-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jq8BA4q+rm7p/6So61MlgfsYyUm/qSBwx13m4bFhqIePiA9qAbGef9jWzxA4pWnv 3nE0FZL7H5xXuF7SCzxN4A== 0000314733-97-000019.txt : 19971125 0000314733-97-000019.hdr.sgml : 19971125 ACCESSION NUMBER: 0000314733-97-000019 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970910 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971124 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOST MARRIOTT CORP/MD CENTRAL INDEX KEY: 0000314733 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 530085950 STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-05664 FILM NUMBER: 97727175 BUSINESS ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 BUSINESS PHONE: 3013809000 MAIL ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 FORMER COMPANY: FORMER CONFORMED NAME: HOST MARRIOTT CORP DATE OF NAME CHANGE: 19931108 FORMER COMPANY: FORMER CONFORMED NAME: MARRIOTT CORP DATE OF NAME CHANGE: 19920703 8-K/A 1 CHESAPEAKE HOTEL, L.P. ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported) September 10, 1997 ------------------------- HOST MARRIOTT CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware (State or Other Jurisdiction of Incorporation) 1-5664 53-0085950 (Commission File Number) (I.R.S. Employer Identification Number) 10400 Fernwood Road, Bethesda, Maryland 20817 (Address of Principal Executive Offices) (Zip Code) ---------------------------- Registrant's Telephone Number, Including Area Code (301) 380-9000 (Former Name or Former Address, if changed since last report.) ================================================================================ FORM 8-K/A ITEM 2. ACQUISITIONS OR DISPOSITIONS OF ASSETS The Registrant hereby amends its Current Report on Form 8-K dated September 10, 1997 by filing financial statements of an acquired business, Chesapeake Hotel Limited Partnership, and certain pro forma financial information for Host Marriott Corporation. Certain matters discussed within this Form 8-K/A are forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 and as such may involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of Host Marriott Corporation to be different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although Host Marriott Corporation believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. These risks are detailed from time-to-time in the company's filings with the Securities and Exchange Commission. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Chesapeake Hotel Limited Partnership: Page ---- Condensed Balance Sheet as of September 12, 1997 (unaudited) 3 Condensed Statements of Operations for the thirty-six weeks ended September 12, 1997 and September 6, 1996 (unaudited) 4 Condensed Statements of Cash Flows for the thirty-six weeks ended September 12, 1997 and September 6, 1996 (unaudited) 5 Notes to Condensed Financial Statements (unaudited) 6 The Registrant previously filed audited financial statements as of December 31, 1996 and 1995 and unaudited condensed financial statements as of June 20, 1997 on its Current Report on Form 8-K dated September 10, 1997. (b) Pro Forma financial information of the Registrant reflecting the acquisition of Chesapeake Hotel Limited Partnership as of and for the thirty-six weeks ended September 12, 1997 and for the fiscal year ended January 3, 1997 (unaudited): Page ---- Pro Forma Condensed Consolidated Financial Data 8 Pro Forma Condensed Consolidated Statement of Operations for the thirty-six weeks ended September 12, 1997 10 Pro Forma Condensed Consolidated Statement of Operations for the fiscal year ended January 3, 1997 11 Notes to Pro Forma Condensed Consolidated Financial Data 12 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 hereunto duly authorized. HOST MARRIOTT CORPORATION By: /s/ Donald D. Olinger -------------------------------- Donald D. Olinger Senior Vice President and Corporate Controller Date: November 24, 1997 -2- Chesapeake Hotel Limited Partnership Condensed Balance Sheet (Unaudited)
