<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
For Quarter Ended: June 30, 1997 Commission File Number: 0-16840
---------------- -------
PSH MASTER L.P.I
(Exact Name of Registrant as Specified in its Charter)
Delaware 31-1204568
(State of Organization) (IRS Employer Identification Number)
P.O. Box 18035, Columbus, OH 43218
(Address of Principal Executive Offices, including Zip Code)
(614) 227-4235
(Registrant's Telephone Number, including Area Code)
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.
X Yes No
----- -----
The number of outstanding Units of Limited Partner Interest in the Registrant,
as represented by Depository Receipts at August 14, 1997 was 3,110,000.
<PAGE> 2
PSH MASTER L.P.I
REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1997
Index
Page
Number
Part I. Financial Information
Item 1: Financial Statements:
Balance Sheets 3
Statements of Operations 5
Statements of Cash Flows 7
Notes to Financial Statements 8
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operation 11
Part II. Other Information
Items 1 through 4. 16
Item 5 - Other Information 16
Item 6 - Exhibits and Reports on Form 8-K 18
Signatures 19
2
<PAGE> 3
PSH MASTER L.P.I
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
Assets June 30, 1997 December 31, 1996
- - ------ ------------- -----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,099,956 $ 1,586,070
Accounts receivable, trade 889,900 1,095,968
Inventories 118,554 119,462
Prepaid expenses and other 479,893 401,083
Cash held in escrow 660,271 268,907
------------ ------------
Total current assets 6,248,574 3,471,490
------------ ------------
Property and equipment:
Land 3,780,000 3,780,000
Leasehold interest in land 7,440,000 7,440,000
Hotels 36,512,414 36,401,424
Furniture, fixtures and equipment 12,241,509 12,139,268
------------ ------------
Total 59,973,923 59,760,692
Less accumulated depreciation and amortization
(25,446,129) (24,367,593)
------------ ------------
Total property and equipment, net 34,527,794 35,393,099
------------ ------------
Other assets:
Replacement reserve fund 108 49,111
China, glass, linen and silver, net 781,590 781,590
Deferred financing fees, organization costs
and other, net 51,566 129,404
------------ ------------
Total other assets 833,264 960,105
------------ ------------
Total assets $ 41,609,632 $ 39,824,694
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
PSH MASTER L.P.I
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
Liabilities and Partners' Deficit June 30, 1997 December 31, 1996
- - --------------------------------- ------------- -----------------
<S> <C> <C>
Current liabilities:
Current portion of mortgage notes payable $ 45,340,207 $ 45,502,185
Accounts payable 916,408 1,542,608
Due to affiliates 53,773 43,212
Accrued expenses:
Payroll and related taxes 519,121 524,870
Real estate and other taxes 557,161 115,370
Interest 4,271 4,271
Other 259,810 172,103
------------ ------------
Total current liabilities 47,650,751 47,904,619
------------ ------------
Note payable 500,000 500,000
------------ ------------
Partners' Deficit:
General Partner (242,679) (263,067)
Limited Partners (3,110,000 units outstanding) (6,298,440) (8,316,858)
------------ ------------
Total partners' deficit (6,541,119) (8,579,925)
------------ ------------
Total liabilities and partners' deficit $ 41,609,632 $ 39,824,694
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
PSH MASTER L.P.I
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Six
Months Ended Months Ended
June 30, 1997 June 30, 1996
------------- -------------
<S> <C> <C>
Revenues:
Suites $11,830,933 $10,192,428
Other 2,975,562 2,838,735
----------- -----------
Total revenues 14,806,495 13,031,163
----------- -----------
Operating costs and expenses:
Direct operating:
Suites 2,250,250 2,074,082
Other 1,955,523 1,962,666
Other operating:
Sales, general and administrative 2,832,260 2,641,793
Energy and maintenance 1,084,879 1,003,838
Rents, taxes and other 1,044,356 1,040,944
Partnership administrative 126,937 102,021
Depreciation and amortization 1,156,374 1,104,126
----------- -----------
Total operating costs and expenses 10,450,579 9,929,470
----------- -----------
Income from operations 4,355,916 3,101,693
