UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 33-17274
MANHATTAN BEACH HOTEL PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 95-4201183
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
3 World Financial Center, 29th Floor, NY, NY 10285
(Address of principal executive offices) (Zip code)
(212) 526-3237
(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 (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 No
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets at June 30, 1994 and
December 31, 1993 3
Statements of Operations for the three and
six months ended June 30, 1994 and 1993 4
Statement of Partners' Capital (Deficit) for the six
months ended June 30, 1994 5
Statements of Cash Flows for the six months ended
June 30, 1994 and 1993 6
Notes to the Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION
Items 1-6 10
Signatures 11
Balance Sheets
June 30, December 31,
Assets 1994 1993
Real estate, at cost:
Building $ 47,975,974 $ 47,975,974
Furniture, fixtures and equipment 12,018,937 12,010,920
Leasehold improvements 3,333,141 3,333,141
63,328,052 63,320,035
Less accumulated depreciation and
amortization (18,569,183) (17,730,553)
44,758,869 45,589,482
Cash 2,288,254 2,183,410
Accounts receivable 979,791 565,945
Prepaid and other assets 349,434 341,743
Total Assets $ 48,376,348 $ 48,680,580
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued
liabilities $ 1,577,295 $ 1,634,598
Due to affiliates 1,989,747 1,847,804
Total Liabilities 3,567,042 3,482,402
Partners' Capital (Deficit):
General Partner (1,831,372) (1,773,041)
Limited Partners (6,975,000 limited
partnership units authorized, issued
and outstanding) 46,640,678 46,971,219
Total Partners' Capital 44,809,306 45,198,178
Total Liabilities and Partners' Capital $ 48,376,348 $ 48,680,580
Statements of Operations
Three months ended Six months ended
June 30, June 30,
Hotel Revenues 1994 1993 1994 1993
Rooms $ 2,073,903 $ 2,031,138 $ 3,981,212 $ 4,161,628
Food and beverage 1,094,121 1,129,883 1,950,931 2,175,051
Telephone 125,286 107,654 241,374 212,578
Other 33,201 89,172 58,543 193,130
Total Revenues 3,326,511 3,357,847 6,232,060 6,742,387
Departmental Expenses
Rooms 606,575 644,012 1,169,039 1,253,937
Food and beverage 898,676 972,635 1,696,489 1,893,590
Telephone 83,371 98,451 163,273 180,274
Other 9,812 83,940 19,461 175,430
Total Expenses 1,598,434 1,799,038 3,048,262 3,503,231
Departmental income 1,728,077 1,558,809 3,183,798 3,239,156
Unallocated Partnership and Hotel Operating Expenses
Advertising and sales 146,915 171,699 318,611 354,243
General and administrative:
Hotel and other 601,733 523,080 1,220,664 1,158,227
Partnership 121,866 121,220 230,063 262,031
Utilities and maintenance 305,091 295,947 555,511 538,500
Management fees 84,260 56,922 144,786 142,992
Property taxes 110,930 108,180 209,604 196,761
Operating leases 62,261 11,441 75,144 33,902
Depreciation and
amortization 418,797 410,761 838,630 804,223
1,851,853 1,699,250 3,593,013 3,490,879
Operating loss (123,776) (140,441) (409,215) (251,723)
Other Income (Expense):
Interest income 9,821 8,024 18,923 17,605
Other income 605 1,020 1,420 33,504
Interest expense -- (10,323) -- (21,199)
10,426 (1,279) 20,343 29,910
Net Loss $ (113,350) $ (141,720) $ (388,872) $ (221,813)
Net Loss Allocated:
To the General Partner $ (17,003) $ (21,258) $ (58,331) $ (33,272)
To the Limited Partner (96,347) (120,462) (330,541) (188,541)
$ (113,350) $ (141,720) $ (388,872) $ (221,813)
Per limited partnership
unit (6,975,000
outstanding) $(.01) $(.02) $(.05) $(.03)
Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1994
Limited General Total
Partners' Partner's Partners'
Capital Deficit Capital
Balance at December 31, 1993 $ 46,971,219 $ (1,773,041) $ 45,198,178
Net loss (330,541) (58,331) (388,872)
Balance at June 30, 1994 $ 46,640,678 $ (1,831,372) $ 44,809,306
Statements of Cash Flows
For the six months ended June 30, 1994 and 1993
Cash Flows from Operating Activities: 1994 1993
Net loss $ (388,872) $ (221,813)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 838,630 804,223
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Accounts receivable (413,846) (56,577)
Prepaid and other assets (7,691) (57,344)
Accounts payable and accrued liabilities (57,303) 70,213
Due to affiliates 141,943 148,190
Net cash provided by operating activities 112,861 686,892
Cash Flows from Investing Activities:
Restricted cash, net -- 314,985
Fixed assets additions (8,017) (450,199)
Net cash used for investing activities (8,017) (135,214)
Cash Flows from Financing Activities:
Due to Radisson/Carlson Group -- (37,037)
Net cash used for financing activities -- (37,037)
Net increase in cash 104,844 514,641
Cash at beginning of period 2,183,410 1,475,890
Cash at end of period $ 2,288,254 $ 1,990,531
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ -- $ 21,199
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1993 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments consisting of only
normal recurring accruals which are, in the opinion of management, necessary to
present a fair statement of financial position as of June 30, 1994 and the
results of operations, changes in partners' capital (deficit), and cash flows
for the six months then ended. Results of operations for the period are not
necessarily indicative of the results to be expected for the full year.
