FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-16647
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
California 33-0207312
-------------------------------- -------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification)
400 South El Camino Real, Suite 1100
San Mateo, California 94402
------------------------------ --------
(Address of principal executive offices) (Zip Code)
(415) 343-9300
----------------------------
(Registrant's telephone number)
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 X No
--- ---
Total number of units outstanding as of June 30, 1995: 2,399,217
Page 1 of 11
NO EXHIBIT INDEX REQUIRED
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Balance Sheets
(in thousands, except units outstanding)
(Unaudited)
June 30, December 31,
1995 1994
Assets -------- ---------
------
Real estate investments, at cost:
Land $ 2,704 $ 2,704
Building and improvements 14,934 14,753
-------- --------
17,638 17,457
Less accumulated depreciation
and amortization (7,010) (6,685)
-------- --------
Net real estate investments 10,628 10,772
Cash and cash equivalents 560 369
Accounts receivable, net 165 91
Prepaid expenses and other assets 652 391
-------- --------
Total assets $ 12,005 $ 11,623
======== ========
Liabilities and Partners' Equity (Deficit)
------------------------------------------
Accounts payable $ 167 $ 117
Accrued expenses 392 238
-------- --------
Total liabilities 559 355
Partners' equity (deficit):
General Partner (1,788) (1,790)
Limited Partners, 2,399,217
units outstanding 13,234 13,058
-------- --------
Total partners' equity 11,446 11,268
-------- --------
Total liabilities and
partners' equity $ 12,005 $ 11,623
======== ========
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See accompanying notes to financial statements.
Page 3 of 11
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Statements of Operations
(in thousands, except per unit amounts)
(Unaudited)
Six Months Three Months
Ended Ended
June 30, June 30,
1995 1994 1995 1994
------ ------ ------ ------
Revenues:
Rooms $2,706 $2,425 $1,364 $1,191
Interest and other 123 123 52 60
------ ------ ------ ------
Total revenues 2,829 2,548 1,416 1,251
------ ------ ------ ------
Operating costs and expenses
(including reimbursed salaries of $614
and $547 paid to affiliates in the six
months ended June 30, 1995 and 1994,
respectively):
Rooms 584 555 306 278
Utilities 199 185 100 95
Management fees (paid to an affiliate) 141 127 71 62
Property taxes and insurance 175 132 98 70
Property general and administrative 250 205 127 112
Sales and marketing 258 186 125 94
Property operation and maintenance 188 147 89 54
Depreciation and amortization 336 316 168 165
Other general and administrative
(including $75 and $78 paid to an
affiliate in the six months ended
June 30, 1995 and 1994, respectively) 120 110 57 52
------ ------ ------ ------
Total operating costs and expenses 2,251 1,963 1,141 982
------ ------ ------ ------
Net income $ 578 $ 585 $ 275 $ 269
====== ====== ====== ======
Net income per limited partnership unit $ 0.24 $ 0.24 $ 0.11 $ 0.11
====== ====== ====== ======
Distributions per limited partnership unit:
Net income $ - $ - $ - $ -
====== ====== ====== ======
Return of capital $ 0.16 $ 0.15 $ 0.08 $ 0.08
====== ====== ====== ======
See accompanying notes to financial statements.
Page 4 of 11
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Statements of Partners' Equity (Deficit)
(in thousands)
For the six months ended June 30, 1995 and 1994
(Unaudited)
Total
General Limited Partners'
Partner Partners Equity
--------- --------- ---------
Balance at December 31, 1993 $ (1,790) $ 13,070 $ 11,280
Distributions (4) (362) (366)
Net income 6 579 585
--------- --------- ---------
Balance at June 30, 1994 $ (1,788) $ 13,287 $ 11,499
========= ========= =========
Balance at December 31, 1994 $ (1,790) $ 13,058 $ 11,268
Distributions (4) (396) (400)
Net income 6 572 578
--------- --------- ---------
Balance at June 30, 1995 $ (1,788) $ 13,234 $ 11,446
========= ========= =========
See accompanying notes to financial statements.
