UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998.
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number: 33-78866
______________________
MOA HOSPITALITY, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0166914
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
______________________
701 Lee Street, Suite 1000
Des Plaines, Illinois 60016
(847) 803-1200
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
______________________
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
Number of shares of Common Stock, $.01 par value, outstanding as of
November 13, 1998: 800,000
<PAGE>
INDEX
MOA HOSPITALITY, INC. AND SUBSIDIARIES
Part I - Financial Information
Item 1. Financial Statements
Condensed consolidated balance sheets - September 30, 1998
(unaudited) and December 31, 1997 ..................................... 2
Condensed consolidated statements of operations -
Three months ended September 30, 1998 and 1997 (unaudited);
Nine months ended September 30, 1998 and 1997 (unaudited) ............. 3
Condensed consolidated statements of cash flows -
Nine months ended September 30, 1998 and 1997 (unaudited) ............. 4
Notes to condensed consolidated financial statements -
September 30, 1998 (unaudited) ........................................ 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
General ............................................................... 7
Results of Operations .................................................10
Liquidity and Capital Resources .......................................17
Part II - Other Information
Item 1. Legal Proceedings .................................................19
Item 2. Changes in Securities .............................................19
Item 3. Defaults upon Senior Securities ...................................19
Item 4. Submission of Matters to a Vote of Security Holders ...............19
Item 5. Other Information .................................................19
Item 6. Exhibits and Reports on Form 8-K ..................................19
Signatures .................................................................20
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MOA HOSPITALITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ................................... $ 27,161 $ 13,032
Accounts receivable from property operations ................ 2,870 2,241
Operating supplies and prepaid expenses ..................... 2,030 2,199
Current portion of mortgage and notes receivable ............ 194 602
------------ ------------
Total Current Assets ........................................ 32,255 18,074
Investment property:
Operating properties, net of accumulated depreciation ..... 291,262 310,992
Land held for development ................................. 2,389 2,389
------------ ------------
Total investment property ..................................... 293,651 313,381
Other Assets:
Deposits and other assets ................................... 427 6,798
Restricted cash ............................................. 1,549 1,226
Mortgage and other notes receivable, less current portion ... 10,456 6,801
Financing and other deferred costs, net of accumulated
amortization of $8,015 in 1998 and $5,605 in 1997. 14,232 16,579
------------ ------------
Total Other Assets ............................................ 26,664 31,404
------------ ------------
Total Assets $ 352,570 $ 362,859
============ ============
LIABILITIES, MINORITY INTERESTS AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable ...................................... $ 2,588 $ 2,693
Real estate taxes payable ................................... 3,406 2,450
Accrued interest payable .................................... 5,822 3,625
Other accounts payable and
accrued expenses .......................................... 8,558 4,393
Current portion of long-term debt ........................... 41,200 67,157
------------ ------------
Total Current Liabilities ................................... 61,574 80,318
Net deferred tax liability .................................. 3,415 3,351
Long-term debt, less current portion:
Mortgage and other notes payable ............................ 175,850 181,098
12% Senior Subordinated Notes, net of unamortized
discount of $2,991 in 1998 and $3,265 in 1997.............. 77,009 76,735
------------ ------------
Total Long-term debt, excluding current portion ............. 252,859 257,833
------------ ------------
Total Liabilities ........................................... 317,848 341,502
------------ ------------
Minority Interests .......................................... 1,717 1,763
Stockholders' equity:
Common stock, $.01 par value, 1,500,000 shares
authorized; 800,000 shares issued and outstanding ....... 8 8
Additional paid-in capital ................................ 15,294 15,294
Retained earnings ......................................... 17,703 4,292
------------ ------------
Total stockholders' equity .................................. 33,005 19,594
------------ ------------
$ 352,570 $ 362,859
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
MOA HOSPITALITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
---------------------- ----------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Motel operating revenues .................. $ 35,272 $ 37,139 $ 92,353 $ 95,725
Other revenues ............................ 357 139 810 614
----------- ----------- ----------- -----------
Total revenues .............................. 35,629 37,278 93,163 96,339
Costs and expenses:
Motel operating expenses .................. 16,152 16,376 46,769 47,417
Marketing and royalty fees ................ 2,132 2,631 5,942 6,928
General and administrative ................ 2,642 1,817 7,516 5,609
Restructuring Costs ....................... 0 0 0 750
Depreciation and amortization ............. 4,194 3,731 12,280 11,058
----------- ----------- ----------- -----------
Total direct expenses ....................... 25,120 24,555 72,507 71,762
----------- ----------- ----------- -----------
Net operating revenue ....................... 10,509 12,723 20,656 24,577
Interest expense ............................ 7,705 7,674 23,120 23,332
----------- ----------- ----------- -----------
Net income (loss) from operations ........... 2,804 5,049 (2,464) 1,245
Gain on sale of properties .................. 9,658 0 24,532 669
Minority interests of others in
net income from operations ................ (72) (111) (112) (180)
----------- ----------- ----------- -----------
Net income (loss) before income taxes ....... 12,390 4,938 21,956 1,734
Income tax expense (credit) ................. 4,822 1,933 8,545 690
----------- ----------- ----------- -----------
Net income (loss) ........................... $ 7,568 $ 3,005 $ 13,411 $ 1,044
=========== =========== =========== ===========
Net income (loss) per common share .......... $ 9.46 $ 3.76 $ 16.76 $ 1.31
=========== =========== =========== ===========
Weighted average number of
common shares outstanding ................. 800,000 800,000 800,000 800,000
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
MOA HOSPITALITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION> Nine Months Ended
September 30
----------------------
1998 1997
---------- ----------
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net income (loss) ........................................................... $ 13,411 $ 1,044
