-----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, J9Q9a7HDT6dSTTyZX/uDABKpjBDh1lS8ao6opwrid6rx5eUsDpgQW8kcTs1Xcd6P EWbUE27mbax57hm92x3o4Q== 0000311174-98-000030.txt : 19981123 0000311174-98-000030.hdr.sgml : 19981123 ACCESSION NUMBER: 0000311174-98-000030 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 DATE AS OF CHANGE: 19981120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAMOUS HOST LODGING V LP CENTRAL INDEX KEY: 0000737876 STANDARD INDUSTRIAL CLASSIFICATION: 7011 IRS NUMBER: 942933595 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14540 FILM NUMBER: 98753908 BUSINESS ADDRESS: STREET 1: 2030 J ST CITY: SACRAMENTO STATE: CA ZIP: 95814 BUSINESS PHONE: 9164429183 MAIL ADDRESS: STREET 1: 2030 J STREET STREET 2: 2030 J STREET CITY: SACRAMENTO STATE: CA ZIP: 95814 FORMER COMPANY: FORMER CONFORMED NAME: SUPER 8 LODGING V LTD DATE OF NAME CHANGE: 19910331 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934 For the Period ended September 30, 1998 Commission File 0-14540 FAMOUS HOST LODGING V, L.P. (Exact name of registrant as specified in its charter) CALIFORNIA 94-2933595 - - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2030 J Street Sacramento, California 95814 - - -------------------------------------- ---------- Address of principle executive offices Zip Code Registrant's telephone number, Including area code (916) 442 - 9183 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 XX No __ FAMOUS HOST LODGING V, L.P. (A California Limited Partnership) FINANCIAL STATEMENTS SEPTEMBER 30, 1998 AND 1997 FAMOUS HOST LODGING V, L.P. (A California Limited Partnership) INDEX Financial Statements: PAGE Balance Sheet - September 30, 1998 and December 31, 1997 2 Statement of Operations - Nine Months Ended September 30, 1998 and 1997 3 Statement of Changes in Partners' Equity - Nine Months Ended September 30, 1998 and 1997 4 Statement of Cash Flows - Nine Months Ended September 30, 1998 and 1997 5 Notes to Financial Statements 6 - 7 Management Discussion and Analysis 8 - 9 Other Information and Signatures 10 - 11 Famous Host Lodging V, L.P. (A California Limited Partnership) Balance Sheet September 30, 1998 and December 31, 1997 9/30/98 12/31/97 ---------- ----------- ASSETS Current Assets: Cash and temporary investments $ 455,904 $ 146,113 Accounts receivable 23,253 32,624 Prepaid expenses 46,524 37,862 ---------- ----------- Total current assets 525,681 216,599 ---------- ----------- Property and Equipment: Buildings 4,077,604 4,077,604 Furniture and equipment 1,314,324 1,294,151 ---------- ----------- 5,391,928 5,371,755 Accumulated depreciation (3,377,016) (3,190,183) ---------- ----------- Property and equipment, net 2,014,912 2,181,572 ---------- ----------- Other Assets: 32,294 32,294 ---------- ----------- Total Assets $ 2,572,887 $ 2,430,465 ========== =========== LIABILITIES AND PARTNERS' EQUITY Current Liabilities: Accounts payable and accrued liabilities 224,186 176,765 ---------- ----------- Total liabilities 224,186 176,765 ---------- ----------- Contingent Liabilities (See Note 1) Partners' Equity: General Partners 5,165 3,385 Limited Partners: 10,000 units authorized, 9,022 issued and outstanding 2,343,536 2,250,315 ---------- ----------- Total partners' equity 2,348,701 2,253,700 ---------- ----------- Total Liabilities and Partners' Equity $ 2,572,887 $ 2,430,465 ========== =========== The accompanying notes are an integral part of the financial statements. - 2 - Famous Host Lodging V, L.P. (A California Limited Partnership) Statement of Operations For the Nine Months Ending September 30, 1998 and 1997 Three Months Nine Months Three Months Nine Months Ended Ended Ended Ended 9/30/98 9/30/98 9/30/97 9/30/97 ---------- ---------- ---------- ---------- Income: Hotel room $ 742,075 $ 2,059,813 $ 635,960 $ 1,927,711 Restaurant 93,972 333,091 177,411 497,360 Telephone and vending 8,742 32,684 17,179 44,088 Interest 2,051 3,699 (428) 5,438 Other 16,750 46,395 10,003 32,820 ---------- ---------- ---------- ---------- Total Income 863,590 2,475,682 840,125 2,507,417 ---------- ---------- ---------- ---------- Expenses: Hotel operating expenses (Note 2) 515,455 1,450,936 474,088 1,386,327 Restaurant operations (Note 2) 127,628 427,560 236,518 654,404 