FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended July 4, 1997
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 033-73340-01
John Q. Hammons Hotels, L.P.
John Q. Hammons Hotels Finance Corporation
John Q. Hammons Hotels Finance Corporation II
(Exact name of registrants as specified in their charters)
Delaware 43-1523951
Missouri 43-1680322
Missouri 43-1720400
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification Nos.)
300 John Q. Hammons Parkway
Suite 900
Springfield, MO 65806
(Address of principal executive offices)
(417) 864-4300
(Registrants' telephone number, including area code)
Indicate by check mark whether the registrants (1) have 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 registrants were required to file such reports, and (2)
have been subject to such filing requirements for the past 90 days.
Yes ___x__ No ______
JOHN Q. HAMMONS HOTELS, L.P.
John Q. Hammons Hotels Finance Corporation
John Q. Hammons Hotels Finance Corporation II
INDEX
PART I. FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements
Consolidated Balance Sheets at July 4, 1997 (unaudited) and
January 3,1997 (audited) ........................................... 3
Consolidated Statement of Income for the three and six months
ended July 4, 1997 (unaudited) and June 28, 1996 (unaudited)...... 5
Consolidated Statements of Changes in Equity for the period
January 3, 1997 to July 4, 1997 (unaudited) ..................... 6
Consolidated Statements of Cash Flows for the six months ended
July 4, 1997 (unaudited) and June 28, 1996 (unaudited)............. 7
Notes to Consolidated Financial Statements ........................ 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ........................................... 10
PART II. OTHER INFORMATION AND SIGNATURES
Item 1. Legal Proceedings.............................................. 19
Item 6. Reports on Form 8-K............................................ 19
Signatures .................................................... 20
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED BALANCE SHEETS
(000's omitted)
<TABLE>
<CAPTION>
ASSETS
July 4, 1997 January 3, 1997
(Unaudited) (Audited)
CURRENT ASSETS
<S> <C> <C>
Cash and equivalents $25,496 $46,449
Marketable securities 5,109 2,355
Receivables -
Trade, less allowance for doubtful
accounts of $163 7,246 5,790
Construction reimbursements and
management fees 1,078 825
Inventories 1,054 1,019
Prepaid expenses and other 1,728 1,928
--------- ---------
Total current assets 41,711 58,366
--------- -----------
PROPERTY AND EQUIPMENT, at cost
Land and improvements 34,806 29,712
Buildings and improvements 506,533 433,059
Furniture, fixtures and equipment 189,930 160,198
Construction in progress 112,117 120,525
---------- ----------
843,386 743,494
Less-Accumulated depreciation
and amortization (188,487) (174,899)
---------- ----------
654,899 568,595
DEFERRED FINANCING COSTS, FRANCHISE
FEES AND OTHER, net 32,163 31,111
---------- ---------
$728,773 $658,072
========== =========
</TABLE>
See Notes to Consolidated Financial Statements
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED BALANCE SHEETS
(000's omitted)
LIABILITIES AND EQUITY
<TABLE>
<CAPTION>
July 4, 1997 January 3, 1997
(Unaudited) (Audited)
CURRENT LIABILITIES
<S> <C> <C>
Current maturities of long-term debt $ 9,326 $12,444
Accounts payable 20,758 29,977
Accrued expenses:
Payroll and related benefits 5,004 4,611
Sales and property taxes 8,749 7,069
Insurance 10,392 9,511
Interest 12,611 12,634
Utilities, franchise fees, and other 7,064 6,242
---------- ---------
Total current liabilities 73,904 82,488
LONG-TERM DEBT 586,870 518,699
OTHER OBLIGATIONS AND DEFERRED REVENUE 9,430 7,023
---------- ---------
Total liabilities 670,204 608,210
---------- ---------
COMMITMENTS AND CONTINGENCIES
EQUITY
Contributed capital 96,436 96,436
Partners' and other deficits, net (37,867) (46,574)
---------- ----------
Total equity 58,569 49,862
---------- ----------
$728,773 $658,072
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
(000's omitted)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 4,1997 June 28, 1996 July 4,1997 June 28, 1996
REVENUES : (Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Rooms $50,582 $44,126 $95,979 $84,357
Food and beverage 20,841 19,435 41,238 39,196
Meeting room rental
and other 4,796 4,782 9,544 9,410
---------- ---------- ---------- ---------