September 12, 1997 ------------- (in thousands) ASSETS Property and equipment, net............................. $ 126,896 Due from Marriott International, Inc.................... 2,365 Other assets............................................ 497 Cash and cash equivalents............................... 7,622 ----------- $ 137,380 =========== LIABILITIES AND PARTNERS' DEFICIT Mortgage debt........................................... $ 2,182 Debt payable to Host Marriott Corporation and affiliates........................... 196,656 Note and other payables due to Host Marriott Corporation and affiliates.................. 37,129 Due to Willmar Distributors, Inc........................ 8,049 Due to Marriott International, Inc...................... 161,045 Accounts payable and accrued interest................... 3,956 ----------- Total Liabilities.................................. 409,017 ----------- PARTNERS' DEFICIT General Partner......................................... (2,670) Limited Partners........................................ (268,967) ----------- Total Partners' Deficit............................ (271,637) ----------- $ 137,380 ===========
See Notes to Condensed Financial Statements. -3- Chesapeake Hotel Limited Partnership Condensed Statements of Operations (Unaudited)
Thirty-Six Weeks Ended ------------------------------ September 12, September 6, 1997 1996 ------------- ------------ (in thousands) REVENUES.................................... $ 35,343 $ 29,657 ----------- ----------- OPERATING COSTS AND EXPENSES Interest................................. 21,636 20,512 Depreciation and amortization............ 8,988 9,394 Incentive management fee................. 6,682 5,442 Property taxes........................... 4,377 4,310 Base management fee...................... 3,077 2,750 Ground rent, insurance and other......... 2,647 2,771 ----------- ----------- 47,407 45,179 ----------- ----------- NET LOSS.................................... $ (12,064) $ (15,522) =========== ===========
See Notes to Condensed Financial Statements. -4- Chesapeake Hotel Limited Partnership Condensed Statements of Cash Flows (Unaudited)
Thirty-Six Weeks Ended ------------------------------ September 12, September 6, 1997 1996 ------------- ------------ (in thousands) OPERATING ACTIVITIES Net loss................................ $ (12,064) $ (15,522) Noncash items........................... 24,307 22,668 Changes in operating accounts........... 573 1,007 ----------- ---------- Cash provided by operations.......... 12,816 8,153 ----------- ---------- INVESTING ACTIVITIES Additions to property and equipment..... (667) (3,377) ----------- ---------- FINANCING ACTIVITIES Repayment of Willmar loan............... (5,000) (2,853) Repayment of mortgage and other debt.... (3,834) (3,023) Saddle Brook renovation loan............ -- 2,139 ----------- ---------- Cash used in financing activities.... (8,834) (3,737) ----------- ---------- INCREASE IN CASH AND CASH EQUIVALENTS........................ 3,315 1,039 CASH AND CASH EQUIVALENTS at beginning of period.................. 4,307 4,468 ----------- ---------- CASH AND CASH EQUIVALENTS at end of period........................ $ 7,622 $ 5,507 =========== ========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest.................. $ 10,465 $ 10,267 =========== ========== NON-CASH INVESTING ACTIVITIES Additions to property and equipment through capital lease...... $ 5,288 $ 5,417 =========== ==========
See Notes to Condensed Financial Statements. -5- Chesapeake Hotel Limited Partnership Notes to Condensed Financial Statements (Unaudited) 1. The accompanying condensed financial statements have been prepared by Chesapeake Hotel Limited Partnership (the "Partnership") without audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with generally accepted accounting principles have been condensed or omitted from the accompanying statements. The Partnership believes the disclosures made are adequate to make the information presented not misleading. However, the condensed financial statements should be read in conjunction with the Partnership's audited financial statements for the year ended December 31, 1996. Interim results are not necessarily indicative of fiscal year performance because of seasonal and short-term variations. For financial reporting purposes, the net loss of the Partnership is allocated 99% to the limited partners and 1% to Marriott PLP Corporation (the "General Partner"). Significant differences exist between the net loss for financial reporting purposes and the net loss for Federal income tax purposes. These differences are due primarily to the use, for income tax purposes, of accelerated depreciation methods and shorter depreciable lives on higher asset bases and differences in the timing of the recognition of interest and incentive management fee expenses. 2. Revenues represent house profit which is hotel sales less hotel-level expenses, excluding certain operating costs and expenses such as depreciation and amortization, property taxes, ground rent, insurance and other, and management fees. Revenues consist of the following for 1997 and 1996:
Thirty-Six Weeks Ended ------------------------------- September 12, September 6, 1997 1996 ------------- ------------ (in thousands) HOTEL SALES Rooms................................... $ 66,175 $ 58,118 Food and beverage....................... 31,299 28,902 Other .................................. 5,045 4,659 ----------- ----------- 102,519 91,679 ----------- ----------- HOTEL EXPENSES Departmental Direct Costs Rooms................................ 16,154 14,593 Food and beverage.................... 24,669 22,746 Other hotel operating expenses.......... 26,353 24,683 ----------- ---------- 67,176 62,022 ----------- ---------- REVENUES................................... $ 35,343 $ 29,657 =========== ==========
3. Marriott International, Inc. was not paid any incentive management fees during the thirty-six weeks ended September 12, 1997 since cash flow did not meet levels specified in the hotel management agreement. However, these fees were accrued as a liability in the condensed financial statements in accordance with generally accepted accounting principles. Subsequently, the hotel management agreement with Marriott International, Inc. was renegotiated, resulting in the forgiveness of deferred incentive management fees totalling approximately $159 million at September 12, 1997. The deferred incentive management fees were previously assigned an estimated fair value of $0 in the Partnership's audited financial statements for the year ended December 31, 1996. -6- 4. On September 10, 1997, the General Partner of CHLP, a wholly-owned subsidiary of Host Marriott Corporation, purchased 434 units, or 98.6% of the limited partnership units, for an aggregate payment of $31.5 million. Combined with its general partner and existing limited partnership positions, Host Marriott Corporation now owns, through affiliates, 99.9% of the Partnership. -7- HOST MARRIOTT CORPORATION AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA The unaudited Pro Forma Condensed Consolidated Statements of Operations of Host Marriott Corporation (the "Company") reflect the following transactions for the thirty-six weeks ended September 12, 1997 and the fiscal year ended January 3, 1997, as if such transactions had been completed on December 30, 1995: * 1997 purchase of a controlling interest in the Chesapeake Hotel Limited Partnership ("CHLP") * 1997 acquisition of the outstanding common stock of Forum Group, Inc. * 1997 acquisition of, or purchase of controlling interests in, eight full- service hotel properties and the completion of the acquisition of the New York Marriott Financial Center Hotel * July 1997 Senior Notes Offering (as defined below) * June 1997 placement of a $500 million revolving line of credit agreement * March 1997 placement of a $90 million mortgage note secured by the Philadelphia Marriott Hotel * March 1997 purchase of $230 million in outstanding bonds secured by the San Francisco Marriott Hotel * 1996 acquisition of, or purchase of controlling interests in, 23 full- service hotel properties and the purchase of the mortgage note secured by the New York Marriott Financial Center Hotel * December 1996 Convertible Preferred Securities Offering (as defined below) * December 1996 repayment of the $109 million mortgage note secured by the Philadelphia Marriott Hotel * 1996 sale/leaseback of 16 Courtyard properties and 18 Residence Inns The unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company as of September 12, 1997 has not been presented as no material acquisitions or other transactions have occurred subsequent to September 12, 1997. On September 10, 1997, the Company purchased a controlling interest in the Chesapeake Hotel Limited Partnership ("CHLP") which owns six full-service hotel properties for approximately $32 million in cash. Prior to the purchase of CHLP, the Company held, through a wholly-owned subsidiary, non-recourse mortgages secured by the properties with a principal balance of approximately $137 million at September 10, 1997. The notes mature on December 31, 2003 and bear interest at 9%. These notes require principal paydown of approximately 44% of the original principal amount ($168 million) prior to maturity. The notes receivable have been eliminated in the consolidation of CHLP by the Company. Also, during 1997, the Company acquired a controlling