================================================================================
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
/x/ Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended June 20, 1997
OR
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number: 0-14374
ATLANTA MARRIOTT MARQUIS LIMITED PARTNERSHIP
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 52-1427553
- --------------------------------------------- --------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10400 Fernwood Road
Bethesda, Maryland
20817
- -----------------------------------------------------------------------------------------------------------
(Address of principal executive offices)
</TABLE>
Registrant's telephone number, including area code: 301-380-2070
Securities registered pursuant to Section 12(b) of the Act:
Not Applicable
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 and (2) has been subject to such filing requirements for
the past 90 days.
Yes ___ No ___ (Not Applicable. The Partnership became subject to Section 13
reporting on November 10, 1997.)
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<PAGE>
TABLE OF CONTENTS
PAGE NO.
--------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statement of Operations
Twelve and Twenty-Four Weeks Ended
June 20, 1997 and June 14, 1996........................ 1
Condensed Consolidated Balance Sheet
June 20, 1997 and December 31, 1996....................... 2
Condensed Consolidated Statement of Cash Flows
Twenty-Four Weeks ended June 20, 1997 and June 14, 1996... 3
Notes to Condensed Consolidated Financial Statements........ 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 6
PART II - OTHER INFORMATION
Item 1. Legal Proceedings........................................... 9
Item 6. Exhibits and Reports on Form 8-K............................ 9
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ATLANTA MARRIOTT MARQUIS LIMITED PARTNERSHIP
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
(in thousands, except per unit amounts)
<TABLE>
<CAPTION>
Twelve Weeks Ended Twenty-Four Weeks Ended
---------------------------- -----------------------------
June 20, June 14, June 20, June 14,
1997 1996 1997 1996
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
REVENUES................................... $ 10,131 $ 8,296 $ 20,173 $ 17,987
------------ ------------ ------------- ------------
OPERATING COSTS AND EXPENSES
Interest................................. 5,267 5,204 10,862 10,409
Depreciation ............................ 1,175 1,607 2,349 3,213
Base mangement fee....................... 659 592 1,311 1,236
Property taxes and other................. 621 573 1,328 1,351
Incentive management fee................. 1,000 686 1,998 1,027
------------ ------------ ------------- ------------
8,722 8,662 17,848 17,236
------------ ------------ ------------- ------------
NET INCOME (LOSS).......................... $ 1,409 $ (366) $ 2,325 $ 751
============ ============ ============= ============
ALLOCATION OF NET INCOME (LOSS)
General Partner.......................... $ 14 $ (4) $ 23 $ 8
Limited Partners......................... 1,395 (362) 2,302 743
------------ ------------ ------------- ------------
$ 1,409 $ (366) $ 2,325 $ 751
============ ============ ============= ============
NET INCOME (LOSS) PER
LIMITED PARTNER UNIT (530 Units)......... $ 2,632 $ (683) $ 4,343 $ 1,402
============ ============ ============= ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
1
<PAGE>
ATLANTA MARRIOTT MARQUIS LIMITED PARTNERSHIP
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
June 20, December 31,
1997 1996
----------- ------------
(unaudited)
ASSETS
<S> <C> <C>
Property and equipment, net................................................... $ 160,869 $ 162,111
Amounts held by Marriott International, Inc................................... 5,252 3,490
Working capital and supplies held by Marriott International, Inc.............. 2,900 2,900
Other assets.................................................................. 8,321 7,406
Cash and cash equivalents..................................................... 18,359 5,601
----------- -----------
$ 195,701 $ 181,508
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES
Mortgage note payable......................................................... $ 216,504 $ 215,574
Due to Host Marriott Corporation under Original Debt
Service Guarantee and Commitment............................................ 20,134 20,134
Due to Marriott International, Inc............................................ 5,029 3,030
Accounts payable and accrued expenses......................................... 9,248 309
----------- -----------
Total Liabilities........................................................... 250,915 239,047
----------- -----------
