Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 11, 1998
ATLANTA MARRIOTT MARQUIS II LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 0-14374 52-1427553
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
10400 Fernwood Road, Bethesda, MD 20817-1109
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 301-380-2070
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ITEM 5. OTHER EVENTS
On June 11, 1998, September 19, 1998 and December 3, 1998, the General Partner
sent to the Limited Partners of the Partnership a letter that accompanied the
Partnership's Quarterly Reports on Form 10-Q. Such letters are being filed as
exhibits to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.2 Letter from the General Partner to the Limited Partners of the Partnership
that accompanied the Partnership's Quarterly Report on Form 10-Q for the
Quarter Ended March 27, 1998.
99.3 Letter from the General Partner to the Limited Partners of the Partnership
that accompanied the Partnership's Quarterly Report on Form 10-Q for the
Quarter Ended June 19, 1998.
99.4 Letter from the General Partner to the Limited Partners of the Partnership
that accompanied the Partnership's Quarterly Report on Form 10-Q for the
Quarter Ended September 11, 1998.
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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, hereunto duly authorized.
ATLANTA MARRIOTT MARQUIS II
LIMITED PARTNERSHIP
By: MARRIOTT MARQUIS CORPORATION
General Partner
December 7, 1998 By: /s/ Earla L. Stowe
------------------
Name: Earla L. Stowe
Title: Vice President and
Chief Accounting Officer
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EXHIBIT INDEX
Exhibit No.: Description:
99.2 Letter from the General Partner to the Limited
Partners of the Partnership that accompanied the
Partnership's Quarterly Report on Form 10-Q
for the Quarter Ended March 27, 1998.
99.3 Letter from the General Partner to the Limited
Partners of the Partnership that accompanied the
Partnership's Quarterly Report on Form 10-Q
for the Quarter Ended June 19, 1998.
99.4 Letter from the General Partner to the Limited
Partners of the Partnership that accompanied the
Partnership's Quarterly Report on Form 10-Q
for the Quarter Ended September 11, 1998.
EXHIBIT 99.2
1998 First Quarter Report
Limited Partner Quarterly Update
Presented for your review is the First Quarter 1998 Report for Atlanta Marriott
Marquis II Limited Partnership. The 1998 First Quarter Form 10-Q immediately
follows this letter and replaces the quarterly report format previously used by
the Partnership. The information presented is essentially the same as the
information given in prior quarters with certain additional items required by
the rules of the Securities and Exchange Commission. Discussion of the
Partnership's performance and Hotel operations is included in Item 2,
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Host Marriott Real Estate Investment Trust
On April 17, 1998, Host Marriott Corporation ("Host Marriott"), parent company
of the General Partner of the Partnership, announced that its Board of Directors
has authorized the company to reorganize its business operations to qualify as a
real estate investment trust ("REIT") to become effective as of January 1, 1999.
As part of the REIT conversion, Host Marriott expects to form a new operating
partnership (the "Operating Partnership") and limited partners in certain Host
Marriott full-service hotel partnerships and joint ventures, including the
Partnership, are expected to be given an opportunity to receive, on a
tax-deferred basis, Operating Partnership units in the new Operating Partnership
in exchange for their current partnership interest. We will keep you informed on
the status of this matter.
Partnership Financing and Investor Returns
As previously reported, on February 2, 1998 the mortgage debt was successfully
refinanced with a third party lender. The Partnership's debt now consists of a
$164 million mortgage loan which bears interest at a fixed rate of 7.4% for a
12-year term. The mortgage loan requires payments of principal and interest
based upon a 25-year amortization schedule.
In conjunction with the Merger, on December 31, 1997, the General Partner made
an initial capital contribution of $6 million to the Partnership. On January 30,
1998, the General Partner contributed an additional $69 million. In return for
such additional capital contributions, the General Partner surrendered its then
existing Class B interest on distributions and received a new Class B limited
partnership interest in the Partnership entitling the General Partner to a 13.5%
cumulative, compounding annual preferred return and priority return of such
capital.
In February 1998, the Partnership distributed funds to the Class A limited
partners of $5,000 per new unit. This distribution represented the excess of the
Partnership's reserve after payment of a majority of the transaction costs
related to the mortgage debt refinancing.
We encourage you to review this report in its entirety. If you have any further
questions regarding your investment, please contact Host Marriott Partnership
Investor Relations at (301) 380-2070.
