<PAGE> 1
FORM 10-Q
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, DC 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: March 31, 1996
Commission File Number: 2-67456
SUPER 8 MOTELS NORTHWEST I
Washington 91-1101310
PART 1
Financial Information
Item 1. Financial Statements
See attached unaudited March 31, 1996 Financial Statements and the partnership's
balance sheet for the year ended December 31, 1995. The Statement of Cash Flows
is omitted from the attachment and is presented as follows:
<TABLE>
<CAPTION>
PERIOD ENDED MARCH 31,
1996 1995
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Revenues and other income received in cash $ 543,734 $ 465,169
Operating expenses paid in cash (370,396) (132,995)
Interest paid (32,019) (9,974)
--------- ---------
Net cash provided by operating activities 141,319 322,200
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (97,554) (357,110)
--------- ---------
Net cash used by investing activities (97,554) (357,110)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Reduction of appraisal and loan fees -- 1,945
Principal payments on debt (10,662) (18,907)
Distributions to partners (151,515) (151,515)
--------- ---------
Net cash used by financing activities (162,177) (168,477)
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (118,412) (203,387)
CASH AND CASH EQUIVALENTS, beginning of period 222,146 258,321
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 103,734 $ 54,934
========= =========
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
PERIOD ENDED MARCH 31,
1996 1995
--------- ---------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net income $ 126,790 $ 72,866
--------- ---------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 29,208 22,744
Change in assets and liabilities
Accounts receivable (5,060) 9,870
Inventory (63) (730)
Prepaid expenses 11,408 (20,678)
Deposits (11,599) (10,858)
Accounts payable (14,762) 254,125
Accrued expenses 5,397 (5,139)
--------- ---------
14,529 249,334
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 141,319 $ 322,200
========= =========
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
See attached First Quarter (3/31/96) Update from the Issuer delivered to its
limited partners.
PART 2
Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
None.
<PAGE> 3
SIGNATURES
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 thereunto duly authorized.
SUPER 8 MOTELS NORTHWEST I
a Washington limited partnership
By: Date: May 7, 1996
---------------------------------------
Gerald L. Whitcomb, General Partner
<PAGE> 4
[SUPER 8 MOTEL NEWSLETTER MASTHEAD]
- --------------------------------------------------------------------------------
VOL. 16 NO.1/APRIL, 1996 SUPER 8 MOTELS NORTHWEST I FIRST QUARTER 1996
- --------------------------------------------------------------------------------
NATIONAL NEWS
Super 8 Motels and its parent company, HFS Incorporated, continue to be
a focus of the lodging spotlight as the first quarter of 1996 in concluded. The
mid-March Super 8 Motels International Convention in Las Vegas, Nevada, served
as the forum for several important announcements, particularly related to
marketing strategies.
"EXPERTS" MARKETING CAMPAIGN FOR 96/97
Super 8 introduced its print and broadcast "experts" campaign, which
utilizes real people rather than actors in selling the chain's attributes. The
30-second spot introduces Pete Robinson, a retired U.S. Army colonel, who tells
viewers that Super 8 surpasses even his high standards. Three 15-second spots
bring us a car wash owner, who talks about Super 8 cleanliness, a greeting card
salesman, who introduces viewers to the popular VIP Club card, and finally, the
owners of a copy center, who speak about Super 8's consistent quality and
service.
The campaign, created by Grey Advertising of New York, is running on
CNN, CNN Headline News, ESPN, TNN U.S. and Canada. TBS and print ads will be
carried in USA Today.
SUPER 8 JOINS NASCAR
Super 8 Motels Vice President of Marketing, Tom McNulty, announced that
Super 8 has teamed up with Winston Cup legend, Bill Elliott, as an associate
sponsor of his #94 Elliott-Hardy McDonald's Ford T-Bird. This exciting move
establishes Super 8 as the only lodging chain active in NASCAR sponsorship.
