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EXHIBIT 99.1
THE PICCADILLY HOTELS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED JUNE 30, 1997
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Independent Auditors' Report
To the Board of Trustees
American Realty Trust
We have audited the accompanying statement of revenues and direct operating
expenses of The Piccadilly Hotels for the year ended June 30, 1997. This
statement of revenues and direct operating expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on this
statement of revenues and direct operating expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and direct operating expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues and
direct operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of revenues and direct operating expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of American Realty Trust) and, as described in Note 1, is
not intended to be a complete presentation of the results of operations.
In our opinion, the statement of revenues and direct operating expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses of The Piccadilly Hotels for the year ended June 30, 1997, in
conformity with generally accepted accounting principles.
Farmer, Fuqua, Hunt & Munselle, P.C.
Dallas, Texas
December 8, 1997
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THE PICCADILLY HOTELS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED JUNE 30, 1997
REVENUES
Room revenues $10,872,023
Food and liquor sales 3,329,040
Other revenues 158,660
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Total revenues 14,359,723
OPERATING EXPENSES
Salaries and benefits 4,158,393
Utilities 845,539
Food costs 897,417
Repairs and maintenance 674,063
Direct expenses 612,961
Linens and supplies 526,087
Property taxes 284,953
House laundry 216,726
Insurance 215,730
Liquor costs 182,573
Music 43,227
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Total direct operating expenses 8,637,669
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REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 5,702,054
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The accompanying notes are an integral part of this statement.
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THE PICCADILLY HOTELS
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
JUNE 30, 1997
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
The Piccadilly Hotels ("the Hotels") consists of four hotels,
two with restaurants, located in Fresno, California. The
Hotels are as follows, The Piccadilly Inn - Shaw, a 194-room
hotel, which includes Oliver's Restaurant, The Piccadilly Inn
- Airport, a 185-room hotel, which includes The Steak & Anchor
Restaurant, The Piccadilly Inn - University, a 190-room
hotel, which includes its catering and restaurant operation,
and The Chateau Inn, a 78-room hotel. During 1997, the Hotels
were owned by The Fansler Foundation, a nonprofit public
benefit corporation.
The accompanying financial statement does not include a
provision for depreciation and amortization, bad debt expense,
interest expense or income taxes. Accordingly, this statement
is not intended to be a complete presentation of the results
of operations.
NOTE 2: ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 3: OTHER REVENUES
Other revenues consist of the following:
Miscellaneous hotel revenues $ 78,674
Telephone revenues (net) 74,630
Gift shop income 5,356
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Total $ 158,660
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NOTE 4: SUBSEQUENT EVENT
The Hotels were sold to American Realty Trust, a Georgia
corporation, on October 16, 1997.