PARTNERS' DEFICIT
General Partner............................................................... (491) (514)
Limited Partners.............................................................. (54,723) (57,025)
----------- -----------
Total Partners' Deficit..................................................... (55,214) (57,539)
----------- -----------
$ 195,701 $ 181,508
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
ATLANTA MARRIOTT MARQUIS LIMITED PARTNERSHIP
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Twenty-Four Weeks Ended
----------------------------
June 20, June 14,
1997 1996
------------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income ................................................... $ 2,325 $ 751
Noncash items................................................. 3,567 4,311
Changes in operating accounts................................. 9,176 9,436
------------- ------------
Cash provided by operating activities....................... 15,068 14,498
------------- ------------
INVESTING ACTIVITIES
Additions to property and equipment, net...................... (1,109) (2,834)
Change in property improvement fund........................... (1,201) 725
------------- ------------
Cash used in investing activities........................... (2,310) (2,109)
------------- ------------
FINANCING ACTIVITIES
Cash distributions............................................ -- (819)
------------- ------------
INCREASE IN CASH AND CASH EQUIVALENTS........................... 12,758 11,570
CASH AND CASH EQUIVALENTS at beginning of period................ 5,601 1,010
------------- ------------
CASH AND CASH EQUIVALENTS at end of period...................... $ 18,359 $ 12,580
============= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for mortgage interest............................... $ 662 $ 662
============= ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
ATLANTA MARRIOTT MARQUIS LIMITED PARTNERSHIP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. The accompanying condensed consolidated financial statements have been
prepared by the Atlanta Marriott Marquis Limited Partnership (the
"Partnership") without audit. Certain information and footnote
disclosures normally included in financial statements presented in
accordance with generally accepted accounting principles have been
condensed or omitted from the accompanying statements. The Partnership
believes the disclosures made are adequate to make the information
presented not misleading. However, the condensed consolidated financial
statements should be read in conjunction with the Partnership's
consolidated financial statements and notes thereto included in the
Partnership's Form 10-K filed on November 10, 1997 for the fiscal year
ended December 31, 1996.
In the opinion of the Partnership, the accompanying condensed
consolidated unaudited financial statements reflect all adjustments
(which include only normal recurring adjustments) necessary to present
fairly the financial position of the Partnership as of June 20, 1997
and the results of operations and cash flows for the twelve weeks ended
June 20, 1997 and June 14, 1996. Interim results are not necessarily
indicative of fiscal year performance because of seasonal and
short-term variations.
2. The Partnership owns an 80% general partnership interest in Ivy Street
Hotel Limited Partnership ("Ivy") which owns and operates the Atlanta
Marriott Marquis Hotel (the "Hotel"). The financial statements and all
significant intercompany transactions and balances have been
eliminated. In 1990, the Partnership determined that the probability of
collecting the receivable from the minority partner in Ivy was remote.
Thus, the Partnership wrote off this receivable and is now recording
100% of the income/(losses) of Ivy until such excess income allocated
to the Partnership equals the excess losses previously recorded by the
Partnership.
3. For financial reporting purposes, the net income/(losses) of the
Partnership is allocated 99% to the limited partners and 1% to Marriott
Marquis Corporation (the "General Partner"), a wholly-owned subsidiary
of Host Marriott Corporation. Significant differences exist between the
net income/(losses) for financial reporting purposes and the net
income/(losses) reported for Federal income tax purposes. These
differences are due primarily to the use, for income tax purposes, of
accelerated depreciation methods, shorter depreciable lives for the
assets, differences in the timing of the recognition of incentive
management fee expense and the treatment of the minority interest
receivable.
4. Hotel revenues represent house profit of the Hotel since Ivy has
delegated substantially all of the operating decisions related to the
generation of house profit of the Hotel to Marriott International, Inc.