Interest income 41,029 36,624
Interest expense 2,358,139 2,373,856
=========== ===========
Net income $ 2,038,806 $ 764,461
=========== ===========
Net income per unit of
limited partnership interest $ 0.65 $ 0.24
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
PSH MASTER L.P.I
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter ended Quarter ended
June 30, 1997 June 30, 1996
------------- -------------
<S> <C> <C>
Revenues:
Suites $5,881,292 $5,065,283
Other 1,453,430 1,390,059
---------- ----------
Total revenues 7,334,722 6,455,342
---------- ----------
Operating costs and expenses:
Direct operating:
Suites 1,141,862 1,068,315
Other 973,412 996,481
Other operating:
Sales, general and administrative 1,410,858 1,311,534
Energy and maintenance 552,289 510,799
Rents, taxes and other 516,912 512,115
Partnership administrative 58,060 46,169
Depreciation and amortization 578,058 552,063
---------- ----------
Total operating costs and expenses 5,231,451 4,997,476
---------- ----------
Income from operations 2,103,271 1,457,866
Interest income 27,753 12,811
Interest expense 1,178,036 1,185,994
---------- ----------
Net income $ 952,988 $ 284,683
========== ==========
Net income per unit of
limited partnership interest $ 0.30 $ 0.09
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
PSH MASTER L.P.I
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Six
Months Ended Months Ended
June 30, 1997 June 30, 1996
------------- -------------
<S> <C> <C>
Cash provided (used) by operations:
Net income $ 2,038,806 $ 764,461
Changes not requiring cash:
Depreciation and amortization 1,156,374 1,104,126
Working capital changes:
(Increase) decrease in accounts receivable, trade 206,068 (120,386)
Increase in inventories,
prepaid expenses and other (77,902) (56,466)
Decrease in accounts payable and
accrued expenses (102,451) (92,227)
Increase in accrued interest payable 0 12,813
Increase in due to affiliates 10,561 8,517
----------- -----------
Cash provided by operations 3,231,456 1,620,838
----------- -----------
Investment and other transactions:
(Increase) decrease in replacement reserve fund 49,003 (201,755)
Increase in cash escrow for real estate taxes (391,364) (361,658)
Additions to property and equipment, net (213,231) (325,620)
Payments of mortgages (161,978) (146,261)
----------- -----------
Cash used by investment and other transactions (717,570) (1,035,294)
----------- -----------
Increase in cash and cash equivalents
$ 2,513,886 $ 585,544
=========== ===========
Supplemental disclosure of cash flow information--
cash paid for interest $ 2,358,140 $ 2,361,043
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
NOTES TO THE FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The accompanying financial statements of PSH Master L.P.I (the Partnership)
have been prepared on a going concern basis which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business.
The Partnership has incurred net losses since its inception and at June 30,
1997, the Partnership had a partners' deficit of $6,541,119. Pleases see Note 8
regarding the sale of the hotels on July 31, 1997.
(2) ORGANIZATION AND BUSINESS
The Partnership is a Delaware limited partnership which owns three all-suite
hotels located in Tampa, Florida; WALT DISNEY WORLD(R) Village in Lake Buena
Vista, Florida; and in the Research Triangle area near Raleigh/Durham, North
Carolina.
(3) SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
In the opinion of Management, the accompanying financial statements contain all
adjustments (all of which are normal and recurring in nature) necessary to
present fairly the financial position of the Partnership at June 30, 1997 and
December 31, 1996 and the results of its operations for the year-to-date and
quarterly periods ended June 30, 1997 and 1996. The Partnership has considered
Statement of Financial Accounting Standard Number 109 "Accounting for Income
Taxes" and, given the cumulative operating losses, has concluded that this
standard has no impact on the Partnership's financial statements.
(4) RELATED PARTIES
The General Partner, an affiliate, is generally empowered by the Partnership
Agreement to conduct, direct and exercise full control over all activities of
the Partnership.
