SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended September 30, 1995
OR -------------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ______________to___________
Commission file number 0-9218
------
SUPER 8 MOTELS II, LTD.
-----------------------
(Exact name of registrant as specified in its charter)
California 94-2574309
-------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer iden-
incorporation or organization) tification No.)
2030 J Street, Sacramento, California 95814
---------------------------------------- ----------
Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (916) 442-9183
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
-------------------------------------
(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 such shorter period that the registrant
has been required to file such reports) and (2) has been subject to the 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 10-K. [x]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant.
Inapplicable.
DOCUMENTS INCORPORATED BY REFERENCE
None
- 1 -
<PAGE>
PART I
Item 1. BUSINESS
--------
General Development of Business
- -------------------------------
Super 8 Motels II, Ltd. (the "Partnership") is a limited
partnership which was organized under the Uniform Limited
Partnership Act of the State of California on May 7, 1979. The
Managing General Partner of the Partnership is Grotewohl
Management Services, Inc., a California corporation wholly-owned
by Philip B. Grotewohl. The Associate General Partner of the
Partnership is Robert J. Dana. The Associate General Partner
does not have general responsibility in connection with the
management of the business affairs of the Partnership. The
Managing General Partner and the Associate General Partner are
sometimes hereinafter referred to as the "General Partners."
Through two intrastate offerings of units of limited
partnership interest in the Partnership (the "Units"), the
Partnership sold 7,000 Units at a price of $1,000 per Unit.
The net proceeds of the two offerings were expended for the
acquisition and development of two properties located in Santa
Rosa, California, and Ontario, California. A fee interest was
acquired in the Ontario property and a leasehold interest was
acquired in the Santa Rosa property. Motel operations commenced
on November 12, 1980 at the Santa Rosa property, and on May 29,
1981 at the Ontario property. The Ontario property was sold on
February 14, 1990.
There is hereby incorporated by reference herein the
information regarding the Partnership's motel property contained
in Part I, Item 2 of this report under the caption "Properties."
Narrative Description of Business
- ---------------------------------
The Partnership's business is to operate its motel property and
to engage in any and all general business activities related or
incidental thereto. The Partnership's motel is operated
pursuant to a franchise originally acquired from Super 8 Motels,
Inc. through Super 8 Management Corporation as a subfranchisor,
under the name "Super 8 Motel."
Super 8 Motels, Inc. is a South Dakota corporation which was
organized in 1972. Its first franchised motel commenced
operation in 1974 and, as of October 24, 1995, a total of 1,348
franchised motels having an aggregate of 82,517 guest rooms were
in operation. On April 30, 1993, Super 8 Motels, Inc. became a
wholly-owned subsidiary of Hospitality Franchise Systems,
Inc.("HFS"). In addition to Super 8 Motels, HFS is also the
franchisor of hospitality properties under the Howard Johnson,
Ramada and Days Inn tradenames.
- 2 -
<PAGE>
Motels franchised by Super 8 Motels, Inc. are budget motels in
that they offer room rates near the lower end of the room rate
scale in each area in which they are located. Such lower rates
are made possible by the elimination of certain features present
in many higher-priced facilities, such as meeting rooms and
large lobbies; by not operating restaurants or cocktail lounges
in connection with the motels; and by utilizing uniform
construction methods (adapted only slightly to fit specific
locales) which have been developed by Super 8 Motels, Inc. and a
standardized design which facilitates maintenance and minimizes
overhead expense.
Super 8 Motels offer accommodations at the upper end, in terms
of facilities and prices, of the budget segment of the lodging
industry. Generally, Super 8 Motels offer larger rooms and
higher quality furniture and furnishings than motels franchised
under the tradenames Motel 6, Regal 8 and E-Z 8. Rates in the
Super 8 Motels tend to exceed those offered by the chains
mentioned above.
By terms of the franchise agreement with Super 8 Motels,
Inc., the Partnership pays monthly franchise fees equal to 4% of
its gross room revenues and contributes an additional 1% of its
gross room revenues to a fund administered by Super 8 Motels,
Inc. to finance the national advertising program. The
Partnership has no equity or other interest in Super 8 Motels,
Inc.
Brown & Grotewohl (the "Manager"), a California general
partnership which is an affiliate of the Managing General
Partner, directs the operation of the Partnership's motel. The
Manager supervises and directs the Partnership's employees
having direct responsibility for the operation of the motel,
establishes room rates, and directs the promotional activities
of the Partnership's employees. It directs the purchase of
replacement equipment and supplies, maintenance activity and the
engagement or selection of all vendors, suppliers and
independent contractors. The motel staff, under the supervision
of the Manager, is responsible for, among other things,
performing all service, administrative and bookkeeping duties in
connection with the motel, including all collections and all
disbursements to be paid out of funds generated by such
operations or otherwise supplied by the Partnership.
The Partnership employs (on a part-time basis) one
secretarial employee, four Partnership and motel administrative
employees, two marketing employees, and five accounting
employees at its Sacramento, California office. Included in the
above list is David P. Grotewohl, son of Philip Grotewohl, whom
the Partnership employs as Director of Operations and as an
attorney. Mark Grotewohl, son of Philip Grotewohl, is employed
as Director of Marketing. Julie Grotewohl, daughter of Philip
Grotewohl, is employed as the Regional Director of Sales.
- 3 -
<PAGE>
Santa Rosa, California
- ----------------------
The motel located in Santa Rosa, California, which consists
of 100 guest rooms, commenced operations on November 12, 1980.
