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Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 25, 1998
MARRIOTT HOTEL PROPERTIES LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 0-14381 52-1436985
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation or Identification No.)
organization)
10400 Fernwood Road, Bethesda, MD 20817-1109
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 301-380-2070
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ITEM 5. OTHER EVENTS
On June 10, 1998, September 2, 1998 and November 25, 1998, the General Partner
sent to the Limited Partners of the Partnership a letter that accompanied the
Partnership's Quarterly Reports on Form 10-Q. Such letters are being filed as
exhibits to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Letter from the General Partner to the Limited Partners
of the Partnership that accompanied the Partnership's
Quarterly Report on Form 10-Q forthe Quarter Ended
March 27, 1998.
99.2 Letter from the General Partner to the Limited Partners of
the Partnership that accompanied the Partnership's
Quarterly Report on Form 10-Q for the Quarter Ended June
19, 1998.
99.3 Letter from the General Partner to the Limited Partners of
the Partnership that accompanied the Partnership's
Quarterly Report on Form 10-Q for the Quarter Ended
September 11, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
MARRIOTT HOTEL PROPERTIES
LIMITED PARTNERSHIP
By: HOTEL PROPERTIES MANAGEMENT, INC.
General Partner
November 25, 1998 By: /s/ Earla L. Stowe
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Name: Earla L. Stowe
Title: Vice President and Chief Accounting
Officer
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EXHIBIT INDEX
Exhibit No.: Description:
99.1 Letter from the General Partner to the Limited Partners of the
Partnership that accompanied the Partnership's Quarterly Report on
Form 10-Q for the Quarter Ended March 27, 1998.
99.2 Letter from the General Partner to the Limited Partners of the
Partnership that accompanied the Partnership's Quarterly Report on
Form 10-Q for the Quarter Ended June 19, 1998.
99.3 Letter from the General Partner to the Limited Partners of the
Partnership that accompanied the Partnership's Quarterly Report on
Form 10-Q for the Quarter Ended September 11, 1998.
Exhibit 99.1
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MARRIOTT HOTEL PROPERTIES LIMITED PARTNERSHIP
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1998 First Quarter Report
Limited Partner Quarterly Update
Presented for your review is the 1998 First Quarter Report for Marriott Hotel
Properties Limited Partnership (the "Partnership"). The 1998 First Quarter Form
10-Q immediately follows this letter and replaces the First Quarter Report
format previously used by the Partnership. The information presented is
essentially the same as the information given in prior years with certain
additional items required by the rules of the Securities and Exchange
Commission. Discussion of the Partnership's performance and Hotel operations is
included in Item 2, Management's Discussion and Analysis of Financial Condition
and Results of Operations. You are encouraged to review this report in its
entirety. If you have any further questions regarding your investment, please
contact Host Marriott Partnership Investor Relations at (301) 380-2070.
Host Marriott Corporation Real Estate Investment Trust
On April 17, 1998, Host Marriott Corporation ("Host Marriott"), parent company
of the General Partner of the Partnership, announced that its Board of Directors
has authorized the company to reorganize its business operations to qualify as a
real estate investment trust ("REIT") to become effective as of January 1, 1999.
As part of the REIT conversion, Host Marriott expects to form a new operating
partnership (the "Operating Partnership") and limited partners in certain Host
Marriott full-service hotel partnerships and joint ventures, including the
Partnership, are expected to be given an opportunity to receive, on a
tax-deferred basis, Operating Partnership units in the new Operating Partnership
in exchange for their current partnership interest. We will keep you informed on
the status of this matter.
Cash Distributions
On May 4, 1998, the Partnership made a cash distribution of $1,500 per limited
partner unit. The distribution represented $540 per limited partner unit from
1997 operations and $960 per limited partner unit related to first quarter 1998
operations. The Partnership currently expects to make an interim 1998
distribution in November 1998.
Orlando World Center Expansion
As reported to you in the 1997 Annual Report, in March 1998, the Partnership
announced its plans to expand the Orlando World Center. The expansion includes a
500-room tower with a new parking garage, expansion of the existing JW's
Steakhouse restaurant, redesign of the existing golf course and constructing
15,000 square feet of additional meeting space. Construction of the new parking
garage began on May 4, 1998.
On April 15, 1998, the Partnership successfully completed the financing for the
expansion of the Orlando World Center hotel. The lender is obligated to provide
up to $88 million to fund the costs related to the construction of the
expansion. During the construction period, the Partnership is required to make
interest only payments at the fixed interest rate of 7.48% with such interest
payments funded by the construction loan. Upon completion of the expansion, the
Partnership would be required to pay principal and interest at the fixed
interest rate of 7.48% amortized over the remaining term of the loan. The loan
matures on January 1, 2008.