Total fees charged by Doubletree to the Partnership for management, advertising,
reservation and accounting services were $637,710 and $560,088 during the second
quarter of 1997 and 1996, respectively. Nuho Company, a successor to PH
Management Company (a previous management company) pursuant to the bankruptcy
plan, received residual management fees of $172,996 and $151,698 during the
second quarter of 1997 and 1996, respectively. Year-to-date, Doubletree earned
$1,284,644 for its services compared to $1,126,728 in the first two quarters of
1996. Of these amounts, Nuho Company received residual fees of $349,965 compared
to $304,893 received in the first two quarters of 1996.
8
<PAGE> 9
(5) REAL ESTATE MORTGAGE NOTES
The nonrecourse notes are secured by the first mortgages on the hotels,
including the ground lease at the Disney hotel. The Partnership makes monthly
payments of principal and interest based upon a 30-year amortization schedule. A
final payment, including interest, is due on August 1, 1997. The lender will
receive appreciation interest equal to 25% of the net proceeds, as defined, at
sale of the hotels. These notes were paid in full in connection with the sale of
the hotels (see Note 8).
(6) NOTE PAYABLE
On October 26, 1994, the Partnership borrowed $500,000 from Doubletree for
capital improvements. This nonrecourse note is secured by second mortgages on
the hotels and is due at the termination of the management agreement with
Doubletree. Interest is computed at 10.25% and payment is equal to the lesser of
the monthly computed interest due or monthly available cash flow from the
Partnership. This note was paid in full in connection with the sale of the
hotels (see Note 8).
(7) PARTNERSHIP DISTRIBUTIONS AND ALLOCATIONS
Pursuant to the terms of the renegotiated debt, the Partnership is precluded
from making cash distributions to the partners until such time as the interest
capitalized by the lender has been repaid. Such repayment is not expected to
occur prior to the sale of the hotels (see Note 8).
For financial statement reporting purposes, net income is allocated 99 percent
to the Unitholders and 1 percent to the General Partner. The net income
allocated to the Unitholders for the quarters ended June 30, 1997 and 1996 were
$943,458, or $.30 per unit, and $281,836, or $.09 per unit, respectively. The
net income allocated to the Unitholders for the first six months of 1997 was
$2,018,418, or $.65 per unit, compared to $756,816, or $.24 per unit, for the
same period of the previous year.
(8) SUBSEQUENT EVENTS
On July 31, 1997 PSH Master L.P.I completed the sale of all three of its hotels
to FelCor Suites Limited Partnership, an affiliate of FelCor Suite Hotels,
Inc., for a gross sales price of $64,800,000. All buildings, improvements and
inventories were included in the sale. The sale will result in a liquidation of
PSH Master L.P. I and a distribution to unit holders of all net proceeds. The
anticipated payout will be in a range of $5.15 to $5.35 per partnership unit.
The Partnership will make a cash distribution to the partners after receipt of
the final payment on the bankruptcy claim against the General Partner,
collection of accounts receivable and payment of accounts payable. The
distribution of proceeds is expected to occur by the end of 1997. Limited
partners will receive instructions from the Partnership's transfer agent, Harris
Trust & Savings Bank, as to the procedures for redeeming their Depositary
Receipts for Units of Limited Partner Interest for cash.
9
<PAGE> 10
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
LIQUIDITY AND CAPITAL RESOURCES
As disclosed in the subsequent events footnote to the financial statements, PSH
Master L.P.I completed the sale of all three of its hotels to FelCor Suites
Limited Partnership, an affiliate of FelCor Suite Hotels, Inc. The sale took
place on July 31, 1997 and the gross selling price, which included all
buildings, improvements and inventories, was $64,800,000. The sale will result
in a liquidation of PSH Master L.P. I and a distribution to unit holders of all
net proceeds. The anticipated payout will be in a range of $5.15 to $5.35 per
partnership unit. The distribution of proceeds is expected to occur by the end
of 1997.