Total revenues 76,219 68,343 146,761 132,963
OPERATING EXPENSES :
Direct operating costs and expenses
Rooms 12,573 10,826 23,842 21,120
Food and beverage 15,100 14,448 29,938 28,751
Other 829 734 1,579 1,450
General, administrative
and sales expenses 20,279 18,428 40,352 37,792
Repairs and maintenance 3,189 3,036 6,094 5,636
Depreciation and
amortization 8,104 6,025 15,037 11,946
--------- --------- ---------- ---------
Total operating expenses 60,074 53,497 116,842 106,695
---------- --------- ---------- ----------
INCOME FROM OPERATIONS 16,145 14,846 29,919 26,268
OTHER INCOME (EXPENSE) :
Interest income 130 526 489 1,220
Interest expense and amortization
of deferred financing fees(10,168) (9,470) (19,886) (19,429)
---------- --------- --------- ---------
NET INCOME $6,107 $5,902 $10,522 $ 8,059
========== ========= ========= ========
</TABLE>
See Notes to Consolidated Financial Statements
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(000's omitted)
Contributed Partners and
Capital Other Equity (Deficit)
General General Limited
Partner Partner Partner Total
<TABLE>
<CAPTION>
BALANCE,
<S> <C> <C> <C> <C>
January 3, 1997 (Audited) $96,436 ($80,236) $33,662 $49,862
Distributions (1,815) (1,815)
Net Income 2,979 7,543 10,522
--------- --------- -------- --------
BALANCE,
July 4, 1997 (Unaudited) $96,436 ($77,257) $39,390 $58,569
========= ========= ======== =======
</TABLE>
See Notes to Consolidated Financial Statements
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted)
<TABLE>
<CAPTION>
Six Months Ended
July 4,1997 June 28, 1996
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $10,522 $8,059
Adjustments to reconcile net income to cash
provided by operating activities-
Depreciation, amortization and
loan cost amortization 15,996 12,861
Changes in certain assets and liabilities-
Receivables (1,709) 1,785
Inventories (35) 116
Prepaid expenses and other 200 600
Accounts payable (9,219) 2,406
Accrued expenses 3,753 1,066
Other obligations and deferred revenue 2,407 (308)
--------- --------
Net cash provided by operating activities 21,915 26,585
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment, net (99,542) (50,659)
Franchise fees and other (3,810) (1,496)
Sale of marketable securities, net (2,754) 5,535
--------- ---------
Net cash used in investing activities (106,106) (46,620)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowing 66,831 19,000
Repayments of debt (1,778) (1,068)
Distributions to partners (1,815) (1,675)
--------- --------
Net cash provided by financing activities 63,238 16,257
--------- --------
Increase (decrease) in cash and equivalents (20,953) (3,778)
CASH AND EQUIVALENTS, beginning of period 46,449 41,777
--------- -------
CASH AND EQUIVALENTS, end of period $25,496 $37,999
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID FOR INTEREST ,net of amounts capitalized $18,918 $18,567
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
JOHN Q. HAMMONS HOTELS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. ENTITY MATTERS
The accompanying consolidated financial statements include the
accounts of John Q. Hammons Hotels, L.P. and its wholly-owned
subsidiaries ("Partnership"), consisting of John Q. Hammons Hotels
Finance Corporation ("Finance Corp.") and John Q. Hammons
Hotels Finance Corporation II ("Finance Corp. II"), both
corporations with nominal assets and no operations, the catering
corporations (which are separate corporations for each hotel
location chartered to own the respective food and liquor licenses
and operate the related food and beverage facilities), and certain
other wholly-owned subsidiaries conducting certain hotel
operations.
In conjunction with a public offering of first mortgage notes in
February 1994 ("1994 Notes") and in November 1995 ("1995
Notes") by the Partnership and Finance Corp I and II, and a public
offering of common stock in November 1994 ("Common Stock
Offering") by its general partner, John Q. Hammons Hotels, Inc.,
("General Partner"), the Partnership, which owned and operated
ten hotels properties, obtained through transfers or contributions
from Mr. John Q. Hammons ("Mr. Hammons") or enterprises that
he controlled, 21 additional operating hotel properties, equity
interests in two hotels under construction, the stock of catering
corporations and management contracts relating to all of Mr.
Hammons' hotels.
The Partnership is directly or indirectly owned and controlled by Mr.
