<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
/x/ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1998
Commission File No.: 33-16163-LA
Nashville Super 8 Ltd., A California Limited Partnership
(Name of small business issuer in its charter)
California 33-0249749
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3725 Talbot Street, #296, San Diego, California 92106
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (619) 294-9435
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Interests
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
State issuer's revenues for its most recent fiscal year: $893,855.
The aggregate market value of the voting securities held by non-affiliates
is not determinable as there is no established market and the securities
have only limited voting rights.
State the number of limited partnership interests outstanding as of
December 31, 1998: 3,975 interests held by 586 limited partners.
DOCUMENT INCORPORATED BY REFERENCE
Definitive Prospectus dated September 1, 1987, as supplemented August
31, 1988, is incorporated by reference into Part III.
<PAGE>
PART I
Item 1. Business
Nashville Super 8 Ltd., A California Limited Partnership, formerly
Motels of America Series XI, A California Limited Partnership, (the
Partnership) was formed on September 1, 1988 pursuant to the California
Revised Uniform Limited Partnership Act. As of December 31, 1998,
the Partnership consisted of a general partner, GHG Hospitality, Inc.
(GHG), and 586 limited partners owning 3,975 limited partnership
interests. The limited partnership interests sold at a public offering price
of $1,000 each commencing September 1, 1987 pursuant to a Registration
Statement on Form S-18 under the Securities Act of 1933 (Registration
33-16163-LA). The offering of $3,975,000 was fully subscribed and
closed on September 27, 1988.
The Partnership was organized to acquire a parcel of property located
near the Nashville Metropolitan Airport in Nashville, Tennessee, and to
build and operate a 106-room "economy" motel as a franchise of Super
8 Motels, Inc. The motel opened for business on April 23, 1989 under
a 20-year franchise agreement with Super 8 Motels, Inc. The agreement
required the payment of initial franchise fees of $20,000 and requires
ongoing royalty and chain-affiliated advertising fees based on a
percentage of gross room revenues. Since January 1, 1990, the motel has
been operated pursuant to a management agreement with GHG.
At the time of the public offering in 1988, the Prospectus stated that the
general partner expected that the Partnership would consider selling or
refinancing the motel after operating it for a period of approximately six
to ten years. An informal survey conducted by the general partner of a
number of limited partners in early 1998 indicated that a substantial
majority would like the motel to be sold. For these reasons, the general
partner decided in early 1998 to initiate the process which could possibly
result in a sale of the motel. On March 3, 1998, the Partnership entered
into an agreement with Hotel Partners, Inc., a real estate broker
specializing in hotel and motel properties, to list the motel for sale.
On November 16, 1998, the Partnership sold its motel property and
related furniture, fixtures, and equipment, operating supplies, and
franchise rights to AM & PS, LLC, A Tennessee Limited Liability
Company (the Purchaser) for $2,900,000 in cash. Net cash proceeds
received by the Partnership from the sale were $2,578,512 after deducting
the payment of the first trust deed of $156,931, sales commissions and
other costs paid outside of escrow of $114,453, and net pro rations and
other closing costs of $50,104. The sale was approved by limited
partners holding a majority of the Partnership's limited partnership
interests pursuant to a Consent Solicitation Statement dated October 17,
1998.
The Partnership paid a liquidating distribution to the limited partners of
$2,289,400 ($575.95 per interest) on November 25, 1998. The
Partnership retained some cash to cover its remaining liabilities and any
unexpected claims. Any amount not needed for this purpose will be
distributed to the partners when management determines that all liabilities
and potential claims have been paid or provided for at which time management
2
<PAGE>
intends to cause the Partnership to be dissolved. The liquidation and
dissolution of the Partnership was approved by limited partners holding a
majority of the Partnership's limited partnership interests pursuant to a
Consent Solicitation Statement dated October 17, 1998.
The Partnership has no employees.
Item 2. Property
The Partnership did not own any property as of December 31, 1998, and
the Partnership does not intend to acquire any property in the future.
Prior to the November 16, 1998 sale of its motel property, the
Partnership owned the following property which it acquired in 1988.