The average monthly occupancy rates and average monthly room
rates for the period from October 1, 1992 to September 30, 1995,
are as follows:
AVERAGE OCCUPANCY RATE
1994 - 1993 - 1992 -
1995 1994 1993
------ ------ ------
October 57% 57% 59%
November 47% 56% 46%
December 41% 42% 42%
January 44% 37% 38%
February 36% 42% 44%
March 45% 41% 44%
April 49% 53% 53%
May 56% 57% 61%
June 62% 61% 59%
July 72% 79% 78%
August 68% 72% 79%
September 66% 65% 67%
---- ---- ----
Annual Average 54% 55% 56%
AVERAGE ROOM RATE
1994 - 1993 - 1992 -
1995 1994 1993
------ ------ ------
October $41.81 $37.63 $38.69
November $38.20 $37.43 $40.40
December $38.30 $36.07 $39.47
January $37.40 $35.25 $38.08
February $39.08 $36.84 $38.96
March $38.79 $38.14 $38.02
April $39.19 $39.19 $39.83
May $42.48 $41.07 $41.99
June $44.60 $41.70 $42.39
July $47.14 $43.70 $43.32
August $47.19 $43.92 $42.33
September $45.39 $43.42 $40.52
------ ------ ------
Total $42.33 $40.15 $40.68
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<PAGE>
The following existing lodging facilities provide direct
or indirect competition to the Partnership's Santa Rosa motel:
FACILITY NUMBER OF ROOMS APPROXIMATE DISTANCE FROM
PARTNERSHIP'S MOTEL (IN MILES)
Motel 6 100 Adjacent
Motel 6 119 0.5
Los Robles Inn 90 0.5
Sandman Motel 112 0.5
Ramada Inn 50 0.5
Holiday Inn Express 95 1.0
Days Inn 160 1.5
TraveLodge 60 2.0
Best Western Garden Inn 100 3.0
The Partnership employs (on a full-time or part-time basis)
one manager, four desk clerks, eleven laundry and housekeeping
employees, and one maintenance worker at the Santa Rosa motel.
The Santa Rosa motel draws its business from a variety of
sources, including corporate travelers, vacationers and
tourists, convention attendees and sports teams. The Santa Rosa
motel has no single customer the loss of which would have a
materially adverse effect on the motel's operations.
Item 2. PROPERTIES
On January 8, 1980, the Partnership acquired by long-term
lease a parcel of approximately three acres of unimproved
land located at 2632 N. Cleveland Avenue, Santa Rosa,
California, adjacent to U.S. Highway 101. Effective May 1,
1981, the lease was amended to delete an area comprising
approximately 32,600 square feet from the lease. A restaurant
facility was subsequently built on this deleted portion.
The term of the lease extends until August 31, 2015, with a
possible extension of the term for up to an additional 15 years
through exercise by the Partnership of three five-year renewal
options. Base rental payments are subject to adjustment at
three-year intervals to reflect changes in the Consumer Price
Index. Effective September 1, 1994 through August 31, 1997, the
base rent is $7,783 per month. Such rent is net to the lessor
of property taxes and assessments, utilities and other expenses
relating to the land.
In April 1980, construction of the Partnership's 100-room
motel was commenced on the site. The motel opened for
operations immediately after construction was completed on
November 12, 1980.
Item 3. LEGAL PROCEEDINGS
Inapplicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Inapplicable.
- 5 -
<PAGE>
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Market Information
The Units are not freely transferable and no public market
for the Units has developed or is expected to develop.
Holders
As of December 15, 1995, a total of 1,228 investors
("Limited Partners") held Units in the Partnership.
Distributions
Cash distributions are made on a quarterly basis from Cash
Available for Distribution, defined in the Partnership's
Certificate and Agreement of Limited Partnership (the
"Partnership Agreement") as Cash Flow, less adequate cash
reserves for obligations of the Partnership for which there is
no provision. Cash Flow means cash funds provided from
operations of the Partnership, without deduction for
depreciation, but after deducting cash funds used to pay or
provide for the payment of debt service, capital improvements
and replacements and the operating expenses of the Partnership's
property.
In addition, the Partnership will promptly distribute net
proceeds of the sale and refinancing of its motel properties to
the General Partners and the limited partners of the Partnership
(the "Limited Partners"), to the extent such proceeds are not
reinvested in the acquisition of additional properties.
No distributions were made during the two most recent
fiscal years.
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<PAGE>
Item 6. SELECTED FINANCIAL DATA
Following are selected financial data of the Partnership
for the fiscal years ended September 30, 1995, 1994, 1993, 1992
and 1991.
SUPER 8 MOTELS II, LTD.
Years Ended September 30:
--------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Total Income $850,781 $827,562 $846,804 $880,622 $890,864
Motel Room Income $829,326 $808,505 $828,804 $843,686 $829,445
Net Income (Loss) $31,089 $(31,564) $(88,213) $(59,661) $(61,649)
Per Partnership Unit:
Cash distributions:
Other - - - $12.50 $25.00
Net income (loss) $4.44 $(4.51) $(12.60) $(8.52) $(8.81)
Years Ended September 30:
--------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Total Assets $1,172,917 $1,122,106 $1,158,408 $1,230,978 $1,396,074
Long-Term Debt - - - - $4,154
- 7 -
<PAGE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity
- ---------
The Managing General Partner believes that the
Partnership's liquidity, defined as its ability to generate
sufficient amounts of cash to satisfy its cash needs, is
adequate. Current assets of $498,927 exceed current liabilities
of $84,276 by $ 414,651 as of September 30, 1995 as compared
with $315,488 for the same date in the previous fiscal year.
