0000810736-95-000003.txt : 19950821 0000810736-95-000003.hdr.sgml : 19950821 ACCESSION NUMBER: 0000810736-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 DATE AS OF CHANGE: 19950818 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLENBOROUGH ALLSUITE HOTELS LP CENTRAL INDEX KEY: 0000810736 STANDARD INDUSTRIAL CLASSIFICATION: 7011 IRS NUMBER: 330207312 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16647 FILM NUMBER: 95564036 BUSINESS ADDRESS: STREET 1: 400 SOUTH EL CAMINO REAL STREET 2: SUITE 1100 CITY: SAN MATEO STATE: CA ZIP: 94402 BUSINESS PHONE: 4153439300 MAIL ADDRESS: STREET 1: 400 SOUTH EL CAMINO REAL SUITE 1100 CITY: SAN MATEO STATE: CA ZIP: 94402-1708 FORMER COMPANY: FORMER CONFORMED NAME: OUTLOOK ALL SUITE HOTELS L P DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AUGUST ALL SUITE HOTELS L P DATE OF NAME CHANGE: 19890814 FORMER COMPANY: FORMER CONFORMED NAME: AUGUST LEXINGTON INCOME PARTNERS DATE OF NAME CHANGE: 19870528 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-16647 GLENBOROUGH ALL SUITE HOTELS L.P., A CALIFORNIA LIMITED PARTNERSHIP ------------------------------------------------------ (Exact name of Registrant as specified in its charter) California 33-0207312 -------------------------------- ------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification) 400 South El Camino Real, Suite 1100 San Mateo, California 94402 ------------------------------ -------- (Address of principal executive offices) (Zip Code) (415) 343-9300 ---------------------------- (Registrant's telephone number) 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 X No --- --- Total number of units outstanding as of June 30, 1995: 2,399,217 Page 1 of 11 NO EXHIBIT INDEX REQUIRED PART I. FINANCIAL INFORMATION Item 1. Financial Statements GLENBOROUGH ALL SUITE HOTELS L.P., A CALIFORNIA LIMITED PARTNERSHIP Balance Sheets (in thousands, except units outstanding) (Unaudited) June 30, December 31, 1995 1994 Assets -------- --------- ------ Real estate investments, at cost: Land $ 2,704 $ 2,704 Building and improvements 14,934 14,753 -------- -------- 17,638 17,457 Less accumulated depreciation and amortization (7,010) (6,685) -------- -------- Net real estate investments 10,628 10,772 Cash and cash equivalents 560 369 Accounts receivable, net 165 91 Prepaid expenses and other assets 652 391 -------- -------- Total assets $ 12,005 $ 11,623 ======== ======== Liabilities and Partners' Equity (Deficit) ------------------------------------------ Accounts payable $ 167 $ 117 Accrued expenses 392 238 -------- -------- Total liabilities 559 355 Partners' equity (deficit): General Partner (1,788) (1,790) Limited Partners, 2,399,217 units outstanding 13,234 13,058 -------- -------- Total partners' equity 11,446 11,268 -------- -------- Total liabilities and partners' equity $ 12,005 $ 11,623 ======== ======== Page 2 of 11 See accompanying notes to financial statements. Page 3 of 11 GLENBOROUGH ALL SUITE HOTELS L.P., A CALIFORNIA LIMITED PARTNERSHIP Statements of Operations (in thousands, except per unit amounts) (Unaudited) Six Months Three Months Ended Ended June 30, June 30, 1995 1994 1995 1994 ------ ------ ------ ------ Revenues: Rooms $2,706 $2,425 $1,364 $1,191 Interest and other 123 123 52 60 ------ ------ ------ ------ Total revenues 2,829 2,548 1,416 1,251 ------ ------ ------ ------ Operating costs and expenses (including reimbursed salaries of $614 and $547 paid to affiliates in the six months ended June 30, 1995 and 1994, respectively): Rooms 584 555 306 278 Utilities 199 185 100 95 Management fees (paid to an affiliate) 141 127 71 62 Property taxes and insurance 175 132 98 70 Property general and administrative 250 205 127 112 Sales and marketing 258 186 125 94 Property operation and maintenance 188 147 89 54 Depreciation and amortization 336 316 168 165 Other general and administrative (including $75 and $78 paid to an affiliate in the six months ended June 30, 1995 and 1994, respectively) 120 110 57 52 ------ ------ ------ ------ Total operating costs and expenses 2,251 1,963 1,141 982 ------ ------ ------ ------ Net income $ 578 $ 585 $ 275 $ 269 ====== ====== ====== ====== Net income per limited partnership unit $ 0.24 $ 0.24 $ 0.11 $ 0.11 ====== ====== ====== ====== Distributions per limited partnership unit: Net income $ - $ - $ - $ - ====== ====== ====== ====== Return of capital $ 0.16 $ 0.15 $ 0.08 $ 0.08 ====== ====== ====== ====== See accompanying notes to financial statements. Page 4 of 11 GLENBOROUGH ALL SUITE HOTELS L.P., A CALIFORNIA LIMITED PARTNERSHIP Statements of Partners' Equity (Deficit) (in thousands) For the six months ended June 30, 1995 and 1994 (Unaudited) Total General Limited Partners' Partner Partners Equity --------- --------- --------- Balance at December 31, 1993 $ (1,790) $ 13,070 $ 11,280 Distributions (4) (362) (366) Net income 6 579 585 --------- --------- --------- Balance at June 30, 1994 $ (1,788) $ 13,287 $ 11,499 ========= ========= ========= Balance at December 31, 1994 $ (1,790) $ 13,058 $ 11,268 Distributions (4) (396) (400) Net income 6 572 578 --------- --------- --------- Balance at