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 September 30, 1997
Commission File 2-88942
FAMOUS HOST LODGING V, L.P.
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(Exact name of registrant as specified in its charter)
CALIFORNIA 94 - 2933595
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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>
FAMOUS HOST LODGING V, L.P.
(A California Limited Partnership)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
<PAGE>
FAMOUS HOST LODGING V, L.P.
(A California Limited Partnership)
INDEX
Financial Statements: PAGE
Balance Sheet - September 30, 1997 and December 31, 1996 2
Statement of Operations - Nine Months Ended
September 30, 1997 and 1996 3
Statement of Changes in Partners' Equity -
Nine Months Ended September 30, 1997 and 1996 4
Statement of Cash Flows - Nine Months Ended
September 30, 1997 and 1996 5
Notes to Financial Statements 6
Management Discussion and Analysis 7
Other Information and Signatures 8 - 10
<PAGE>
Famous Host Lodging V, L.P.
(A California Limited Partnership)
Balance Sheet
September 30, 1997 and December 31, 1996
9/30/97 12/31/96
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ASSETS
Current Assets:
Cash and temporary investments $ 299,236 $ 246,283
Accounts receivable 21,569 24,531
Prepaid expenses 53,555 39,762
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Total current assets 374,360 310,576
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Property and Equipment:
Buildings 4,077,604 4,077,604
Furniture and equipment 1,275,330 1,253,417
Projects in progress 58,444 58,444
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5,411,378 5,389,465
Accumulated depreciation (3,121,078) (2,917,212)
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Property and equipment, net 2,290,300 2,472,253
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Other Assets: 32,294 32,294
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Total Assets $ 2,696,954 $ 2,815,123
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 235,661 $ 184,339
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Total current liabilities 235,661 184,339
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Total liabilities 235,661 184,339
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Contingent Liabilities (See Note 1)
Partners' Equity:
General Partners 4,631 3,836
Limited Partners 2,456,662 2,626,948
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Total partners' equity 2,461,293 2,630,784
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Total Liabilities and Partners' Equity $ 2,696,954 $ 2,815,123
=========== ===========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
Famous Host Lodging V, L.P.
(A California Limited Partnership)
Statement of Operations
For the Nine Months Ending September 30, 1997 and 1996
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
9/30/97 9/30/97 9/30/96 9/30/96
----------- ----------- ----------- -----------
Income:
Hotel room $ 635,960 $ 1,927,711 $ 620,744 $ 1,937,515
Restaurant 177,411 497,360 144,457 491,946
Telephone and vending 17,179 44,088 18,159 49,576
Interest (428) 5,438 2,145 6,520
Other 10,003 32,820 9,450 26,836
----------- ----------- ----------- -----------
Total Income 840,125 2,507,417 794,955 2,512,393
----------- ----------- ----------- -----------
Expenses:
Motel operating expenses
(Note 2) 710,606 2,040,731 670,366 2,035,681
General and admini-
strative 12,374 52,571 11,829 57,276
Depreciation and
amortization 69,779 209,771 72,783 220,205
Property management fees 41,907 124,828 39,712 125,379
----------- ----------- ----------- -----------
Total Expenses 834,666 2,427,901 794,690 2,438,541
----------- ----------- ----------- -----------
Net Income (Loss) $ 5,459 $ 79,516 $ 265 $ 73,852
=========== =========== =========== ===========
Net Income (Loss) Allocable
to General Partners $55 $795 $3 $739
=========== =========== =========== ===========
Net Income (Loss) Allocable
to Limited Partners $5,404 $78,721 $262 $73,113
=========== =========== =========== ===========
Net Income (Loss)
per Partnership Unit $0.60 $8.73 $0.03 $8.10
=========== =========== =========== ===========
Distribution to Limited
Partners per
Partnership Unit $9.20 $27.60 $9.20 $27.60
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
Famous Host Lodging V, L.P.
(A California Limited Partnership)
Statement of Changes in Partners' Equity
For the Nine Months Ending September 30, 1997 and 1996
1997 1996
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General Partners:
Balance at beginning of year $ 3,836 $ 3,688
Net income (loss) 795 739
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Balance at end of period 4,631 4,427
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Limited Partners:
Balance at beginning of year 2,626,948 2,944,319
Net income (loss) 78,721 73,113
Distributions to limited partners (249,007) (249,007)
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Balance at end of period 2,456,662 2,768,425
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Total Partners' Equity $ 2,461,293 $ 2,772,852
=========== ===========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
Famous Host Lodging V, L.P.
