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, 1995
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
ATTN: Andre Anderson 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
Balance Sheets
June 30, December 31,
Assets 1995 1994
Real estate, at cost:
Building $ 47,975,974 $ 47,975,974
Furniture, fixtures and equipment 2,296,218 1,972,493
Leasehold improvements 3,333,141 3,333,141
53,605,333 53,281,608
Less accumulated depreciation and amortization (10,131,039) (9,270,740)
43,474,294 44,010,868
Cash 3,554,063 2,797,178
Restricted cash 234,245 270,489
Accounts receivable 887,931 906,721
Prepaid and other assets 360,075 381,075
Total Assets $ 48,510,608 $ 48,366,331
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued liabilities $ 1,390,006 $ 1,291,771
Due to affiliates 2,245,053 2,121,394
Total Liabilities 3,635,059 3,413,165
Partners' Capital (Deficit):
General Partner (1,821,436) (1,809,793)
Limited Partners (6,975,000 limited
partnership units authorized, issued and
outstanding) 46,696,985 46,762,959
Total Partners' Capital 44,875,549 44,953,166
Total Liabilities and Partners' Capital $ 48,510,608 $ 48,366,331
Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1995
Limited General
Partners Partner Total
Balance at December 31, 1994 $ 46,762,959 $ (1,809,793) $ 44,953,166
Net loss (65,974) (11,643) (77,617)
Balance at June 30, 1995 $ 46,696,985 $ (1,821,436) $ 44,875,549
Statements of Operations
Three months ended Six months ended
June 30, June 30,
Hotel Revenues 1995 1994 1995 1994
Rooms $ 2,161,893 $ 2,073,903 $ 4,293,424 $ 3,981,212
Food and beverage 1,139,027 1,094,121 2,109,554 1,950,931
Telephone 162,464 125,286 317,906 241,374
Other 29,537 33,201 60,957 58,543
Total Revenues 3,492,921 3,326,511 6,781,841 6,232,060
Departmental Expenses
Rooms 606,859 606,575 1,227,590 1,169,039
Food and beverage 895,657 898,676 1,770,757 1,696,489
Telephone 82,907 83,371 162,444 163,273
Other 10,746 9,812 20,748 19,461
Total Expenses 1,596,169 1,598,434 3,181,539 3,048,262
Departmental income 1,896,752 1,728,077 3,600,302 3,183,798
Unallocated Partnership and Hotel Operating Expenses
Advertising and sales 132,308 146,915 277,253 318,611
General and administrative:
Hotel and other 511,113 445,348 997,426 925,415
Partnership 159,371 121,866 277,185 230,063
Utilities and maintenance 298,039 305,091 576,272 555,511
Ground rent 160,124 156,385 315,111 295,249
Management fees 104,476 84,260 190,166 144,786
Property taxes 89,111 110,930 187,622 209,604
Operating leases 36,786 62,261 74,002 75,144
Depreciation and amortization 434,196 418,797 860,299 838,630
1,925,524 1,851,853 3,755,336 3,593,013
Operating loss (28,772) (123,776) (155,034) (409,215)
Other Income:
Interest income 40,395 9,821 73,904 18,923
Other income 2,813 605 3,513 1,420
43,208 10,426 77,417 20,343
Net Income (Loss) $ 14,436 $ (113,350) $ (77,617) $ (388,872)
Net Income (Loss) Allocated:
To the General Partner $ 2,165 $ (17,003) $ (11,643) $ (58,331)
To the Limited Partners 12,271 (96,347) (65,974) (330,541)
$ 14,436 $ (113,350) $ (77,617) $ (388,872)
Per limited partnership unit
(6,975,000 outstanding) $.01 $(.01) $(.01) $(.05)
Statements of Cash Flows
For the six months ended June 30, 1995 and 1994
Cash Flows from Operating Activities: 1995 1994
Net loss $ (77,617) $ (388,872)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 860,299 838,630
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Restricted cash (287,481) (157,789)
Accounts receivable 18,790 (413,846)
Prepaid and other assets 21,000 (7,691)
Accounts payable and accrued liabilities 98,235 (57,303)
Due to affiliates 123,659 141,943
Net cash provided by (used for) operating activities 756,885 (44,928)
Cash Flows from Investing Activities:
Proceeds from restricted cash 323,725 157,789
Additions to real estate (323,725) (8,017)
Net cash provided by investing activities 0 149,772
Net increase in cash 756,885 104,844
Cash at beginning of period 2,797,178 2,183,410
Cash at end of period $ 3,554,063 $ 2,288,254
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of June 30, 1995 and the results of operations and cash flows for
the six months ended June 30, 1995 and 1994 and the statement of changes in
partners' capital (deficit) for the six months ended June 30, 1995. Results of
operations for the periods are not necessarily indicative of the results to be
expected for the full year.
