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, 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: 0-16756
RAMADA ASSURED INCOME ASSOCIATES, L.P.
(Exact name of registrant as specified in its charter)
Delaware 86-0565475
(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 (in thousands)
September 30, December 31,
Assets 1995 1994
Current assets:
Cash and cash equivalents $ 2,248 $ 2,809
Accounts receivable, net of allowance of
$0 in 1995 and $100 in 1994 84 241
Restricted cash (Note 1) 0 300
Prepaid and other assets 0 12
Total Assets $ 2,332 $ 3,362
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable and accrued liabilities $ 99 $ 667
Total Current Liabilities 99 667
Partners' Capital (Deficit):
General Partner (5) (1,612)
Limited Partners (613 limited partnership
units authorized, issued and outstanding) 2,238 4,307
Total Partners' Capital 2,233 2,695
Total Liabilities and Partners' Capital $ 2,332 $ 3,362
Statement of Partners' Capital (Deficit)
For the nine months ended September 30, 1995
(in thousands)
Limited General
Partners Partner Total
Balance at December 31, 1994 $ 4,307 $ (1,612) $ 2,695
Contribution (Note 2) 0 1,600 1,600
Distributions - income tax withholdings (469) 0 (469)
Distribution (Note 2) (1,600) 0 (1,600)
Net income 0 7 7
Balance at September 30, 1995 $ 2,238 $ (5) $ 2,233
Statements of Operations
(in thousands, except per Unit data)
Three months ended Nine months ended
September 30, September 30,
Hotel Revenues 1995 1994 1995 1994
Rooms $ 0 $ 4,071 $ 0 $ 10,354
Food and beverage 0 1,167 0 3,717
Other 61 105 155 276
Total Revenues 61 5,343 155 14,347
Departmental Expenses
Rooms 0 1,433 0 3,856
Food and beverage 0 1,317 0 3,734
Other 0 (217) 0 107
Total Expenses 0 2,533 0 7,697
Departmental income 61 2,810 155 6,650
Unallocated Hotel Operating Expenses
Interest Expense 0 1,664 0 4,949
Advertising and sales 0 360 0 934
General and administrative 17 572 148 1,535
Utilities and maintenance 0 917 0 2,512
Management fees 0 162 0 432
Insurance and Property taxes 0 333 0 1,068
Depreciation and amortization 0 420 0 1,260
17 4,428 148 12,690
Net operating income (loss) before loss
on sales of property and equipment,
provision for real estate loss and
extraordinary item 44 (1,618) 7 (6,040)
Provision for real estate loss 0 (16,661) 0 (16,661)
Net income (loss) before
extraordinary item 44 (18,279) 7 (22,701)
Extraordinary Item:
Forgiveness of indebtedness 0 62,670 0 62,670
Net Income $ 44 $ 44,391 $ 7 $ 39,969
Net Income Allocated:
To the General Partner $ 44 $ (10,004) $ 7 $ (10,048)
To the Limited
Partners 0 54,395 0 50,017
$ 44 $ 44,391 $ 7 $ 39,969
Per limited partnership unit
(613 outstanding)
Net income (loss) before
extraordinary item $ 0 $ (29,819) $ 0 $ (37,033)
Extraordinary item 0 102,235 0 102,235
$ 0 $ 72,416 $ 0 $ 65,202
Statements of Cash Flows
For the nine months ended September 30, 1995 and 1994
(in thousands)
Cash Flows from Operating Activities: 1995 1994
Net income $ 7 $ 39,969
Adjustments to reconcile net income (loss) to
net cash provided by (used for) operating
activities:
Depreciation and amortization 0 1,260
Zero coupon notes discount amortization 0 1,682
Forgiveness of indebtedness 0 (62,670)
Loss on write-down of real estate 0 16,661
Allowance for doubtful accounts 0 (76)
Increase (decrease) in cash arising from
changes in operating assets and
liabilities:
Accounts receivable, net 157 (317)
Prepaid expenses and other assets 12 201
Accounts payable and accrued expenses (568) 392
Accrued interest on debt declared accelerated 0 3,267
Net cash provided by (used for) operating activities (392) 369
Cash Flows from Investing Activities:
Additions to real estate 0 (445)
Restricted cash - Performance Bonus 0 (7)
Restricted cash 300 0
Net cash provided by (used for) investing activities 300 (452)
Cash Flows from Financing Activities:
Capital Contributions by General Partner 1,600 2,900
Distributions paid (2,069) (4,000)
Net cash used for financing activities (469) (1,100)
Net decrease in cash (561) (1,183)
Cash at beginning of period 2,809 2,647
Cash at end of period $ 2,248 $ 1,464
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 0 $ 0
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 September 30, 1995 and the results of operations and cash flows
for the nine months ended September 30, 1995 and 1994 and the statement of
changes in partners' capital (deficit) for the nine months ended September 30,
1995. Results of operations for the periods are not necessarily indicative of
the results to be expected for the full year.
