<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB - Quarterly or Transitional Report
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission File Number 33-16163-LA
Nashville Super 8 Ltd., A California Limited Partnership
(Exact name of small business issuer as specified in its charter)
California 33-0249749
(State or other jurisdiction of (U. S. Employer Identification Number
incorporation or organization) Identification Number)
PMB 296, 3725 Talbot Street, San Diego, CA 92106
(Address of principal executive offices)
(619) 294-9435
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the registrant (1) has filed all reports required to be filed by
Sections 13 or 15(d) of the Exchange Act during the last 12 months (or for such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes /x/ No / /
State the number of limited partnership interests outstanding as of the latest
practicable date: 3,975
<PAGE>
PART I. -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Incorporated herein is the following unaudited financial information:
Balance Sheet as of June 30, 1999 and December 31, 1998.
Statement of Operations for the three months and six months ended June 30, 1999
and June 30, 1998.
Statement of Cash Flows for the three months and six months ended June 30,
1999 and June 30, 1998.
Notes to Financial Statements.
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Balance Sheet
June 30, 1999 and December 31, 1998
(Unaudited)
(Part 1 of 2)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1999 1998
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 0 $ 350,562
Accounts receivable 0 5,620
Operating supplies 0 0
Prepaid expenses 0 3,557
Due from affilitiates (note 4) 0 628
----------- ----------
Total current assets 0 360,367
Investment property, at cost:
Land 0 0
Building and improvements 0 0
Furniture, fixtures and equipment 0 0
-------------- -------------
0 0
Less accumulated depreciation 0 0
-------------- ------------
Investment property,
net of accumulated depreciation 0 0
-------------- -------------
Franchise fees, net (note 3) 0 0
-------------- -------------
$ 0 $ 360,367
============== ==============
</TABLE>
See accompanying notes to financial statements
Page 1
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Balance Sheet
June 30, 1999 and December 31, 1998
(Unaudited)
(Part 2 of 2)
<TABLE>
<CAPTION>
LIABILITIES AND June 30, December 31,
PARTNER'S CAPITAL ACCOUNTS 1999 1998
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses $ 0 $ 53,698
Due to affiliates (note 4) 0 0
----------- ----------
Total current liabilities 0 53,698
----------- ----------
Long-term debt (note 5) 0 0
----------- ----------
Total liabilities $ 0 $ 53,698
----------- ----------
Partners' capital accounts (deficit):
General Partners:
Cumulative net earnings $ 8,761 8,761
Cumulative cash distributions (77,205) (77,205)
------------ ------------
(68,444) (68,444)
Limited partners:
Capital contributions, net of
offering costs 3,449,823 3,449,823
Cumulative net earnings (82,012) (90,466)
Cumulative cash distributions (3,299,367) (2,984,244)
------------- -------------
68,444 375,113
------------- -------------
Total partners' capital accounts 0 306,669
------------ ------------
$ 0 $360,367
============= ============
</TABLE>
See accompanying notes to financial statements.
Page 2
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Statement of Operations
Three Months and Six Months Ended
June 30, 1999 and June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues:
Income from Discontinued operations $ 3,308 $ 0 $3,308 $ 0
Interest Income 2,558 410 5,147 1,188
-------- ------- -------- -------
$ 5,866 $ 410 8,455 1,188
-------- -------- -------- -------
Expenses:
Loss from Discontinued operations 0 3,804 0 49,939
-------- -------- -------- --------
0 3,804 0 49,939
-------- -------- -------- --------
Net earnings $ 5,866 $(3,394) $ 8,455 $ (48,751)
======== ======== ======== ==========
Net earnings per limited
partnership interest $ 1.48 $(.77) $2.13 $(11.04)
========= ======== ========= ========
</TABLE>
See accompanying notes to financial statements.
Page 3
<PAGE>
NASHVILLE SUPER 8 LTD.
A California Limited Partnership
Statement of Cash Flows
For the Three Months and Six Months Ended
June 30, 1999 and June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 5,866 $ (3,394) $ 8,455 $(48,751)
Adjustments to reconcile net income to cash:
Depreciation and amortization 0 27,936 0 55,476
Changes in assets and liabilities:
(Increase) decrease in other assets 8,460 (14,846) 9,179 (10,161)
Increase (decrease) in liabilities:
Accounts payable/accrued expenses (30,443) 11,802 (53,698) (21,509)
Due to/from Affiliates (346) 2,375 628 (526)
--------- --------- -------- ---------
Net cash provided by
operating activities (16,464) 23,873 (35,436) (25,471)
--------- --------- --------- ---------
Cash flows used in or provided from investing
activities:
Investment property expenditures 0 (31,108) 0 (34,308)
--------- --------- ---------- ---------
Net cash (used in)/provided from
investing activities 0 (31,108) 0 (34,308)
--------- --------- ----------- ---------
Cash flows from financing activities:
Increase(decrease) to Notes payable 0 (2,177) 0 (4,271)
Cash distributions to partners (315,125) 0 (315,125) 0
--------- --------- ----------- ---------
Net cash (used in) financing activities(315,125) (2,177) (315,125) (4,271)
--------- --------- ----------- ---------
Net increase (decrease) in cash (331,589) (9,352) (350,561) (64,050)
Cash/cash equivalents,begin.of period 331,589 104,621 350,561 159,319
--------- --------- ---------- ----------
Cash/cash equivalents,end of period 0 95,269 0 95,269
========= ========= ========== ==========
</TABLE>
See accompanying notes to financial statements.
