SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
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For the Period ended June 30, 1996
Commission File 0-11512
SUPER 8 ECONOMY LODGING IV, LTD
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(Exact name of registrant as specified in its charter)
CALIFORNIA 94 - 2827163
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2030 J Street
Sacramento, California 95814
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Address of principal executive offices Zip Code
Registrant's telephone number,
including area code (916) 442 - 9183
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes XX No
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<PAGE>
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
<PAGE>
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
INDEX
Financial Statements: PAGE
Balance Sheet - June 30, 1996 and September 30, 1995 2
Statement of Operations - Nine Months Ended
June 30, 1996 and 1995 3
Statement of Changes in Partners' Equity -
Nine Months Ended June 30, 1996 and 1995 4
Statement of Cash Flows - Nine Months Ended
June 30, 1996 and 1995 5
Notes to Financial Statements 6
Management Discussion and Analysis 7 - 8
Other Information and Signatures 9 - 10
<PAGE>
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
BALANCE SHEET
JUNE 30, 1996 AND SEPTEMBER 30,1995
6/30/96 9/30/95
---------- ----------
ASSETS
Current Assets:
Cash and temporary investments $ 829,954 $ 794,899
Accounts receivable 27,387 22,343
Prepaid expenses 13,330 11,934
---------- ----------
Total Current Assets 870,671 829,176
---------- ----------
Property and Equipment:
Land 799,311 799,311
Buildings 2,226,531 2,226,531
Furniture and equipment 549,828 548,367
---------- ----------
3,575,670 3,574,209
Accumulated depreciation and amortization (1,725,666) (1,672,013)
---------- ----------
Property and Equipment, Net 1,850,004 1,902,196
---------- ----------
Other assets 38,097 38,097
---------- ----------
Total Assets $ 2,758,772 $ 2,769,469
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 94,860 $ 111,441
---------- ----------
Total Liabilities 94,860 111,441
---------- ----------
Partners' Equity:
General Partners (12,969) (17,358)
Limited Partners 2,676,881 2,675,386
---------- ----------
Total Partners' Equity 2,663,912 2,658,028
---------- ----------
Total Liabilities and Partners' Equity $ 2,758,772 $ 2,769,469
========== ==========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
Three Nine Three Nine
Months Months Months Months
Ended Ended Ended Ended
6/30/96 6/30/96 6/30/95 6/30/95
---------- ---------- ---------- ----------
Income:
Guest room $ 417,702 $ 1,131,932 $ 385,470 $ 1,019,967
Telephone and vending 10,196 29,924 9,420 26,087
Interest 6,852 20,465 5,759 16,045
Other 817 2,975 750 2,878
---------- ---------- ---------- ----------
Total Income 435,567 1,185,296 401,399 1,064,977
---------- ---------- ---------- ----------
Expenses:
Motel operating expenses
(Note 2) 198,870 575,892 192,422 553,879
General and administrative 5,322 27,355 5,355 28,705
Depreciation and amortizatio 28,183 84,931 26,302 78,935
Property management fees 21,428 58,234 19,756 52,441
---------- ---------- ---------- ----------
Total Expenses 253,803 746,412 243,835 713,960
---------- ---------- ---------- ----------
Net Income (Loss) $ 181,764 $ 438,884 $ 157,564 $ 351,017
========== ========== ========== ==========
Net Income (Loss) Allocable
to General Partners $1,818 $4,389 $1,576 $3,510
======== ======== ======== ========
Net Income (Loss) Allocable
to Limited Partners $179,946 $434,495 $155,988 $347,507
======== ======== ======== ========
Net Income (Loss)
per Partners $17.99 $43.45 $15.60 $34.75
======== ======== ======== ========
Distributions to Limited
Partners per Partnership Unit $16.00 $43.30 $13.65 $40.95
======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
6/30/96 6/30/95
General Partners: ---------- ----------
Balance, beginning of year $ (17,358) $ (22,492)
Net income (loss) 4,389 3,510
---------- ----------
Balance, End of period (12,969) (18,982)
---------- ----------
Limited Partners:
Balance, beginning of year 2,675,386 2,713,084
Net income (loss) 434,495 347,507
Distributions to Limited Partners (433,000) (409,500)
---------- ----------
Balance, End of Period 2,676,881 2,651,091
---------- ----------
Total Partners' Equity $ 2,663,912 $ 2,632,109
========== ==========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
6/30/96 6/30/95
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Cash Flows from Operating Activities:
Received from motel revenues $ 1,158,433 $ 1,006,360
Expended for motel operations and
general and administrative expenses (679,459) (637,122)
Interest received 21,819 16,000
---------- ----------
Net Cash Provided (Used) by Operating Activities 500,793 385,238
---------- ----------
Cash Flows from Investing Activities:
Purchases of property and equipment (32,738) (34,918)
---------- ----------
Net Cash Provided (Used) by Investing Activities (32,738) (34,918)
---------- ----------
Cash Flows from Financing Activities:
Distributions to limited partners (433,000) (409,500)
---------- ----------
Net Cash Provided (Used) by Financing Activities (433,000) (409,500)
---------- ----------
Net Increase (Decrease) in Cash
and Temporary Investments 35,055 (59,180)
Cash and Temporary Investments:
Beginning of period 794,899 763,487
---------- ----------
End of period $ 829,954 $ 704,307
========== ==========
Reconciliation of Net Income (Loss) to Net Cash Provided (Used) by
Operating Activities:
Net Income (Loss) $ 438,884 $ 351,017
Adjustments to reconcile net income to ---------- ----------
net cash used by operating activities:
Depreciation and amortization 84,931 78,935
(Increase) decrease in accounts receivable (5,044) (42,617)
(Increase) decrease in prepaid expenses (1,396) (20)
(Increase) decrease in other assets - (5,006)
Increase (decrease) in accounts payable (16,582) 2,929
---------- ----------
Total Adjustments 61,909 34,221
---------- ----------
Net Cash Provided (Used) by Operating Activies $ 500,793 $ 385,238
========== ==========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
Note 1:
The attached interim financial statements include all adjustments which are, in
the opinion of management, necessary to a fair statement of the results for the
period presented.
