1
FORM 10-Q
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, DC 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: March 31, 1997
Commission File Number: 2-67456
SUPER 8 MOTELS NORTHWEST I
Washington 91-1101310
PART 1
Financial Information
Item 1. Financial Statements
See attached unaudited March 31, 1997 Financial Statements and the partnership's
balance sheet for the year ended December 31, 1996. The Statement of Cash Flows
is omitted from the attachment and is presented as follows:
PERIOD ENDED MARCH 31,
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Revenues and other income received in cash $ 575,498 $ 543,734
Operating expenses paid in cash (362,431) (370,396)
Interest paid (23,544) (32,019)
--------- ---------
Net cash provided by operating activities 189,523 141,319
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment -- (97,554)
--------- ---------
Net cash used by investing activities -- (97,554)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on debt (10,869) (10,662)
Distributions to partners (151,513) (151,515)
--------- ---------
Net cash used by financing activities (162,382) (162,177)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
27,141 (118,412)
CASH AND CASH EQUIVALENTS, beginning of period 544,684 222,146
========= =========
CASH AND CASH EQUIVALENTS, end of period $ 571,825 $ 103,734
========= =========
2
PERIOD ENDED MARCH 31,
1997 1996
--------- ---------
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net income $ 128,215 $ 126,790
--------- ---------
Adjustments to reconcile net income to net cash
provided by operating
activities:
Depreciation and amortization 29,208 29,208
Change in assets and liabilities
Accounts receivable 8,661 (5,060)
Inventory -- (63)
Prepaid expenses 4,783 11,408
Deposits -- (11,599)
Accounts payable 81,557 (14,762)
Accrued expenses (62,901) 5,397
--------- ---------
61,308 14,529
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 189,523 $ 141,319
========= =========
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
See attached First Quarter 3/31/97 Update from the Issuer delivered to its
limited partners.
PART 2
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 to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
None.
3
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.
SUPER 8 MOTELS NORTHWEST I
a Washington limited partnership
By: Date: May 7, 1997
-------------------------------------
Gerald L. Whitcomb, General Partner
4
SUPER 8 NORTHWEST I
BALANCE SHEET
MARCH 31, 1997 AND 1996
(Unaudited)
ASSETS
1997 1996
----------- -----------
CURRENT ASSETS
Cash $ 571,825 $ 103,734
Accounts receivable 12,857 24,220
Inventory 42,093 42,340
Prepaid expenses 2,428 1,914
----------- -----------
TOTAL CURRENT ASSETS 629,203 172,208
PROPERTY AND EQUIPMENT
Land 2,053,409 2,053,409
Land Improvements 79,671 79,671
Buildings 2,836,155 2,915,719
Equipment, furniture and fixtures 1,021,107 1,017,992
Construction in progress 0 0
----------- -----------
Subtotal 5,990,342 6,066,791
Less accumulated depreciation (2,050,500) (1,962,165)
----------- -----------
TOTAL PROPERTY AND EQUIPMENT, NET 3,939,842 4,104,626
OTHER ASSETS
Franchise fees 30,000 30,000
Appraisal fees and loan fees 15,000 15,000
----------- -----------
Subtotal 45,000 45,000
Less accumulated amortization (26,625) (22,125)
----------- -----------
Subtotal 18,375 22,875
Deposits 34,345 45,309
------------ -----------
TOTAL OTHER ASSETS 52,720 68,184
TOTAL ASSETS $ 4,621,765 $ 4,345,018
=========== ===========
LIABILITIES AND PARTNER'S CAPITAL EQUITY
1997 1996
----------- -----------
CURRENT LIABILITIES
Accounts payable - trade $ 117,964 $ 83,595
Accounts payable - affiliates 30,706 27,447
Accrued expenses 25,405 89,697
Current portion of long-term debt 46,269 41,893
----------- -----------
TOTAL CURRENT LIABILITIES 220,344 242,632
NONCURRENT LIABILITIES
Long-term debt, net of current portion shown above 1,320,653 1,365,894
Property management fees 605,348 605,348
----------- -----------
TOTAL NONCURRENT LIABILITIES 1,926,001 1,971,242
PARTNERS' CAPITAL EQUITY
General partner 346,784 210,292
Limited partners 2,128,636 1,920,852
----------- -----------
TOTAL PARTNERS' CAPITAL EQUITY 2,475,420 2,131,144
----------- -----------
$ 4,621,765 $ 4,345,018
=========== ===========
5
SUPER 8 NORTHWEST I
STATEMENT OF INCOME
FOR THE THREE MONTHS ENDING MARCH 31, 1997 AND 1996
(Unaudited)
1997 1996
-------- --------
SALES
Rooms $535,832 $521,875
Other 25,692 25,220
-------- --------
TOTAL SALES 561,524 547,095
DIRECT OPERATING EXPENSES
Payroll and related expenses 124,337 107,281
Supplies and maintenance 28,714 34,817
Utilities 40,730 39,058
Other 6,080 7,180
-------- --------
TOTAL DIRECT OPERATING EXPENSES 199,861 188,336
INDIRECT OPERATING EXPENSES
Advertising and promotion 15,294 13,761
Bank and credit card charges 7,765 7,859
Insurance 7,633 7,133
Property and business taxes 30,324 31,182
Other 2,929 2,412
-------- --------
TOTAL INDIRECT OPERATING EXPENSES 63,945 62,347
ADMINISTRATIVE AND GENERAL EXPENSES
Administrative service fees 42,513 40,051
Franchise fees 21,433 20,828
Property management fees 28,076 27,354
Professional services 8,403 7,215
Other 4,095 4,605
-------- --------
TOTAL ADMINISTRATIVE AND GENERAL
EXPENSES 104,520 100,053
FIXED CHARGES
Amortization 1,125 1,125
Depreciation 28,084 28,083
Interest 31,044 32,019
Lease expense 10,043 10,043
-------- --------
70,296 71,270
-------- --------
INCOME FROM OPERATIONS 122,902 125,091
OTHER INCOME
Interest income 3,963 349
Gain on sale of asset 0 0
Rental income 1,350 1,350
-------- --------
TOTAL OTHER INCOME 5,313 1,699
-------- --------
NET INCOME (LOSS) $128,215 $126,790
======== ========
This statement subject to change after audit to be performed by Moss Adams,
CPA's.