(the "Manager"). House profit reflects hotel operating results which
flow to Ivy as property owner and represents gross hotel sales less
property-level expenses, excluding depreciation and amoritzation, base
and incentive management fees, property taxes and certain other costs,
which are disclosed separately in the condensed consolidated statement
of operations.
Partnership revenues generated by the Hotel for 1997 and 1996 consist of (in
thousands):
<TABLE>
<CAPTION>
Twelve Weeks Ended Twenty-Four Weeks Ended
------------------------------------ -------------------------------------
June 20, June 14, June 20, June 14,
1997 1996 1997 1996
--------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
HOTEL SALES
Rooms.................................... $ 14,250 $ 12,312 $ 27,710 $ 26,355
Food and beverage........................ 6,404 6,164 13,254 12,238
Other.................................... 1,387 1,259 2,800 2,611
--------------- --------------- --------------- ---------------
22,041 19,735 43,764 41,204
--------------- --------------- --------------- ---------------
HOTEL EXPENSES
Departmental direct costs
Rooms................................. 3,024 2,557 5,752 5,467
Food and beverage..................... 4,236 3,999 8,370 8,259
Other.................................... 4,650 4,883 9,469 9,491
--------------- --------------- --------------- ---------------
11,910 11,439 23,591 23,217
--------------- --------------- --------------- ---------------
REVENUES............................... $ 10,131 $ 8,296 $ 20,173 $ 17,987
=============== =============== =============== ===============
</TABLE>
4
<PAGE>
5. Pursuant to the terms of the Management Agreement, the Manager is
obligated to transfer, not less than once each accounting period, all
funds derived from the operation of the Hotel after all Hotel operating
expenses. Such amounts from the Manager are owned by Ivy.
6. Certain reclassifications were made to the prior year financial
statements to conform to the 1997 presentation.
Subsequent Event
On July 10, 1997 (the "Extension Date"), the Partnership and Ivy entered into a
letter agreement (the "Letter Agreement") which effectively extends the maturity
of the Mortgage Debt until February 2, 1998 (the "New Maturity Date"). On the
Extension Date, the Partnership and Ivy were required to pay $17,590,000
representing the Deferred Interest on the Mortgage Debt in addition to the
scheduled interest payment due of $10,119,000. As a result, the Mortgage Debt
balance outstanding was reduced to $199,000,000. The payment of the Deferred
Interest was funded from $7,200,000 of Ivy cash reserves and $10,390,000 drawn
pursuant to a Host Marriott interest guarantee (the "Interest Guarantee"). Host
Marriott had agreed to advance up to $50,000,000 to cover interest and principal
shortfalls. Should cash flow from operations be insufficient to fund fully
interest due, $20,000,000 was available under the Interest Guarantee through
loan maturity. The remaining $30,000,000 was available under the Principal
Guarantee. Prior to the payment of Deferred Interest in the amount of
$10,390,000 on July 10, 1997, there were no amounts outstanding under either
the Principal Guarantee or the Interest Guarantee. In conjunction with the
extension, Host Marriott reaffirmed its obligations pursuant to these guarantees
through the New Maturity Date. The Principal Guarantee is available at maturity
or in case of a sale, refinancing or acceleration of the principal amount of the
underlying Notes resulting from an Event of Default. To the extent the Interest
Guarantee is not used, it becomes available as a Principal Guarantee. The
General Partner estimates that a sale of the Hotel would generate sufficient
proceeds to repay the maturing Mortgage Debt, outstanding guarantees to and
advances from Host Marriott and cover transaction costs; therefore, no advances
under the guarantees would be required.
During the term of the Letter Agreement, the Mortgage Debt continues to be
nonrecourse and will accrue interest at 12.3% per annum, with interest payments
due on January 10 and February 2, 1998. Additionally, all funds remitted by the
Manager during the term of the extension will be held by the Partnership for the
benefit of the lender. In conjunction with the Letter Agreement, Ivy paid an
extension fee of $500,000 as well as approximately $410,000 in costs and
expenses related to the transaction. It is expected that cash flow from
operations will provide adequate funds to meet the scheduled interest payments.
