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 March 31, 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: 0-16991
HOTEL PROPERTIES L.P.
Exact Name of Registrant as Specified in its Charter
Delaware 13-3430078
State or Other Jurisdiction of
Incorporation or Organization I.R.S. Employer Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn.: Andre Anderson 10285
Address of Principal Executive Offices Zip Code
(212) 526-3237
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 ____
Balance Sheets At March 31, At December 31,
1998 1997
Assets
Real estate held for disposition $ 103,113,635 $ 101,883,177
Cash and cash equivalents 2,594,487 3,334,906
Restricted cash 987,784 938,376
Restricted cash - loan reserve 2,534,466 2,535,447
Due from hotel managers, net 638,106 623,501
Replacement reserve receivable 1,589,949 1,783,963
Rent receivable 1,441,561 454,951
Other assets 53,741 _
Deferred charges - refinancing costs
net of accumulated amortization of
$894,989 in 1998 and $813,626 in 1997 732,263 813,626
Total Assets $ 113,685,992 $ 112,367,947
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 87,742 $ 72,916
Due to affiliates 38,000 40,000
Mortgage loans payable 77,865,542 78,332,542
Promissory notes payable 241,814 420,273
Refinancing fee payable 412,500 412,500
Deferred management fees payable 4,187,505 4,187,505
Deferred interest payable 1,849,185 1,849,185
Total Liabilities 84,682,288 85,314,921
Partners' Capital:
General Partner 78,259 58,752
Limited Partners (3,464,700 limited partnership
units authorized, issued and outstanding) 28,925,445 26,994,274
Total Partners' Capital 29,003,704 27,053,026
Total Liabilities and Partners' Capital $ 113,685,992 $ 112,367,947
Statement of Partners' Capital
For the three months ended March 31, 1998
Limited General
Partners Partner Total
Balance at December 31, 1997 $ 26,994,274 $ 58,752 $ 27,053,026
Net Income 1,931,171 19,507 1,950,678
Balance at March 31, 1998 $ 28,925,445 $ 78,259 $ 29,003,704
Statements of Operations
For the three months ended March 31, 1998 1997
Income
Rent:
Operating profit $ 2,469,624 $ 2,302,655
Replacement escrow 1,299,364 1,253,840
Interest and other 114,875 118,704
Total Income 3,883,863 3,675,199
Expenses
Interest 1,758,997 1,799,048
Depreciation and amortization 81,363 1,822,340
General and administrative 44,051 64,374
Professional fees 48,774 10,093
Total Expenses 1,933,185 3,695,855
Net Income (Loss) $ 1,950,678 $ (20,656)
Net Income (Loss) Allocated:
To the General Partner $ 19,507 $ _
To the Limited Partners 1,931,171 (20,656)
$ 1,950,678 $ (20,656)
Per limited partnership unit
(3,464,700 outstanding) $ .56 $ (.01)
Statements of Cash Flows
For the three months ended March 31, 1998 1997
Cash Flows From Operating Activities:
Net Income (Loss) $ 1,950,678 $ (20,656)
Adjustments to reconcile net income (loss)
to net cash used for operating activities:
Rental income from replacement escrow (1,299,364) (1,253,840)
Depreciation and amortization 81,363 1,822,340
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Due from hotel managers, net (14,605) (26,747)
Rent receivable (986,610) (765,734)
Accounts payable and accrued expenses 14,826 145,684
Due to affiliates (2,000) 10,700
Mortgage loans interest payable _ (3,178)
Net cash used for operating activities (255,712) (91,431)
Cash Flows From Investing Activities:
Proceeds from restricted cash (49,408) 223,431
Proceeds from replacement reserve receivable 1,493,378 3,575,577
Additions to real estate (1,230,458) (3,799,008)
Other assets (53,741) _
Net cash provided by investing activities 159,771 -
Cash Flows From Financing Activities:
Net interest from restricted cash - loan reserve 981 1,015
Principal payments on mortgage loans payable (467,000) (423,770)
Principal payment on promissory note (178,459) _
Distributions _ (1,399,879)
Net cash used for financing activities (644,478) (1,822,634)
Net decrease in cash and cash equivalents (740,419) (1,914,065)
Cash and cash equivalents, beginning of period 3,334,906 3,590,188
Cash and cash equivalents, end of period $ 2,594,487 $ 1,676,123
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 1,758,997 $ 1,802,226
Notes to the Financial Statements
The unaudited financial statements should be read in conjunction with the
Partnership's annual 1997 audited financial statements within Form 10-K.
