FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 2, 1998, or
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ________.
Commission file number 0-9708.
SUPER 8 MOTELS TEXAS, LTD.
(Exact name of registrant as specified in its charter)
State of Organization TEXAS *
IRS Identification No.74-2062237
P. O. Box 969 Rockwall, TX 75087-0969
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (972) 771-6783
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to section 12(g) of the Act:
Limited Partnership Interests
(Title of class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirement
for the past 90 days. YES X NO_____
State the aggregate market value of the voting stock held
by non-affiliates of the registrant.
Not Applicable to Registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Certain Exhibits in Part IV are hereby incorporated by
reference from the Registrant's Form 10-K for the year ended
December 29, 1989, the Registrant's Form 10-K for the year ended
December 28, 1990 and the Registrant=s Form 10-K for the year ended
December 31, 1993.
PART I
Item 1. Business.
Historical Development of Business
Super 8 Motels Texas, Ltd., a Texas limited partnership
(the "Partnership") was organized in September 1979 for the purpose
of developing and operating "budget" hotels in Texas. The initial
general partners of the Partnership were Michael G. Guhin, William
E. Hauck, Dennis A. Brown and William E. Wells (the "Original
General Partners").
The Partnership was initially capitalized through a public
offering and sale of 2,437 Units of Limited Partnership interest
(the "Interests"). The Interests were sold for a purchase price of
$500 per Interest. The initial offering terminated in October 1980.
A second public offering of 7,563 Interests was completed in March
1982. The total capitalization of the Partnership was 10,000
Interests for an aggregate of $5,000,000.
The proceeds of both offerings were used to acquire 3.5
acres of land, develop, and operate a 126 room hotel near the
Houston Intercontinental Airport in Harris, County, Texas. The land
which is located at the corner of Drummet (John F. Kennedy) and
North Belt streets was purchased for approximately $990,000 cash.
Construction of the hotel facility cost approximately $2,000,000.
The Partnership paid the Original General Partners an Acquisition
Fee in the amount of $203,350 for the acquisition and development of
the property. In addition the Partnership paid $265,000 to
construct a 23,000 square feet restaurant which was leased to a
Kopper Kettle franchisee who purchased the restaurant during 1990.
The Partnership entered into a franchise agreement with a
basic term of 20 years with Super 8 Motels, Inc. and paid a
franchise fee of $15,000 plus $100 for each guest room over 120.
Under the terms of the franchise agreement the Partnership paid
monthly franchise fees equal to 4% of gross room revenue and an
additional 1% of gross room revenues to a Super 8 advertising fund
managed by the franchisor. One-half of the franchise fees for the
first five years and three-fourths of such fees since that time were
retained by Super 8 Motels, Inc. The balance of such fees were paid
to the Original General Partners.
In September 1993, Super 8 Motels, Inc. (Super 8) and the
Partnership agreed to terminate the Super 8 System Franchise
agreement (Franchise Agreement) dated November 13, 1980. The
Partnership executed an agreement with Super 8's affiliate, Ramada
Franchise Systems, Inc. (Ramada) to convert the hotel to a Ramada
Limited facility. The conversion was effective June 30, 1994. Under
the new agreement, the Partnership pays to the franchisor monthly,
fees equal to 3.5% of its gross room revenues through June 29, 1995
and 4% thereafter, and contributes 4.5% of its gross room revenues
to a fund administrated by the franchisor for advertising,
promotion, training, reservation and other related services and
programs.
From 1983 through 1985 the Partnership's hotel was managed
by Super 8 Management, Inc. a subsidiary of Super 8 Motels, Inc., an
affiliate of the Original General Partners. From 1986 through May
31, 1989 the hotel was managed by Brown, Brosche Financial, Inc., an
affiliate of the Original General Partners. On June 1, 1989
Westbrooke Hospitality Corporation ("WHC") became manager of the
Partnership property (the "Property Manager"). See Item 3. Legal
Proceedings.
Narrative Description of Partnership's Business
On June 1, 1989 Martin J. Cohen and Two-Two-Two Hotel, Inc.