Users of these interim financial statements should refer to the audited
financial statements for the year ended December 31, 1995 for a complete
disclosure of significant accounting policies and practices and other detail
necessary for a fair presentation of the financial statements.
In accordance with the partnership agreement, the following information is
presented related to fees paid to the General Partners or affiliates for the
period.
Property Management Fees $ 58,234
Franchise Fees $ 22,659
Partnership management fees and subordinated incentive distributions are
contingent in nature and none have been accrued or paid during the current
period.
Note 2:
The following table summarizes the major components of motel operating expenses
for the following periods:
Three Nine Three Nine
Months Months Months Months
Ended Ended Ended Ended
6/30/96 6/30/96 6/30/95 6/30/95
---------- ---------- ---------- ----------
Salaries and related costs $ 76,031 $ 225,891 $ 72,624 $ 210,271
Utilities 15,796 45,338 19,258 48,007
Allocated costs, mainly
indirect salaries 23,816 71,595 22,276 66,800
Replacements and renovations 7,694 13,212 6,013 15,895
Other operating expenses 75,533 219,856 72,251 212,906
---------- ---------- ---------- ----------
Total Motel Operating
Expenses $ 198,870 $ 575,892 $ 192,422 $ 553,879
========== ========== ========== ==========
The following additional material contingencies are required to be stated in the
interim reports under federal securities law: None.
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<PAGE>
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
JUNE 30, 1996
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's current assets of $870,671 exceeded its current
liabilities of $94,860 providing an operating reserve of $775,811, which is
greater than the $455,000 target set by the General Partners.
In the unlikely event that the Partnership's reserves do not meet
operating needs, the Partnership's Pleasanton, California motel will provide
substantial collateral against additional debt.
The Partnership has no material commitments for capital expenditures.
The Partnership's guideline for replacements and renovation expenditures is
approximately 3% of room revenues. Applicable expenditures during the first six
months of the fiscal year which will end on September 30, 1996, were $45,950 or
4.1% of room revenues. Expenditures of this type are not expected to exceed the
General Partners' 3% guideline on a yearly basis.
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
The following is a comparison of operating results for the nine month
periods ended June 30, 1996 and June 30, 1995.
Total revenues increased $120,319 or 11.3%. Guest room revenue increased
$111,965 or 11.0% for the current period due to an increase in the occupancy
rate to 73.6% (as compared with 72.2% for the corresponding period of the
preceding fiscal year) and an increase in average room rate from $50.71 in
1995 to $55.05 in 1996 for the comparative periods.
Total expenditures increased $32,452 or 4.5% during the nine months
covered by this report as compared to the previous fiscal year. The
expenditure increase is associated with the improved occupancy.
-7-
<PAGE>
SUPER 8 ECONOMY LODGING IV, LTD.
(A California Limited Partnership)
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
JUNE 30, 1996 (Continued)
FUTURE TRENDS
The General Partners expect the Pleasanton motel to continue its
improved performance if the current improvement in the general economic
climate continues.
In the opinion of management, these financial statements reflect all
adjustments which were necessary to a fair statement of results for the interim
periods presented. All adjustments are of a normal recurring nature.
-8-
<PAGE>
PART II. OTHER INFORMATION
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Item 1. Legal Proceedings
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None
Item 2. Changes in Securities
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None
Item 3. Defaults upon Senior Securities
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None
Item 4. Submission of Matters
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None
Item 5. Other Information
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None
Item 6. Exhibits and Reports on Form 8-K
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None
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<PAGE>
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
SUPER 8 ECONOMY LODGING IV, LTD
8-2-96 By /S/ David P. Grotewohl
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Date David P. Grotewohl,
President of Grotewohl
Management Services, Inc.,
Managing General Partner
8-2-96 By /S/ David P. Grotewohl
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Date David P. Grotewohl,
Chief Financial Officer
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 829,954
<SECURITIES> 0
<RECEIVABLES> 27,387
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 870,671
<PP&E> 3,575,670
<DEPRECIATION> 1,725,666
<TOTAL-ASSETS> 2,758,772
<CURRENT-LIABILITIES> 94,860
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,663,912
<TOTAL-LIABILITY-AND-EQUITY> 2,758,772
<SALES> 1,161,856
<TOTAL-REVENUES> 1,185,286
<CGS> 575,892
<TOTAL-COSTS> 575,892
<OTHER-EXPENSES> 170,520
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 438,884
<INCOME-TAX> 0
<INCOME-CONTINUING> 438,884
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 438,884
<EPS-PRIMARY> 43.45
<EPS-DILUTED> 43.45
</TABLE>