Page 5 of 11
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Statements of Cash Flows
(in thousands)
(Unaudited)
Six months ended
June 30,
------------------
1995 1994
------ ------
Cash flows from operating activities:
Net income $ 578 $ 585
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 336 316
Changes in assets and liabilities:
Accounts receivable (74) (5)
Prepaid expenses and other assets (272) (89)
Accounts payable 50 17
Accrued expenses 154 (20)
------- -------
Net cash provided by operating activities 772 804
------- -------
Cash flows used in investing activities:
Additions to real estate investments (181) (122)
------- -------
Cash used in investing activities: (181) (122)
------- -------
Cash flows used in financing activities:
Distributions to partners (400) (366)
------- -------
Cash used in financing activities (400) (366)
------- -------
Net increase in cash and cash equivalents 191 316
Cash and cash equivalents at
beginning of period 369 243
------- -------
Cash and cash equivalents at
end of period $ 560 $ 559
======= =======
See accompanying notes to financial statements.
Page 6 of 11
GLENBOROUGH ALL SUITE HOTELS, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
June 30, 1995
(Unaudited)
Note 1. SIGNIFICANT ACCOUNTING POLICY
------------------------------
In the opinion of Glenborough Realty Corporation, the General
Partner, the accompanying unaudited financial statements contain
all adjustments (consisting of only normal accruals) necessary to
present fairly the financial position of Glenborough All Suite
Hotels, L.P., A California Limited Partnership (the
"Partnership"), at June 30, 1995 and December 31, 1994, and the
related statements of operations for the three and six months
ended June 30, 1995 and 1994, and the changes in partners' equity
(deficit) and cash flows for the six months ended June 30, 1995
and 1994.
Note 2. REFERENCE TO 1994 AUDITED FINANCIAL STATEMENTS
----------------------------------------------
These unaudited financial statements should be read in
conjunction with the Notes to Financial Statements included in
the 1994 audited financial statements.
Note 3. TRANSACTIONS WITH AFFILIATES
----------------------------
In accordance with the limited partnership agreement, the
Partnership paid the General Partner and its affiliates
compensation for services provided to the Partnership.
Glenborough Hotel Group provided services relating to the
management and operation of the hotels and was compensated
$141,000 and $127,000 for management fees for the six months
ended June 30, 1995 and 1994, respectively. In addition,
Glenborough Hotel Group was reimbursed for salaries related to
the management and operations of the hotels in the amounts of
$614,000 and $547,000 for the six months ended June 30, 1995 and
1994, respectively. These costs are included in operating costs
and expenses on the statements of operations.
The Partnership pays Glenborough Corporation for direct expenses
plus a 1% fee for general and administrative costs and services
including investor relations, office supplies and legal and other
services. Glenborough Corporation was paid $75,000 and $78,000
for these costs and services for the six months ended June 30,
1995 and 1994, respectively.
Note 4. OTHER INFORMATION
-----------------
The Partnership has been named in a Registration Statement
proposing a consolidation by merger of several entities, which
has been filed with the Securities and Exchange Commission. In
that regard, as of June 30, 1995, the Partnership has advanced
$354,000 (included in prepaid expenses and other assets) toward
Page 7 of 11
GLENBOROUGH ALL SUITE HOTELS, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
June 30, 1995
(Unaudited)
their pro rata share of the transaction costs associated with the
consolidation. An additional $127,000 in transaction costs have
been included in prepaid expenses and other assets and was
payable at June 30, 1995. In the event the proposal is not
approved by the Partnership's limited partners, and the
consolidation goes forward with any of the other entities, the
amounts advanced will be fully reimbursed by an affiliate of the
general partners of the Partnership. If the consolidation,
itself, does not go forward with any of the other entities, the
Partnership will bear a proportion of the transaction costs based
upon the number of limited partners who voted for approval of the
transaction as compared to those who dissented or abstained. The
limited partners are expected to receive their solicitation
materials for this potential transaction in 1995.
Note 5. NEW ACCOUNTING PRONOUNCEMENT
In March 1995, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standard (SFAS) No. 121,
"Accounting for Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of". This statement requires that
long-lived assets be reported at the lower of carrying amount or
fair value. The Company plans to adopt SFAS No. 121 in 1996 and
believes that the adoption will not have a material impact upon
its financial statements.