June 30, 1995 $ (1,788) $ 13,234 $ 11,446 ========= ========= ========= See accompanying notes to financial statements. Page 5 of 11 GLENBOROUGH ALL SUITE HOTELS L.P., A CALIFORNIA LIMITED PARTNERSHIP Statements of Cash Flows (in thousands) (Unaudited) Six months ended June 30, ------------------ 1995 1994 ------ ------ Cash flows from operating activities: Net income $ 578 $ 585 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 336 316 Changes in assets and liabilities: Accounts receivable (74) (5) Prepaid expenses and other assets (272) (89) Accounts payable 50 17 Accrued expenses 154 (20) ------- ------- Net cash provided by operating activities 772 804 ------- ------- Cash flows used in investing activities: Additions to real estate investments (181) (122) ------- ------- Cash used in investing activities: (181) (122) ------- ------- Cash flows used in financing activities: Distributions to partners (400) (366) ------- ------- Cash used in financing activities (400) (366) ------- ------- Net increase in cash and cash equivalents 191 316 Cash and cash equivalents at beginning of period 369 243 ------- ------- Cash and cash equivalents at end of period $ 560 $ 559 ======= ======= See accompanying notes to financial statements. Page 6 of 11 GLENBOROUGH ALL SUITE HOTELS, L.P., A CALIFORNIA LIMITED PARTNERSHIP Notes to Financial Statements June 30, 1995 (Unaudited) Note 1. SIGNIFICANT ACCOUNTING POLICY ------------------------------ In the opinion of Glenborough Realty Corporation, the General Partner, the accompanying unaudited financial statements contain all adjustments (consisting of only normal accruals) necessary to present fairly the financial position of Glenborough All Suite Hotels, L.P., A California Limited Partnership (the "Partnership"), at June 30, 1995 and December 31, 1994, and the related statements of operations for the three and six months ended June 30, 1995 and 1994, and the changes in partners' equity (deficit) and cash flows for the six months ended June 30, 1995 and 1994. Note 2. REFERENCE TO 1994 AUDITED FINANCIAL STATEMENTS ---------------------------------------------- These unaudited financial statements should be read in conjunction with the Notes to Financial Statements included in the 1994 audited financial statements. Note 3. TRANSACTIONS WITH AFFILIATES ---------------------------- In accordance with the limited partnership agreement, the Partnership paid the General Partner and its affiliates compensation for services provided to the Partnership. Glenborough Hotel Group provided services relating to the management and operation of the hotels and was compensated $141,000 and $127,000 for management fees for the six months ended June 30, 1995 and 1994, respectively. In addition, Glenborough Hotel Group was reimbursed for salaries related to the management and operations of the hotels in the amounts of $614,000 and $547,000 for the six months ended June 30, 1995 and 1994, respectively. These costs are included in operating costs and expenses on the statements of operations. The Partnership pays Glenborough Corporation for direct expenses plus a 1% fee for general and administrative costs and services including investor relations, office supplies and legal and other services. Glenborough Corporation was paid $75,000 and $78,000 for these costs and services for the six months ended June 30, 1995 and 1994, respectively. Note 4. OTHER INFORMATION ----------------- The Partnership has been named in a Registration Statement proposing a consolidation by merger of several entities, which has been filed with the Securities and Exchange Commission. In that regard, as of June 30, 1995, the Partnership has advanced $354,000 (included in prepaid expenses and other assets) toward Page 7 of 11 GLENBOROUGH ALL SUITE HOTELS, L.P., A CALIFORNIA LIMITED PARTNERSHIP Notes to Financial Statements June 30, 1995 (Unaudited) their pro rata share of the transaction costs associated with the consolidation. An additional $127,000 in transaction costs have been included in prepaid expenses and other assets and was payable at June 30, 1995. In the event the proposal is not approved by the Partnership's limited partners, and the consolidation goes forward with any of the other entities, the amounts advanced will be fully reimbursed by an affiliate of the general partners of the Partnership. If the consolidation, itself, does not go forward with any of the other entities, the Partnership will bear a proportion of the transaction costs based upon the number of limited partners who voted for approval of the transaction as compared to those who dissented or abstained. The limited partners are expected to receive their solicitation materials for this potential transaction in 1995. Note 5. NEW ACCOUNTING PRONOUNCEMENT In March 1995, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 121, "Accounting for Impairment of Long-Lived Assets and for Long- Lived Assets to Be Disposed Of". This statement requires that long-lived assets be reported at the lower of carrying amount or fair value. The Company plans to adopt SFAS No. 121 in 1996 and believes that