EXHIBIT 99.3
1998 Second Quarter Report
Limited Partner Quarterly Update
Presented for your review is the 1998 Second Quarter Report for Atlanta Marriott
Marquis II Limited Partnership. A discussion of the Partnership's performance
and hotel operations is included in the attached Form 10-Q, Item 2, Management's
Discussion and Analysis of Financial Condition and Results of Operations. As
always, we encourage you to read this report in its entirety. If you have any
questions regarding your investment, please contact Host Marriott Partnership
Investor Relations at (301) 380-2070.
Host Marriott Corporation's Conversion to a Real Estate Investment Trust
As previously reported, Host Marriott Corporation ("Host Marriott"), parent
company of the General Partner of the Partnership, announced on April 17, 1998
that its Board of Directors authorized Host Marriott to reorganize its business
operations to qualify as a real estate investment trust ("REIT") to become
effective as of January 1, 1999. As part of the REIT conversion, Host Marriott
formed a new operating Partnership (the "Operating Partnership") and limited
partners in certain Host Marriott full-service hotel partnerships and joint
ventures, including the Atlanta Marriott Marquis II Limited Partnership, are
expected to be given an opportunity to receive, on a tax-deferred basis,
Operating Partnership units in the Operating Partnership in exchange for their
current Partnership interests. The Operating Partnership units would be
redeemable by the limited partner for freely traded Host Marriott shares (or the
cash equivalent thereof) at any time after one year from the closing of the
merger. In connection with the REIT conversion, the Operating Partnership filed
a Registration Statement on Form S-4 (the "Form S-4") with the Securities and
Exchange Commission (the "SEC") on June 2, 1998. Limited partners will be able
to vote on this Partnership's participation in the merger later this year
through a consent solicitation.
In order to assist you with your financial planning, we are providing you with
the preliminary valuation information on your Partnership units as disclosed in
the Form S-4. The estimated exchange value is $45,425 per Partnership unit (the
"Estimated Exchange Value"). The Estimated Exchange Value is subject to
adjustment to reflect various closing and other adjustments and the final
valuation information will be set forth in the final Form S-4 you will receive
later this year through a consent solicitation.
The Estimated Exchange Value is being provided to you at this time for
information purposes only. We have not attempted to provide you with all of the
detail relating to the methodologies, variables, assumptions and estimates used
in determining the Estimated Exchange Value. The final valuation likely will
differ from the Estimated Exchange Value set forth above and such difference may
be material. The consent solicitation that will be mailed to you to solicit your
approval of a merger of the Partnership will contain the final valuation for a
Partnership unit as well as a discussion of the methodologies, variables,
assumptions and estimates used.
The solicitation period is expected to commence in late September 1998, and the
merger, if approved, would close by the end of the year (although there is no
assurance that this will be the case). Please notify the General Partner in
writing of any address changes in order to facilitate the prompt delivery of the
consent solicitation documents to you.
Second Market Activity
Limited partners should be aware that the Partnership agreement contains certain
restrictions on the assignment of partnership interests. Among these
restrictions is a prohibition on sales of additional Partnership interests in
any calendar year if such additional transfers would result in the Partnership
not being able to qualify for at least one of the "safe harbors" which govern
the circumstances under which a limited partnership will cease to be treated as
a partnership and will instead be treated as a corporation for tax purposes. The
Partnership has reached the "safe harbor" limit for the 1998 calendar year.
Therefore, the General Partner will not accept any further transfers due to
sales.
We will, however, continue to accept transfers between related parties. Please
contact our transfer agent, Trust Company of America/Gemisys at 1-800-797-6812
for the necessary documents. Please note that the General Partner does not
charge a fee in connection with any kind of transfer of Partnership units.
Partnership Financing and Investor Returns
As previously reported, the mortgage debt was successfully refinanced on
February 2, 1998 with a third party lender. The Partnership's debt now consists
of a $164 million mortgage loan which bears interest at a fixed rate of 7.4% for
a 12-year term. The mortgage loan requires payments of principal and interest
based upon a 25-year amortization schedule.
In conjunction with the Merger, on December 31, 1997, the General Partner made
an initial capital contribution of $6 million to the Partnership. On January 30,
1998, the General Partner contributed an additional $69 million. In return for
such additional capital contributions, the General Partner surrendered its then
existing Class B interest on distributions and received a new Class B limited
partnership interest in the Partnership entitling the General Partner to a 13.5%
cumulative, compounding annual preferred return and priority return of such
capital.
In February 1998, the Partnership distributed funds to the Class A limited
partners of $5,000 per new unit. This distribution represented the excess of the
Partnership's reserve after payment of a majority of the transaction costs
related to the mortgage debt refinancing.
