Securities and Exchange Commission
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): September 09, 1999
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 0-15736 52-1468081
(State or other jurisdiction of (Commission File Number) (I.R.S.Employer
incorporation or organization) Identification No.)
10400 Fernwood Road, Bethesda, MD 20817-1109
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 301-380-2070
<PAGE>
ITEM 5. OTHER EVENTS
On September 09, 1999, the General Partner sent to the Limited Partners of
the Partnership a letter that accompanied the Partnership's Quarterly Report on
Form 10-Q. Such a letter is being filed as an exhibit to this Current Report on
Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.5 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 18, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this Form 8-K to be signed on its behalf by the
undersigned, hereunto duly authorized, on this 9th day of September, 1999.
COURTYARD BY MARRIOTT I
LIMITED PARTNERSHIP
By: CBM ONE LP
General Partner
September 09, 1999 By: /s/ Earla L. Stowe
Name: Earla L. Stowe
Title: Vice President
<PAGE>
EXHIBIT INDEX
Exhibit No.: 99.1 Description
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 18, 1999.
Exhibit 99.1
Courtyard by Marriott
Limited Partnership
1999 Second Quarter Report
Limited Partner Quarterly Update
Presented for your review is the 1999 Second Quarter Report for Courtyard
by Marriott 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.
Strategy for Liquidity
As previously reported, the General Partner is utilizing a major investment
banking firm to explore alternatives to provide liquidity for the Partnership
and maximize the value of the limited partners' investment.
During the second quarter 1999, Partnership financial information was made
available to a number of prospective purchasers for their review and analysis.
The General Partner and the investment banking firm are continuing to work with
prospective purchasers in an effort to negotiate a transaction that will provide
liquidity for the Partnership while securing the highest possible value for the
limited partner units.
We can make no assurances as to the outcome of our efforts. However, if a
suitable transaction develops we will advise you through special correspondence
and the quarterly updates.
Transfer and Sale of Limited Partnership Units
As you know, the Partnership Units are a non-traded security. In most
cases, the Partnership Agreement does allow limited partners to transfer
Partnership Units to related parties. In addition, you may, under certain
circumstances, sell your Partnership Units to a third party; however, the
General Partner must consent to such sale. Please note there are certain tax and
legal limitations to transferring Partnership Units including significant tax
effects resulting from the sale of these Units that may impact your decision to
sell. In addition to consulting with your advisors, we recommend that limited
partners contact the General Partner about such limitations before entering into
any agreement to sell your Partnership Units.
If you do wish to request a transfer of your Partnership Units, please
contact our Transfer Agent at 800-797-6812. You will be supplied with the
necessary documents. Please note that the General Partner does not charge any
fee for effecting a transfer.
Cash Distributions
On April 30, 1999, the Partnership made the final 1998 cash distribution of
$3,000 per limited partner unit bringing the total for 1998 to $11,000 per
limited partner unit. Since inception, the Partnership has distributed $72,181
per limited partner unit. On August 10, 1999, the Partnership distributed an
interim 1999 distribution of $6,000 per limited partner unit. This distribution
was funded from first and second quarter 1999 Partnership operations.
We previously reported that we anticipated cash distributions for 1999
would be similar to the level of the 1998 cash distributions. We want to make
you aware that actual 1999 Hotel operating results through the second quarter
are lower than hotel management's expectations provided to us earlier this year
and also lower than 1998 levels. This is primarily due to the need to pay higher
salaries and benefits for Hotel employees in order to remain competitive in
local labor markets. In addition, food and beverage costs are higher in 1999 as
compared to 1998. For more information on Hotel operating results, please read
the Management's Discussion and Analysis of Financial Condition and Results of
Operations section of the enclosed Form 10Q.
At this time, we continue to believe that 1999 cash distributions will be
at the same level as 1998. However, if the trends described above continue, the
actual amount available for distribution may be impacted. We will provide you
with an update on this matter after evaluating third quarter operating results.
Partnership Debt
During the second quarter ended June 18, 1999, in accordance with the terms
of the mortgage loan, the Partnership repaid $3.9 million on the mortgage debt.
This resulted in a principal balance of $309.2 million as of June 18, 1999.
Hotel Operations
During the second quarter of 1999, the combined revenues of the
Partnership's 50 Hotels improved when compared to the same period in 1998.
However, operating profit decreased in second quarter 1999 when compared to
second quarter 1998 due to an increase in hotel property-level costs and
expenses. For a detailed discussion of hotel operations, please refer to Item 2
of the Partnership's Report on Form 10-Q for the 1999 second quarter.
During second quarter 1999, Marriott International's communication efforts
for the Courtyard by Marriott brand were focused in USA Today, radio and
television advertising. Courtyards' award winning advertising was seen on ESPN
and on the CNN Airport network.
Even though new supply is significant in some of the Partnership's markets,
the Courtyard brand continues to command premium market share. Marriott Rewards
has had a positive impact on the business and is seen as the best frequent
traveler program in the lodging industry. The brand continues to be the market
leader and outperforms both national and local competitors. The brand is
continuing to carefully monitor the introduction of new mid-priced brands
including Wingate Hotels, Hilton Garden Inns, Four Points by Sheraton, MainStay,
Candlewood, Club Hotels and Clarion. To remain competitive, the Partnership has
scheduled the remaining five hotels to be renovated in 1999. At the end of 1999,
all 50 of the Partnership's Hotels will have completed a rooms renovation which
includes the replacement of carpets, draperies, wall coverings and bedspreads.
We appreciate your continued support and invite you to visit Courtyard
Hotels as you travel throughout the United States.
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