Certain prior year amounts have been reclassified in order to conform to the
current year's presentation.
No significant events have occurred subsequent to fiscal year 1994, 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, 1995, Manhattan Beach Hotel Partners, L.P. (the "Partnership") had
cash of $3,554,063, including cash held at the Property for working capital.
Cash increased by $756,885 from December 31, 1994 due to cash flow generated by
operating activities. 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 reserve account for furniture, fixtures
and equipment ("FF&E") are made over time to protect and maintain the value of
the Partnership's Hotel.
Accounts receivable decreased to $887,931 at June 30, 1995, compared to
$906,721 at December 31, 1994. Accounts payable and accrued liabilities
increased to $1,390,006 at June 30, 1995 compared to $1,291,771 at December 31,
1994. The changes in both accounts receivable and accounts payable primarily
are due to the timing of payments. Due to affiliates increased to $2,245,053
at June 30, 1995 compared to $2,121,394 at December 31, 1994, primarily as a
result of the accrual of property management oversight fees.
The General Partner will evaluate the Partnership's cash flow on an annual
basis. 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 months ended June 30, 1995, the Partnership had net income of
$14,436 compared to a net loss of $113,350 for the three months ended June 30,
1994. For the six months ended June 30, 1995, the Partnership had a net loss
of $77,617 compared to a net loss of $388,872 for the six months ended June 30,
1994. The improvement in 1995 primarily is due to an increase in hotel
revenues, which was partially offset by a smaller increase in unallocated
Partnership and hotel operating expenses.
For the three and six months ended June 30, 1995, the Hotel generated
departmental income of $1,896,752 and $3,600,302, respectively, compared to
$1,728,077 and $3,183,798, respectively, for the corresponding periods in 1994.
The increase in departmental income for the 1995 periods primarily is a result
of higher room rates.
For the three and six months ended June 30, 1995, unallocated Partnership and
Hotel operating expenses, including depreciation, were $1,925,524 and
$3,755,336, respectively, compared to $1,851,853 and $3,593,013, respectively,
for the corresponding periods in 1994. The increases primarily are a result of
higher property insurance premiums at the Hotel, increased legal costs
associated with the pending settlement of the lawsuit filed by Communication
Facility Management Corporation and higher management fees due to higher Hotel
sales and profits.
For the three and six months ended June 30, 1995, the Partnership generated
$43,208 and $77,417, respectively, in total other income, compared to $10,426
and $20,343, respectively, for the corresponding periods in 1994. The increase
primarily is due to an increase in interest income from $9,821 and $18,923 for
the three and six months ended June 30, 1994, respectively, to $40,395 and
$73,904, respectively, for the comparative periods in 1995. The increase in
interest income is due to higher cash balances maintained by the Partnership
and higher interest rates through June 1995.
The following charts summarize the Hotel's performance for the six months
ended June 30 of the indicated years.
Average Occupancy Average Room Rate
1995 1994 Variance 1995 1994 Variance
80.9% 82.2% (1.3%) $77.13 $70.43 $6.70
Total Hotel Sales
1995 1994 % Change
$ 6,781,841 $ 6,232,060 8.8%
Hotel House Profit
1995 1994 % Change
$ 1,805,650 $ 1,396,350 29.3%
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.
Partnership Net Loss
1995 1994 % Change
($ 77,617) ($ 388,872) (80.0%)
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 June 30, 1995.
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 11, 1995 BY: /s/Jeffrey C. Carter
Name: Jeffrey C. Carter
Title: Director, President and Chief
Financial Officer