And as reflected in its Statement of Cash Flows, the
Partnership's cash and temporary investments have increased in
each of the last three fiscal years. Nevertheless, after the
second quarter of the fiscal year ended September 30, 1992, the
Managing General Partner suspended the Limited Partners'
quarterly distributions to preserve cash. The Partnership will
resume distributions to the extent that they can be sustained by
the cash flow from the Santa Rosa motel operations. As
discussed below, the Santa Rosa hospitality market has been
adversely affected by the poor general economic climate
experienced by much of California and by an excess supply of
lodging accommodations in the Santa Rosa area.
The General Partners have a reserve target equal to 5% of
"Adjusted Capital Contributions," or $174,716 (5% of
$3,494,317). "Adjusted Capital Contributions" is computed as
the original amount raised ($7,000,000) less the $259,154
returned to the Limited Partners in 1982 from the sale of excess
Ontario land, and less the $3,246,529 returned to the Limited
Partners from the 1990 Ontario motel sale. The $414,651 excess
of current assets over current liabilities exceeds the General
Partners' reserve target. The General Partners have decided to
maintain the higher operating reserve pending improvement in the
Santa Rosa lodging market.
The Partnership's primary source of liquidity is its gross
revenues from operations. As noted below, the Partnership has a
positive cash flow from motel operations. In addition, the
Partnership's equity in its Santa Rosa motel, which is presently
unencumbered, would provide a potential source of liquidity
through financing in the event the Partnership's liquidity were
impaired. There can be no assurance, however, that the
Partnership could borrow against such equity on favorable terms
should additional liquidity be required.
Capital Resources
- -----------------
The Partnership owns and operates one motel property, a
100-room lodging facility located on leased land in Santa Rosa,
California.
The Partnership currently has no material commitments for
capital expenditures. Its motel property is in full operation,
and no further property acquisitions or extraordinary capital
- 8 -
<PAGE>
improvements are contemplated. Except as described below, the
General Partners are aware of no material trends or changes with
respect to the mix or relative cost of the Partnership's capital
resources. Working capital is expected to be generated by
revenues from operations.
During the fiscal year covered by this report, the Partnership
capitalized $28,974 of the $62,836 spent on the refurbishment of
its motel and furnishings. Included in the capitalized items
were $8,215 for replacement room air-conditioning units, $7,270
for replacement guest room carpets, $1,250 for used televisions,
$6,654 for a portion of two vehicles used by central office
personnel. Thenon-capitalized renovations of $33,862 included
expenditures for lamps and light fixtures, drapes, bedspreads,
mattresses, chairs, and landscaping. The General Partners
anticipate that approximately 3% of gross room revenues will be
spent on replacement and renovation during the fiscal year
ending September 30, 1996. The Managing General Partner intends
that all of these expenditure will be made from cash flow from
operations or, if such cash flow is insufficient, from the
Partnership's cash reserves.
New Accounting Standards
- ------------------------
SFAS No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of, requires
the Partnership to disclose information about potential
impairment to the value of long-lived assets. The Partnership
is not required to adopt and does not currently plan to adopt
SFAS No. 121 until its fiscal year ending September 30, 1997.
The Partnership does not expect to make any disclosures about
impairment of long-lived assets under SFAS No. 121.
Results of Operations
- ---------------------
Partnership's Combined Financial Results
- ----------------------------------------
During the year covered by this report as compared to the
previous fiscal year, the Partnership achieved a $23,219
increase in total income, due primarily to a $20,821 increase in
guest room revenue. This 2.6% increase in guest room revenue is
discussed below.
During the year covered by this report as compared to the
previous fiscal year, the Partnership achieved a $39,434
reduction in total expenses, due primarily to the $36,685
reduction in motel operating expenses. This 5.1% decrease in
motel operating expenses is discussed below.
During the fiscal year ended September 30, 1994 as compared to
the previous fiscal year, the Partnership experienced a $19,242
decrease in total income, due to a $20,299 reduction in guest
room income. This 2.4% decrease in guest room income is
discussed below.
- 9 -
<PAGE>
During the fiscal year September 30, 1994 as compared to the
previous fiscal year, the Partnership achieved a $75,891
reduction in total expenses. This reduction was due primarily
to the $73,016 reduction in motel operating expenses. This 9.2%
reduction in motel operating expenses is discussed below.
Santa Rosa Motel
- ----------------
The following is a comparison of operating results of the
Partnership's Santa Rosa motel for the twelve-month periods
ended September 30, 1993, 1994 and 1995.
Average Average
Occupancy Room
Rate Rate
--------- -------
Twelve months ended:
September 30, 1993 55.8% $40.68
September 30, 1994 55.2% $40.15
September 30, 1995 53.7% $42.33
Total
Expenditures Partnership
Total and Debt Cash
Revenues Service Flow (1)
---------- ------------- --------------
Twelve months ended:
September 30, 1993 $846,804 $844,704 $2,100
September 30, 1994 $827,562 $773,164 $54,398
September 30, 1995 $850,781 $752,705 $98,076
(1) While Partnership Cash Flow as it is used here is not an
amount found in the financial statements, this amount is the
best indicator of the annual change in the amount, if any,
available for distribution to the Limited Partners. This
calculation is reconciled to the financial statements in the
following table.
Reconciliation of Partnership Cash Flow (included in the chart
above) to Net Income as shown on the Statements of Operations
(in the financial statements) is as follows:
1993 1994 1995
Partnership Cash Flow $2,100 $54,398 $98,076
Payments on Capital Lease Obligations 4,154 0 0
Additions to Fixed Assets 5,541 10,883 28,974
Depreciation and Amortization (100,045) (96,852) (97,047)
Other Items 37 7 1,086
-------- -------- -------
Net Income $(88,213) $(31,564) $31,089
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<PAGE>
During the fiscal year covered by this report as compared to
the previous fiscal year, the Partnership's Santa Rosa motel
achieved an increase in its guest room revenue by achieving an
increase in the average daily room rate received from $40.15 to
$42.33, which was slightly offset by a decrease in the occupancy
rate. The higher room rate was achieved through increased
leisure guest rooms sold while all other market segments
declined slightly.
