-----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, LgcNcvvMwWRHdqxtwhgZcRn7NOIfD6z5gboYR17NSWQbmPjEVBpoZvBs2KWZ21jq iCEZIIbLN++vJu358k+EAQ== 0000950148-96-000704.txt : 19960506 0000950148-96-000704.hdr.sgml : 19960506 ACCESSION NUMBER: 0000950148-96-000704 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960426 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960503 SROS: AMEX SROS: BSE SROS: CSX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STARWOOD LODGING TRUST CENTRAL INDEX KEY: 0000048595 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 520901263 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06828 FILM NUMBER: 96556371 BUSINESS ADDRESS: STREET 1: 11835 W OLYMPIC BLVD STREET 2: SUITE 550 CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 3105753900 MAIL ADDRESS: STREET 1: 11835 W OLYMPIC BLVD STREET 2: SUITE 550 CITY: LOS ANGELES STATE: CA ZIP: 90064 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS TRUST /MD/ DATE OF NAME CHANGE: 19930506 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS DATE OF NAME CHANGE: 19800720 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STARWOOD LODGING CORP CENTRAL INDEX KEY: 0000316206 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 521193298 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07959 FILM NUMBER: 96556372 BUSINESS ADDRESS: STREET 1: 11845 W OLYMPIC BLVD STREET 2: SUITE 560 CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 3105753900 MAIL ADDRESS: STREET 1: 11845 W OLYMPIC BLVD STREET 2: SUITE 560 CITY: LOS ANGELES STATE: CA ZIP: 90064 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS CORP DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K 1 =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 26, 1996 Commission File Number: 1-6828 Commission File Number: 1-7959 STARWOOD LODGING STARWOOD LODGING TRUST CORPORATION (Exact name of registrant as (Exact name of registrant as specified in its charter) specified in its charter) Maryland Maryland (State or other jurisdiction (State or other jurisdiction of incorporation or organization) of incorporation or organization) 52-0901263 52-1193298 (I.R.S. employer identification no.) (I.R.S. employer identification no.) 11835 W. Olympic Blvd., Suite 695 11835 W. Olympic Blvd., Suite 675 Los Angeles, California 90064 Los Angeles, California 90064 (Address of principal executive (Address of principal executive offices, including zip code) offices, including zip code) (310) 575-3900 (310) 575-3900 (Registrant's telephone number, (Registrant's telephone number, including area code) including area code) =============================================================================== 2 =============================================================================== ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On April 26, 1996, Starwood Lodging Trust and Starwood Lodging Corporation announced jointly that they completed the acquisition of the three Doubletree Guest Suite hotels located in Irving, Texas; Ft. Lauderdale, Florida; and Tampa, Florida. A copy of the press release is filed as an exhibit to this report on Form 8-K. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Businesses Acquired. See Index to Financial Statements (page F -1). (b) Pro Forma Financial Information. See Index to Financial Statements (page F -1). EXHIBITS. 23.1 Independent accountants consent 99.1 Form of press release dated April 30, 1996 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized. STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION By:______________________________ By:______________________________ Ronald C. Brown Alan M. Schnaid Vice President and Corporate Controller Chief Financial Officer Principal Accounting Officer Date: May 3, 1996 4 INDEX TO FINANCIAL STATEMENTS
STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION -- PRO FORMA Combined and Separate Balance Sheets at December 31, 1995............................................... F-2 Notes to the Pro Forma Balance Sheets................................................................... F-5 Combined and Separate Statements of Operations for the year ended December 31, 1995..................... F-6 Notes to Pro Forma Statements of Operations ............................................................ F-10 GUARANTEED HOTEL INVESTORS 1985, L.P. Report of Independent Public Accountants................................................................ F-14 Statement of Net Assets of Hotel Operations............................................................. F-15 Statement of Hotel Operating Revenue and Expenses for the year ended December 31, 1995.................. F-16 Statement of Hotel Cash Flows........................................................................... F-17 Notes to Financial Statements........................................................................... F-18
F-1 5 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION UNAUDITED COMBINED PRO FORMA BALANCE SHEETS DECEMBER 31, 1995