During the first half of 1997, the Partnership made monthly payments of
principal and interest on its first mortgage debt based upon a 30-year
amortization schedule at the contract rate of 10.25%, in accordance with the
restructured loans. Cash from operations, after funding replacement reserves,
exceeded the required debt service by $2,510,797, significantly improving the
Partnership's cash position (which increased by $2,513,886 from December 31,
1996 to June 30, 1997) and current ratio position (excluding the required
balloon payment on the existing first mortgage debt).
Hotel operations are the Partnership's primary and on-going source of cash to
pay its operating expenses, to meet its reserve requirements and to make cash
distributions to its partners. Hotel occupancy is seasonal by nature. Cash flows
track this seasonality closely due to the nature of trade receivables. Other
trade receivables include wholesale and travel agent accounts, and corporate and
group billings, the majority of which are collected within 30 days. The
Partnership earns interest income from its various operating cash accounts
including the balances held in the Replacement Reserve Funds.
In addition to its hotel operations, the Partnership will receive a payment in
1997 on its unsecured claim against the General Partner, which in 1991 filed for
protection against its creditors under Chapter 11 of the U.S. Bankruptcy Code.
An unsecured claim in the amount of $5,038,658 was filed in the bankruptcy case
on behalf of the Partnership due to the General Partner's default under the
Performance and Break-even Guaranty (the Guaranty Agreement). Total payments
received to date by the Partnership against its unsecured claim total $757,870.
The Partnership expects to receive total payments of approximately $1,675,000,
including amounts previously received. This amount includes operating profits
and sale proceeds from a hotel owned by the General Partner. Due to the
remaining variables in the Plan, however, there are no assurances as to the
actual amount to be received. The Plan also provides that PC Development Limited
Partnership will continue as the General Partner of the Partnership.
10
<PAGE> 11
The Partnership is required by its Management Agreement to maintain Replacement
Reserve Fund balances of specified amounts to facilitate operating the Hotels as
"first-class" suite accommodations. Separate Replacement Reserve Funds have been
established for replacements, substitutions and additions to furniture and
equipment and these were funded at the rate of 4% of total revenues during the
first half of 1997.
In addition, the Partnership borrowed $500,000 from Doubletree to be used for
capital improvements on October 26, 1994. Interest is computed at 10.25%,
payable monthly in arrears.
The Partnership deposits cash each month into escrow for the payment of real and
personal property taxes, as required by the lender. The monthly deposits to the
escrow account are sufficient to meet these tax obligations as they come due.
The Partnership's mortgage obligations mature on August 1, 1997, requiring a
balloon payment of approximately $45,340,200. In addition, the lender will
receive 25% of the net proceeds, as defined, upon sale of the hotels, as
appreciation interest. These notes were paid in full in connection with the sale
of the hotels (see Note 8 to the financial statements).
RESULTS OF OPERATIONS
The Tampa and Disney hotels opened in April 1986 and March 1987, respectively,
and the Durham hotel opened in December 1987. The following table summarizes
combined operating information for the hotels:
<TABLE>
<CAPTION>
Six Months Six Months
Quarter Ended Quarter Ended Ended Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Available suites 57,785 57,785 114,935 115,570
Occupancy percentage 84.35% 82.76% 82.50% 80.97%
Average daily rate $120.66 $105.91 $124.77 $108.92
Direct operating costs as a
percent of total revenues:
Suites 19.4% 21.1% 19.0% 20.4%
Other 67.0% 71.7% 65.7% 69.1%
Total 28.8% 32.0% 28.4% 31.0%
</TABLE>
11
<PAGE> 12
SIX MONTHS ENDED JUNE 30, 1997
Total revenues increased $1,775,332 or 13.6% during the first six months of
1997. Driven primarily by increases in both volume and average daily rate,
suites revenue increased $1,638,505 or 16.1%. Occupancy increased due to strong
volume increases at the Raleigh/Durham hotel. Occupancy at the Disney hotel also
increased, while volumes at Tampa declined slightly. Average daily rates
increased at each of the hotels, with the largest gains being recorded by the
Disney hotel. Food, beverage and other revenues increased $136,827 or 4.8% over
the prior year. Based upon both higher volumes and price increases, food and
beverage revenue increased $111,252 or 5.2%. Other revenue increases include
higher movie rentals and no shows income.
