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, 1997
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
Incorporation or Organization I.R.S. Employer Identification No.
3 World Financial Center, 29th Floor,
New York, 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 At September 30, At December 31,
1997 1996
Assets
Property held for disposition $ 0 $ 36,800,000
Cash and cash equivalents 692,558 2,100,400
Restricted cash 200,000 413,229
Accounts receivable 1,107 1,386,303
Prepaid and other assets 111,102 382,225
Total Assets $ 1,004,767 $ 41,082,157
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued liabilities $ 148,696 $ 1,549,286
Due to affiliates 62,500 63,495
Total Liabilities 211,196 1,612,781
Partners' Capital (Deficit):
General Partner (472,443) (1,634,727)
Limited Partners (6,975,000 limited partnership
units authorized, issued and outstanding) 1,266,014 41,104,103
Total Partners' Capital 793,571 39,469,376
Total Liabilities and Partners' Capital $ 1,004,767 $ 41,082,157
Statement of Partners' Capital (Deficit)
For the nine months ended September 30, 1997
General Limited
Partner Partners Total
Balance at December 31, 1996 $ (1,634,727) $ 41,104,103 $ 39,469,376
Net income 1,564,689 0 1,564,689
Distributions (402,405) (39,838,089) (40,240,494)
Balance at September 30, 1997 $ (472,443) $ 1,266,014 $ 793,571
Statements of Operations
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
Hotel Revenues
Rooms $ 1,384,170 $ 2,611,756 $ 6,721,596 $ 7,588,802
Food and beverage 557,591 1,274,601 3,183,047 3,556,598
Telephone 86,928 171,081 416,672 500,108
Other 52,975 67,896 217,035 154,625
Total Revenues 2,081,664 4,125,334 10,538,350 11,800,133
Departmental Expenses
Rooms 390,801 718,586 1,810,471 2,070,511
Food and beverage 525,141 1,023,132 2,517,119 2,867,443
Telephone 35,237 87,116 179,204 269,027
Other 8,742 13,361 47,326 36,259
Total Expenses 959,921 1,842,195 4,554,120 5,243,240
Departmental Income 1,121,743 2,283,139 5,984,230 6,556,893
Unallocated Partnership and
Hotel Operating Expenses
Advertising and sales 84,511 156,863 424,924 447,400
General and administrative:
Hotel and other 328,229 584,347 1,581,676 1,779,552
Partnership 99,451 100,614 377,021 361,182
Utilities and maintenance 184,163 326,533 740,497 882,116
Ground rent 99,740 206,367 499,619 571,619
Management fees 70,773 138,181 366,015 386,794
Property taxes 49,686 101,058 251,806 295,587
Operating leases 14,107 24,218 81,118 63,033
Depreciation and amortization 0 464,394 0 1,373,017
Provision for loss on property
held for disposition 8,347 0 280,132 0
939,007 2,102,575 4,602,808 6,160,300
Operating Income (loss) 182,736 180,564 1,381,422 396,593
Other Income (Loss)
Interest income 195,651 44,056 253,662 118,942
Other income 715 795 4,280 2,745
Loss on sale of property (74,675) 0 (74,675) 0
121,691 44,851 183,267 121,687
Net Income $ 304,427 $ 225,415 $ 1,564,689 $ 518,280
Net Income Allocated:
To the General Partner $ 304,427 $ 225,415 $ 1,564,689 $ 518,280
To the Limited Partners 0 0 0 0
$ 304,427 $ 225,415 $ 1,564,689 $ 518,280
Net Income per limited partnership unit
(6,975,000 outstanding) $ 0 $ 0 $ 0 $ 0
Statements of Cash Flows
For the nine months ended September 30, 1997 1996
Cash Flows From Operating Activities:
Net income $ 1,564,689 $ 518,280
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 0 1,373,017
Loss on provision for property held
for disposition 280,132 0
Loss on sale of property 74,675 0
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Funding of restricted cash (697,535) (561,990)
Accounts receivable 1,385,196 (425,394)
Prepaid and other assets 214,338 (137,992)
Accounts payable and accrued liabilities (1,400,590) 45,111
Due to affiliates (995) 142,666
Net cash provided by operating activities 1,419,910 953,698
Cash Flows From Investing Activities:
Net proceeds from sale of property 36,782,110 0
Proceeds from restricted cash 910,764 401,855
Additions to real estate (280,132) (401,855)
Net cash provided by investing activities 37,412,742 0
Cash Flows From Financing Activities:
Distributions (40,240,494) (1,409,091)
Net cash used for financing activities (40,240,494) (1,409,091)
Net decrease in cash and cash equivalents (1,407,842) (455,393)
Cash and cash equivalents, beginning of period 2,100,400 4,414,032
Cash and cash equivalents, end of period $ 692,558 $ 3,958,639
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
Manhattan Beach Hotel Partners L.P.'s (the "Partnership") annual 1996 audited
financial statements within Form 10-K.