General and administrative 25,389 109,519 12,374 52,571 Depreciation and amortization 56,222 186,833 69,779 209,771 Property management fees 42,785 122,831 41,907 124,828 ---------- ---------- ---------- ---------- Total Expenses 767,479 2,297,679 834,666 2,427,901 ---------- ---------- ---------- ---------- Net Income (Loss) $ 96,111 $ 178,003 $ 5,459 $ 79,516 ========== ========== ========== ========== Net Income (Loss) Allocable to General Partners $961 $1,780 $55 $795 ========== ========== ========== ========== Net Income (Loss) Allocable to Limited Partners $95,150 $176,223 $5,404 $78,721 ========== ========== ========== ========== Net Income (Loss) per Partnership Unit $10.55 $19.53 $0.60 $8.73 ========== ========== ========== ========== Distribution to Limited Partners per Partnership Unit $0.00 $9.20 $9.20 $27.60 ========== ========== ========== ========== The accompanying notes are an integral part of the financial statements. - 3 - Famous Host Lodging V, L.P. (A California Limited Partnership) Statement of Changes in Partners' Equity For the Nine Months Ending September 30, 1998 and 1997 1998 1997 ---------- ---------- General Partners: Balance at beginning of year $ 3,385 $ 3,836 Net income (loss) 1,780 795 ---------- ---------- Balance at end of period 5,165 4,631 ---------- ---------- Limited Partners: Balance at beginning of year 2,250,315 2,626,948 Net income (loss) 176,223 78,721 Distributions to limited partners (83,002) (249,007) ---------- ---------- Balance at end of period 2,343,536 2,456,662 ---------- ---------- Total Partners' Equity $ 2,348,701 $ 2,461,293 ========== ========== The accompanying notes are an integral part of the financial statements. - 4 - Famous Host Lodging V, L.P. (A California Limited Partnership) Statement of Cash Flows For the Nine Months Ending September 30, 1998 and 1997 1998 1997 ----------- ----------- Cash flows from operating activities: Received from hotel and restaurant revenues $ 2,481,354 $ 2,503,228 Expended for hotel and restaurant operation and general and administrative expenses (2,072,087) (2,180,831) Interest received 3,699 7,151 ----------- ----------- Net cash provided (used) by operating activities 412,966 329,548 ----------- ----------- Cash flows from investing activities: Purchases of property and equipment (20,173) (27,818) Proceeds from sale of equipment - 230 ----------- ----------- Net cash provided (used) by investing activities (20,173) (27,588) ----------- ----------- Cash flows from financing activities: Distributions paid to limited partners (83,002) (249,007) ----------- ----------- Net cash provided (used) by operating activities (83,002) (249,007) ----------- ----------- Net increase (decrease) in cash and temporary investments 309,791 52,953 Cash and Temporary Investments: Beginning of year 146,113 246,283 ----------- ----------- End of Period $ 455,904 $ 299,236 =========== =========== Reconciliation of net income (loss) to net cash provided (used) by operating activities: Net income (loss) $ 178,003 $ 79,516 ----------- ----------- Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 186,833 209,771 (Gain) loss on disposition of property and equipment - (230) (Increase) decrease in accounts receivable 9,371 2,962 (Increase) decrease in prepaid expenses (8,662) (13,793) Increase (decrease) in accounts payable and accrued liabilities 47,421 51,322 ----------- ----------- Total adjustments 234,963 250,032 ----------- ----------- Net cash provided (used) by operating activities $ 412,966 $ 329,548 =========== =========== The accompanying notes are an integral part of the financial statements. - 5 - Famous Host Lodging V, L.P. (A California Limited Partnership) Notes to Financial Statements September 30, 1998 and 1997 Note 1: The attached interim financial statements include all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the period presented. Users of these interim financial statements should refer to the audited financial statements for the year ended December 31, 1997 for a complete disclosure of significant accounting policies and practices and other detail necessary for a fair presentation of the financial statements. Long-lived assets are reviewed for impairment whenever events or changes