interest in Marriott Hotel Properties Limited Partnership which owns Marriott's Orlando World Center Hotel and a controlling interest in Marriott's Harbor Beach Resort. In addition, the Company acquired The Ritz-Carlton, Marina del Rey and controlling interests in the partnerships which own the Oklahoma City Waterford, the Hanover Marriott, the Norfolk Waterside Marriott, the Hartford/Farmington Marriott and the Manhattan Beach Marriott, respectively. In addition, the Company completed the acquisition of the New York Marriott Financial Center Hotel, after acquiring the mortgage note in late 1996. HMC Senior Communities, Inc., a wholly-owned subsidiary of the Company, completed the acquisition of the outstanding common stock of Forum Group, Inc., (the "Forum Group") from Marriott Senior Living Services, Inc., a subsidiary of Marriott International, Inc. The Company also obtained a new $90 million mortgage note secured by the Philadelphia Marriott Hotel and purchased $230 million of outstanding bonds secured by the San Francisco Marriott Hotel. In June 1997, HMC Capital Resources Corporation, a wholly-owned subsidiary of the Company, entered into a revolving line of credit agreement under which it may borrow up to $500 million for certain permitted uses. HMH Properties, Inc., an indirect wholly-owned subsidiary of the Company, completed the issuance of 8 7/8% senior notes for net proceeds of approximately $570 million on July 17, 1997 (the "July 1997 Senior Notes Offering"). -8- During 1996, the Company acquired six full-service hotel properties and a controlling interest in 17 additional full-service hotel properties, and purchased the mortgage note secured by the New York Marriott Financial Center Hotel. Also during 1996, the Company sold and leased back 16 Courtyard properties and 18 Residence Inns and repaid a mortgage note secured by the Philadelphia Marriott Hotel. In addition, the Company completed the issuance of 11 million shares of Company-Obligated, Mandatorily-Redeemable Convertible Preferred Securities of a Subsidiary Trust for net proceeds of $530 million on December 2, 1996 (the "December 1996 Convertible Preferred Securities Offering"). The Pro Forma Condensed Consolidated Financial Data of the Company are unaudited and presented for informational purposes only and may not reflect the Company's future results of operations and financial position or what the results of operations and financial position of the Company would have been had such transactions occurred as of the dates indicated. The Pro Forma Condensed Consolidated Financial Data and Notes thereto should be read in conjunction with the Company's Consolidated Financial Statements and Notes thereto and "Management's Discussion and Analysis of Results of Operations and Financial Condition" included on Form 10-K for the fiscal year ended January 3, 1997 and on Form 10-Q for the twelve weeks and thirty-six weeks ended September 12, 1997. -9- HOST MARRIOTT CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Thirty-Six Weeks Ended September 12, 1997 (in millions, except per share amounts)
CHLP Acquisition Other Pro Historical Adjustments Adjustments Forma ----------- ------------- ------------- ------- Revenues Hotels....................... $ 736 $ 35 (A) $ 12 (C) $ 783 Senior living communities.... 16 -- 33 (B) 49 Other........................ 16 -- -- 16 ------ ------ ----- ------ 768 35 45 848 ------ ------ ----- ------ Operating costs and expenses Hotels....................... 433 17 (A) 6 (C) 456 Senior living communities.... 9 -- 17 (B) 26 Other........................ 22 -- -- 22 ------ ------ ------ ------ 464 17 23 504 ------ ------ ------ ------ Operating profit.............. 304 18 22 344 Minority interest............. (24) -- (1)(C) (25) Corporate expenses............ (27) -- (1)(B) (28) Interest expense.............. (198) -- (10)(B) (234) (2)(C) (26)(D) (2)(E) 5 (F) (1)(G) Dividends on Convertible Preferred Securities of a subsidiary trust....... (26) -- -- (26) Interest income............... 37 (10)(A) (4)(B) 19 (1)(C) (3)(F) ------ ------ ------ ------ Income (loss) before income taxes and extraordinary item........................ 66 8 (24) 50 Benefit (provision) for income taxes................ (28) (3)(L) 10 (L) (21) ------ ------ ------ ------ Income (loss) before extraordinary item.......... $ 38 $ 5 $ (14) $ 29 ====== ====== ====== ====== Income per common share before extraordinary item......................... $ .19 $ .14 ====== ====== Weighted average shares outstanding.................. 202.8 202.8 ====== ======