Historical Starwood Starwood Lodging GHI Lodging Combined Properties Combined ------------- ----------- ------------- (A) (B) ASSETS Hotel assets held for sale - net................ $ 21,063,000 $ $ 21,063,000 Hotel assets - net.............................. 315,895,000 73,500,000 389,395,000 ------------- ----------- ------------- 336,958,000 73,500,000 410,458,000 Mortgage notes receivable, net.................. 79,261,000 79,261,000 Investments in joint ventures................... 2,858,000 2,858,000 ------------- ----------- ------------- Total real estate investments............... 419,077,000 73,500,000 492,577,000 Cash and cash equivalents....................... 9,332,000 9,332,000 Accounts and interest receivable................ 9,595,000 9,595,000 Notes receivable, net........................... 1,796,000 1,796,000 Inventories, prepaid expenses and other assets.. 20,194,000 20,194,000 ------------- ----------- ------------- $ 459,994,000 $73,500,000 $ 533,494,000 ============= =========== ============= LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Secured notes payable and revolving line of credit........................................ $ 119,100,000 $73,500,000 $ 192,600,000 Mortgage and other notes payable................ 4,385,000 4,385,000 Accounts payable and other liabilities.......... 19,022,000 19,022,000 Dividends and distributions payable............. 9,284,000 9,284,000 ------------- ----------- ------------- 151,791,000 73,500,000 225,291,000 ------------- ----------- ------------- Commitments and contingencies MINORITY INTEREST............................... 92,735,000 92,735,000 ------------- ----------- ------------- SHAREHOLDERS' EQUITY Trust shares of beneficial interest, $0.01 par value; authorized 30,000,000 shares; outstanding 13,825,000 shares............................. 138,000 138,000 Corporation common stock, $0.01 par value; authorized 30,000,000 shares; outstanding 13,825,000 shares................. 138,000 138,000 Additional paid-in capital...................... 434,107,000 434,107,000 Accumulated deficit............................. (218,915,000) (218,915,000) ------------- ----------- ------------- 215,468,000 215,468,000 ------------- ----------- ------------- $ 459,994,000 $73,500,000 $ 533,494,000 ============= =========== =============
F-2 6 STARWOOD LODGING TRUST UNAUDITED COMBINED PRO FORMA BALANCE SHEETS DECEMBER 31, 1995
Historical Pro Forma Starwood Starwood Lodging GHI Lodging Trust Properties Trust ------------- ----------- ------------- (A) (B) ASSETS Hotel assets held for sale - net................ $ 20,547,000 $ $ 20,547,000 Hotel assets - net.............................. 221,063,000 73,500,000 294,563,000 ------------- ----------- ------------- 241,610,000 73,500,000 315,110,000 Mortgage notes receivable, net.................. 79,261,000 79,261,000 Mortgage Notes Receivable - Corporation......... 68,486,000 68,486,000 Investments in joint ventures................... 2,841,000 2,841,000 ------------- ----------- ------------- Total real estate investments............... 392,198,000 73,500,000 465,698,000 Cash and cash equivalents....................... 710,000 710,000 Rent and interest receivable.................... 1,841,000 1,841,000 Notes receivable, net........................... 1,232,000 1,232,000 Notes receivable - Corporation.................. 17,978,000 17,978,000 Prepaid expenses and other assets............... 11,778,000 11,778,000 ------------- ----------- ------------- $ 425,737,000 $73,500,000 $ 499,237,000 ============= =========== ============= LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Secured notes payable and revolving line of credit........................................ $ 119,100,000 $73,500,000 $ 192,600,000 Mortgage and other notes payable................ 100,000 100,000 Accounts payable and other liabilities.......... 4,412,000 4,412,000 Dividends and distributions payable............. 9,284,000 9,284,000 ------------- ----------- ------------- 132,896,000 73,500,000 206,396,000 ------------- ----------- ------------- Commitments and contingencies MINORITY INTEREST............................... 88,113,000 88,113,000 ------------- ----------- ------------- SHAREHOLDERS' EQUITY Trust shares of beneficial interest, $0.01 par value; authorized 3000,000 shares; outstanding 13,825,000 shares............................. 138,000 138,000 Additional paid-in capital...................... 354,619,000 354,619,000 Accumulated deficit............................. (150,029,000) (150,029,000) ------------- ----------- ------------- 204,728,000 204,728,000 ------------- ----------- ------------- $ 425,737,000 $73,500,000 $ 499,237,000 ============= =========== =============
F-3 7 STARWOOD LODGING CORPORATION UNAUDITED COMBINED PRO FORMA BALANCE SHEETS DECEMBER 31, 1995
Historical Pro Forma Starwood Starwood Lodging GHI Lodging Corporation Properties Corporation ------------ ---------- ------------ (A) (B) ASSETS Hotel assets held for sale - net.................. $ 516,000 $ 516,000 Hotel assets - net................................ 94,832,000 94,832,000 ------------ ---------- ------------ 95,348,000 95,348,000 Investments in joint ventures..................... 17,000 17,000 ------------ ---------- ------------ Total real estate investments................. 95,365,000 95,365,000 Cash and cash equivalents......................... 8,622,000 8,622,000 Accounts and interest receivable.................. 7,754,000 7,754,000 Notes receivable, net............................. 564,000 564,000 Inventories, prepaid expenses and other assets.... 