-----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, C5jXEZJTc37JwJSiA72mS9xxHOKPpUUGWJi5ZXQ3c1XL07917rParI3pT/84Vxpj AoyXofnTfA8dwYdj2RdW+w== 0000769129-96-000005.txt : 19960520 0000769129-96-000005.hdr.sgml : 19960520 ACCESSION NUMBER: 0000769129-96-000005 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960517 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GROWTH HOTEL INVESTORS CENTRAL INDEX KEY: 0000769129 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942964750 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-15347 FILM NUMBER: 96569504 BUSINESS ADDRESS: STREET 1: 1 INSIGNIA FINANCIAL PLAZA PO BOX 1089 STREET 2: C/O INSIGNIA FINANCIAL GROUP INC CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: 1 INSIGNIA FINANCIAL PLAZA PO BOX 1089 STREET 2: C/O INSIGNIA FINANCIAL GROUP INC CITY: GREENVILLE STATE: SC ZIP: 29602 FORMER COMPANY: FORMER CONFORMED NAME: MRI BUSINESS HOTEL INVESTORS 85 DATE OF NAME CHANGE: 19850819 10-Q/A 1 FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report (As last amended by 34-32231, eff. 6/3/93.) U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the quarterly period ended March 31, 1996 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period.........to......... Commission file number 0-15347 GROWTH HOTEL INVESTORS (Exact name of small business issuer as specified in its charter) California 94-2964750 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's phone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports ), and (2) has been subject to such filing requirements for the past 90 days. Yes X. No . ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Investment Properties: A description of the hotel properties in which the Partnership has an ownership interest, together with occupancy and room rate data follows:
Average Average Daily Occupancy Rate Room Rate For Quarter Ended For Quarter Ended March 31, March 31, Name and Location 1996 1995 1996 1995 Growth Hotel Investors I: Hampton Inn-Syracuse 44% 49% $57.32 $51.88 East Syracuse, New York Hampton Inn-Brentwood 76% 75% 66.24 55.65 Nashville, Tennessee Hampton Inn-Aurora 68% 76% 59.75 53.22 Aurora, Colorado Hampton Inn-Albuquerque North 69% 76% 56.85 52.49 Albuquerque, New Mexico Growth Hotel Investors Combined Fund No. 1: Hampton Inn-Memphis I40 East 65% 71% 53.20 50.36 Memphis, Tennessee Hampton Inn-Columbia-West 73% 82% 58.96 53.03 West Columbia, South Carolina Hampton Inn-Spartanburg 54% 63% 51.61 46.23 Spartanburg, South Carolina Hampton Inn-Little Rock, North 64% 72% 51.37 46.78 North Little Rock, Arkansas Hampton Inn-Amarillo 59% 64% 49.70 46.68 Amarillo, Texas
Average Average Daily Occupancy Rate Room Rate For Quarter Ended For Quarter Ended March 31, March 31, Name and Location 1996 1995 1996 1995 Growth Hotel Investors Combined Fund No. 1: (continued) Hampton Inn-Greenville 76% 77% $ 57.79 $ 51.92 Greenville, South Carolina Hampton Inn-Charleston-Airport 74% 70% 53.57 52.76 North Charleston, South Carolina Hampton Inn-Memphis-Poplar 79% 80% 67.95 63.00 Memphis, Tennessee Hampton Inn-Greensboro 77% 85% 63.42 55.79 Greensboro, North Carolina Hampton Inn-Birmingham 71% 80% 60.51 57.17 Birmingham, Alabama Hampton Inn-Atlanta-Roswell 75% 81% 63.36 55.86 Roswell, Georgia Hampton Inn-Chapel Hill 81% 81% 60.29 54.68 Chapel Hill, North Carolina Hampton Inn-Dallas-Richardson 78% 71% 55.60 50.25 Richardson, Texas Hampton Inn-Nashville- 67% 81% 64.66 59.20 Briley Parkway Nashville, Tennessee Hampton Inn-San Antonio-Northwest 54% 59% 55.87 56.28 San Antonio, Texas Hampton Inn-Madison Heights 69% 63% 57.38 53.19 Madison Heights, Michigan Hampton Inn-Mountain Brook 77% 68% 60.78 56.40 Birmingham, Alabama Hampton Inn-Northlake 78% 77% 60.22 53.34 Atlanta, Georgia
The Partnership's net income for the three months ended March 31, 1996 was approximately $452,000 as compared to $393,000 for the corresponding period of 1995. The increase in net income is attributable to an increase in equity in unconsolidated joint venture operations. The increase in earnings from the joint venture is due to an increase in hotel revenues due to an overall room rate increase at the investment properties. In additon to the increase in the Partnership's equity in earnings of the joint venture, the Partnership had a decrease in mortgage interest due to the repayment of long-term debt on the Partnership's Hampton Inn - Brentwood property during the fourth quarter of 1995. Partially offsetting these increases to income were increases in hotel operating expenses, depreciation expense and general and administrative expenses. