-----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, RPVh1RMwEnv+b6ULtjJZQk6LBMfS9qqDu+Ib0tLmq/Q5kd58nyYjMkKDMC1FUENL 64dxXbYUbtgbjTCfTU0Rlw== 0000832179-98-000007.txt : 19980803 0000832179-98-000007.hdr.sgml : 19980803 ACCESSION NUMBER: 0000832179-98-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980619 FILED AS OF DATE: 19980731 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP /DE/ CENTRAL INDEX KEY: 0000832179 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 521533559 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16728 FILM NUMBER: 98675273 BUSINESS ADDRESS: STREET 1: 10400 FERNWOOD RD DEPT 908 STREET 2: HOST MARRIOT CORP ASSET MANAGEMENT CITY: BETHESDA STATE: MD ZIP: 20817 BUSINESS PHONE: 3013809000 MAIL ADDRESS: STREET 1: 10400 FERNWOOD RD DEPT 908 STREET 2: HOST MARRIOT CORP ASSET MANAGEMENT CITY: BETHESDA STATE: MD ZIP: 20817 10-Q 1 FORM 10-Q Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter ended June 19, 1998 OR Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 0-16728 COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Delaware -------------------------------------------------------------- (State or other Jurisdiction of incorporation or organization) 52-1533559 ----------------------------------- (I.R.S. Employer Identification No.) 10400 Fernwood Road Bethesda, Maryland 20817 --------------------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: 301-380-2070 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 and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No | | ================================================================================ COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP ================================================================================ TABLE OF CONTENTS PAGE NO. PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statement of Operations Twelve and Twenty-Four Weeks Ended June 19, 1998 and June 20, 1997...5 Condensed Consolidated Balance Sheet June 19, 1998 and December 31, 1997..................................6 Condensed Consolidated Statement of Cash Flows Twenty-Four Weeks ended June 19, 1998 and June 20, 1997..............7 Notes to Condensed Consolidated Financial Statements...................8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................10 PART II - OTHER INFORMATION Item 1. Legal Proceedings.....................................................12 Item 6. Exhibits and Reports on Form 8-K......................................13 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (in thousands, except per Unit amounts)
Twelve Weeks Ended Twenty-Four Weeks Ended June 19, June 20, June 19, June 20, 1998 1997 1998 1997 ------------- ------------ ------------ ------------ REVENUES Hotel revenues (Note 3)..............................$ 36,148 $ 35,295 $ 70,774 $ 67,972 ------------- ------------ ------------ ------------ OPERATING COSTS AND EXPENSES Depreciation ........................................ 6,255 6,297 12,521 12,594 Ground rent, taxes and other......................... 6,154 5,593 12,154 11,526 Base and Courtyard management fees................... 4,144 3,992 8,130 7,784 Incentive management fee............................. 3,388 3,382 6,600 6,385 ------------- ------------ ------------ ------------ 19,941 19,264 39,405 38,289 ------------- ------------ ------------ ------------ OPERATING PROFIT........................................ 16,207 16,031 31,369 29,683 Interest expense..................................... (10,048) (10,349) (21,137) (21,748) Interest income...................................... 631 680 1,303 1,156 ------------- ------------ ------------ ------------ NET INCOME..............................................$ 6,790 $ 6,362 $ 11,535 $ 9,091 ============= ============ ============ ============ ALLOCATION OF NET INCOME General Partner......................................$ 340 $ 318 $ 577 $ 454 Limited Partners..................................... 6,450 6,044 10,958 8,637 ------------- ------------ ------------ ------------ $ 6,790 $ 6,362 $ 11,535 $ 9,091 ============= ============ ============ ============ NET INCOME PER LIMITED PARTNER UNIT (1,470 Units)........................................$ 4,388 $ 4,112 $ 7,454 $ 5,876 ============= ============ ============ ============
See Notes to Condensed Consolidated Financial Statements. COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP CONDENSED CONSOLIDATED BALANCE SHEET (In thousands)
June 19, December 31, 1998 1997 ------------ ------------ (Unaudited) ASSETS Property and equipment, net..................................................$ 459,053 $ 455,435 Due from Courtyard Management Corporation.................................... 10,289 11,318 Other assets................................................................. 33,260 43,060 Restricted cash.............................................................. 16,103 13,212 Cash and cash equivalents.................................................... 20,375 13,690 -------------- --------------- $ 539,080 $ 536,715 ============== =============== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) LIABILITIES Debt.........................................................................$ 507,114 $ 512,955 Management fees due to Courtyard Management Corporation...................... 32,600 34,829 Due to Marriott International, Inc. and affiliates........................... 8,995 9,050 Accounts payable and accrued liabilities..................................... 12,326 10,578 -------------- --------------- Total Liabilities........................................................ 561,035 567,412 -------------- --------------- PARTNERS' CAPITAL (DEFICIT) General Partner.............................................................. 7,149 6,572 Limited Partners............................................................. (29,104) (37,269) -------------- --------------- Total Partners' Deficit.................................................. (21,955) (30,697) -------------- --------------- $ 539,080 $ 536,715 ============== ===============