Property name and address Property description
Nashville Super 8 Motel A 106-room "economy" motel on
Metropolitan Airport Center approximately 2 acres of land.
Nashville, Tennessee
Item 3. Legal Proceedings
The Partnership is not subject to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
On October 17, 1998, a Consent Solicitation Statement was submitted to
the limited partners to approve (i) the sale of substantially all of the assets
of the Partnership and (ii) the complete termination and liquidation of the
Partnership resulting in cash distributions to the limited partners.
3
<PAGE>
On November 10, 1998, the general partner announced that the results of
the consent solicitation were as follows:
<TABLE>
<CAPTION>
Limited Percent
Partnership to
Interests Total
<S> <C> <C>
Sale of substantially all assets:
Voted for:
Consent card returned 2,294 57.71%
Consent card not returned by deadline
- deemed to be "voted for" 1,564 39.35
--------- ---------
Total voted for 3,858 97.06
Voted against 112 2.81
Abstained 5 0.13
Termination and liquidation of Partnership:
Voted for:
Consent card returned 2,314 58.21%
Consent card not returned by deadline
- deemed to be "voted for" 1,564 39.35
-------- ---------
Total voted for 3,878 97.56
Voted against 92 2.31
Abstained 5 0.13
</TABLE>
PART II
Item 5. Market for Limited Partnership Interests and Related Partner
Matters
There is no public trading market for the Partnership's limited partnership
interests. There were approximately 586 holders of the Partnership's
3,975 limited partnership interests as of December 31, 1998. Cash
distributions of $2,336,702 and $58,500 were paid to holders of limited
partnership interests in 1998 and 1997, respectively.
4
<PAGE>
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Condition:
On September 1, 1987, the Partnership commenced its public offering
pursuant to its Prospectus. On September 27, 1988, the Partnership
completed the public offering. The Partnership received $3,449,823 (net
of offering costs of $525,177) from the sale of limited partnership
interests. These funds were available for investment in property, to pay
legal fees and other costs related to the investments, to pay operating
expenses, and for working capital. The majority of the proceeds were
used to acquire and construct the property identified in Item 2 above.
At the time of the public offering in 1988, the Prospectus stated that the
general partner expected that the Partnership would consider selling or
refinancing the motel after operating it for a period of approximately six
to ten years. An informal survey conducted by the general partner of a
number of limited partners in early 1998 indicated that a substantial
majority would like the motel to be sold. For these reasons, the general
partner decided in early 1998 to initiate the process which could possibly
result in a sale of the motel. On March 3, 1998, the Partnership entered
into an agreement with Hotel Partners, Inc., a real estate broker
specializing in hotel and motel properties, to list the motel for sale.
On November 16, 1998, the Partnership sold its motel property and
related furniture, fixtures, and equipment, operating supplies, and
franchise rights to AM & PS, LLC, A Tennessee Limited Liability
Company (the Purchaser) for $2,900,000 in cash. Net cash proceeds
received by the Partnership from the sale were $2,578,512 after deducting
the payment of the first trust deed of $156,931, sales commissions and
other costs paid outside of escrow of $114,453, and net pro rations and
other closing costs of $50,104. The sale was approved by limited
partners holding a majority of the Partnership's limited partnership
interests pursuant to a Consent Solicitation Statement dated October 17,
1998.
The Partnership paid a liquidating distribution to the limited partners of
$2,289,400 ($575.95 per interest) on November 25, 1998. The
Partnership retained some cash to cover its remaining liabilities and any
unexpected claims. Any amount not needed for this purpose will be
distributed to the partners when management determines that all liabilities
and potential claims have been paid or provided for at which time
management intends to cause the Partnership to be dissolved. The
liquidation and dissolution of the Partnership was approved by limited
partners holding a majority of the Partnership's limited partnership
interests pursuant to a Consent Solicitation Statement dated October 17,
1998.
Accrued expenses as of December 31, 1998, includes estimated costs of
$49,890 to administer the affairs of the Partnership from January 1, 1999
until the final liquidation and dissolution.