No significant events have occurred subsequent to fiscal year 1993, and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
At June 30, 1994, Manhattan Beach Hotel Partners, L.P. (the "Partnership") had
cash of $2,288,254 including cash held at the Property for working capital.
Cash increased by $104,844 from December 31, 1993 due to an increase in net
cash from operating activities which was partially offset by the use of cash
for fixed asset additions. Such cash balances are expected to be sufficient to
meet the anticipated cash requirements of the Partnership. Pursuant to the
management agreement (the "Management Agreement") with Manhattan Beach
Management Company, an affiliate of Interstate Hotel Corporation
("Interstate"), contributions to the FF&E reserve account will be made over
time to protect and maintain the value of the Partnership's Hotel.
Accounts receivable increased to $979,791 at June 30, 1994 compared to $565,945
at December 31, 1993. Accounts payable and accrued liabilities decreased to
$1,577,295 at June 30, 1994 compared to $1,634,598 at December 31, 1993. The
changes in both accounts receivable and accounts payable are due primarily to
the timing of payments. Due to affiliates increased to $1,989,747 at
June 30, 1994 compared to $1,847,804 at December 31, 1993, primarily due to
the accrual of property management oversight fees.
Cash flow from operations was not sufficient in the second quarter of 1994 to
pay a distribution. Future distributions will be dependent on the results of
operations of the Hotel and the level of net operating income available to the
Partnership.
Results of Operations
For the three and six months ended June 30, 1994, the Partnership had a net
loss of $113,350 and $388,872, respectively, compared to a net loss for the
three and six months ended June 30, 1993 of $141,720 and $221,813,
respectively. The increase in net loss for the six month period is primarily
due to a decrease in departmental income. All of this decrease occurred in the
first quarter of 1994.
For the three and six months ended June 30, 1994, the Hotel generated
departmental income of $1,728,077 and $3,183,798, respectively, compared to
$1,558,809 and $3,239,156, respectively, for the corresponding periods in 1993.
The increase for the three month period is primarily attributable to a
reduction in total expenses. The decrease for the six month period is
primarily due to lower total Hotel revenues, resulting from a decline in
average occupancy for the six month period from 88.71% in 1993 to 82.19% in
1994. Average occupancy declined largely due to the expiration of a contract
with a major airline in the fourth quarter of 1993. The decrease in occupancy
was partially offset by a $2.23 increase in average room rates for the six
month period from $68.20 in 1993 to $70.43 in 1994.
For the three and six months ended June 30, 1994, unallocated Partnership and
Hotel operating expenses, including depreciation, were $1,851,853 and
$3,593,013, respectively, compared to $1,699,250 and $3,490,879, respectively,
for the corresponding periods in 1993. The increase is largely due to an
increase in insurance expense in 1994 relative to 1993 as a result of an
adjustment made in 1993 for the employee self-insured health insurance program
which was terminated in 1992. The expense was lower in 1993 due to the
reversal of an accrual as of December 31, 1992. The increase is also
attributable to an increase in operating lease expense as a result of payments
being fully expensed in 1994, as well as an increase in depreciation expense
for the period.
For the three and six months ended June 30, 1994, the Partnership generated
$10,426 and $20,343, respectively, in total other income. For the three months
ended June 30, 1993, other expenses exceeded income by $1,279. For the six
month period in 1993, the Partnership generated $29,910 in total other income.
The increase for the three month period is primarily due to a decrease in
interest expense, due to the pay-off of a note payable due to the Carlson
Group. The decrease for the six month period is due to the recognition in 1993
of the remaining balance of an escrow account set up for litigation settlement
from which all distributions had already been paid.
The following charts summarize the Hotel's performance for the six months ended
June 30 of the indicated years.
Average Occupancy Average Room Rate
1994 1993 Variance 1994 1993 Variance
82.19% 88.71% (6.52%) $70.43 $68.20 $2.23
Total Hotel Sales
1994 1993 % Change
$ 6,232,060 $ 6,742,387 (7.6%)
Hotel House Profit
1994 1993 % Change
$ 1,396,350 $ 1,341,650 4.1%
House profit is the Hotel's operating profit prior to payments made for certain
other items including, property taxes, insurance, ground rent, equipment
leases, Partnership general and administrative expenses and the funding of the
FF&E reserve account.
PART II OTHER INFORMATION
Items 1-4 Not applicable
Item 5 Other Information
Effective May 20, 1994, American Express Company ("American
Express") distributed to holders of record of American Express,
shares of Lehman Brothers Holdings Inc. ("Lehman Brothers") common
stock. As a result of this transaction, the Partnership's General
Partner is no longer an affiliate of American Express. This change
is not expected to have any impact on the Partnership.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended June 30, 1994.
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.
MANHATTAN BEACH HOTEL PARTNERS, L.P.
BY: MANHATTAN BEACH COMMERCIAL PROPERTIES III INC.
General Partner
Date: August 12, 1994
BY: s/Jeffrey C. Carter/
Name: Jeffrey C. Carter
Title: Director and President
Date: August 12, 1994
BY: s/Joseph J. Flannery/
Name: Joseph J. Flannery
Title: Vice President and
Chief Financial Officer