<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 31, 1995
Commission File Number: 1-6828
STARWOOD LODGING TRUST
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction
of incorporation or organization)
52-0901263
(I.R.S. employer identification no.)
11835 W. Olympic Blvd., Suite 695
Los Angeles, California 90064
(Address of principal executive
offices, including zip code)
(310) 575-3900
(Registrant's telephone number,
including area code)
11845 W. Olympic Blvd., Suite 550
Los Angeles, California 90064
(Former name or former address,
if changed since last report)
Commission File Number: 1-7959
STARWOOD LODGING CORPORATION
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction
of incorporation or organization)
52-1193298
(I.R.S. employer identification no.)
11835 W. Olympic Blvd., Suite 675
Los Angeles, California 90064
(Address of principal executive
offices, including zip code)
(310) 575-3900
(Registrant's telephone number,
including area code)
11845 W. Olympic Blvd., Suite 560
Los Angeles, California 90064
(Former name or former address,
if changed since last report)
================================================================================
<PAGE> 2
The undersigned Registrants hereby amend the following items, the Financial
Statements, Pro Forma Financial Information and Exhibits of their Form 8-K dated
January 4, 1996 as set forth in the pages attached hereto:
================================================================================
Item 7 of the Joint Current Report on Form 8-K/A dated March 8, 1996
filed by Starwood Lodging Trust and Starwood Lodging Corporation is hereby
amended to read in its entirety as follows:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired. See Index to
Financial Statements (page F -1).
(b) Pro Forma Financial Information. See Index to Financial
Statements (page F -1).
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION
By: /s/ RONALD C. BROWN By: /s/ ALAN M. SCHNAID
____________________________ ___________________________________
Ronald C. Brown Alan M. Schnaid
Vice President and Director of Accounting
Chief Financial Officer Principal Accounting Officer
Date: March 12, 1996
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS
STARWOOD LODGING TRUST AND STARWOOD LODGING
CORPORATION -- PRO FORMA
<TABLE>
<S> <C>
Combined and Separate Balance Sheets at December 31, 1995............................................... F-2
Notes to the Pro Forma Balance Sheets................................................................... F-5
Combined and Separate Statements of Operations for the year ended December 31, 1995..................... F-8
Notes to Pro Forma Statements of Operations ............................................................ F-11
THE TERRACE GARDEN INN AND LENOX INN
Report of Independent Public Accountants................................................................ F-15
Statement of Operations for the year ended December 31, 1995............................................ F-16
Notes to Statement of Operations........................................................................ F-17
</TABLE>
F-1
<PAGE> 5
STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION
UNAUDITED COMBINED PRO FORMA BALANCE SHEETS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Historical
Starwood Starwood
Lodging The Pro Forma Lodging
Combined Grand Hotel Adjustments Combined
------------- ------------- ------------- -------------
(A) (B)
<S> <C> <C> <C> <C>
ASSETS
Hotel assets held for sale - net ............... $ 21,063,000 $ $ 21,063,000
Hotel assets - net 315,895,000 33,000,000 348,895,000
------------- ------------- ------------- -------------
336,958,000 33,000,000 369,958,000
Mortgage notes receivable, net ................. 79,261,000 (19,500,000) 59,761,000
Investments in joint ventures .................. 2,858,000 2,858,000
------------- ------------- ------------- -------------
Total real estate investments .............. 419,077,000 13,500,000 432,577,000
Cash and cash equivalents ...................... 9,332,000 9,332,000
Accounts and interest receivable ............... 9,595,000 9,595,000
Notes receivable, net .......................... 1,796,000 1,796,000
Inventories, prepaid expenses and other assets . 20,194,000 20,194,000
------------- ------------- ------------- -------------
$ 459,994,000 $ 13,500,000 $ 473,494,000
============= ============= ============= =============
LIABILITIES AND SHAREHOLDERS'
EQUITY
LIABILITIES
Secured notes payable and revolving line of
credit ......................................... $ 119,100,000 $ 13,500,000 $ 132,600,000
Mortgage and other notes payable ............... 4,385,000 4,385,000