8,416,000 8,416,000 ------------ ---------- ------------ $120,721,000 $120,721,000 ============ ========== ============ LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Mortgage and other notes payable.................. $ 4,285,000 $ 4,285,000 Mortgage notes payable - Trust.................... 68,486,000 68,486,000 Notes payable - Trust............................. 17,978,000 17,978,000 Accounts payable and other liabilities............ 14,610,000 14,610,000 ------------ ---------- ------------ 105,359,000 105,359,000 ------------ ---------- ------------ Commitments and contingencies MINORITY INTEREST................................. 4,622,000 4,622,000 ------------ ---------- ------------ SHAREHOLDERS' EQUITY Corporation common stock, $0.01 par value; authorized 30,000,000 shares; outstanding 13,825,000 shares................... 138,000 138,000 Additional paid-in capital........................ 79,488,000 79,488,000 Accumulated deficit............................... (68,886,000) (68,886,000) ------------ ---------- ------------ 10,740,000 10,740,000 ------------ ---------- ------------ $120,721,000 $120,721,000 ============ ========== ============
F-4 8 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION NOTES TO THE UNAUDITED COMBINED AND SEPARATE PRO FORMA BALANCE SHEETS AT DECEMBER 31, 1995 NOTE 1. BASIS OF PRESENTATION (A) The Trust and the Corporation have unilateral control of SLT Realty Limited Partnership ("Realty") and SLC Operating Limited Partnership ("Operating" and, together with Realty the "Partnerships"), respectively, and therefore, the historical financial statements of Realty and Operating are consolidated with those of the Trust and the Corporation. Unless the context otherwise requires, all references herein to the "Companies" refer to the Trust and the Corporation, and all references to the "Trust" and the "Corporation" include the Trust and the Corporation and those entities respectively owned or controlled by the Trust or the Corporation, including Realty and Operating. NOTE 2. ACQUIRED PROPERTY (B) On April 26, 1996 the Companies completed the purchase of the 308-room Doubletree Guest Suites located in Irving, Texas ("DFW Airport"), the 254-room Doubletree Guest Suites Located in Ft. Lauderdale, Florida ("Cypress Creek") and the 260-room Doubletree Guest Suites located in Tampa, Florida ("Westshore") (collectively the "GHI Properties"). F-5 9 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION PRO FORMA COMBINED AND SEPARATE STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 (UNAUDITED) Effective January 1, 1995, Starwood Lodging Trust (the "Trust") and Starwood Lodging Corporation (the "Corporation" and collectively, "the Companies") consummated the previously announced reorganization (the "Reorganization") with Starwood Capital Group, L.P. and its affiliates (collectively "Starwood Capital"). On July 6, 1995, the Trust and the Corporation completed a public offering (the "Offering") of 11,787,500 paired shares. Net proceeds from the Offering of approximately $245.7 million together with proceeds from a financing facility and cash on hand were used as follows: approximately $206.5 million was used to repay existing indebtedness, including $10 million which was used by Realty to purchase the first trust deed on Operating's Milwaukee hotel, and approximately $53.8 million was used for the acquisition of the 462-room Sheraton Colony Square in Atlanta, Georgia and the 224-room Embassy Suites in Tempe, Arizona. On September 20, 1995, the Companies acquired the 652-room Doral Inn in New York, New York for $43.3 million. On October 31, 1995, the Companies acquired the 364-room Terrace Garden Inn and 180-room Lenox Inn for $27.9 million and $9 million, respectively. Both properties are located in Atlanta, Georgia. On November 30, 1995, the Companies acquired the 206-room Calverton Holiday Inn in Beltsville, Maryland, for $11.5 million. Due to the impact of the Offering and the acquisitions of properties acquired, the historical results of operations and earnings per share are not indicative of future results of operations and earnings per share. The following Unaudited Combined and Separate Pro Forma Statement of Operations for the year ended December 31, 1995 gives effect to the Offering and the related acquisitions of the Sheraton Colony Square in Atlanta, Georgia, the Embassy Suites in Tempe, Arizona, the Omni Europa in Chapel Hill, North Carolina and the GHI Properties as of the beginning of the year. Pro forma results include the results of the other properties acquired in 1995 (the Doral Inn in New York, New York - acquired on September 20, the Terrace Garden and Lenox Inn in Atlanta, Georgia - acquired on October 31, and the Holiday Inn in Beltsville, Maryland - acquired on November 30) from their respective dates of acquisition. The pro forma information is based upon historical information and does not purport to present what actual results would have been had such transactions, in fact, occurred at the beginning of each period presented, or to project results for any future period. F-6 10 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION UNAUDITED COMBINED PRO FORMA STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995