The General Partner is continuing its efforts to refinance the Mortgage Debt
upon or prior to the New Maturity Date.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain matters discussed herein are forward-looking statements within the
meaning of the Private Litigation Reform Act of 1995 and as such may involve
known and unknown risks, uncertainties, and other factors which may cause the
actual results, performance or achievements of the Partnership to be different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Although the Partnership believes the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that its expectations will be
attained. These risks are detailed from time to time in the Partnership's
filings with the Securities and Exchange Commission. The Partnership undertakes
no obligation to publicly release the result of any revisions to these
forward-looking statements that may be made to reflect any future events or
circumstances.
CAPITAL RESOURCES AND LIQUIDITY
The Partnership's financing needs have been historically funded through loan
agreements with independent financial institutions. The General Partner believes
that the Partnership's ability to continue to conduct its operations in the
ordinary course of business is contingent upon the General Partner's ability to
successfully refinance the Partnership's Mortgage Debt.
Principal Sources and Uses of Cash
The Partnership's principal sources of cash are cash from operations. Its
principal uses of cash are to pay debt service payments on the Mortgage Debt, to
make guarantee repayments and to fund the property improvement fund.
Cash provided by operations was $15.1 million and $14.5 million for the
twenty-four weeks ended June 20, 1997 and June 14, 1996, respectively. The
increase is primarily attributable to an increase in Hotel revenues. The
Partnership paid $662,000 of interest expense on the Mortgage Debt for the
twenty-four weeks ended June 20, 1997 and June 14, 1996, respectively.
Contributions to the property improvement fund were $2.0 million for the
twenty-four weeks ended June 20, 1997 and June 14, 1996, respectively.
As previously reported, in 1996 the General Partner established a reserve in
anticipation of a potential principal paydown and the costs which will be
incurred to refinance the Mortgage Debt. Though these refinancing costs are not
currently estimable, based on the General Partner's experiences with other
partnerships, such costs are expected to be substantial. These costs include
lender property appraisals, legal expenses, bank fees, environmental studies and
other transaction costs. The initial reserve was funded from 1996 cash available
after payment of debt service which would have otherwise been distributable to
the Partnership. The Partnership will continue to reserve all available cash
flow for the refinancing. Furthermore, in 1996 Ivy reserved all cash flow in
excess of ground rent for refinancing costs and owner funded capital needs. As
of June 20, 1997, total reserves approximated $13 million.
As a result of establishing these reserves and the utilization of funds to pay
down the Deferred Interest, the Partnership did not make a cash distribution
from 1996 operations to the partners. In addition, cash distributions for 1997
and thereafter will be dependent upon the outcome of the debt refinancing.
Capital Expenditures
The Partnership is required to maintain the Hotel in good repair and condition.
The management agreement provides for the establishment of a property
improvement fund to cover the cost of non-routine repairs and maintenance and
renewals and replacements to the Hotel's property and equipment. Contributions
to the fund for 1994 through June of 1995 were 4% of Hotel gross sales and
increased to 5% thereafter. Currently, the funds available in the property
improvement fund are sufficient for the scheduled $7.0 million rooms
refurbishment for approximately half of the Hotel's rooms which will begin in
August. The General Partner expects that the funds for the refurbishment of the
remaining rooms will be provided for in conjunction with the refinancing of the
Mortgage Debt or will be provided for with future years' contributions to the
property
6
<PAGE>
improvement fund. The General Partner believes that cash from Hotel operations,
the Interest/Principal Guarantee, the availability of funds from the refinancing
and capital reserves will provide adequate funds in the short-term to meet the
operational needs of the Partnership. Although there can be no assurance, the
General Partner anticipates that the debt maturing in February will be
successfully refinanced with a new third-party lender.