A study by Wake Forest University for NASCAR illustrates that over 90%
of NASCAR fans support sponsors' products. With auto racing now clearly the
number one sport in the country--reaching over 500 million live and television
viewers annually--this sponsorship is an ideal association for Super 8.
WORLD WIDE WEB PAGE LAUNCHED
For those customers now utilizing the ever-expanding computer technology
available today, Super 8's home page on the World Wide Web is now in place to
capture their attention. The site provides Internet browsers with general
information about the chain. Information can be accessed through two home ports:
The Travelweb Home Page (http://www.travelweb.com) and directly through the
Super 8 Home Page (http://www.super8motels.com/super8.html).
REGIONAL NEWS
THREE NATIONAL VIP WINNERS FROM PENINSULA
Peninsula Management Northwest-managed motels were once again honored
at the National level for outstanding performance in VIP sales. All Peninsula
properties excelled well above the national average--with three motels leading
the nation in their size category:
**Klamath Falls, Oregon (58-61 rooms)
**Kelso, Washington (65-87 rooms)
**Ellensburg, Washington (88+ rooms)
Each of these VIP top-producing properties received a check for $5,000
to share among its entire staff.
REGIONAL MEETINGS AUDIT QUARTER
Included in the '98 business planning and budgeting process was the
concept of Quarterly Regional Meetings. The first series of such meetings are
being held in late April and early May in Port Angeles, Washington, Corvallis,
Oregon, and at SeaTac.
The primary focus of the agendas will be careful analysis of the first
quarter's result of operations, strategies for any adjustments to plans deemed
necessary, and sales targets for Summer and Fall.
Advanced training in the area of sales will be conducted for each group
by Esin Davis, Director of Sales and Marketing, while individual time has been
allotted for each property manager to discuss localized issues with their
Regional Director.
CONTINENTAL BREAKFAST TESTED AT LACEY
In mid-April, a minor lobby reconfiguration was accomplished in Lacey
to facilitate the testing of the continental breakfast concept at that
location. This concept is increasingly found among the amenity packages of
competitors in many markets, thus Peninsula's interest in measuring its value,
or lack thereof, to its Super 8 customers. Should this test in Lacey produce
positive results, similar programs may be tested in other Northwest locations,
particularly those without adjacent dining.
NEW CONSTRUCTION SITES PROGRESS
The two new sites announced in the last issue of the Update are
progressing well. Ferndale, Washington has now been slated to open in October,
1996. Site preparation is completed, and the foundation is being installed as
of this writing.
The Woodburn, Oregon, site has an anticipated opening date in late
January, 1997. Site plans and building plans are currently being reviewed by
city officials, and subcontractors are working on off-site water and sewer.
Continuing this highly visible development on the I-5 corridor,
officers of the Peninsula Group have entered into an option to purchase a site
at the newly-constructed freeway interchange at the northerly end of Roseburg,
Oregon. Look for further details on the Roseburg project in the July Update.
<PAGE> 5
NORTHWEST I
First Quarter 1996 operational results for Super 8 Motels Northwest I
show Total Sales increased by $94,542 over the first quarter of 1995. This is
an increase of 21%. Net Income grew to $126,790 from $72,866, for an increase
of $53,294 or 74%.
These increases are a result of Federal Way increasing occupancy by
over seven occupancy points, for a year-to-date occupancy of 64.32%. Even with
this jump in occupancy, Federal Way has also maintained an average daily rate
of $44.37. Total revenue increased over $27,000, while operating expenses were
tightly controlled. The result is that Net Income rose by almost $25,000
despite the expenditure of over $11,000 for planned property renovations.
SeaTac is beginning to feel the results of the extensive renovation
recently completed. First quarter occupancy rose from 40% in 1995 to 47% in
1996. Average daily rate increased by $5.52 to $57.07 for an increase of 11%
over 1995. Total revenue increased by over $66,000 or 27% over the same period
in 1995. Operating expenses were again well controlled, with the result of an
increase in Net Income from $30,000 to $63,000 after payment of interest and
lease expenses which are a result of borrowing money for the renovation.
