-----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, LjqcrtIKYh2ZlJs0QBp+LXmH1ay4rKuC/i4MM+xlhKhT5ELEbfE1DU1ptj37Pvwy z+EDwn7POsReMMJEHP06kg== 0000803868-95-000025.txt : 19951119 0000803868-95-000025.hdr.sgml : 19951119 ACCESSION NUMBER: 0000803868-95-000025 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSION BAY SUPER 8 LTD CENTRAL INDEX KEY: 0000803868 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330202890 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-18078 FILM NUMBER: 95590757 BUSINESS ADDRESS: STREET 1: 3145 SPORTS ARENA BLVD CITY: SAN DIEGO STATE: CA ZIP: 92110 BUSINESS PHONE: 6192261212 MAIL ADDRESS: STREET 1: 4540 MISSION BAY DRIVE CITY: SAN DIEGO STATE: CA ZIP: 92107 FORMER COMPANY: FORMER CONFORMED NAME: MOTELS OF AMERICA SERIES IX DATE OF NAME CHANGE: 19900402 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (MARK ONE) /X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 OR / / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM to COMMISSION FILE NUMBER: 33-9075-LA MISSION BAY SUPER 8 LTD., A CALIFORNIA LIMITED PARTNERSHIP (Exact name of small business issuer as specified in its charter) CALIFORNIA 33-0202890 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 3145 Sports Arena Blvd. San Diego, CA 92110 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code:(619) 226-1212 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- State the number of limited partnership interests outstanding as of the latest practicable date: 6,600 PART I. -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Incorporated herein is the following unaudited financial information: Balance Sheet as of September 30, 1995 and December 31, 1994. Statement of Operations for the three- and six-month periods ended September 30, 1995 and September 30, 1994. Statement of Cash Flows for the three- six-month periods ended September 30, 1995 and September 30, 1994. Notes to Financial Statements. 2 MISSION BAY SUPER 8 LTD. A California Limited Partnership Balance Sheet September 30, 1995 and December 31, 1994 (Unaudited) (Part 1)
September 30, December 31, 1995 1994 ASSETS Current Assets: Cash and cash equivalents $ 201,713 $ 43,260 Accounts receivable 18,854 15,428 Operating supplies 19,340 19,204 Prepaid expenses 46,009 9,884 Due from affiliates (Note 4) 0 27,431 ---------- ---------- Total Current Assets $ 285,916 $ 115,207 ---------- ---------- Investment property, at cost: Land 1,212,000 1,212,000 Building and improvements (Note 5) 2,024,033 2,024,033 Furniture, fixtures and equipment 719,695 702,412 ---------- ---------- 3,955,728 3,938,445 Less accumulated depreciation 1,190,533 1,128,445 ---------- ---------- Investment property, net of accumulated depreciation 2,765,195 2,810,000 Deferred organization costs and franchise fee, net (Note 3) 12,079 12,829 Construction in Progress 0 0 ---------- ---------- $3,063,190 $2,938,036 ---------- ---------- ---------- ----------
3 MISSION BAY SUPER 8 LTD. A California Limited Partnership Balance Sheet September 30, 1995 and December 31, 1994 (Unaudited) (Part 2)
September 30, December 31, 1995 1994 LIABILITIES AND PARTNER'S CAPITAL ACCOUNTS Current liabilities: Accounts payable $ 15,037 $ 20,782 Accrued expenses 13,254 11,264 Due to affiliates (Note 5) 2,495 0 ---------- ---------- Total current liabilities 30,786 32,046 ---------- ---------- Partners' capital accounts (deficit): General Partners: Cumulative net earnings 30,594 7,953 Cumulative cash distributions (296,197) (286,197) ---------- ---------- (265,603) (278,244) Limited partners: Capital contributions, net of offering costs 5,761,115 5,761,115 Cumulative net earnings 275,338 71,565 Cumulative cash distributions (2,738,446) (2,648,446) ---------- ---------- 3,298,007 3,184,234 ---------- ---------- Total partners' capital accounts 3,032,404 2,905,990 ---------- ---------- $3,063,190 $2,938,036 ---------- ---------- ---------- ----------
