Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 10, 1998
DESERT SPRINGS MARRIOTT LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 0-16777 52-1508601
(State or other jurisdiction of (Commission File Number) I.R.S. Employer
incorporation or organization) Identification No.)
10400 Fernwood Road, Bethesda, MD 20817
Address of principal executive office (Zip Code)
Registrant's telephone number, including area code: 301-380-2070
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ITEM 5. OTHER EVENTS
On June 10, 1998, September 2, 1998 and November 25, 1998, the General Partner
sent to the Limited Partners of the Partnership a letter that accompanied the
Partnership's Quarterly Reports on Form 10-Q. Such letters are being filed as
exhibits to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Letter from the General Partner to the Limited Partners of
the Partnership that accompanied the Partnership's Quarterly
Report on Form 10-Q for the Quarter Ended March 27, 1998.
99.2 Letter from the General Partner to the Limited Partners of
the Partnership that accompanied the Partnership's Quarterly
Report on Form 10-Q for the Quarter Ended June 19, 1998.
99.3 Letter from the General Partner to the Limited Partners of
the Partnership that accompanied the Partnership's Quarterly
Report on Form 10-Q for the Quarter Ended September 11, 1998.
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SIGNATURE
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, hereunto duly authorized.
DESERT SPRINGS MARRIOTT
LIMITED PARTNERSHIP
By: MARRIOTT DESERT SPRINGS CORPORATION
General Partner
November 30, 1998 By: /s/ Earla L. Stowe
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Name: Earla L. Stowe
Title: Vice President and
Chief Accounting Officer
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EXHIBIT INDEX
Exhibit No.: Description:
99.1 Letter from the General Partner to the Limited
Partners of the Partnership that accompanied
the Partnership's Quarterly Report on Form
10-Q for the Quarter Ended March 27, 1998.
99.2 Letter from the General Partner to the Limited
Partners of the Partnership that accompanied
the Partnership's Quarterly Report on Form
10-Q for the Quarter Ended June 19, 1998.
99.3 Letter from the General Partner to the Limited
Partners of the Partnership that accompanied
the Partnership's Quarterly Report on Form
10-Q for the Quarter Ended September 11, 1998.
Exhibit 99.1
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DESERT SPRINGS MARRIOTT
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LIMITED PARTNERSHIP
1998 First Quarter Report
Limited Partner Quarterly Update
Presented for your review is the first quarter 1998 Report for Desert Springs
Marriott Limited Partnership. As reported in the 1997 Annual Report, the
Partnership files the Form 10-Q with the Securities and Exchange Commission (the
"SEC") each quarter. The 1998 first quarter Form 10-Q immediately follows this
letter and replaces the quarterly report format previously used by the
Partnership. The information presented is essentially the same as the
information given in prior years with certain additional items required by the
SEC's rules. Discussion of the Partnership's performance and Hotel operations is
included in Item 2, Management's Discussion and Analysis of Financial Condition
and Results of Operations. As in the past, we encourage you to review the
information contained in this report in its entirety. If you have any further
questions regarding your investment, please contact Host Marriott Investor
Relations at (301) 380-2070.
Partnership Cash Distributions
For 1997, the Partnership made a cash distribution in May 1998 of $2,500 per
limited partner unit. The distribution was made entirely from 1997 cash from
operations.
The 1998 third quarter update, to be mailed in November, will inform you of our
expectations for any distributions that can be made from 1998 operations. It is
too early in the operating year to make such a determination at this time. Any
distribution would be made at approximately this time next year, pursuant to the
terms of the new financing agreement.
Host Marriott Corporation Real Estate Investment Trust
On April 17, 1998, Host Marriott Corporation ("Host Marriott"), the parent of
the General Partner of the Partnership, announced that its Board of Directors
has authorized the company to reorganize its business operations to qualify as a
real estate investment trust ("REIT") to become effective as of January 1, 1999.
As part of the REIT conversion, Host Marriott expects to form a new operating
partnership (the "Operating Partnership") and limited partners in certain Host
Marriott full-service hotel partnerships and joint ventures, including the
Partnership, are expected to be given an opportunity to receive, on a
tax-deferred basis, Operating Partnership units in the new Operating Partnership
in exchange for their current partnership interest. We will keep you informed on
the status of this matter.
