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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: May 15, 1997
BRISTOL HOTEL COMPANY
14285 Midway Road, Suite 300
Dallas, Texas 75244
972-391-3910
Commission File No. 1-14062
Incorporated in Delaware IRS No. 75-2584227
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ITEM 5. OTHER EVENTS
Bristol Hotel Company (the "Parent Company") is the issuer of its
11.22% Senior Notes due 2000 in the original principal amount of $70 million
(the "Senior Notes"). The Senior Notes are guaranteed by Bristol Hotel Asset
Company (the "Company"), a wholly owned subsidiary of the Parent Company. The
financial statements of Bristol Hotel Asset Company for the three months ended
March 31, 1997 and 1996 are attached as Exhibit 99.1 hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 99.1 Financial statements of Bristol Hotel Asset Company.
SIGNATURE
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 hereto duly authorized.
BRISTOL HOTEL COMPANY
DATE: May 15, 1997 BY: /s/ Jeffrey P. Mayer
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Jeffrey P. Mayer
Senior Vice President and Chief
Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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99.1 Financial statements of Bristol Hotel Asset Company.
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EXHIBIT 99.1
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
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<S> <C>
Condensed Consolidated Balance Sheets as of March 31, 1997 and
December 31, 1996 5
Condensed Consolidated Statements of Income for the three months ended
March 31, 1997 and 1996 6
Condensed Consolidated Statements of Cash Flows for the three months
ended March 31, 1997 and 1996 7
Notes to Condensed Consolidated Financial Statements 8
</TABLE>
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BRISTOL HOTEL ASSET COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1997 AND DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
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(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents.................................................. $ 5,979 $ 4,666
Marketable securities...................................................... 122 116
Accounts receivable, net................................................... 12,273 10,501
Inventory.................................................................. 3,419 3,320
Deposits and other current assets.......................................... 6,042 6,354
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Total current assets................................................... 27,835 24,957
Property and equipment, net..................................................... 588,556 552,564
Other assets:
Restricted cash............................................................ 3,259 3,069
Deferred charges and other non-current assets, net......................... 11,163 8,174
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Total assets........................................................... $ 630,813 $ 588,764
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LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current portion of long-term debt.......................................... $ 15,518 $ 15,769
Accounts payable and accrued expenses...................................... 14,004 18,840
Accrued property, sales and use taxes...................................... 6,370 7,346
Accrued insurance reserves................................................. 6,394 6,920
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Total current liabilities.............................................. 42,286 48,875
Long-term debt, excluding current portion....................................... 188,266 148,585
Deferred income taxes........................................................... 76,243 75,619
Other liabilities............................................................... 1,289 2,351
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Total liabilities...................................................... 308,084 275,430
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Common stock................................................................... -- --
Additional paid-in capital...................................................... 290,011 286,465
Retained earnings............................................................... 32,718 26,869
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Total stockholder's equity............................................. 322,729 313,334
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Total liabilities and stockholder's equity............................. $ 630,813 $ 588,764
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</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
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BRISTOL HOTEL ASSET COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1997 1996
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<S> <C> <C>
Revenue:
Rooms...................................................................... $ 41,731 $ 35,454
Food and beverage.......................................................... 12,475 10,599
Other...................................................................... 4,055 3,624
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Total revenue.............................................................. 58,261 49,677
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Operating costs and expenses:
Departmental expenses:
Rooms.................................................................. 9,905 8,574
Food and beverage...................................................... 8,439 7,193
Other.................................................................. 1,207 1,146
Undistributed operating expenses:
Administrative and general............................................. 4,699 4,633
Marketing.............................................................. 4,208 3,730
Property occupancy costs............................................... 8,326 7,133
Depreciation and amortization.......................................... 5,164 3,988
Corporate expense...................................................... 3,012 2,962
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Operating income................................................................ 13,301 10,318
Interest expense................................................................ 3,987 2,253
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Income before income taxes...................................................... 9,314 8,065
Income taxes.................................................................... 3,465 2,968
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Net income...................................................................... $ 5,849 $ 5,097
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</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
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BRISTOL HOTEL ASSET COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1997 1996
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<S> <C> <C>
Cash flows from operating activities:
Net income .............................................. $ 5,849 $ 5,097
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ................... 5,164 3,988
Amortization of deferred financing costs ........ 273 346
Changes in working capital .............................. (7,735) 237
Decrease in advance deposits ............................ 286 5,046
Increase in restricted cash ............................. (190) (1,959)
Increase in deferred income taxes ....................... 624 1,493
Decrease in other liabilities ........................... (1,062) (40)
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Cash provided by operating activities ............... 3,209 14,208
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Cash flows from investing activities:
Improvements to property and equipment .................. (6,156) (27,043)
Purchase of property and equipment ...................... (35,000) --
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Cash used in investing activities ................... (41,156) (27,043)
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Cash flows from financing activities:
Proceeds from Parent Company ............................ 3,546 28
Repayments of long-term debt ............................ (1,770) (1,963)
Proceeds from senior term facility ...................... 41,200 10,829
Increase in deferred charges and other non-current assets (3,716) (821)
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Cash provided by financing activities .............. 39,260 8,073
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Net increase (decrease) in cash and cash equivalents ......... 1,313 (4,762)
Cash and cash equivalents at beginning of period ............. 4,666 7,906
-------- --------
Cash and cash equivalents at end of period ................... $ 5,979 $ 3,144
======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
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BRISTOL HOTEL ASSET COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
Bristol Hotel Asset Company (the "Company") was formed in November 1995 as
a wholly owned subsidiary of Bristol Hotel Company (the "Parent Company"). The
operating results of the Company are substantially the operating results of the
Parent Company. However, the Parent Company rather than the Company, is the
obligor on the $70 million Senior Notes as discussed in Note 3 below.