Adjustments to reconcile net income (loss) to cash provided by
operating activities:
Depreciation, amortization and accretion of
discount on notes ..................................................... 12,555 11,300
Minority interests of others in net income (loss)
from operations ....................................................... 112 180
Deferred income taxes ................................................... 64 129
Net gain on sale of properties .......................................... (24,532) (669)
Change in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable ................................................. (624) (868)
Operating supplies, prepaid expenses,
deposits and other assets ......................................... 6,988 6,472
Increase (decrease) in liabilities:
Accounts payable and accrued expenses ............................. 5,044 2,025
Accrued interest payable .......................................... 2,197 2,379
---------- ----------
Net cash provided by (used in) operating activities ........................... 15,215 21,992
Cash flows provided by (used in) investing activities:
Acquisition and development of investment properties ........................ (13,107) (11,116)
Refurbishment of investment properties ...................................... (5,631) (4,413)
Net proceeds from sale of investment properties ............................. 47,436 340
Cash restricted for refurbishment of properties ............................. (322) 943
Collections on mortgage and other notes receivable .......................... 2,152 736
---------- ----------
Net cash provided by (used in) investing activities ........................... 30,528 (13,510)
Cash flows provided by (used in) financing activities:
Proceeds from secured notes payable ......................................... 5,942 2,000
Repayment of secured notes payable .......................................... (37,148) (6,871)
Distributions to minority interests ......................................... (157) (236)
Deferred financing costs .................................................... (251) (297)
---------- ----------
Net cash provided by (used in) financing activities ........................... (31,614) (5,404)
---------- ----------
Net increase (decrease) in cash and cash equivalents .......................... 14,129 3,078
Cash and cash equivalents at beginning of period .............................. 13,032 12,248
---------- ----------
Cash and cash equivalents at end of period .................................... $ 27,161 $ 15,326
========== ==========
Supplementary disclosure of cash flow information:
Cash paid during the period for interest .................................... $ 20,648 $ 20,953
========== ==========
Cash paid (net of refunds received) during the period
for income taxes .......................................................... $ 96 $ 252
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
MOA HOSPITALITY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1998
1. Basis of Presentation
The accompanying unaudited interim condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting only of normal recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for
the three-month and nine-month periods ended September 30, 1998 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in MOA Hospitality, Inc.
and Subsidiaries' Annual Report on Form 10-K for the year ended December 31,
1997. The terms "MOA" and the "Company" mean MOA Hospitality, Inc. and its
subsidiaries.
2. Maturing Debt Obligations
At September 30 ,1998, the Company had $41,200,000 of debt obligations
maturing within one year. Included in the $41,200,000 is $37,818,000 of debt
obligations maturing prior to December 31, 1998. Two banks have agreed to
refinance on a long-term basis $3,590,000 of the $37,818,000 with interest
rate and principal amortization terms similar to the existing debt that they
hold. In addition, upon the sale of two properties in November 1998, the
Company reduced the otherwise maturing principal balances by $4,584,000.
Accordingly, as of November 13, 1998 the Company has $29,644,000 of debt
obligations that matures prior to year end. The Company has been actively
pursuing the refinance of these maturing debt obligations; however, as of
November 13, 1998, the Company has not been able to obtained any firm
commitments for such refinancing. Given the current state of the capital
markets, there is no assurance that the Company will be able to obtain
refinancing prior to the maturity of these debt obligations. The condensed
consolidated financial statements contain no adjustment relating to the
outcome of the above described uncertainty.
3. Acquisitions and Divestitures
In March 1998, the Company sold one lodging facility to an unrelated
party, for approximately $1.4 million in cash. The Company realized a pre-
tax gain of approximately $0.5 million.
In May 1998, the Company sold one lodging facility to an unrelated party,
for approximately $20 million in cash. The Company realized a pre-tax gain
of approximately $12.7 million. The Company paid down approximately $12.4
million of first mortgage debt in conjunction with this transaction.
In June 1998, the Company sold land to an unrelated party, for
approximately $3.0 million in cash. The Company realized a pre-tax gain of
approximately $1.7 million.
<PAGE>
MOA HOSPITALITY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
In June 1998, the Company borrowed approximately $4.8 million under its
$150 million secured loan facility with Credit Suisse First Boston in
conjunction with the acquisition of three properties for $8.5 million. The
three properties were purchased from an affiliate of the Company that had
built the properties for the Company.
In July 1998, the Company sold one lodging facility to an unrelated
party, for approximately $4.0 million consisting of $1.0 million in cash and a
$3 million first mortgage note. The Company realized a pre-tax gain of
approximately $0.5 million. The Company paid down approximately $2.5 million
of the first mortgage debt in conjunction with this transaction.
In August 1998, the Company sold one lodging facility to an unrelated
party, for approximately $2.1 million in cash. The Company realized a pre-tax
loss of approximately $.3 million. The Company paid down approximately $2.2
million of the first mortgage debt in conjunction with this transaction.
In September 1998, the Company sold three lodging facilities to unrelated
parties in three separate transactions for approximately $24.9 million
consisting of approximately $22.5 million of cash and two separate first
mortgage notes aggregating approximately $2.4 million. The Company realized a
net pre-tax gain of approximately $8.8 million on these transactions and paid
down approximately $11.6 million of first mortage debt.
In October 1998, the Company borrowed approximately $3.1 million under
its $150 million secured loan facility with Credit Suisse First Boston in
conjunction with the acquisition of two properties for approximately $6.1
million. The Company had assumed management control of one property in May
1998 and the other property in September 1998. The properties were purchased
from an affiliate of the Company that had built the properties for the
Company.