in circumstatnces indicate that the carrying amount may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying value of the asset. In accordance with the partnership agreement, the following information is presented related to fees paid to the General Partners or affiliates for the period. Property Management Fees $122,831 In February, 1991 the Partnership terminated its franchise and its affiliation with Super 8 Motels, Inc. and began operating as a Holiday Inn. Accordingly, no franchise or advertising fees have been paid to the General Partners or their affiliates for the period. Partnership management fees and subordinated incentive distributions are contingent in nature and none have been accrued or paid during the current period. Note 2: The following table summarizes the major components of hotel operating expenses for the periods reported: - 6 - Famous Host Lodging V, L.P. (A California Limited Partnership) Notes to Financial Statements (Continued) September 30, 1998 and 1997 Three Months Nine Months Three Months Nine Months Ended Ended Ended Ended 9/30/98 9/30/98 9/30/97 9/30/97 ---------- ---------- ---------- ---------- Hotel operating costs: Salaries and related expenses $ 124,057 $ 372,985 $ 117,271 $ 361,159 Rent 70,806 197,257 60,991 184,586 Franchise, advertising and reservation fees 52,333 143,909 45,383 137,479 Utilities 48,493 110,747 54,594 121,026 Allocated costs, mainly indirect salaries 49,964 147,481 43,878 132,302 Maintenance, repairs and replacements 51,575 140,490 49,215 118,310 Property taxes 15,894 47,943 16,028 47,768 Property insurance 10,269 31,333 9,168 32,184 Other operating expenses 92,064 258,791 77,560 251,513 ---------- ---------- ---------- ---------- Total hotel operating expenses $ 515,455 $ 1,450,936 $ 474,088 $ 1,386,327 ========== ========== ========== ========== Restaurant operating costs: Salaries and related expenses $ 50,124 $ 176,099 $ 102,794 $ 291,574 Cost of food and beverage 37,065 121,995 76,845 207,861 Rent 9,168 32,063 16,662 47,421 Utilities 14,739 34,752 15,949 38,581 Property taxes 2,550 7,810 2,632 7,876 Property insurance 2,286 6,809 2,061 6,716 Other operating expenses 11,696 48,032 19,575 54,375 ---------- ---------- ---------- ---------- $ 127,628 $ 427,560 $ 236,518 $ 654,404 ========== ========== ========== ========== There are certain administrative expenses allocated between the Partnership and other partnerships managed by the General Partner and its affiliates. These expenses, which are based on usage, are telephone, data processing, rent of administrative office and administrative salaries. Management believes that the methods used to allocate shared administrative expenses are accurate. The following additional material contingencies are required to be restated in interim reports under federal securities law: None. - 7 - FAMOUS HOST LODGING V, L.P. (A California Limited Partnership) MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION SEPTEMBER 30, 1998 LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1998, the Partnership has current assets of $525,681 and current liabilities of $224,186 creating an operating reserve of $301,495. Distributions to the limited partners have been suspended to replenish the operating reserves. The Partnership expended for renovations and replacements $71,679 which is equal to 3.5% of guest room revenue (of which $20,173 was capitalized) during the period covered by this report. Included in these expenditures was $15,173 for guest room carpet replacement, $5,000 for new faces on the restaurant signs, $6,660 for replacement air-conditioners, $5,200 for pool deck repairs, $5,491 for replacement chairs and $18,915 for roof repairs. RESULTS OF OPERATIONS The following is a comparison of operating results for the nine month periods ended September 30, 1998 and September 30, 1997. Total income decreased $31,735 or 1.3%. Hotel room revenues increased $132,102 or 6.9%, due to a slight increase in guest room occupancy from 72.0% in 1997 to 73.0% in 1998 and an increase in the average room rate from $66.23 in 1997 to $69.88 in 1998. The $164,269 or 33.0% decrease in restaurant revenue was due to a reduction in the restaurant hours of operations from 16 hours daily to 7 hours