5
<PAGE>
Results of Operations:
All of the Partnership's operations are related to the motel business which
was sold on November 16, 1998. Income (loss) from discontinued
operations was $(60,891) in 1998 and $25,042 in 1997. Loss on disposal
of discontinued operations was $(188,166) in 1998. Net income (loss)
was $(249,057) in 1998 and $25,042 in 1997. Total revenues were
$893,855 in 1998 and $1,211,019 in 1997. The property operated at an
occupancy of 57.68% in 1998 and 61.79% in 1997. The average daily
room rate was $44.16 in 1998 and $49.63 in 1997.
Total revenues and operating expenses decreased in 1998 compared to
1997 because the motel was operated by the Partnership for
approximately ten and one-half months in 1998 compared to twelve
months in 1997. In addition, the occupancy rate and average daily room
rate for 1998 were adversely affected by the temporary closure during all
of 1998 of Opryland Theme Park for major renovations and
refurbishments.
Loss on disposal of discontinued operations of $(188,166) in 1998 is
comprised of a loss of $104,660 on the sale of the motel and related
assets, costs of $16,953 associated with obtaining the consent of limited
partners to sell the motel and liquidate and dissolve the Partnership, and
estimated expenses of $66,553 to administer the affairs of the Partnership
from the date of the sale until the final liquidation and dissolution.
Approximately $16,663 of the estimated expenses were incurred in 1998.
In 1997, the Partnership incurred costs of $28,716 associated with a
proposal to reorganize the Partnership into a real estate investment trust
(REIT). The efforts were discontinued when management and the
proposed sponsor of the REIT were unable to negotiate mutually
acceptable terms and conditions for a reorganization.
The effect of current operations on liquidity was net cash provided by
(used in) operating activities of $(2,670) in 1998 and $212,036 in 1997
and net cash provided by the sale of motel and related assets of
$2,578,512 in 1998. The cash was used primarily for cash distributions
to partners which were $2,341,957 in 1998 and $65,000 in 1997,
payments of long-term debt prior to the sale which were $7,353 in 1998
and $7,987 in 1997, and investment property expenditures prior to the
sale which were $35,289 in 1998 and $58,998 in 1997.
Year 2000 Issues:
Many existing computer programs use only two digits to identify a year
in the date field. If not corrected, many computer applications could fail
or create erroneous results by or at the Year 2000.
Based on the sale of substantially all of the Partnership's assets and the
cessation of substantially all of the Partnership's operations, management
believes that the Year 2000 issues will not have a material effect on the
Partnership.
6
<PAGE>
Item 7. Financial Statements and Supplementary Data
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
I N D E X
Pages
Independent Auditor's Report 8
Balance Sheets, December 31, 1998 and 1997 9-10
Statements of Operations, Years Ended December 31, 1998 and 1997 11
Statements of Partners' Capital, Years Ended December 31, 1998
and 1997 12-13
Statements of Cash Flows, Years Ended December 31, 1998
and 1997 14
Notes to Financial Statements 15-22
7
<PAGE>
Independent Auditor's Report
The Partners
Nashville Super 8 Ltd.,
A California Limited Partnership
We have audited the balance sheets of Nashville Super 8 Ltd., A
California Limited Partnership, as of December 31, 1998 and 1997,
and the related statements of operations, partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Nashville Super
8 Ltd., A California Limited Partnership, as of December 31, 1998
and 1997, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting
principles.
As more fully discussed in Note 1, the Partnership sold substantially
all of its assets and paid a liquidating distribution to its limited partners
in 1998.