In November 1998, the Company sold two lodging facilities to an unrelated
party for approximately $5.0 million in cash. The Company realized a pre-tax
gain of approximately $.9 million. The Company paid down approximately $4.6
million of first mortgage debt in conjunction with this transaction. In
November, the Company leased one of its lodging facilities to an unrelated
party. The lease provided for a $150,000 security deposit, an annual base
rent of approximately $157,000 and provided the tenant with option to purchase
the property for $1.8 million between November 2003 and July 2004. The lease
expires October 31, 2004. The Company also has entered into an agreement to
sell one of its lodging facility for $3.7 million consisting of cash in the
approximate amount of $.8 million and a first mortgage note in the approximate
amount of $2.9 million. The Company has received a $.3 million non-refundable
deposit to be applied toward the purchase price. The transaction is expected
to close in November and result in an approximate gain of $.4 million.
During the third quarter, the Company recognized a $.6 million gain on
the sale of an investment.
4. Income Taxes
Income tax expense differs from the amounts computed by applying the U.S.
federal income tax rate of 35% to income before income taxes principally as a
result of state income taxes.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CERTAIN STATEMENTS UNDER THE CAPTION "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS," CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995 AND, AS SUCH, SPEAK ONLY AS OF THE DATE MADE. SUCH FORWARD-LOOKING
STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES AND OTHER FACTORS
WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY
TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH
FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: THE COMPANY'S ABILITY TO OBTAIN
FINANCING, COMPETITION, INTEREST RATE FLUCTUATIONS, OR GENERAL BUSINESS AND
ECONOMIC CONDITIONS.
THIS DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE INTERIM CONDENSED
CONSOLIDATED HISTORICAL FINANCIAL STATEMENTS OF THE COMPANY AND THE NOTES
THERETO INCLUDED ELSEWHERE HEREIN. THE SUPPLEMENTAL HISTORICAL OPERATING
RESULTS PRESENTED BELOW FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER
30, 1998 AND 1997 HAVE BEEN PREPARED ON THE SAME BASIS AS THE INTERIM
CONDENSED CONSOLIDATED HISTORICAL FINANCIAL STATEMENTS AND, IN THE OPINION OF
THE COMPANY, INCLUDE ALL ADJUSTMENTS (CONSISTING ONLY OF NORMAL RECURRING
ADJUSTMENTS) NECESSARY TO PRESENT FAIRLY THE INFORMATION SET FORTH THEREIN.
General
MOA operates principally in the economy, limited-service segment of
the lodging industry. As a result, its average room rates tend to be lower
than the average room rates of full service lodging facilities and the overall
industry average. However, due to the limited nature of the public space and
ancillary services provided by economy limited service motels, the Company's
expenses tend to be lower than those of full service lodging facilities and
the overall industry average. The profitability of the lodging industry in
general is significantly dependent upon room rental rates and occupancy rates.
Due to the fixed nature of a relatively high portion of the Company's
expenses, changes in either room rates or occupancy rates can result in
significant changes in the operating profit of the Company's motels.
Between January 1, 1997 and September 30, 1998, the Company has acquired or
assumed management control pending acquisition and sold a number of motels in
various transactions summarized as follows:
Number of
Date Transaction Rooms
----- ----------- -----------
January 1997 Sold a motel located in (130)
Kissimmee, FL.
February 1997 Assumed management control 48
of a motel located in
Greensboro, GA which was built
by an affiliate for the Company
and acquired in October 1997.
<PAGE>
Number of
Date Transaction Rooms
----- ----------- -----------
May 1997 Assumed management control 61
of a motel located in
Wilson, NC which was built
by an affiliate for the Company
and acquired in October 1997.
September 1997 Assumed management control 117
of two motels located in
Columbia, SC and Milford, MA
which were built by an
affiliate for the Company
and acquired in October 1997.
December 1997 Sold a motel located in (48)
Cambridge, OH.
Purchased a motel located in 53
East Syracuse, NY which was built
by an affiliate for the Company.
March 1998 Sold a motel located in (49)
South Hill, VA.
Assumed management control 54
of a motel located in Mineral
Wells, WV which was built by an
affiliate for the Company and
acquired in June 1998. The
Company has leased the property
to a third party tenant.
May 1998 Sold a motel located in (168)
Santa Clara, CA. Sold adjacent
vacant land in June 1998.
Assumed management control 66
of a motel located in Mishawaka,
IN which was built by an affiliate
for the Company.
<PAGE>
Number of
Date Transaction Rooms
----- ----------- -----------
June 1998 Assumed management control 131
of two motels located in Lake
City, FL and Stafford, TX
which were built by an affiliate
for the Company and acquired in
June 1998. The Company has
leased the properties to third
party tenants.
July 1998 Sold a motel located in (122)
Detroit/Novi, MI.
August 1998 Sold a motel located in (128)
Louisville, KY.
September 1998 Sold three motels located in (280)
Santa Monica, CA; Greensboro, GA;
and, Birmingham/Pelham, AL.
Assumed management control of a 60
motel located in Athens, GA that
was built by an affiliate for the
Company and acquired in October,
1998. The Company has leased the
property to a third party tenant.
------
(335)
======
In the aggregate, the Company received $29.7 million in cash
(inclusive of $48.0 million of net proceeds from sales of properties) in
conjunction with the above listed transactions. Cash required for the above
described acquisitions was funded from internal sources and $12.5 million in
borrowings.
The above listed acquisitions have been accounted for under the
purchase method of accounting and therefore results from operations have been
included only since the earlier of the date of acquisition or date the Company
assumed management control and was at financial risk.
<PAGE>
Three Months Ended September 30, 1998 Compared to the Three Months Ended
September 30, 1997
The following chart presents certain historical operating results and
statistics discussed herein and is being provided as a supplement to the
condensed consolidated financial statements presented elsewhere herein.
