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 September 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 September 30, 1994 and
December 31, 1993 3
Statements of Operations for the three and
nine months ended September 30, 1994 and 1993 4
Statement of Partners' Capital (Deficit) for the
nine months ended September 30, 1994 5
Statements of Cash Flows for the nine months
ended September 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
September 30, December 31,
Assets 1994 1993
Real estate, at cost:
Building $ 47,975,974 $ 47,975,974
Furniture, fixtures and equipment 12,026,961 12,010,920
Leasehold improvements 3,333,141 3,333,141
63,336,076 63,320,035
Less accumulated depreciation and amortization (18,991,307) (17,730,553)
44,344,769 45,589,482
Cash 2,128,340 2,183,410
Restricted Cash 213,765 0
Accounts receivable 1,067,657 565,945
Prepaid and other assets 521,295 341,743
Total Assets $ 48,275,826 $ 48,680,580
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued liabilities $ 1,330,473 $ 1,634,598
Due to affiliates 2,036,304 1,847,804
Total Liabilities 3,366,777 3,482,402
Partners' Capital (Deficit):
General Partner (1,816,410) (1,773,041)
Limited Partners (6,975,000 limited
partnership units authorized, issued
and outstanding) 46,725,459 46,971,219
Total Partners' Capital 44,909,049 45,198,178
Total Liabilities and Partners' Capital $ 48,275,826 $ 48,680,580
Statements of Operations
Three months ended Nine months ended
September 30, September 30,
Hotel Revenues 1994 1993 1994 1993
Rooms $ 2,307,591 $ 2,061,763 $ 6,288,803 $ 6,223,391
Food and beverage 1,103,070 1,050,835 3,054,001 3,225,886
Telephone 129,250 102,929 370,624 315,507
Other 51,560 47,594 110,103 240,724
Total Revenues 3,591,471 3,263,121 9,823,531 10,005,508
Departmental Expenses
Rooms 607,489 586,389 1,776,528 1,840,326
Food and beverage 854,663 907,747 2,551,152 2,801,337
Telephone 77,034 80,993 240,307 261,267
Other 7,897 45,816 27,358 221,246
Total Expenses 1,547,083 1,620,945 4,595,345 5,124,176
Departmental income 2,044,388 1,642,176 5,228,186 4,881,332
Unallocated Partnership and Hotel Operating Expenses
Advertising and sales 145,363 180,691 463,974 534,934
General and administrative:
Hotel and other 657,297 630,232 1,877,961 1,788,459
Partnership 110,844 111,092 340,907 373,123
Utilities and maintenance 362,534 313,001 918,045 851,501
Management fees 114,752 57,105 259,538 200,097
Property taxes 106,652 100,660 316,256 297,421
Operating leases 37,463 15,609 112,607 49,511
Depreciation and amortization 422,124 414,026 1,260,754 1,218,249
1,957,029 1,822,416 5,550,042 5,313,295
Operating income (loss) 87,359 (180,240) (321,856) (431,963)
Other Income (Expense):
Interest income 11,829 9,800 30,752 27,405
Other income 555 950 1,975 34,454
Interest expense 0 (9,754) 0 (30,953)
12,384 996 32,727 30,906
Net Income (Loss) $ 99,743 $ (179,244) $ (289,129) $ (401,057)
Net Income (Loss) Allocated:
To the General Partner $ 14,962 $ (26,886) $ (43,369) $ (60,159)
To the Limited Partner 84,781 (152,358) (245,760) (340,898)
$ 99,743 $ (179,244) $ (289,129) $ (401,057)
Per limited partnership unit
(6,975,000 outstanding) $.01 $(.02) $(.04) $(.05)
Statement of Partners' Capital (Deficit)
For the nine months ended September 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 (245,760) (43,369) (289,129)
Balance at September 30, 1994 $ 46,725,459 $ (1,816,410) $ 44,909,049
Statements of Cash Flows
For the nine months ended September 30, 1994 and 1993
Cash Flows from Operating Activities: 1994 1993
Net loss $ (289,129) $ (401,057)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 1,260,754 1,218,249
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Accounts receivable (501,712) 196,689
Prepaid and other assets (179,552) (79,079)
Accounts payable and accrued liabilities (304,125) (139,890)
Due to affiliates 188,500 166,266
Net cash provided by operating activities 174,736 961,178
Cash Flows from Investing Activities:
Restricted cash, net (213,765) 314,985
Additions to real estate (16,041) (490,905)
Net cash used for investing activities (229,806) (175,920)
Cash Flows from Financing Activities:
Due to Radisson/Carlson Group 0 (56,401)
Net cash used for financing activities 0 (56,401)
Net increase (decrease) in cash (55,070) 728,857
Cash at beginning of period 2,183,410 1,475,890
Cash at end of period $ 2,128,340 $ 2,204,747
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 0 $ 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 September 30, 1994 and the
results of operations, changes in partners' capital (deficit), and cash flows
for the nine 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 September 30, 1994, Manhattan Beach Hotel Partners, L.P. (the "Partnership")
had cash of $2,128,340 including cash held at the Property for working capital.
Cash decreased by $55,070 from December 31, 1993 due to the use of cash for
fixed asset additions and an increase in the restricted cash balance which was
partially offset by an increase in cash from operating activities of $174,736.
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 $1,067,657 at September 30, 1994 compared to
$565,945 at December 31, 1993. Accounts payable and accrued liabilities
decreased to $1,330,473 at September 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 $2,036,304 at September 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 third 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 nine months ended September 30, 1994, the Partnership had net
income of $99,743 and a net loss of $289,129, respectively, compared to a net
loss for the three and nine months ended September 30, 1993 of $179,244 and
$401,057, respectively. The improvement for both the three and nine month
periods is primarily due to an increase in departmental income which was
partially offset by an increase in unallocated Partnership and Hotel operating
expenses, including depreciation.
For the three and nine months ended September 30, 1994, the Hotel generated
departmental income of $2,044,388 and $5,228,186, respectively, compared to
$1,642,176 and $4,881,332, respectively, for the corresponding periods in 1993.
The increase for the three month period is primarily attributable to an
increase in departmental revenue, which includes rooms, food and beverage,
telephone and other revenues, as well as a decrease in departmental expenses,
as a result of a decline in food and beverage, telephone and other expenses.
The increase for the nine month period is primarily due to a decline in all
departmental expenses which was partially offset by a decrease in total
revenue, resulting from decreases in food and beverage and other revenue.
For the three and nine months ended September 30, 1994, unallocated Partnership
and Hotel operating expenses, including depreciation, were $1,957,029 and
$5,550,042, respectively, compared to $1,822,416 and $5,313,295, 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 management fees, operating lease expense and
depreciation expense for the period.
For the three and nine months ended September 30, 1994, the Partnership
generated total other income of $12,384 and $32,727, respectively, compared to
$996 and $30,906 for the corresponding periods in 1993. The increase for both
the three and nine month periods is primarily due to a decrease in interest
expense, due to the pay-off of a note payable due to the Carlson Group.
The following charts summarize the Hotel's performance for the nine months ended
September 30 of the indicated years.
Average Occupancy Average Room Rate
1994 1993 Variance 1994 1993 Variance
85.4% 85.7% (0.3%) $70.96 $69.94 $1.02
Total Hotel Sales
1994 1993 % Change
$9,823,531 $10,005,508 (1.8%)
Hotel House Profit
1994 1993 % Change
$2,461,123 $1,987,608 23.8%
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 1-5 Not applicable
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 September 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: November 11, 1994
BY: s/Jeffrey C. Carter/
Name: Jeffrey C. Carter
Title: Director, President and
Chief Financial Officer