Mortgage Debt
On July 10, 1997 (the "Extension Date"), the Partnership and Ivy entered into a
Letter Agreement which effectively extends the maturity of the Mortgage Debt
until February 2, 1998 (the "New Maturity Date"). On the Extension Date, the
Partnership and Ivy were required to pay $17,590,000 representing the Deferred
Interest on the Mortgage Debt in addition to the scheduled interest payment due
of $10,119,000. As a result, the Mortgage Debt balance outstanding ws reduced to
$199,000,000. Cash flow from operations provided the Partnership with adequate
funds to meet the scheduled interest payment of $10,119,000. The payment of the
Deferred Interest was funded from $7,200,000 of Ivy cash reserves and
$10,390,000 drawn pursuant to a Host Marriott interest guarantee (the "Interest
Guarantee"). Host Marriott had agreed to advance up to $50,000,000 to cover
interest and principal shortfalls. Should cash flow from operations be
insufficient to fund fully interest due, $20,000,000 was available under the
Interest Guarantee through loan maturity. The remaining $30,000,000 was
available under the Principal Guarantee. Prior to the payment of Deferred
Interest in the amount of $10,390,000 on January 10, 1997, there were no amounts
outstanding under either the Principal Guarantee or the Interest Guarantee. In
conjunction with the extension, Host Marriott reaffirmed its obligations
pursuant to these guarantees through the New Maturity Date. The Principal
Guarantee is available at maturity or in case of a sale, refinancing or
acceleration of the principal amount of the underlying Notes resulting from an
Event of Default, as defined. To the extent the Interest Guarantee is not used,
it becomes available as a Principal Guarantee. The General Partner estimates
that a sale of the Hotel would generate sufficient proceeds to repay the
maturing Mortgage Debt, outstanding advances from Host Marriott and cover
transaction costs; therefore, no advances under the guarantees would be
required.
During the term of the Letter Agreement, the Mortgage Debt continues to be
nonrecourse, and will accrue interest at 12.3% per annum with interest payments
due on January 10 and February 2, 1998. Additionally, all funds remitted by the
Manager during the term of the extension will be held by the Partnership for the
benefit of the lender. In conjunction with the Letter Agreement, Ivy paid an
extension fee of $500,000 as well as approximately $410,000 representing costs
and expenses related to the transaction. It is expected that cash flow from
operations will provide adequate funds to meet the scheduled interest payments.
The General Partner is continuing to explore alternatives to repay the Mortgage
Debt upon or prior to maturity on February 2, 1998 and to obtain the additional
funds needed for capital repairs and refurbishments at the Hotel. The General
Partner has contacted serveral lenders active in current hotel lending markets.
To date, the General Partner has not found a lender, or a combination of
lenders, that would provide the entire amount necessary to refinance the
maturing Mortgage Debt of the Hotel and obtain sufficient funds to complete the
necessary refurbishments. The General Partner is currently working with a lender
that will provide approximately $160 to $165 million in first mortgage financing
and is exploring alternatives to fund the shortfall, including the possibility
of a contribution of equity from the General Partner. In addition, the General
Partner has considered a sale of the Hotel to payoff the existing lender.
However, the General Partner does not believe that the Hotel has realized the
appreciation necessary to generate material cash proceeds that would be
available for distribution to the limited partners of AMMLP and, furthermore,
such a sale would likely result in a significant taxable event to the limited
partners of AMMLP. There can be no assurance that the General Partner will be
successful in its attempts to refinance the Hotel's Mortgage Debt. Failure to
refinance or payoff the Mortgage Debt at maturity could lead to a foreclosure of
the Hotel.
RESULTS OF OPERATIONS
Partnership revenues for the second quarter of 1997 increased 22% when compared
to the same period in 1996 primarily due to an approximately 15%, or $1,471,000
increase in room revenues, and a slight increase in food and beverage revenues.