<TABLE>
<CAPTION>
Supplemental Operating Results and Statistics
----------------------------------------------------------
(unaudited)
Three Months Ended September 30
----------------------------------------------------------
Motels Owned Acquisitions/
Both Periods Divestitures Consolidated
-------------------- ----------------- -----------------
1998 1997 1998 1997 1998 1997
---------- --------- -------- -------- -------- --------
(dollars in thousands, except Other data)
<S> <C> <C> <C> <C> <C> <C>
Motel operations:
Motel operating revenues:
Room revenues ...........................$ 31,092 $ 31,782 $ 2,272 $ 3,438 $33,364 $35,220
Ancillary motel revenues ................ 1,565 1,418 343 501 1,908 1,919
---------- --------- -------- -------- -------- --------
Total motel operating revenues......... 32,657 33,200 2,615 3,939 35,272 37,139
Motel costs and expenses:
Motel operating expenses ................ 14,522 14,399 1,630 1,977 16,152 16,376
Marketing and royalty fees .............. 2,001 2,413 131 218 2,132 2,631
Depreciation and amortization ........... 3,343 3,246 308 279 3,651 3,525
---------- --------- -------- -------- -------- --------
Total motel direct expenses ........... 19,866 20,058 2,069 2,474 21,935 22,532
---------- --------- -------- -------- -------- --------
$ 12,791 $ 13,142 $ 546 $ 1,465 13,337 14,607
========== ========= ======== ========
Corporate operations:
Other revenues ............................ 357 139
General and administrative expenses:
Management operations ................... 1,462 1,042
Construction/Acquisition and
Divestiture .......................... 221 190
Other general and administrative......... 959 585
-------- --------
Total general and administrative expenses . 2,642 1,817
Depreciation and amortization ............. 543 206
-------- --------
(2,828) (1,884)
-------- --------
Net operating income ........................ $10,509 $12,723
======== ========
Other data:
Number of motels at period end (5)......... 128 128 4 10 132 138
Number of rooms at period end (5) ......... 10,490 10,490 236 912 10,726 11,402
Occupancy percentage (5) .................. 69.64% 71.03% 70.92% 73.18% 69.71% 71.18%
ADR (1)(5) ................................ $ 46.26 $ 46.28 $ 47.51 $ 64.42 $ 46.92 $ 47.59
REVPAR (2)(5) ............................. $ 33.84 $ 34.34 $ 40.52 $ 54.01 $ 34.58 $ 35.72
Net operating income margin (3) ........... 29.50% 34.13%
Net motel revenue margin (4)(5) ........... 51.89% 51.56% 37.59% 50.73% 50.92% 51.48%
</TABLE>
[FN]
(1) ADR represents room revenues divided by the total number of rooms
occupied.
(2) REVPAR represents total motel operating revenues divided by the total
number of rooms available.
(3) Net operating income margin represents net operating income divided by
total motel operating revenues plus other revenues.
(4) Net motel revenue margin represents total motel operating revenues less
motel operating expenses and marketing and royalty fees, divided by motel
room revenues.
(5) At September 30, 1998 and for the three months then ended, excludes amounts
related to four motels which are leased to third party tenants.
<PAGE>
Total revenues consist principally of motel operating revenues. Motel
operating revenues are derived from room rentals and ancillary motel revenues
such as food and beverage service, long distance telephone calls, fax machine
use and from vending machines. Other revenues include interest income,
distributions on partnership interests in excess of the Company's basis in
such partnerships and other miscellaneous income. Total revenues decreased to
$35,629,000 for the three months ended September 30, 1998 from $37,278,000 for
the three months ended September 30, 1997, a decrease of $1,649,000 or 4.4%.
Motel revenues decreased to $35,272,000 for the three months ended
September 30, 1998 from $37,139,000 for the three months ended September 30,
1997, a decrease of $1,867,000 or 5.0%. The motel revenues for motels owned
during both periods decreased approximately $543,000 or 1.6%. The decrease in
motel revenues for motels owned during both periods was attributable
principally to a decrease in the occupancy percentage. The occupancy
percentage decreased from 71.03% for the three months ended September 30, 1997
to 69.64% for the three months ended September 30, 1998. Management
attributes the decline in occupancy principally to the significant increase in
the supply of motels rooms in the markets in which the Company competes. The
average daily rate ("ADR") for the motels owned during both periods decreased
slightly to $46.26 for the three months ended September 30, 1998 from $46.28
for the three months ended September 30, 1997. REVPAR for motels owned during
both periods decreased to $33.84 for the three months ended September 30, 1998
from $34.34 for the three months ended September 30, 1997, a decrease of $0.50
or 1.5%. Motel revenues for motels acquired and divested since January 1,
1997 accounted for $1,324,000 of the overall $1,867,000 decrease in motel
revenues. The acquired and divested motels had an occupancy percentage of
70.92%, an ADR of $47.51 and REVPAR of $40.52 for the three months ended
September 30, 1998.
Motel operating expenses include payroll and related costs, utilities,
repairs and maintenance, property taxes, insurance, linens and other operating
supplies. Motel operating expenses decreased to $16,152,000 for the three
months ended September 30, 1998 from $16,376,000 for the three months ended
September 30, 1997, a net decrease of $224,000 or 1.4%. The cost of operating
motels owned during both periods increased to $14,522,000 for the three months
ended September 30, 1998 from $14,399,000 for the three months ended September
30, 1997, an increase of $123,000 or 0.9%. Increases in labor costs which
were mitigated to some extent by a decline in certain other operating costs,
were responsible for the overall increase in operating expenses. Management
attributes the increase in labor costs to be a result of the overall tight
labor markets as indicated by the historically low level of unemployment and
an increase in the minimum wage instituted in the prior year. Motel operating
expenses for motels acquired and divested since January 1, 1997 decreased to
$1,630,000 for the three months ended September 30, 1998 from $1,977,000 for
the three months ended September 30, 1997. Motel operating expenses as a
percentage of motel revenues increased to 45.8% for the three months ended
September 30, 1998 from 44.1% for the three months ended September 30, 1997.