Historical Pro Forma Starwood Starwood Lodging Acquired Pro Forma Lodging Combined Properties Adjustments Combined ------------ ----------- ------------- ------------ (A) (B) REVENUE Hotel.......................................... $121,250,000 $37,421,000 $ $158,671,000 Gaming......................................... 26,929,000 26,929,000 Interest from mortgage and other notes......... 10,905,000 10,905,000 Management fees and other income............... 1,966,000 1,966,000 Income from joint ventures and rents from leased hotel properties........... 791,000 791,000 Loss on sales of hotel assets.................. (125,000) (125,000) ------------ ----------- ------------ ------------ 161,716,000 37,421,000 199,137,000 ------------ ----------- ------------ ------------ EXPENSES Hotel operations............................... 85,017,000 26,321,000 (1,756,000) (E) 109,582,000 Gaming operations.............................. 24,242,000 24,242,000 Interest....................................... 13,138,000 (13,138,000) (F) 8,269,000 8,269,000 (F) Depreciation and amortization.................. 15,469,000 8,026,000 23,495,000 Administrative and operating................... 5,712,000 10,000 (E) 5,722,000 ------------ ----------- ------------ ------------ 143,578,000 34,347,000 (6,615,000) 171,310,000 ------------ ----------- ------------ ------------ Income (loss) from continuing operations before minority interest..................... 18,138,000 $ 3,074,000 $ 6,615,000 27,827,000 =========== ============ Minority interest in Partnerships (G).......... 7,013,000 8,373,000 ------------ ------------ Net income..................................... $ 11,125,000 $ 19,454,000 ============ ============ Net income per paired share (H)................ $ 1.43 $ 1.41 ============ ============ Weighted average number of paired shares....................................... 7,771,000 13,798,000 ============ ============
See accompanying notes to the pro forma statements of operations. F-7 11 STARWOOD LODGING TRUST UNAUDITED COMBINED PRO FORMA STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995
Historical Pro Forma Starwood Starwood Lodging Acquired Pro Forma Lodging Trust Properties Adjustments Trust ------------ ----------- ------------- ------------ (A) (B) REVENUE Rents from Corporation........................ $26,730,000 $ $ 11,836,000 (C) $38,566,000 Interest from Corporation..................... 4,761,000 544,000 (D) 5,305,000 Interest from mortgage and other notes ....... 10,792,000 10,792,000 Income from joint ventures and rents from leased hotel properties ......... 791,000 791,000 Other income.................................. 1,074,000 1,074,000 Loss on sales of hotel assets ................ (125,000) (125,000) ----------- ----------- ------------ ----------- 44,023,000 12,380,000 56,403,000 ----------- ----------- ------------ ----------- EXPENSES Interest - other ............................. 12,429,000 (12,429,000) (F) 8,142,000 8,142,000 (F) Depreciation and amortization................. 8,977,000 4,127,000 13,104,000 Administrative and operating ................. 2,439,000 2,439,000 ----------- ----------- ------------ ----------- 23,845,000 4,127,000 (4,287,000) 23,685,000 ----------- ----------- ------------ ----------- Income (loss) from continuing operations before minority interest.................... 20,178,000 $(4,127,000) $ 16,667,000 32,718,000 =========== ============ Minority interest in Partnerships (G) ........ 7,314,000 9,845,000 ----------- ----------- Net income.................................... $12,864,000 $22,873,000 =========== =========== Net income per paired share (H) .............. $ 1.66 $ 1.66 =========== ===========
See accompanying notes to the pro forma statements of operations. F-8 12 STARWOOD LODGING CORPORATION UNAUDITED COMBINED PRO FORMA STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995
Historical Pro Forma Starwood Starwood Lodging Acquired Pro Forma Lodging Corporation Properties Adjustments Corporation ------------ ----------- ------------ ------------ (A) (B) REVENUE Hotel ........................................ $121,250,000 $37,421,000 $ $158,671,000 Gaming ....................................... 26,929,000 26,929,000 Interest from notes receivable................ 113,000 113,000 Management fees and other income.............. 892,000 892,000 ------------ ----------- ------------ ------------ 149,184,000 37,421,000 186,605,000 ------------ ----------- ------------ ------------ EXPENSES Hotel operations ............................. 85,017,000 26,321,000 (1,756,000) (E) 109,582,000 Gaming operations ............................ 24,242,000 24,242,000 Rent - Trust ................................. 26,730,000 11,836,000 (C) 38,566,000 Interest - Trust ............................. 4,761,000 544,000 (D) 5,305,000 Interest - other ............................. 709,000 (709,000) (F) 127,000 127,000 (F) Depreciation and amortization................. 6,492,000 3,899,000 10,391,000 Administrative and operating ................. 3,273,000 10,000 (E) 3,283,000 ------------ ----------- ------------ ------------ 151,224,000 30,220,000 10,052,000 191,496,000 ------------ ----------- ------------ ------------ Loss before minority interest ................ (2,040,000) $ 7,201,000 $(10,052,000) (4,891,000) =========== ============ Minority interest in Partnerships (G) ........ (301,000) (1,472,000) ------------ ------------ Net loss ..................................... $ (1,739,000) $ (3,419,000) ============ ============ Net loss per paired share (H)................ ($0.22) $ (0.25) ============ ============