Hammons, as were all enterprises that transferred or contributed
net assets to the Partnership. Accordingly, the accompanying
financial statements present, as a combination of entities under
common control as if using the pooling method of accounting, the
financial position and related results of operations of all entities on
a consolidated basis for all periods presented. All significant
balances and transactions between the entities and properties
have been eliminated.
Mr. Hammons and entities directly or indirectly owned or controlled
by him are the only limited partners of the Partnership. Mr.
Hammons, through his voting control of the General Partner,
continues to be in control of the Partnership.
2. GENERAL
The accompanying unaudited interim financial statements have
been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission for reporting on Form 10-Q.
Accordingly, certain information and footnotes required by
generally accepted accounting principles for complete financial
statements have been omitted. These interim statements should
be read in conjunction with the financial statements and notes
thereto included in the Partnership's Form 10-K for the year ended
January 3, 1997, which included financial statements for the year
ended January 3, 1997 and December 29, 1995.
The information contained herein reflects all normal and recurring
adjustments that, in the opinion of management, are necessary for
a fair presentation of the results of operations and financial position
for the interim periods.
The Partnership considers all operating cash accounts and money
market investments with an original maturity of three months or less
to be cash equivalents. Marketable securities consist of
available-for-sale commercial paper and government agency
obligations that mature or will be available for use in operations in
1997. These securities are valued at current market value, which
approximates cost.
3. ALLOCATIONS OF INCOME, LOSSES AND DISTRIBUTIONS
Income, losses and distributions of the Partnership will generally be
allocated between the General Partner and the limited partners
based on their respective ownership interests of 28.31% and
71.69%.
In the event the Partnership has taxable income, distributions are
to be made to the partners in an aggregate amount equal to the
amount that the Partnership would have paid for income taxes had
it been a C Corporation during the applicable period. Aggregate
tax distributions will first be allocated to the general partner, if
applicable, with the remainder allocated to the limited partners.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The following discussion and analysis addresses results of
operations for the three and six months ended July 4, 1997 and
June 28, 1996.
THREE MONTHS
Total revenues increased to $76.2 million in the 1997 Three
Months from $68.3 million in the 1996 Three Months, an increase
of $7.9 million or 11.5%. Of the total revenues reported in the 1997
Three Months, 66.4% were revenues from rooms, 27.3% were
revenues from food and beverage, and 6.3% were revenues from
meeting room rental and other, compared with 64.6%, 28.4%, and
7.0% respectively during the 1996 Three Months.
Rooms revenues increased to $50.6 million in the 1997 Three
Months from $44.1 million in the 1996 Three Months, an increase
of $6.5 million or 14.6% because of increases in average room
rates and total number of available rooms. Average room rates of
Mature Hotels (open more than one year) increased to $79.48 in
the 1997 Three Months from $76.24 in the 1996 Three Months, an
increase of $3.24 or 4.2%. Occupancy of Mature Hotels decreased
to 68.0% in the 1997 Three Months from 68.3% in the 1996 Three
Months, a decrease of 0.3 percentage points. The lower
occupancy was primarily due to the increased number of limited
service rooms opening in the immediate market area of some
Partnership hotels.
Food and beverage revenues increased to $20.8 million in the
1997 Three Months from $19.4 million in the 1996 Three Months,
an increase of $1.4 million or 7.2%. The increase in revenues was
attributable to the opening of additional full service hotels, opening
of new restaurant concepts in the existing hotels, and menu pricing
adjustments.
Meeting room rental and other revenues were $4.8 million in the
1997 and 1996 Three Months.
Rooms operating expenses increased to $12.6 million in the 1997
Three Months from $10.8 million in the 1996 Three Months, an
increase of $1.8 million or 16.1%. This expense represented
24.9% of rooms revenues in the 1997 Three Month period and
24.5% in the 1996 Three Month period.
Food and beverage operating expenses increased to $15.1 million
in the 1997 Three Months from $14.4 million in the 1996 Three
Months, an increase of $0.7 million or 4.5%.
Other operating expenses increased to $0.8 million in the 1997
Three Months from $0.7 million in the 1996 Three Months, an
increase of $0.1 million or 12.9%.
General, administrative and sales expenses increased to $20.3
million in the 1997 Three Months from $18.4 million in the 1996
Three Months, an increase of $1.9 million or 10.0%. The increased
expenses were a result of expenses incurred during the 1997
Three Months associated with the opening of more rooms during
1996 and 1997.
Repairs and maintenance expenses increased to $3.2 million in the
1997 Three Months from $3.0 million in the 1996 Three Months, an
increase of $0.2 million or 5.0%. The increase was a result of the
Company's increased number of hotels open.