If you have not had the opportunity to see the completed renovation, we
encourage you to do so. We have received many good comments on the "new look"
as well as the functional new design of the lobby and common areas. Guests
enjoy the new elevator and exercise room, as well as the brighter and more
up-to-date look of the rooms.
Your first quarter distribution in the amount of $25.00 per partnership
unit. This represents a 10% annualized return on your original investment.
Enclosed you will find occupancy charts and room rate comparisons, first
quarter unaudited financial statements and a copy of the December 31,
1995, year-end audited financial statements, as prepared by the Partnership's
certified public accounting firm of Moss Adams.
The partnership information meetings were held at the SeaTac Super 8
Motel on April 16, 1996, and at the Portland Super 8 Motel on April 18, 1996.
Attendance was very good and we appreciate your continued interest. One of the
comments at the meeting was that once again there had been offers made by
various liquidity funds to purchase units at far below the original cost of
$1,000. If you need to dispose of your units, you are urged to call your NASD
registered securities representative or the corporate office of The Peninsula
Group at (360) 943-8000, so that you may be assisted in assessing a fair value
for your units.
The official business meeting for Super 8 Motels Northwest I will be
held on Wednesday, June 12, 1996, at 10:30 a.m. at the corporate office located
at 7515 Terminal St. S.W., Turnwater, Washington.
Thank you for your continued support of Super 8 Motels Northwest I.
Remember, when making your summer travel plans, THINK SUPER 8. Call
1-800-800-8000 for reservations at any Super 8 Motel located in the United
States and Canada.
- --------------------------------------------------------------------------------
The | THE
Official | PENINSULA
Publication of | GROUP, INC.
7515 Terminal St. SW, Turnwater, WA 98501 / (360) 943-8000
----------------------------------------------------------
Owners and operators of America's finest economy lodging serving 23 convenient
Northwest locations: ALASKA: Anchorage - Fairbanks - Juneau - Ketchikan OREGON:
Ashland - Bend - Corvallis - Grants Pass - Klamath Falls - Portland
International Airport - Salem - Wilsonville WASHINGTON: Bremerton - Ellensburg
- - Federal Way - Kelso - Kennewick - Moses Lake - Olympia/Lacey - Port Angeles -
Sea-Tac International Airport - Walla Walla - Yakima
<PAGE> 6
FEDERAL WAY SUPER 8 MOTEL
OCCUPANCY
<TABLE>
<CAPTION>
JAN FEB MAR QUARTER
------------------------------
<S> <C> <C> <C> <C>
1995 52.4% 56.3% 63.9% 57.6%
1996 50.8% 67.7% 74.7% 64.3%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ROOM RATE
-----------------------------
<S> <C>
1995
- ----
JAN $43.10
FEB $43.08
MAR $43.17
QUARTER $43.12
1996
- ----
JAN $42.39
FEB $43.33
MAR $43.13
QUARTER $43.00
</TABLE>
SEA-TEC SUPER 8 MOTEL
OCCUPANCY
<TABLE>
<CAPTION>
JAN FEB MAR QUARTER
------------------------------
<S> <C> <C> <C> <C>
1995 41.2% 40.8% 41.0% 41.0%
1996 39.7% 45.5% 57.4% 47.5%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ROOM RATE
-----------------------------
<S> <C>
1995
- ----
JAN $51.22
FEB $51.59
MAR $51.84
QUARTER $51.55
1996
- ----
JAN $56.68
FEB $56.92
MAR $57.46
QUARTER $57.02
</TABLE>
<PAGE> 7
SUPER 8 MOTELS NORTHWEST I
BALANCE SHEET
MARCH 31, 1996 AND 1995
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash................................................ $ 103,734 $ 54,934
Accounts receivable................................. 24,220 25,788
Inventory........................................... 42,340 49,671
Prepaid expenses.................................... 1,914 24,865
---------- ----------
TOTAL CURRENT ASSETS............................ 172,208 155,257
PROPERTY AND EQUIPMENT
Land................................................ 2,053,409 2,053,409
Land improvements................................... 79,671 79,671
Buildings........................................... 2,915,719 2,163,300
Equipment, furniture, and fixtures.................. 1,017,992 1,019,107
Construction in progress............................ 0 355,110
---------- ----------
Subtotal....................................... 6,066,791 5,670,597