Accounts payable and other liabilities ......... 19,022,000 19,022,000
Dividends and distributions payable ............ 9,284,000 9,284,000
------------- ------------- ------------- -------------
151,791,000 13,500,000 165,291,000
------------- ------------- ------------- -------------
Commitments and contingencies
MINORITY INTEREST .............................. 92,735,000 92,735,000
------------- ------------- ------------- -------------
SHAREHOLDERS' EQUITY
Trust shares of beneficial interest,
$0.01 par value; authorized
30,000,000 shares; outstanding
13,825,000 shares ............................ 138,000 138,000
Corporation common stock, $0.01 par
value; authorized 30,000,000 shares;
outstanding 13,825,000 shares ................ 138,000 138,000
Additional paid-in capital ..................... 434,107,000 434,107,000
Accumulated deficit ............................ (218,915,000) (218,915,000)
------------- ------------- ------------- -------------
215,468,000 215,468,000
------------- ------------- ------------- -------------
$ 459,994,000 $ 13,500,000 $ 473,494,000
============= ============= ============= =============
</TABLE>
F-2
<PAGE> 6
STARWOOD LODGING TRUST
UNAUDITED COMBINED PRO FORMA BALANCE SHEETS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Historical Pro Forma
Starwood Starwood
Lodging The Pro Forma Lodging
Trust Grand Hotel Adjustments Trust
------------- -------------- ----------- -------------
(A) (B)
<S> <C> <C> <C> <C>
ASSETS
Hotel assets held for sale - net .......... $ 20,547,000 $ $ $ 20,547,000
Hotel assets - net ........................ 221,063,000 33,000,000 (5,700,000)(C) 248,363,000
------------- ------------- ---------- -------------
241,610,000 33,000,000 (5,700,000) 268,910,000
Mortgage notes receivable, net ............ 79,261,000 (19,500,000) 59,761,000
Mortgage Notes Receivable - Corporation ... 68,486,000 68,486,000
Investments in joint ventures ............. 2,841,000 2,841,000
------------- ------------- ---------- -------------
Total real estate investments ............. 392,198,000 13,500,000 (5,700,000) 399,998,000
Cash and cash equivalents ................. 710,000 710,000
Rent and interest receivable .............. 1,841,000 1,841,000
Notes receivable, net ..................... 1,232,000 1,232,000
Notes receivable - Corporation ............ 17,978,000 5,700,000(C) 23,678,000
Prepaid expenses and other assets ......... 11,778,000 11,778,000
------------- ------------- ---------- -------------
$ 425,737,000 $ 13,500,000 $ $ 439,237,000
============= ============= ========== =============
LIABILITIES AND SHAREHOLDERS'
EQUITY
LIABILITIES
Secured notes payable and revolving line of
credit .................................... $ 119,100,000 $ 13,500,000 $ $ 132,600,000
Mortgage and other notes payable .......... 100,000 100,000
Accounts payable and other liabilities .... 4,412,000 4,412,000
Dividends and distributions payable ....... 9,284,000 9,284,000
------------- ------------- ----------- -------------
132,896,000 13,500,000 146,396,000
------------- ------------- ----------- -------------
Commitments and contingencies
MINORITY INTEREST ......................... 88,113,000 88,113,000
------------- ------------- ----------- -------------
SHAREHOLDERS' EQUITY
Trust shares of beneficial interest,
$0.01 par value; authorized
3000,000 shares; outstanding
13,825,000 shares ......................... 138,000 138,000
Additional paid-in capital ................ 354,619,000 354,619,000
Accumulated deficit ....................... (150,029,000) (150,029,000)
------------- ------------- ----------- -------------
204,728,000 204,728,000
------------- ------------- ----------- -------------
$ 425,737,000 $ 13,500,000 $ $ 439,237,000
============= ============= =========== =============
</TABLE>
F-3
<PAGE> 7
STARWOOD LODGING CORPORATION
UNAUDITED COMBINED PRO FORMA BALANCE SHEETS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Historical Pro Forma
Starwood Starwood
Lodging The Pro Forma Lodging
Corporation Grand Hotel Adjustments Corporation
------------- ------------- ------------- -------------
(A) (B)
<S> <C> <C> <C> <C>
ASSETS
Hotel assets held for sale - net ............. $ 516,000 $ $ 516,000
Hotel assets - net ........................... 94,832,000 5,700,000(C) 100,532,000
------------- ------------- ------------- -------------
95,348,000 5,700,000 101,048,000
Investments in joint ventures ................ 17,000 17,000
------------- ------------- ------------- -------------
Total real estate investments ................ 95,365,000 5,700,000 101,065,000
Cash and cash equivalents .................... 8,622,000 8,622,000