/s/ Levitz, Zacks, Ciceric, CPAs
San Diego, California
January 15, 1999
8
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Balance Sheets
December 31, 1998 and 1997
<TABLE>
<CAPTION>
ASSETS
1998 1997
<S> <C> <C>
Current Assets:
Cash and cash equivalents $350,562 $159,319
Accounts receivable 5,620 17,447
Operating supplies -0- 15,455
Prepaid expenses 3,557 4,947
Due from affiliate 628 -0-
----------- -----------
Total current assets 360,367 197,168
----------- -----------
Investment property, at cost:
Land -0- 711,092
Building and improvements -0- 2,854,422
Furniture, fixtures and equipment -0- 634,303
----------- ----------
-0- 4,199,817
Less accumulated depreciation -0- 1,252,452
---------- -----------
Investment property, net -0- 2,947,365
---------- -----------
Other Assets:
Franchise fees, net -0- 11,417
---------- -----------
Total other assets -0- 11,417
---------- -----------
Total assets $360,367 $3,155,950
========== ===========
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL
1998 1997
<S> <C> <C>
Current Liabilities:
Accounts payable $ 561 $ 23,761
Accrued expenses 53,137 58,669
Due to affiliates -0- 11,553
Current portion of long-term debt -0- 8,384
----------- -----------
Total current liabilities 53,698 102,367
Long-term debt, less current portion -0- 155,900
----------- -----------
Total liabilities 53,698 258,267
----------- -----------
Partners' Capital:
General partner:
Cumulative net income (loss) 8,761 6,732
Cumulative cash distributions (77,205) (71,950)
----------- -----------
(68,444) (55,218)
----------- -----------
Limited partners (3,975 interests):
Capital contributions, net of offering costs 3,449,823 3,449,823
Cumulative net income (loss) (90,466) 150,620
Cumulative cash distributions (2,984,244) (647,542)
----------- -----------
375,113 2,952,901
----------- -----------
Total partners' capital 306,669 2,897,683
----------- -----------
Total liabilities and partners' capital $360,367 $3,155,950
=========== ============
</TABLE
10
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Statements of Operations
Years Ended December 31, 1998 and 1997
</TABLE>
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Discontinued Operations:
Revenues:
Room revenues $ 861,270 $1,186,602
Phone revenues 20,206 19,555
Interest income 6,140 1,283
Other 6,239 3,579
------------ ----------
Total revenues 893,855 1,211,019
------------ ----------
Expenses:
Property operating expenses 427,242 513,135
Depreciation 120,606 173,814
General and administrative 111,480 125,933
Repairs and maintenance 92,447 77,548
Management fees 53,033 72,584
Marketing 45,077 55,946
Royalties and chain-affiliated advertising 40,906 61,678
Real estate taxes 36,216 45,293
Interest expense 15,435 18,133
Property and liability insurance 11,429 12,197
Amortization 875 1,000
REIT proposal costs -0- 28,716
------------ -----------
Total expenses 954,746 1,185,977
------------ -----------
Income (loss) from discontinued operations (60,891) 25,042
Loss on disposal of discontinued operations (188,166) -
------------ -----------
Net income (loss) $ (249,057) $ 25,042
============ ===========
Net income (loss) per interest:
Income (loss) from discontinued operations $ (13.79) $ 5.67
Loss on disposal of discontinued operations (46.86) -
------------ -----------
Net income (loss) per interest $ (60.65) $ 5.67
============ ===========
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Statements of Partners' Capital
Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
General Partner
Cumulative Cumulative
Net Income Cash
(Loss) Distributions Total
<S> <C> <C> <C>
Balance, December 31, 1996 $14,228 $(65,450) $ (51,222)
Net income, year ended
December 31, 1997 2,504 -0- 2,504
Cash distributions ($14.72 per interest) -0- (6,500) (6,500)
___________ ___________ _________
Balance, December 31, 1997 16,732 (71,950) (55,218)
Net income (loss), year ended
December 31, 1998 (7,971) -0- (7,971)
Cash distributions ($587.85 per interest) -0- (5,255) (5,255)
___________ ___________ _________
Balance, December 31, 1998 $ 8,761 $ (77,205) $(68,444)
========== =========== =========
</TABLE>
See accompanying notes to financial statements
12
<PAGE>
<TABLE>
<CAPTION>
