<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Quarter Ended June 30, 1996 Commission File Number 1-11903
AMERICAN GENERAL HOSPITALITY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Maryland 75-2648842
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3860 West Northwest Highway, Suite 300, Dallas, Texas 75220
(Address of Registrant's Principal Executive Office) (Zip Code)
(214) 904-2000
(Registrant's Telephone Number Including Area Code)
Indicate by check mark whether the Registrant (i) 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 report), and (ii) has been subject to such
filing requirements for the past 90 days.
_______Yes X No
---------
The registrant became subject to the filing requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934 on July 25, 1996.
The number of shares of Common Stock, $.01 par value, outstanding on
September 3, 1996, was 8,262,008.
1 of 26
<PAGE>
AMERICAN GENERAL HOSPITALITY CORPORATION
This Quarterly Report on Form 10-Q contains historical information and forward-
looking statements. Statements looking forward in time are included in this
Form 10-Q pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. They involve known and unknown risks and
uncertainties that may cause the Company's actual results in future periods to
be materially different from any future performance suggested herein. In the
context of forward-looking information provided in this Form 10-Q and in other
reports, please refer to the discussion of risk factors detailed in, as well as
the other information contained in, the Company's filing with the Securities and
Exchange Commission during the past 12 months.
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
PART I. Financial Information
Item 1 Financial Statements
AMERICAN GENERAL HOSPITALITY CORPORATION
Balance Sheet - June 30, 1996 (unaudited) 3
Notes to Balance Sheet 4
Pro forma Consolidated Balance Sheet
June 30, 1996 (unaudited) 6
Statements of Estimated Revenues Less Expenses for the
Six Months Ended June 30, 1996 and 1995 (unaudited) 7
AGH LEASING, L.P. (the "Lessee")
Balance Sheet - June 30, 1996 (unaudited) 8
Notes to Balance Sheet 9
Pro forma Balance Sheet - June 30, 1996 11
Pro forma Combined Statements of Operations
for the Six Months Ended June 30, 1996 (unaudited) 12
Pro forma Combined Statements of Operations
for the Six Months Ended June 30, 1995 (unaudited) 13
AGH PREDECESSOR HOTELS
Combined Balance Sheets - June 30, 1996
(unaudited) and December 31, 1995 13
Combined Statements of Operations - for the Three
and Six Months Ended June 30, 1996 and 1995 (unaudited) 14
Combined Statements of Cash Flows - For the Six
Months Ended June 30, 1996 and 1995 (unaudited) 15
Notes to Combined Financial Statements 16
AMERICAN GENERAL HOSPITALITY CORPORATION AND AGH LEASING, L.P.
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 19
PART II Other Information 25
</TABLE>
2
<PAGE>
AMERICAN GENERAL HOSPITALITY CORPORATION
BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash ......................................................... $100
----
$100
=====
LIABILITIES AND SHAREHOLDERS' EQUITY
Commitments and contingencies
Preferred stock, $.01 par value per share,
20,000,000 shares authorized, no shares
issued or outstanding
Common stock, $.01 par value per share,
100,000,000 shares authorized, 100 shares
issued and outstanding ..................................... $100
=====
</TABLE>
The accompanying notes are an integral part of this balance sheet
3
<PAGE>
AMERICAN GENERAL HOSPITALITY CORPORATION
NOTES TO BALANCE SHEET
1. ORGANIZATION AND INITIAL PUBLIC OFFERING
Organization - American General Hospitality Corporation (the
"Company") was formed on April 12, 1996, as a Maryland corporation which intends
to qualify as a real estate investment trust ("REIT"). The Company has been
formed to acquire equity interests in 13 hotels (the "Initial Hotels"). Four of
the Initial Hotels (the "AGH Predecessor Hotels") were acquired primarily from
limited partnerships controlled by the shareholders of American General
Hospitality, Inc. (the "AGHI Affiliates"). The remaining nine Initial Hotels
(the "AGH Acquisition Hotels") were acquired primarily from parties unaffiliated
with the Company through contracts with the sellers acquired from an AGHI
affiliate.
Upon completion of the initial public offering described below, the
Company, through wholly owned subsidiaries, acquired an approximate 81.3% equity
interest in American General Hospitality Operating Partnership, L.P. (the
"Operating Partnership"). A wholly owned subsidiary of the Company is the sole
general partner of the Operating Partnership. The Operating Partnership and
entities which it controls own the Initial Hotels and lease them to AGH Leasing,
L.P. (the "Lessee"), which is owned, in part, by certain officers of the
Company, under operating leases ("Participating Leases") which provide for rent
based on the revenues of the Initial Hotels. The Lessee has entered into
management agreements pursuant to which all of the Initial Hotels are managed by
American General Hospitality, Inc. ("AGHI").
Initial Public Offering - As of July 31, 1996, the Company completed
an initial public offering of 7,500,000 shares of its common stock and an
additional 575,000 shares of common stock were issued by the Company on August
28, 1996 upon exercise of the underwriters over-allotment option at a price per
common share of $17.75 (the "Offering"). In addition, concurrently with the
July 31, 1996 closing of the Offering, the Company acquired interests in five of
the Initial Hotels from the AGHI Employee Retirement Savings Plan in exchange
for 137,008 shares. Upon consummation of the Offering, the Company contributed
all of the net proceeds of the Offering ($129.3 million after deducting Offering
expenses), together with interests in five of the Initial Hotels acquired in
connection with the consummation of the Offering, to AGH GP, Inc. ("General
Partner") and AGH LP, Inc. ("Limited Partner"), which, in turn, contributed such
proceeds and interests to the Operating Partnership in exchange for an
approximate 81.3% equity interest in the Operating Partnership. The General
Partner, a wholly owned subsidiary of the Company, owns a 1.0% interest in the
Operating Partnership. The Limited Partner, also a wholly owned subsidiary of
the Company, owns an approximate 80.3% limited partnership interest in the
Operating Partnership.