Motel operating expenses as a percentage of motel revenues for the motels
owned in both periods increased to 44.5% for the three months ended September
30, 1998 from 43.4% for the three months ended September 30, 1997. Motel
operating expenses as a percentage of motel revenues for the acquired and
divested motels was 62.3% for the three months ended September 30, 1998.
<PAGE>
Marketing and royalty fees include media advertising, billboard rental
expense, advertising fund contributions and royalty charges paid to
franchisors and other related marketing expenses. Marketing and royalty fees
decreased to $2,132,000 for the three months ended September 30, 1998 from
$2,631,000 for the three months ended September 30, 1997, a decrease of
$499,000 or 19.0%. The marketing and royalty fees for motels owned during
both periods decreased to $2,001,000 for the three months ended September 30,
1998 from $2,413,000 for the three months ended September 30, 1997, a decrease
of $412,000 or 17.1%. For the motels owned during both periods, marketing and
royalty fees as a percentage of room revenues decreased to 6.4% for the three
months ended September 30, 1998 from 7.6% for the three months ended September
30, 1997. The decrease in marketing and royalty fees is attributable to a
reduction in franchise fees due to the decline in room revenues on which most
such fees are based and a reduction in rates for certain contractual franchise
fees. In addition, during the period from February 1998 through May 1998 the
Company disaffiliated its Shoney's Inns from the ShoLodge Franchise System and
ceased the payments of franchise fees at such time. On an annual basis, the
Company historically paid approximately $650,000 of franchise fees on its
fourteen Shoney's Inns. Marketing and royalty fees for motels acquired and
divested since January 1, 1997 decreased to $131,000 for the three months
ended September 30, 1998 from $218,000 for the three months ended September
30, 1997.
Corporate general and administrative expenses are segregated by the
Company into three separate areas: Management Company Operations,
Construction/Acquisition and Divestiture Division and Other General and
Administrative. Included in the Management Company Operations, which is the
division responsible for the day-to-day motel operations, are the costs
associated with training, marketing, purchasing, administrative support,
property related legal and accounting costs. The major components of these
costs are salaries, wages and related expenses, travel, rent and other
administrative expenses. The general and administrative expenses for the
Management Operations increased $420,000 to $1,462,000 for the three months
ended September 30, 1998 from $1,042,000 for the three months ended September
30, 1997, an increase of 40.3%. The increase is principally due to costs
incurred with respect to the installation and the implementation of the
Company's new primary financial accounting system. The general and
administrative expenses associated with Construction/Acquisition and
Divestiture Division increased $31,000 from $190,000 for the three months
ended September 30, 1997 to $221,000 for the three months ended September 30,
1998. The increase is a result of an increase in the divestiture activities
of the Company partially offset by a decline in development activities of the
Company. Other General and Administrative expenses increased $374,000 to
$959,000 for the three months ended September 30, 1998 from $585,000 for the
three months ended September 30, 1997. The increase is principally due to
legal costs incurred in connection with a lawsuit that the Company initiated
against Shoney's Franchise Systems, Inc., the franchiser of the former
Shoney's Inn franchises operated by the Company. As a percentage of total
motel operating revenues, Management Operations general and administrative
expenses was 4.1% for the three months ended Septembe 30, 1998 and 2.8%
for the three months ended September 30, 1997.
Depreciation and amortization increased to $4,194,000 for the three
months ended September 30, 1998 from $3,731,000 for the three months ended
September 30, 1997, a net increase of $463,000 or 12.4%. Approximately
$337,000 of the net increase in depreciation and amortization is attributable
to the corporate operations resulting from the amortization of deferred costs.
Net operating income decreased to $10,509,000 for the three months
ended September 30, 1998 from $12,723,000 for the three months ended September
30, 1997, a decrease of $2,214,000 or 17.4%. The decrease in net operating
income included a decrease of $1,144,000 in net motel revenues (motel revenues
less motel operating expenses and marketing and royalty fees) an increase in
corporate general and administrative expenses of $825,000 and an increase in
depreciation and amortization of $463,000. This decrease was partially
mitigated by an increase in other revenues of $218,000. Net operating income
as a percent of total revenues was 29.5% for the three months ended September
30, 1998 as compared to 34.1% for the three months ended September 30, 1997.
<PAGE>
Interest expense increased to $7,705,000 for the three months ended
September 30, 1998 from $7,674,000 for the three months ended September 30,
1997, an increase of $31,000.
Gain on sale of properties amounted to $9,658,000 on a pre-tax basis
for the three months ended September 30, 1998. The gain consisted of
$9,058,000 from the sale of five lodging properties and a gain of $600,000 on
the sale of an investment during the third quarter of 1998.
Net income increased to $7,568,000 for the three months ended
September 30, 1998 from $3,005,000 for the three months ended September 30,
1997. The increase in net income was driven by the gains realized on the sale
of properties which more than offset the decline in operating income.
<PAGE>
Nine Months Ended September 30, 1998 Compared to the Nine Months Ended
September 30, 1997
The following chart presents certain historical operating results and
statistics discussed herein and is being provided as a supplement to the
consolidated financial statements presented elsewhere herein.