Limited Partners
Cumulative Cumulative Total
Capital Net Income Cash Partners'
Contributions (Loss) Distributions Total Capital
<C> <C> <C> <C> <C>
$3,449,823 $128,082 $(589,042) $2,988,863 $2,937,641
-0- 22,538 -0- 22,538 25,042
-0- -0- (58,500) (58,500) (65,000)
___________ ___________ ___________ ____________ ___________
3,449,823 150,620 (647,542) 2,952,901 2,897,683
-0- (241,086) -0- (241,086) (249,057)
-0- -0- (2,336,702) (2,336,702) (2,341,957)
____________ ___________ ____________ ____________ ___________
$ 3,449,823 $ (90,466) $(2,984,244) $ 375,113 $ 306,669
============ =========== ============= ============ ===========
</TABLE>
13
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Statements of Cash Flows
Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(249,057) $ 25,042
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 121,481 174,814
Loss on disposal of discontinued operations 188,166 -0-
Post-measurement date expenses paid (16,663) -0-
Expenses pro rated in escrow 32,032 -0-
(Increase) decrease in:
Accounts receivable 10,784 (11,893)
Prepaid expenses 1,390 250
Due from affiliate (628) -0-
Increase (decrease) in:
Accounts payable (23,200) 5,059
Accrued expenses (55,422) 11,142
Due to affiliates (11,553) 7,622
---------- --------
Net cash provided by (used in) operating activities (2,670) 212,036
---------- --------
Cash flows from investing activities:
Sale of motel and related assets 2,692,965 -0-
Sales commissions and other costs paid outside
of escrow (114,453) -0-
Investment property expenditures (35,289) (58,998)
----------- ---------
Net cash provided by (used in) investing activities 2,543,223 (58,998)
----------- ---------
Cash flows from financing activities:
Payments of long-term debt (7,353) (7,987)
Cash distributions to partners (2,341,957) (65,000)
------------ ---------
Net cash used in financing activities (2,349,310) (72,987)
------------ ---------
Net increase in cash and cash equivalents 191,243 80,051
Cash and cash equivalents, beginning of year 159,319 79,268
----------- ---------
Cash and cash equivalents, end of year $ 350,562 $ 159,319
=========== =========
Supplemental disclosure of cash flow information:
Interest paid $(15,435) $ (18,133)
=========== ==========
</TABLE>
See accompanying notes to financial statements
14
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Notes to Financial Statements
Years Ended December 31 1998 and 1997
Note 1. THE PARTNERSHIP AND A SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Nashville Super 8 Ltd., A California Limited Partnership (the
Partnership), formerly Motels of America Series XI, A California
Limited Partnership, was formed on September 1, 1988 pursuant to the
California Revised Uniform Limited Partnership Act. The Partnership
consists of a general partner which owns a 10% interest and 586
limited partners which collectively own a 90% interest. The purpose
of the Partnership was to construct, own, and operate a 106-room
"economy" motel in Nashville, Tennessee under a Super 8 franchise.
The motel was opened in April 1989.
On November 16, 1998, the Partnership sold its motel property and
related furniture, fixtures, and equipment, operating supplies, and
franchise rights to AM & PS, LLC, A Tennessee Limited Liability
Company (the Purchaser) for $2,900,000 in cash. The sale was
approved by limited partners holding a majority of the Partnership's
limited partnership interests pursuant to a Consent Solicitation
Statement dated October 17, 1998.
The Partnership paid a liquidating distribution to the limited partners of
$2,289,400 ($575.95 per interest) on November 25, 1998. The
Partnership retained some cash to cover its remaining liabilities and
any unexpected claims. Any amount not needed for this purpose will
be distributed to the partners when management determines that all
liabilities and potential claims have been paid or provided for at which
time management intends to cause the Partnership to be dissolved. The
liquidation and dissolution of the Partnership was approved by limited
partners holding a majority of the Partnership's limited partnership
interests pursuant to a Consent Solicitation Statement dated October
17, 1998.