Also on July 31, 1996 the Operating Partnership acquired directly or
indirectly the remaining interests in each of the Initial Hotels for an
aggregate of 1,896,996 of units of limited partnership interest ("OP Units")
(560,178 OP Units to the Primary Contributors, which consist of the principals
of AGHI and the Lessee and certain of their respective affiliates and 1,336,818
OP Units to parties unaffiliated with the Primary Contributors); and
approximately $91.0 million in cash to parties unaffiliated with the Primary
Contributors, which was subject to approximately $52.9 million in mortgage
indebtedness of which approximately $33.5 million was repaid from the net
proceeds of the Offering and the initial draw from the outstanding balance of
the Line of Credit. On August 28, 1996, the Line of Credit was repaid with
proceeds of the underwriters over-allotment option. The Operating Partnership
reimbursed AGHI for approximately $900,000 for direct out-of-pocket expenses
incurred in connection with the acquisition of the Initial Hotels, including
legal, environmental and engineering expenses. In addition, the Operating
Partnership sold certain personal property relating to certain of the Initial
Hotels to the Lessee in exchange for a series of three five-
4
<PAGE>
AMERICAN GENERAL HOSPITALITY CORPORATION
NOTES TO BALANCE SHEET, CONTINUED
year recourse promissory notes in the aggregate principal amount of $315,000
that are collateralized by such personal property.
Upon the closing of the Offering, the Company closed a $100 million
line of credit with a consortium of banks led by Societe Generale, Southwest
Agency and Bank One, Texas, N.A. The Line of Credit is secured by, among other
things, first mortgage liens on all of the Initial Hotels, other than Holiday
Inn Dallas DFW Airport South and Courtyard by Marriott-Meadowlands. The Line of
Credit has an initial term of three years that is subject to extension under
certain circumstances for an additional one-year term. Borrowings under the Line
of Credit bear interest at 30-day, 60-day or 90-day LIBOR (the "London Interbank
Offered Rate"), at the option of the Company, plus 1.85% per annum, payable
monthly in arrears or one-half percent in excess of the prime rate.
The Company's accompanying balance sheet as of June 30, 1996, presents
the Company's financial position before the Offering and related transactions.
Included in this Form 10-Q is financial information for the AGH Predecessor
Hotels which is considered to be the predecessor to the Company.
The unaudited balance sheet has been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission (the "SEC") and should
be read in conjunction with the financial statements and notes thereto of the
Company, Lessee, and AGH Predecessor Hotels included in Amendment number five to
the Company's Registration Statement on Form S-11 dated July 24, 1996 (the
"Registration Statement"). The following notes to the balance sheet highlight
significant changes to the notes included in the Registration Statement and
presents interim disclosures required by the SEC. The accompanying balance sheet
reflects, in the opinion of management, all adjustments necessary for a fair
presentation of the interim balance sheet. All such adjustments are of a normal
and recurring nature.
2. PRO FORMA AND ESTIMATED INFORMATION
The following unaudited pro forma Balance Sheet and Statements of
Estimated Revenues Less Expenses of the Company are presented as if the
consummation of the Formation Transactions and the application of the net
proceeds of the Offering had occurred on June 30, 1996, and January 1, 1995,
respectively and all of the Initial Hotels had been leased pursuant to the
Participating Leases. Such pro forma and estimated information is based in part
upon the Combined Statements of Operations of the AGH Predecessor Hotels and the
pro forma Combined Statements of Operations of the Initial Hotels and Lessee
included elsewhere in this Form 10-Q. Such information should be read in
conjunction with the Financial Statements listed in the Index on page 2 of this
Form 10-Q and in Amendment number five to the Company's Registration Statement
dated July 24, 1996. In management's opinion, all adjustments necessary to
reflect the effects of the Formation Transactions and the Offering have been
made. The pro forma and estimated information does not purport to present what
the actual financial position or results of operations of the Company, or of the
Initial Hotels and the Lessee, would have been if the previously mentioned
transactions had occurred on such dates or to project the future financial
position or results of operations of the Company, or of the Initial Hotels and
the Lessee, for any future period.
3. SUBSEQUENT EVENT
On July 26, 1996, the Company amended its charter to eliminate its
authorized preferred stock.
5
<PAGE>
AMERICAN GENERAL HOSPITALITY CORPORATION
PROFORMA CONSOLIDATED BALANCE SHEET
June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
AGH AGH
Predecessor Acquisition Pro Forma
Hotels Hotels Adjustments Pro Forma
-------------- ------------- ------------- --------------
ASSETS
<S> <C> <C> <C> <C>
Investment in hotel properties, net $22,811,252 $66,654,014 $86,705,934 $176,171,200
Cash and cash equivalents 1,661,804 7,805,622 (8,418,258) 1,049,168
Accounts receivable, net 497,378 2,856,684 (3,354,062)
Deferred expenses, net 371,191 650,306 1,920,103 2,941,600
Other assets 348,497 1,164,441 (1,512,938)
Advances to Lessee 315,000 315,000
--------------- -------------- -------------- --------------
Total assets $25,690,122 $79,131,067 $75,655,779 $180,476,968
=============== ============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Debt $20,142,499 $51,374,169 ($52,099,941) $19,416,727
Accounts payable, trade,
accrued expenses and other
liabilities 982,074 8,990,602 (9,722,676) 250,000
Minority interest in Operating
Partnership 30,071,515 30,071,515
--------------- -------------- -------------- --------------
Total liabilities 21,124,573 60,364,771 (31,751,102) 49,738,242
--------------- -------------- -------------- --------------
Stockholders' equity
Preferred stock
Common stock 82,620 82,620
Additional paid-in capital 131,543,606 131,543,606
Unearned officers' compensation (887,500) (887,500)
Retained earnings 4,565,549 18,766,296 (23,331,845)
--------------- -------------- -------------- --------------
Total stockholders' equity 4,565,549 18,766,296 107,406,881 130,738,726
--------------- -------------- -------------- --------------
Total liabilities and stockholders'
equity $25,690,122 $79,131,067 $75,655,779 $180,476,968
=============== ============== ============== ==============
</TABLE>
6
<PAGE>
AMERICAN GENERAL HOSPITALITY CORPORATION
STATEMENTS OF ESTIMATED REVENUES LESS EXPENSES
For the Six Months Ended June 30, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Estimated Revenues Less Expenses Data:
Participating Lease revenue $13,792,741 $11,936,259
Interest income 15,750 15,750
--------------- ---------------
Total revenue 13,808,491 11,952,009
--------------- ---------------
Depreciation 2,913,699 4,249,209
Amortization 323,330 323,330
Real estate and personal property taxes and
property insurance 1,082,537 1,082,537
General and administrative 565,000 565,000
Ground lease expense 432,210 394,431
Amortization of unearned officers'
compensation 44,375 44,375
Interest expense 758,736 758,736
--------------- ---------------
Total expenses 6,119,887 7,417,618
--------------- ---------------
Estimated revenues less expenses before minority
interest 7,688,604 4,534,391
Minority interest 1,437,769 847,931
--------------- ---------------
Estimated revenues less expenses applicable to
common shareholders $6,250,835 $3,686,460
=============== ===============
Estimated revenues less expenses per common
share $0.76 $0.45
=============== ===============
Weighted average number of shares of Common
Stock outstanding 8,262,008 8,262,008
=============== ===============
</TABLE>
7
<PAGE>
AGH LEASING, L.P.
BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash ................................................................. $100
----
$100
====
LIABILITIES AND EQUITY
Commitments and contingencies
Equity .............................................................. $100
====
</TABLE>
The accompanying notes are an integral part of this balance sheet
8
<PAGE>
AGH LEASING, L.P.
NOTES TO BALANCE SHEET
1. ORGANIZATION AND INITIAL PUBLIC OFFERING
Organization - AGH Leasing, L.P. (the "Lessee"), was formed on May 29,
1996, as a Delaware limited partnership. Upon completion of the initial public
offering described below, American General Hospitality Corporation (the
"Company") acquired an approximate 81.3% interest in American General
Hospitality Operating Partnership, L.P. (the "Operating Partnership"). In order
for the Company to qualify as a real estate investment trust ("REIT"), neither
the Company nor the Operating Partnership can operate hotels; therefore, the
Operating Partnership, which owns 13 hotels (the "Initial Hotels"), leases the
Initial Hotels to the Lessee under operating leases ("Participating Leases")
which provide for rent based on the revenues of the Initial Hotels.
Upon completion of the initial public offering of the Company and the
commencement of the Participating Leases, the financial statements of the Lessee
will include the results of operations of the hotels leased from the Operating
Partnership due to the Lessee's control over the operations of the hotels during
the 12 year term of the Participating Leases. The Lessee has complete
discretion in establishing room rates and all rates for hotel goods and
services. Likewise, all operating expenses of the hotels are under the control
of the Lessee. The Lessee has the right to manage or to enter into management
contracts with other parties to manage the hotels. If the Lessee elects to
enter into management contracts with parties other than American General
Hospitality, Inc. ("AGHI"), the Lessee must obtain the prior written consent of
the Operating Partnership, which consent may not be unreasonably withheld. The
Lessee, with the written consent of the Operating Partnership, has entered into
management agreements pursuant to which all of the Initial Hotels are managed by
AGHI. The Lessee is owned in part by certain executive officers of the Company
and AGHI.
Initial Public Offering - As of July 31, 1996, the Company completed an
initial public offering of 7,500,000 shares of its common stock and an
additional 575,000 shares of common stock were issued by the Company on August
28, 1996 upon exercise of the underwriters' over-allotment option at a price per
common share of $17.75 (the "Offering"). Upon consummation of the Offering, the
Company contributed all of the net proceeds of the Offering to the Operating
Partnership in exchange for an approximate 81.3% equity interest in the
Operating Partnership. The Operating Partnership used such funds to purchase
certain of the Initial Hotels, repay debt and other obligations of the Initial
Hotels, and for working capital.
Upon consummation of the Offering, the partners of the Lessee capitalized
the Lessee with $500,000 cash and pledged 275,000 OP Units to the Company to
secure the Lessee's obligations under the Participating Leases.
2. PRO FORMA AND ESTIMATED INFORMATION
The following unaudited pro forma Balance Sheet and Statements of
Operations of AGH Leasing, L.P. are presented as if the consummation of the
Formation Transactions and the application of the net proceeds of the Offering
had occurred on June 30, 1996 and January 1, 1995, respectively and all of the
Initial Hotels had been leased pursuant to the Participating Leases. Such pro
forma information is based in part upon the Statements of Estimated Revenues
Less Expenses of the Company and the Combined Statements of Operations of the
AGH Predecessor Hotels included elsewhere in this Form 10-Q. Such information
should be read in conjunction with the Financial Statements listed in the Index
on page 2 of this Form 10-Q and in Amendment number five of the Company's
Registration Statement dated July 24, 1996.
9
<PAGE>
AGH LEASING, L.P.
NOTES TO BALANCE SHEET, CONTINUED
In management's opinion, all adjustments necessary to reflect the effects of the
Formation Transactions and the Offering have been made. The pro forma
information does not purport to present what the actual financial position of or
the results of operation of the Initial Hotels and the Lessee would have been if
the previously mentioned transactions had occurred on such dates or to project
the future financial position or results of operations of the Initial Hotels and
the Lessee for any future period.
10
<PAGE>
AGH LEASING, L.P.