See Notes to Condensed Consolidated Financial Statements. COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (in thousands)
Twenty-Four Weeks Ended June 19, June 20, 1998 1997 -------------- -------------- (in thousands) OPERATING ACTIVITIES Net income.................................................................$ 11,535 $ 9,091 Noncash items.............................................................. 13,247 13,320 Changes in operating accounts.............................................. (143) 1,654 ---------------- --------------- Cash provided by operating activities.................................. 24,639 24,065 ---------------- --------------- INVESTING ACTIVITIES Additions to property and equipment........................................ (16,140) (12,262) Change in property improvement funds....................................... 9,089 5,242 ---------------- --------------- Cash used in investing activities...................................... (7,051) (7,020) ---------------- --------------- FINANCING ACTIVITIES Repayments of debt......................................................... (5,841) (5,420) Capital distributions to the limited partners.............................. (2,793) (4,042) Change in restricted cash.................................................. (2,269) (2,030) ---------------- --------------- Cash used in financing activities...................................... (10,903) (11,492) ---------------- --------------- INCREASE IN CASH AND CASH EQUIVALENTS........................................... 6,685 5,553 CASH AND CASH EQUIVALENTS at beginning of period................................ 13,690 14,197 ---------------- --------------- CASH AND CASH EQUIVALENTS at end of period......................................$ 20,375 $ 19,750 ================ =============== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for mortgage and other interest..................................$ 19,238 $ 19,673 ================ ===============
See Notes to Condensed Consolidated Financial Statements. COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The accompanying condensed consolidated financial statements have been prepared by the Courtyard By Marriott II Limited Partnership (the "Partnership") without audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with generally accepted accounting principles have been condensed or omitted from the accompanying statements. The Partnership believes the disclosures made are adequate to make the information presented not misleading. However, the condensed consolidated financial statements should be read in conjunction with the Partnership's consolidated financial statements and notes thereto included in the Partnership's Form 10-K for the year ended December 31, 1997. In the opinion of the Partnership, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position of the Partnership as of June 19, 1998 and December 31, 1997, the results of operations for the twelve and twenty-four weeks ended June 19, 1998 and June 20, 1997 and the cash flows for the twenty-four weeks ended June 19, 1998 and June 20, 1997. Interim results are not necessarily indicative of fiscal year performance because of seasonal and short-term variations. For financial reporting purposes, the net income of the Partnership is allocated 95% to the limited partners and 5% to CBM Two Corporation (the "General Partner"). Significant differences exist between the net income for financial reporting purposes and the net income reported for Federal income tax purposes. These differences are due primarily to the use for income tax purposes of accelerated depreciation methods, shorter depreciable lives for the assets, differences in the timing of the recognition of certain fees and straight-line rent adjustments. 2. Certain reclassifications were made to the prior year financial statements to conform to the 1998 presentation. 3. Revenues represent house profit which is hotel sales less hotel-level expenses, excluding certain operating costs and expenses such as depreciation, base, Courtyard and incentive management fees, real and personal property taxes, ground and equipment rent, insurance and certain other costs. Revenues consist of the following for the twelve and twenty-four weeks ended (in thousands):
Twelve Weeks Ended Twenty-Four Weeks Ended June 19, June 20, June 19, June 20, 1998 1997 1998 1997 -------------- ------------- ------------- --------- HOTEL SALES Rooms...........................................$ 62,679 $ 59,969 $ 122,959 $ 116,725 Food and beverage............................... 4,172 4,248 8,201 8,359 Other........................................... 2,218 2,305 4,341 4,642 -------------- ------------- ------------- ------------- 69,069 66,522 135,501 129,726 -------------- ------------- ------------- ------------- HOTEL EXPENSES Departmental direct costs Rooms......................................... 13,153 12,369 25,811 24,009 Food and beverage............................. 3,457 3,591 6,916 7,025 Other........................................... 16,311 15,267 32,000 30,720 -------------- ------------- ------------- ------------- 32,921 31,227 64,727 61,754 -------------- ------------- ------------- ------------- REVENUES..........................................$ 36,148 $ 35,295 $ 70,774 $ 67,972 ============== ============= ============= =============