See accompanying notes to the pro forma statements of operations. F-9 13 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION NOTES TO THE UNAUDITED COMBINED AND SEPARATE PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 NOTE 1. BASIS OF PRESENTATION The Trust and the Corporation have unilateral control of SLT Realty Limited Partnership ("Realty") and SLC Operating Limited Partnership ("Operating" and, together with Realty the "Partnerships"), respectively, and therefore, the historical financial statements of Realty and Operating are consolidated with those of the Trust and the Corporation. Unless the context otherwise requires, all references herein to the "Companies" refer to the Trust and the Corporation, and all references to the "Trust" and the "Corporation" include the Trust and the Corporation and those entities respectively owned or controlled by the Trust or the Corporation, including Realty and Operating. NOTE 2. PRO FORMA ADJUSTMENTS (A) Reflects the historical statements of operations of the Companies. Operations for properties sold or pending sale are not considered material to the pro forma presentation. (B) Reflects the pro forma statements of operations (reflecting the Companies' cost basis) of the properties acquired in connection with the Offering. For additional information, please see pages F-1 through F-140 (Financial Statements and Financial Statement Schedules) of the Companies' Form S-2 as amended dated June 29, 1995. Reflects the pro forma statements of operations (reflecting the Companies' cost basis) of the GHI Properties. Listed below are the effects each acquired hotel had on the Combined Pro Forma Statement of Operations for the year ended December 31, 1995 (in thousands):
Omni Sheraton Embassy Chapel Colony Suites GHI Hill(1) Square(1) Tempe(1) Properties Total ------- --------- -------- ---------- ------- REVENUE Hotel Revenues............................ $1,265 $9,557 $4,032 $22,567 $37,421 ------ ------ ------ ------- ------- EXPENSES Hotel Expenses............................ 887 7,127 2,271 16,036 26,321 Depreciation.............................. 163 2,073 1,229 4,561 8,026 ------ ------ ------ ------- ------- 1,050 9,200 3,500 20,597 34,347 ------ ------ ------ ------- ------- Income before minority interest........... $ 215 $ 357 $ 532 $ 1,970 $ 3,074 ====== ====== ====== ======= =======
F-10 14 (1) For additional information, please see pages F-1 through F-140 (Financial Statement Schedules) of the Companies' Form S-2 as amended dated June 29, 1995 Additional information related to the GHI Properties is as follows:
For the Year Ended December 31, ------------------------------- ADR Occupancy % REVPAR ------------------------ ------------------------ ------------------------ Hotel 1995 1994 1993 1995 1994 1993 1995 1994 1993 - ----- ---- ---- ---- ---- ---- ---- ---- ---- ---- DFW Airport $91 $91 $89 79% 68% 72% $72 $62 $64 Cypress Creek $77 $82 $81 72% 65% 75% $55 $53 $61 Westshore $84 $86 $82 64% 63% 70% $54 $54 $57
(C) Reflects pro forma adjustment for rents on the following hotels and land acquired by the Companies in 1995 and 1996. The hotel leases between the Trust and the Corporation provide for annual base or minimum rents plus contingent or percentage rents based on the gross revenue of the properties and are accounted for as operating leases.
Hotel Date Contributed/Acquired ------------------------------------------------- ------------------------- Omni - Chapel Hill, NC........................... April 6, 1995 Colony Square - Atlanta, GA...................... July 24, 1995 Embassy Suites - Tempe, AZ....................... July 27, 1995 Doubletree Guest Suites - Irving, TX............. April 26, 1996 Doubletree Guest Suites - Ft. Lauderdale, FL..... April 26, 1996 Doubletree Guest Suites -Tampa, FL............... April 26, 1996
(D) Reflects interest on the notes payable from the Corporation to the Trust at 9.5% for the note secured by the leasehold interest in the Doral property, prime plus 3% for notes secured by the Milwaukee property and prime plus 2% for unsecured notes. (E) The Corporation intends to operate all of the Companies' hotels and terminate existing third party management contracts for all properties at the earliest practicable date. Accordingly, certain costs directly attributable to existing third party management contracts included in the pro forma statements of operations have been eliminated. Such cost savings are reflected in the pro forma statements of operations as if such contracts had been canceled as of the beginning of the periods presented. Listed below are the hotels on which third party management contracts have been or are anticipated to be terminated and the related management and other fees incurred in each period. F-11 15
Fees Paid (1) ------------- Year Ended 12/31/95 Status ---------- ------------------ Hotel - ----- Holiday Inn - Albany, GA.................. $ 9,000 Terminated Best Western - Columbus, OH............... 33,000 Terminated Best Western - Savannah, GA............... 21,000 Terminated Radisson - Gainesville, FL................ 19,000 Terminated Park Central - Dallas, TX................. 34,000 Terminated Capitol Hill - Washington, DC............. 43,000 Cancelable in 1995 French Quarter - Lexington, KY............ 21,000 Terminated Doubletree - Rancho Bernardo, CA.......... 67,000 Terminated Colony Square - Atlanta, GA............... 139,000 Terminated Omni - Chapel Hill, NC.................... 23,000 Terminated Embassy Suites - Tempe, AZ................ 406,000 Terminated GHI Properties............................ 941,000 Cancelable in 1996 ---------- 1,756,000 ==========