During the fiscal year ended September 30, 1994 as compared to
the previous fiscal year, the Partnership's Santa Rosa motel
experienced decreases in both its occupancy rate and average
daily room rate. These declines were due to poor market
conditions in the Santa Rosa lodging market. The corporate
guest category declined from 23% of the motel's guests to 18%.
The offsetting increase was in the discount and group
categories. As discussed below, the General Partners instituted
a cost-cutting program that de-emphasized the relatively intense
sales and marketing efforts previously employed. This resulted
in a loss of some room nights, but the overall financial effect
was positive.
During the fiscal year covered by this report as compared to
the previous fiscal year, the Partnership's Santa Rosa motel
achieved a 2.6% reduction in total expenditures and debt service
while the average occupancy declined 1.5%. In accordance with
the cost-cutting program instituted by the General Partners
which de-emphasized the relatively intense sales and marketing
effort, the property was able to achieve comparative savings of
$19,341 in housekeeping wages and $6,620 in maintenance wages.
A non-recurring decline in comparative phone system costs of
$7,263 was offset by an $18,091 increase in additions to fixed
assets.
During the year ended September 30, 1994 as compared to the
previous fiscal year, the Santa Rosa motel achieved an 8.5%
decrease in expenditures. The General Partners instituted a
cost-cutting program that eliminated the expensive, but
relatively ineffective sales and marketing programs in favor of
reduced revenue offset by greater cost savings. Changing the
responsibilities of the on-site property manager allowed the
motel to realize cost savings of $23,876 in front desk manager
payroll costs, $8,215 in resident manager payroll costs and
$13,123 in head housekeeper payroll costs. Additional
associated savings included $10,417 in reduced print advertising
and $13,108 in maintenance payroll costs. Offsetting these
savings was a $10,826 increase in the local water and sewer
charges due primarily to much higher water and sewer rates.
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<PAGE>
Future Trends
- --------------
The Managing General Partner believes that the adverse
conditions in the Santa Rosa lodging market will continue to
have a negative impact on the Partnership's profitability in the
near term. Although there can be no assurance in this regard,
analysis of economic growth trends and planned hotel and motel
construction leads the Managing General Partner to believe that
the Santa Rosa economy will eventually absorb the existing
supply of motel rooms.
The Managing General Partner expects the Partnership's
occupancy percentages (and thus revenues and profitability) to
benefit from an economic recovery in the local and California
economies. The Managing General Partner anticipates lower
occupancy rates and perhaps lower room rates in the event of an
economic downturn. The Managing General Partner believes that
competitive conditions in the Santa Rosa market are such as to
restrict the Partnership's ability, in the short run, to
increase its room rates to compensate for inflation. The
cost-cutting program instituted in the first part of the 1994
calendar year will continue to be enforced, but in the future
will result in lower savings on a comparative basis as cost
inflation and replacement requirements raise future minimum
costs.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Financial Statements and Notes to Financial Statements
attached hereto at pages F-1 through F-12.
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<PAGE>
ANNUAL REPORT ON FORM 10-K
ITEM 8
FINANCIAL STATEMENTS
SUPER 8 MOTELS II, LTD.
SACRAMENTO, CALIFORNIA
SEPTEMBER 30, 1995
F-1
<PAGE>
Item 8: Financial Statements
SUPER 8 MOTELS II, LTD.
INDEX OF FINANCIAL STATEMENTS
Pages
-----
Financial Statements:
Report of Independent Certified Public Accountants F-3
Balance Sheets, September 30, 1995 and 1994 F-4
Statements of Operations for the years ended F-5
September 30, 1995, 1994 and 1993
Statements of Partners' Equity for the years ended F-6
September 30, 1995, 1994 and 1993
Statements of Cash Flows for the years ended F-7 to
September 30, 1995, 1994 and 1993 F-8
Notes to Financial Statements F-9 to
F-12
Note: All schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule or because the information required is included in the financial
statements or notes thereto.
F-2
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Super 8 Motels II, Ltd.
We have audited the accompanying balance sheets of Super 8 Motels II, Ltd., a
California limited partnership, as of September 30, 1995 and 1994 and the
related statements of operations, partners' equity and cash flows for each of
the three years in the period ended September 30, 1995. 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 II, Ltd. as of
September 30, 1995 and 1994 and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 1995, in
conformity with generally accepted accounting principles.
VOCKER KRISTOFFERSON AND CO.
November 17, 1995
San Mateo, California
F-3
<PAGE>
SUPER 8 MOTELS II, LTD.
(A California Limited Partnership)
BALANCE SHEETS
September 30, 1995 and 1994
ASSETS
1995 1994
---- ----
Current Assets:
Cash and temporary investments (Notes 1 and 3) $ 453,839 $ 338,374
Accounts receivable 17,785 15,641
Prepaid expenses 27,303 26,027
---------- ----------
Total Current Assets 498,927 380,042
---------- ----------
Property and Equipment (Note 2):
Capital improvements 34,947 34,947
Buildings 1,845,878 1,845,878
Furniture and equipment 466,449 455,847
---------- ----------
2,347,274 2,336,672
Accumulated depreciation and amortization (1,673,284) (1,594,608)
---------- ----------
Property and Equipment, Net 673,990 742,064
---------- ----------
Total Assets $1,172,917 $1,122,106
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 82,477 $ 62,879
Due to related parties (Note 4) 1,799 1,675
---------- ----------
Total Liabilities 84,276 64,554
---------- ----------
Contingent Liabilities and Lease Commitment
(Notes 4 and 5) - -
Partners' Equity:
General Partners 46,345 46,034
Limited Partners 1,042,296 1,011,518
---------- ----------
Total Partners' Equity 1,088,641 1,057,552
---------- ----------
Total Liabilities and Partners' Equity $1,172,917 $1,122,106
========== ==========
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
SUPER 8 MOTELS II, LTD.