Less accumulated depreciation....................... (1,962,165) (1,852,873)
---------- ----------
TOTAL PROPERTY AND EQUIPMENT, NET 4,104,626 3,817,724
OTHER ASSETS
Franchise fees...................................... 30,000 30,000
Appraisal fees and loan fees........................ 15,000 3,006
---------- ----------
Subtotal....................................... 45,000 33,006
Less accumulated amortization....................... (22,125) (22,316)
---------- ----------
Subtotal....................................... 22,875 10,690
Deposits............................................ 45,309 43,328
---------- ----------
TOTAL OTHER ASSETS............................. 68,184 54,018
TOTAL ASSETS................................... $4,345,018 $4,026,999
========== ==========
</TABLE>
LIABILITIES AND PARTNER'S CAPITAL EQUITY
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable - trade............................ $ 83,595 $ 273,643
Accounts payable - Affiliates....................... 27,447 32,890
Accrued expenses.................................... 89,696 77,728
Current portion of long-term debt................... 41,893 74,945
---------- ----------
TOTAL CURRENT LIABILITIES...................... 242,632 459,206
NONCURRENT LIABILITIES
Long-term debt, net of current portion shown above.. 1,365,894 411,588
Property management fees............................ 605,348 605,348
---------- ----------
TOTAL NONCURRENT LIABILITIES................... 1,971,242 1,016,936
PARTNER'S CAPITAL EQUITY
General partner..................................... 210,292 178,201
Limited partners.................................... 1,920,852 2,372,657
---------- ----------
TOTAL PARTNER'S CAPITAL EQUITY................. 2,131,144 2,550,858
---------- ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL
EQUITY........................................ $4,345,018 $4,026,999
========== ==========
</TABLE>
<PAGE> 8
SUPER 8 MOTELS NORTHWEST I
STATEMENT OF INCOME
FOR THE THREE MONTHS ENDING MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------- -------
<S> <C> <C>
SALES
Rooms ........................................ $521,875 $427,657
Other ........................................ 25,220 24,897
-------- --------
TOTAL SALES ............................ 547,096 452,554
DIRECT OPERATING EXPENSES
Payroll and related expenses ................. 107,281 110,171
Supplies and maintenance ..................... 34,817 25,948
Utilities .................................... 39,058 34,356
Other ........................................ 7,180 4,573
-------- --------
TOTAL DIRECT OPERATING EXPENSES ........ 188,336 175,048
INDIRECT OPERATING EXPENSES
Advertising and promotion .................... 13,761 22,427
Bank and credit card charges ................. 7,859 6,300
Insurance .................................... 7,133 6,425
Property and business taxes .................. 31,182 29,472
Other ........................................ 2,411 3,678
-------- --------
TOTAL INDIRECT OPERATING EXPENSES ...... 62,346 68,302
ADMINISTRATIVE AND GENERAL EXPENSES
Administrative service fees .................. 40,051 47,607
Franchise fees ............................... 20,828 17,106
Property management fees ..................... 27,354 23,287
Professional services ........................ 7,215 9,120
Other ........................................ 4,605 9,245
-------- --------
TOTAL ADMINISTRATIVE AND GENERAL
EXPENSES ............................. 100,052 106,365
FIXED CHARGES
Amortization ................................. 1,125 562
Depreciation ................................. 28,083 22,182
Interest ..................................... 32,019 9,974
Lease expense ................................ 10,043 0
-------- --------
TOTAL FIXED CHARGES .................... 71,270 32,718
-------- --------
INCOME FROM OPERATIONS ......................... 125,091 70,121
OTHER INCOME
Interest income .............................. 349 945
Gain on sale of asset ........................ 0 0
Rental Income ................................ 1,350 1,800
TOTAL OTHER INCOME ..................... 1,699 2,745
-------- --------
NET INCOME (LOSS) .............................. $126,790 $ 72,866
======== ========
</TABLE>
This statement subject to change after audit to be performed by Moss Adams,
CPA's.