The unaudited financial statements include all normal and reoccurring
adjustments which are, in the opinion of management, necessary to present a
fair statement of financial position as of March 31, 1998 and the results of
operations and cash flows for the three months ended March 31, 1998 and 1997
and the statement of partner's capital for the three months ended March 31,
1998. 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 to conform to the current
year's presentation.
The following significant event has occurred subsequent to fiscal year 1997
which requires disclosure in this interim report per Regulation S-X, Rule
10-01, Paragraph (a)(5).
On January 9, 1998, the Partnership entered into a non-binding letter of intent
with a major independent hotel buyer, pursuant to which the parties agreed to
negotiate in good faith an agreement to purchase the Hotels for a cash purchase
price of approximately $114 million (the "Offer"), subject to Marriott's right
of first refusal. On that same day, the General Partner notified Marriott of
the Offer, and by letter dated February 5, 1998, Marriott notified the General
Partner that it would exercise its right of first refusal to purchase the
Hotels at the same price and under the same terms and conditions as those set
forth in the Offer.
On March 13, 1998, the Partnership filed a Form 8-K reporting that on March 10,
1998, the Partnership notified Limited Partners of the negotiation of the
potential sale of the Partnership's Hotels for a cash purchase price of
approximately $114 million.
Effective April 24, 1998, the Partnership executed a formal Purchase and Sale
Contract with Marriott to sell the Hotels for $114 million in cash, subject to
closing adjustments (the "Proposed Sale").
The Proposed Sale is subject to the satisfaction of certain conditions,
including the Partnership obtaining the approval of a majority in interest of
the outstanding Unitholders. To obtain such approval, a proxy solicitation
describing the terms of the Proposed Sale was mailed to Limited Partners on
May 5, 1998. Limited Partners were requested to submit executed ballots by
May 15, 1998. Should the Proposed Sale be approved, it is currently
anticipated that the closing will occur on or before June 1, 1998.
The following unaudited pro forma financial information gives effect to the
Proposed Sale as though it had closed on March 31, 1998. The pro forma
financial information is presented for illustrative purposes only, and
therefore, is not necessarily indicative of the operating results and financial
position that might have been achieved had the Proposed Sale occurred as of an
earlier date, nor are they necessarily indicative of operating results and
financial position which may occur in the future. The sale price of the Hotels
is $114,000,000 in cash. The costs to sell the Hotels as of June 30, 1998 are
anticipated to be approximately $2,280,000. The Partnership will use a portion
of the proceeds from the sale to repay the mortgage loan payable in full, which
is $77,865,542 as of March 31, 1998. The remaining cash in the Partnership is
assumed to be distributed in accordance with the Partnership Agreement.
Pro Forma Balance Sheet (Unaudited) Pro Forma
March 31, Pro Forma March 31,
1998 Adjustments 1998 (f)
Assets
Real estate held for disposition $103,113,635 $(103,113,635)(a) $ _
Cash and cash equivalents 2,594,487 3,321,713 (e) 39,770,658
111,720,000 (a)
(77,865,542)(b)
Restricted cash 987,784 (987,784)(a) _
Restricted cash - loan reserve 2,534,466 (2,534,466)(e) _
Due from hotel managers, net 638,106 (638,106)(a) _
Replacement reserve receivable 1,589,949 (1,589,949)(e) _
Rent receivable 1,441,561 (1,441,561)(e) _
Other asset 53,741 (53,741)(a) _
Deferred charges - refinancing costs,
net of accumulated amortization of
$894,989 in 1998 732,263 (732,263)(d) _
Total Assets $113,685,992 $(73,915,334) $39,770,658
Liabilities and Partner's Capital
Liabilities
Accounts payable and accrued
expenses $ 87,742 $ _ 87,742
Due to affiliates 38,000 _ 38,000
Mortgage loans payable 77,865,542 (77,865,542)(b) _
Refinancing fee payable 412,500 (412,500)(e) _
Deferred management fees 4,187,505 (4,187,505)(c) _
Deferred interest payable 1,849,185 (1,849,185)(c) _
Promissory notes payable 241,814 (241,814)(e) _
Total Liabilities $ 84,682,288 $(84,556,546) $ 125,742
Partners' Capital:
$ 274,311 (a)
3,180 (c)
General Partner $ 78,259 (7,323)(d) $ 348,427
5,062,474 (a)
Limited Partners (3,464,700
limited partnership 6,033,510 (c)
units authorized, issued
and outstanding) 28,925,445 (724,940)(d) 39,296,489
Total Partners' Capital $ 29,003,704 $ 10,641,212 $ 39,644,916
Total Liabilities and Partners'
Capital $113,685,992 $(73,915,334) $ 39,770,658
The pro forma balance sheet as of March 31, 1998 reflects the assumed sale of
the four Hotels and the liquidation of the Partnership on March 31, 1998. The
sale price of the Hotels is $114,000,000 in cash, subject to certain
adjustments. The cost to sell the Hotels as of June 30, 1998 are anticipated
to be approximately $2,280,000. The Partnership will use a portion of the
proceeds from the sale to repay the mortgage loan payable in full, which is
$77,865,542 as of March 31, 1998. The remaining cash in the Partnership is
assumed to be distributed in accordance with the Partnership Agreement. See
accompanying Notes to the Pro Forma Adjustments.