- ------------------ (1) Fees include base and incentive management fees as well as accounting fee chargebacks and other corporate costs. Pro Forma administrative and operating expenses reflect (i) increases in operating expenses resulting principally from additional corporate office personnel and (ii) decreases in operating expenses resulting form a decrease in director's and officers' liability insurance. Such cost adjustments are reflected in the pro forma statements of operations as follows:
Administrative and Operating Expenses -------------- Year Ended 12/31/95 -------------- Additional personnel costs and corporate travel........ $ 97,000 Decrease in directors' and officers' liability insurance (87,000) -------- $ 10,000 ========
(F) Reflects the elimination of historical and pro forma interest expense related to the debt repaid from the proceeds of the Offering and the addition of interest expense on pro forma amounts outstanding calculated as follows: F-12 16
Year Ended 12/31/95 ------------------------------------- Trust Corp Combined --------- ------- --------- Interest on GSI note........................................................ 97,000 97,000 Interest expense on amount outstanding under line of credit (subsequent to offering).................................................. 2,120,000 2,120,000 Interest expense relating to acquisition of the GHI Properties(1)........... 5,329,000 5,329,000 Interest expense relating to additional draw down on line (2)............... 531,000 531,000 Other....................................................................... 162,000 30,000 192,000 --------- ------- --------- Total Interest Expense - pro forma.......................................... 8,142,000 127,000 8,269,000 ========= ======= =========
(1) Assumes draw down to acquire properties on January 1, 1995 (2) Assumes draw down of $9.8 million on January 1, 1995 to reflect actual draw down in 3rd quarter (G) Net income (loss) per paired share has been computed using the weighted average number of paired shares and equivalent paired shares outstanding. All paired share information has been adjusted to reflect a one-for-six reverse split effective June 12, 1995. (H) Reflects Starwood Capital's minority interest in the income of the Partnerships. F-13 17 Arthur Andersen LLP To the Partners of Guaranteed Hotel Investors 1985, L.P.: We have audited the accompanying statement of net assets of Hotel operations of GUARANTEED HOTEL INVESTORS 1985, L.P. (a Delaware Limited Partnership) as of December 31, 1995, and the related statements of Hotel operating revenue and expenses and Hotel cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying statements have been prepared for inclusion in Form 8-K of SLT Realty Limited Partnership (SLT) pursuant to the Purchase Agreement as described in Note 1 between Guaranteed Hotel Investors 1985, L.P. (GHI) and SLT dated October 27, 1995, and are not intended to be a complete presentation of GHI's assets and liabilities or results of its operations or its cash flows. In our opinion, the statements referred to above present fairly, in all material respects, the net assets of Hotel operations of GHI as of December 31, 1995, and the results of the Hotel operations and the Hotel cash flows for the year then ended, in conformity with generally accepted accounting principles. Arthur Andersen LLP Phoenix, Arizona, March 25, 1996. F-14 18 GUARANTEED HOTEL INVESTORS 1985, L.P. STATEMENT OF NET ASSETS OF HOTEL OPERATIONS AS OF DECEMBER 31, 1995 (NOTE 1) CURRENT ASSETS: Accounts receivable $ 718,454 Other receivables 10,303 Prepaid expenses 280,832 ----------- Total current assets 1,009,589 ----------- PROPERTY AND EQUIPMENT, at historical cost: Land 5,396,153 Buildings and improvements 41,350,548 Furniture and equipment 7,810,114 ----------- 54,556,815 Less- Accumulated depreciation (9,013,099) ----------- 45,543,716 Operating stock 337,148 ----------- 45,880,864 ----------- OTHER ASSETS 94,641 ----------- Total assets 46,985,094 ----------- CURRENT LIABILITIES: Accounts payable 1,262,754 Accrued liabilities 281,956 Advance deposits 56,303 Property taxes payable 508,630 Capital lease obligations 111,689 ----------- Total current liabilities 2,221,332 ----------- NET ASSETS $44,763,762 ===========
The accompanying notes are an integral part of this Statement. F-15 19 GUARANTEED HOTEL INVESTORS 1985, L.P. STATEMENT OF HOTEL OPERATING REVENUE AND EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1995 (NOTE 1) REVENUE: Room $18,286,393 Food and beverage 2,711,330 Other revenue 1,568,904 ----------- Total revenue 22,566,627 ----------- EXPENSES: Property operating costs and expenses 7,172,670 General and administrative 2,803,639 Advertising and promotion 2,154,145 Utilities 1,191,628 Repairs and maintenance 1,058,664 Property taxes and insurance 1,476,854 Depreciation and amortization 2,473,779 Loss on disposition of property 62,709 Interest expense and other 115,322 ----------- Total expenses 18,509,410 ----------- EXCESS OF REVENUE OVER EXPENSES $ 4,057,217 ===========