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
Years Ended September 30:
---------------------------------------
1995 1994 1993
---- ---- ----
Income:
Motel room $829,326 $808,505 $828,804
Telephone and vending 10,260 11,854 11,326
Interest 10,068 6,287 5,977
Other 1,127 916 697
---------- ---------- ----------
Total Income 850,781 827,562 846,804
Expenses:
Motel operations (Notes 4 and 6) 688,067 724,752 797,768
General and administrative (Note 4) 34,578 37,522 37,110
Depreciation and amortization (Note 2) 97,047 96,852 100,045
Interest - - 94
---------- ---------- ----------
Total Expenses 819,692 859,126 935,017
---------- ---------- ----------
Net Income (Loss) $31,089 $(31,564) $(88,213)
======= ======== ========
Net Income (Loss) Allocable to
General Partners $311 $(316) $(882)
===== ===== =====
Net Income (Loss) Allocable to Limited
Partners $30,778 $(31,248) $(87,331)
======= ======== ========
Net Income (Loss) Per Partnership Unit
(Note 1) $4.44 $(4.51) $(12.60)
===== ====== =======
Distributions to Limited Partners
Per Partnership Unit (Note 1) $ - $ - $ -
===== ====== =======
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
SUPER 8 MOTELS II, LTD.
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
Years Ended September 30:
---------------------------------------
1995 1994 1993
---- ---- ----
General Partners:
Balance, beginning of year $ 46,034 $ 46,350 $ 47,232
Net income (loss) 311 (316) (882)
---------- ---------- ----------
Balance, End of Year 46,345 46,034 46,350
---------- ---------- ----------
Limited Partners:
Balance, beginning of year 1,011,518 1,042,766 1,130,097
Net income (loss) 30,778 (31,248) (87,331)
---------- ---------- ----------
Balance, End of Year 1,042,296 1,011,518 1,042,766
---------- ---------- ----------
Total Partners' Equity $1,088,641 $1,057,552 $1,089,116
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
SUPER 8 MOTELS II, LTD.
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
Years Ended September 30:
---------------------------------------
1995 1994 1993
---- ---- ----
Cash Flows From Operating Activities:
Received from motel operations $840,465 $817,779 $835,409
Expended for motel operations and
general and administrative expenses (704,198) (768,739) (812,352)
Interest received 8,172 6,125 5,927
Interest paid - - (131)
---------- ---------- ----------
Net Cash Provided by
Operating Activities 144,439 55,165 28,853
---------- ---------- ----------
Cash Flows From Investing Activities:
Purchases of property and equipment (28,974) (10,883) (5,541)
---------- ---------- ----------
Net Cash Used by
Investing Activities (28,974) (10,883) (5,541)
---------- ---------- ----------
Cash Flows From Financing Activities:
Payments on capital lease obligations - - (4,154)
---------- ---------- ----------
Net Cash Used by Financing
Activities - - (4,154)
---------- ---------- ----------
Net Increase in Cash and
Temporary Investments 115,465 44,282 19,158
Cash and Temporary Investments:
Beginning of year 338,374 294,092 274,934
---------- ---------- ----------
End of Year $453,839 $338,374 $294,092
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
SUPER 8 MOTELS II, LTD.
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS (Continued)
Years Ended September 30:
---------------------------------------
1995 1994 1993
---- ---- ----
Reconciliation of Net Income (Loss) to Net Cash
Provided by Operating Activities:
Net income (loss) $ 31,089 $(31,564) $(88,213)
--------- -------- --------
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation and amortization 97,047 96,852 100,045
Increase in accounts receivable (2,144) (3,658) (5,468)
Increase in prepaid expenses (1,276) (1,727) (46)
Decrease in other assets - - 2,738
Increase (decrease) in accounts
payable and accrued liabilities 19,599 (4,831) 19,799
Increase (decrease) in due to
related parties 124 93 (2)
--------- -------- --------
Total Adjustments 113,350 86,729 117,066
--------- -------- --------
Net Cash Provided by
Operating Activities: $144,439 $ 55,165 $ 28,853
======== ======== ========
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
SUPER 8 MOTELS II, LTD.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - THE PARTNERSHIP
Super 8 Motels II, Ltd., is a limited partnership organized under California
law on May 7, 1979, to acquire and operate motel properties in Santa Rosa and
Ontario, California. The Santa Rosa Motel was opened in November, 1980, and
the Ontario Motel was opened in May, 1981. The Ontario Motel property was
sold in February, 1990. The Partnership grants credit to customers,
substantially all of which are local businesses in Santa Rosa.
The net income or net loss of the Partnership is allocated 1% to the General
Partners and 99% to the Limited Partners. Net income and distributions per
partnership unit are based upon 7,000 units outstanding. All partnership
units are owned by the Limited Partners.
The Partnership agreement requires that the Partnership maintain reserves for
normal repairs, replacements, working capital and contingencies in an amount
of at least 5% of adjusted capital contributions ($174,716 at September 30,
1995). As of September 30, 1995, the Partnership had a combined balance in
cash and temporary investments of $453,839.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Items of Partnership income are passed through to the individual partners for
income tax purposes, along with any income tax credits. Therefore, no federal
or California income taxes are provided for in the financial statements of the
Partnership. Since the Partnership has a fiscal year-end other than the
majority of the partners, the Partnership is required annually to make a
payment to the Internal Revenue Service based on the prior year's income.
