<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1995
Commission File Number 2-67456
SUPER 8 MOTELS NORTHWEST I
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1101310
(State or other jurisdiction of IRS Employer
incorporation or organization) Identification Number
7515 Terminal St. S.W., Tumwater, WA 98501
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (360) 943-8000
Securities registered pursuant to section 12 (g) of the Act:
TITLE OF CLASS
Limited Partnership Units
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
requirements for the past 90 days. Yes ( X ) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form I0-K or any amendment to this
Form 10-K. (X)
<PAGE> 2
There has been no market for limited partnership units since the initial
offering of limited partnership units was completed in 1982, therefore the
market value of limited partnership units is unknown.
DOCUMENTS INCORPORATED BY REFERENCE
Partnership's Audited Financial Statements.
Partnership's January, 1996 newsletter to limited partners.
Also incorporated by reference are the partnership agreement, franchise
agreement and property management agreements to which the Partnership is a party
and which were included with and/or described in the original offering materials
for the Partnership, as well as all appropriate exhibits delineated in Part III
hereof.
PAGE 2
<PAGE> 3
PART I
ITEM 1.
Business
(a) General Development of Business
Super 8 Motels Northwest I is a Washington limited partnership (the
"Partnership") which was formed to invest in and operate two "economy" motels
located in the state of Washington (the "Motels"). The Partnership operates the
Motels as a franchise of Super 8 Motels, Inc., the national franchiser of the
"Super 8" tradename. The General Partner of the Partnership is Gerald L.
Whitcomb.
The Partnership was formed in March 1980. The Limited Partnership Units of the
Partnership (the "Units") were offered and sold by selected broker-dealers on a
best efforts basis in the states of Washington, Oregon, Montana, Idaho and
Alaska.
The Partnership's total offering of $6,000,000 (6,000 Units at $1,000 each) was
fully subscribed and the offering closed in February 1982.
(b) Financial Information About Industry Segments.
Not applicable as the registrant operates in a single industry (motels) and
within that industry only in the economy motel category. For financial
information generally, see "Financial Statements."
(c) Narrative Description of Business.
The motel properties were developed and are being operated as economy motels in
the locations indicated below. Both properties are franchisees of the national
"Super 8" motel chain. The economy motel concept provides for a clean,
comfortable average-size motel room that has all the basic amenities required by
the traveling public at a price lower than that of most surrounding motel
properties of equal quality.
All guest rooms are equipped with direct-dial telephone, color television and
tub/shower combination, and are fully carpeted, sound proofed and insulated.
Guests are allowed to use major national credit cards and cash checks with
V.I.P. Club membership. Vending machines are also available.
Each property has interior hallways, a lobby with a manager's office, an
employee lounge, an in-house laundry and a manager's apartment. No restaurants
are located on either property.
The 120-room Super 8 Motel at Sea-Tac is located near the Seattle/Tacoma
International Airport and provides additional special services to the traveling
public: long parking privileges, airport courtesy telephone, and free limousine
transportation to and from the airport.
The 90-room Super 8 Motel at Federal Way provides a special parking area for
commercial trucks, guest laundry facilities and a travelers lounge. Adjacent to
the property are two family style restaurants owned and operated by non
affiliated companies.
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Both motels historically experience seasonal fluctuations in occupancy, the low
point occurring in the winter months and peaking in late summer.
The motels provide full or part-time employment for approximately 39 people
(Sea-Tac 22, Federal Way 17).
(d) Financial Information About Foreign and Domestic Operations and Export
Sales.
The Partnership operates only in one geographic area, the Puget Sound region of
Washington State. For financial information generally, see "Financial
Statements."
ITEM 2
Properties
(a) Location and General Characteristics.
The Partnership owns two parcels of real property, both purchased during the
year ended December 31, 1981. The Sea-Tac property is located at 192nd Street at
Old Highway 99 in King County, Washington. Construction commenced on the Sea-Tac
parcel in August 1981 and it opened in March 1982. The Federal Way property is
located at 348th Street and 16th Avenue in Federal Way, King County, Washington.
Construction commenced on the Federal Way property in March 1982 and was
completed in September 1982.
Both motels are of frame construction with stucco exteriors, tile roofs and have
full fire alarm system. Heating and cooling is by individual room through the
wall heat pumps.
The approximate size of the buildings is as follows:
<TABLE>
<S> <C>
Sea-Tac 43,850 square feet
Federal Way 37,800 square feet
</TABLE>
Both motels underwent major renovations in 1987 at an approximate total cost of
$328,000. An approximately $1,000,000 renovation of the Sea-Tac property
commenced in February 1995, with one-half of the property closed for a
substantial period of time. The Sea-Tac renovation was completed in February,
1996. During the course of renovating the Sea-Tac property, an abandoned
residential oil tank was discovered as was other petroleum products located
underneath the building. Upon discovery of these items, the Partnership
immediately engaged an environmental consulting firm as well as legal counsel
and both the tank and the soils which were found to contain unsuitable levels of
petroleum products were removed from the site and properly disposed of.
Both motels are in operation as economy motels. For utilization of these
properties see Item 7.
See Item 1 (c) for further information on each property.
ITEM 3
Legal Proceeding
The Partnership is not party to any material legal proceedings.
PAGE 4
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ITEM 4
Submission of Matters to a Vote of Security Holders
None.
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PART II
ITEM 5.
Market for the Registrant's Common Stock and
Related Security Holder Matters
The Units are owned by approximately 1,050 investors.
There is no established public trading market for the units and no significant
transactions in units between a willing buyer and a willing seller have occurred
since the original offering of limited partnership units. Because of this, the
Partnership is unable to determine a fair market value for the units.
Distributions of cash to the Limited Partners made during 1995 totaled $600,000.
