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): April 30, 1999
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 0-15736 52-1468081
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(State or other jurisdiction of (Commission File (I.R.S.Employer
incorporation or organization) Number) Identification No.)
10400 Fernwood Road, Bethesda, MD 20817-1109
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(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 April 30, 1999, the General Partner sent to the Limited Partners of the
Partnership a letter that accompanied the Partnership's Annual Report on
Form 10-K. 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
99.4 Letter from the General Partner to the Limited
Partners of the Partnership that accompanied the
Partnership's Annual Report on Form 10-K for the Year
Ended December 31, 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.
COURTYARD BY MARRIOTT
LIMITED PARTNERSHIP
By: CBM ONE LLC
General Partner
April 30, 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:
99.4 Letter from the General Partner to the
Limited Partners of the Partnership
that accompanied the Partnership's
Annual Report on Form 10-K for the
Year Ended December 31, 1998.
Exhibit 99.4
TO THE LIMITED PARTNERS OF
COURTYARD BY MARRIOTT
LIMITED PARTNERSHIP
Presented for your review is the 1998 Annual Report for Courtyard by Marriott
Limited Partnership (the "Partnership"). A discussion of the Partnership's
performance and hotel operations is included in the Form 10-K, Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations which is included herein. The estimated 1999 tax information is also
included in this letter. Finally, the Partnership's Supplementary Unaudited
Information is contained in Item 13 of the Partnership's Form 10-K. As in the
past, we encourage you to review the information contained in this report.
Strategy for Liquidity
We previously reported to you that the General Partner was exploring
alternatives to provide liquidity for the Partnership and to maximize the value
of your investment including the possibility of combining the Partnership with
several others that owned similar hotels to create a publicly traded company in
the form of a real estate investment trust ("REIT"). Although, as we previously
reported, that plan proved to be impractical, we are continuing to explore other
options. While we can make no assurances as to the outcome of these efforts, the
General Partner continues to work with an investment bank that is acting as an
advisor in this regard.
At this time, we do not have any definitive offers or proposals to share with
you although we will continue to explore opportunities to provide liquidity for
the Partnership and maximize the value of your investment. If a suitable
transaction arises we will keep you apprised of such developments through both
quarterly updates and special correspondence.
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
In 1998, the Partnership distributed a total of $10,000 per limited partner
unit, $8,000 from 1998 operating results and $2,000 from 1997 operations. In
addition, the Partnership distributed $3,000 per limited partner unit from 1998
operations in April 1999. Based on current projections for 1999, the Partnership
expects the level of cash distributions to be at least equal to the level of
1998 cash distributions. However, actual distributions may be higher or lower
based on actual Hotel operating results. We expect to make interim 1999
distributions in August and November 1999 and a year-end 1999 cash distribution
in April 2000. Since inception, the Partnership has distributed $72,177 per
limited partner including $29,000 per limited partner unit from refinancing
proceeds.
Partnership Debt
During 1998, the Partnership paid approximately $7.4 million of amortization on
the loan's principal balance, leaving a principal balance of $313 million at
December 31, 1998.
Hotel Operations
The Partnership's 50 Hotels combined operating results improved in 1998 due to
the continued increase in demand in the lodging industry. In 1998, Hotel
revenues increased $11.8 million, or 6%, to $201.3 million and room revenues
increased $11.5 million, or 7%, to $182.1 million as a result of the strong
growth in average room rate. The chart below summarizes REVPAR, or revenue per
available room, for the combined Partnership Hotels for the years 1996 through
1998 and the percentage increase from the prior year:
1998 1997 1996
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REVPAR % Increase REVPAR % Increase REVPAR % Increase
$69.41 7% $64.88 7% $60.50 5%
On a combined basis, REVPAR for 1998 increased primarily due to a $6, or 7%,
increase in the combined average room rate to $87. The combined average
occupancy remained stable at approximately 80%. The increase in average room
rate was primarily due to aggressive weekday pricing combined with a strong
advertising campaign focused on leisure travelers.
During 1998, the Courtyard chain continued to focus on communication efforts in
USA Today and radio and television advertising. Courtyard's award winning
television commercials were seen on CNN, The Weather Channel, CNN Airport and
ESPN. In addition, Courtyard hotels participate in the Marriott Rewards Frequent
Travel Program which offers points to program members when they stay at a
Courtyard Hotel. The points are redeemable for free hotel rooms at most Marriott
lodging products.
The moderate priced lodging segment remains highly competitive, reflecting a
significant influx of new competition. However, Courtyard hotels continue to
command a premium share of the more competitive markets. To ensure that the
Partnership's Hotels remain competitive, a majority of the Partnership's Hotels
have completed rooms renovations during the past few years. The rooms were
renovated with new carpet, draperies, wallcoverings and bedspreads.
Estimated 1999 Tax Information
Based on current projections, taxable income estimated at $11,200 will be
allocated to each limited partner unit for the year ending December 31, 1999.
This estimate will be updated in the third quarter 1999 report.
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Conclusion
You will note that the name of the General Partner has changed to CBM One LLC.
This change was necessary as a part of the conversion of Host Marriott
Corporation, from a corporation to a real estate investment trust. CBM One LLC
is owned 1% by Host Marriott, L.P. and 99% by a wholly owned subsidiary of
Rockledge Hotel Properties, Inc. ("Rockledge"). Host Marriott Corporation is the
general partner of Host Marriott L.P. Host Marriott, L.P. receives approximately
99% of the economic interest in Rockledge by virtue of its ownership of 95% of
the non-voting common stock of Rockledge.
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 the address or telephone number listed below.
Sincerely,
CBM ONE LLC
General Partner
Robert E. Parsons, Jr.
President
April 30, 1999
Host Marriott Corporation
Partnership Investor Relations
10400 Fernwood Road, Department 908
Bethesda, MD 20817-1109
Telephone: 301/380-2070
Monday through Friday
9am to 4pm, Eastern time
For transfer or re-registration information:
GEMISYS, INC.
Transfer Department
7103 South Revere Parkway
Englewood, CO 80112
Telephone: 800/797-6812