<PAGE> 9
SUPER 8 MOTELS NORTHWEST I
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1994
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents......................... $ 222,146 $ 258,321
Accounts receivable, trade........................ 15,718 13,295
Accounts receivable, affiliates................... 3,442 22,363
Inventory......................................... 42,277 48,941
Prepaid expenses.................................. 13,322 4,187
---------- ----------
Total current assets......................... 296,905 347,107
---------- ----------
PROPERTY AND EQUIPMENT, at cost
Land.............................................. 2,053,409 2,053,409
Land improvements................................. 79,671 79,671
Buildings......................................... 2,818,164 2,163,300
Equipment, furniture and fixtures................. 1,017,991 1,017,107
---------- ----------
5,969,235 5,313,487
Less accumulated depreciation..................... (1,934,081) (1,830,691)
---------- ----------
4,035,154 3,482,796
---------- ----------
OTHER ASSETS
Franchise fees.................................... 30,000 30,000
Appraisal fees and loan fees...................... 15,000 4,951
---------- ----------
45,000 34,951
Less accumulated amortization..................... (21,000) (21,754)
---------- ----------
24,000 13,197
Deposits.......................................... 33,710 32,470
---------- ----------
Total other assets.......................... 57,710 45,667
---------- ----------
$4,389,769 $3,875,570
========== ==========
</TABLE>
<PAGE> 10
SUPER 8 MOTELS NORTHWEST I
_________________________________________________________________BALANCE SHEET
LIABILITIES AND PARTNERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1994
---- ----
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable, trade $ 49,240 $ 25,235
Accounts payable, affiliates 76,564 27,173
Accrued expenses 84,299 82,867
Current portion of long-term debt 38,000 87,000
---------- ----------
Total current liabilities 248,103 222,275
---------- ----------
NONCURRENT LIABILITIES
Long-term debt, net of current
portion shown above 1,380,449 418,440
---------- ----------
ACCRUED PROPERTY MANAGEMENT FEES 605,348 605,348
---------- ----------
COMMITMENTS
PARTNERS' EQUITY
General partner equity 192,789 178,987
Limited partners (authorized and
outstanding, 6,000 units) 1,963,080 2,450,520
---------- ----------
2,155,869 2,629,507
---------- ----------
$4,389,769 $3,875,570
========== =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000316297
<NAME> SUPER 8 MOTELS NORTHWEST 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 103,734
<SECURITIES> 0
<RECEIVABLES> 24,220
<ALLOWANCES> 0
<INVENTORY> 42,340
<CURRENT-ASSETS> 172,208
<PP&E> 6,066,791
<DEPRECIATION> 1,962,165
<TOTAL-ASSETS> 4,345,018
<CURRENT-LIABILITIES> 242,632
<BONDS> 1,971,242
0
0
<COMMON> 0
<OTHER-SE> 2,131,144
<TOTAL-LIABILITY-AND-EQUITY> 4,345,018
<SALES> 0
<TOTAL-REVENUES> 547,096
<CGS> 0
<TOTAL-COSTS> 188,336
<OTHER-EXPENSES> 201,649
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,019
<INCOME-PRETAX> 126,790
<INCOME-TAX> 0
<INCOME-CONTINUING> 126,790
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 126,790
<EPS-PRIMARY> 17.96
<EPS-DILUTED> 17.96
</TABLE>