the adoption will not have a material impact upon its financial statements. Page 8 of 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations LIQUIDITY AND CAPITAL RESOURCES From inception through the quarter ended December 31, 1989, distributions were paid to the limited partners at an 8.5% annualized rate, supported first by warranty payments received from the seller of the Partnership's properties and then from June 1988 through December 1989 by loans provided by the former general partner, the seller of the hotels and an affiliate of Shearson Lehman Brothers Inc. (all of which were subsequently paid off at a discount). For the first three quarters of 1990, distributions were paid at a 6% annualized rate. No distribution was paid in the fourth quarter of 1990 to reserve funds necessary to pay for renovation costs at the Fort Worth property. This resulted in a distribution rate of 4.5% for 1990. Distributions were paid at a rate of 5% in 1991, a rate of 3% in 1992, 1993 and the six months ended June 30, 1994. The distribution made in the third quarter of 1994 was increased to a rate of 3.3% and has remained at that rate since. Based on the projected cash flow of the Partnership, distributions are expected to continue at a rate of 3.3% for the remainder of 1995. Management believes that the Partnership's available cash together with the cash generated by the operations of the Partnership's properties, as proven in recent years, will be sufficient to finance the Partnership's continued operations. Another factor maintaining the optimistic outlook of the Partnership's liquidity and capital resource position would be the increase in corporate and contract business at the hotels during the first half of 1995. This increased corporate and contract business played a major part in the Partnership's increase in accounts receivable from $91,000 at December 31, 1994 to $165,000 at June 30, 1995. Of the $165,000 outstanding, approximately 75% or $124,000 is from accounts of current guests or corporate and contract business less than 30 days outstanding. Prepaid expenses and other assets increased approximately $261,000 from December 31, 1994 to June 30, 1995 primarily due to advances made by the Partnership toward transaction costs associated with the proposed consolidation by merger, as discussed in Note 4 of the Notes to Financial Statements. RESULTS OF OPERATIONS Total revenue increased $281,000 or 11% during the six months ended June 30, 1995 over the six months ended June 30, 1994 due to an increase in rooms revenue. This is a result of the sales and marketing staffs' success at both hotels in attracting tour group and new commercial contract business, and the greater role the "Countryline" reservation system has played in the hotels' increased occupancy which generally yields higher average daily room rates. To a lesser extent, the total revenue increase can partially be attributable to the resumption of major league Page 9 of 11 baseball, where the Arlington hotel is impacted by the influx of people attracted to the area since the Texas Rangers home stadium is in close proximity. Total operating costs and expenses increased $288,000 or 15% during the six months ended June 30, 1995 over the same period in 1994. This increase is primarily due to increases in variable expenses associated with higher occupancy such as rooms expense, utilities, property management fees, property operation and maintenance, and sales and marketing costs (the "Countryline" reservation system). Following are the occupancy percentages and average daily room rates of each of the hotels for the six months ended June 30, 1995 and 1994: For the six months For the six months ended June 30, 1995 ended June 30, 1994 ------------------- ------------------- Average Average room room Occupancy rate Occupancy rate --------- ------- --------- ------- Arlington 76% $64.10 64% $61.71 Tucson 83% $64.86 82% $63.75 Page 10 of 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings The Partnership is not a part to, nor any of its assets the subject of any material pending legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None. (b) Reports on Form 8-K. No reports on Form 8-K were required to be filed during this reporting period. Page 11 of 11 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. GLENBOROUGH ALL SUITE HOTELS L.P., A CALIFORNIA LIMITED PARTNERSHIP By: Glenborough Realty Corporation, a California corporation the Managing General Partner Date: August 10, 1995 By: Andrew Batinovich Senior Vice President, Chief Financial Officer and Director 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. GLENBOROUGH ALL SUITE HOTELS L.P., A CALIFORNIA LIMITED PARTNERSHIP By: Glenborough Realty Corporation, a California corporation the Managing General Partner Date: August 10, 1995 By: /s/ ANDREW BATINOVICH --------------------------------- - Andrew Batinovich Senior Vice President, Chief Financial Officer and Director Page 11 of 11 EX-27 2
5 1000 6-MOS DEC-31-1995 JUN-30-1995 560 0 165 0 0 652 17638 (7010) 12005 559 0 0 0 0 11446 12005 0 2829 0 0 (2251) 0 0 0 0 578 0 0 0 578 .24 .24