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, 1995
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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: 33-17274
MANHATTAN BEACH HOTEL PARTNERS, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 95-4201183
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
3 World Financial Center, 29th Floor, NY, NY
ATTN: Andre Anderson 10285
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(Address of principal executive offices) (Zip code)
(212) 526-3237
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Balance Sheets
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September 30, December 31,
Assets 1995 1994
- -------------------- ---------- ----------
Real estate, at cost:
Building $47,975,974 $47,975,974
Furniture, fixtures and equipment 2,356,163 1,972,493
Leasehold improvements 3,333,141 3,333,141
53,665,278 53,281,608
Less accumulated depreciation and amortization (10,567,518) (9,270,740)
43,097,760 44,010,868
Cash 3,839,875 2,797,178
Restricted cash 287,639 270,489
Accounts receivable 1,117,134 906,721
Prepaid and other assets 524,711 381,075
Total Assets $48,867,119 $48,366,331
Liabilities and Partners' Capital
- ---------------------------------
Liabilities:
Accounts payable and accrued liabilities $ 1,378,508 $ 1,291,771
Due to affiliates 2,343,252 2,121,394
Total Liabilities 3,721,760 3,413,165
Partners' Capital (Deficit):
General Partner (1,617,600) (1,809,793)
Limited Partners (6,975,000 limited partnership
units authorized, issued and outstanding) 46,762,959 46,762,959
Total Partners' Capital 45,145,359 44,953,166
Total Liabilities and Partners' Capital $48,867,119 $48,366,331
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Statement of Partners' Capital (Deficit)
For the nine months ended September 30, 1995
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Limited General
Partners Partner Total
---------- ---------- ----------
Balance at December 31, 1994 $46,762,959 $(1,809,793) $44,953,166
Net income -- 192,193 192,193
Balance at September 30, 1995 $46,762,959 $(1,617,600) $45,145,359
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Statements of Operations
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Three months ended Nine months ended
September 30, September 30,
Hotel Revenues 1995 1994 1995 1994
- -------------- --------- --------- --------- ---------
Rooms $2,470,556 $2,307,591 $ 6,763,980 $6,288,803
Food and beverage 1,091,912 1,103,070 3,201,466 3,054,001
Telephone 148,061 129,250 465,967 370,624
Other 27,587 51,560 88,544 110,103
Total Revenues 3,738,116 3,591,471 10,519,957 9,823,531
Departmental Expenses
- ---------------------
Rooms 607,316 607,489 1,834,906 1,776,528
Food and beverage 860,820 854,663 2,631,577 2,551,152
Telephone 85,877 77,034 248,321 240,307
Other 11,522 7,897 32,270 27,358
Total Expenses 1,565,535 1,547,083 4,747,074 4,595,345
Departmental income 2,172,581 2,044,388 5,772,883 5,228,186
Unallocated Partnership and Hotel Operating Expenses
- ----------------------------------------------------
Advertising and sales 136,757 145,363 414,010 463,974
General and administrative:
Hotel and other 517,416 485,404 1,514,842 1,410,819
Partnership 116,457 110,844 393,642 340,907
Utilities and maintenance 315,878 362,534 892,150 918,045
Ground rent 182,361 171,893 497,472 467,142
Management fees 130,946 114,752 321,112 259,538
Property taxes 99,339 106,652 286,961 316,256
Operating leases 13,220 37,463 87,222 112,607
Depreciation and amortization 436,479 422,124 1,296,778 1,260,754
1,948,853 1,957,029 5,704,189 5,550,042
Operating income (loss) 223,728 87,359 68,694 (321,856)
Other Income:
- ---------------
Interest income 44,902 11,829 118,806 30,752
Other income 1,180 555 4,693 1,975
46,082 12,384 123,499 32,727
Net Income (Loss) $ 269,810 $ 99,743 $ 192,193 $ (289,129)
Net Income (Loss) Allocated:
To the General Partner $ 203,836 $ 14,962 $ 192,193 $ (43,369)
To the Limited Partners 65,974 84,781 -- (245,760)
$ 269,810 $ 99,743 $ 192,193 $ (289,129)
Per limited partnership unit
(6,975,000 outstanding) $.01 $.01 $-- $(.04)
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Statements of Cash Flows
For the nine months ended September 30, 1995 and 1994
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Cash Flows from Operating Activities: 1995 1994
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Net income (loss) $ 192,193 $ (289,129)
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities:
Depreciation and amortization 1,296,778 1,260,754
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Restricted cash (400,820) (405,431)
Accounts receivable (210,413) (501,712)
Prepaid and other assets (143,636) (179,552)
Accounts payable and accrued liabilities 86,737 (304,125)
Due to affiliates 221,858 188,500
Net cash provided by (used for) operating activities 1,042,697 (230,695)
Cash Flows from Investing Activities:
Proceeds from restricted cash 383,670 191,666
Additions to real estate (383,670) (16,041)
Net cash provided by investing activities -- 175,625
Net increase (decrease) in cash 1,042,697 (55,070)
Cash at beginning of period 2,797,178 2,183,410
Cash at end of period $3,839,875 $2,128,340
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Notes to the Financial Statements
---------------------------------
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of September 30, 1995 and the results of operations and cash flows
for the nine months ended September 30, 1995 and 1994 and the statement of
changes in partners' capital (deficit) for the nine months ended September 30,
1995. Results of operations for the periods are not necessarily indicative of
the results to be expected for the full year.