The following is a summary of the Partnership's significant accounting
policies:
Discontinued Operations
All of the Partnership's operations are related to the motel business
which was sold on November 16, 1998. Accordingly, all of the
revenues and expenses of the Partnership prior to the sale have been
presented as discontinued operations in the accompanying statements of
operations. Loss on disposal of discontinued operations includes
estimated expenses of $66,553 to administer the affairs of the
Partnership until its final liquidation and dissolution. Approximately
$16,663 of the estimated expenses were incurred in 1998. This
estimate could change in the next year due to unforeseen circumstances.
15
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Notes to Financial Statements
(Continued)
Years Ended December 31 1998 and 1997
Note 1. THE PARTNERSHIP AND A SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Cash Equivalents
The Partnership considers all highly liquid instruments purchased with
an original maturity of three months or less to be cash equivalents.
Investment Property
Investment property is recorded at cost. Depreciation is computed
using the straight-line method based on estimated useful lives of 7 to
39 years. Maintenance and repairs costs are expensed as incurred,
while significant improvements, replacements, and major renovations
are capitalized.
Franchise Fees
Franchise fees are amortized over the 20-year life of the franchise
agreement which expires in 2009.
Advertising
Advertising costs are expensed as incurred. Advertising expense was
$50,484 for the year ended December 31, 1998 and $63,443 for the
year ended December 31, 1997.
Income Taxes
No provision for income taxes has been made as any liability for such
taxes would be that of the partners rather than the Partnership.
Net Income (Loss) Per Interest
Net income (loss) per interest is based upon the amount allocated to
limited partners pursuant to the partnership agreement divided by
3,975 limited partner interests outstanding throughout the year.
16
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Notes to Financial Statements
(Continued)
Years Ended December 31 1998 and 1997
Note 1. THE PARTNERSHIP AND A SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Note 2. PARTNERSHIP AGREEMENT
Net income or loss and cash distributions from operations of the
Partnership are allocated 90% to the limited partners and 10% to the
general partner. Profits from the sale or other disposition of
Partnership property are to be allocated to the general partner until
its capital account equals zero; thereafter, to the limited partners
until their capital accounts equal their capital contributions reduced
by prior distributions of cash from sale or refinancing plus an amount
equal to a cumulative but not compounded annual 8% return thereon which
cumulative return shall be reduced (but not below zero) by the
aggregate amount of prior distributions of cash available for
distribution; thereafter, gain shall be allocated 15% to the general
partner and 85% to the limited partners. Loss from sale shall be
allocated 1% to the general partner and 99% to the limited partners.
Note 3. FRANCHISE AGREEMENT
The Partnership entered into a twenty-year franchise agreement
expiring in 2009 with Super 8 Motels, Inc. to provide the Partnership
with consultation in the areas of design, construction, and operation of
the motel. The agreement required the payment of initial franchise
fees of $20,000 and requires ongoing royalty and chain-affiliated
advertising fees based on a percentage of gross room revenues.
The franchise agreement was assumed by the Purchaser in connection
with the sale of the motel.
17
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Notes to Financial Statements
(Continued)
Years Ended December 31 1998 and 1997
Note 4. LONG-TERM DEBT
The Partnership had a note payable to a bank due in monthly
installments of approximately $2,150, including interest at the bank's
index rate plus 2%, through August 2009 or until paid in full. The
note was secured by a first priority deed of trust on the Partnership's
motel. The fair value of long-term debt approximated its carrying
amount based on the borrowing rates available to the Partnership for
loans with similar terms.
The note, which had a balance of $156,931 as of November 16, 1998,
was paid in full in connection with the sale of the motel.
Note 5. RELATED PARTY TRANSACTIONS
The motel is operated pursuant to a management agreement with the
general partner, GHG Hospitality, Inc. (GHG). The agreement expires
upon the termination or dissolution of the Partnership or upon three
months' written notice from the general partner. The agreement
provides for the payment of monthly management fees of 6% of gross
revenues.
The Partnership has agreed to reimburse GHG for certain expenses
related to services performed in maintaining the books and
administering the affairs of the Partnership.
GHG and an affiliate, Grosvenor Management Services, Inc. (GMS),
allocate to the Partnership certain marketing and accounting salaries
and certain other expenses directly related to the operations of the
Partnership.