Distributions of cash to the Limited Partners during 1994 and 1993 were $600,000
for each year.
ITEM 6.
Selected Financial Data*
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total Sales $2,319,042 $2,415,274 $2,329,668 $2,493,458 $2,239,462
Net Income (Loss)* $ 132,423 $ 783,376 $ 666,072 $ 543,842 $ 692,692
Net Income (Loss)* per $ 18.76 $ 110.98 $ 94.36 $ 89.63 $ 115.47
Unit
Total Assets** $4,389,769 $3,875,570 $3,895,056 $3,953,444 $4,713,708
Long-Term Debt* $1,985,797 $1,023,788 $1,224,831 $1,301,730 $1,285,171
Cash Distribution Per Unit $ 100.00 $ 100.00 $ 100.00 $ 240.05 $ 160.00
</TABLE>
*In filings prior to the year ended December 31, 1994, with the United States
Securities and Exchange Commission (the "SEC"), and in the Partnership's prior
years' financial statements, the Partnership did not accrue unpaid property
management fees due to the uncertainty of payment. During the year ended
December 31, 1994, the Partnership changed its method of accounting for such
fees and the above information was restated for 1993, 1992, and 1991 to account
for such fees so that Net Income, Long Term Debt and Net Income Per Unit was
revised to accrue the expense when incurred and reflect the associated liability
on the balance sheet.
**Net of amortization and depreciation
Detailed financial data is provided in the form of audited Financial Statements
as of December 31, 1995 and 1994 and for each of the three years ended December
31, 1995, 1994
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and 1993. These statements show the results of operations, changes in partners'
equity, cash flows and additional financial disclosures.
ITEM 7.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
At December 31, 1995, the Partnership's current assets exceeded its current
liabilities by $48,802 which was $76,030 less than the difference between
current assets and current liabilities on December 31, 1994. This drop is
largely attributable to the funds the Partnership expended in renovating its
Sea-Tac property (see the discussion below), and the loss of available rooms
during the renovation. Further, as in the recent past, because the months of
January, February, and March are the slowest season of occupancy, the
Partnership must carefully manage its cash during those months. Nevertheless,
the Partnership was able to make a distribution to its limited partners on
January 31, 1996, of $150,000.
The interest rate on the Partnership's primary mortgage was 7.5% in 1995 and
1994. This adjustable rate loan provides for an interest rate adjustment each
January determined as the lesser of 1% per annum, or an amount equal to the
monthly median cost of funds index for FSLIC insured savings and loan
associations plus 3.75% per annum. The rate in effect for 1996 is 8.5% per
annum.
The interest rate on the long term loan funding the Sea-Tac renovation is
variable, based on the lender's prime rate plus 1% per annum and is payable in
interest only payments through March 31, 1996. The bank's prime rate of interest
at December 31, 1995, was 8.5% per annum.
<TABLE>
<CAPTION>
Balance Sheet data 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Current Assets $296,905 $347,107 $284,080
Current Liabilities $248,103 $222,275 $218,033
Current Ratio 1.20:1 1.56:1 1.30:1
</TABLE>
At December 31, 1995, both the Sea-Tac and Federal Way properties completed
their thirteenth full years of operation.
PAGE 7
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Comparative operational statistics follow:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Sea-Tac
Occupancy 52% 60% 58%
Rented rooms 22,411 26,083 25,134
Gross room rent* $56.77 $54.20 $53.13
Federal Way
Occupancy 64% 61% 63%
Rented rooms 21,183 20,055 20,536
Gross room rate* $44.73 $44.07 $42.72
Total
Occupancy 57% 60% 60%
Rented rooms 43,594 46,138 45,670
Gross room rate* $50.92 $49.80 $48.45
</TABLE>
*"Gross Room Rate" is defined as total room revenue divided by total rooms sold.
The Sea-Tac motel renovation contributed to the significant decrease in rooms
rented at the property. The number of rented rooms for the partnership decreased
from 46,138 during 1994 to 43,594 in 1995, a decrease of 2,544 rooms. The slight
increase in the gross room rate was not enough to offset the drop in occupancy
caused by the Sea-Tac renovation. Total revenues of the Partnership decreased
$96,232 from $2,415,274 in 1994 to $2,319,042 in 1995.
Net income of the Partnership decreased by $650,953 in 1995 from the prior year,
from $783,376 for the year ended December 31, 1994 to $132,423 for the year
ended December 31, 1995. Increases in direct operating expenses and fixed
charges, coupled with decreased revenues, largely contributed to the decrease in
net income of the Partnership.
Direct operating expenses increased to $444,939 as a result of the increase in
maintenance, repairs and supplies due to the renovation of the Sea-Tac location.
Indirect operating expenses grew by $14,336, primarily as a result in increases
in advertising and promotion, insurance, and other expenses.
Increases in professional services and administrative fees resulted in a $47,292
rise in administrative and general costs during 1995 when compared to 1994.
The $48,679 increase in fixed charges resulted from increases in depreciation
and interest expense.
On February 16, 1993, the Board of Directors of Super 8 Motels, Inc., the
Partnership's franchiser, announced an agreement to sell the company to
Hospitality Franchise Systems, Inc. The sale was consummated in 1993.
Hospitality Franchise Systems, Inc., the world's largest franchiser of hotel
rooms, is a publicly-held company whose stock is traded on the New York Stock
Exchange under the symbol "HFS." The company has more than 4,400 franchised
Super 8 Motels, Days Inn, Howard Johnson, Ramada and other motel brands with
over 300,000 rooms in the United States, Canada, Mexico, India, and Europe.