EXHIBIT 99.4
1998 Third Quarter Report
Limited Partner Quarterly Update
Presented for your review is the 1998 Third Quarter Report for Atlanta Marriott
Marquis II Limited Partnership (the "Partnership"). A discussion of the
Partnership's performance and hotel operations is included in the attached Form
10-Q, Item 2, Management's Discussion and Analysis of Financial Condition and
Results of Operations. You are encouraged to review this report in its entirety.
If you have any further questions regarding your investment, please contact Host
Marriott Partnership Investor Relations at (301) 380-2070.
Host Marriott Corporation's Conversion to a Real Estate Investment Trust
As publicly announced in April 1998, Host Marriott Corporation ("Host
Marriott"), the parent company of the General Partner of the Partnership, has
adopted a plan to restructure its business operations so that it will qualify as
a real estate investment trust ("REIT") for federal income tax purposes. As part
of the REIT conversion, Host Marriott proposes to merge into HMC Merger
Corporation (to be renamed "Host Marriott Corporation"), a Maryland corporation
("Host REIT"), and thereafter continue and expand its full-service hotel
ownership business. Host REIT will operate through Host Marriott, L.P., a
Delaware limited partnership (the "Operating Partnership"), of which Host REIT
will be the sole general partner. This is commonly called an "UPREIT" structure
and it is used to facilitate tax-deferred acquisitions of properties.
In previous correspondence, you were notified that you would be asked to vote on
a proposed transaction involving the Merger of this Partnership with a
subsidiary of the Operating Partnership. The Prospectus/Consent Solicitation
Statement and the Partnership's Supplement which contain detailed information
relating to this proposal were mailed to all Limited Partners of record as of
September 18, 1998. This is the date set by the General Partner as the record
date for determining Limited Partners entitled to vote on the Merger and the
related amendments to the partnership agreement. The Prospectus/Consent
Solicitation Statement and the Partnership's Supplement should be reviewed as
you make your decision to vote. You also received, among other things, a list of
Questions and Answers and telephone numbers for assistance. We strongly
encourage Limited Partners to consult with their own financial and tax advisors
when making their decision on how to vote and which option to choose.
It is important that your Partnership Units be voted, regardless of the number
of Partnership Units you hold. The solicitation period ends at 5:00 p.m.,
Eastern time, on December 12, 1998, unless extended. If you have not yet
received the Prospectus/Consent Solicitation Statement or if you or your
advisors have any questions regarding the Merger, please contact the Information
Agent at 1-800-733-8481 extension 445. To speak to a representative of the
General Partner or Host Marriott Corporation, please call Partnership Investor
Relations at 301-380-2070.
<PAGE>
Partnership Financing and Investor Returns
As previously reported, the mortgage debt was successfully refinanced on
February 2, 1998 with a third party lender. The Partnership's debt now consists
of a $164 million mortgage loan which bears interest at a fixed rate of 7.4% for
a 12-year term. The mortgage loan requires payments of principal and interest
based upon a 25-year amortization schedule.
In conjunction with the refinancing of the mortgage debt and the reorganization
of the Partnership, the General Partner made an initial capital contribution of
$6 million to the Partnership on December 31, 1997. On January 30, 1998, the
General Partner contributed an additional $69 million. In return for such
additional capital contributions, the General Partner surrendered its then
existing Class B interest on distributions and received a new Class B limited
partnership interest in the Partnership entitling the General Partner to a 13.5%
cumulative, compounding annual preferred return and priority return of such
capital.
In February 1998, the Partnership distributed funds to the Class A limited
partners of $5,000 per new unit. This distribution represented the excess of the
Partnership's reserve after payment of a majority of the transaction costs
related to the mortgage debt refinancing.
Estimated 1998 Tax Information
As a result of the refinancing in February of 1998, 100% of the taxable income
for the year ending December 31, 1998 will be allocated to the Class B limited
partner based on its preferred return. Therefore, no taxable income or loss will
be allocated to each original Class A limited partner unit for the year ending
December 31, 1998. The Partnership's vote on the Merger will have no effect on
the allocation of taxable income or loss.
The 1998 tax information, used for preparing your Federal and state income tax
returns, will be mailed no later than March 15, 1999. To ensure confidentiality,
we regret that we are unable to furnish your tax information over the telephone.
Unless otherwise instructed, we will mail your tax information to your address
as it appears on this report. Therefore, to avoid delays in delivery of this
important information, please notify the Partnership in writing of any address
changes by January 31, 1999.