PROFORMA BALANCE SHEET
June 30, 1996
(unaudited)
<TABLE>
<S> <C>
ASSETS
Furniture, fixtures and equipment $315,000
Cash and cash equivalents 500,000
---------
Total assets $815,000
=========
LIABILITIES AND EQUITY
Notes Payable to Operating Partnership $315,000
Equity 500,000
---------
Total liabilities and equity $815,000
=========
</TABLE>
11
<PAGE>
INITIAL HOTELS AND LESSEE
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
AGH Predecessor Hotels AGH Acquisition Hotels
---------------------------------------- ----------------------------------------
Pro Forma Pro Forma Pro Forma
Historical Adjustments Pro Forma Historical Adjustments Pro Forma Combined
---------- ----------- --------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Room revenue $5,770,451 $8,287 $5,778,738 $23,779,491 $7,204 $23,786,695 $29,565,433
Food and beverage revenue 1,038,976 1,038,976 8,260,931 49,185 8,310,116 9,349,092
Other revenue 368,324 368,324 1,827,603 1,827,603 2,195,927
---------------------------------------- ------------------------------------------------------
Total revenue 7,177,751 8,287 7,186,038 33,868,025 56,389 33,924,414 41,110,452
---------------------------------------- ------------------------------------------------------
Expenses:
Property operating costs and
expenses 2,538,523 (7,313) 2,531,210 12,831,434 (90,513) 12,740,921 15,272,131
General and administrative 813,889 (2,495) 811,394 2,904,924 (45,252) 2,859,672 3,671,066
Advertising and promotion 392,016 392,016 2,237,109 (2,396) 2,234,713 2,626,729
Repairs and maintenance 288,530 288,530 1,437,289 (1,795) 1,435,494 1,724,024
Utilities 306,802 306,802 1,326,429 1,326,429 1,633,231
Management fees 252,740 (32,182) 220,558 723,653 199,094 922,747 1,143,305
Franchise costs 225,366 225,366 714,856 714,856 940,222
Depreciation 520,609 (520,609) 2,110,088 (2,078,588) 31,500 31,500
Amortization 32,308 (32,308) 192,777 (192,777)
Real estate and personal
property taxes, and property
insurance 231,684 (231,684) 722,903 (722,903)
Interest expense 943,540 (943,540) 2,161,521 (2,145,771) 15,750 15,750
Other expense 135,902 (129,748) 6,154 869,511 (745,503) 124,008 130,162
Participating Lease expenses 2,461,054 2,461,054 11,331,687 11,331,687 13,792,741
---------------------------------------- ------------------------------------------------------
Total expenses 6,681,909 561,175 7,243,084 28,232,494 5,505,283 33,737,777 40,980,861
---------------------------------------- ------------------------------------------------------
Revenues over (under) expenses $495,842 ($552,888) ($57,046) $5,635,531 $5,448,894 $186,637 $129,591
======================================== ======================================================
</TABLE>
12
<PAGE>
INITIAL HOTELS AND LESSEE
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30,1995
(Unaudited)
<TABLE>
<CAPTION>
AGH Predecessor Hotels AGH Acquisition Hotels
-------------------------------------------------- ---------------------------------
Prior to Pro Forma Pro Forma Pro Forma
Historical Acquisition Adjustments Pro Forma Historical Adjustments Pro Forma Combined
----------- ----------- ----------- --------- ---------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Room revenue $3,713,543 $1,532,369 $5,245,912 $21,857,528 $8,545 $21,866,073 $27,111,985
Food and beverage revenue 495,483 420,569 916,052 8,161,445 44,980 8,206,425 9,122,477
Other revenue 223,624 92,884 40,695 357,203 1,736,019 20,689 1,756,708 2,113,911
--------------------------------------------------- -----------------------------------------------
Total revenue 4,432,650 2,045,822 40,695 6,519,167 31,754,992 74,214 31,829,206 38,348,373
--------------------------------------------------- -----------------------------------------------
Expenses:
Property operating costs
and expenses 1,474,314 743,827 (37,059) 2,181,082 12,375,874 (176,707) 12,199,167 14,380,249
General and administrative 516,970 157,452 (7,005) 667,417 2,611,486 (90,974) 2,520,512 3,187,929
Advertising and promotion 238,743 97,924 336,667 1,950,814 (4,792) 1,946,022 2,282,689
Repairs and maintenance 196,382 104,843 301,225 1,266,359 (3,590) 1,262,769 1,563,994
Utilities 170,575 91,129 261,704 1,370,331 1,370,331 1,632,035
Management fees 155,459 61,199 3,855 220,513 639,302 307,509 946,811 1,167,324
Franchise costs 121,114 83,718 204,832 712,753 712,753 917,585
Depreciation 1,647,275 126,676 (1,773,951) 2,848,285 (2,816,785) 31,500 31,500
Amortization 51,522 ( 51,522) 256,749 (256,749)
Real estate and personal
property taxes,
and property insurance 151,140 37,406 (188,546) 824,905 (824,905)
Interest expense 619,129 (619,129) 2,931,667 (2,915,917) 15,750 15,750
Other expenses 151,553 (146,339) 5,214 549,461 (438,849) 110,612 115,826
Participating Lease expenses 2,058,678 2,058,678 9,877,581 9,877,581 11,936,259
--------------------------------------------------- -----------------------------------------------
Total expenses 5,494,176 1,504,174 (761,019) 6,237,332 28,337,986 2,655,822 30,993,808 37,231,140
--------------------------------------------------- -----------------------------------------------
Revenues over (under)
expenses ($1,061,526) $ 541,648 $801,714 $281,836 $3,417,006 ($2,581,608) $835,398 $1,117,234
=================================================== ===============================================
</TABLE>
13
<PAGE>
AGH PREDECESSOR HOTELS
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
(Unaudited)
<C> <C> <C>
ASSETS
Investments in hotel properties, at cost:
Land .............................................. $1,496,515 $1,496,515
Buildings and improvements......................... 19,105,039 18,427,855
Furniture, fixtures and equipment.................. 3,675,809 3,439,484
------------- -------------
24,277,363 23,363,854
Less accumulated depreciation........................ (1,466,111) (945,502)
------------- -------------
Net investment in hotel properties................... 22,811,252 22,418,352
Cash and cash equivalents............................ 1,222,879 857,608
Restricted cash...................................... 438,925 441,445
Accounts receivable, net ............................ 497,378 281,169
Inventories.......................................... 59,923 55,611
Prepaid expenses..................................... 198,642 166,463
Deferred expenses.................................... 371,191 370,046
Other assets......................................... 89,932 85,410
------------- -------------
Total assets....................................... $25,690,122 $24,676,104
============= =============
LIABILITIES AND EQUITY
Debt................................................. $20,142,499 $19,277,646
Accounts payable, trade.............................. 235,213 560,862
Accrued expenses and other liabilities .............. 746,861 832,889
------------- -------------
Total liabilities.................................. 21,124,573 20,671,397
------------- -------------
Commitments and contingencies (Notes 1 and 2)