Fees, reimbursements, salaries, and other expenses paid to GHG and
GMS and included in total expenses for the years ended December 31,
1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Management fees $ 53,033 $ 72,584
Reimbursement for partnership
administration expenses 23,398 23,770
Salaries and other allocated expenses 37,973 31,504
----------- ------------
$ 114,404 $ 127,858
=========== ============
</TABLE>
18
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Notes to Financial Statements
(Continued)
Years Ended December 31 1998 and 1997
Note 5. RELATED PARTY TRANSACTIONS (continued)
In addition, all motel staff are employed by GMS. The Partnership
reimbursed GMS $374,948 in 1998 and $344,455 in 1997, including a
one percent processing fee, for the wages of these employees.
In 1997, the Partnership purchased used air conditioners and computers
for $4,780 from an affiliate of GHG.
Note 6. NET INCOME (LOSS) PER INTEREST
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Income (loss) from discontinued operations $(60,891) $ 25,042
Less amount allocated to general partner 6,089 (2,504)
--------- ----------
Income (loss) from discontinued operations
allocated to limited partners (54,802) 22,538
Limited partner interests outstanding throughout
the year 3,975 3,975
--------- ----------
Income (loss) from discontinued operations
per interest $ (13.79) $ 5.67
========= ========
Loss on disposal of discontinued operations $(188,166) $ --
Less amount allocated to general partner 1,882 --
---------- -----------
Loss on disposal of discontinued operations
allocated to limited partners (186,284) --
Limited partner interests outstanding throughout
the year 3,975 --
---------- -----------
Loss on disposal of discontinued operations
per interest $ (46.86) $ --
========== ===========
</TABLE>
19
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Notes to Financial Statements
(Continued)
Years Ended December 31 1998 and 1997
Note 7. SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Net cash provided by the sale of motel and related assets in 1998 was
as follows:
<TABLE>
<CAPTION>
<S> <C>
Sale price $2,900,000
Less payments directly from escrow account:
Long-term debt (156,931)
Net pro rations and other closing costs (50,104)
----------------
$2,692,965
================
</TABLE>
20
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Notes to Financial Statements
(Continued)
Years Ended December 31 1998 and 1997
Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
None
PART III
Item 9. Directors and Executive Officers of the Registrant
The general partner has general responsibility and ultimate authority in
all matters affecting the business of the Partnership.
The general partner and its directors and executive officers as of
December 31, 1998 are as follows:
GHG HOSPITALITY, INC. (GHG) was incorporated in November
1989 under the laws of the state of Delaware. GHG was elected as
general partner effective January 1, 1990.
J. MARK GROSVENOR, 51, is President and a Director of GHG.
From 1976 to 1988, he served as chief executive officer of Nite Lite
Inns, a California corporation, which owned Grosvenor Enterprises, a
California limited partnership, which owns Grosvenor Inn. In 1984,
he acquired Medallion Foods, Inc., a food processing company,
located in Newport, Arkansas. Mr. Grosvenor graduated from San
Diego State University with a bachelor's degree in business and
finance.
STEPHEN D. BURCHETT, 39, is Vice President of GHG. From
1984 to 1991 he worked in private business law practice in San Diego,
California with Schall, Boudreau & Gore and Kaufman, Lorber, Grady
& Farley. Mr. Burchett graduated from California State University
Fullerton in 1981 with a bachelor's degree in finance and from the
University of Santa Clara School of Law in 1984 with a juris
doctorate.
SYLVIA MELLOR CLARK, 54, is Controller of GHG. In 1978, she
joined Grosvenor Industries, Inc., where she is controller and a
director. Prior to joining Grosvenor Industries, Inc., she operated her
own accounting firm from 1976 to 1978. Ms. Clark graduated from
San Diego State University and National University.
Item 10. Executive Compensation
The Partnership has not paid and does not propose to pay any executive
compensation to the general partner or any of its affiliates (except as
described in Item 12 below). There are no compensatory plans or
arrangements regarding termination of employment or change of
control.