("TWO") became the new general partners of the Partnership. TWO is
wholly owned by the Property Manager. For its property management
services the Property Manager receives a base management fee equal
to the greater of: three percent (3%) of the gross revenue of the
hotel or $36,000. The Property Manager is also entitled to receive
an incentive management fee equal to ten percent (10%) of the gross
operating profit. For the year ended January 2, 1998, the Property
Manager received aggregate fees of $96,353.
The Property Manager employs six (6) desk clerks, twelve
(12) housekeepers, one (1) houseman, one (1) laundry worker, one (1)
bellmen/van driver, one (1) hospitality attendant, three (3)
maintenance men, one (1) sales director and one (1) hotel manager.
Thirteen (13) of such employees are part-time.
The occupancy percentages and average daily room rates at
the hotel and the annual cost of operations for the past five years
are set forth below:
Annual Operating
Percent Average Annual Expenses
Annual Daily Operating Less Deprec &
Year Occupancy Room Rate Revenue Amortization
1997 88% $38.44 $1,637,968 $1,327,949
1996 79% $37.04 $1,403,060 $1,289,306
1995 76% $34.74 $1,266,281 $1,186,347
1994 69% $32.42 $1,071,174 $1,059,372
1993 58% $30.96 $ 876,428 $ 818,591
In addition to the operating expenses paid in 1997, 1996
and 1995, the Partnership spent $24,719, $62,636 and $6,606,
respectively, on capital additions.
The hotel is located in a highly competitive market area.
There are approximately 6,000 hotel rooms in the general vicinity of
the hotel. Many of these hotels have much greater financial
resources and more experienced personnel than that of the
Partnership. Most are a part of national chains with high consumer
name recognition. There has and continues to be an over supply of
hotel rooms in the area surrounding the location of the
Partnership's hotel.
Set forth below is a comparison of certain hotels that compete with
the Partnership
Average Published Special %
Number % Annual Single Airlne Airlne
Property of Rooms Occupancy Room Rate Rate Business
Holiday
Inn Exprs 200 55 63 NA
NA
Sheraton 420 69 169 60 15
Hyatt 309 80 139 59 10
Holiday
Inn 306 92 139 47 60
LaQuinta 122 69 69 NA NA
Clairon 220 76 79 29-37 45
Budgetele 107 55 53 NA NA
Days Inn 172 48 57 30-35 20
Hampton 150 75 74 30-35 50
Sleep Inn 107 68 66 35-39 10
AmeriSuite128 53 139 NA NA
The foregoing information was obtained by the hotel
manager in March 1998 in telephone conversations with personnel of
the other properties. The information has not been verified by any
third party. Therefore, there can be no assurance that the
information represents the actual rates or operations of such
properties.
Employees of the various airlines which service the Houston
Intercontinental Airport provided approximately 59% of the room
rentals at the hotel during 1997 and approximately 30% to 45% in
1996 and 1995. Airline employees currently pay a daily single rate
of $31 for lodging at the Partnership's hotel. The Property Manager
anticipates that airline employee lodging will result in daily room
rentals of approximately 49% of the hotel's 126 rooms in 1998.
Because competition is so intense in the area and the
number of room rentals by airline employees and airline contract
business, the Partnership's hotel average room rate of $38.44 is
below the current published room rates. Set forth below are the
Partnership's current published room rates.
Number of Occupants Published Daily
And Room Type Room Rate
One person, one bed $60.00
Two persons, one bed $67.00
Two persons, two beds $67.00
Three persons, two beds $74.00
Four persons, two beds $81.00
Item 2. Properties.