Page 4
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statement
June 30, 1999
(Unaudited)
Readers of this quarterly report should refer to the partnership audited
financial statements and annual report Form 10-KSB (File No. 33-16163-LA) for
the period ended December 31, 1998, as certain footnote disclosures which would
substantially duplicate those contained in such financial reports have been
omitted from this report.
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. At that time the
Partnership retained some cash to cover its remaining liabilities and any
unexpected claims. In June 1999 the Partnership paid all the remaining
expenses and claims. The remaining funds of $315,125 ($79.28 per interest)
was then paid as a final distribution to the limited partners on 6/25/999.
The partnership will be dissolved on or before August 31, 1999. Since the
partnership was in existence in 1999 a final partnership tax return for 1999
will be filed and final K1s will be mailed to the partners before
March 1, 2000.
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.
Page 5
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statement
June 30, 1999
(Unaudited)
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. 1998 loss on disposal of
discontinued operations included estimated expenses of $66,553 to administer
the affairs of the Partnership until its final liquidation and dissolution.
The actual costs for administrating the liquidation and dissolution were
$63,747. Approximately $16,663 of these expenses were paid in 1998 and
$47,084 were paid during the six months ended June 30, 1999. The difference
between the actual dissolution expenses of $63,747 and the $66,553 estimated
at December 31, 1998 equals $2,806 which was classified to other income for the
six month ended June 30, 1999.
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.
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.
Page 6
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partners
Notes to Financial Statement
June 30, 1999
(Unaudited)
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.
Net income per interest is based upon the 90% allocated to limited partners
divided by 3,975 limited partner interests outstanding throughout the year.
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.
Page 7
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statement (Continued)
June 30, 1999
(Unaudited)
Note 4. 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.
At June 30, 1999, intercompany balances owed to GHG and GMS relating to these
operating expenses were paid in full.
Note 5. 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 6. ADJUSTMENTS
In the opinion of the general partners, all adjustments (consisting solely of
normal recurring adjustments) necessary for a fair presentation have been made
to the accompanying figures as of and for the three months and six months
ended June 30, 1999.
Page 8
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statement (Continued)
June 30, 1999
(Unaudited)
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.
Page 9
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statement
June 30, 1999
(Unaudited)
The Partnership paid a liquidating distribution to the limited partners of
$2,289,400 ($575.95 per interest) on November 25, 1998. At that time the
Partnership retained some cash to cover its remaining liabilities and any
unexpected claims. In June 1999 the Partnership paid all remaining expenses
and claims. The remaining cash available of $315,125 ($79.28 per interest)
was then paid to the limited partners on 6/25/99 as a final distribution.
The Partnership will be dissolved on or before August 31, 1999. Since the
partnership was in existence in 1999 a final partnership tax return for 1999
will be filed and final K1s will be mailed to the partners before
March 1, 2000.
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, included estimated costs of $66,553
to administer the affairs of the Partnership until the final liquidation and
dissolution, which actually totaled $63,747 resulting in $2,806 being charged
to other income for the six months ended June 30, 1999.
Results of Operations:
All of the Partnership's operations are related to the motel business which was
sold on November 16, 1998.
The 1998 loss on disposal of discontinued operations [$(188,166)] was
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. The actual costs to
adminster the affairs of the Partnership until final liquidation and dissolution
totaled $63,747. This difference ($2,806) was charged to other income for the
six months ended June 30, 1999.
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.
Page 10
<PAGE>
NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
Notes to Financial Statement
June 30, 1999
(Unaudited)
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.
(REGISTRANT) NASHVILLE SUPER 8 LTD.,
A California Limited Partnership
By: GHG Hospitality, Inc.
Corporate General Partner
By (SIGNATURE) / s / Stephen D. Burchett
(NAME AND TITLE) Stephen D. Burchett, Vice President
(DATE) August 12, 1999
By (SIGNATURE)0 / s / Sylvia Mellor Clark
(NAME AND TITLE) Sylvia Mellor Clark, Controller
(DATE) August 12, 1999
Page 11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 8,455
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 8,455
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 8,455
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,455
<EPS-BASIC> 2.13
<EPS-DILUTED> 2.13
</TABLE>