Certain prior year amounts have been reclassified in order to conform to the
current year's presentation.
No significant events have occurred subsequent to fiscal year 1994, and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
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Liquidity and Capital Resources
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At September 30, 1995, Manhattan Beach Hotel Partners, L.P. (the "Partnership")
had cash of $3,839,875, including cash held at the Property for working
capital. Cash increased by $1,042,697 from December 31, 1994 due to cash flow
generated by operating activities. Such cash balances are expected to be
sufficient to meet the anticipated cash requirements of the Partnership.
Pursuant to the management agreement (the "Management Agreement") with
Manhattan Beach Management Company, an affiliate of Interstate Hotel
Corporation ("Interstate"), contributions to the reserve account for furniture,
fixtures and equipment ("FF&E") are made over time to protect and maintain the
value of the Partnership's Hotel. As of September 30, 1995, $287,639 was held
in the cash reserve account for FF&E and is noted as "Restricted cash" on the
Partnership's balance sheet.
Accounts receivable increased to $1,117,134 at September 30, 1995, compared to
$906,721 at December 31, 1994. Accounts payable and accrued liabilities
increased to $1,378,508 at September 30, 1995 compared to $1,291,771 at
December 31, 1994. The changes in both accounts receivable and accounts
payable primarily are due to the timing of payments. Due to affiliates
increased to $2,343,252 at September 30, 1995, compared to $2,121,394 at
December 31, 1994, primarily as a result of the accrual of property management
oversight fees. Prepaid and other assets increased to $524,711 at September
30, 1995, compared to $381,075 at December 31, 1994, primarily due to the
prepayment of general liability insurance coverage through May 1996.
Results of Operations
- ---------------------
For the three-month period ended September 30, 1995, the Partnership had net
income of $269,810 compared to net income of $99,743 for the three-month period
ended September 30, 1994. For the nine-month period ended September 30, 1995,
the Partnership had net income of $192,193 compared to a net loss of $289,129
for the nine-month period ended September 30, 1994. The improvement for the
three-month period in 1995 primarily is due to an increase in departmental
income and other income, and a slight decrease in unallocated Partnership and
hotel operating expenses. The improvement for the nine-month period in 1995
primarily is due to an increase in departmental income and other income, which
was partially offset by an increase in unallocated Partnership and hotel
operating expenses.
For the three and nine-month periods ended September 30, 1995, the Hotel
generated departmental income of $2,172,581 and $5,772,883, respectively,
compared to $2,044,388 and $5,228,186, respectively, for the corresponding
periods in 1994. The increase in departmental income for the 1995 periods
primarily is due to an increase in hotel revenues as a result of higher room
rates, which was partially offset by an increase in departmental expenses for
the periods.
For the three and nine-month periods ended September 30, 1995, unallocated
Partnership and Hotel operating expenses, including depreciation, were
$1,948,853 and $5,704,189, respectively, compared to $1,957,029 and $5,550,042,
respectively, for the corresponding periods in 1994. The increase for the
nine-month period primarily is a result of higher property insurance premiums
at the Hotel, increased legal costs associated with the pending settlement of
the lawsuit filed by Communication Facility Management Corporation and higher
management fees due to increased Hotel sales and profits.
For the three and nine-month periods ended September 30, 1995, the Partnership
generated $46,082 and $123,499, respectively, in total other income, compared
to $12,384 and $32,727, respectively, for the corresponding periods in 1994.
The increases primarily are due to increases in interest income from $11,829
and $30,752 for the three and nine-month periods ended September 30, 1994,
respectively, to $44,902 and $118,806, respectively, for the comparative
periods in 1995. The increases in interest income are due to higher cash
balances maintained by the Partnership and higher interest rates in 1995.
The following charts summarize the Hotel's performance for the nine-month
period ended September 30 of the indicated years.
Average Occupancy Average Room Rate
1995 1994 Variance 1995 1994 Variance
----- ----- ------ ------ ------ -------
84.3% 85.4% (1.1%) $77.39 $70.96 $6.43
Total Hotel Sales
1995 1994 % Change
---------- --------- --------
$10,519,957 $9,823,531 7.1%
Hotel House Profit
1995 1994 % Change
--------- --------- --------
$3,042,206 $2,461,123 23.6%
House profit is the Hotel's operating profit prior to payments made for certain
other items including property taxes, insurance, ground rent, equipment leases,
Partnership general and administrative expenses and the funding of the FF&E
reserve account.
Partnership Net Income (Loss)
1995 1994 % Change
------- -------- --------
$192,193 ($289,129) 166%
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PART II OTHER INFORMATION
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Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended September 30, 1995.
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SIGNATURES
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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.
MANHATTAN BEACH HOTEL PARTNERS, L.P.
BY: MANHATTAN BEACH COMMERCIAL PROPERTIES III INC.
General Partner
Date: November 14, 1995
BY: /s/Jeffrey C. Carter
Name: Jeffrey C. Carter
Title: Director, President and
Chief Financial Officer
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 4,127,514
<SECURITIES> 0
<RECEIVABLES> 1,117,134
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 53,665,278
<DEPRECIATION> 10,567,518
<TOTAL-ASSETS> 48,867,119
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 45,145,359
<TOTAL-LIABILITY-AND-EQUITY> 48,867,119
<SALES> 0
<TOTAL-REVENUES> 10,519,957
<CGS> 0
<TOTAL-COSTS> 4,747,074
<OTHER-EXPENSES> 5,704,189
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 192,193
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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