HFS operates its franchise business in a manner that respects the separate
identity of each brand. They maintain separate marketing campaigns, additional
general franchise services, and
PAGE 8
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separate reservation systems and "800" numbers. Having over 4,200 properties
worldwide provides enormous opportunities in marketing, purchasing, and
technology. This transaction made available to Super 8 franchisees HFS's
operational, marketing, and franchise sales experience.
Nationwide the Super 8 motel chain continues to grow, increasing the name
familiarity of the chain.
<TABLE>
<CAPTION>
As of December 31, Number of Super 8 Motels Increase
------------------ ------------------------ --------
<S> <C> <C>
1995 1,400 180
1994 1,220 159
1993 1,060 119
1992 941 78
1991 863 78
</TABLE>
The Super 8 "Superline" national reservation system and "VIP Club"
(approximately 3,000,000 members) continue to be improved.
Prior to 1985, the Partnership had been accruing, as an expense and as a
liability, the Motels' property management fees. Even though the obligation to
pay those fees exists, the terms of the partnership agreement of the Partnership
did not allow them to be paid until such time as the limited partners have
received a cumulative annual 10% return on their adjusted capital investment. In
previous filings with the United States Securities and Exchange Commission (the
"SEC"), and in the Partnership's prior years' financial statements, the
Partnership's accounting policy regarding these fees was to expense them when
paid (instead of when earned) and to not accrue unpaid property management fees
as a liability on the face of the balance sheet.
In 1994, the Partnership changed its accounting policy for property management
fees to reflect, on the Partnership's income statement, the expense when the
obligation to pay the fee was incurred and to accrue the corresponding liability
on the face of the Partnership's balance sheet. Thus, the financial information
contained in this report conforms with that reporting position. Currently,
previously incurred but unpaid management fees total approximately $605,000.
Attention is directed to Note 7 in the Partnership's Financial Statements, for a
discussion of property management fees. Additionally, see the discussion in Part
II, Item 6, "Selected Financial Data" of this report.
ITEM 8
Financial Statements
See Independent Auditors Report and Financial Statements, pages 2 through 14,
for financial statements incorporated herein by reference; and Item 14 for a
list of the Financial Statement Schedules filed as a part of this report.
PAGE 9
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ITEM 9
Disagreements on Accounting and Financial Disclosure
None.
PAGE 10
<PAGE> 11
PART III
ITEM 10.
Directors and Executive Officers of the Registrant
The sole General Partner of the Partnership is Gerald L. Whitcomb.
Gerald L. Whitcomb, age 52, was educated at the University of Nebraska with
majors in economics and business finance and obtained a JD. in Law. He practiced
law in Shelton, Washington from 1969 to 1979. Since 1979, he has been involved
in the management of the Peninsula Group, Inc., (formerly known as Super 8
Motels Northwest, Inc.) and its affiliates. -
Mr. Whitcomb is the principal organizer and stockholder of The Peninsula Group
Incorporated and its subsidiaries, one of which was the General Partner of
Shelton Super 8 Motel Associates. Mr. Whitcomb is the general partner of Super 8
Motels Northwest II, a limited partnership whose limited partnership units were
registered under the Securities Act of 1933. He is also a partner in Super 8
Motel Developers, which is General Partner of Super 8 Motels of Lacey
Associates, the General Partner of Super 8 Motels Northwest I, Juneau Motel
Associates, Anchorage Motel Associates and Peninsula Motel Associates, all
Washington limited partnerships. Mr. Whitcomb is the Managing Partner of Tongass
Motel Associates, an Alaska general partnership, Mr. Whitcomb is partner in
Peninsula Properties Partnership, a Washington partnership.
Due to a change in management of the Partnership's General Partner's offices
where the individual responsible for ensuring that appropriate filings are made
with the SEC, some recently required filings on Forms 3, 4 or 5 appear not to
have been timely made. The Partnership is working closely with its counsel to
promptly rectify any such delinquent filings.
ITEM 11.
Executive Compensation
The General Partner received no salary or bonus compensation from the
Partnership during fiscal year ended December 31, 1995. See Item 13.
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management
<TABLE>
<CAPTION>
Title Name Percent
----- ---- -------
<S> <C> <C>
General Partner Gerald L. Whitcomb 1
Limited Partners Various 99
</TABLE>
PAGE 11
<PAGE> 12
The General Partner, together with family members, owns twelve of the Limited
Partnership Units in addition to his General Partner Interest. See Note 3 of
Notes to the "Financial Statements" for a discussion of distributions and
allocations of profits and losses.
ITEM 13.
Certain Relationships and Related Transactions
See the Notes to the Partnership's Financial Statements.
A portion of Note 6 relating to property management fees payable to an affiliate
of the general partner follows:
"Payment of property management fees is subordinated to receipt by the limited
partners of a cumulative, pre-tax return on their adjusted capital investment of
10% per annum. This I0% was achieved as of June 30, 1992. Effective July 1, 1992
the Partnership began paying monthly the current management fees. Prior to
December 31, 1992, the Partnership then determined, based upon working capital
needs of Northwest I, that the first six months of 1992 and all of 1991
management fees were to be paid. Management fees paid during 1992 were $124,403
for 1992 and $111,973 for 1991. Management fees paid during 1993 were $115,480
for 1993. Management fees paid during 1994 were $119,617 for 1994 and $115,594
for 1990. Management fees paid during 1995 were $115,938 for 1995."
PAGE 12
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PART IV
ITEM 14.
Exhibits, Financial Statement Schedules, and Reports on form 8-K
Exhibits incorporated by reference
1.2 Subscription Agreement (which is filed as Exhibit B to the
Prospectus).
3.1 Certificate and Agreement of Limited Partnership of the Registrant
(which is filed as Exhibit "A" to the Prospectus).
6.1 Opinion of Counsel to the Partnership.
Exhibits filed herewith.