Exhibit 99.2
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MARRIOTT HOTEL PROPERTIES LIMITED PARTNERSHIP
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1998 Second Quarter Report
Limited Partner Quarterly Update
Presented for your review is the 1998 Second Quarter Report for Marriott Hotel
Properties Limited Partnership (the "Partnership"). The 1998 Second Quarter Form
10-Q immediately follows this letter. Discussion of the Partnership's
performance and Hotel operations is included in Item 2, Management's Discussion
and Analysis of Financial Condition and Results of Operations. You are
encouraged to review this report in its entirety. If you have any further
questions regarding your investment, please contact Host Marriott Partnership
Investor Relations at (301) 380-2070.
Host Marriott Corporation's Conversion to a Real Estate Investment Trust
As previously reported to you, Host Marriott Corporation ("Host Marriott"),
parent company of the General Partner of the Partnership, announced on April 17,
1998, that its Board of Directors authorized Host Marriott to reorganize its
business operations to qualify as a real estate investment trust ("REIT") to
become effective as of January 1, 1999. As part of the REIT conversion, Host
Marriott formed a new operating partnership (the "Operating Partnership"), and
limited partners in certain Host Marriott full-service hotel partnerships and
joint ventures, including the Partnership, are expected to be given an
opportunity to receive, on a tax-deferred basis, Operating Partnership units in
the new Operating Partnership in exchange for their current limited partnership
interests. The Operating Partnership units would be redeemable by the limited
partner for freely traded Host Marriott shares (or the cash equivalent thereof)
at any time after one year from the closing of the merger. In connection with
the REIT conversion, the Operating Partnership filed a Registration Statement on
Form S-4 (the "Form S-4") with the Securities and Exchange Commission on June 2,
1998. Limited partners will be able to vote on this Partnership's participation
in the merger later this year through a consent solicitation.
In order to assist you with your financial planning, we are providing you with
the preliminary valuation information on your Partnership units as disclosed in
the Form S-4. The estimated exchange value is $141,425 per Partnership unit (the
"Estimated Exchange Value"). The Estimated Exchange Value is subject to
adjustment to reflect various closing and other adjustments and the final
valuation information will be set forth in the final Form S-4 you will receive
later this year through a consent solicitation.
The Estimated Exchange Value is being provided to you at this time for
information purposes only. We have not attempted to provide you with all of the
detail relating to the methodologies, variables, assumptions and estimates used
in determining the Estimated Exchange Value. The final valuation likely will
differ from the Estimated Exchange Value set forth above and such difference may
be material. The consent solicitation that will be mailed to you to solicit your
approval of a merger of the Partnership will contain the final valuation for a
Partnership unit as well as a discussion of the methodologies, variables,
assumptions and estimates used.
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The solicitation period is expected to commence in late September and the
merger, if approved, would close by the end of the year (although there is no
assurance that this will be the case). Please notify the General Partner in
writing of any address changes in order to facilitate the prompt delivery of the
consent solicitation documents to you.
Secondary Market Activity
There has been an increase in the number of third party solicitations for this
Partnership's limited partner units. We are not in a position to advise you as
to whether you should accept such offers. However, in addition to reviewing the
information provided in this report, we encourage you to consult with your
financial and tax advisors when deciding if you should sell your Partnership
units. Due to the allocation of tax losses and income to you over the life of
the Partnership as well as any cash distributions paid to you, your tax basis in
this investment may be significantly lower than your original investment amount.
Therefore, there may be negative tax effects resulting from the sale of these
units that may impact your decision to sell. Once you have begun the sale
process we will do whatever is in our power to facilitate the transfer of your
units. Please note, the General Partner does not charge a fee in connection with
the transfer of Partnership units. If you wish to effect a transfer, please
contact our transfer agent, Trust Company of America/Gemisys at 1-800-797-6812
for the necessary documents.
Cash Distributions
On May 4, 1998, the Partnership made a cash distribution of $1,500 per limited
partner unit. This distribution represented $540 per limited partner unit from
1997 operations and $960 per limited partner unit related to first quarter 1998
operations. On August 4, 1998, the Partnership made an interim cash distribution
of $8,000 per limited partner unit from 1998 operations.
Orlando World Center Expansion
As previously reported, the Partnership is expanding the Orlando World Center.
The expansion includes a 500-room tower with a new parking garage, expansion of
the existing JW's Steakhouse restaurant, redesign of the existing golf course
and construction of 15,000 square feet of additional meeting space. Renovation
of the golf course began on May 4, 1998 and is expected to be completed in
January 1999. Construction of the parking garage began on July 22, 1998.
Construction of the 500-room tower is expected to begin during the fourth
quarter 1998. The entire project is expected to be completed in the spring of
2000.