Exhibit 99.2
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DESERT SPRINGS MARRIOTT
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LIMITED PARTNERSHIP
1998 Second Quarter Report
Limited Partner Quarterly Update
Presented for your review is the 1998 Second Quarter Report for Desert Springs
Marriott Limited Partnership. A discussion of the Partnership's performance and
hotel operations is included in the attached Form 10-Q, Item 2, Management's
Discussion and Analysis of Financial Condition and Results of Operations. As
always, we encourage you to read this report in its entirety. If you have any
questions regarding your investment, please contact Host Marriott Partnership
Investor Relations at (301) 380-2070.
Partnership Cash Distributions
As you are aware, the Partnership made a distribution in May 1998 in the amount
of $2,500 per limited partner unit. This amount represents funds from 1997
operations. The 1998 third quarter update, to be mailed in November, will inform
you of our expectations for any distributions that can be made from 1998
operations. It is too early in the operating year to make such a determination
at this time. Pursuant to the terms of the new financing agreement, any
distribution from 1998 operations will be made at approximately the same time in
1999 that it was distributed this year.
Host Marriott Corporation's Conversion to a Real Estate Investment Trust
As previously reported, Host Marriott Corporation ("Host Marriott"), parent
company of the General Partner of the Partnership, announced on April 17, 1998,
that its Board of Directors authorized Host Marriott to reorganize its business
operations to qualify as a real estate investment trust ("REIT") to become
effective as of January 1, 1999. As part of the REIT conversion, Host Marriott
formed a new operating partnership (the "Operating Partnership"), and limited
partners in certain Host Marriott full-service hotel partnerships and joint
ventures, including the Desert Springs Marriott Limited Partnership, are
expected to be given an opportunity to receive, on a tax-deferred basis,
Operating Partnership units in the Operating Partnership in exchange for their
current limited partnership interests. The Operating Partnership units would be
redeemable by the limited partner for freely traded Host Marriott shares (or the
cash equivalent thereof) at any time after one year from the closing of the
merger. In connection with the REIT conversion, the Operating Partnership filed
a Registration Statement on Form S-4 (the "Form S-4") with the Securities and
Exchange Commission on June 2, 1998. Limited partners will be able to vote on
the Partnership's participation in the merger later this year through a consent
solicitation.
In order to assist you with your financial planning, we are providing you with
the preliminary valuation information on your Partnership units as disclosed in
the Form S-4. The estimated exchange value is $40,880 per Partnership unit (the
"Estimated Exchange Value"). The Estimated Exchange Value is subject to
adjustment to reflect various closing and other adjustments and the final
valuation information will be set forth in the final Form S-4 you will receive
later this year through a consent solicitation. The Estimated Exchange Value is
being provided to you at this time for information purposes only. We have not
attempted to provide you with all of the detail relating to the methodologies,
variables, assumptions and estimates used in determining the Estimated Exchange
Value. The final valuation likely will differ from the Estimated Exchange Value
set forth above and such difference may be material. The consent solicitation
that will be mailed to you to solicit your approval of a merger of the
Partnership will contain the final valuation for a Partnership unit as well as a
discussion of the methodologies, variables, assumptions and estimates used.
The solicitation period is expected to commence in late September 1998, and the
merger, if approved, would close by the end of the year (although there is no
assurance that this will be the case). Please notify the General Partner in
writing of any address changes in order to facilitate the prompt delivery of the
consent solicitation documents to you.
Secondary Market Activity
There has been an increase in the number of third party solicitations for this
Partnership's limited partner units. We are not in a position to advise you as
to whether you should accept such offers. However, in addition to reviewing the
information provided in this report, we encourage you to consult with your
financial and tax advisors when deciding if you should sell your Partnership
units. Due to the allocation of tax losses and income to you over the life of
the Partnership as well as any cash distributions paid to you, your tax basis in
this investment may be significantly lower than your original investment amount.