Financial Statements of the Registrant for the years ended December 31, 1995,
1994 and 1993.
Financial Statements include:
Report of Independent Public Accountants
Balance Sheet
Statement of Income
Statement of Changes in Partners' Equity
Statement of Cash Flows
Notes to Financial Statements
January, 1996 Partnership newsletter mailed to limited partners.
There were no reports filed on Form 8-K during 1995.
Financial Data Schedule for the year ended December 31, 1995
PAGE 13
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SIGNATURES
Pursuant to the requirements of Section 13 of 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:
Gerald L. Whitcomb March 28, 1996
- - --------------------- ----------------------
GERALD L. WHITCOMB Date
General Partner
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SUPER 8 MOTELS NORTHWEST I
INDEPENDENT AUDITOR'S REPORT
AND
FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994, AND 1993
<PAGE> 16
CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Balance sheet 2-3
Statement of income 4
Statement of changes in partners' equity 5
Statement of cash flows 6-7
Notes to financial statements 8-14
</TABLE>
<PAGE> 17
INDEPENDENT AUDITOR'S REPORT
To the General and Limited Partners
Super 8 Motels Northwest I
We have audited the accompanying balance sheets of Super 8 Motels Northwest I as
of December 31, 1995 and 1994, and the related statements of income, changes in
partners' equity, and cash flows for the three years ended December 31, 1995,
1994, and 1993. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Super 8 Motels Northwest I as
of December 31, 1995 and 1994, and the results of its operations and its cash
flows for the three years ended December 31, 1995, 1994, and 1993, in conformity
with generally accepted accounting principles.
As described in Note 7, the accompanying financial statements for the year ended
December 31, 1993, have been restated to reflect the accrual of property
management fees.
MOSS ADAMS LLP
Tacoma, Washington
February 5, 1996
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<PAGE> 18
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>
The accompanying notes are an integral
part of these financial statements.
- 2 -
<PAGE> 19
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>
The accompanying notes are an integral
part of these financial statements.
- 3 -
<PAGE> 20
SUPER 8 MOTELS NORTHWEST I
STATEMENT OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------------------------
1995 1994 1993
---------- ---------- -----------
<S> <C> <C> <C>
SALES
Rooms $2,219,855 $2,293,355 $ 2,207,419
Other 99,187 121,919 122,249
---------- ---------- -----------
2,319,042 2,415,274 2,329,668
---------- ---------- -----------
DIRECT OPERATING EXPENSES
Payroll and related expenses 474,549 475,404 500,245
Maintenance, repairs, and supplies 598,914 151,562 190,011
Utilities 142,569 141,005 139,291
Other 30,761 33,883 20,486
---------- ---------- -----------
1,246,793 801,854 850,033
---------- ---------- -----------
INDIRECT OPERATING EXPENSES
Taxes (principally property taxes) and fees 126,524 130,685 111,636
Advertising and promotion 94,561 92,511 88,641
Bank and credit card charges 35,972 36,989 34,785
Insurance 29,250 23,619 24,850
Other 24,443 12,610 12,891
---------- ---------- -----------
310,750 296,414 272,803
---------- ---------- -----------
ADMINISTRATIVE AND GENERAL EXPENSES
Administrative service fees 152,275 129,030 122,680
Property management fees 115,938 121,034 116,483
Franchise fees 88,894 89,782 90,807
Professional services 66,574 31,906 28,265
Other 20,704 25,341 20,272
---------- ---------- -----------
444,385 397,093 378,507
---------- ---------- -----------
FIXED CHARGES
Depreciation 103,390 93,279 97,801
Interest expense 88,797 50,229 59,584
Amortization 2,251 2,251 2,252
---------- ---------- -----------
194,438 145,759 159,637
---------- ---------- -----------
INCOME FROM OPERATIONS 122,676 774,154 668,688
OTHER INCOME (EXPENSE) 9,747 9,222 (2,616)
---------- ---------- -----------
NET INCOME $ 132,423 $ 783,376 $ 666,072
========== ========== ===========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 18.76 $ 110.98 $ 94.36
========== ========== ===========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
- 4 -
<PAGE> 21
SUPER 8 MOTELS NORTHWEST I
STATEMENT OF CHANGES IN PARTNERS' EQUITY
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNER PARTNERS TOTAL
--------- ----------- -----------
<S> <C> <C> <C>
BALANCE, December 31, 1992,
as restated $ (26,308) $ 2,418,489 $ 2,392,181
Distributions paid (6,061) (600,000) (606,061)
Net income, as restated 99,911 566,161 666,072
--------- ----------- -----------
BALANCE, December 31, 1993,
as restated 67,542 2,384,650 2,452,192
Distributions paid (6,061) (600,000) (606,061)
Net income 117,506 665,870 783,376
--------- ----------- -----------
BALANCE, December 31, 1994 178,987 2,450,520 2,629,507
Distributions paid (6,061) (600,000) (606,061)
Net income 19,863 112,560 132,423
--------- ----------- -----------
BALANCE, December 31, 1995 $ 192,789 $ 1,963,080 $ 2,155,869
========= =========== ===========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
- 5 -
<PAGE> 22
SUPER 8 MOTELS NORTHWEST I
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Revenues and other income
received in cash $ 2,345,287 $ 2,412,161 $ 2,330,067
Operating expenses paid in cash (1,929,863) (1,610,514) (1,542,921)
Interest paid (89,744) (50,900) (59,584)
----------- ----------- -----------