Accounts and interest receivable ............. 7,754,000 7,754,000
Notes receivable, net ........................ 564,000 564,000
Inventories, prepaid expenses and other assets 8,416,000 8,416,000
------------- ------------- ------------- -------------
$ 120,721,000 $ 5,700,000 $ 126,421,000
============= ============= ============= =============
LIABILITIES AND SHAREHOLDERS'
EQUITY
LIABILITIES
Mortgage and other notes payable ............. $ 4,285,000 $ $ 4,285,000
Mortgage notes payable - Trust ............... 68,486,000 68,486,000
Notes payable - Trust ........................ 17,978,000 5,700,000(C) 23,678,000
Accounts payable and other liabilities ....... 14,610,000 14,610,000
------------- ------------- ------------- -------------
105,359,000 5,700,000 111,059,000
------------- ------------- ------------- -------------
Commitments and contingencies
MINORITY INTEREST ............................ 4,622,000 4,622,000
------------- ------------- ------------- -------------
SHAREHOLDERS' EQUITY
Corporation common stock, $0.01 par
value; authorized 30,000,000 shares;
outstanding 13,825,000 shares ................ 138,000 138,000
Additional paid-in capital ................... 79,488,000 79,488,000
Accumulated deficit .......................... (68,886,000) (68,886,000)
------------- ------------- ------------- -------------
10,740,000 10,740,000
------------- ------------- ------------- -------------
$ 120,721,000 $ 5,700,000 $ 126,421,000
============= ============= ============= =============
</TABLE>
F-4
<PAGE> 8
STARWOOD LODGING TRUST AND
STARWOOD LODGING CORPORATION
NOTES TO THE UNAUDITED COMBINED AND
SEPARATE PRO FORMA BALANCE SHEETS
AT DECEMBER 31, 1995
NOTE 1. BASIS OF PRESENTATION
(A) The Trust and the Corporation have unilateral control of SLT Realty
Limited Partnership ("Realty") and SLC Operating Limited Partnership
("Operating" and, together with Realty the "Partnerships"),
respectively, and therefore, the historical financial statements of
Realty and Operating are consolidated with those of the Trust and the
Corporation. Unless the context otherwise requires, all references
herein to the "Companies" refer to the Trust and the Corporation, and
all references to the "Trust" and the "Corporation" include the Trust
and the Corporation and those entities respectively owned or controlled
by the Trust or the Corporation, including Realty and Operating.
NOTE 2. ACQUIRED PROPERTY
(B) On January 4, 1996, the Companies completed the purchase of the Grand
Hotel (the "Grand"), a 236-room luxury hotel, located in Washington,
D.C., for an additional $13.5 million. The Trust had purchased the
mortgage interest in September 1995 for $19.5 million.
NOTE 3. PRO FORMA ADJUSTMENTS
(C) Immediately after receiving its interest in the property, the Trust
sold its interest in the personal property to the Corporation for
approximately $5.7 million for a note in such amount.
F-5
<PAGE> 9
STARWOOD LODGING TRUST AND
STARWOOD LODGING CORPORATION
PRO FORMA COMBINED AND
SEPARATE STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)
Effective January 1, 1995, Starwood Lodging Trust (the "Trust") and
Starwood Lodging Corporation (the "Corporation" and collectively, "the
Companies") consummated the previously announced reorganization (the
"Reorganization") with Starwood Capital Group, L.P. and its affiliates
(collectively "Starwood Capital"). On July 6, 1995, the Trust and the
Corporation completed a public offering (the "Offering") of 11,787,500 paired
shares. Net proceeds from the Offering of approximately $245.7 million together
with proceeds from a financing facility and cash on hand were used as follows:
approximately $206.5 million was used to repay existing indebtedness, including
$10 million which was used by Realty to purchase the first trust deed on
Operating's Milwaukee hotel, and approximately $53.8 million was used for the
acquisition of the 462-room Sheraton Colony Square in Atlanta, Georgia and the
224-room Embassy Suites in Tempe, Arizona. On September 20, 1995, the Companies
acquired the 652-room Doral Inn in New York, New York for $43.3 million. On
October 31, 1995, the Companies acquired the 364-room Terrace Garden Inn and
180-room Lenox Inn for $27.9 million and $9 million, respectively. Both
properties are located in Atlanta, Georgia. On November 30, 1995, the Companies
acquired the 206-room Calverton Holiday Inn in Beltsville, Maryland, for $11.5
million. On January 4, 1996, the Companies completed the purchase of the
263-room Grand Hotel in Washington, D.C., for an additional $13.5 million. The
Trust had purchased the mortgage interest in the Grand in September of 1995 for
$19.5 million.