The unaudited interim financial statements include all normal and reoccurring
adjustments which are, in the opinion of management, necessary to present a
fair statement of financial position as of September 30, 1997 and the results
of operations for the three and nine months ended September 30, 1997 and 1996,
cash flows for the nine months ended September 30, 1997 and 1996, and the
statement of partners' capital (deficit) for the nine months ended
September 30, 1997. 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 1996,
which require disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5):
On March 20, 1997, the Partnership executed a letter of intent to sell its
principal asset, the Radisson Plaza Hotel and Golf Course (the "Hotel"),
located at 1400 Parkview Avenue, Manhattan Beach, California, to a joint
venture of Host Marriott Corporation and Interstate Hotels Corporation.
Interstate Hotels Corporation had been managing the Hotel with its wholly-owned
subsidiary for more than five years.
On August 15, 1997, the Partnership consummated the sale of the Hotel and
related improvements and personalty to HMC/Interstate Manhattan Beach, L.P., a
Delaware limited partnership (the "Buyer"), for $38,250,000 cash, subject to
various closing adjustments and prorations (the "Sale"). The Sale was
accomplished pursuant to a Purchase and Sale Agreement and Joint Escrow
Instructions dated as of June 30, 1997 between the Partnership and the Buyer.
The Partnership received net proceeds from the Sale totaling $36,782,110, and
the transaction resulted in a loss on sale of $74,675, which is reflected in
the Partnership's statement of operations for the period ending September 30,
1997. As a result of the Sale, the Partnership is expected to terminate by
year-end 1997.
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
On March 20, 1997, the Partnership executed a letter of intent to sell its
principal asset, the Radisson Plaza Hotel and Golf Course (the "Hotel"),
located at 1400 Parkview Avenue, Manhattan Beach, California, to a joint
venture of Host Marriott Corporation and Interstate Hotels Corporation.
Interstate Hotels Corporation had been managing the Hotel with its
wholly-owned subsidiary for more than five years.
On August 15, 1997, the Partnership consummated the sale of the Hotel and
related improvements and personalty to HMC/Interstate Manhattan Beach, L.P., a
Delaware limited partnership (the "Buyer"), for $38,250,000 cash, subject to
various closing adjustments and prorations (the "Sale"). The Sale was
accomplished pursuant to a Purchase and Sale Agreement and Joint Escrow
Instructions dated as of June 30, 1997 between the Partnership and the Buyer.
The Partnership received net proceeds from the Sale totaling $36,782,110, and
the transaction resulted in a loss on sale of $74,675, which is reflected in
the Partnership's statement of operations for the period ending September 30,
1997.
On September 15, 1997, the Partnership paid a distribution to limited partners
in the amount of $5.71 per Unit, representing most of the net proceeds from the
Sale plus cash flow from operations generated during 1997. As a result of the
Sale, the General Partner is in the process of winding-up the affairs of the
Partnership and expects to terminate the Partnership by the end of 1997.
Certain funds have been set aside which are believed to be sufficient to
provide for the Partnership's liabilities and expenses through termination of
the Partnership, and to establish an adequate reserve for contingencies. Any
cash remaining after payment of these items and establishment of such reserves
will be distributed in accordance with the Partnership Agreement after
termination of the Partnership.