On November 20, 1997, the Emerging Issues Task Force ("EITF") of the Financial Accounting Standards Board reached a consensus on EITF 97-2 "Application of FASB Statement No. 94 and APB Opinion No. 16 to Physician Practice Management Entities and Certain Other Entities with Contractual Management Arrangements." EITF 97-2 addresses the circumstances in which a management entity may include the revenues and expenses of a managed entity in its financial statements. The Partnership is assessing the impact of EITF 97-2 on its policy of excluding property-level revenues and operating expenses of the Hotels from its statements of operations. If the Partnership concludes that EITF 97-2 should be applied to the Hotels, it would include operating results of this managed operation in its financial statements. Application of EITF 97-2 to financial statements for the twelve and twenty-four weeks ended June 19, 1998, would have increased both revenues and operating expenses by approximately $32.9 million and $64.7 million, respectively, and would have had no impact on net income. 4. Host Marriott Corporation, on behalf of the General Partner, CBM Two Corporation, filed a preliminary Prospectus/Consent Solicitation Statement with the Securities and Exchange Commission in December 1997, which proposed the consolidation (the "Consolidation") of this Partnership and five other limited partnerships into a publicly traded real estate investment trust ("REIT"). In addition, there are existing REIT's which are active in the moderate price and extended stay hotel segment that have expressed an interest in acquiring the hotels owned by the six limited partnerships. Although the General Partner has had preliminary discussions with some of these companies, no agreements have yet been reached. The General Partner has retained Merrill Lynch to advise the Partnership with respect to the Partnership's strategic alternatives. The General Partner intends to continue to explore these alternatives and determine which path to pursue, subject to appropriate partner approval. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS Certain matters discussed herein are forward-looking statements and as such may involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Partnership to be different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although the Partnership believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. These risks are detailed from time to time in the Partnership's filings with the Securities and Exchange Commission. The Partnership undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. RESULTS OF OPERATIONS Revenues. Revenues increased by $0.9 million and $2.8 million to $36.1 million and $70.8 million for the twelve and twenty-four weeks ended June 19, 1998, respectively. These represent a 2.4% and a 4.1% increase, respectively, for the quarter and year-to-date when compared to the same periods in 1997. The increase in revenues was achieved primarily through an increase in hotel sales offset by an increase in direct hotel operating costs and expenses. For the twelve and twenty-four weeks ended June 19, 1998, hotel sales increased by $2.5 million and $5.8 million, or 3.8% and 4.5%, to $69.1 million and $135.5 million, respectively, over the same periods in 1997. The increase in sales was achieved primarily through an increase in the combined average room rate. The combined average room rate increased $5.94 to $88.78 for the second quarter and $6.27 to $88.65 year-to-date as compared to the same periods in 1997. The increase in average room rate is primarily due to aggressive weekday pricing combined with a strong advertising campaign which focused on leisure travelers. Combined average occupancy for the twelve and twenty-four weeks ended June 19, 1998 decreased by 2.1 and 1.7 percentage points to 81.3% and 79.9%, respectively, when compared to the same periods in 1997. The decrease in occupancy is mainly due to increased competition and aggressive rate increases in some markets. For the twenty-four weeks ended June 19, 1998, 40 of the Partnership's 70 Hotels posted occupancy rates exceeding 80%. REVPAR, or revenue per available room, represents the combination of the average daily room rate charged and the average daily occupancy achieved and is a commonly used indicator of hotel performance (although it is not a GAAP or generally accepted accounting principles measurement of revenue). REVPAR for the twelve weeks and twenty-four weeks ended June 19, 1998 was $72.18 and $70.83, representing a 4.5% and 5.4% increase, respectively, when compared to the same periods in 1997. Direct hotel operating costs and expenses increased from $31.2 million and $61.8 million for the twelve and twenty-four weeks ended June 19, 1997 to $32.9 million and $64.7 million, respectively, for the same periods in 1998. Room profit increased by 4.0% and 4.8% for the twelve and twenty-four weeks ended June 19, 1998, respectively, as compared to the same periods in 1997. Operating Costs and Expenses. The Partnership's operating costs and expenses