Due to the impact of the Offering and the acquisitions of properties
acquired, the historical results of operations and earnings per share are not
indicative of future results of operations and earnings per share. The following
Unaudited Combined and Separate Pro Forma Statement of Operations for the year
ended December 31, 1995 gives effect to the Reorganization, the Offering and the
related acquisitions of the Sheraton Colony Square in Atlanta, Georgia, the
Embassy Suites in Tempe, Arizona, and the Omni Europa in Chapel Hill, North
Carolina; and the subsequent acquisitions of the Doral Inn in New York, New
York, the Terrace Garden and Lenox Inn in Atlanta, Georgia, the Holiday Inn in
Beltsville, Maryland, and the Grand Hotel in Washington, D.C. as of the
beginning of the year. The Pro Forma Statement of Operations excludes the effect
of the Boston Park Plaza, a property in which the Companies acquired a 58.2%
interest on January 24, 1996. For additional information relating to the
acquisition of the Boston Park Plaza, see Item 7 (Financial Statements, Pro
Forma Financial Information and Exhibits) of the Companies Form 8-K, as amended,
dated January 24, 1996. The pro forma information is based
F-6
<PAGE> 10
upon historical information and does not purport to present what actual results
would have been had such transactions, in fact, occurred at the beginning of
each period presented, or to project results for any future period.
F-7
<PAGE> 11
STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION
UNAUDITED COMBINED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Historical Pro Forma
Starwood Starwood
Lodging Acquired Pro Forma Lodging
Combined Properties Adjustments Combined
------------- ------------- ------------- -------------
(A) (B)
<S> <C> <C> <C> <C>
REVENUE
Hotel ................................. $ 121,250,000 $ 52,813,000 $ $ 174,063,000
Gaming ................................ 26,929,000 26,929,000
Interest from mortgage and other notes 10,905,000 (456,000)(E) 10,449,000
Management fees and other income ...... 1,966,000 1,966,000
Income from joint ventures and
rents from leased hotel properties .... 791,000 791,000
Loss on sales of hotel assets ......... (125,000) (125,000)
------------- ------------- ------------- -------------
161,716,000 52,813,000 (456,000) 214,073,000
------------- ------------- ------------- -------------
EXPENSES
Hotel operations ...................... 85,017,000 39,832,000 (1,932,000)(F) 122,917,000
Gaming operations ..................... 24,242,000 24,242,000
Interest .............................. 13,138,000 3,219,000 (16,357,000)(G) 9,747,000
9,747,000 (G) --
Depreciation and amortization ......... 15,469,000 10,933,000 26,402,000
Administrative and operating .......... 5,712,000 10,000 (F) 5,722,000
------------- ------------- ------------- -------------
143,578,000 53,984,000 (8,532,000) 189,030,000
------------- ------------- ------------- -------------
Income (loss) from continuing
operations before minority interest ... 18,138,000 $ (1,171,000) $ 8,076,000 25,043,000
============= =============
Minority interest in Partnerships (H) . 7,013,000 7,536,000
============= =============
Net income ............................ $ 11,125,000 $ 17,507,000
============= =============
Net income per paired share (I) ....... $ 1.43 $ 1.27
============= =============
Weighted average number of paired
shares ................................ 7,771,000 13,825,000
============= =============
</TABLE>
See accompanying notes to the pro forma statements of operations.