At September 30, 1997, the Partnership held cash and cash equivalents of
$692,558, compared to $2,100,400 at December 31, 1996. The decrease is due to
cash distributions to limited partners exceeding net proceeds from the Sale.
Such cash balances are expected to be sufficient to meet the anticipated cash
requirements of the Partnership through liquidation. Pursuant to the management
agreement for the Hotel, contributions to the account for furniture, fixtures
and equipment ("FF&E reserve account") were to be made over time to protect and
maintain the value of the Hotel. Restricted cash was $200,000 at September 30,
1997, compared to $413,229 at December 31, 1996. The decrease is due to the
transfer of the FF&E reserve account to the Partnership's operating account
following the Sale. The 1997 balance consists primarily of an escrow account
funded by the Partnership pursuant to the terms of the Sale.
Accounts receivable decreased to $1,107 at September 30, 1997, compared to
$1,386,303 at December 31, 1996. Accounts payable and accrued liabilities
decreased to $148,696 at September 30, 1997, compared to $1,549,286 at December
31, 1996. The changes in accounts receivable and accounts payable and accrued
liabilities are due primarily to the Sale and differences in the timing of
payments. Prepaid and other assets decreased to $111,102 at September 30,
1997, compared to $382,225 at December 31, 1996, primarily due to a decrease in
prepaid inventory and other property expenses. Due to affiliates was $62,500
at September 30, 1997, largely unchanged from $63,495 at December 31, 1996.
Results of Operations
For the three- and nine-month periods ended September 30, 1997, the
Partnership had net income of $304,427 and $1,564,689, respectively,
compared with net income of $225,415 and $518,280, respectively, for the three-
and nine-month periods ended September 30, 1996. The increases are primarily
due to decreases in unallocated Partnership and Hotel operating expenses due to
the Sale on August 15, 1997, when operations on behalf of the Partnership
ceased, and an increase in other income, which was partially offset by a
decrease in departmental income due to the Sale.
For the three- and nine-month periods ended September 30, 1997, the Hotel
generated departmental income of $1,121,743 and $5,984,230, respectively,
compared to $2,283,139 and $6,556,893, respectively, for the three- and
nine-month periods ended September 30, 1996. The decreases in departmental
income for the 1997 periods are due to decreases in all Hotel revenues and all
departmental expenses as a result of the Sale on August 15, 1997, when
operations on behalf of the Partnership ceased.
For the three- and nine-month periods ended September 30, 1997, unallocated
Partnership and Hotel operating expenses were $939,007 and $4,602,808,
respectively, compared to $2,102,575 and $6,160,300, respectively, for the
corresponding periods in 1996. The 1996 balances include depreciation and
amortization, whereas during the 1997 periods, the Hotel was no longer being
depreciated due to the anticipated Sale. The decreases for the 1997 periods
primarily are due to decreases in advertising and sales expenses, Hotel and
other general and administrative expenses, ground rent, management fees,
property taxes, operating leases and depreciation and amortization as a result
of the Sale on August 15, 1997, when operations on behalf of the Partnership
ceased. These decreases were partially offset by a loss on property held for
disposition, which represents FF&E additions being expensed as a result of the
reclassification of the Partnership's real estate to "Property held for
disposition" in anticipation of the Sale.
For the three- and nine-month periods ended September 30, 1997, the Partnership
generated total other income of $121,691 and $183,267, respectively, compared
to $44,851 and $121,687, respectively, for the corresponding periods in 1996.
The increases for the 1997 periods are due primarily to increases in interest
income as a result of higher cash balances being maintained by the Partnership
due to the Sale. These increases were partially offset by the loss on sale of
property.
Part II Other Information
Item 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 -
On August, 27, 1997, the Partnership filed a Form 8K reporting
that on August 15, 1997, the Partnership executed a sale of
its principal asset, the Radisson Plaza Hotel and Golf Course,
located at 1400 Parkview Avenue, Manhattan Beach, California,
to HMC/Interstate Manhattan Beach, L.P., a Delaware limited
partnership.
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 13, 1997
BY: /s/ Jeffrey C. Carter
President, Director and
Chief Financial Officer