Direct operating costs increased $169,025 or 4.2%, in the first six months,
compared to the same period of 1996. Costs in the suites department increased
$176,168 or 8.5%. Of this amount, $116,418 resulted from increased payroll to
meet volume and service needs. Room commissions paid to travel agents and
reservation expenses, both costs that are tied to revenues, increased $75,061
and $16,885, respectively. Cost increases in the suites department were
partially offset by decreases in laundry expense of $24,479, and cable TV costs
of $5,133.
Other direct operating expenses decreased $7,143 or 0.4%. A decrease of $15,295
was achieved in the telephone department, food operating costs decreased by
$8,999, and the gift shop was eliminated resulting in a decrease of $38,109.
Additionally, swimming pool expenses of $13,204 have been reclassified to room
linen and property maintenance expenses. Offsetting these decreases were
increases of $49,935 for food and beverage labor and $18,506 in movie rental
expenses associated with higher volumes.
Sales, general and administrative expenses, up $190,467, or 7.2% reflect higher
payroll expenses of $90,472 associated with staffing additions in the sales and
administrative departments of each hotel and higher professional fees of
$14,580. Increases also occurred in revenue-driven expenses, including
management fees and credit-card commissions, which increased $84,151 and
$29,270, respectively. Offsetting these higher expenses in the six-month period
were reductions in seminar/training and travel expenses of $23,174, print and
stationery expenses of $9,417, and recruiting and relocation costs of $7,623.
Energy and maintenance costs increased $81,041 or 8.1% in the first six months.
This increase reflects higher labor expense and repairs costs of $29,818 and
$12,151, respectively. Energy costs increased $39,067 or 7.7% due to higher
usage at the Florida hotels.
Rents, taxes and other expenses increased $3,412 or 0.3% in the first half of
1997. Disney's land lease expense increased $47,475 due to revenue increases.
Disney bus transportation decreased $31,994 due to lower costs associated with a
new provider. Taxes also declined by $6,020 due to a reassessment of value at
the Florida hotels.
Partnership administrative expenses consist primarily of quarterly and annual
report costs, tax processing and transfer agent charges, and legal and audit
fees.
12
<PAGE> 13
QUARTER ENDED JUNE 30, 1997
Total revenues increased $879,380 or 13.6% in the current quarter. Suite
revenues increased 16.1% from the second quarter of 1997, based upon a 13.9%
increase in average daily rate and a 1.9% increase in occupancy. Average daily
rate increased significantly at each hotel while the volume gain at
Raleigh/Durham was partially offset by lower occupancy at the Florida hotels.
Food, beverage and other revenues increased $63,371 or 4.6% from last year.
Based upon higher volumes and price increases, food and beverage revenues
increased $26,057 or 2.5%. Other revenue increases include higher movie rental,
vending and no shows income.
Direct operating costs increased $50,478, or 2.4%, in the current quarter,
compared to the same period of 1996. Costs in the suites department increased
$73,547 or 6.9%. Of this amount, $42,494 reflects higher payroll levels, $26,751
reflects room commissions paid to travel agents and $9,354 represents higher
reservations expense associated with increased revenues.
Other direct operating expenses decreased $23,069 or 2.3%. Of this amount,
$20,977 reflects savings due to the elimination of the gift shop, $17,320 is due
to lower cost of food and beverage purchases, and $7,780 reflects swimming pool
expenses which have been expensed in the rooms and maintenance departments.
Offsetting these decreases is an increase in movie rental expenses of $11,301
associated with higher volumes. Increases in food and beverage labor and
contracted services comprise the balance of the increase in the current quarter.