F-8
<PAGE> 12
STARWOOD LODGING TRUST
UNAUDITED COMBINED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Historical Pro Forma
Starwood Starwood
Lodging Acquired Pro Forma Lodging
Trust Properties Adjustments Trust
------------ ------------ ----------- ------------
(A) (B)
<S> <C> <C> <C> <C>
REVENUE
Rents from Corporation ..................... $ 26,730,000 $ $12,624,000 (C) $ 39,354,000
Interest from Corporation .................. 4,761,000 4,082,000 (D) 8,843,000
Interest from mortgage and other notes ..... 10,792,000 (456,000)(E) 10,336,000
Income from joint ventures and
rents from leased hotel properties ......... 791,000 791,000
Other income ............................... 1,074,000 1,074,000
Loss on sales of hotel assets .............. (125,000) (125,000)
------------ ------------ ----------- ------------
44,023,000 16,250,000 60,273,000
------------ ------------ ----------- ------------
EXPENSES
Interest - other ........................... 12,429,000 (12,429,000)(G) 9,650,000
9,650,000 (G)
Depreciation and amortization .............. 8,977,000 3,458,000 12,435,000
Administrative and operating ............... 2,439,000 2,439,000
------------ ------------ ----------- ------------
23,845,000 3,458,000 (2,779,000) 24,524,000
------------ ------------ ----------- ------------
Income (loss) from continuing
operations before minority interest ........ 20,178,000 $ (3,458,000) $ 19,029,000 35,749,000
============ ============
Minority interest in Partnerships (H) ...... 7,314,000 10,757,000
------------ ------------
Net income ................................. $ 12,864,000 $ 24,992,000
============ ============
Net income per paired share (I) ............ $ 1.66 $ 1.81
============ ============
</TABLE>
See accompanying notes to the pro forma statements of operations.
F-9
<PAGE> 13
STARWOOD LODGING CORPORATION
UNAUDITED COMBINED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Historical Pro Forma
Starwood Starwood
Lodging Acquired Pro Forma Lodging
Corporation Properties Adjustments Corporation
------------- ------------- --------------- ---------------
(A) (B)
<S> <C> <C> <C> <C>
REVENUE
Hotel ................................ $ 121,250,000 $ 52,813,000 $ $ 174,063,000
Gaming ............................... 26,929,000 26,929,000
Interest from notes receivable ....... 113,000 113,000
Management fees and other income ..... 892,000 892,000
------------- ------------- --------------- ---------------
149,184,000 52,813,000 201,997,000
------------- ------------- --------------- ---------------
EXPENSES
Hotel operations ..................... 85,017,000 39,832,000 (1,932,000)(F) 122,917,000
Gaming operations .................... 24,242,000 24,242,000
Rent - Trust ......................... 26,730,000 12,624,000 (C) 39,354,000
Interest - Trust ..................... 4,761,000 4,082,000 (D) 8,843,000
Interest - other ..................... 709,000 3,219,000 (3,928,000)(G) 97,000
97,000 (G)
Depreciation and amortization ........ 6,492,000 7,475,000 13,967,000
Administrative and operating ......... 3,273,000 10,000 (F) 3,283,000
------------- ------------- --------------- ---------------
151,224,000 50,526,000 10,953,000 212,703,000
------------- ------------- --------------- ---------------
Loss before minority interest ........ (2,040,000) $ 2,287,000 $ (10,953,000) (10,706,000)
============= ===============
Minority interest in Partnerships (H) (301,000) (3,221,000)
------------- ------------- --------------- ---------------
Net loss ............................. $ (1,739,000) $ (7,485,000)
============= ===============
Net loss per paired share (I) ....... $ (0.22) $ (0.54)
============= ===============
</TABLE>
See accompanying notes to the pro forma statements of operations.
F-10
<PAGE> 14
STARWOOD LODGING TRUST AND
STARWOOD LODGING CORPORATION
NOTES TO THE UNAUDITED COMBINED AND
SEPARATE PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
NOTE 1. BASIS OF PRESENTATION
The Trust and the Corporation have unilateral control of SLT Realty Limited
Partnership ("Realty") and SLC Operating Limited Partnership ("Operating" and,
together with Realty the "Partnerships"), respectively, and therefore, the
historical financial statements of Realty and Operating are consolidated with
those of the Trust and the Corporation. Unless the context otherwise requires,
all references herein to the "Companies" refer to the Trust and the
Corporation, and all references to the "Trust" and the "Corporation" include
the Trust and the Corporation and those entities respectively owned or
controlled by the Trust or the Corporation, including Realty and Operating.
NOTE 2. PRO FORMA ADJUSTMENTS
(A) Reflects the historical statements of operations of the Companies.
Operations for properties sold or pending sale are not considered
material to the pro forma presentation.
(B) Reflects the pro forma statements of operations (reflecting the
Companies' cost basis) of the Doral Inn and the properties acquired in
connection with the Offering. For additional information, please see
pages F-1 through F-140 (Financial Statements and Financial Statement
Schedules) of the Companies' Form S-2 as amended dated June 29, 1995
and Item 7 (Financial Statements, Pro Forma Financial Information and
Exhibits) of the Companies' Form 8-K as amended dated September 20,
1995. Reflects the pro forma statements of operations (reflecting
the Companies' cost basis) of the Terrace Garden Inn, Lenox Inn,
the Calverton Holiday Inn, and the Grand Hotel.