The condensed consolidated balance sheet at December 31, 1996, has been
derived from the audited balance sheet at that date. The condensed consolidated
balance sheet at March 31, 1997, the condensed consolidated statements of
income for the three months ended March 31, 1997 and 1996, and the condensed
consolidated statements of cash flow for the three months ended March 31, 1997
and 1996 have been prepared by the Company and are unaudited. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly, in all material respects, the financial position
of the Company as of March 31, 1997, and the results of operations and cash
flows for the three months ended March 31, 1997 and 1996 have been made.
Interim results are not necessarily indicative of fiscal year performance
because of the impact of seasonal and short-term variations.
Certain information and footnote disclosures normally included in
financial statements presented in accordance with generally accepted accounting
principles have been condensed or omitted. The Company 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 consolidated financial statements and notes thereto included in the
Parent Company's Annual Report on Form 10-K for the year ended December 31,
1996, the Parent Company's Form 10-Q for the quarter ended March 31, 1997 and
the Parent Company's Current Report on Form 8-K/A dated March 14, 1997, which
contains the audited financial statements of the Company for the year ended
December 31, 1996.
2. PROPERTY AND EQUIPMENT
On January 31, 1997, the Company acquired The Allerton Hotel, a 382 room
hotel located on North Michigan Avenue in Chicago, Illinois for $35 million,
which was financed with borrowings from the Company's senior term facility. The
Company anticipates spending approximately $27 million in a comprehensive
redevelopment of The Allerton Hotel, which, when completed, will operate as a
Crowne Plaza hotel with over 400 rooms.
3. COMMITMENTS AND CONTINGENCIES
The Company is guarantor of the $70 million Senior Notes of the Parent
Company, which are also secured by a first-priority pledge of all outstanding
shares of capital stock of the Company.
4. SUBSEQUENT EVENTS
On April 28, 1997, the Company completed its acquisition of the ownership
and/or management of 60 full-service Holiday Inn hotels in the United States
and Canada (the "Holiday Inn Acquisition"). With the Holiday Inn Acquisition,
the Company has become the largest Holiday Inn franchisee in the world and one
of the largest owner/operators of full-service hotels in North America. The
Company's portfolio consists of 83 owned hotels containing approximately 24,000
rooms, 12 management contracts and three Company-managed hotels owned by joint
ventures in which the Company holds a 50% interest. In total, the Company owns
and/or manages over 28,000 rooms in North America. The Company, which has
historically operated in the southern
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BRISTOL HOTEL ASSET COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4. SUBSEQUENT EVENTS (CONTINUED)
United States, now operates properties in 22 states, the District of Columbia
and Canada, including multiple properties in Los Angeles, Memphis, Nashville,
New Orleans, Orlando, San Antonio and San Francisco as well as six properties
in Canada.
As consideration for the Holiday Inn Acquisition, 9,361,308 shares of the
Parent Company's common stock were issued and $398 million was paid in cash.
The Company obtained the financing for the Holiday Inn Acquisition through a
new senior credit facility that provides for up to $560 million aggregate
amount of term loan borrowings (the "New Credit Facility"). The New Credit
Facility has been utilized as follows (dollars in thousands):
<TABLE>
<S> <C>
Refinancing of existing debt .......................... $108,176
Acquisition costs (excluding costs funded previously) . 22,800
Final payment on existing Bristol mortgage indebtedness 25,809
Final payment of Holiday Inns debt .................... 299,622
Purchase of hotels .................................... 98,000
Working capital ....................................... 5,593
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Total New Credit Facility ............................. $560,000
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</TABLE>
The New Credit Facility will mature in three years, subject to the Company's
option to extend the maturity for up to two additional years. Outstanding
principal amounts under the New Credit Facility bear interest at a rate equal
to, at the Company's election, one-, two-, three-, or six-month LIBOR plus
2.00%, subject to adjustment downward to 1.50% if certain ratings and financial
tests are satisfied. The Company has entered into interest rate cap transaction
agreements whereby the LIBOR rate is capped at 6% for $300 million of its
floating rate debt. The agreements are effective June 30, 1997 and terminate
April 30, 1998. The Company's obligations under the New Credit Facility are
secured principally by a pledge of the outstanding capital stock of the
Company's subsidiaries and mortgages on certain hotels.
The following pro forma financial data give effect to the Holiday Inn
Acquisition and the refinancing of the indebtedness pursuant to borrowings
under the New Credit Facility (collectively, the "Pro Forma Transactions") as
if these transactions had occurred on January 1 of each period presented. The
Holiday Inn Acquisition will be accounted for under the purchase method of
accounting. The following unaudited pro forma financial data are not
necessarily indicative of the results that actually would have occurred had the
Pro Forma Transactions been consummated on the dates indicated or that may
occur in the future.
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MARCH 31,
1997 1996
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(Dollars in thousands)
<S> <C> <C>
Revenues $148,684 $133,751
Income before income taxes 14,825 10,683
Net income 9,136 6,670
</TABLE>
On May 12, 1997, the Parent Company entered into a Terms Agreement
with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
pursuant to which the Parent Company intends to issue up to 3,162,500 shares of
the Parent Company's common stock in connection with an underwritten public
offering of such shares (the "Offering"). The Offering is being made pursuant
to a $500 million shelf registration statement that became effective on April
22, 1997, after being previously filed with the Securities and Exchange
Commission on March 6, 1997. The Parent Company anticipates using the net
proceeds from the Offering, which is expected to close in May, 1997, for
general corporate purposes including the funding of hotel redevelopment costs
and acquisitions. Pending such uses, the Parent Company intends to use the net
proceeds to repay borrowings under the New Credit Facility.
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