6
VOL. 17 NO. 1 /APRIL 30, 1997 FIRST QUARTER 1997
UPDATE
SUPER 8 MOTELS NORTHWEST I
NATIONAL NEWS
DOMINANCE IN ECONOMY LODGING CONTINUES IN '97
The first quarter of 1997 was one of continuing strength throughout the nation.
As the fastest-growing motel chain in North America, Super 8 now has over 1,500
motels operating in 48 states and 6 Canadian provinces. The additional 260
properties currently under construction will provide for even greater dominance
by Fall.
D.K. Shiffiet, the leading consumer research firm in the hospitality industry,
recently confirmed that Super 8 leads all other brands in the economy segment
both in system growth rate and in the number of reservations secured through the
toll-free reservation system. Rooms reserved through Superline stand at a
record-breaking 43%.
Completing the picture is a look at the VIP Club, clearly an industry stand-out
in customer-retention programs. The Club now boasts over 4.4 million members,
accounting for 51% of Super 8 reservations in 1996.
SUPER 8 UPHOLDS QUALITY
Following its commitment made one year ago, Super 8 has continued to be vigilant
in quality assurance by terminating 14 motels in 1996, while still maintaining
dynamic growth. "Super 8 will not tolerate motels that jeopardize the quality
image of the system. With quarterly inspections at motels, Super 8 continues to
have the most consistent quality image among large chains in America," said
Super 8 President Bob Weller.
On a positive note, there were several cases where reinstatement of terminated
properties was granted based upon extensive renovations and upgrades reviewed
and approved by Super 8. The owners of these reinstated motels recognized Super
8's competitive advantage and decided to comply with Super 8's quality standards
in order to remain in the system. Super 8 will continue to be vigilant with its
quality assurance policies.
NATIONAL ADVERTISING AND PROMOTIONS FOR 1997
Super 8 Motels will continue its NASCAR sponsorship with Bill Elliott
Motorsports in 1997. Advertising space has been acquired on the TV panel located
on the rear of Elliott's Winston Cup car #94. Other sponsors on the car include
Ford Thunderbird and McDonald's restaurants.
In order to increase television exposure, Super 8 will air its commercials on
the highly-viewed NBA playoff games this Spring. A total of 18 games is slotted
to reach the 70% male market.
7
A thirteen-week schedule from April to June has been set on "Imus in the
Morning," a national radio program that airs during morning drive-time in 72
markets. Don Imus, the hottest radio personality in America today, covers
politics, current events, and celebrity interviews. Imus will do a live read of
five 30-second spots per week.
NEW SUPER 8 OPENINGS OF INTEREST
**San Diego at Sea World **Tucson, Arizona/Downtown and West **Baton Rouge,
Louisiana **Daytona Beach, Florida **Pittsburgh, Pennsylvania **Memphis,
Tennessee **Austin, Texas
REGIONAL NEWS
On April 7, key members of Peninsula Management Northwest traveled to REDMOND,
OREGON, for a Redmond Chamber of Commerce "Business After Hours" function, held
at the construction site of the newest Northwest Super 8 Motel. In addition to
an excellent turnout of Chamber members, Peninsula was joined by the Redmond
Mayor, Rotary President, and representatives of numerous area developers. Tours
of the facility were offered, and PMNW sales/marketing staff enlightened
attendees as to the amenities of the new Super 8.
This 85-room property features an elevator, central corridor, indoor pool and
spa, guest laundry facilities, electronic door locks, and a meeting room that
seats approximately 30 people. Adjacent to the property is a family-style
restaurant, which will complement the Super 8 operation well. Look for this
motel to open on June 27 for a brisk Summer season.
