to unusually harsh weather
conditions and a temporary quarantine of Shriner's Hospital, which indirectly
provides a significant amount of business to the hotel. Gross operating income
and operating income for the Plymouth hotel for the three and six months ended
June 30, 1996 decreased from the same period in 1995 primarily due to unusually
harsh weather conditions and increased competition for local advertising space.
Gross operating income and operating income for the Roseville hotel for the
three and six months ended June 30, 1996 decreased primarily due to decreased
special rated business and certain state of Minnesota business which did not
return in 1996. Gross operating income for the Scottsdale hotel for the three
and six months ended June 30, 1996 increased primarily due to an increase in
room rates. Operating income for the Scottsdale hotel for the three months
ended June 30, 1996 decreased from the same period in 1995 primarily due to
increased utilities during an extremely hot spring compared to 1995 and
-13-
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------
additional sales and marketing expenses incurred the second quarter of 1996.
Operating income for the Scottsdale hotel for the six months ended June 30, 1996
increased from the same period in 1995 primarily due to increased room demand in
the area as a result of Super Bowl XXX being hosted by the City of Phoenix. The
878Kankakee hotel was sold on July 19, 1995, as previously discussed.
The Partnership is investigating the extent of building damage to the
foundation at the Roseville hotel. Erosion and settlement have caused some of
the walls to buckle and the concrete floor to crack and sink. Excavation to
determine the severity of the problem is expected to begin during September
1996. All repair work is expected to be completed this fall. As of August 5,
1996, there is no estimate of the total expected costs to be incurred.
PART II. OTHER INFORMATION
-----------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
No reports on Form 8-K were filed with the Commission during the quarter
ended June 30, 1996.
All other items are not applicable.
-14-
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CRI HOTEL INCOME PARTNERS, L.P.
By: CRICO Hotel Associates I, L.P.
General Partner
By: CRI, Inc.
General Partner
August 14, 1996 By: /s/ Deborah K. Browning
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Date Deborah K. Browning
Vice President/Chief Accounting
Officer
Signing on behalf of the Registrant
and as Principal Accounting Officer
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EXHIBIT INDEX
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Exhibit Method of Filing
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27 Financial Data Schedule Filed herewith electronically
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