increased by 3.5% to $19.9 million and by 2.9% to $39.4 million for the twelve and twenty-four weeks ended June 19, 1998, respectively, when compared to the same periods in 1997. As a percentage of total hotel sales, these costs and expenses decreased slightly from 29.5% in the twenty-four weeks ended June 20, 1997 to 29.1% in the same period of 1998. As a percentage of total sales for the second quarter of 1997 and 1998, these costs and expenses remained stable at 29%. Some of the component of this category are discussed below: Base and Courtyard Management Fees. The increase in base and Courtyard management fees from $7.8 million for the twenty-four weeks ended June 20, 1997 to $8.1 million for the comparable period in 1998 is due to the improved combined hotel sales for the 70 Hotels. Incentive Management Fees. During the twenty-four weeks ended June 19, 1998, incentive management fees earned increased by 3.4% to $6.6 million from $6.4 million in the comparable period in 1997. The increase in incentive management fees earned was the result of improved combined hotel operating results. Operating Profit. Operating profit increased by $1.7 million to $31.4 million in the twenty-four weeks ended June 19, 1998 from $29.7 million in the same period in 1997, primarily due to higher revenues. Interest expense decreased by 2.8% to $21.1 million for the twenty-four weeks ended June 19, 1998 from $21.7 million for the comparable period in 1997. For the second quarter 1998, interest expense decreased $0.3 million as compared to the second quarter 1997. The decrease was primarily due to principal amortization on the Certificates/Mortgage Loan. The weighted average interest rate for the twenty-four weeks ended June 19, 1998 was 8.6% as compared to 8.4% for the comparable period in 1997. For the twenty-four weeks ended June 19, 1998, the Partnership had net income of $11.5 million, an increase of $2.4 million, from net income of $9.1 million for the comparable period in 1997. This increase was primarily due to higher revenues as discussed above, offset by increases in management fees, ground rent, taxes and other expenses. CAPITAL RESOURCES AND LIQUIDITY The Partnership's financing needs have historically been funded through loan agreements with various lenders and Host Marriott Corporation ("Host Marriott"). The General Partner believes that the Partnership will have sufficient capital resources and liquidity to continue to conduct its business in the ordinary course. Principal Sources and Uses of Cash The Partnership's principal source of cash is from operations. Its principal uses of cash are to make debt service payments, fund the property improvement fund and to make distributions to limited partners. Cash provided by operations for the twenty-four weeks ended June 19, 1998, and June 20, 1997, was $24.6 million and $24.1 million, respectively. The increase in cash provided by operations is due to improved operations, offset by the change in the receivable balance due from the Manager at June 19, 1998 when compared to the change at June 20, 1997. Cash used in investing activities was $7.1 million for the first two quarters of 1998 and $7.0 million for the first two quarters of 1997. Cash used in investing activities for 1998 includes capital expenditures of $16.1 million, primarily related to renovations and replacements at the Partnership's hotels. Cash used in financing activities was $10.9 million and $11.5 million for the first two quarters of 1998 and 1997, respectively. During the first twenty-four weeks of 1998 and 1997, the Partnership repaid $5.8 million and $5.4 million, respectively, of principal on the Certificates/Mortgage Loan. The Partnership also transferred a net amount of $2.3 million and $2.0 million into reserve accounts during the twenty-four weeks ended June 19, 1998 and June 20, 1997, respectively. Cash used in financing activities included $2.8 million and $4.0 million of cash distributions to limited partners during the twenty-four weeks ended June 19, 1998 and June 20, 1997, respectively. In April of 1998, the Partnership utilized 1997 cash flow after debt service to make a final cash distribution totaling $2.8 million or $1,900 per limited partner unit, bringing the total distribution from 1997 operations to $13.2 million or $9,000 per limited partner unit. Additionally, on July 27, 1998, the Partnership utilized 1998 cash flow through June 19, 1998 to make a distribution of $5.9 million or $4,000 per limited partner unit. The General Partner believes that cash from hotel operations combined with the ability to defer certain management fees to the Manager and ground rent payments to Marriott International, Inc. and affiliates will provide adequate funds in the short term and long term to meet the operational and capital needs of the Partnership. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Certain Limited Partners of the Partnership have filed a lawsuit, styled Whitey Ford, et al. v. Host Marriott Corporation, et al., Case No. 96-CI-08327, in the 285th Judicial District Court of Bexar County, Texas against the General Partner, the Manager, various of their subsidiaries, J.W. Marriott, Jr., Stephen Rushmore and Hospitality Valuation Services, Inc. (collectively, the "Defendants"). On January 29, 1998, two other Limited Partners filed a petition to expand this lawsuit to include a class action. On June 23, 1998, the Court entered an order certifying a class of Limited Partners under Texas law, appointing A.R. Milkes and D.R. Burklew as representative plaintiffs on behalf of the class, and later, appointing the law firm of Berg & Androphy as lead class counsel. The plaintiffs allege, among other things, that the Defendants committed fraud, breached fiduciary duties, and violated the provisions of various contracts. The General Partner believes that all of the plaintiffs' allegations are without foundation and the Defendants intend to vigorously defend against them. On February 11, 1998, four individual limited partners in partnerships sponsored by Host Marriott Corporation ("Host Marriott"), filed a class action lawsuit, styled Ruben, et al. v. Host Marriott Corporation, et al., Civil Action No. 16186, in Delaware State Chancery Court against Host Marriott and the general partners of Courtyard by Marriott Limited Partnership, Courtyard by Marriott II Limited Partnership, Marriott Residence Inn Limited Partnership, Marriott Residence Inn II Limited Partnership, and Fairfield Inn by Marriott Limited Partnership (collectively, the "Five Partnerships"). The plaintiffs allege that the merger of the Five Partnerships (the "Merger") into an umbrella partnership real estate investment trust proposed by CRF Lodging Company, L.P. in a preliminary registration statement filed with the Securities and Exchange Commission, dated December 22, 1997, constitutes a breach of the fiduciary duties owed to the limited partners of the Five Partnerships by Host Marriott and the general partners of the Five Partnerships. In addition, the plaintiffs allege that the Merger breaches various agreements relating to the Five Partnerships. The plaintiffs are seeking, among other things, the following: certification of a class; injunctive relief to block consummation of the Merger or, in the alternative, recision of the Merger; and damages. Host Marriott and the general partners of the Five Partnerships believe that these allegations are totally devoid of merit and they intend to vigorously defend against them. The defendants also maintain that this lawsuit is premature because the Merger has not been and may not be consummated as proposed in the SEC filings. Accordingly, they have filed a motion to dismiss the lawsuit. On March 16, 1998, limited partners in several partnerships sponsored by Host Marriott, filed a lawsuit, styled Robert M. Haas, Sr. and Irwin Randolph Joint Tenants, et al. v. Marriott International, Inc., et al., Case No. 98-CI-04092, in the 57th Judicial District Court of Bexar County, Texas against Marriott International, Inc. ("Marriott International"), Host Marriott, various of their subsidiaries, J.W. Marriott, Jr., Stephen Rushmore, and Hospitality Valuation Services, Inc. (collectively, the "Defendants"). The lawsuit relates to the following limited partnerships: Courtyard by Marriott Limited Partnership, Courtyard by Marriott II Limited Partnership, Marriott Residence Inn Limited Partnership, Marriott Residence Inn II Limited Partnership, Fairfield Inn by Marriott Limited Partnership, Desert Springs Marriott Limited Partnership, and Atlanta Marriott Marquis Limited Partnership (collectively, the "Seven Partnerships"). The plaintiffs allege that the Defendants conspired to sell hotels to the Seven Partnerships for inflated prices and that they charged the Seven Partnerships excessive management fees to operate the Seven Partnerships' hotels. The plaintiffs further allege, among other things, that the Defendants committed fraud, breached fiduciary duties, and violated the provisions of various contracts. The plaintiffs are seeking unspecified damages. The Defendants, which do not include the Seven Partnerships, believe that there is no truth to the plaintiffs' allegations and that the lawsuit is totally devoid of merit. The Defendants intend to vigorously defend against the claims asserted in the lawsuit. They have filed an answer to the plaintiffs' petition and asserted a number of defenses. Although the Seven Partnerships have not been named as Defendants in the lawsuit, the partnership agreements relating to the Seven Partnerships include an indemnity provision which requires the Seven Partnerships, under certain circumstances, to indemnify the general partners against losses, judgments, expenses and fees. The Partnership and the Hotels are involved in routine litigation and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance and which collectively are not expected to have a material adverse effect on the business, financial condition or results of operations of the Partnership. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits: None. b. Reports on Form 8-K: May 6, 1998 -- Letter from the General Partner to limited partners regarding status of proposed consolidation. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized. COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP By: CBM TWO CORPORATION General Partner July 31, 1998 By: /s/ Earla L. Stowe ------------------ Earla L. Stowe Vice President and Chief Accounting Officer EX-27 2 FDS --
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE SECOND QUARTER 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000832179 COURTYARD BY MARRIOT II LIMITED PARTNERSHIP 1000 US DOLLARS 6-MOS DEC-31-1998 JAN-1-1998 JUN-19-1998 1000 36,478 33,260 10,289 0 0 80,027 726,554 (267,501) 539,080 12,326 548,709 0 0 0 (21,955) 539,080 0 70,774 0 38,102 0 0 21,137 11,535 0 11,535 0 0 0 11,535 0 0 THIS REPRESENTS OTHER ASSETS. THIS REPRESENTS PARTNERS DEFICIT.
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