Property and equipment are recorded at cost. Depreciation and amortization
are computed using the following estimated useful lives and methods:
Description Methods Useful Lives
---------------------- ---------------------- ------------
Capital improvements 200% declining balance 7-20 years
and straight-line
Buildings 150% declining balance 10-25 years
and straight-line
Furniture and equipment 200% declining balance 5-7 years
and straight-line
Costs incurred in connection with maintenance and repair are charged to
expense. Major renewals and betterments that materially prolong the life of
assets are capitalized.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
F-9
<PAGE>
SUPER 8 MOTELS II, LTD.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 3 - CASH AND TEMPORARY INVESTMENTS
Cash and temporary investments as of September 30, 1995 and 1994
consist of the following:
1995 1994
---- ----
Cash in bank, non-interest bearing $ 36,869 $ 23,348
Money market accounts 316,970 215,026
Certificates of deposit 100,000 100,000
-------- --------
Total Cash and Temporary Investments $453,839 $338,374
======== ========
Temporary investments are recorded at cost, which approximates market value.
The Partnership considers temporary investments with original maturities of
six months or less to be cash equivalents for purposes of the statement of
cash flows.
NOTE 4 - RELATED PARTY TRANSACTIONS
Franchise Fees
Super 8 Motels, Inc., now a wholly-owned subsidiary of Hospitality Franchise
Systems, Inc., is franchisor of all Super 8 Motels. The Partnership pays to
the franchisor monthly fees equal to 4% of the gross room revenues of the
motel and contributes an additional 1% of its gross room revenues to an
advertising fund administered by the franchisor. In return the franchisor
provides the right to use the name "Super 8," a national institutional
advertising program, an advance room reservation system, and inspection
services. These costs ($41,466 in 1995, $40,308, in 1994 and $41,370 in 1993)
are included in motel operations expense in the accompanying statements of
operations. The Partnership operates its motel property as a franchisee of
Super 8 Motels, Inc. through a sub-franchise agreement with Brown & Grotewohl,
a partnership of the Estate of Dennis A. Brown and Grotewohl Management
Services, Inc., a general partner of Super 8 Motels II, Ltd. Under the
sub-franchise agreement, Brown & Grotewohl earned 40% of the above franchise
fees, which amounted to $16,587, $16,123 and $16,548 in 1995, 1994 and 1993,
respectively.
Property Management Fees
The General Partners or their affiliates handle the management of the motel
property of the Partnership. The fee for this service is 5% of the gross
revenues from Partnership operations, as defined in the Partnership agreement,
not including income from the sale, exchange or refinancing of such
properties. This fee is payable only out of the cash available for
distribution of the Partnership, defined as the total cash receipts from
Partnership operations during a given period of time less cash used during the
same period to pay debt service, capital improvements and replacements,
operating expenses and reserves. It is subordinated to prior receipt by the
Limited Partners of a cumulative 10% per annum pre-tax return on their
adjusted capital investments for each year of the Partnership's existence. At
September 30, 1995 the Limited Partners had not received the 10% cumulative
return, and accordingly, no property management fees are payable. Management
does not anticipate payment of these fees in the immediate future; therefore,
they are not reflected in these financial statements.
F-10
<PAGE>
SUPER 8 MOTELS II, LTD.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 4 - RELATED PARTY TRANSACTIONS (Continued)
Subordinated Partnership Management Fees
During the Partnership's operational stage, the General Partners are to
receive 9% of cash available for distribution for Partnership management
services, along with an additional 1% of cash available for distribution on
account of their interest in the income and losses, subordinated, however, to
receipt by the Limited Partners of a cumulative 10% per annum pre-tax return
on their adjusted capital investments and to payment of the property
management fees referred to above. Since the Limited Partners had not
received the 10% cumulative return and the property management fees had not
been paid, no partnership management fees are presently payable and therefore
are not reflected in these financial statements. Management expects their
fees will never be paid. This fee is payable only from cash funds provided
from operations of the Partnership, and may not be paid from the proceeds of
sale or refinancing.
Subordinated Incentive Distributions
Under the terms of the Partnership agreement, the net proceeds of the sale of
any of the Partnership's motel properties and of any financing or refinancing
of any of the Partnership's motel properties, to the extent that such proceeds
are not to be reinvested in the acquisition of additional properties, shall
promptly be distributed to the General Partners and Limited Partners. Until
the Limited Partners have received distributions from all sources equal to
their capital contributions plus a cumulative 10% per annum pre-tax return on
their adjusted capital contributions, all of such proceeds shall be
distributed to the Limited Partners. Thereafter, 15% of the remainder of such
proceeds shall be distributed to the General Partners as cash incentive
distributions and the balance shall be distributed to the Limited Partners.
Administrative Expenses Shared by the Partnership and its Affiliates
There are certain administrative expenses allocated between the Partnership
and affiliated Super 8 partnerships. These expenses, which are allocated
based on usage, are telephone, data processing, rent of the administrative
office, and administrative salaries. The administrative expenses allocated
to the Partnership were approximately $110,000 in 1995, $107,000 in 1994 and
$115,000 in 1993 and are included in motel operations expenses and general and
administrative expenses in the accompanying statements of operations.
Included in administrative salaries are allocated amounts paid to three
employees who are related to Philip B. Grotewohl, the sole shareholder of
Grotewohl Management Services, Inc., a general partner of the Partnership.