Net cash provided by
operating activities 325,680 750,747 727,562
----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of property and equipment (653,803) (6,893) (8,470)
Proceeds from sale of asset -- -- 3,251
----------- ----------- -----------
Net cash used by
investing activities (653,803) (6,893) (5,219)
----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from loan 999,999 -- --
Payment of appraisal and loan fees (15,000) (1,945) --
Principal payments on debt (86,990) (78,297) (70,159)
Distributions to:
Limited partners (600,000) (600,000) (600,000)
General partner (6,061) (6,061) (6,061)
----------- ----------- -----------
Net cash provided (used) by
financing activities 291,948 (686,303) (676,220)
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (36,175) 57,551 46,123
CASH AND CASH EQUIVALENTS,
beginning of year 258,321 200,770 154,647
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
end of year $ 222,146 $ 258,321 $ 200,770
=========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
- 6 -
<PAGE> 23
SUPER 8 MOTELS NORTHWEST I
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
RECONCILIATION OF NET INCOME TO
NET CASH PROVIDED BY OPERATING
ACTIVITIES
Net income $ 132,423 $ 783,376 $ 666,072
--------- --------- ---------
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 105,641 95,530 100,053
Loss on sale of asset -- -- 2,656
Change in assets and liabilities
Accounts receivable 16,498 (12,335) 3,013
Inventory 6,664 7,579 6,283
Prepaid expenses (9,135) (720) (1,475)
Deposits (1,240) (4,179) (800)
Accounts payable 73,397 (5,627) (48,009)
Accrued expenses 1,432 1,300 (1,234)
Accrued management fees -- (114,177) 1,003
--------- --------- ---------
193,257 (32,629) 61,490
--------- --------- ---------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 325,680 $ 750,747 $ 727,562
========= ========= =========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
- 7 -
<PAGE> 24
SUPER 8 MOTELS NORTHWEST I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 1 - PARTNERSHIP OPERATIONS
DESCRIPTION OF BUSINESS - SUPER 8 MOTELS NORTHWEST I IS A
WASHINGTON LIMITED PARTNERSHIP. THE PARTNERSHIP OWNS AND OPERATES TWO MOTELS:
ONE IN FEDERAL WAY, WASHINGTON, AND ONE IN THE VICINITY OF THE SEATTLE-TACOMA
INTERNATIONAL AIRPORT.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Cash Equivalents - Cash equivalents are investments with maturity
at date of purchase of three months or less.
(b) Inventory - Inventory consists of various operating supplies which
have been valued at cost.
(c) Property, Equipment, and Depreciation - Property and equipment are
stated at cost and are dep eciated using straight-line and accelerated methods
over estimated useful lives as follows:
<TABLE>
<CAPTION>
Years
-----
<S> <C>
Land improvements 30
Buildings 25 - 30
Equipment, furniture, and fixtures 5
</TABLE>
(d) Franchise Fees - Initial franchise fees are stated at cost and are
being amortized over 20 years using the straight-line method.
(e) Income Taxes - No provision has been made in the accompanying
financial statements for federal or state income taxes as taxable income or loss
of the partnership is allocated to and included in the taxable income of the
partners. See Note 5 for additional discussion.
(f) Income per Limited Partnership Unit - Net income per limited
partnership unit is computed by dividing the limited partners' share of net
income by the limited partners' units outstanding for each year.
- 8 -
<PAGE> 25
SUPER 8 MOTELS NORTHWEST I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g) Accrued Vacation - It is the partnership's policy to expense
vacation pay as paid rather than as earned as required by generally accepted
accounting principles. The effect upon the financial statements is not
significant.
(h) Concentration of Credit Risk - The partnership has bank deposits in
excess of federal deposit insurance limits. The partnership's management does
not anticipate any adverse effect on its financial position resulting from the
credit risk.
(i) Use of Estimates - The preparation of the financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
(j) Loan Fees - Loan fees in connection with financing for remodeling
the Sea-Tac motel are amortized over a five-year period.
NOTE 3 - DISTRIBUTIONS AND ALLOCATIONS OF PROFITS AND LOSSES
Distributions - Under the partnership agreement, on a quarterly
basis, the general partner determines the amount, if any, of cash available for
distribution and distributes cash as follows:
- 1% to the general partner and 99% to the limited partners until
the limited partners have received a cumulative pretax return on
their adjusted capital investment equal to 10% per year through
the end of the partnership year for which the distribution is
being made, then
- Payment of the unpaid balance of property management fees (see
Note 6), then
- Any remaining cash will be allocated 15% to the general partner
and 85% to the limited partners.
Profit and Losses - Profits and losses are allocated 1% to the
general partner and 99% to the limited partners until the limited partners' have
received a cumulative pretax return of 10% per year on their adjusted capital
investment; and thereafter, 15% to the general partner and 85% to the limited
partners. At the years ended December 31, 1995, 1994, and 1993, the limited
partners received a cumulative pretax return of 10% and the partnership's net
income for these years has been allocated 15% to the general partner and 85% to
the limited partners.