daily. Total expenditures decreased $130,222 or 5.4%. Restaurant expenses decreased $226,844 or 34.7%. This decrease is associated with the decrease in restaurant hours of operation. Hotel operating expenses increased $64,609 or 4.7%. Maintenance and repair expenses increased due to Holiday Inn inspection standards requirements. Allocated expenses increased due to legal fees associated with the proposed sale of the hotel. FUTURE TRENDS The General Partners expect the hotel's performance during 1998 to be substantially unchanged from 1997. Changes in restaurant personnel and procedures are expected to continue bringing improved results. The General Partners expect that these changes will result in a reduction in the net loss experienced by the restaurant operation. As discussed in more detail in the following section labeled "Legal Proceedings," the General Partners have agreed to offer the motels for sale and to present any offer that equal or exceeds 75% of the appraised value for the approval of the Limited Partners. - 8 - FAMOUS HOST LODGING V, L.P. (A California Limited Partnership) MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION SEPTEMBER 30, 1998 (Continued) In 1996 the computers used by the Partnership at the Managing General Partner's offices in Sacramento were updated. In the process of updating its hardware and software, the Managing General Partner eliminated any potential Year 2000 problem with respect to such computers. Similarly, the Managing General Partner does not anticipate any material Year 2000 problem with the computers in use at the motel. The Managing General Partner has not investigated and does not know whether any Year 2000 problems may arise from its third party vendors. Because the motel is a "budget" motel, the Partnership's most significant vendors are its utility providers and banks. To the extent banking services, utility services and other goods and services are unavailable as a result of Year 2000 problems with the computer systems of such vendors or otherwise, the ability of the Partnership to conduct business at its motels would be compromised. No contingency plans have been developed in this regard. In the opinion of management, these financial statements reflect all adjustments which were necessary to a fair statement of results for the interim periods presented. All adjustments are of a normal recurring nature. - 9 - PART II. OTHER INFORMATION Item 1. Legal Proceedings On October 27, 1997 a complaint was filed in the United States District Court, Eastern District of California by the registrant, the Managing General Partner, and four other limited partnerships (together with the registrant, the "Partnerships") as to which the Managing General Partner serves as general partner (i.e., Super 8 Motels, Ltd., Super 8 Motels II, Ltd., Super 8 Motels III, Ltd. and Super 8 Economy Lodging IV, Ltd.), as plaintiffs. The complaint named as defendants Everest/Madison Investors, LLC, Everest Lodging Investors, LLC, Everest Properties, LLC, Everest Partners, LLC, Everest Properties II, LLC, Everest Properties, Inc., W. Robert Kohorst, David I. Lesser, The Blackacre Capital Group, L.P., Blackacre Capital Management Corp., Jeffrey B. Citron, Ronald J. Kravit, and Stephen P. Enquist ( the "Everest Defendants"). The factual basis underlying the plaintiffs' causes of actions pertained to tender offers directed by certain of the defendants to limited partners of the Partnerships, and to indications of interest made by certain of the defendants in purchasing the property of the Partnerships. The complaint requested the following relief: (i) a declaration that each of the defendants had violated Sections 13(d), 14(d) and 14(e) of the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and regulations promulgated by the Securities and Exchange Commission thereunder; (ii) a declaration that certain of the defendants had violated Section 15(a) of the Exchange Act and the rules and regulations thereunder; (iii) an order permanently enjoining the defendants from (a) soliciting tenders of or accepting for purchase securities of the Partnerships, (b) exercising any voting rights attendant to the securities already acquired, (c) soliciting proxies, and (d) violating