Notes to the Pro Forma Adjustments
(a) To record the sale of the Hotels reflecting the removal of the property
held for disposition and related deferred charges, the receipt of net sale
proceeds, and the allocation of the gain to the General Partner and
Unitholders as follows:
Sales price $114,000,000
Closing costs 2,280,000
Net Cash Proceeds 111,720,000
Property held for
disposition 103,113,635
Restricted Cash 987,784
Due from Hotel Managers 638,106
Other Asset 53,741
Replacement Reserve
Receivable 1,589,949
Gain on Sale $ 5,336,785
Allocated as follows:
Unitholders $ 5,062,474
General Partner 274,311
$ 5,336,785
The allocation of gain to the General Partner is based upon their
estimated share of distributions from the sale.
(b) To reflect the payment of mortgage indebtedness, pursuant to the agreements
discussed herein, as follows:
Mortgage Loan Payable $ 77,865,542
$ 77,865,542
(c) To reflect the forgiveness and related allocation to the General Partner
and Unitholders as follows:
Deferred Management Fees $ 4,187,505
Deferred Interest Payable 1,849,185
$ 6,036,690
Allocated as follows:
Unitholders $ 6,033,510
General Partner 3,180
$ 6,036,690
(d) To reflect the write-off of deferred charges associated with the mortgages
totalling $732,263 and the related allocation to the General Partner and
Unitholders.
Unitholders $ 724,940
General Partner 7,323
$ 732,263
(e) To reflect the collection of rent receivable and other receivables from
hotel managers, the receipt of the Partnership's portion of the replacement
reserve from Marriott, the satisfaction of obligations payable from the
replacement reserve, and the receipt of restricted cash.
(f) The remaining cash, net of accounts payable and accrued expenses and due to
affiliates, will be distributed to the General Partner and Unitholders in
accordance with the ending capital balances as follows:
General Partner $ 348,427
Unitholders 39,296,489
$ 39,644,916
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
On June 28, 1995, the Partnership refinanced and amended its $80,438,000
mortgage loans payable and the $2,531,417 revolving credit loans payable
(collectively, the "Loan") with The Equitable Life Assurance Society of the
United States ("Equitable"), and terminated its Asset Management Agreement with
Equitable Real Estate Investment Management, Inc. ("EREIM"). The Loan was
consolidated into a new mortgage loan with Equitable totaling $82,469,417 (the
"New Mortgage"). The New Mortgage is collateralized by four separate deeds of
trust with respect to the Hotels and has a term of five years.
As a condition of the New Mortgage, the Partnership entered into an escrow
agreement with Equitable requiring the Partnership to provide additional
collateral for the New Mortgage (the "Loan Reserve"). As of March 31, 1998,
the Loan Reserve balance was maintained at $2.5 million, and there were no
defaults on the New Mortgage. The Loan Reserve may be used by the Partnership
to meet Marriott Hotel Services, Inc.'s ("Marriott" or the "Hotel Manager")
request for additional funds for furniture, fixtures and equipment ("FF&E") or
building additions or expansions in excess of those available in the Hotels'
reserve accounts. In each case, Marriott is obligated to contribute a portion
of such funds.