The accompanying notes are an integral part of this Statement. F-16 20 GUARANTEED HOTEL INVESTORS 1985, L.P. STATEMENT OF HOTEL CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1995 (NOTE 1) CASH FLOWS FROM OPERATING ACTIVITIES: Excess of revenues over expenses $ 4,057,217 Adjustments to net income- Depreciation and amortization 2,473,779 Loss on disposition of property 62,709 Change in assets and liabilities- Decrease in accounts receivable 27,469 Decrease in prepaids 479,840 Increase in other receivables (10,303) Increase in accounts payable 85,524 Increase in accrued expenses 281,956 Increase in advance deposits 56,303 Decrease in property taxes payable (152,518) ----------- Net cash provided by operating activities 7,361,976 ----------- CASH FLOWS FOR INVESTING ACTIVITIES: Additions or improvement of property (1,095,827) ----------- CASH FLOWS FOR FINANCING ACTIVITIES: Payments of principal on capital lease obligations (184,888) Cash transferred to partnership (6,081,261) ----------- Net cash used for financing activities (6,266,149) ----------- NET CHANGE IN CASH AND CASH EQUIVALENTS - ----------- CASH AND CASH EQUIVALENTS, beginning and end of year $ - =========== SUPPLEMENTAL DISCLOSURE: Cash paid during the year for interest $ 45,800 ===========
The accompanying notes are an integral part of this Statement. F-17 21 GUARANTEED HOTEL INVESTORS 1985, L.P. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995 (1) ORGANIZATION AND BASIS OF PRESENTATION: On October 27, 1995, SLT Realty Limited Partnership (SLT), a Delaware limited partnership, entered into an agreement (the Purchase Agreement) with Guaranteed Hotel Investors 1985, L.P. (GHI or the Partnership), a Delaware limited partnership, to purchase substantially all of the operating hotel property assets of GHI which represent three hotels located in Fort Lauderdale, Florida; Tampa, Florida; and Irving, Texas (together the Hotels or Hotel Properties). The accompanying financial statements reflect only the Hotel operations of GHI including all normal assets, except cash, and liabilities related to the Hotel operations. The buyer, under the Purchase Agreement, will primarily acquire only the Hotel real properties and certain related assets (see Note 6). Pursuant to the Purchase Agreement, certain assets and liabilities, such as cash, receivables, and payables, will not be sold. Also, the accompanying financial statements do not include any purchase accounting adjustments which may be caused by the closing of the Purchase Agreement. The Partnership's assets and liabilities not involved in the hotel operations have been excluded. Each hotel property includes a restaurant; one of the hotels operates the restaurant within the hotel, whereas the other two hotels lease their respective restaurants to third party operators. During 1995, the Hotels were managed by Doubletree Partners, an affiliate of Doubletree Hotels Corporation, and were operated as Doubletree Guest Suites which provide guest rooms and group meeting room facilities. Management, accounting and data processing fees paid by GHI to Doubletree Partners for the year ended December 31, 1995 approximated $940,000. (2) SIGNIFICANT ACCOUNTING POLICIES: FINANCIAL STATEMENTS The accompanying financial statements are prepared on the accrual basis of accounting and include only those assets, excluding cash, and liabilities and those revenues and expenses that relate to the Hotel operations of GHI; therefore, they are not intended to represent the overall financial position or results of operations of GHI. The preparation F-18 22 of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. DEPRECIATION Depreciation on buildings, building improvements, furniture and equipment is provided using the straight-line method based upon the following estimated useful lives: Buildings and improvements 5-34 years Furniture and equipment 2-15 years
(3) CAPITAL LEASE OBLIGATIONS: The Hotels lease telephone systems from various telephone vendors which expire in 1996. The obligations under capital lease at December 31, 1995, totaled approximately $112,000. Future minimum lease payments under capital lease for 1996 total $120,000, including interest of $8,000. For the year ended December 31, 1995, amortization expense and accumulated amortization for equipment under capital leases was $47,000 and $824,000, respectively. (4) INCOME TAXES: GHI is not directly subject to income taxes; therefore, no income tax provision has been allocated to the Hotel operations. (5) CONTINGENCY: During 1994, Doubletree Partners spent $1,425,000 for purposes of management assumption, brand conversion, and renovation of the Hotels in connection with the management agreements between Doubletree Partners and GHI. The management agreements provide that if GHI sells the Hotels during years one through five of the agreements and Doubletree Partners is not retained by the new owners as manager of the Hotels, all of the $1,425,000 is to be reimbursed to Doubletree Partners as a sale termination fee. In connection with the proposed sale of the Hotels, SLT has agreed to assume this contingent liability. (6) SUBSEQUENT EVENT - INVESTOR APPROVAL OF SALE OF HOTELS: GHI entered into an agreement on October 27, 1995, to sell, subject to the consent of GHI's investors and the satisfactory completion of due diligence by