<TABLE>
<CAPTION>
Supplemental Operating Results and Statistics
----------------------------------------------------------
(unaudited)
Nine Months Ended September 30
----------------------------------------------------------
Motels Owned Acquisitions/
Both Periods Divestitures Consolidated
------------------ ------------------ ------------------
1998 1997 1998 1997 1998 1997
-------- -------- -------- -------- -------- --------
(dollars in thousands, except Other data)
<S> <C> <C> <C> <C> <C> <C>
Motel operations:
Motel operating revenues:
Room revenues ........................... $ 77,973 $ 80,820 $ 8,629 $ 9,404 $ 86,602 $ 90,224
Ancillary motel revenues ................ 4,434 4,085 1,317 1,416 5,751 5,501
-------- -------- -------- -------- -------- --------
Total motel operating revenues ........ 82,407 84,905 9,946 10,820 92,353 95,725
Motel costs and expenses:
Motel operating expenses ................ 41,111 41,417 5,658 6,000 46,769 47,417
Marketing and royalty fees .............. 5,399 6,305 543 623 5,942 6,928
Depreciation and amortization ........... 10,047 9,671 730 847 10,777 10,518
-------- -------- -------- -------- -------- --------
Total motel direct expenses ........... 56,557 57,393 6,931 7,470 63,488 64,863
-------- -------- -------- -------- -------- --------
$ 25,850 $ 27,512 $ 3,015 $ 3,350 28,865 30,862
======== ======== ======== ========
Corporate operations:
Other revenues ............................ 810 614
General and administrative expenses:
Management operations ................... 4,011 3,605
Construction/Acquisition and
Divestiture .......................... 817 659
Other general and administrative ........ 2,688 1,345
-------- --------
Total general and administrative expenses . 7,516 5,609
Restructuring costs ....................... 0 750
Depreciation and amortization ............. 1,503 540
-------- --------
(8,209) (6,285)
-------- --------
Net operating income ........................ $ 20,656 $ 24,577
======== ========
Other data:
Number of motels at period end (5) ........ 127 127 5 11 132 138
Number of rooms at period end (5) ......... 10,429 10,429 297 973 10,726 11,402
Occupancy percentage (5) .................. 63.47% 66.39% 67.44% 70.49% 63.75% 66.65%
ADR (1) (5) ............................... $ 43.16 $ 42.66 $ 58.34 $ 61.11 $ 44.31 $ 44.01
REVPAR (2) (5) ............................ $ 28.95 $ 29.75 $ 45.35 $ 49.56 $ 30.12 $ 31.12
Net operating income margin (3) ........... 22.17% 25.51%
Net motel revenue margin (4) (5) .......... 46.04% 46.01% 43.40% 44.63% 45.77% 45.86%
</TABLE>
[FN]
(1) ADR represents room revenues divided by the total number of rooms
occupied.
(2) REVPAR represents total motel operating revenues divided by the total
number of rooms available.
(3) Net operating income margin represents net operating income divided by
total motel operating revenues plus other revenues.
(4) Net motel revenue margin represents total motel operating revenues less
motel operating expenses and marketing and royalty fees, divided by motel
room revenues.
(5) At September 30, 1998 and for the nine months then ended, excludes amounts
related to four motels which are leased to third party tenants.
<PAGE>
Total revenues decreased $3,176,000 to $93,163,000 for the nine months
ended September 30, 1998 from $96,339,000 for the nine months ended September
30, 1997 or 3.3%.
Motel revenues decreased to $92,353,000 for the nine months ended
September 30, 1998 from $95,725,000 for the nine months ended September 30,
1997, a decrease of $3,372,000 or 3.5%. The motel revenues for motels owned
during both periods decreased approximately $2,498,000 or 2.9% and the motel
revenues for acquired and divested motels, since January 1, 1997 declined
approximately $874,000. The decrease in motel revenues for motels owned
during both periods was attributable principally to a decrease in the
occupancy percentage. The occupancy percentage decreased from 66.39% for the
nine months ended September 30, 1997 to 63.47% for the nine months ended
September 30, 1998. Management attributes the decline in occupancy
principally to two factors: i) a significant increase in the supply of
motels rooms in the markets in which the Company competes and ii) the
negative impact of the much publicized weather effect of El Nino during
the first part of 1998. The ADR for the motels owned during both periods
increased to $43.16 for the nine months ended September 30, 1998 from $42.66
for the nine months ended September 30, 1997, an increase of $0.50 or 1.2%.
REVPAR for motels owned during both periods decreased to $28.95 for the nine
months ended Sepember 30, 1998 from $29.75 for the nine months ended
September 30, 1997, a decrease of $0.80 or 2.7%. The acquired and divested
motels had an occupancy percentage of 67.44%, an ADR of $58.34 and REVPAR
of $45.35 for the period which they were owned by the Company in 1998.
Motel operating expenses include payroll and related costs, utilities,
repairs and maintenance, property taxes, insurance, linens and other operating
supplies. Motel operating expenses decreased to $46,769,000 for the nine
months ended September 30, 1998 from $47,417,000 for the nine months ended
September 30, 1997, a net decrease of $648,000 or 1.4%. The cost of operating
motels owned during both periods decreased to $41,111,000 for the nine months
ended September 30, 1998 from $41,417,000 for the nine months ended September
30, 1997, a decrease of $306,000 or .7%. Motel operating expenses for motels
acquired and divested since January 1, 1997 decreased to $5,658,000 for the
nine months ended September 30, 1998 from $6,000,000 for the nine months ended
September 30, 1997. Motel operating expenses as a percentage of motel
revenues increased to 50.6% for the nine months ended September 30, 1998 from
49.5% for the nine months ended September 30, 1997. Motel operating expenses
as a percentage of motel revenues for the motels owned in both periods
increased to 49.9% for the nine months ended September 30, 1998 from 48.8% for
the nine months ended September 30, 1997. Motel operating expenses as a
percentage of motel revenues for the acquired and divested motels was 56.9%
for the nine months ended September 30, 1998.