Capital.............................................. 5,877,391 5,812,391
Retained earnings.................................... (1,311,842) (1,807,684)
------------- -------------
Total equity....................................... 4,565,549 4,004,707
------------- -------------
Total liabilities and equity....................... $25,690,122 $24,676,104
============= =============
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
14
<PAGE>
AGH PREDECESSOR HOTELS
COMBINED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues:
Room revenue........................................ $3,145,837 $2,088,183 $5,770,451 $3,713,543
Food and beverage revenue........................... 529,645 280,150 1,038,976 495,483
Other revenue....................................... 194,874 121,257 368,324 223,624
---------- ---------- ---------- ----------
Total revenue 3,870,356 2,489,590 7,177,751 4,432,650
---------- ---------- ---------- ----------
Expenses:
Property operating costs and
expenses.......................................... 868,632 547,197 1,618,894 1,004,187
Food and beverage costs and
expenses.......................................... 468,320 251,621 919,629 470,127
General and administrative.......................... 441,912 284,328 813,889 516,970
Advertising and promotion........................... 213,809 117,193 392,016 238,743
Repairs and maintenance............................. 158,283 105,898 288,530 196,382
Utilities........................................... 150,958 94,478 306,802 170,575
Management fees..................................... 137,625 87,676 252,740 155,459
Franchise costs..................................... 124,671 70,972 225,366 121,114
Depreciation........................................ 231,924 610,710 520,609 1,647,275
Amortization........................................ 16,060 46,669 32,308 51,522
Real estate and personal property taxes,
and property insurance............................ 117,546 85,947 231,684 151,140
Interest expense.................................... 486,394 363,577 943,540 619,129
Other expenses...................................... 86,986 92,919 135,902 151,553
--------- ---------- --------- ------------
Total expenses................................ 3,503,120 2,759,185 6,681,909 5,494,176
--------- ---------- --------- ------------
Net income (loss)............................. $367,236 ($269,595) $495,842 ($1,061,526)
========= ========== ========= ============
</TABLE>
15
<PAGE>
AGH PREDECESSOR HOTELS
COMBINED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------------
1996 1995
------------- ------------
<S> <C> <C>
Cash flow from operating activities:
Net income (loss) $495,842 ($1,061,526)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 520,609 1,647,275
Amortization 32,308 51,522
Changes in assets and liabilities:
Accounts receivable (216,209) (189,672)
Inventories (4,312) (2,913)
Prepaid expenses (32,179) (159,003)
Other assets (4,522) (114,767)
Franchise agreements (120,500)
Organization costs (13,679) (66,204)
Accounts payable, trade (325,649) 609,048
Accrued expenses and other liablilities (86,028) 210,859
Restricted cash 2,520 (286,142)
------------ ---------------
Net cash provided by operating activities 368,701 517,977
------------ ---------------
Cash flows from investing activities:
Improvements and additions to hotel properties (913,509) (659,447)
Acquisition of hotel properties, net of cash acquired (8,171,424)
------------ ---------------
Net cash used in investing activities (913,509) (8,830,871)
------------ ---------------
Cash flows from financing activities:
Proceeds from borrowings 1,085,737 7,468,883
Principal payments on borrowings (220,884) (274,714)
Payment of deferred loan costs (19,774) (111,500)
Capital contributions 65,000 1,868,118
Distributions paid (155,727)
------------ ---------------
Net cash provided by financing activities 910,079 8,795,060
------------ ---------------
Net change in cash and cash equivalents 365,271 482,166
Cash and cash equivalents at beginning of periods 857,608 615,067
------------ ---------------
Cash and cash equivalents at end of periods 1,222,879 1,097,233
============ ===============
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $943,540 $619,129
============ ===============
</TABLE>
The accompanying notes are an integral part of these combined
financial statements.
16
<PAGE>
AGH PREDECESSOR HOTELS
NOTES TO COMBINED FINANCIAL STATEMENTS
1. ORGANIZATION, BASIS OF PRESENTATION AND INITIAL PUBLIC OFFERING
Organization - American General Hospitality Corporation (the "Company"), a
newly organized Maryland corporation which intends to qualify as a real estate
investment trust ("REIT"), has been formed to acquire equity interests in 13
hotels (the "Initial Hotels"). Four of the Initial Hotels (the "AGH Predecessor
Hotels") were acquired primarily from limited partnerships controlled by the
shareholders of American General Hospitality, Inc. (the "AGHI Affiliates"). The
remaining nine Initial Hotels (the "AGH Acquisition Hotels") were acquired
primarily from parties controlled by persons unaffiliated with AGHI.
Upon completion of the initial public offering described below, the Company
acquired a 81.3% equity interest in American General Hospitality Operating
Partnership, L.P. (the "Operating Partnership"). A wholly owned subsidiary of
the Company is the sole general partner of the Operating Partnership. The
Operating Partnership and entities which it controls own the Initial Hotels and
lease them to AGH Leasing, L.P. (the "Lessee") under operating leases
("Participating Leases") which provide for rent based on the revenues of the
Initial Hotels. The Lessee has entered into management agreements pursuant to
which all of the Initial Hotels will be managed by American General Hospitality,
Inc. ("AGHI").
Basis of Presentation - The accompanying combined financial statements of
the AGH Predecessor Hotels have been presented on a combined basis due to common
ownership and management and because the entities were the subject of a business
combination with the Company upon consummation of the initial public offering.
The AGH Predecessor Hotels consist of the 165 room Courtyard by Marriott
Meadowlands located in Secaucus, New Jersey (purchased buildings and
improvements, and furniture, fixtures and equipment for cash in December 1993
for approximately $5.9 million), the 23 room Hotel Maison de Ville located in
New Orleans, Louisiana (purchased land, buildings and improvements, and
furniture, fixtures and equipment for cash in August 1994 for approximately $2.5
million), the 124 room Hampton Inn Richmond airport located in Richmond,
Virginia (purchased land, buildings and improvements, and furniture, fixtures
and equipment for cash in December 1994 for approximately $5.1 million) and the
243 room Holiday Inn Dallas DFW Airport West located in Bedford, Texas
(purchased land, buildings and improvements, and furniture, fixtures and
equipment for cash in June 1995 for approximately $8.0 million).