Sales, general and administrative expenses, up $99,324, or 7.6%. This increase
reflects higher payroll expenses of $41,440 associated with staffing additions
at each hotel, and increases in revenue-driven management fees expense, which
increased $41,693. Increases totaling $32,795 were incurred in central
accounting services, credit card commissions, personnel relocation and
professional fees. Offsetting these higher expense levels in the current quarter
were reductions in seminars and training costs of $10,579 and a reduction in
travel expenses of $5,543. Cost control measures also helped reduce general
expense levels in the current quarter.
Energy and maintenance costs increased $41,490, or 8.1% during the quarter.
Energy costs increased $18,568 or 7.2% due to higher usage at the Disney hotel.
Increased maintenance staffing at the Florida hotels was partially offset by
lower landscaping and repair-related expenses.
Rents, taxes and other expenses increased $4,797 or 0.9%. Of this amount,
$26,034 resulted from higher land rent, driven by revenue and volume increases.
Offsetting the increase in land rent was a reduction in bus transportation costs
of $17,759 at the Disney hotel and a decrease in taxes of $3,695, primarily at
the Florida hotels.
13
<PAGE> 14
PART II. OTHER INFORMATION
ITEMS 1 THROUGH 4
Information required in Items 1 through 4 is not applicable to the Registrant
for the quarter ended June 30, 1997.
ITEM 5 - OTHER INFORMATION
On July 31, 1997, PSH Master L.P.I completed the sale of all three of its
hotels to FelCor Suites Limited Partnership, an affiliate of FelCor Suite
Hotels, Inc., one of the largest publicly-traded hotel REITs. The gross sales
price, determined through arms-length negotiations, was $64,800,000. The sale
included the hotels located in Tampa, Florida, Lake Buena Vista, Florida and
Durham, North Carolina; improvements and replacement reserve funds; and all food
and beverage, linen, china, silver, and guest supplies inventories. The hotels
will continue to be managed by DoubleTree Hotels Corporation.
The sale will result in a liquidation of PSH Master L.P.I and a distribution to
unit holders of all net proceeds. The anticipated payout will be in a range of
$5.15 to $5.35 per partnership unit. The Partnership will make a cash
distribution to the partners after receipt of the final payment on the
bankruptcy claim against the General Partner, collection of accounts receivable
and payment of accounts payable. The distribution of proceeds is expected to
occur by the end of 1997. Limited partners will receive instructions from the
Partnership's transfer agent, Harris Trust & Savings Bank, as to the procedures
for redeeming their Depositary Receipts for Units of Limited Partner Interest
for cash.
The following unaudited pro forma balance sheet as of June 30, 1997, and the pro
forma statements of income for the six month period then ended give effect to
the sale of the three hotels. The adjustments related to the pro forma balance
sheet assume the transaction was consummated at June 30, 1997. The adjustments
related to the pro forma statements of operation assume the transaction was
consummated at January 1, 1997. The unaudited pro forma financial statements
should be read in conjunction with the related notes.
14
<PAGE> 15
PSH MASTER L.P.I
PRO FORMA CONDENSED BALANCE SHEET
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
JUNE 30, 1997 ADJUSTMENTS JUNE 30, 1997
------------- ------------- -------------
<S> <C> <C> <C>
Cash and cash equivalents $ 4,099,956 $ (4,099,956) $ 0
Other current assets 2,148,618 (2,148,618) 0
------------ ------------ ---------------
Total current assets 6,248,574 (6,248,574) 0
------------ ------------ ---------------
Land and leasehold interest in land 11,220,000 (11,220,000) 0
Hotels 36,512,414 (36,512,414) 0
Furniture, fixtures and equipment 12,241,509 (12,241,509) 0
------------ ------------ ---------------
Sub-total 59,973,923 (59,973,923) 0
Depreciation and amortization (25,446,129) 25,446,129 0
------------ ------------ ---------------
Net property and equipment 34,527,794 (34,527,794) 0
------------ ------------ ---------------
Other assets 833,264 (833,264) 0
------------ ------------ ---------------
Total Assets 41,609,632 (41,609,632) 0
============ ============ ===============
Accounts payable 970,181 (970,181) 0
Accrued expenses 1,340,363 (1,340,363) 0
Current portion of mortgages 45,340,207 (45,340,207) 0