Sections 13 or 14 of the Exchange Act or the rules and regulations promulgated thereunder; (iv) an order enjoining certain of the defendants from violating Section 15(a) of the Exchange Act and the rules and regulations promulgated thereunder; (v) an order directing certain of the defendants to offer to each person who sold securities to such defendants the right to rescind such sale; and (vi) a declaration that the Partnerships need not provide to the defendants a list of limited partners in the Partnerships or any other information respecting the Partnerships which is not publicly available. On October 28, 1997 a complaint was filed in the Superior Court of the State of California, Sacramento County by Everest Lodging Investors, LLC and Everest/Madison Investors, LLC, as plaintiffs, against Philip B. Grotewohl, Grotewohl Management Services, Inc., Kenneth M. Sanders, Robert J. Dana, Borel Associates, and BWC Incorporated, as defendants, and the Partnerships, as nominal defendants. The factual basis underlying the causes of action pertained to the receipt by the defendants of franchise fees and reimbursement of expenses, the indications of interest made by the plaintiffs in purchasing the properties of the nominal defendants, and the alleged refusal of the defendants to provide information required by the terms of the Partnerships' partnership agreements and California law. The complaint requested the following relief: (i) a declaration that the action has a proper derivative action; (ii) an order requiring the defendants to discharge their fiduciary duties to the Partnerships and to enjoin them from breaching their fiduciary duties; (iii) disgorgement of certain profits; (iv) appointment of a receiver; and (v) an award for damages in an amount to be determined. - 10 - PART II. OTHER INFORMATION (Continued) On February 20, 1998, the parties entered into a settlement agreement and both of the above complaints were dismissed. Pursuant to the terms of the settlement agreement, among other things, the General Partner has agreed to proceed with the marketing for sale of the properties of the Partnerships, if by June 30, 1998, it receives an offer to purchase one or more properties for a cash price equal to 75% or more of the appraised value. In addition, the General Partner has agreed to submit the offer for approval to the limited partners as required by the partnership agreements and applicable law. The General Partner has also agreed that upon the sale of one or more properties, to distribute promptly the proceeds of the sale after payment of payables and retention of reserves to pay anticipated expenses. The Everest Defendants agreed not to generally solicit the acquisition of any additional units of the Partnerships without first filing necessary documents with the SEC. Under the terms of the settlement agreement, the Partnerships have agreed to reimburse the Everest Defendants for certain costs not to exceed $60,000, to be allocated among the Partnerships. Of this amount, the Partnership will pay approximately $12,000 during the year covered by this report. Item 2. Changes in Securities None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matter to the Vote of Security Holders None Item 5. Other Information See Notes to Financial Statements Item 6. Exhibits and Reports on Form 8-K None - 11 - SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FAMOUS HOST LODGING V, L.P. 11-14-98 By /S/ Philip B. Grotewohl - - -------- ---------------------------------- Date Philip B. Grotewohl, Chairman of Grotewohl Management Services, Inc., Managing General Partner 11-14-98 By /S/ Philip B. Grotewohl - - -------- --------------------------------- Date Philip B. Grotewohl, Chief executive officer, chief financial officer, chief accounting officer and sole director of Grotewohl Management Services, Inc., Managing General Partner EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD QTR 10-Q
5 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 455,904 0 23,253 0 0 524,681 5,391,928 3,377,016 2,572,887 224,186 0 0 0 0 2,348,701 2,572,887 2,425,588 2,475,682 1,878,496 1,878,496 491,183 0 0 178,003 0 178,003 0 0 0 178,003 19.53 19.53
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