Room revenues increased primarily due to a 16% increase in REVPAR, or revenue
per available room. REVPAR increased due to a 9% increase in the average room
rate from approximately $126 to approximately $138 combined with a 4.3
percentage point increase in average occupancy to approximately 74%. The
improvement in second quarter average room rate and average occupancy primarily
occurred toward the end of the quarter of 1997 when compared to the same period
last year. In June 1996, the anticipated Summer Olympics negatively impacted
room rates. Food and beverage revenues remained consistent with prior year.
7
<PAGE>
On a year-to-date basis, Partnership revenues increased 12% when compared to the
same period last year primarily due to a 5% increase in room revenues coupled
with a 23% increase in food and beverage revenues. Room revenus increased due to
a 5% increase in REVPAR caused by a 4% increase in average room rate from
approximately $128 to approximately $133 and an increase in average occupancy of
1.0 percentage point to approximately 75%.
Based on current forecasts, 1997 Hotel operating results are expected to be even
compared with 1996 results due to continued soft demand in the Atlanta market.
Hotel management is reviewing its pricing strategies and analyzing operating
costs in order to maximize revenue where possible. Additionally, Hotel
management has formed an alliance with the Westin, Hyatt and Hilton (the
"Atlanta Alliance"). The Atlanta Alliance is a formal arrangement among the four
hotels to present a meeting alternative to customers' groups that are too large
for a single hotel but too small for the Georgia World Congress Center,
Atlanta's convention center. The national sales forces for all four hotel
companies are actively promoting the Atlanta Alliance.
Depreciation: Depreciation decreased $864,000, or 27%, for the twenty-four weeks
ended June 20, 1997 when compared to 1996 due to a portion of the Hotel's
furniture and equipment becoming fully depreciated.
Incentive Management Fees: For the twenty-four weeks ended June 20, 1997,
$1,999,000 of incentive management fees were accrued as compared to $1,027,000
for the same period in 1996. The increase in the incentive management fees
accrued was the result of improved Hotel operating results.
8
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Neither the Partnership, Ivy nor the Hotel are presently subject to any material
litigation nor, to the General Partner's knowledge is any material litigation
threatened against the Partnership or the Hotel, other than routine litigation
and administrative proceedings arising in the ordinary course of business, some
of which are expected to be covered by liability insurance and which,
collectively, are not expected to have a material adverse effect on the
business, financial conditions, or results of operations of the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
27. Financial Data Schedule
b. Reports on Form 8-K - None.
9
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Form 10-Q to be signed on its behalf by the
undersigned, thereunto duly authorized.
ATLANTA MARRIOTT MARQUIS
LIMITED PARTNERSHIP
By: MARRIOTT MARQUIS CORPORATION
General Partner
November 10, 1997 By: /s/ Patricia K. Brady
-------------------------------
Patricia K. Brady
Vice President and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 2nd
Quarter 10-Q and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000770809
<NAME> Atlanta Marriott Marquis Limited Partnership
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-20-1997
<EXCHANGE-RATE> 1.00
<CASH> 18,359
<SECURITIES> 8,321<F1>
<RECEIVABLES> 8,152<F2>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 34,832
<PP&E> 230,465
<DEPRECIATION> (69,596)
<TOTAL-ASSETS> 195,701
<CURRENT-LIABILITIES> 14,277<F3>
<BONDS> 236,638<F4>
0
0
<COMMON> 0
<OTHER-SE> (55,214)
<TOTAL-LIABILITY-AND-EQUITY> 195,701
<SALES> 0
<TOTAL-REVENUES> 20,173
<CGS> 0
<TOTAL-COSTS> 6,986
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,862
<INCOME-PRETAX> 2,325
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,325
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,325
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>This is other assets.
<F2>This includes amounts held by MII and working capital and supplies held by
MII.
<F3>This includes due to MII and accounts payable and accrued expenses.
<F4>This includes mortgage note payable and due to HMC.
</FN>
</TABLE>