NOTE 5 - LEASE COMMITMENT
The Partnership has a long-term operating lease commitment on approximately
three acres of land in Santa Rosa, California, the site of the Santa Rosa
motel. The term of the lease runs through August 31, 2015, with an option to
extend the lease for three consecutive periods of five years each. The base
monthly rent is subject to adjustment at three year intervals to reflect
changes in the Consumer Price Index. The Partnership will pay all property
taxes, assessments and utilities. Rent expenses for the fiscal years ending
September 30, 1995, 1994 and 1993 were $101,679, $95,140, and $93,031,
respectively.
F-11
<PAGE>
SUPER 8 MOTELS II, LTD.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 5 - LEASE COMMITMENT (Continued)
The future lease commitment at September 30, 1995, using the minimum monthly
amounts, is as follows:
Years Ending
September 30: Amount
------------- ----------
1996 $ 93,395
1997 93,395
1998 93,395
1999 93,395
2000 93,395
2001-2005 466,973
2006-2010 466,973
2011-2015 459,191
----------
$1,860,112
==========
NOTE 6 - MOTEL OPERATING EXPENSES
The following table summarizes the major components of motel operating
expenses for the years ended September 30, 1995, 1994 and 1993.
1995 1994 1993
---- ---- ----
Salaries and related costs $191,794 $223,905 $281,667
Rent 94,016 86,968 86,968
Utilities 73,824 83,034 74,004
Allocated costs, mainly indirect
salaries 89,327 85,609 93,675
Other operating expenses 239,106 245,236 261,454
-------- -------- --------
Total Motel Operating Expenses $688,067 $724,752 $797,768
======== ======== ========
F-12
<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Inapplicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The original general partners of the Partnership were
Dennis A. Brown, Philip B. Grotewohl and Robert J. Dana.
Upon Mr. Brown's death on February 25, 1988, Mr. Grotewohl
and Mr. Dana elected to continue the Partnership. During March
1988, Mr. Grotewohl appointed Grotewohl Management Services,
Inc., a California corporation wholly-owned by Mr. Grotewohl,
his successor as Managing General Partner of the Partnership.
Item 11. EXECUTIVE COMPENSATION
The following discussion contains certain information
regarding aggregate direct or indirect compensation paid by the
Partnership during the fiscal year ended September 30, 1995 or
payable to the General Partners and the Estate of Dennis A Brown
as a group. Although Mr. Brown ceased to be a general partner
of the Partnership upon his death, his estate shares in certain
compensation otherwise payable to the General Partners and their
affiliates.
Property Management Fees
- ------------------------
The Manager is managing and will manage the Partnership's
motel pursuant to an agreement between the Partnership and Super
8 Management Corporation, a corporation which was wholly-owned
by Dennis A. Brown and Philip B. Grotewohl. In March 1988 the
management contract between the Partnership and Super 8
Management Corporation was assigned to the Manager, which is a
California general partnership between the Estate of Dennis A
Brown and the Managing General Partner. The fee for this service
is 5% of the gross proceeds from the operations of the motel.
This fee is payable only out of the operational cash flow of the
Partnership, and is subordinated to the prior receipt by the
Limited Partners of a cumulative 10% per annum return on their
Adjusted Capital Contributions. This compensation is in
addition to the cost of goods and services acquired for the
Partnership from independent contractors.
As a result of the sale of the Ontario motel in February 1990,
the General Partners waived their claim to accrued management
fees as the receipt thereof became extremely remote. No
property management fees have been accrued since the Ontario
motel sale due to the unlikelihood that they would ever be paid
to the General Partners. Before the General Partners can
receive any property management fees, the Limited Partners must
receive preferential distributions of $2,976,061 to meet the
subordination requirement calculated through September 30,1995,
plus $349,432 per each year thereafter.
- 13 -
<PAGE>
Franchise Fees and Advertising Fees
- -----------------------------------
Super 8 Motels, Inc. is the franchisor of all Super 8
Motels. The Partnership operates its motel as a franchisee of
Super 8 Motels, Inc., through sub-franchises obtained from Super
8 Management Corporation. The original sub-franchise agreement
between Super 8 Motels, Inc. and Super 8 Management Corporation
was transferred to the Manager in March 1988. The Partnership,
as franchisee, pays to the franchisor monthly franchise fees
equal to 4% of its gross room revenue and contributes 1% of its
gross room revenue to an advertising fund administered by the
franchisor to finance institutional advertising. The Manager is
entitled to one-half of the franchise fees.
The total of franchise fees accrued during the fiscal year
covered by this report was $33,174 (of which $16,587 accrued to
the Manager). All of the above sums have been paid.
General Partners' Interest in Cash Available for Distribution
- -------------------------------------------------------------
At quarterly intervals, the total amount of the
Partnership's Cash Available for Distribution is determined at
the discretion of the General Partners. (See Item 5
above.) Distributions therefrom are made as follows: (1) 90%
of such distributions is paid to the Limited Partners; (2) 9%
thereof is paid to the General Partners as Partnership
management fees; and (3) 1% thereof is paid to the General
Partners in accordance with their interest in the income and
losses of the Partnership.
Notwithstanding the foregoing, however, distributions of
Cash Available for Distribution to the General Partners are
deferred and paid only after payment to the Limited Partners of
distributions of Cash Available for Distribution in an amount
equal to 10% per annum cumulative on their Adjusted Capital
Contributions. During the fiscal year covered by this report,
no amounts were deferred for the General Partners' share of
distributions of Cash Available for Distribution. A total of
$669,814 has been deferred since commencement of the
Partnership. As discussed in the section captioned "Property
Management Fees" above, the payment of these fees is unlikely
due to the large preferential distribution unpaid to the Limited
Partners.