Therefore, there may be negative tax effects resulting from the sale of these
units that may impact your decision to sell. Once you have begun the sale
process we will do whatever is in our power to facilitate the transfer of your
units. Please note, the General Partner does not charge a fee in connection with
the transfer of Partnership units. If you wish to effect a transfer, please
contact our transfer agent, Trust Company of America/Gemisys at 1-800-797-6812
for the necessary documents.
Exhibit 99.3
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DESERT SPRINGS MARRIOTT
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LIMITED PARTNERSHIP
1998 Third Quarter Report
Limited Partner Quarterly Update
Presented for your review is the 1998 Third Quarter Report for Desert Springs
Marriott Limited Partnership (the "Partnership"). A discussion of the
Partnership's performance and hotel operations is included in the attached Form
10-Q, Item 2, Management's Discussion and Analysis of Financial Condition and
Results of Operations. You are encouraged to read this report in its entirety.
If you have any further questions regarding your investment, please contact Host
Marriott Partnership Investor Relations at (301) 380-2070.
Host Marriott Corporation's Conversion to a Real Estate Investment Trust
As publicly announced in April 1998, Host Marriott Corporation ("Host
Marriott"), the parent company of the General Partner of the Partnership, has
adopted a plan to restructure its business operations so that it will qualify as
a real estate investment trust ("REIT") for federal income tax purposes. As part
of the REIT conversion, Host Marriott proposes to merge into HMC Merger
Corporation (to be renamed "Host Marriott Corporation"), a Maryland corporation
("Host REIT"), and thereafter continue and expand its full-service hotel
ownership business. Host REIT will operate through Host Marriott, L.P., a
Delaware limited partnership (the "Operating Partnership"), of which Host REIT
will be the sole general partner. This is commonly called an "UPREIT" structure
and it is used to facilitate tax-deferred acquisitions of properties.
In previous correspondence, you were notified that you would be asked to vote on
a proposed transaction involving the Merger of this Partnership with a
subsidiary of the Operating Partnership. The Prospectus/Consent Solicitation
Statement and the Partnership's Supplement which contain detailed information
relating to this proposal were mailed to all Limited Partners of record as of
September 18, 1998. This is the date set by the General Partner as the record
date for determining Limited Partners entitled to vote on the Merger and the
related amendments to the partnership agreement. The Prospectus/Consent
Solicitation Statement and the Partnership's Supplement should be reviewed as
you make your decision to vote. You also received, among other things, a list of
Questions and Answers and telephone numbers for assistance. We strongly
encourage Limited Partners to consult with their own financial and tax advisors
when making their decision on how to vote and which option to choose.
It is important that your Partnership Units be voted, regardless of the number
of Partnership Units you hold. The solicitation period ends at 5:00 p.m.,
Eastern time, on December 12, 1998, unless extended. If you have not yet
received the Prospectus/Consent Solicitation Statement or if you or your
advisors have any questions regarding the Merger, please contact the Information
Agent at 1-800-733-8481 extension 445.
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Partnership Cash Distributions
As you are aware, the Partnership made a distribution in May 1998 in the amount
of $2,500 per limited partner unit. This amount represents funds from 1997
operations. It is our expectation that distributions from 1998 will be
approximately $1,500 per limited partner unit. However, actual distributions may
be higher or lower depending on actual Hotel operating results for the remainder
of the year. Pursuant to the terms of the new financing agreement, any
distribution from 1998 operations will be made at approximately the same time in
1999 that it was distributed this year.
Estimated 1998 Tax Information
If the Partnership votes to approve the Merger and the Merger is consummated,
the taxable income is estimated to be $8,700 per limited partner unit for the
year ending December 31, 1998. If the Partnership does not approve the Merger,
the taxable income is estimated to be $8,100 per limited partner unit for 1998.
The 1998 tax information, used for preparing your Federal and state income tax
returns, will be mailed no later than March 15, 1999. To ensure confidentiality,
we regret that we are unable to furnish your tax information over the telephone.
Unless otherwise instructed, we will mail your tax information to your address
as it appears on this report. Therefore, to avoid delays in delivery of this
important information, please notify the Partnership in writing of any address
changes by January 31, 1999.