Marketing and royalty fees include media advertising, billboard rental
expense, advertising fund contributions and royalty charges paid to
franchisors and other related marketing expenses. Marketing and royalty fees
decreased to $5,942,000 for the nine months ended September 30, 1998 from
$6,928,000 for the nine months ended September 30, 1997, a decrease of
$986,000 or 14.2%. The marketing and royalty fees for motels owned during
both periods decreased to $5,399,000 for the nine months ended September 30,
1998 from $6,305,000 for the nine months ended September 30, 1997, a decrease
of $906,000 or 14.4%. For the motels owned during both periods, marketing and
royalty fees as a percentage of room revenues decreased to 6.9% for the nine
months ended September 30, 1998 from 7.8% for the nine months ended September
30, 1997. The decrease in marketing and royalty fees is attributable to a
reduction in franchise fees due to the decline in room revenues on which most
such fees are based and a reduction in rates for certain contractual franchise
fees. In addition, during the period from February 1998 through May 1998 the
Company disaffiliated its Shoney's Inns from the ShoLodge Franchise System and
ceased the payments of franchise fees at such time. On an annual basis, the
Company historically paid approximately $650,000 of franchise fees on its
fourteen Shoney's Inns. Marketing and royalty fees for motels acquired and
divested since January 1, 1997 decreased to $543,000 for the nine months ended
September 30, 1998 from $623,000 for the nine months ended June 30, 1997.
<PAGE>
Corporate general and administrative expenses are segregated by the
Company into three separate areas: Management Company Operations,
Construction/Acquisition and Divestiture Division and Other General and
Administrative. Included in the Management Company Operations, which is the
division responsible for the motel operations, are the costs associated with
training, marketing, purchasing, administrative support, property related
legal and accounting costs. The major components of these costs are salaries,
wages and related expenses, travel, rent and other administrative expenses.
The general and administrative expenses for the Management Operations
increased $406,000 to $4,011,000 for the nine months ended September 30, 1998
from $3,605,000 for the nine months ended September 30, 1997, an increase of
11.3%. The increase is principally due to the costs incurred with respect to
the installation and implementation of the Company's new primary financial
accounting system. The general and administrative expenses associated with
the Construction/Acquisition and Divestiture Division increased $158,000
from $659,000 for the nine months ended September 30, 1997 to $817,000 for
the nine months ended September 30, 1998. Other General and Administrative
expenses increased $1,343,000 to $2,688,000 for the nine months ended
September 30, 1998 from $1,345,000 for the nine months ended September
30, 1997. The increase is principally due to legal costs incurred in
connection with a lawsuit that the Company initiated against ShoLodge
Franchise Systems, Inc., the franchiser of the Shoney's Inn franchises
operated by the Company. As a percentage of total motel operating revenues,
Management Operations general and administrative expenses was 4.3% for the
nine months ended September 30, 1998 and 3.8% for the nine months ended
September 30, 1997.
Restructuring costs in the amount of $750,000 were recorded in 1997 as
a provision for the reorganization of the Company's management structure.
This reorganization included the implementation of a decentralized
organizational structure whereby many of the property management support
functions previously based out of the corporate office were moved to various
regional offices which are located throughout the country. The provision for
restructuring costs covered the associated relocation and severance costs.
Depreciation and amortization increased to $12,280,000 for the nine
months ended September 30, 1998 from $11,058,000 for the nine months ended
September 30, 1997, a net increase of $1,222,000 or 11.1%. Approximately
$963,000 of the net increase in depreciation and amortization is attributable
to the corporate operations resulting from the amortization of deferred costs.
Net operating income decreased to $20,656,000 for the nine months
ended September 30, 1998 from $24,577,000 for the nine months ended September
30, 1997, a decrease of $3,921,000 or 16.0%. The decrease in net operating
income included a decrease of $1,738,000 in net motel revenues (motel revenues
less motel operating expenses and marketing and royalty fees) an increase in
corporate general and administrative expenses of $1,907,000 and an increase in
depreciation and amortization of $1,222,000; partially offset by an increase
of other revenues in the amount of $196,000 and the $750,000 restructuring
provision recorded in 1997. Of the $1,738,000 decrease in net motel revenues,
$1,286,000 resulted from the motels owned during both periods or a decrease of
3.5%. Net operating income as a percent of total revenues was 22.4% for the
nine months ended September 30, 1998 as compared to 25.7% for the nine months
ended September 30, 1997.
<PAGE>
Interest expense decreased to $23,120,000 for the nine months ended
September 30, 1998 from $23,332,000 for the nine months ended September 30,
1997, a decrease of $212,000.
Gain on sale of properties amounted to $24,532,000 for the nine months
ended September 30, 1998 compared to $669,000 for the respective period in
1997. Seven motels, a parcel of vacant land and an investment were sold in
1998 as compared to one property in the respective period for 1997.
Net income increased to $13,411,000 for the nine months ended
September 30, 1998 from $1,044,000 for the nine months ended September 30,
1997. The increase in net income is due to the sale of properties which more
than offset the decline in operating income.
Liquidity and Capital Resources
The Company's primary uses of its capital resources include debt service,
capital expenditures (primarily for motel refurbishment) and working capital.
In addition on a discretionary basis the Company utilizes its capital
resources for the development and acquisition of motel properties.