(A California Limited Partnership)
Statement of Cash Flows
For the Nine Months Ending September 30, 1997 and 1996
1997 1996
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Cash flows from operating activities:
Received from hotel and restaurant revenues $ 2,503,228 $ 2,516,396
Expended for hotel and restaurant operation
and general and administrative expenses (2,180,831) (2,216,271)
Interest received 7,151 6,879
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Net cash provided (used) by operating activities 329,548 307,004
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Cash flows from investing activities:
Purchases of property and equipment (27,818) (14,742)
Proceeds from sale of equipment 230 -
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Net cash provided (used) by investing activities (27,588) (14,742)
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Cash flows from financing activities:
Distributions paid to limited partners (249,007) (249,007)
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Net cash provided (used) by operating activities (249,007) (249,007)
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Net increase (decrease) in cash
and temporary investments 52,953 43,255
Cash and Temporary Investments:
Beginning of year 246,283 286,074
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End of Period $ 299,236 $ 329,329
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Reconciliation of net income (loss) to net cash provided (used) by operating
activities:
Net income (loss) $ 79,516 $ 73,852
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Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization 209,771 220,205
(Gain) loss on disposition of property
and equipment (230) -
(Increase) decrease in accounts receivable 2,962 10,880
(Increase) decrease in prepaid expenses (13,793) (26,605)
Increase (decrease) in accounts payable
and accrued liabilities 51,322 28,672
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Total adjustments 250,032 233,152
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Net cash provided (used) by
operating activities $ 329,548 $ 307,004
=========== ===========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
Famous Host Lodging V, L.P.
(A California Limited Partnership)
Notes to Financial Statements
September 30, 1997 and 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, 1996 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 $124,828
In February, 1991 the Partnership terminated its franchise and its affiliation
with Super 8 Motels, Inc. and began operating as a Holiday Inn. Accordingly, no
franchise or advertising fees have been paid to the General Partners or their
affiliates for the period.
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 hotel operating expenses
for the periods reported:
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
9/30/97 9/30/97 9/30/96 9/30/96
----------- ----------- ----------- -----------
Salaries and related
expenses $ 220,066 $ 652,733 $ 203,585 $ 595,972
Cost of food and beverage 76,845 207,861 57,434 186,216
Rent 77,653 232,007 73,378 226,431
Franchise, advertising
and reservation fees 45,383 137,479 66,007 207,867
Utilities 71,485 162,407 66,966 158,157
Allocated costs, mainly
indirect salaries 43,878 132,302 41,520 134,970
Renovations and
replacements 22,508 42,070 7,201 32,757
Other operating expenses 152,788 473,872 154,275 493,311
----------- ----------- ----------- -----------
Total hotel and restaurant
operating expenses $ 710,606 $ 2,040,731 $ 670,366 $ 2,035,681
=========== =========== =========== ===========
The following additional material contingencies are required to be restated in
interim reports under federal securities law: None.
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<PAGE>
FAMOUS HOST LODGING V, LTD.
(A California Limited Partnership)
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
SEPTEMBER 30, 1997
LIQUIDITY AND CAPITAL RESOURCES
The Partnership has current assets of $374,360 and current liabilities of
$235,661. The excess of current assets over current liabilities constitutes an
operating reserve of $138,699. This amount is less than the $276,800 reserve
target set by the General Partners. The reserve target is equal to 5% of the
adjusted capital contribution as defined in the Partnership Agreement. The
reserve was partially depleted during 1995 and 1996 due to extraordinary
expenditures for renovation of the restaurant and due to site studies and
drawings for a potential expansion for the hotel.
The Statement of Cash Flows shows net cash flows of $52,953 for the nine months
ending September 30, 1997 (after $249,007 distributions to the Limited Partners)
as compared to a positive cash flow of $43,255 during the corresponding period
of the previous fiscal year. The improved cash flow is associated with improved
operating activities.
The Partnership expended $69,888 for renovations and replacements (of which
$27,818 was capitalized) during the period covered by this report. The
expenditures included $18,879 for sofas, $7,775 for guest room carpet, $12,200
for parking lot repairs, $5,700 for roof repairs, $5,946 for ballast & lamp
upgrade and $6,200 for a security system. Unlike the previous fiscal year, the
General Partner expects that the Partnership will spend approximately 3% of
gross room revenues on renovations and replacements.
RESULTS OF OPERATIONS
The following is a comparison of operating results for the nine month periods
ended September 30, 1997 and September 30, 1996.
Total income decreased $4,976 or 0.2%. Hotel room revenues decreased $9,804 or
0.5%, due to a decrease in guest room occupancy from 74.0% to 72.0% and an
increase in the average room rate from $64.56 to $66.23.
Total expenditures decreased $10,640 or 0.4%.
FUTURE TRENDS
The General Partners expect the hotel's performance during 1997 to be improved
over that experienced during 1996.
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.