Page 8 of 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
From inception through the quarter ended December 31, 1989,
distributions were paid to the limited partners at an 8.5%
annualized rate, supported first by warranty payments received
from the seller of the Partnership's properties and then from
June 1988 through December 1989 by loans provided by the former
general partner, the seller of the hotels and an affiliate of
Shearson Lehman Brothers Inc. (all of which were subsequently
paid off at a discount). For the first three quarters of 1990,
distributions were paid at a 6% annualized rate. No distribution
was paid in the fourth quarter of 1990 to reserve funds necessary
to pay for renovation costs at the Fort Worth property. This
resulted in a distribution rate of 4.5% for 1990. Distributions
were paid at a rate of 5% in 1991, a rate of 3% in 1992, 1993 and
the six months ended June 30, 1994. The distribution made in the
third quarter of 1994 was increased to a rate of 3.3% and has
remained at that rate since. Based on the projected cash flow of
the Partnership, distributions are expected to continue at a rate
of 3.3% for the remainder of 1995.
Management believes that the Partnership's available cash
together with the cash generated by the operations of the
Partnership's properties, as proven in recent years, will be
sufficient to finance the Partnership's continued operations.
Another factor maintaining the optimistic outlook of the
Partnership's liquidity and capital resource position would be
the increase in corporate and contract business at the hotels
during the first half of 1995. This increased corporate and
contract business played a major part in the Partnership's
increase in accounts receivable from $91,000 at December 31, 1994
to $165,000 at June 30, 1995. Of the $165,000 outstanding,
approximately 75% or $124,000 is from accounts of current guests
or corporate and contract business less than 30 days outstanding.
Prepaid expenses and other assets increased approximately
$261,000 from December 31, 1994 to June 30, 1995 primarily due to
advances made by the Partnership toward transaction costs
associated with the proposed consolidation by merger, as
discussed in Note 4 of the Notes to Financial Statements.
RESULTS OF OPERATIONS
Total revenue increased $281,000 or 11% during the six months
ended June 30, 1995 over the six months ended June 30, 1994 due
to an increase in rooms revenue. This is a result of the sales
and marketing staffs' success at both hotels in attracting tour
group and new commercial contract business, and the greater role
the "Countryline" reservation system has played in the hotels'
increased occupancy which generally yields higher average daily
room rates. To a lesser extent, the total revenue increase can
partially be attributable to the resumption of major league
Page 9 of 11
baseball, where the Arlington hotel is impacted by the influx of
people attracted to the area since the Texas Rangers home stadium
is in close proximity.
Total operating costs and expenses increased $288,000 or 15%
during the six months ended June 30, 1995 over the same period in
1994. This increase is primarily due to increases in variable
expenses associated with higher occupancy such as rooms expense,
utilities, property management fees, property operation and
maintenance, and sales and marketing costs (the "Countryline"
reservation system).
Following are the occupancy percentages and average daily room
rates of each of the hotels for the six months ended June 30,
1995 and 1994:
For the six months For the six months
ended June 30, 1995 ended June 30, 1994
------------------- -------------------
Average Average
room room
Occupancy rate Occupancy rate
--------- ------- --------- -------
Arlington 76% $64.10 64% $61.71
Tucson 83% $64.86 82% $63.75
Page 10 of 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is not a part to, nor any of its assets
the subject of any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K.
No reports on Form 8-K were required to be filed during
this reporting period.
Page 11 of 11
SIGNATURES
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, thereunto duly authorized.
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
By: Glenborough Realty Corporation,
a California corporation
the Managing General Partner
Date: August 10, 1995 By:
Andrew Batinovich
Senior Vice President,
Chief Financial Officer and
Director
SIGNATURES
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, thereunto duly authorized.
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
By: Glenborough Realty Corporation,
a California corporation
the Managing General Partner
Date: August 10, 1995 By: /s/ ANDREW BATINOVICH
---------------------------------
-
Andrew Batinovich
Senior Vice President,
Chief Financial Officer and
Director
Page 11 of 11
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