The acquisition of each AGH Predecessor Hotel has been accounted for as a
purchase and accordingly, the results of operations for each AGH Predecessor
Hotel has been included in the combined statements of operations since the
respective dates of acquisition.
Initial Public Offering - As of July 31, 1996, the Company completed an
initial public offering of 7,500,000 shares of its common stock and an
additional 575,000 shares of common stock were issued by the Company on August
28, 1996 upon exercise of the underwriters' over-allotment option at a price per
common share of $17.75 (the "Offering"). Upon consummation of the Offering, the
Company contributed all of the net proceeds of the Offering to the Operating
Partnership in exchange for an approximate 81.3% equity interest in the
Operating Partnership. The Operating Partnership used such funds to purchase
certain of the Initial Hotels, repay debt and other obligations of the Initial
Hotels, and for working capital.
17
<PAGE>
AGH PREDECESSOR HOTELS
NOTES TO COMBINED FINANCIAL STATEMENTS, CONTINUED
Interim Financial Information - The unaudited interim financial statements
as of June 30, 1996 and for the six months ended June 30, 1996 and 1995 have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC"). The notes to the interim financial statements
included herein are intended to highlight significant changes to the notes to
the December 29, 1995 financial statements and present interim disclosures
required by the SEC. Such information should be read in conjunction with the
Financial Statements listed in the Index on page 2 of this Form 10-Q and in
Amendment number five in the Company's Registration Statement dated July 24,
1996. The accompanying interim financial statements reflect, in the opinion of
management, all adjustments necessary for a fair presentation of the interim
financial statements. All such adjustments are of a normal and recurring nature.
18
<PAGE>
ITEM II.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
Upon consummation of the Offering and related transactions, the Company
owns an approximate 81.3% interest in the Initial Hotels through its interest in
the Operating Partnership. In order for the Company to qualify as a REIT,
neither the Company nor the Operating Partnership can operate hotels; therefore,
the Operating Partnership leases the Initial Hotels to the Lessee. The principal
source of revenue for the Operating Partnership and the Company is lease
payments paid by the Lessee under the Participating Leases. Participating Rent
is based upon the Initial Hotels' gross revenues. The Lessee's ability to make
payments to the Company under the Participating Leases is dependent on the
Lessee's and AGHI's ability to generate cash flow from the operations of the
Initial Hotels.
The accompanying discussion and analysis of financial condition and results
of operations is based on the combined historical financial statements of the
AGH Predecessor Hotels that are included elsewhere in this Form 10-Q. The AGH
Predecessor Hotels' financial statements include the results of operations of
the following hotels since their dates of acquisition by affiliates of AGHI:
Courtyard by Marriott Meadowlands (December 1993), Hotel Maison de Ville (August
1994), Hampton Inn Richmond Airport (December 1994) and Holiday Inn Dallas DFW
Airport West (June 1995). The four AGH Predecessor Hotels were combined into one
set of financial statements since they were acquired by the Company from a group
of Limited Partnerships controlled by shareholders of AGHI.
RESULTS OF OPERATIONS
Estimated Revenues Less Expenses of the Company - On an estimated basis for
the six months ended June 30, 1996, the Company would have had $13,792,741 in
revenue from the Participating Leases, calculated by applying the rent
provisions of the Participating Leases to the estimated revenues of the Initial
Hotels, and $15,750 in interest income from the FF&E Note issued by the Lessee.
Pro forma expenses would have been $6,119,887. Depreciation expense would have
been $2,913,699, which represents depreciation of the AGH Predecessor Hotels'
historical carryover cost basis plus depreciation of the AGH Acquisition Hotels'
new cost basis. This is a $1,335,510 decrease from 1995 due to the accelerated
depreciation recorded in 1995 on FF&E that was replaced in connection with
renovations at the AGH Predecessor Hotels. General and administrative expenses
would have been $565,000 representing salaries and wages of $280,440,
professional fees of $62,500, directors' and officers' insurance expense of
$45,000 and other expenses of $177,060. Interest expense would have been
$758,736 on the indebtedness totaling approximately $19.4 million related to the
Holiday Inn Dallas DFW Airport South and the Courtyard by Marriott Meadowlands.
The DFW South Loan and the Secaucus Loans mature between December 2000 and
February 2001 and bear interest at fixed rates ranging from 7.50% to 8.75% .
Funds From Operations - The Company considers Funds From Operations to be
an appropriate measure of the performance of an equity REIT. Funds From
Operations should not be considered an alternative to net income or other
measurements under generally accepted accounting principles as an indicator of
operating performance or to cash flows from operating, investing or financing
activities as a measure of liquidity.
The following is a reconciliation of Estimated Revenues Less Expenses to
Funds From Operations and illustrates the difference in the two measures of
operating performance:
19
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------------------
1996 1995
---- ----
<S> <C> <C>
Estimated Revenues Less Expenses before
Minority Interest $ 7,688,604 $ 4,534,391
Depreciation 2,913,699 4,249,209
----------- -----------
Funds From Operations $10,602,303 $ 8,783,600
------------- -----------
Weighted Average Number of shares of
Common Stock and OP Units Outstanding 10,159,004 10,159,004
============= ===========
</TABLE>
AGH PREDECESSOR HOTELS
The following table sets forth certain combined historical financial
information for the AGH Predecessor Hotels as a percentage of combined AGH
Predecessor Hotels' revenue for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Room revenue.............................. 81.3% 83.9% 80.4% 83.8%
Food and beverage revenue................. 13.7% 11.3% 14.5% 11.2%
Other revenue............................. 5.0% 4.9% 5.1% 5.0%
---- ---- ---- ----
Total revenue.......................... 100.0% 100.0% 100.0% 100.0%
Hotel operating expenses.................. 66.3% 62.6% 67.1% 64.8%
Depreciation and amortization............. 6.4% 26.4% 7.7% 38.3%
Interest expense.......................... 12.6% 14.6% 13.1% 14.0%
Other corporate expenses.................. 5.3% 7.2% 5.2% 6.8%
---- ---- ---- ----
Net income (loss) 9.5% (10.8)% 6.9% (23.9)%
==== ======= ==== =======
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
1996 1995* 1996 1995*
---- ---- ---- ----
<S> <C> <C> <C> <C>
KEY FACTORS:
Occupancy................................. 80.1% 77.8% 72.2% 75.5%
ADR....................................... $77.75 $73.15 $79.24 $70.13
REVPAR.................................... $62.29 $56.91 57.20 $52.95
</TABLE>
* 1995 operating statistics includes information for Holiday Inn Dallas DFW West
for periods in which AGH did not own the property.