On April 15, 1998, the Partnership successfully completed the financing for the
expansion of the Orlando World Center hotel. The lender is obligated to provide
up to $88 million to fund the costs related to the construction of the
expansion. During the construction period, the Partnership is required to make
monthly payments of principal and interest with such interest payments funded by
the construction loan while principal payments will be funded by hotel
operations. The loan bears interest at a fixed interest rate of 7.48%. Upon
completion of the expansion, the Partnership will be required to pay principal
and interest at the fixed interest rate of 7.48% amortized over the remaining
term of the loan. The loan matures on January 1, 2008. As of June 19, 1998, the
Partnership has received construction loan advances of $2.5 million which were
used to pay construction costs.
Exhibit 99.3
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MARRIOTT HOTEL PROPERTIES LIMITED PARTNERSHIP
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1998 Third Quarter Report
Limited Partner Quarterly Update
Presented for your review is the 1998 Third Quarter Report for Marriott Hotel
Properties Limited Partnership (the "Partnership"). A discussion of the
Partnership's performance and Hotel operations is included in the attached Form
10-Q, Item 2, Management's Discussion and Analysis of Financial Condition and
Results of Operations. You are encouraged to review this report in its entirety.
If you have any further questions regarding your investment, please contact Host
Marriott Partnership Investor Relations at (301) 380-2070.
Host Marriott Corporation's Conversion to a Real Estate Investment Trust
As publicly announced in April 1998, Host Marriott Corporation ("Host
Marriott"), the parent company of the General Partner of the Partnership, has
adopted a plan to restructure its business operations so that it will qualify as
a real estate investment trust ("REIT") for federal income tax purposes. As part
of the REIT conversion, Host Marriott proposes to merge into HMC Merger
Corporation (to be renamed "Host Marriott Corporation"), a Maryland corporation
("Host REIT"), and thereafter continue and expand its full-service hotel
ownership business. Host REIT will operate through Host Marriott, L.P., a
Delaware limited partnership (the "Operating Partnership"), of which Host REIT
will be the sole general partner. This is commonly called an "UPREIT" structure
and it is used to facilitate tax-deferred acquisitions of properties.
In previous correspondence, you were notified that you would be asked to vote on
a proposed transaction involving the Merger of this Partnership with the
Operating Partnership. The Prospectus/Consent Solicitation Statement and the
Partnership's Supplement which contain detailed information relating to this
proposal were mailed to all Limited Partners of record as of September 18, 1998.
This is the date set by the General Partner as the record date for determining
Limited Partners entitled to vote on the Merger and the related amendments to
the partnership agreement. The Prospectus/Consent Solicitation Statement and the
Partnership's Supplement should be reviewed as you make your decision to vote.
You also received, among other things, a list of Questions and Answers and
telephone numbers for assistance. We strongly encourage Limited Partners to
consult with their own financial and tax advisors when making their decision on
how to vote and which option to choose.
It is important that your Partnership Units be voted, regardless of the number
of Partnership Units you hold. The solicitation period ends at 5:00 p.m.,
Eastern time, on December 12, 1998, unless extended. If you have not yet
received the Prospectus/Consent Solicitation Statement or if you or your
advisors have any questions regarding the Merger, please contact the Information
Agent at 1-800-733-8481 extension 445.
Cash Distributions
On May 4, 1998, the Partnership made a cash distribution of $1,500 per limited
partner unit. This distribution represented $540 per limited partner unit from
1997 operations and $960 per limited partner unit related to first quarter 1998
operations. On August 4, 1998, the Partnership made an interim cash distribution
of $8,000 per limited partner unit from second quarter year-to-date 1998
operations. On November 6, 1998, the Partnership made an interim cash
distribution of $6,500 per limited partner unit from third quarter operations.
We expect to make a final cash distribution from 1998 operations in April 1999.
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Orlando World Center Expansion
As previously reported, the Partnership is expanding the Orlando World Center.
The expansion includes a 500-room tower with a new parking garage, expansion of
the existing JW's Steakhouse restaurant, redesign and renovation of the existing
golf course and construction of 15,000 square feet of additional meeting space.
Renovation of the golf course began on May 4, 1998 and is expected to be
completed in January 1999. Construction of the parking garage began on July 22,
1998. Construction of the 500-room tower is expected to begin prior to the end
of 1998. The entire project is expected to be completed in the spring of 2000.
As of September 11, 1998, the Partnership has received construction loan
advances of $4.6 million which were used to pay construction costs.
Estimated 1998 Tax Information
If the Partnership votes to approve the Merger and the Merger is consummated,
the taxable income is estimated to be $18,800per limited partner unit for the
year ending December 31, 1998. If the Partnership does not approve the Merger,
the taxable income is estimated to be $15,600 per limited partner unit for 1998.
The 1998 tax information, used for preparing your Federal and state income tax
returns, will be mailed no later than March 15, 1999. To ensure confidentiality,
we regret that we are unable to furnish your tax information over the telephone.
Unless otherwise instructed, we will mail your tax information to your address
as it appears on this report. Therefore, to avoid delays in delivery of this
important information, please notify the Partnership in writing of any address
changes by January 31, 1999.