------------ ------------ ---------------
Total current liabilities 47,650,751 (47,650,751) 0
Note payable 500,000 (500,000) 0
------------ ------------ ---------------
Total Liabilities 48,150,751 (48,150,751) 0
Partners' Deficit (6,541,119) 6,541,119 0
------------ ------------ ---------------
Total Liabilities and Equity $ 41,609,632 $(41,609,632) $ 0
============ ============ ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE> 16
PSH MASTER L.P.I
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
JUNE 30, 1997 ADJUSTMENTS JUNE 30, 1997
------------- ------------- -------------
<S> <C> <C> <C>
Revenues:
Suites $11,830,933 $(11,830,933) $ 0
Other 2,975,562 (2,975,562) 0
----------- ------------ -----------
Total revenues 14,806,495 (14,806,495) 0
----------- ------------ -----------
Operating costs and expenses:
Direct operating:
Suites 2,250,250 (2,250,250) 0
Other 1,955,523 (1,955,523) 0
Other operating:
Sales, general and administrative 2,832,260 (2,832,260) 0
Energy and maintenance 1,084,879 (1,084,879) 0
Rents, taxes and other 1,044,356 (1,044,356) 0
Partnership administrative 126,937 (126,937) 0
Depreciation and amortization 1,156,374 (1,156,374) 0
----------- ------------ -----------
Total operating costs and expenses 10,450,579 (10,450,579) 0
----------- ------------ -----------
Income from operations 4,355,916 (4,355,916) 0
Interest income 41,029 (41,029) 0
Interest expense 2,358,139 (2,358,139) 0
----------- ------------ -----------
Net income $ 2,038,806 $ (2,038,806) $ 0
=========== ============ ===========
Net income per unit of
limited partnership interest $ 0.65 $ (0.65) $ 0.00
=========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE> 17
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(1) PRO FORMA ADJUSTMENTS
The pro forma information is based on the historical financial statements of PSH
Master L.P.I. The sale of the three hotels represents a sale of all of the
fixed assets and the entire business of the Partnership and will result in a
distribution of all cash to the partners. Accordingly, the pro forma adjustments
required totally eliminate all assets and liabilities of the Partnership, and,
there would have been no income or expenses to report in the first six months of
1997 had the sale taken place at the beginning of the fiscal year. These pro
forma statements are not necessarily indicative of the results that actually
would have occurred if the sale had be in effect as of and for the periods
presented.
17
<PAGE> 18
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter ended June 30, 1997. The
information required to be filed on Form 8-K, pertaining to the disposition of
all three of the Partnership's hotels on July 31, 1997, has been included in
this quarter's Form 10-Q and therefore no separate filing will be made on Form
8-K.
Exhibit 27 - Financial Data Schedule is located on page 20.
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Security Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PSH MASTER L.P.I
(Registrant)
By: PC Development Limited Partnership,
General Partner
By: PH Management Company,
General Partner
By: /s/ James V. Pickett 8/14/97
--------------------------------- -------
James V. Pickett, Chairman.. Date
By: /s/ Stephen C. Denz 8/14/97
--------------------------------- -------
Stephen C. Denz, Controller. Date
(Principal Financial Officer)
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
/s/ James V. Pickett 8/14/97
------------------------------------------------ -------
James V. Pickett, Chairman of the Board of Date
Directors and President of PH Management Company
/s/ Stephen C. Denz 8/14/97
------------------------------------------------ -------
Stephen C. Denz, Secretary and Director of Date
PH Management Company
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000813897
<NAME> PSH MASTER L.P.I.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,099,956
<SECURITIES> 0
<RECEIVABLES> 889,900
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<DEPRECIATION> 25,446,129
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<CURRENT-LIABILITIES> 47,650,751
<BONDS> 500,000
0
0
<COMMON> 0
<OTHER-SE> (6,541,119)
<TOTAL-LIABILITY-AND-EQUITY> 41,609,632
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<TOTAL-REVENUES> 14,847,524
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<INCOME-PRETAX> 2,038,806
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