20
<PAGE>
As previously described, the year-to-year comparisons of the results of
operations of the AGH Predecessor Hotels are significantly impacted by the
acquisition in June of 1995 of Dallas DFW Airport West.
Comparison of the six months ended June 30, 1996 to the six months ended June
30, 1995
Room revenue increased to $5,770,451 from $3,713,543, an increase of
$2,056,908 or 55.4%, principally resulting from: (i) an increase of $1,740,664
in room revenue due to the acquisition of the Holiday Inn Dallas DFW Airport
West in June 1995, (ii) an increase in the Courtyard by Marriott Meadowlands'
room revenues of $256,877 due to an increase in ADR to $90.19 from $81.29.
Food and beverage revenue increased to $1,038,976 from $495,483, an
increase of $543,493 or 109.7%. The increase is due primarily to the acquisition
of the Holiday Inn Dallas DFW Airport West, which produced additional food and
beverage revenues in the first two quarters of 1996 of $539,804.
Other revenue, which includes telephone revenues, interest income and
miscellaneous income, increased to $368,324 from $223,624, an increase of
$144,700 or 64.7%. Of the increase, $123,743 was due to the acquisition of the
Holiday Inn Dallas DFW Airport West discussed above.
Hotel operating expenses increased to $4,817,866 from $2,873,557, an
increase of $1,944,309 or 67.7%. The increase was due, in part, to the
acquisition of the Holiday Inn Dallas DFW Airport West, which had additional
operating expenses of $1,811,911 in 1996. Hotel operating expenses as a
percentage of total revenue increased from 64.8% in 1995 to 67.1% in 1996. The
increase is primarily attributable to the acquisition of the Holiday Inn Dallas
DFW Airport West, which incurred operating expenses as a percentage of total
revenue for 1996 of 72.9%. This percentage is higher than the other hotels due
to certain transitional expenses incurred by the hotel.
Depreciation and amortization decreased to $552,917 from $1,698,797, a
decrease of $1,145,880 or 67.5%. The decrease is related to the accelerated
depreciation recorded in 1995 on FF&E that was replaced in connection with
renovations at the AGH Predecessor Hotels.
Interest and other expenses increased to $1,079,442 from $770,682, an
increase of $308,760 or 40.1%. The acquisition of the Holiday Inn Dallas DFW
Airport West in June 1995 and the interest expense related to the mortgage
indebtedness incurred in connection with the acquisition accounted for nearly
all of the increase.
Comparison of three months ended June 30, 1996 to the three months ended June
30, 1995
Room revenue increased to $3,145,837 from $2,088,183, an increase of
$1,057,654 or 50.7%, principally resulting from (i) an increase $789,976 in
revenue due to the acquisition of the Holiday Inn of Dallas DFW West in June
1995 and (ii) an increase in the Courtyard by Marriott Meadowlands' room
revenues of $182,486 due to an increase in ADR to $91.73 from $81.73 as a result
of a renovation project in early 1996.
Food and beverage revenue increased to $529,645 from $280,150, an increase
of $249,495, or 89.1% due primarily to the acquisition of the Holiday Inn Dallas
DFW West which produced additional food and beverage revenues in the second
quarter of 1996 of $238,107. Other revenue increased to $194,874 from $121,257,
or 60.7%, due to the activity of the acquisition described above.
Hotel operating expenses increased to $2,564,210 from $1,559,363, an
increase of $1,004,847 or 64.4%. The increase was due in part to the acquisition
of the Holiday Inn Dallas DFW West hotel which
21
<PAGE>
had additional operating expenses of $856,729 in the second quarter of 1996.
Additionally, the rooms department operating expenses in the Courtyard by
Marriott Meadowlands were higher commensurate with higher occupancy and room
rates.
Depreciation and amortization decreased to $247,984 from $657,379, a
decrease of $409,395 or 62.3%. The decrease is primarily due to the accelerated
depreciation recorded in 1995 on FF&E that was replaced in connection with the
recent renovations at the AGH Predecessor hotels.
Interest and other expenses increased to $690,926 from $542,443, an
increase of $148,483. The increase was due to the increase in interest expense
related to the mortgage indebtedness incurred in connection with the acquisition
of the Holiday Inn Dallas DFW West hotel, as well as additional taxes and other
costs incurred with respect to the property.
Liquidity and Capital Resources
The Company's principal source of cash to meet its cash requirements,
including distributions to stockholders, will be its share of Operating
Partnership's cash flow from the Participating Leases. The Lessee's obligations
under the Participating Leases are secured by the pledge of 275,000 OP Units.
The Lessee's ability to make rent payments under the Participating Leases and
the Company's liquidity, including its ability to make distributions to
stockholders, will be dependent on the ability of the Lessee and AGHI to
generate sufficient cash flow from the Initial Hotels.
Upon consummation of the Offering, the Company had approximately $29.4
million of outstanding indebtedness, including approximately $19.4 million
encumbering two of the Initial Hotels and $10 million borrowed under the Line of
Credit in connection with the closing and for working capital. On August 28,
1996, all amounts borrowed under the Line of Credit were repaid with the
proceeds of the underwriters' over-allotment option. The Company intends to
acquire additional hotels and may incur additional indebtedness to make such
acquisitions or to meet distribution requirements imposed on it under the Code
to the extent that working capital and cash flow from the Company's investment
are insufficient to make such distributions. The Company intends to limit
consolidated indebtedness (measured at the time the debt is incurred) to no more
than 45.0% of the Company's investment in hotels.