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the hotel market environment of its investment properties to assess the feasibility of increasing rates, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rates and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of concessions and room rate reductions to offset softening market conditions, there is no guarantee that the Managing General Partner will be able to sustain such a plan. At March 31, 1996, the Partnership had unrestricted cash of $3,533,000 as compared to $5,146,000 at March 31, 1995. Net cash provided by operating activities increased due to the increase in net income discussed above along with the Partnership incurring costs of $775,000 during the first quarter of 1995 in relation to a buyout agreement as discussed in "Item 1. Financial Statements Note D". Net cash used in investing activities increased for the three month period ended March 31, 1996, in comparison to the three month period ended March 31, 1995, due to the difference in the timing of the receipt of distributions from its unconsolidated joint venture. Distributions will be received in the second quarter of 1996 as compared to the first quarter of 1995. Net cash used in financing activities increased primarily as a result of an increase in the amounts due to affiliates in the first quarter of 1995. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of approximately $5,429,000 includes mortgages with maturity dates in 1997. A balloon payment on the mortgage encumbering the Partnership's Hampton Inn - Aurora property is due in May 1997 in the amount of approximately $3,034,000. The Partnership's Hampton Inn - Albuquerque has a balloon payment due in May 1997, in the amount of approximately $2,375,000. Future cash distributions will depend on the levels of cash generated from operations, property sales and the availability of cash reserves. The Managing General Partner is currently evaluating the feasibility of selling all of the investment properties (as discussed in further detail below) or the refinancing opportunities. The General Partner is evaluating the possibility of making a cash distribution in the second quarter of 1996. On February 15, 1996, Devon Associates, a New York general partnership, commenced a tender offer (the "Offer") for up to 15,000 of the outstanding Units at a purchase price of $705.00 per Unit. Due to the participation in the tender offer by affiliates of NPI Realty, and the Managing General Partner's related, existing and potential conflicts of interest, the Partnership, in its Schedule 14D-9 filed with Securities and Exchange Commission and sent to limited partners, expressed no opinion and made no recommendation as to whether limited partners should tender their Units pursuant to the Offer. The expiration of the tender offers described above was midnight, New York time, on March 25, 1996. See Items 2-4 of the Schedule 14D-9 of the Partnership, as filed with the Commission on February 29, 1996, as amend by "Amendment No. 1" thereto, as filed with the Commission on March 7, 1996, and as further amended by "Amendment No. 2" thereto, as filed with the Commission on March 14, 1996 and as further amended by "Amendemnt No. 3" thereto filed with the Commission on March 18, 1996 (collectively, the "Schedule 14D-9"), for additional information with respect to the Offer and the current and potential conflicts of interest of MRC-85, which Items 2-4 are incorporated herein by reference. Devon Associates acquired 13,396 units with respect to this offer. See Part II Item I - Legal Proceedings. On March 31, 1996, the Partnership received a letter advising that the Partnership's and Growth Hotel Investors ("GHI") joint venture partner in certain of the hotel properties was offering $147,000,000 in cash for all 28 hotel properties directly or indirectly owned by the Partnership and GHI. See "Amendment No. 2" to the Partnership's Statement on Schedule 14D-9, as filed with the Commission on March 14, 1996, for a more complete description of this offer, which "Amendment No. 2 is hereby incorporated by reference herein. By the terms of the offer, the offer expired on March 31, 1996. The Managing General Partner determined that before the offer could be recommended, if at all, to the Partnership's limited partners further analysis of the hotel properties and their value was needed. See Part II. Item 1 - Legal Proceedings for information with respect to the marketing of the hotel properties for sale in connection with the settlement of the actions arising out of the Devon Associates tender offers. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GROWTH HOTEL INVESTORS By: MONTGOMERY REALTY COMPANY-85, its general partner /s/William H. Jarrard, Jr. President and Director Date: May 17, 1996 -----END PRIVACY-ENHANCED MESSAGE-----