- 9 -
<PAGE> 26
SUPER 8 MOTELS NORTHWEST I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 4 - LONG-TERM DEBT
Long-term debt at December 31, 1995 and 1994, consisted of the
following:
<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
Note payable to bank, collateralized by deed of trust on real property;
interest at 9.3%, payable in monthly installments of $6,273 including
interest; due January 1996. $ 4,858 $ 76,039
Note payable to bank, collateralized by real property; interest at 7.5%
for 1995 and 1994. The rate is adjustable each year based on the
lesser of 1% or an amount equal to the monthly median cost of funds
index for FSLIC insured savings and loan associations plus 3.575%;
payable in monthly installments of $4,204 including interest; due
January 2010. The rate in effect for 1996 is 8.5%. 413,592 429,401
Line of credit, collateralized by deed of trust on real property. The
rate is variable at lender's prime rate plus 1%, payable in monthly
interest only payments through March 31, 1996, changing to monthly
payments of $9,768 plus interest; due February 2001. The bank's
prime rate of interest at December 31, 1995, was 8.5%. 999,999 --
---------- ----------
1,418,449 505,440
Less current portion 38,000 87,000
---------- ----------
Noncurrent portion $1,380,449 $ 418,440
========== ==========
</TABLE>
- 10 -
<PAGE> 27
SUPER 8 MOTELS NORTHWEST I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 4 - LONG-TERM DEBT (CONTINUED)
Based on the December 31, 1995, interest rate, principal payments
required on these notes during each of the next five years and thereafter are as
follows:
<TABLE>
<S> <C> <C>
1996 $ 38,000
1997 42,000
1998 46,000
1999 51,000
2000 56,000
Thereafter 1,185,449
----------
$1,418,449
==========
</TABLE>
NOTE 5 - INCOME TAXES
The cost of certain assets and the amount of certain expenses
reported for federal income tax purposes are different from the amounts reported
under generally accepted accounting principles in the accompanying financial
statements. The differences arise primarily from:
(a) Depreciating land improvements and buildings for financial reporting
purposes sing the straight-line method over a 30 year life, and for federal
income tax purposes using the straight-line method over 15, 18, or 31.5 year
lives.
(b) Depreciating furniture and equipment for financial reporting
purposes using the straight-line method over a five year life, and for federal
income tax purposes using the accelerated cost recovery method or the modified
accelerated cost recovery method over a five or a seven year life.
(c) Deducting sales tax incurred prior to 1987 on property and equipment
acquisitions as an expense for federal income tax purposes and capitalizing it
for financial reporting purposes.
(d) Amortizing capitalized interest for federal income tax purposes
using a ten year life and for financial reporting purposes amortizing it over
the lifeof the building.
- 11 -
<PAGE> 28
SUPER 8 MOTELS NORTHWEST I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 5 - INCOME TAXES (CONTINUED)
Following is a reconciliation of net income for financial
reporting purposes to net income for federal income tax reporting purposes for
the years ended December 31, 1995, 1994, and 1993:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net income as shown in
statement of income $132,423 $783,376 $666,072
Additional depreciation and
amortization for income tax
purposes (59,171) (68,917) (76,509)
Accrued property management fees -- (114,177) 1,003
Other 1,380 992 3,094
-------- -------- --------
Net income for federal income
tax reporting purposes $ 74,632 $601,274 $593,660
======== ======== ========
</TABLE>
NOTE 6 - RELATED-PARTY TRANSACTIONS
Transactions between the partnership and the general partner,
Gerald L. Whitcomb, and between the partnership and affiliates of the general
partner are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Purchases of supplies and
equipment $222,467 $165,472 $206,876
Administrative service fees $152,275 $129,030 $122,680
</TABLE>
The partnership has a management agreement with an affiliate of
the general partner to employ the affiliate for a period of 20 years as manager
of the motels owned by the partnership. The agreement provides for payment of a
property management fee to the affiliate equal to 5% of the partnership's gross
revenues from motel operations in addition to reimbursement of certain
out-of-pocket cost incurred by the affiliate in connection with management of
the property. The 5% base fees are property management fees. The reimbursements
of out-of-pocket costs are recorded as administrative service fees.
- 12 -
<PAGE> 29
SUPER 8 MOTELS NORTHWEST I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 6 - RELATED-PARTY TRANSACTIONS (CONTINUED)
Payment of property management fees is subordinated to receipt by
the limited partners of a cumulative, pretax return on their adjusted capital
investment of 10% per annum. This 10% was achieved as of June 30, 1992.
Effective July 1, 1992, management began paying monthly the current management
fees. Prior to December 31, 1992, management then determined, based upon working
capital needs of Northwest I, that the first six months of 1992 and all of 1991
management fees were to be paid. Management fees paid during 1992 were $124,403
for 1992 and $111,973 for 1991. Management fees paid during 1993 were $115,480
for 1993. Management fees paid during 1994 were $119,617 for 1994 and $115,594
for 1990.
Management fees paid during 1995 were $115,938 for 1995.
However, since the partnership agreement states that the
management fees are to be paid out of operational cash flow, after paying the
10% return to limited partners, no payment for management fees relating to 1990
and before has been made. These unpaid management fees totaling $605,348 will be
paid only when sufficient operational cash flow is experienced. In 1994 all
management fees were accrued with restatement of prior years' information. See
Note 7 for further discussion.
NOTE 7 - PRIOR-PERIOD ADJUSTMENT
As discussed in the last two paragraphs of Note 6, management did
not previously accrue unpaid property management fees because management then
believed that such fees were not probable of payment. In 1994 the partnership
adopted the accrual method of accounting for unpaid property management fees.
Accordingly, the accompanying December 31, 1993, financial statements were
restated.
A summary of the effect of this restatement on the 1993 financial
statements is as follows:
<TABLE>
<S> <C>
Increase in long-term liabilities $719,525
Decrease in partners' equity $719,525
Increase (decrease) in net income $(1,003)
</TABLE>
- 13 -
<PAGE> 30
SUPER 8 MOTELS NORTHWEST I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 8 - COMMITMENT
(a) Franchise Agreement - The partnership has purchased franchise rights
to provide motel services to the general public using a system commonly known as
Super 8 Motels. An initial franchise fee of $15,000 was paid for each motel and
the partnership is committed to pay additional fees equal to 4% of gross room
revenue for the 20 year term of the agreement. The franchise agreement with
Super 8 Motels, Inc. to pay 1% of gross room revenue to the national advertising
fund was terminated December 31, 1995.
(b) Lease Commitments - The partnership has an operating lease for
equipment at the Sea-Tac motel. The term of the operating lease is 3.5 years.