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<PAGE>
PART II. OTHER INFORMATION
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Item 1. Legal Proceedings
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On October 27, 1997 a complaint was filed in the United States District
Court, Eastern District of California by the registrant, Grotewohl Management
Services, Inc. (a general partner of the registrant) and four other limited
partnerships (together with the registrant, the "Partnerships") as to which
Grotewohl Management Services, Inc. serves as general partner (i.e., Super 8
Motels, Ltd., Super 8 Motels II, Ltd., Super 8 Motels III, Ltd., and Super 8
Economy Lodging IV, Ltd.), as plaintiffs. The complaint names as defendants
Everest/Madison Investors, LLC, Everest Lodging Investors, LLC, Everest
Properties, LLC, Everest Partners, LLC, Everest Properties II, LLC, Everest
Properties, Inc., W. Robert Kohorst, David I. Lesser, The Blackacre Capital
Group, L.P., Blackacre Capital Management Corp., Jeffrey B. Citron, Ronald J.
Kravit, and Stephen B. Enquist. The factual basis underlying the plaintiffs'
causes of actions pertains to tender offers directed by certain of the
defendants to limited partners of the Partnerships, and to indications of
interest made by certain of the defendants in purchasing the property of the
Partnerships. The complaint requests the following relief: (i) a declaration
that each of the defendants has violated Sections 13(d), 14(d) and 14(e) of the
Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder;
(ii) a declaration that certain of the defendants have violated Section 15(a) of
the Exchange Act and the rules and regulations thereunder; (iii) an order
permanently enjoining the defendants from (a) soliciting tenders of or accepting
for purchase securities of the Partnerships, (b) exercising any voting rights
attendant to the securities already acquired, (c) soliciting proxies, and (d)
violating Sections 13 or 14 of the Exchange Act or the rules and regulations
promulgated thereunder; (iv) an order enjoining certain of the defendants from
violating Section 15(a) of the Exchange Act and the rules and regulations
promulgated thereunder; (v) an order directing certain of the defendants to
offer to each person who sold securities to such defendants the right to rescind
such sale; and (vi) a declaration that the Partnerships need not provide to the
defendants a list of limited partners in the Partnerships or any other
information respecting the Partnerships which is not publicly available. The
plaintiffs have not yet received an answer of the defendants respecting the
complaint.
On October 28, 1997 a complaint was filed in the Superior Court of the
State of California, Sacramento County by Everest Lodging Investors, LLC and
Everest/Madison Investors, LLC, as plaintiffs, against Philip B. Grotewohl,
Grotewohl Management Services, Inc., Kenneth M. Sanders, Robert J. Dana, Borel
Associates, and BWC Incorporated, as defendants, and the Partnerships, as
nominal defendants. The factual basis underlying the causes of action pertains
to the receipt by the defendants of franchise fees and reimbursement of
expenses, the indications of interest made by the plaintiffs in purchasing the
properties of the nominal defendants, and the alleged refusal of the defendants
to provide information required by the terms of the Partnership's partnership
agreement and California law. The complaint requests the following relief: (i) a
declaration that the action is a proper derivative action; (ii) an order
requiring the defendants to discharge their fiduciary duties to the Partnerships
and to enjoin them from breaching their fiduciary duties; (iii) disgorgement of
certain profits; (iv) appointment of a receiver; and (v) an award for damages in
an amount to be determined. The defendants and nominal defendants have recently
been served and are formulating their response to the complaint.
- 8 -
<PAGE>
PART II. OTHER INFORMATION (CONTINUED)
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Item 2. Changes in Securities
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None
Item 3. Defaults upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters
---------------------
None
Item 5. Other Information
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See Notes to Financial Statements
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
See Item 1 above
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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.
FAMOUS HOST LODGING V, L.P.
11-10-97 By /S/ David P. Grotewohl
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Date David P. Grotewohl,
President of Grotewohl
Management Services, Inc.,
Managing General Partner
11-10-97 By /S/ David P. Grotewohl
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Date David P. Grotewohl,
Chief Financial Officer
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 299,236
<SECURITIES> 0
<RECEIVABLES> 21,569
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 374,360
<PP&E> 5,411,378
<DEPRECIATION> 3,121,078
<TOTAL-ASSETS> 2,696,954
<CURRENT-LIABILITIES> 235,661
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,461,293
<TOTAL-LIABILITY-AND-EQUITY> 2,696,954
<SALES> 2,469,159
<TOTAL-REVENUES> 2,507,417
<CGS> 2,040,731
<TOTAL-COSTS> 2,040,731
<OTHER-EXPENSES> 387,170
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 79,516
<INCOME-TAX> 0
<INCOME-CONTINUING> 79,516
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 79,516
<EPS-PRIMARY> 8.73
<EPS-DILUTED> 8.73
</TABLE>