After considering a number of factors, including the recently improved
operating performance of the Hotels, the improving hospitality industry
nationwide and the significantly strengthened market for the acquisition of
full-service hotel properties, the General Partner decided during the second
quarter of 1997 to begin marketing the Hotels for sale. In July 1997, the
Partnership retained Eastdil Realty Company ("Eastdil"), a
nationally-recognized real estate firm, to assist with the marketing efforts.
Eastdil completed the preparation of marketing brochures during the third
quarter of 1997, and commenced the active marketing of the Hotels in the fourth
quarter. The Hotel operating leases give Marriott the right of first refusal
in the event the Partnership receives an offer to purchase the Hotels and
desires to accept such offer. Pursuant to the terms of the Hotel operating
leases, the Partnership must give notice of such offer to Marriott, and
Marriott may elect to purchase the Hotels at the same price and under the same
conditions. The goal is to maximize the selling price of the Hotels and
distribute the net sales proceeds to partners in accordance with the terms of
the Partnership Agreement.
On January 9, 1998, the Partnership entered into a non-binding letter of intent
with a major independent hotel buyer, pursuant to which the parties agreed to
negotiate in good faith an agreement to purchase the Hotels for a cash purchase
price of approximately $114 million (the "Offer"), subject to Marriott's right
of first refusal. On that same day, the General Partner notified Marriott of
the Offer, and by letter dated February 5, 1998, Marriott notified the General
Partner that it would exercise its right of first refusal to purchase the
Hotels at the same price and under the same terms and conditions as those set
forth in the Offer. Effective April 28, 1998, the Partnership entered into a
formal Purchase and Sale Contract with Marriott to sell the Hotels for $114
million in cash, subject to closing adjustments (the "Proposed Sale").
The Proposed Sale is subject to the satisfaction of certain conditions,
including the Partnership obtaining the approval of a majority in interest of
the outstanding Unitholders. To obtain such approval, a proxy solicitation
describing the terms of the Proposed Sale was mailed to Limited Partners on
May 5, 1998. Limited Partners were requested to submit executed ballots by May
15, 1998. Should the Proposed Sale be approved, it is currently anticipated
that the closing will occur on or before June 1, 1998. If the closing occurs
after June 1, 1998, the Partnership will incur a prepayment penalty on its Loan
with Equitable, currently estimated at $700,000. Upon completion of the
Proposed Sale, distributions will be made to Limited Partners in accordance
with the Partnership Agreement. If the Proposed Sale occurs, the General
Partner currently estimates that proceeds available for distribution to
Unitholders will be approximately $37 million to $39 million, or $10.57 to
$11.14 per Unit, assuming the Proposed Sale is completed by June 1, 1998. The
amount will be dependent on operations of the Hotels and the Partnership until
closing, the timing of the closing and other factors, all of which are
uncertain at this time. While it is expected that the Hotels will be sold
during 1998, there can be no assurance that the Proposed Sale will be
consummated, or that the Proposed Sale will result in any particular level of
distributable cash.
In view of the anticipated sale of the Hotels, the Partnership's real estate
has been recorded at cost, less accumulated depreciation and amortization at
March 31, 1998 on the Partnership's Balance Sheet as "Real estate held for
disposition." Real estate held for disposition at March 31, 1998 was
$103,113,635. Upon reclassification, depreciation expense is no longer
recorded.
The Partnership's cash balance is invested in an interest- bearing account and
is used as a working capital reserve for operating expenses, debt service and
Partnership liabilities. At March 31, 1998, the Partnership had cash and cash
equivalents of $2,594,487, compared to $3,334,906 at December 31, 1997. The
decrease is due to cash used for financing and operating activities exceeding
cash provided by investing activities.
A reserve account for each of the Hotels has been established to cover certain
costs of improvements, replacements, refurbishments and renewals, as well as
FF&E upgrades. For the Los Angeles, St. Louis and Tan-Tar-A Hotels, the
reserve is maintained on behalf of the Partnership at each Hotel and is
classified as "Replacement reserve receivable" on the Partnership's balance
sheet. Replacement reserve receivable decreased from $1,783,963 at
December 31, 1997 to $1,589,949 at March 31, 1998 due to expenditures exceeding
contributions to the reserve. For the Nashville Hotel, the reserve is held by
the Partnership and is classified as "Restricted cash" on the Partnership's
balance sheet. Restricted cash increased to $987,784 at March 31, 1998,
compared to $938,376 at December 31, 1997 as a result of contributions
exceeding expenditures from the reserve. Rent receivable increased to
$1,441,561 at March 31, 1998, compared to $454,951 at December 31, 1997 due to
the timing of receipt of payments. Other assets increased to $53,741 at
March 31, 1998, compared to $0 at December 31, 1997, primarily due to costs
relating to the Proposed Sale being capitalized for the 1998 period. Deferred
charges - refinancing costs decreased to $732,263 at March 31, 1998, compared
to $813,626 at December 31, 1997, due to the scheduled amortization of the New
Mortgage. Accounts payable and accrued expenses increased to $87,742 at March
31, 1998, compared to $72,916 at December 31, 1997, primarily due to the timing
of payments for legal and audit expenses.