21
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Notes to Financial Statements
(Continued)
Years Ended December 31 1998 and 1997
Item 11. Security Ownership of Certain Beneficial Owners and
Management
(a) No person or group is known to the Partnership to be
the beneficial owner of more than 5% of the outstanding limited
partnership interests in the Partnership.
(b) The general partner does not directly or indirectly own
any limited partnership interests in the Partnership. The general
partner does not possess a right to acquire beneficial ownership of
limited partnership interests in the Partnership.
(c) There are no arrangements, known to the Partnership,
which may result in a change in control of the Partnership.
Item 12. Certain Relationships and Related Transactions
The motel is operated pursuant to a management agreement with GHG.
The agreement provides for the payment of monthly management fees
of 6% of gross revenues.
The Partnership has agreed to reimburse GHG for certain expenses
related to services performed in maintaining the books and
administering the affairs of the Partnership.
GHG and an affiliate, Grosvenor Management Services, Inc. (GMS),
allocate to the Partnership certain marketing, accounting, and
maintenance salaries and other expenses directly related to the
operation of the Partnership.
Fees, reimbursements, salaries, and other expenses paid to GHG and
GMS and included in total expenses for the years ended December 31,
1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Management fees $ 53,033 $ 72,584
Reimbursement for partnership
administration expenses 23,398 23,770
Salaries and other allocated expenses 37,973 31,504
----------- -----------
$ 114,404 $ 127,858
=========== ===========
</TABLE>
In addition, all motel employees are paid by GMS. The Partnership
reimbursed GMS $374,948 in 1998 and $344,455 in 1997, including a
one percent processing fee, for the wages of these employees.
In 1997, the Partnership purchased used air conditioners and computers
for $4,780 from an affiliate of GHG.
22
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Notes to Financial Statements
(Continued)
Years Ended December 31 1998 and 1997
Item 13. Exhibits and Reports on Form 8-K
(a) The following documents are filed as part of this
report:
1. Financial Statements (see Index to Financial
Statements filed with this annual report).
2. Exhibits:
3-A. The Prospectus of the Partnership dated
September 1, 1987, as supplemented August
31, 1988, as filed with the Commission, is
hereby incorporated herein by reference.
3-B. Agreement of Limited Partnership set forth as
Exhibit B to the Prospectus, as filed with the
Commission, is incorporated herein by reference.
3-C. Amendment to Agreement of Limited
Partnership dated January 1, 1990, as filed with
the Commission, is incorporated herein by reference.
(b) A report on Form 8-K, dated November 16, 1998,
disclosing the sale of the motel was filed during the
last quarter of the period covered by this report.
No annual report or proxy material for the fiscal year 1998 has been
sent to the limited partners of the Partnership. An annual report will
be sent to the limited partners subsequent to this filing and the
Partnership has incorporated such reports in this filing.
23
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
(REGISTRANT) NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
By: GHG Hospitality, Inc.
Corporate General Partner
(SIGNATURE) /s/ J. MARK GROSVENOR
(NAME AND TITLE) J. MARK GROSVENOR, President and Director of GHG
(DATE) MARCH 26, 1999
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
(REGISTRANT) NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
By: GHG Hospitality, Inc.
Corporate General Partner
(SIGNATURE) /s/ J. MARK GROSVENOR
(NAME AND TITLE) J. MARK GROSVENOR, President and Director of GHG
(DATE) MARCH 26, 1999
(SIGNATURE) /s/ STEPHEN D. BURCHETT
(NAME AND TITLE) STEPHEN D. BURCHETT, Vice President of GHG
(DATE) MARCH 26, 1999
(SIGNATURE) /s/ SYLVIA MELLOR CLARK
(NAME AND TITLE) SYLVIA MELLOR CLARK, Controller of GHG
(DATE) MARCH 26, 1999
24
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 350,562
<SECURITIES> 0
<RECEIVABLES> 5,620
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 360,367
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 53,698
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 360,367
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (249,057)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (249,057)
<EPS-PRIMARY> (60.65)
<EPS-DILUTED> (60.65)
</TABLE>