The Partnership owns in fee simple approximately 2.72 gross
acres of real property at the northeast corner of the intersection
of Drummet (John F. Kennedy) and North Belt streets in Harris County
Texas. The property is approximately 15 miles north of downtown
Houston. It is a part of the World Houston International Business
Center. The Partnership owns a building that is located on the real
property. The building is a three story 126 hotel that rents rooms
on a daily basis. The hotel also has one hospitality room, two
rooms rented as offices, an exercise room and a swimming pool with a
spa and sauna. The hotel building is constructed of stucco over a
wood frame in a pseudo-Tudor design. The guest rooms contain
approximately 220 square feet and can accommodate one to four
occupants. In addition to the sleeping area which contains one or
two beds, there are clothing storage and dressing areas and bathroom
with a tub/shower combination in each guest room. All the guest
rooms are fully carpeted and decorated in a similar fashion.
In September 1990, the Partnership sold its 23,000 square
foot restaurant building and approximately .78 acres of land for
$500,000.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted during the fourth quarter of the
fiscal year ended January 2, 1998 to a vote of the limited
partners.
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PART II
Item 5. Market for registrant's Common Equity and Related
Stockholder Matters.
Market Information
There is no trading market for the Interests of the
Partnership and none is expected to develop.
Holders
As of January 2, 1998, approximately 720 persons held
Interests of the Partnership.
Dividends
The Partnership does not make dividend distributions.
Under the terms of the Limited Partnership Agreement the Limited and
General Partners are entitled to receive cash distributions, if any,
from the Partnership. Effective June 1, 1989, the Limited Partners
are entitled to receive pro rata, based on the number of the
Interests held by a person bears to the total Interests outstanding,
99% of such cash distribution. The General Partner is entitled to
1% of such distribution.
The Partnership has not made any cash distributions since
the first quarter of 1984. The General Partners do not anticipate
that the Partnership will have any cash available for distribution
to the Partners in 1998.
Item 6. Selected Financial Data.
Set forth below is selected financial data of the
Partnership for the past five years. This financial data should be
read in conjunction with the financial statements and related notes
included elsewhere in this report.
1997 1996 1995
Gross Revenues $1,637,968 1,403,060 1,266,281
Net Income(Loss) $ 155,023 ( 34,722) ( 60,276)
Net Income(loss)
Per Limited
Partner Unit
Diluted $ 15.35 ( 3.44) ( 5.97)
Total Assets $2,917,019 2,774,127 2,847,672
Long Term
Obligations $ 236,838 281,838 326,828
Cash Distributed
Per Limited
Partner Unit -0- -0- -0-
1994 1993
Gross Revenues $1,071,174 876,428
Net Income $ 32,729 ( 40,566)
Net Income (Loss)
Per Limited
Partner Unit $ 3.24 (4.02)
(Diluted)
Total Assets $2,944,914 2,611,092
Long Term
Obligations $ 371,838 134,012
Cash Distributed
Per Limited
Partner Unit -0- -0-
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
1997 Versus 1996
Total revenues from the Partnership's hotel operations
increased by $234,908 from $1,403,060 in 1996 to $1,637,968 in 1997.
The hotel's change in room revenues was a result of a 3.8% increase
in the average daily rate from $37.04 in 1996 to $38.44 in 1997,
while occupancy increased from 79% in 1996 to 88% in 1997.
Management attributes the increase in occupancy to improved economic
conditions in the area and increased airline business. Other
revenues (primarily consisting of telephone revenues, interest
income and other hotel guest charges) increased .1% or $228 between
1997 and 1996. The major increase in other revenues was the result
of an increase in guaranteed no show revenues.
The net income from operations increased from $(34,722) in
1996 to $155,023 in 1997. The increase in net income resulted from
the increase in operating revenues in excess of the increase in
operating expenses as further described below.
Operating expenses increased by $45,158 from $1,437,787 in
1996 to $1,482,945 in 1997. Substantial increases in room expenses
were incurred as a result of additional costs associated with the
increase in the number of rooms occupied in 1997 over 1996.
Depreciation and amortization expenses increased by $6,515 in 1997
as a result of the depreciation expense incurred on the capital
improvements placed in service during 1996 and 1997. Franchise
fees increased by $20,171 in 1997 as a result of the increase in
room revenue. Management fees increased by $28,303 in 1997 as a
result of the increase in total revenue and the improved operating
performance of the hotel. Maintenance and repairs decreased by
$27,474 in 1997 as a result of reduced building repairs.