On October 18, 1996, the Partnership entered into a loan agreement and executed
a promissory note in an amount up to $1,100,000 (the "Line of Credit") with
Marriott International Capital Corporation (the "Lender"). The purpose of such
financing was to provide the Partnership with the required capital to implement
certain upgrades to furniture, fixtures and equipment and to make certain
non-structural repairs and renovations (collectively, the "Renovations") at the
St. Louis Hotel. The Lender will fund to the Partnership from time-to- time
amounts necessary (up to the maximum amount of the Line of Credit) to complete
the Renovations at the St. Louis Hotel. The Line of Credit is unsecured and
non-recourse to the Partnership. During 1997, the Partnership borrowed
$1,100,000 under the Line of Credit and funded the replacement reserve to make
the Renovations.
The Partnership has directed the Hotel Manager, the St. Louis Hotel's tenant,
to make payments on behalf of the Partnership solely from the St. Louis Hotel's
FF&E Replacement Reserve account in an amount equal to $61,986 per period
commencing with the second accounting period in fiscal 1997 until the maturity
of the Line of Credit. The Line of Credit bears interest at a rate of 9% per
annum on all outstanding amounts and can be prepaid by the Partnership without
premium or penalty. The Hotel Manager will fund all interest payments into the
FF&E Replacement Reserve account from the Hotel Manager's own funds prior to
making any interest payments to the Lender. Consequently, the payment from the
tenant will offset the interest as if this were an interestfree loan to the
Partnership. The Partnership made principal payments on the Line of Credit
from the replacement reserve totaling $858,186 to date, leaving a balance due
of $241,814 as of March 31, 1998.
Prior to 1994, cash distributions were paid on a quarterly basis from net cash
flow provided by operating activities to Unitholders based on the seasonal
performance of the Hotels. The General Partner suspended the payment of cash
distributions in the fourth quarter of 1994. This action was taken in order to
increase Partnership cash reserves to provide for the various costs of securing
replacement financing related to the maturity of the Partnership's outstanding
indebtedness in June 1995. Distributions remained suspended through 1996 in
order for the Partnership to meet certain requirements under the terms of the
New Mortgage. Due to the satisfaction of such requirements, and improved
operations during 1996 at both the Partnership and Hotel levels, a cash
distribution in the amount of $0.40 per Unit was paid to Limited Partners on
February 14, 1997 from the Partnership's operations during the prior year. The
distribution was paid to Limited Partners of record as of each month-end in
1996. This represented a one-time distribution of 1996 annual cash flow and
did not indicate the reinstatement of regular cash distributions. The General
Partner expects to distribute the proceeds from the anticipated sale of the
Hotels to Limited Partners in accordance with the terms of the Partnership
Agreement.
Other than from a sale of the Hotels, the primary source of ongoing cash and
liquidity is from rental revenue under the operating leases and the
Partnership's cash reserves. The Partnership knows of no trends, demands,
commitments, events or uncertainties, other than the Partnership's cash
requirements pursuant to the terms of the New Mortgage, that will result in or
that are reasonably likely to result in the Partnership's liquidity increasing
or decreasing in any material way, other than the normal seasonal fluctuation
in hotel operations which, in turn, causes fluctuations in rental income
throughout the year.
Results of Operations
The Partnership generated net income of $1,950,678 for the three-month period
ended March 31, 1998, compared to a net loss of $20,656 for the three-month
period ended March 31, 1997. The improvement is due to an increase in total
income and a decrease in total expenses, primarily depreciation. After adding
back the non-cash items of depreciation and amortization and subtracting the
amount of rental income from the FF&E replacement escrow, the Partnership had
adjusted net operating income of $732,677 for the three-month period ended
March 31, 1998, compared with $547,844 for the three-month period ended
March 31, 1997, reflecting improved operational activity.