General Partners' Interest in Net Proceeds of Sales and
Financing of Partnership Properties
- --------------------------------------------------------
Net proceeds of the sale of the Partnership's motel
property and of any financing or refinancing thereof (to the
extent that the proceeds of any such financing or refinancing
are not to be reinvested in the acquisition of additional
properties) will be promptly distributed. Such distributions
- 14 -
<PAGE>
will be paid as follows: (1) until the Limited Partners have
received distributions from all sources equal to 100% of their
capital contributions plus 10% per annum cumulative on their
Adjusted Capital Contributions, all of such proceeds will be
distributed to the Limited Partners; (2) thereafter, 15% of the
balance of such proceeds will be distributed to the General
Partners as cash incentive distributions and the remaining 85%
thereof will be distributed to the Limited Partners. No
distributions have been paid to or accrued for the benefit of
the General Partners.
Allocation of Compensation
- --------------------------
Compensation to the General Partners and their affiliates
is allocated as follows:
(1) Mr. Dana receives annual amounts from the General
Partners' compensation from the Partnership so that his
cumulative additional compensation from year to year is equal to
the greater of 25% of the General Partners'
cumulative share of Cash Available for Distribution and sale or
refinancing proceeds or 25% of the cumulative property
management fees received by the General Partners (reduced by
all Partnership-related business expenses of the General
Partners).
(2) All compensation to the General Partners which is not
allocated to Mr. Dana is divided equally between Mr. Grotewohl
and the Estate of Dennis A. Brown.
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 Units.
Security Ownership of Management
- --------------------------------
The General Partners do not beneficially own any Units.
Changes in Control
- ------------------
With the consent of all other General Partners and Limited
Partners holding more than 50% of the Units, a General Partner
may designate a successor or additional general partner, in each
case with such participation in such General Partner's interest
as such General Partner and successor or additional general
partner may agree upon, provided that the interests of the
Limited Partners are not affected thereby.
A General Partner may withdraw from the Partnership at any time
upon 60 days' prior written notice to the Limited Partners and
any other General Partners, or may transfer his interest to an
- 15 -
<PAGE>
entity controlled by him; provided, however, that in either such
event, if it is determined that the Partnership business is to
be continued rather than dissolved and liquidated upon the
happening thereof, the withdrawal or transfer will be effective
only after receipt by the Partnership of an opinion of counsel
to the effect that such withdrawal or transfer will not cause
the Partnership to be classified as an association taxable as a
corporation rather than as a partnership for federal income tax
purposes.
The Limited Partners shall take no part in the management of
the Partnership's business; however, a majority in interest of
the Limited Partners, without the concurrence of the General
Partners, shall have the right to amend the Partnership
Agreement, dissolve the Partnership, remove a General Partner or
any successor general partner, elect a new general partner or
general partners upon the removal, retirement, death, insanity,
insolvency or bankruptcy of a General Partner, and approve or
disapprove the sale, exchange or pledge in a single transaction
of all or substantially all of the properties acquired by the
Partnership.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Administrative Expenses Shared by the Partnership and its Affiliates
- ---------------------------------------------------------------------
There are certain administrative expenses allocated between the
Partnership and affiliated Super 8 partnerships. These
expenses, which are allocated based on usage, are telephone,
data processing, rent of administrative offices and
administrative salaries. The administrative expenses allocated
to the Partnership were approximately $110,000 in fiscal year
ended September 30, 1995 and are included in general and
administrative expenses and motel and restaurant operations
expenses in the Partnership's financial statements. Included in
administrative salaries are allocated amounts paid to three
employee who are related to Philip B Grotewohl, the sole
shareholder of a General Partner.
- 16 -
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report
1. Financial Statements Included in Part II of this Report
Report of Independent Certified Public Accountants
Balance Sheets, September 30, 1995 and 1994
Statements of Operations for the Years Ended September 30,
1995, 1994 and 1993
Statements of Partners' Equity for the Years Ended September 30,
1995, 1994 and 1993
Statements of Cash Flows for the Years Ended September 30,
1995, 1994 and 1993
Notes to Financial Statements
2. Financial Statement Schedules Included in Part IV of the Report
None
3. Exhibits
3. and 4. The Partnership Agreement is incorporated herein
as an exhibit from the annual report on Form 10-K for the fiscal
year ended September 30, 1984 (File No. 0-9218).
10.1 Ground lease pertaining to the Partnership's Santa Rosa,
California property filed as Exhibit 10.1 to the annual
report on Form 10-K for the fiscal year ended September 30, 1982
(File No. 0-9218) is hereby incorporated herein as an exhibit.
(b) Reports on Form 8-K
Inapplicable
- 17 -
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 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.
(Registrant) SUPER 8 MOTELS II, LTD.
-----------------------
(Signature and Title) /s/ Philip B. Grotewohl
----------------------------
Philip B. Grotewohl, President of Grotewohl
Management Services, Inc. Managing General Partner
Date December 28, 1995
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.
By (Signature and Title) /s/ Philip B. Grotewohl
---------------------------
Philip B. Grotewohl, Chief executive officer,
chief financial officer, chief accounting
officer and sole director of Grotewohl
Management Services, Inc., Managing General
Partner
Date December 28, 1995
- 18 -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 453,839
<SECURITIES> 0
<RECEIVABLES> 17,785
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 498,927
<PP&E> 2,347,274
<DEPRECIATION> 1,673,284
<TOTAL-ASSETS> 1,172,917
<CURRENT-LIABILITIES> 84,276
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,088,641
<TOTAL-LIABILITY-AND-EQUITY> 1,172,917
<SALES> 839,586
<TOTAL-REVENUES> 850,781
<CGS> 688,067
<TOTAL-COSTS> 688,067
<OTHER-EXPENSES> 131,625
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 31,089
<INCOME-TAX> 0
<INCOME-CONTINUING> 31,089
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,089
<EPS-PRIMARY> 4.44
<EPS-DILUTED> 4.44
</TABLE>