1996 Versus 1995
Total revenues from the Partnership's hotel operations
increased by $136,779 from $1,266,281 in 1995 to $1,403,060 in 1996.
The hotel's change in room revenues was a result of a 6.6% increase
in the average daily rate from $34.74 in 1995 to $37.04 in 1996,
while occupancy increased from 76% in 1995 to 79% in 1996.
Management attributes the increase in occupancy to improved economic
conditions in the area, increased marketing efforts of the facility,
change to the Ramada Limited franchise and the favorable guests=
response to the renovation completed in 1994. Other revenues
(primarily consisting of telephone revenues, interest income and
other hotel guest charges) increased 3.6% or $2,137 between 1996 and
1995. The major increase in other revenues was the result of an
increase in telephone revenues.
The net loss from operations decreased from $60,276 in 1995
to $34,722 in 1996. The decrease in net losses resulted from the
increase in operating revenues in excess of the increase in
operating expenses as further described below.
Operating expenses increased by $111,230 from $1,326,557 in
1995 to $1,437,787 in 1996. Substantial increases in room expenses
were incurred as a result of additional costs associated with the
increase in the number of rooms occupied in 1996 over 1995.
Depreciation and amortization expenses increased by $8,271 in 1996
as a result of the depreciation expense incurred on the capital
improvements placed in service during 1996. Property taxes
increased by $13,186 in 1996 as a result of the capital expenditures
incurred and the improved operating performance of the hotel.
Franchise fees increased by $13,143 in 1996 as a result of the
increase in room revenue. Management fees increased by $7,431 in
1996 as a result of the increase in total revenue and the improved
operating performance of the hotel. Maintenance and repairs
increased by $25,434 in 1996 as a result of the additional
expenditures required to maintain the facility subsequent to the
renovation completed in 1994.
Inflation
The Partnership's costs of operations, including labor,
supplies, utilities, insurance and real estate taxes are
significantly affected by inflationary factors. The Partnership
pays many of its hourly employees at or slightly above the federal
mandated minimum wage requirements. The increase in the federal
minimum wage rate effective in September 1997 resulted in higher
costs to the Partnership.
Financial Condition, Liquidity and Capital Resources
At January 2, 1998, the Partnership's current assets of
$423,426 exceeded its current liabilities of $245,382 by $178,044.
In 1997, the Partnership's current assets increased by $273,139 and
its current liabilities increased by $32,869. The increase in
current assets is principally the result of the profitability of
the partnership which resulted in the improvement in cash flow from
operations in 1997 over 1996.
Management attributes the Partnership's improvement in
liquidity, as reflected by the above numbers, to improvement in
cash flow from operations in previous years and reduced capital
expenditures in 1997 and 1996.
Outlook and Year 2000 Compliance
The Partnership or its representatives from time to time
may make or may have made certain forward-looking statements,
whether orally or in writing, including without limitation any such
statements made or to be made in the Management=s Discussion and
Analysis of Financial Condition and Results of Operations, press
releases and other information contained in its filings with the
Securities and Exchange Commission. The Company wishes to ensure
that such statements are accompanied by meaningful cautionary
statements, so as to ensure to the fullest extent possible the
protections of the safe harbor established in the Private Securities
Litigation Reform Act of 1995. Accordingly, forward-looking
statements should not be relied upon as a prediction of actual
results.
In previous years the hotel has relied on contract airline
business to provide a substantial portion of the hotel's annual room
revenue. Management anticipates the contract airline business to
provide a substantial portion of the 1998 occupancy which is
estimated to approach 80%, with average daily rates in the range of
$38.00 to $39.00 for the year. However, several new hotels are
under development in the area which may negatively impact the
occupancy of the hotel in future years.
The partnership does not except any significant costs
associated with updating the hotel=s system for the year 2000
compliance. At the present time all systems are being updated to
comply with the year 2000.
Item 8. Financial Statements and Supplementary Data.