SLT, fee simple title to the Hotels and certain other assets used in the operations of the Hotels, as specified in F-19 23 the Purchase Agreement, for a cash payment of $73,250,000. On March 15, 1996, a majority of GHI's investors approved the sale of the Hotels to SLT. The purchase price was based upon bids received on behalf of the Partnership by an independent investment banking firm from unaffiliated third parties. SLT was awarded the bid conditional on all requirements outlined in the Purchase Agreement. In addition to the Hotel Properties, title to other assets will pass to SLT at the close of the sale, including: Equipment, trade fixtures, inventory, supplies, furnishings and other items of tangible personal property situated on or about or used in connection with Hotel Properties. Motor vehicles used in connection with the Hotel Properties. To the extent assignable, governmental licenses and permits pertaining to the current ownership. Deposits in the form of cash or receivables, including, without limitation, credit card receivables, held by GHI as of the Closing Date (a date within 15 days after satisfaction or waiver of all of the requirements set forth in the Purchase Agreement, but in no event later than April 30, 1996) with respect to the rental of guest rooms and meeting rooms and food service for periods of time from and after the Closing Date. F-20
EX-23.1 2 CONSENT 1 EXHIBIT 23.1 ARTHUR ANDERSEN LLP CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the inclusion in this Form 8-K of our report dated March 25, 1996 on the Hotel operations financial statements of GHI Hotel Investors 1985, L.P. It should be noted that we have not audited any financial statements of GHI Hotel Investors 1985, L.P. or the Hotel operations subsequent to December 31, 1995, or performed any audit procedures subsequent to the date of our report. Arthur Andersen LLP April 26, 1996, Phoenix, Arizona EX-99.1 3 PRESS RELEASE 1 FOR IMMEDIATE RELEASE CONTACTS: STANDARD CONTACTS STARWOOD LODGING COMPLETES ACQUISITION OF THREE DOUBLETREE ALL-SUITE HOTELS LOS ANGELES, California (April 30, 1996) -- Starwood Lodging Trust (the "Trust"), a real estate investment trust, and Starwood Lodging Corporation (the "Corporation"), a hotel management and operating company, whose shares are paired and trade together on the New York Stock Exchange (NYSE:HOT), today announced they have completed the previously announced acquisition of a portfolio of three Doubletree Guest Suites hotels for $73.25 million. The properties contain a total of 822 two-room suites, and are located in Irving, Texas (DFW Airport), Ft. Lauderdale, Florida (Cypress Creek) and Tampa, Florida (Westshore/International Airport). The aggregate purchase price equates to $89,000 per room, or approximately 75 percent of estimated replacement cost. The Doubletree at DFW Airport is located two miles south of DFW Airport and contains 308 suites, 6,000 square feet of meeting space and three food and beverage outlets. The Doubletree Cypress Creek is located approximately fifteen miles north of downtown Ft. Lauderdale and contains 254 suites, 12,000 square feet of meeting space and a 120-seat restaurant. The Doubletree Westshore is located five miles west of downtown Tampa and two miles south of Tampa International Airport, and contains 260 suites, 6,000 square feet of meeting space and a restaurant and lounge. Steven R. Goldman, Senior Vice President of Starwood Lodging Corporation, stated, "We are pleased to add three high quality, all-suite properties to Starwood Lodging's hotel portfolio. Hotel demand in Dallas continues to grow, and DFW airport is now among the top performing airport markets in the country. The Ft. Lauderdale and Tampa markets have rebounded well from the recession of several years ago. With this acquisition, Starwood Lodging now has interests in full service hotels in four major airport markets including San Francisco and Philadelphia. We believe that this helps to diversify our overall portfolio; moreover, the all-suite product has great appeal to a broad customer base and is well positioned to take advantage of improving conditions throughout the hotel industry." Including the three Doubletree hotels and additional properties under contract, the Trust and the Corporation will have acquired interests in seventeen full-service hotels aggregating approximately 5,700 rooms at a total acquisition cost of approximately $400 million since the completion of their $271 million public offering in July 1995. The Trust, which conducts all of its business as general partner of SLT Realty Limited Partnership, is the only hotel REIT whose shares are paired with a hotel operating company, the Corporation. With this purchase, the Trust will own equity and mortgage interests in 57 hotels containing 13,600 rooms located in 24 states and the District of Columbia. The equity portfolio will include 32 franchise locations, such as Embassy Suites, Marriott, Sheraton, Radisson, Holiday Inn, Doubletree, Days Inn and Best Western, as well as 14 independent properties. 2 The Corporation, which conducts substantially all of its business as managing general partner of SLC Operating Limited Partnership, leases properties from the Trust and operates them directly or through third-party management companies. # # #
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