See accompanying notes to financial statements. 4 MISSION BAY SUPER 8 LTD., A California Limited Partnership Statement of Operations (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------------- ----------------------------- 1995 1994 1995 1994 ---------- ---------- ----------- ----------- Revenues: Room revenues $ 395,068 $ 368,331 $ 873,478 $ 799,045 Phone revenues 10,783 12,605 27,379 31,592 Interest income 579 470 761 671 Other income 14,908 10,990 28,779 17,794 ---------- ---------- ---------- ---------- 421,338 392,396 930,397 849,102 ---------- ---------- ---------- ---------- Expenses: Property operating expenses 129,616 122,638 310,203 295,099 Depreciation 19,986 18,554 62,088 55,663 General and Administrative 33,232 29,615 106,072 100,187 Amortization 250 250 750 750 Management fees 25,245 23,516 55,699 50,906 Royalties 15,802 14,749 34,923 31,984 Repairs and Maintenance 13,440 15,352 39,424 42,866 Real estate taxes 9,153 12,147 31,879 37,491 Marketing 17,694 18,805 45,359 48,490 Property and liability insurance 5,919 5,834 17,586 18,405 ---------- ---------- ---------- ---------- 270,337 261,460 703,983 681,841 ---------- ---------- ---------- ---------- Net earnings $ 151,001 $ 130,936 $ 226,414 $ 167,261 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net earnings per limited partnership interest $ 20.59 $ 17.85 $ 30.87 $ 22.81 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
See accompanying notes to financial statements. 5 MISSION BAY SUPER 8 LTD., A California Limited Partnership Statement of Cash Flows (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- ------------------------- 1995 1994 1995 1994 ---------- ---------- ---------- ---------- Cash flows from operating activities: Net earnings $ 151,001 $ 130,936 $ 226,414 $ 167,261 Adjustments to reconcile net earnings to cash: Depreciation and amortization 20,236 18,804 62,840 56,413 Changes in assets and liabilities: (Increase) in other assets: (11,900) 17,052 (39,687) 10,144 Increase in liabilities: Accounts payable and accrued expenses 3,028) (621) (3,755) 4,811 ---------- ---------- ---------- ---------- Net cash provided by operating activities 162,365 166,171 245,812 238,629 ---------- ---------- ---------- ---------- Cash flows used in or provided from investing activities: Acquisition and construction costs of investment property (484) (3,472) (17,283) (18,813) Depletion of investment property (note 5) 0 0 0 25,702 ---------- ---------- ---------- ---------- Net cash provided from investing activities (484) (3,472) (17,283) 6,889 ---------- ---------- ---------- ---------- Cash flows from financing activities: Increase (decrease) in due to affiliates 33,857 8,412 29,924 (17,597) Cash distributions (100,000) (50,000) (100,000) (50,000) ---------- ---------- ---------- ---------- Net cash (used in) financing activities (66,143) (41,588) (70,076) (67,597) ---------- ---------- ---------- ---------- Net increase (decrease) in cash 95,738 121,111 158,453 177,921 Cash and cash equivalents at beginning of period 105,975 66,311 43,260 9,501 ---------- ---------- ---------- ---------- Cash and cash equivalents at end of period $ 201,713 $ 187,422 $ 201,713 $ 187,422 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
See accompanying notes to financial statements. 6 Notes to Financial Statements September 30, 1995 (Unaudited) Readers of this quarterly report should refer to the partnership audited financial statements and annual report Form 10-KSB (File No. 33-9075-LA) for the period ended December 31, 1994, as certain footnote disclosures which would substantially duplicate those contained in such financial reports have been omitted from this report. 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Mission Bay Super 8 Ltd., A California Limited Partnership (the Partnership), (formerly Motels of America Series IX), a California Limited Partnership, was formed on February 5, 1987 pursuant to the California Revised Uniform Limited Partnership Act. The purpose of the Partnership is to construct, own, and operate a 117-room "economy" motel under a Super 8 Franchise. The motel was opened in November 1987. The following is a summary of the Partnership's significant accounting policies: CASH AND CASH EQUIVALENTS The Partnership considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. INVESTMENT PROPERTY Investment property is recorded at cost. Depreciation is computed using the straight-line method based on estimated useful lives of 5 to 35 years. Maintenance and repair costs are expensed as incurred, while significant improvements, replacements, and major renovation are capitalized. FRANCHISE FEES Franchise fees are amortized over the 20-year life of the franchise agreement. INCOME TAXES No provision for income taxes has been made as any liability for