See Financial statements and Notes to Financial Statements
attached here at pages F-1 through F-10.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
None.
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PART III
Item 10. Directors and Executive Officer of Registrant.
The Partnership Agreement was Amended and Restated
effective June 1, 1989 to admit Martin J. Cohen and Two-Two-Two
Hotel, Inc., a Texas corporation, the General Partners of the
Partnership.
Martin J. Cohen, age 62, is the Managing General Partner of
the Partnership. Mr. Cohen has since June 1987 owned and operated
Martin J. Cohen Financial Services, a financial planning and
investment services company. Prior to forming his present company
Mr. Cohen was from 1978 a principal with Balanced Financial
Corporation which was also a financial planning and investment
services company. Between 1960 and 1978, he was a registered
representative with Eppler, Guerin & Turner a Dallas, Texas based
New York Stock Exchange brokerage firm. Mr. Cohen has not
previously managed a limited partnership.
Two-Two-Two Hotel, Inc. is a wholly owned subsidiary of
WHC. WHC effective June 1, 1989 became the Property Manager of the
Partnership property, a 126 room hotel near the Houston
Intercontinental Airport. WHC is located at 4441 West Airport Frwy,
Irving, TX 75062, phone number (972) 258-0900.
Peter A. Gerard, age 52 is President, Treasurer and
Director of TWO. Mr. Gerard has been Chairman of WHC since January
1993. From May 1984 until January 1993, he served as Executive Vice
President for the Company. Prior to joining WHC he was a senior
vice-president for corporate finance with Schneider, Bernet &
Hickman, a Dallas based stock brokerage company. Mr. Gerard holds a
bachelor's degree from Yale and a MBA from Harvard.
Albert E. Stevens, age 45, is Vice-President, Secretary and
Director of TWO. Mr. Stevens has served as President of WHC since
January 1993. Prior to assuming this position he had since 1972
served in several operating positions with WHC. Mr. Stevens holds a
bachelor's degree from the University of Texas at Arlington and a
MBA from Southern Methodist University.
The principals of WHC have managed hotels since 1972. WHC
currently has four hotel facilities under management in three
states. WHC has been involved in "turnaround" management of
troubled hotel properties. WHC utilizes computerized accounting and
control systems that track each property and generates daily
management reports. WHC has an in house training program and a
planned marketing and sales program for each property it manages.
Item 11. Executive Compensation
Managing General Partner Fee.
Under the terms of the Amended Partnership Agreement Martin
J. Cohen is entitled to receive a fee of $50.00 per hour plus
expenses for the time he spends conducting the affairs of the
Partnership. Under this provision Mr. Cohen received $12,294,
10,400 and $8,600 for 1997, 1996 and 1995, respectively.
Property Management Fee.
Under the terms of the management contract between the
Partnership and WHC, WHC shall be entitled to receive a base
management fee equal to the greater of: three percent (3%) of the
Gross Revenue of the Partnership property or $36,000 per year. Base
management fees were $49,133, $42,044 and $37,979 for 1997, 1996 and
1995, respectively. In addition to the base management fee, WHC is
entitled to an incentive management fee equal to ten percent (10%)
of the gross operating profit, as defined. Incentive management
fees were $47,220, $26,006 and $22,640 for 1997, 1996 and 1995,
respectively.
Accounting Service Fee.
Under the terms of the management contract, Westbrooke
Financial Services Corporation, a wholly owned subsidiary of WHC,
provides accounting, data processing and internal auditing to the
property. Service fees of $28,539, $28,000 and $26,346 were paid
for 1997, 1996 and 1995, respectively.
General Partners' Interest in Cash Available for Distribution.
Under the terms of the Amended Partnership Agreement the
General Partners will receive 1% of cash distributions from the
Partnership.
General Partners' Interest In Net Proceeds of Sales and Financing of
Partnership Property.
After the Limited Partners have received 100% of their
capital contribution from all sources, any remaining proceeds of
sale of the property or financing shall be distributed 85% and 15%
respectively to the Limited Partners and the General Partners.
Sharing Among the General Partners.