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Data. -10- HOST MARRIOTT CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Fiscal Year Ended January 3, 1997 (in millions, except per share amounts)
CHLP Acquisition Other Pro Historical Adjustments Adjustments Forma ----------- ------------- ------------ ------- Revenues Hotels...................... $ 717 $ 45 (A) $ 120 (C) $ 994 112 (H) Senior living communities.... -- -- 68 (B) 68 Other........................ 15 -- (1)(H) 14 ------ ------- ------- ------- 732 45 299 1,076 ------ ------- ------- ------- Operating costs and expenses Hotels...................... 461 23 (A) 55 (C) 598 52 (H) 7 (K) Senior living communities... -- -- 34 (B) 34 Other....................... 38 -- -- 38 ------ ------- ------- ------- 499 23 148 670 ------ ------- ------- ------- Operating profit............. 233 22 151 406 Minority interest............ (6) -- (1)(B) (25) (14)(C) (4)(H) Corporate expenses........... (43) -- (1)(B) (44) Interest expense............. (237) -- (26)(B) (348) (26)(C) (56)(D) (8)(E) 23 (F) (3)(G) (22)(H) 7 (J) Dividends on Convertible Preferred Securities of a subsidiary trust.......... (3) -- (34)(I) (37) Interest income.............. 48 (16)(A) 1 (B) 10 (3)(C) (11)(F) (9)(H) ------ ------- ------- ------- Income (loss) before income taxes............... (8) 6 (36) (38) Benefit (provision) for income taxes................ (5) (2)(L) 15 (L) 8 ------ ------- ----------- ------- Net income (loss)............ $ (13) $ 4 $ (21) $ (30) ====== ======= =========== ======= Loss per common share........ $ (.07) $ (.16) ====== ======= Weighted average shares outstanding................. 188.7 188.7 ====== =======
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Data. -11- NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA A. Represents the adjustment to record the revenue, operating expenses and reduction of interest income for the acquisition of Chesapeake Hotel Limited Partnership as if the acquisition occurred at the beginning of the applicable period. B. Represents the adjustment to record the revenue, operating expenses, interest expense, minority interest and interest income for the acquisition of the Forum Group, Inc., as if the acquisition occurred at the beginning of the applicable period. C. Represents the adjustment to record the revenue, operating expenses, secured debt interest expense, minority interest and to reduce interest income for the 1997 acquisition of, or the purchase of controlling interests in, eight full-service hotel properties as if the acquisitions occurred at the beginning of the applicable period. D. Represents the adjustment to record interest expense and amortization of deferred financing fees for the July 1997 Senior Notes Offering (as defined above). E. Represents the adjustment to record interest expense for the $90 million mortgage loan (interest rate of 8.49%) obtained for the Philadelphia Marriott Hotel during the first quarter of 1997. F. Represents the adjustment to reduce interest expense and interest income for the first quarter 1997 purchase of the $230 million of outstanding bonds secured by a first mortgage on the San Francisco Marriott Hotel. G. Represents the adjustment to record commitment fees and amortization of deferred financing fees for the June 1997 revolving line of credit agreement. H. Represents the adjustment to record revenue, operating expenses, secured debt interest expense and to reduce interest income for the 1996 acquisition of, or the purchase of controlling interests in, 23 full-service hotel properties and the purchase of the mortgage note secured by the New York Marriott Financial Center Hotel, as if they were added on December 30, 1995. I. Represents the adjustment to record the quarterly dividend payments for the December 1996 Convertible Preferred Securities Offering, as if the offering had taken place on December 30, 1995. J. Represents the adjustment to reduce interest expense for the fourth quarter 1996 repayment of a mortgage note secured by the Philadelphia Marriott Hotel. K. Represents the net adjustment to eliminate the depreciation expense of $3 million and record the incremental lease expense of $10 million for the 1996 sale/leaseback of the 16 Courtyard properties and 18 Residence Inns. L. Represents the income tax impact of pro forma adjustments at statutory rates. -12- -----END PRIVACY-ENHANCED MESSAGE-----