Listed below are the effects each acquired hotel had on the Combined
Pro Forma Statement of Operations for the year ended December 31, 1995
(in thousands):
F-11
<PAGE> 15
<TABLE>
<CAPTION>
Omni Sheraton Embassy Holiday
Chapel Colony Suites Doral Terrace Lenox Inn The
Hill(1) Square(1) Tempe(1) Inn(2) Garden Inn Calverton Grand Total
-------- -------- -------- -------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Hotel Revenues .............. $ 1,265 $ 9,557 $ 4,032 $ 13,312 $ 9,289 $ 3,415 $ 3,465 $ 8,478 $ 52,813
-------- -------- -------- -------- -------- -------- --------- -------- --------
EXPENSES
Hotel Expenses .............. 887 7,127 2,271 11,362 6,007 2,079 2,117 7,982 39,832
Depreciation ................ 163 2,073 1,229 3,192 1,419 300 789 1,768 10,933
-------- -------- -------- -------- -------- -------- --------- -------- --------
1,050 9,200 3,500 14,554 7,426 2,379 2,906 9,750 50,765
-------- -------- -------- -------- -------- -------- --------- -------- --------
Income (loss) before minority
interest .................... $ 215 $ 357 $ 532 $ (1,242) $ 1,863 $ 1,036 $ 559 $ (1,272) $ 2,048
======== ======== ======== ======== ======== ======== ========= ======== ========
</TABLE>
(1) For additional information, please see pages F-1 through F-140
(Financial Statement Schedules) of the Companies' Form S-2 as amended
dated June 29, 1995
(2) For additional information see Item 7 (Financial Statements, Pro Forma
Financial Information and Exhibits) of the Companies' Form 8-K as
amended dated September 20, 1995.
ADDITIONAL INFORMATION RELATED TO THE PROPERTIES IS AS FOLLOWS:
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------
ADR Occupancy % REVPAR
---------------------- ------------------- ----------------------
Hotel 1995 1994 1993 1995 1994 1993 1995 1994 1993
- ----- ------ ------ ------ ----- ----- ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Terrace Garden Inn $93.51 $88.39 $82.62 65% 65% 63% $61.16 $57.73 $51.98
Lenox Inn $69.48 $63.57 $60.10 79% 77% 75% $55.00 $49.15 $45.10
Calverton Holiday Inn $67.49 $63.37 $56.92 63% 58% 58% $42.39 $36.43 $32.94
The Grand(1)
</TABLE>
(1) ADR, Occupancy And REVPAR not available.
(C) Reflects pro forma adjustment for rents on the following hotels
contributed by Starwood Capital in the Reorganization and hotels and
land acquired by the Companies in 1995 and 1996. The hotel leases
between the Trust and the Corporation provide for annual base or
minimum rents plus contingent or percentage rents based on the gross
revenue of the properties and are accounted for as operating leases.
<TABLE>
<CAPTION>
Hotel Date Contributed/Acquired
- -------------------------------------- -------------------------
<S> <C>
Capitol Hill - Washington, DC......... January 1, 1995
French Quarter - Lexington, KY........ January 1, 1995
Doubletree - Rancho Bernardo, CA...... January 1, 1995
Harvey - Wichita, KS.................. January 1, 1995
Omni - Chapel Hill, NC................ April 6, 1995
Colony Square - Atlanta, GA........... July 24, 1995
Embassy Suites - Tempe, AZ............ July 27, 1995
Doral Inn - New York, NY.............. September 20, 1995
Terrace Garden Inn - Atlanta, GA...... October 31, 1995
</TABLE>
F-12
<PAGE> 16
<TABLE>
<S> <C>
Lenox Inn - Atlanta, GA............... October 31, 1995
Calverton Holiday Inn - Beltsville, MD November 30, 1995
The Grand Hotel - Washington, DC...... January 4, 1996
</TABLE>
(D) Reflects interest on the notes payable from the Corporation to the
Trust at 9.5% for the note secured by the leasehold interest in the
Doral property, prime plus 3% for notes secured by the Milwaukee
property and prime plus 2% for unsecured notes.