The Current General Partners have entered into an agreement
among General Partners which provides for Mr. Cohen to approve WHC's
operating budget for the Partnership property. The agreement also
provides that the General Partners shall each receive fifty percent
(50%) of any General Partner cash distributions from the
Partnership.
General Partners' Option to Purchase Partnership Interest.
The amended and restated Partnership agreement provides
that the General Partners have an option for 120 months to acquire a
20% interest in the partnership upon the payment of $500,000 to the
Partnership.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
Security Ownership of Certain Beneficial Owners.
No person is known by the Partnership to be the beneficial
owner of more than 5% of the Interest.
Equity Ownership of Management.
Neither of the General Partners own any Limited Partner
Interests of the Partnership.
Changes In Control.
The Partnership agreement provides that the General
Partners may be removed and a successor General Partner appointed by
a majority vote of the Limited Partners.
There are no arrangements, known to the Partnership,
including any pledge by any person of Interests of the Partnership,
the operation of which may at a subsequent date result in a change
of control of the Partnership.
Item 13. Certain Relationships and Related Transactions.
See: Item 11. Executive Compensation.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K.
(a) 1, 2, d. The financial statements and related schedules are
listed in the Index to Financial Statements and Schedules in item 8
of this Report and are incorporated herein by reference in answer to
this Item 14a and 1, 2, and d.
3. Exhibits
(10) Material Contracts
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter
of the period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
March 25, 1998 SUPER 8 MOTELS TEXAS, LTD.
/s/ Martin J. Cohen
Martin J. Cohen, Managing
General Partner
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates
indicated.
/s/ Martin J. Cohen
Martin J. Cohen, Managing
General Partner, principal
executive officer of
Registrant
March 25, 1998
Two-Two-Two Hotel, Inc.,
General Partner, principal
executive officer of
Registrant
/s/ Peter A. Gerard
Peter A. Gerard, President
March 25, 1998
INDEX OF
EXHIBITS
ITEM DESCRIPTION PAGE
(3) & (4) Second Amended and Restated Certificate of
Limited Partnership*
(10)
10.1 Super 8 Franchise Agreement*
10.2 Restaurant Lease*
10.3 Property Management Agreement*
10.4 Contract of Sale of Restaurant and Related Land**
10.5 Ramada Limited Franchise Agreement***
_______________________________
* Incorporated by reference from Registrants Form 10-K for the year
ended December 29, 1989.
**Incorporated by reference from Registrants Form 10-K for the year
ended December 28, 1990.
***Incorporated by reference from Registrants Form 10-K for the year
ended December 31. 1993.
SUPER 8 MOTELS TEXAS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies of Super 8 Motels
Texas, Ltd. (The Partnership) applied in the preparation of the
accompanying financial statements follows.
Nature of Operations
The Partnership's operations consist of a hotel property near the
Houston Intercontinental Airport. Its customers generally are
passengers or employees of the airlines which use the airport.
Depreciation
Depreciation is provided for in amounts sufficient to relate the
cost of depreciable assets to operations over their estimated
service lives ranging from 5 to 40 years by the straight line
method. Accelerated methods of depreciation are used for tax
purposes.
Federal Income Taxes
Federal income taxes are not reflected in the financial statemetns
as the partners individually report their distributive shares of
taxable income or loss of the Partnership.
Fiscal Year
The Partnership's fiscal year ends on the Friday nearest December
31. Fiscal years 1996 and 1995 comprised fifty-two week periods and
1997 comprise fifty-three weeks.
Earnings Per Limited Partner Unit
Basic earnings (loss) per limited partner unit are computed by
dividing income available to limited partners by the weighted
average number of limited partner units outstanding during each
period presented. Diluted earnings per common share are computed by
dividing income available to limited partners by the weighted
average number of limited partner units outstanding giving effect to
all dilutive potential limited partner units, outstanding during
each period presented. For purposes of calculating the dilutive
effect of the option, (Note B) the proceeds are assumed to have been
used to retire the outstanding debt and reduce interest expense.