Minimum lease payments based on current rents are as follows:
<TABLE>
<S> <C>
1996 $ 37,126
1997 37,126
1998 37,126
1999 6,188
--------
$117,566
========
</TABLE>
NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Cash and Cash Equivalents - The carrying amount approximates fair
value because of the short-term maturity of those instruments.
Long-Term Debt - The carrying amounts of the partnership's
borrowings under its long-term revolving credit agreement and notes payable
approximate fair value.
- 14 -
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000316297
<NAME> SUPER 8 MOTELS NORTHWEST I
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 222,146
<SECURITIES> 0
<RECEIVABLES> 19,160
<ALLOWANCES> 0
<INVENTORY> 42,277
<CURRENT-ASSETS> 296,905
<PP&E> 5,969,235
<DEPRECIATION> 1,934,081
<TOTAL-ASSETS> 4,389,769
<CURRENT-LIABILITIES> 248,103
<BONDS> 1,985,797
0
0
<COMMON> 0
<OTHER-SE> 2,155,869
<TOTAL-LIABILITY-AND-EQUITY> 4,389,769
<SALES> 0
<TOTAL-REVENUES> 2,319,042
<CGS> 0
<TOTAL-COSTS> 1,246,793
<OTHER-EXPENSES> 860,776
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 88,797
<INCOME-PRETAX> 132,423
<INCOME-TAX> 0
<INCOME-CONTINUING> 132,423
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132,423
<EPS-PRIMARY> 18.76
<EPS-DILUTED> 18.76
</TABLE>
<PAGE> 1
[SUPER 8 MOTEL LOGO]
UPDATE
- - -------------------------------------------------------------------------------
VOL 15 NO.4/JANUARY,1996 SUPER 8 MOTELS NORTHWEST I FOURTH QUARTER 1995
- - -------------------------------------------------------------------------------
NATIONAL NEWS
NATIONAL PRESS ATTENTION CONTINUES
In a recent issue of the Hotel and Motel Management magazine, Super 8 Motels
President Robert Weller revealed that the secret of Super 8's repeat customer
business is evidenced in the long-standing VIP Club--which, with 3.3 million
members, accounted for more than one-half of the 1994 room nights.
ADDITIONAL GOOD NEWS
REGARDING MARKET SHARE
A primary focus in the presentations at the Super 8 Winter 1995 Regional
Marketing Meetings was a current market share report from D. K. Shifflet, Inc.
Super 8's Vice President of Marketing, Thomas McNulty, shared the following:
**Super 8 shows the greatest market share increase in the economy
segment, followed by Comfort Inns in second place. Today, Super 8
enjoys a 7.3% share of the market, compared to 6.4% in 1993, and only
5.6% in 1992.
**Superline posted a 5% increase in call volume in 1995 over 1994--up
to 7 million calls. Even more importantly, Superline produced a 20%
increase in reservations made. These 3 million reservations represent
35% of all rooms sold system-wide, second only to Red Roof Inns at 39%.
**Super 8 proudly notes that it is now the economy segment leader in
guest satisfaction, outranking all its competitors in the three major
categories: satisfaction, service, and value.
C.U.C AGREEMENT PROVES PRODUCTIVE
Investors will recall a brief report in the October 1995 Update about
Super 8's marketing agreement with C.U.C. International, the leading discount
travel club in the United States. We are advised that as of December 20, 1995,
C.U.C. has enrolled 40,000 new VIP Club members. Further, they have booked
24,000 reservations, representing 34,000 room nights and $1,300,000 in
revenue. All this activity was generated in just six months.
FIRST SUPER 8 HOTEL OPENS IN SAN FRANCISCO
August of 1995 marked the opening of Super 8's first downtown property with
the "Hotel" designation on Geary Street in San Francisco. With 102 rooms in six
stories, the hotel is unlike the chain's traditional roadside Inn.
This new concept of the Super 8 Hotel is designed as a solution to the needs
of the Super 8 customer in major city/downtown locations. Currently the San
Francisco unit is breaking all revenue records. It will, however, lose its
one-of-a-kind status with the opening of a similar property in Ottawa, Canada.
An increase in Super 8's corporate business from 40% to 48% of its guest mix
prompted this move to the city; as a result, negotiations for other hotels are
underway in Atlanta, New York, and Philadelphia.
REGIONAL NEWS
FOURTH QUARTER FOCUS
1996 BUSINESS PLANNING
The entire Peninsula Management Northwest team devoted the months of
September, October, and November to the development and approval of a 1996
Business Plan and Budget for each of the 23 motels operated by the Company. The
process entailed extensive input from the property managers, as well as
observations and inspections from Regional Managers, Personnel and Training,
Marketing, and Maintenance departments. The process culminated in a
presentation of the final product at the Managers' Meeting held in early
December at the Corporate Office in Tumwater. Both the Business Plans and 1996
Budgets received official approval by The Peninsula Group's Board of Directors
at its December 20, 1995 meeting.
Illustrative of these 1996 Plans, and of their utility as working tools, is
the following brief outline of their contents:
I. Background and Operational Histories
II. History of Results in Critical Areas for Success
III. Business Condition--Economic and Competitive Data
IV. Physical Plant Analysis
V. 1996 Revenue Objectives/Plans--Marketing and Guest Retention
VI. Productivity and Cost Control Plans
Integral to all plans are mechanisms for both monthly, and more formalized
quarterly, reviews of objectives and results, affording management timely
opportunities to make mid-course adjustments.
PENINSULA EMPLOYEE BENEFITS SHINE IN SURVEY
The scope of a recently commissioned independent employee benefits survey was
to compare the benefits offered by The Peninsula Group Incorporated and
affiliates with other hospitality companies similar in size and operations.