The Company's debt service requirements consist of the obligation to make
interest and principal payments on its outstanding indebtedness. As of
September 30, 1998, the Company had principal repayment obligations of
$39,269,000, $8,636,000 and $6,001,000 during the remainder of the fiscal year
ending December 31, 1998 and during the fiscal years ending December 31, 1999
and 2000, respectively. The Company had been told by investment bankers that
the cash flows derived from the properties securing the maturing mortgage
loans would be sufficient to allow for the refinancing of such mortgage debt
given the interest rate environment that had existed throughout much of 1998.
The availability of financing however has changed significantly in the past
couple of months with the capital markets seeking safety in the form of United
States government securities and liquidity. Accordingly, it is less certain
that the Company will be able to secure replacement financing of its debt
obligations that are maturing through the remainder of 1998. The Company has
been actively pursuing such refinancing; however, as of November 13, 1998 no
firm commitments to refinance such maturing debt have been secured. Banks
holding two separate pieces of debt aggregating $3,590,000 at September 30,
1998 that recently matured, have agreed to refinance such debt on a long-term
basis at interest rates and principal amortization terms similar to the debt
being refinanced. The legal documentation of these refinances are in the
process of being finalized. There are two other separate pieces of debt
maturing in the remainder of 1998 with principal balances of $17,540,000 and
$16,688,000 at September 30, 1998. Subsequent to September 30, 1998, the
Company paid down $4,584,000 of the $16,688,000 outstanding at September 30,
1998 with the net proceeds from the sale of two properties. The Company
believes that the remaining properties and the cash flow produced by the
properties securing these borrowings should be sufficient to allow for
refinancing to be obtained. In addition, given the current cash balances
of the Company, the Company would be in a position to reduce the amount of
refinancing being sought in order to secure financing if necessary. Given the
current state of the capital markets, there is no assurance that the Company
will be able to obtain refinancing prior to the maturity of debt obligations
discussed above.
The Company's capital expenditure requirements principally include capital
improvements and refurbishment of its lodging facilities as part of its
ongoing operating strategy to provide well-maintained facilities. The Company
made capital expenditures (exclusive of acquisitions and development of
properties) of $5,631,000 and $4,413,000 for the nine months ended September
30, 1998 and 1997, respectively. In addition, as of September 30, 1998, the
Company had $1,549,000 of cash restricted for future refurbishment of motel
properties, in accordance with certain debt agreements. The Company is not
aware of any unusual required level of future capital expenditures necessary
to maintain its existing properties.
<PAGE>
In June 1998, three properties built by an affiliate were acquired for
$8,500,000 of which $4,800,000 was funded from the $150,000,000 secured loan
facility with CS First Boston. In October 1998, the Company acquired two
properties for $6,100,000 that were built by an affiliate. The purchase was
partially funded by $3,100,000 of borrowings by the Company under its
$150,000,000 secured loan facility with CS First Boston. As of November 13,
1998, two properties were under various stages of development for the Company.
Management anticipates approximately $5,550,000 will be expended to purchase
these motels upon their completion toward the end of 1998 of which the Company
anticipates borrowing approximately $3,550,000 from CS First Boston under the
$150,000,000 secured loan facility. In addition, the Company anticipates
drawing upon its $150,000,000 secured loan facility with CS First Boston to
finance a portion of the acquisition price for these properties.
For the nine months ended September 30, 1998, cash and cash equivalents
increased $14,129,000. This increase consisted of $15,215,000 of funds
provided by operating activities and $30,528,000 of funds provided by
investing activities and $31,614,000 of funds used in financing activities.
Net investing activities of $30,528,000 include: sources of $47,436,000 from
the net proceeds from the sale of investment properties and $2,152,000 of
funds provided from the collections on mortgage and other notes receivable;
and uses of $322,000 representing the change in cash restricted for
refurbishment, $13,107,000 of cash utilized for motel development and
$5,631,000 expended on refurbishment of existing properties. Cash used in
financing activities includes: $37,148,000 of cash utilized to repay
indebtedness; and $408,000 of cash used for deferred financing costs and
distributions to minority interests offset by $5,942,000 from proceeds from
additonal borrowings.
Impact of Year 2000
The year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
The Company completed the installation and implementation of its new primary
financial accounting system in September 1998 at a cost of approximately
$400,000. The new system is year 2000 compliant according to the manufacturer
and developer of the hardware and software. The Company has made an
assessment of its other financial systems and believes other than for a few
necessary minor modifications, that they are year 2000 compliant. There can
be no guarantee that the systems of other companies, principally banks and the
Company's credit card processor on which the Company relies upon to transact
business in the normal course will be year 2000 compliant which could possibly
cause hardships for the Company.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Not Applicable
(b) Reports on Form 8-K:
Not Applicable
<PAGE>
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.
MOA HOSPITALITY, INC.
November 13, 1998 By: /s/ Kurt M. Mueller
Kurt M. Mueller
Chief Financial Officer
(Principal Accounting Officer)
November 13, 1998 By: /s/ John D. Simon
John D. Simon
Secretary and Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S INTERIM CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> SEP-30-1998
<CASH> 27161
<SECURITIES> 0
<RECEIVABLES> 3064
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 32255
<PP&E> 370300
<DEPRECIATION> 79037
<TOTAL-ASSETS> 352570
<CURRENT-LIABILITIES> 61574
<BONDS> 252859
0
0
<COMMON> 8
<OTHER-SE> 32997
<TOTAL-LIABILITY-AND-EQUITY> 352570
<SALES> 0
<TOTAL-REVENUES> 93163
<CGS> 52711
<TOTAL-COSTS> 72507
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23120
<INCOME-PRETAX> 21956
<INCOME-TAX> 8545
<INCOME-CONTINUING> 13411
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13411
<EPS-PRIMARY> 16.76
<EPS-DILUTED> 16.76
</TABLE>