Total income for the three-month period ended March 31, 1998 was $3,883,863,
compared with $3,675,199 for the three-month period ended March 31, 1997. The
increase is due to higher rents from operating profit earned at the Los Angeles
and Nashville Hotels and higher rents from replacement escrow. Rent from
replacement escrow, which is calculated as a percentage of the Hotels' gross
revenues, was $1,299,364 for the three-month period ended March 31, 1998,
compared with $1,253,840 for the three-month period ended March 31, 1997.
Interest and other income totaled $114,875 for the three-month period ended
March 31, 1998, largely unchanged from $118,704 for the three-month period
ended March 31, 1997.
Net cash used for operating activities was $255,712 for the three-month period
ended March 31, 1998, compared with $91,431 for the three-month period ended
March 31, 1997. The increase primarily is due to increased rent receivable for
the three- month period in 1998.
Net cash provided by investing activities was $159,771 for the three-month
period ended March 31, 1998, compared with $0 for the three-month period ended
March 31, 1997. The change primarily is due to replacement escrow revenue from
the Hotels exceeding capital expenditures at the Hotels for the three- month
period in 1998.
Net cash used for financing activities was $644,478 for the threemonth period
ended March 31, 1998, compared with $1,822,634 for the three-month period ended
March 31, 1997. The decrease primarily is due to no distribution being paid
during the three- month period in 1998, partially offset by an increase in the
principal payments on the promissory note during the three-month period in
1998.
Total expenses for the three-month period ended March 31, 1998 were $1,933,185,
compared with $3,695,855 for the three-month period ended March 31, 1997. The
decrease primarily is due to lower depreciation and amortization expense, lower
interest expense and lower general and administrative expenses, which were
partially offset by higher professional fees. Interest expense decreased to
$1,758,997 for the three-month period ended March 31, 1998, compared with
$1,799,048 for the three-month period ended March 31, 1997, due to the
scheduled amortization of the New Mortgage. Depreciation and amortization
expenses for the three-month period ended March 31, 1998 were $81,363, compared
with $1,822,340 for the three-month period ended March 31, 1997. The decrease
is due primarily to the Hotels no longer being depreciated as a result of being
classified as "Real estate held for disposition" as of June 30, 1997. General
and administrative expenses for the three-month period ended March 31, 1998
were $44,051, compared with $64,374 for the three- month period ended March 31,
1997. The decrease primarily is due to lower administrative, printing, postage
and other miscellaneous expenses. Professional fees totaled $48,774 for the
three-month period ended March 31, 1998, compared with $10,093 for the
three-month period ended March 31, 1997. The increase primarily is due to
higher legal accruals relating to the Proposed Sale.
The following table summarizes the Hotels' performance for the period from
January 1 to March 22 of the indicated years (i.e., the first three Marriott
accounting periods):
1998 1997 % Change
Weighted Average Occupancy 74.3% 76.5% (2.3)
Weighted Average Room Rate $98.66 $92.76 6.4
Total Hotel Sales $ 26,390,184 $ 25,877,428 2.0
Hotel Operating Profit 4,329,655 3,820,523 13.3
Rent Earned by the Partnership 2,469,624 2,302,655 7.3
Part II Other Information
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
On March 13, 1998, the Partnership filed a Form 8-K reporting
that on March 10, 1998, the Partnership notified Limited
Partners of the negotiation of the potential sale of the
Partnership's Hotels for a cash purchase price of
approximately $114 million.
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.
HOTEL PROPERTIES L.P.
BY: EHP/GP INC.
General Partner
Date: May 15, 1998 BY: /s/Jeffrey C. Carter
Director, President and
Chief Financial Officer
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<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Mar-31-1998
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<SECURITIES> 000
<RECEIVABLES> 3,669,616
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 103,113,635
<PP&E> 000
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<TOTAL-ASSETS> 113,685,992
<CURRENT-LIABILITIES> 780,056
<BONDS> 77,865,542
<COMMON> 000
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<OTHER-SE> 29,003,704
<TOTAL-LIABILITY-AND-EQUITY> 113,685,992
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<TOTAL-REVENUES> 3,883,863
<CGS> 000
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<OTHER-EXPENSES> 174,188
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<NET-INCOME> 1,950,678
<EPS-PRIMARY> .56
<EPS-DILUTED> .56
</TABLE>