Construction continues on a new 81-room Super 8 Motel, which will be located
just off the I-5 corridor in WOODBURN, OREGON. The property will feature all the
amenities mentioned above, including a complementary continental breakfast,
indoor pool and spa, and a handicapped-accessible suite. A Fall opening date
will be announced in the next edition of the Update.
SUPER 8 MOTELS NORTHWEST I
First quarter 1997 operational results for Super 8 Motels Northwest I show Total
Sales increased by $14,428 over the first quarter of 1996. This is an increase
of 2.6%.
Federal Way occupancy decreased by about 3%, while its average daily rate
increased by $1.46 per rented room. The net result was a slight decline in
revenues. On the other hand, SeaTac occupancy remained essentially even with
1996, while average daily rate increased by $3.60, which resulted in an increase
in room sales of over $20,000. The result for the partnership is that Net Income
increased slightly in 1997 to $128,215 compared to $126,760 in 1996.
8
First quarter distribution is in the amount of $25.00 per partnership unit. This
represents a 10% annualized return on your original partnership investment.
Enclosed you will find occupancy and room rate charts, first quarter unaudited
financial statements, and a copy of the December 31,1996 year-end audited
financial statements as prepared by the CPA firm of Moss Adams.
The partnership informational Meeting was held at SeaTac on April 14th and at
Portland on April 16th. Partner attendance was very good and we appreciate the
interest. One of the comments at the meeting was that once again there had been
offers made by various liquidity funds to purchase units at far below the
original unit cost of $1,000. If you find a need to dispose of your units, you
are urged to call your NASD registered securities representative or the
partnership office so that you may be assisted in receiving a fair value for
your units.
The official Business Meeting for Super 8 Motels Northwest I will be held on
Thursday, June 12, 1997, at 10:30 a.m. at the Corporate Office of The Peninsula
Group located at 7515 Terminal Street S.W., Tumwater, Washington.
Thank you for your continuing support of Super 8 Motels Northwest I, and
remember: If your summer plans include travel, CALL SUPERLINE AT 1-800-800-8000
TO RESERVE YOUR ROOM AT ANY SUPER 8 LOCATED IN THE UNITED STATES AND CANADA.
The Official Publication of
THE PENINSULA GROUP, INC.
7515 Terminal St. SW, Tumwater, WA 98501 / (360) 943-8000
Owners and operators of America's finest economy lodging serving 23 convenient
Northwest locations: ALASKA: Anchorage - Fairbanks - Juneau - Ketchikan OREGON:
Ashland - Bend - Corvallis - Grants Pass - Klamath Falls - Portland
International Airport - *Redmond - *Roseburg - Salem - Wilsonville - *Woodburn
WASHINGTON: Bremerton - Ellensburg - Federal Way Ferndale - Kelso - Kennewick -
Moses Lake - Olympia/Lacey - Port Angeles - Sea-Tac International Airport -
Walla Walla - Yakima
*Coming soon
9
SUPER 8 MOTELS NORTHWEST I
BALANCE SHEET
- --------------------------------------------------------------------------------
ASSETS
DECEMBER 31,
-----------------------------
1996 1995
----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 544,684 $ 222,146
Accounts receivable, trade 21,518 15,718
Accounts receivable, affiliates -- 3,442
Inventory 42,093 42,277
Prepaid expenses 7,212 13,322
----------- -----------
Total current assets 615,507 296,905
----------- -----------
PROPERTY AND EQUIPMENT, at cost
Land 2,053,409 2,053,409
Land improvements 79,671 79,671
Buildings 2,836,155 2,818,164
Equipment, furniture and fixtures 1,021,108 1,017,991
----------- -----------
5,990,343 5,969,235
Less accumulated depreciation (2,022,417) (1,934,081)
----------- -----------
Total property and equipment 3,967,926 4,035,154
----------- -----------
OTHER ASSETS
Loan fees 15,000 15,000
Franchise fees 30,000 30,000
----------- -----------
45,000 45,000
Less accumulated amortization (25,500) (21,000)
----------- -----------
19,500 24,000
Deposits 34,343 33,710
----------- -----------
Total other assets 53,843 57,710
----------- -----------
$ 4,637,276 $ 4,389,769
=========== ===========
10
SUPER 8 MOTELS NORTHWEST I
BALANCE SHEET
- --------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' EQUITY
DECEMBER 31,
--------------------------
1996 1995
---------- ----------
CURRENT LIABILITIES
Accounts payable, trade $ 37,503 $ 49,240
Accounts payable, affiliates 29,609 76,564
Accrued expenses 88,307 84,299
Current portion of long-term debt 46,000 38,000
---------- ----------
Total current liabilities 201,419 248,103
---------- ----------
LONG-TERM DEBT, net of current portion
shown above 1,331,791 1,380,449
---------- ----------
ACCRUED PROPERTY MANAGEMENT FEES 605,348 605,348
---------- ----------
PARTNERS' EQUITY
General partner's equity 329,065 192,789
Limited partners' equity (authorized, issued and
outstanding 6,000 units) 2,169,653 1,963,080
---------- ----------
2,498,718 2,155,869
---------- ----------
$4,637,276 $4,389,769
========== ==========