Eight companies participated in the study.
The survey results indicate that the benefit package offered by The Peninsula
Group is favorably comparable with ALL eight companies in the areas of life
insurance, health insurance, vacation pay, and exceeded the average trend in
the areas of sick pay. Further, most surveyed were just beginning to research
or offer the more specialized 401K and Section 125 plans. Included in the 1996
plan is similar research on behalf of Peninsula's employee group.
GUEST SECURITY IMPROVED
WITH NEW GUEST ROOM LOCKS
The list of motels with newly installed or soon-to-be installed "Ving" locks
continues to grow and now includes
<PAGE> 2
Lacey, SeaTac, Anchorage, Fairbanks, Juneau, Federal Way, Ketchikan, and
Yakima. This important improvement in guest security will be incorporated into
all reasonable major motel renovations in 1996.
NEW DEVELOPMENT '96
In late September, the Board approved the purchase of a new Super 8 Motel
site on the North I-5 corridor in Ferndale, Washington. Construction start is
slated for February 1, 1996.
Occurring concurrently to the Ferndale development was the acquisition of a
site on the I-5 corridor south of Portland in Woodburn, Oregon. Crews are
expected to commence work on this highly visible location in May, 1996.
SUPER 8 MOTELS NORTHWEST I
From a revenue perspective, the operating results of the properties of
Super 8 Motels Northwest I were below expectations. This is wholly due to the
disruption caused by the major renovation to the SeaTac motel. Because of
regulatory harassment, the job was constantly delayed, adding costs and
removing opportunity for revenue. Currently management is reviewing the pros
and cons of bringing an action against the City of SeaTac for abuse of
regulatory authority. Such an action is very difficult to litigate with
favorable results, so it may very well be a waste of time and additional funds.
On the other hand, such regulatory abuses cost all of us immense amounts of
money every year. In certain areas, government has just run amuck, and this
instance is a classic example of regulation overwhelming common sense.
In any event, the SeaTac property rented 3,672 less rooms in 1995 than 1994,
bringing year-end occupancy down to 51.6% of total rooms. Average daily rate
(ADR) increased by $2.69, or almost 5% compared to 1994. The net effect was a
decrease in net room revenues in the amount of $141,017. The bright side of all
of this is that the SeaTac Super 8 Motel is now one of the most modern and
up-to-date facilities in the Super 8 system, as well as one of the best in its
class at SeaTac. The motel has improved guest security with the latest in
electronic guest room door locks, better interior and exterior lighting, and
other security apparatus. It is more energy efficient with new heat pumps/air
conditioners, low voltage/high efficiency lighting and new televisions
thoughout the property, Most of all, SeaTac Super 8 invites guests to enjoy
the new lobby, coffee bar and waiting area; new, very efficient check-in desk;
exercise room with high-quality equipment; baggage storage area; elevator;
new bathroom configurations with enhanced lighting and sink areas;
remote-controlled televisions; special rooms with recliners and enhanced work
spaces; and, upgraded and refurbished conference room and small executive
meeting room.
It was discouraging and frustrating to lose the revenue during the remodel,
but in the long term, it should be well worth the investment in time, effort and
money!
The Federal Way Super 8 had a very good year. It ended 1995 with a strong
fourth quarter--an overall increase in occupancy of 1,128 rooms, better than
5% increase over 1994. ADR also increased by $.67 to $44.74. Net room sales
increased by almost $64,000, or 7% overall growth in 1995.
You will find comparative occupancy and room rate charts enclosed, along
with unaudited year-end financial statements. We're still consulting with our
accounting firm to determine the proper allocation of the cost of the SeaTac
renovation. You will note a large increase in "supplies and maintenance."
This partially reflects the allocation of a portion of the renovation costs
to current expenses. As such, there may be additional adjustments between the
enclosed statements and the year-end audited statements. The CPA firm of Moss
Adams is currently performing the 1995 year-end audit of the partnership
books. The audited statement will be sent to you along with your first
quarter 1996 statements in the April 30, 1996 newsletter mailing.
Fourth quarter 1995 distribution is in the amount of $25.00 per partnership
unit. This distribution equals a 10% annualized distribution for the quarter.
This check brings your total distributions for 1995 to $100.00 per partnership
unit, or 10% per annum of each $1,000.00 invested.
Two items for your calendars:
First, you should receive your 1995 income tax information directly from
the preparer during the first several days in March, 1996. As always, they will
be mailed not later than the last day of February, 1996. Should you not
receive your information in very early March, 1996, please call the Corporate
Office at 360-943-8000. You only need to leave your name, current address, and
partnership (Northwest I) with the receptionist and she will forward the
information to Investor Relations. Please do not call for the information
prior to the above-noted date; the information is mailed to you directly from
the tax preparer and we do not have the information before that date. Thank
you for your help in this matter.
Second, the annual Super 8 Motels Northwest I partnership informational
meetings will be held as follows:
DATE: Tuesday, April 16, 1996
TIME: 7:00 p.m.*
LOCATION: Conference Room, SeaTac Super 8 Motel
3100 South 192nd, SeaTac, Washington
-OR-
DATE: Thursday, April 18, 1996
TIME: 8:00 p.m.
LOCATION: Conference Room, Portland Super 8 Motel
11011 N.E. Holman, Portland, Oregon
Your attendance is welcome and appreciated. *Please note: Super 8 Motels
Northwest II statements and operational data will be discussed at the
conclusion of the 7:00 p.m. NW I meeting at SeaTac.
- - -------------------------------------------------------------------------------
The Oficial Publication of
[PENINSULA GROUP LOGO]
7515 Terminal St. SW, Tumwater, 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-SeaTac International Airport-Walla Walla-Yakima