The Company has closed a $100 million Line of Credit, which the Company
will use to fund acquisitions of additional hotels, make renovations and
capital improvements to hotels and for working capital requirements. The
Company currently has approximately $60.0 million available for borrowing under
the Line of Credit. The Company expects that its borrowing capacity under the
Line of Credit will increase to approximately $100 million, assuming all
additional borrowings are used to fund capital improvements to the Initial
Hotels or the acquisition of additional hotels. Borrowings under the Line of
Credit bear interest at 30-day, 60-day or 90-day LIBOR, at the option of the
Company, plus 1.85% per annum, payable monthly in arrears or one-half percent
in excess of the prime rate.
The Company will invest in additional hotel properties only as suitable
opportunities arise, and the Company will not undertake investment unless
adequate sources of financing are available. Future investments in hotel
properties will be financed, in whole or part, from proceeds from additional
issuances of Common Stock, borrowings under the line of Credit or from the
issuance of other debt or equity securities.
The Participating Leases require the Company to establish annual minimum
reserves equal to 4.0% of total revenue for each of the Initial Hotels which
will be utilized by the Lessee for the replacement and refurbishment of FF&E and
other capital expenditures to enhance the competitive position of the Initial
Hotels. The Company and the Lessee will agree on the use of funds in this
reserve and the Company will have the right to approve the Lessee's long-term
expenditure budgets. While the Company expects its
22
<PAGE>
reserve to be adequate to fund recurring capital needs, including periodic
renovations, the Company may use Cash Available for Distribution, as defined
below, in excess of distributions paid or funds drawn under the Line of Credit
or other borrowings to fund additional capital improvements, as necessary,
including major renovations at the Company's hotels.
Cash Available for Distribution represents Funds From Operations plus the
sum of amortization of deferred financing costs, franchise transfer costs and
unearned officers' compensation. This amount is then reduced by the sum of 4.0%
of total revenue for each of the Initial Hotels that is required to be set aside
by the Operating Partnership for refurbishment and replacement of FF&E, capital
expenditures, and other non-routine items as required by the Participating
Leases and the estimated cash used to pay interest expenses related to the (i)
$24.6 million costs of planned renovations and refurbishment at the seven
Initial Hotels the Company plans to covert to leading franchise brands in order
to reposition such hotels for future growth and (ii) the $2.6 million of planned
improvements that the Company expects to make at five other Initial Hotels.
Estimated Cash Available for Distribution does not include the effects of any
revenue increases expected to result from capital expenditures at the Initial
Hotels.
Franchise Conversions and Other Capital Improvements
The Company has plans to spend approximately $24.6 million on capital
improvements for renovations and franchise brand conversion during the twelve
months following the Offering. The hotel properties and amounts are as follows:
<TABLE>
<CAPTION>
Hotel Anticipated Cost
----- ----------------
<S> <C>
Holiday Inn Select - Madison $ 1,714,000
Holiday Inn Park Center Plaza 4,667,000
Fred Harvey Albuquerque Airport Hotel 5,017,000
Le Baron Airport Hotel 6,500,000
Days Inn Ocean City 1,905,000
Holiday Inn Mission Valley 2,505,000
Holiday Inn New Orleans International
Airport 2,295,000
</TABLE>
In addition, the Company expects to spend up to $2.6 million on additional
capital improvements during the twelve months following the Offering in
connection with certain renovations and improvements that will not undergo a
conversion of franchise brands.
There can be no assurance that the Company will be able to complete the
scheduled capital improvements within the twelve months following the completion
of the Offering or that the anticipated costs for the capital improvements will
not exceed the amounts budgeted for that purpose. The Company intends to use
borrowings under the Line of Credit and the FF&E reserve established under the
Participating Leases to fund these expenditures.
23
<PAGE>
Inflation
Operators of hotels, in general, possess the ability to adjust room rates
quickly. Competitive pressures may, however, limit the Lessee's ability to raise
room rates in the face of inflation. Since 1987, industry-wide annual increases
in ADR have failed to keep pace with inflation.
Seasonality
The hotel industry is seasonal in nature. Generally, hotel revenue is
greater in the second and third quarters of a calendar year, although this may
not be true for hotels in major tourist destinations. Revenue for hotels in
tourist areas generally is substantially greater during the tourist season than
other times of the year. Seasonal variations in revenue at the Initial Hotels
may cause quarterly fluctuations in the Company's lease revenue.
24
<PAGE>
AMERICAN GENERAL HOSPITALITY CORPORATION
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - Form 27 - Financial Data Schedule
(b) Reports on Form 8-K - The Company did not file
any reports on Form 8-K during the period for
which this report is being filed.
25
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: September 9, 1996
AMERICAN GENERAL HOSPITALITY CORPORATION
By: /s/ Kenneth E. Barr
-------------------------------------
Kenneth E. Barr
Executive Vice President
Secretary and Chief Financial Officer
(Principal Financial and Accounting Officer)
26
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AGH
PREDECESSOR HOTELS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> APR-01-1996 JAN-01-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 1,661,804 1,661,804
<SECURITIES> 0 0
<RECEIVABLES> 497,536 497,536
<ALLOWANCES> (158) (158)
<INVENTORY> 59,923 59,923
<CURRENT-ASSETS> 0 0
<PP&E> 24,277,363 24,277,363
<DEPRECIATION> (1,466,111) (1,466,111)
<TOTAL-ASSETS> 25,690,122 25,690,122
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 4,565,549 4,565,549
<TOTAL-LIABILITY-AND-EQUITY> 25,690,122 25,690,122
<SALES> 0 0
<TOTAL-REVENUES> 3,870,356 7,177,751
<CGS> 0 0
<TOTAL-COSTS> 1,336,952 2,538,523
<OTHER-EXPENSES> 1,431,790 2,646,929
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 486,394 943,540
<INCOME-PRETAX> 367,236 495,842
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 367,236 495,842
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