(E) Reflects the elimination of interest income, on a mortgage note
receivable secured by the Grand note, recognized in 1995. The Trust had
purchased the mortgage interest in September 1995 and, in January 1996,
the Companies completed the purchase of Grand (see note 2 to the
Separate Pro Forma Balance Sheets).
(F) The Corporation intends to operate all of the Companies' hotels and
terminate existing third party management contracts for all properties
at the earliest practicable date. Accordingly, certain costs directly
attributable to existing third party management contracts included in
the pro forma statements of operations have been eliminated. Such cost
savings are reflected in the pro forma statements of operations as if
such contracts had been canceled as of the beginning of the periods
presented. Listed below are the hotels on which third party management
contracts have been or are anticipated to be terminated and the related
management and other fees incurred in each period.
<TABLE>
<CAPTION>
Fees Paid (1)
-------------
Year
Ended
12/31/95 Status
------------- ------------------
Hotel
- -----
<S> <C> <C>
Holiday Inn - Albany, GA.............. $ 9,000 Terminated
Best Western - Columbus, OH........... 33,000 Cancelable in 1995
Best Western - Savannah, GA........... 21,000 Cancelable in 1995
Radisson - Gainesville, FL............ 19,000 Cancelable in 1996
Park Central - Dallas, TX............. 34,000 Terminated
Capital Hill - Washington, DC......... 43,000 Cancelable in 1995
French Quarter - Lexington, KY........ 21,000 Terminated
Doubletree - Rancho Bernardo, CA...... 67,000 Terminated
Colony Square - Atlanta, GA........... 139,000 Terminated
Omni - Chapel Hill, NC................ 23,000 Terminated
Embassy Suites - Tempe, AZ............ 406,000 Terminated
Doral Inn - New York, NY.............. 433,000 Cancelable in 1995
Terrace Garden Inn - Atlanta, GA...... 247,000 Terminated
Lenox Inn - Atlanta, GA............... 107,000 Terminated
Holiday Inn Calverton - Beltsville, MD 330,000 Terminated
-----------
1,932,000
===========
</TABLE>
- -------------
(1) Fees include base and incentive management fees as well as accounting
fee chargebacks and other corporate costs.
F-13
<PAGE> 17
Pro Forma administrative and operating expenses reflect (i) increases
in operating expenses resulting principally from additional corporate
office personnel and (ii) decreases in operating expenses resulting
form a decrease in director's and officers' liability insurance. Such
cost adjustments are reflected in the pro forma statements of
operations as follows:
<TABLE>
<CAPTION>
Administrative
and
Operating
Expenses
--------------
Year
Ended
12/31/95
--------------
<S> <C>
Additional personnel costs and corporate travel......... $ 97,000
Decrease in directors' and officers' liability insurance (87,000)
--------
$ 10,000
========
</TABLE>
(G) Reflects the elimination of historical and pro forma interest expense
related to the debt repaid from the proceeds of the Offering and the
addition of interest expense on pro forma amounts outstanding
calculated as follows:
<TABLE>
<CAPTION>
Year Ended 12/31/95
--------------------------------------------
Trust Corp Combined
--------- ------ ---------
<S> <C> <C> <C>
Interest on GSI note .................................................... 97,000 97,000
Interest expense on amount outstanding under line of credit
(subsequent to offering) ................................................ 2,120,000 2,120,000
Interest expense relating to acquisition of the Doral Inn (1) ........... 2,083,000 2,083,000
Interest expense relating to acquisition of the Terrace Garden Inn (1) .. 1,686,000 1,686,000
Interest expense relating to acquisition of the Lenox Inn (1) ........... 544,000 544,000
Interest expense relating to acquisition of the Calverton Holiday Inn (1) 764,000 764,000
Interest expense relating to acquisition of the Grand (1) ............... 2,393,000 2,393,000
Interest expense relating to amount drawn to purchase Grand note ........ (471,000) (471,000)
Interest expense relating to additional draw down line (2) .............. 531,000 531,000
--------- ------ ---------
Total Interest Expense - pro forma ...................................... 9,650,000 97,000 9,747,000
========= ====== =========
</TABLE>
(1) Assumes draw down to property on January 1, 1995
(2) Assumes draw down of $9.8 million on January 1, 1995 to reflect actual
draw down in 3rd quarter
(H) Net income (loss) per paired share has been computed using the
weighted average number of paired shares and equivalent paired
shares outstanding. All paired share information has been
adjusted to reflect a one-for-six reverse split effective June
12, 1995.