such taxes would be that of the partners rather than the Partnership. (Continued) 7 MISSION BAY SUPER 8 LTD., A California Limited Partnership Notes to Financial Statements, Continued NET INCOME PER INTEREST Net income per interest is based upon the 90% allocated to limited partners divided by 6,600 limited partner interests outstanding throughout the year. 2. PARTNERSHIP AGREEMENT Net income or loss and cash distributions from operations of the Partnership are allocated 90% to the limited partners and 10% to the general partner. Profits from the sale or other disposition of Partnership property are to be allocated to the general partner until its capital account equals zero; thereafter, to the limited partners until their capital accounts equal their capital contributions reduced by prior distributions of cash from sale or refinancing plus an amount equal to a cumulative but not compounded annual 8% return thereon which cumulative return shall be reduced (but not below zero) by the aggregate amount of prior distributions of cash available for distribution; thereafter, gain shall be allocated 15% to the general partner and 85% to the limited partners. Loss from sale shall be allocated 1% to the general partner and 99% to the limited partners. 3. FRANCHISE AGREEMENT The Partnership has entered into a twenty-year franchise agreement with Super 8 Motels, Inc. to provide the Partnership with consultation in the areas of design, construction and operation of the motel. The agreement required the payment of an initial fee of $20,000 and ongoing royalties equal to 4% of gross room revenues and a chain-affiliated advertising fee equal to 2% of gross room revenues. 4. RELATED PARTY TRANSACTIONS The motel is operated pursuant to a management agreement with GHG. The agreement provides for the payment of monthly management fees of 6% of gross revenues. The Partnership has agreed to reimburse GHG for certain expenses related to services performed in maintaining the books and administering the affairs of the Partnership. GHG and an affiliate, GMS Management Services, Inc. (GMS), allocate to the Partnership certain marketing, accounting, and maintenance salaries and certain other expenses directly related to the operation of the Partnership. (Continued) 8 MISSION BAY SUPER 8 LTD., A California Limited Partnership Notes to Financial Statements, Continued 4. RELATED PARTY TRANSACTIONS (Continued) Fees and reimbursements for partnership administration expenses paid to GHG and GMS for the three months ended September 30, 1995 and September 30, 1994 and for the nine months ended September 30, 1995 and September 30, 1994 are as follows:
THREE MONTHS ENDED NINE MONTHS ENDED ------------------ ------------------ 9/30/95 9/30/94 9/30/95 9/30/94 ------- ------- ------- ------- Management Fees $25,245 $23,516 $55,699 $50,906 Reimbursement for partnership admini- stration expenses $10,107 $10,620 $30,317 $31,860
In addition, all motel employees are paid by GMS. The Partnership reimbursed GMS $61,231 for the wages of these employees plus a one percent processing fee. At September 30, 1995, $2,495 was due to GHG and GMS relating to reimbursement for these operating expenses. 5. PROPOSED EXCHANGE OF INVESTMENT PROPERTY AND WRITEDOWN TO APPRAISED VALUE Management is presently considering the possibility of exchanging substantially all of the Partnership's investment property for common stock in a real estate investment trust (REIT). Under this proposal, the common stock in the REIT would be distributed to the limited partners and the Partnership would be dissolved. The proposed transaction is contingent upon management reaching a satisfactory agreement with the REIT and is subject to the approval of the limited partners. In connection with this proposed transaction, an independent appraiser valued the Partnership's investment property at $2,810,000 as of August 1, 1994. Because of the significant decrease in the market value of investment property, and the proposed exchange of investment property for common stock in a REIT, management has elected to writedown the Partnership's investment property to its appraised value of $2,810,000 as of December 31, 1994. (Continued) 9 MISSION BAY SUPER 8 LTD., A California Limited Partnership Notes to Financial Statements, Continued 6. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) No person or group is known to the Partnership to be the beneficial owner of more than 5% of the outstanding limited partnership interests in the Partnership. (b) The general partner does not directly or indirectly own any limited partnership interests in the Partnership. The general partner does not possess a right to acquire beneficial ownership of limited partnership interests in the Partnership. (c) There are no arrangements, known to the Partnership, which may result in a change in control of the Partnership other than the proposal to exchange the Partnership's investment property for common stock in a REIT as discussed in Note 5. 7. ADJUSTMENTS In the opinion of the general partners, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation have been made to the accompanying figures as of and for the nine months ended September 30, 1995. 8. SUBSEQUENT EVENTS In November 1995, the partnership paid a distribution of $99,000.00 to the limited partners. 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition: On November 19, 1986, the Partnership commenced its public offering pursuant to its Prospectus. On June 15, 1987, the Partnership completed the public offering. The Partnership received $5,761,115 (net of offering costs of $838,885) from the sale of limited partnership interests. These funds were available for investment in property, to pay legal fees and other costs related to the investments, to pay operating expenses, and for working capital. The majority of the proceeds was used to acquire and construct the 117-room "economy" motel on approximately 1.056 acres of land. The Partnership's liquidity is indicated by net working capital which was $255,130 at September 30, 1995 and $83,161 at December 31, 1994. At September 30, 1995, the Partnership had cash and cash equivalents of approximately $201,713. Such funds will be utilized to make distributions to partners and for working capital requirements. Results of Operations: For the three months ended September 30, 1995, room revenues were $395,068, the occupancy rate was 74% and the average daily rate was $49.59. This compares to the three months ended September 30, 1994 with room revenues of $368,331, occupancy rate of 73.1% and an average daily rate of $46.81. For the three months ended September 30, 1995, the hotel experienced a profit of $151,001. This compares to the three months ended September 30, 1994, which resulted in a profit of $130,936. For the nine months ended September 30, 1995, room revenues were $873,478, the occupancy rate was 61.47% and average daily rate was $44.49. This compares to September 30, 1994 with room revenues of $799,045, occupancy rate of 58.58% and an average daily rate of $42.72. There is significant competition in the lodging market. The Partnership is in competition either directly or indirectly with a large number of hotels and motels of varying quality and sizes, including other motels which are part of national or regional chains. The Partnership's motel does not compete directly with any large budget motel chains, but competes indirectly in the greater San Diego area with such budget motels as Comfort Inns and E-Z "8" Motels. (Continued) 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The effect of current operations on liquidity was net cash provided by operating activities of $245,812 for the nine months ended September 30, 1995 and net cash provided by operating activities of $238,629 for the nine months ended September 30, 1994. Seasonality: The motel business is seasonal with the third quarter being the strongest due to the tourist business and the last half of the fourth quarter and the first half of the first quarter being the weakest. 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, thereunto duly authorized. (REGISTRANT) MISSION BAY SUPER 8 LTD., A California Limited Partnership By: GHG Hospitality, Inc. Corporate General Partner BY (SIGNATURE) /s/ J. Mark Grosvenor (NAME AND TITLE) J. Mark Grosvenor, President and Director (DATE) November 10, 1995 BY (SIGNATURE) /s/ Sylvia Mellor Clark (NAME AND TITLE) Controller (DATE) November 10, 1995 EX-27 2
5 9-MOS DEC-31-1995 SEP-30-1995 201,713 0 18,854 0 19,340 285,916 3,955,728 1,190,533 3,063,190 30,786 0 0 0 0 0 3,063,190 0 930,397 0 703,983 0 0 0 226,414 0 226,414 0 0 0 226,414 30.87 30.87
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