The following significant events have occurred subsequent to fiscal year 1994,
which requires disclosure in this interim report per Regulation S-X, Rule
10-01, Paragraph (a)(5).
Note 1:
On March 1, 1995, $300,000 in escrow funds held in restricted cash was released
to the Partnership.
Note 2:
Pursuant to the January 24, 1994 court order approving the settlement and
dismissing the class action lawsuit, Ramada Inc. was required to pay the
Partnership an additional $4.8 million with respect to the Guaranty in three
installments of $1.6 million each. Prior to 1995, the Partnership received the
first two installments totalling $3.2 million. On March 21, 1995, the
Partnership received the final installment of $1.6 million which satisfied
Ramada, Inc.'s obligation to the Partnership. The Partnership distributed the
final $1.6 million to the class members on May 5, 1995.
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
On October 3, 1994, the Partnership closed on the sale of its six remaining
hotels (collectively, the "Hotels") to affiliates of Ashford Financial
Corporation ("Ashford"). The Hotels sold for $20,250,000, from which
$17,050,000 of the proceeds was utilized to pay the Noteholders, who agreed to
forgive the remaining portion of the Partnership's outstanding debt balance and
accrued interest as of the date of the sale in the amount of $62,670,000. The
balance of the sales proceeds, after transaction expenses, was added to the
Partnership's working capital. As of October 3, 1994, all 10 of the
Partnership's hotels were sold, and the Partnership is currently in the process
of collecting its remaining accounts receivable and settling its remaining
liabilities. In accordance with the terms of the sales contract with Ashford,
the Partnership is obligated to remain the holder of certain of the Hotels'
operating licenses for up to one year following the date of sale. Therefore,
it is currently anticipated that the Partnership will dissolve prior to
year-end 1995.
The Partnership had cash and cash equivalents of $2,248,000 at September 30,
1995, compared with $2,809,000 at December 31, 1994. The decrease is due
primarily to the payment of accounts payable and accrued expenses and the
payment of withholding taxes on behalf of the Limited Partners, which was
partially offset by the release of escrowed funds. Accounts payable and
accrued liabilities decreased to $99,000 at September 30, 1995 from $667,000 at
December 31, 1994, primarily due to the payment of property operating expenses,
audit and legal fees.
On March 1, 1995, $300,000 in escrow funds held in restricted cash was released
to the Partnership.
During 1995, approximately $469,000 in state income taxes was paid by the
Partnership on behalf of the Limited Partners. The payment of taxes will
reduce the Partnership's liquidating distribution.
Pursuant to the January 24, 1994 court order approving the settlement and
dismissing the class action lawsuit, Ramada, Inc. was required to pay the
Partnership an additional $4.8 million with respect to the Guaranty in three
installments of $1.6 million each. Prior to 1995, the Partnership received,
and distributed to class members, the first two installments totalling $3.2
million. On March 21, 1995, the Partnership received the final installment of
$1.6 million, which satisfied Ramada, Inc.'s obligation to the Partnership.
The Partnership distributed the final $1.6 million to class members on May 5,
1995. The General Partner is currently evaluating the Partnership's remaining
cash needs and will make a final liquidating distribution upon settlement of
the Partnership's remaining liabilities.
Results of Operations
Total revenues for the three and nine-month periods ended September 30, 1995
were $61,000 and $155,000, respectively, consisting primarily of interest
income earned on cash balances. Total revenues for the three and nine-month
periods ended September 30, 1994 were $5,343,000 and $14,347,000, respectively,
resulting from operations of the remaining six hotels, which were sold on
October 3, 1994.
Total operating costs and expenses for the three and nine-month periods ended
September 30, 1995 were $17,000 and $148,000, respectively, resulting from
general and administrative expenses. Operating expenses for the three and
nine-month periods ended September 30, 1994 totalled $4,428,000 and
$12,690,000, respectively. The decrease in 1995 is due to the sale of the
remaining six hotels.
PART II OTHER INFORMATION
Items 1 - 5 Not applicable
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended September 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.
RAMADA ASSURED INCOME ASSOCIATES, L.P.
BY: HRH1, INC. General Partner
Date: November 14, 1995
BY: /s/Jeffrey C. Carter
Name: Jeffrey C. Carter
Title: President, Director and Chief
Financial Officer