(I) Reflects Starwood Capital's minority interest in the income of
the Partnerships.
F-14
<PAGE> 18
REPORT OF INDEPENDENT ACCOUNTANTS
To the Boards of Trustees and Directors and Shareholders of
Starwood Lodging Trust and Starwood Lodging Corporation:
We have audited the accompanying Historical Summary of Gross Revenues, and
Direct Operating Expenses (the "Historical Summary") of the hotel properties
(the "Terrace Garden Inn" and the "Lennox Inn") described in Note 1 for the
year ended December 31, 1995. The Historical Summary is the responsibility
of the management of the Terrace Garden Inn and the Lennox Inn. Our
responsibility is to express an opinion on the Historical Summary 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 Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summary. We believe that our audits provide a reasonable basis
for our opinion.
The accompanying Historical Summary is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission as
described in Note 1, and are not intended to be a complete presentation of the
Terrace Garden Inn's and Lennox Inn's expenses.
In our opinion, the Historical Summary referred to above present fairly, in all
material respects, the gross revenues and direct operating expenses described in
Note 1 of the Terrace Garden and Lennox Inn properties for the year ended
December 31, 1995, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Los Angeles, California
February 9, 1996
F-15
<PAGE> 19
TERRACE GARDEN INN AND LENNOX INN
HISTORICAL SUMMARIES OF GROSS REVENUES
AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Gross Revenues:
Room Rental ....................................... $11,804,212
Food & Beverage ................................... 2,584,234
Telephone ......................................... 466,548
Other ............................................. 250,304
-----------
Total Gross Revenues ........................ $15,105,298
-----------
Direct Operating Expenses:
Food & Beverage ................................... $ 1,967,322
Room .............................................. 2,586,414
Telephone .......................................... 198,681
General & Administrative .......................... 1,373,813
Depreciation ...................................... 116,364
Interest .......................................... 15,364
Repairs & Maintenance ............................. 819,815
Management Fees ................................... 360,701
Energy ............................................ 756,697
Marketing ......................................... 703,601
Lease ............................................. 924,379
Other ............................................. 850,470
-----------
Total Direct Operating Expenses ................... $10,673,621
-----------
Gross Revenues In Excess Of
Direct Operating Expenses ......................... $ 4,431,677
===========
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-16
<PAGE> 20
TERRACE GARDEN INN AND LENNOX INN
NOTES TO HISTORICAL SUMMARY OF
GROSS REVENUE AND DIRECT OPERATING EXPENSES
1. BASIS OF PRESENTATION
The Historical Summary of Gross Revenue and Direst Operating Expenses (the
"Historical Summary") relates to the operation of the 360-room Terrace Garden
Inn and the 180-room Lennox Inn (the "Hotels") located in Atlanta, Georgia.
These properties were acquired from the Citicorp Corporation ("Citicorp") by
Starwood Lodging Trust on October 31, 1995. Citicorp acquired the property in
mid 1994.
The Historical Summary has been prepared to substantially comply with the rules
and regulations of the Securities and Exchange Commission for business
combinations accounted for as a purchase. The historical financial statement
summary, rather than full audited financial statements, is presented for the
Hotels because the Hotels were acquired from an unaffiliated third party in a
negotiated transaction, and the seller of the Hotels would not allow the
Company access to records supporting hotel historical costs, depreciation,
indebtedness and equity of the Hotels. Because it was not practicable to
obtain full audited financial statements of the Hotels, the historical summary
of gross revenue and direct operating expenses does not include certain
historical expenses of the Hotels, such as interest, depreciation and
amortization and indirect costs. Therefore, the Historical Summary is not
representative of the actual operations for the period presented.
Revenue is recognized as earned. Management has provided for credit risks; and
credit losses have been within management's expectations.
Maintenance and repairs are charged to operations as incurred; major renewals
and betterments are capitalized.
2. UNAUDITED FINANCIAL INFORMATION
The Hotels incurred depreciation expense for furniture and fixtures of
approximately $116,364 for the year ended December 31, 1995.
The Company purchased the Hotels for approximately $37 million and estimates
that the combined allocation of the purchase price will be approximately $10.3
million to land, $24.1 million to hotel properties and $2.6 million to
furniture and fixtures. Expected lives for the hotel properties are 30 to 35
years and for furniture and fixtures are 3 to 10 years.
The Company funded the purchase of the Hotels primarily from borrowings under
an existing line of credit.
F-17