Depreciation and amortization expenses increased to $8.1 million
in the 1997 Three Months from $6.0 million in the 1996 Three
Months, an increase of $2.1 million or 34.5%. These expenses
represented 10.6% of total revenues in the 1997 Three Months and
8.8% of total revenues in the 1996 Three Months. The increase
was a result of additional capital expenditures related to new hotels
and improvements in existing properties.
Income from Operations increased to $16.1 million in the 1997
Three Months from $14.8 million in the 1996 Three Months, an
increase of $1.3 million or 8.7%. The increase was due primarily to
the higher amount of total revenue offset in part by higher
depreciation from new hotels open during the 1997 quarter.
Interest income decreased to $0.1 million in the 1997 Three
Months from $0.5 million in the 1996 Three Months, a decrease of
$0.4 million. The decrease was attributable to lower balances in
cash and equivalents because of amounts spent for new
construction.
Interest expense and amortization of deferred financing fees
increased to $10.2 million in the 1997 Three Months from $9.5
million in the 1996 Three Months, an increase of $0.7 million or
7.4%. As a percentage of total revenues, this expense decreased
to 13.3% in the 1997 Three Months from 13.9% in the 1996 Three
Months.
Net Income increased to $6.1 million in the 1997 Three Months
from $5.9 million in the 1996 Three Months, an increase of $0.2
million or 3.5%. As a percentage of total revenues, net income
decreased to 8.0% in the 1997 Three Months from 8.6% in the
1996 Three Months. The increase in net income was due primarily
to an increase in total revenue due to the opening of new hotels in
1996 and 1997 offset in part by the increase in depreciation and
interest expense associated with these openings.
SIX MONTHS
Total revenues increased to $146.8 million in the 1997 Six Months
from $133.0 million in the 1996 Six Months, an increase of $13.8
million or 10.4%. Of the total revenues reported in the 1997 Six
Months, 65.4% were revenues from rooms, 28.1% were revenues
from food and beverage, and 6.5% were revenues from meeting
room rental and other, compared with 63.4%, 29.5%, and 7.1%
respectively during the 1996 Six Months.
Rooms revenues increased to $96.0 million in the 1997 Six Months
from $84.4 million in the 1996 Six Months, an increase of $11.6
million or 13.8% as a result of increases in average room rates
and total number of available rooms. Average room rates of
Mature Hotels increased to $78.90 in the 1997 Six Months from
$75.74 in the 1996 Six Months, an increase of $3.16 or 4.2%.
Occupancy of Mature Hotels decreased to 65.6% in the 1997 Six
Months from 65.7% in the 1996 Six Months, a decrease of 0.1
percentage points.
Food and beverage revenues increased to $41.2 million in the
1997 Six Months from $39.2 million in the 1996 Six Months, an
increase of $2.0 million or 5.2%. The increase in revenues was
attributable to the opening of additional full service hotels, opening
of new restaurant concepts in the existing hotels, and menu pricing
adjustments.
Meeting room rental and other revenues increased to $9.5 million
in the 1997 Six Months from $9.4 million in the 1996 Six Months,
an increase of $0.1 million or 1.4%.
Rooms operating expenses increased to $23.8 million in the 1997
Six Months from $21.1 million in the 1996 Six Months, an increase
of $2.7 million or 12.9%. This expense represented 24.8% of
rooms revenues in the 1997 Six Month period and 25.0% in the
1996 Six Month period.
Food and beverage operating expenses increased to $29.9 million
in the 1997 Six Months from $28.8 million in the 1996 Six Months,
an increase of $1.1 million or 4.1%.
Other operating expenses increased to $1.6 million in the 1997 Six
Months from $1.5 million in the 1996 Six Months, an increase of
$0.1 million or 8.9%.
General, administrative and sales expenses increased to $40.4
million in the 1997 Six Months from $37.8 million in the 1996 Six
Months, an increase of $2.6 million or 6.8%. The increased
expenses were a result of expenses incurred during the 1997 Six
Months associated with the opening of more rooms.
Repairs and maintenance expenses increased to $6.1 million in the
1997 Six Months from $5.6 million in the 1996 Six Months, an
increase of $0.5 million or 8.1%. The increase was a result of the
Company's increased number of hotels open.
Depreciation and amortization expenses increased to $15.0 million
in the 1997 Six Months from $11.9 million in the 1996 Six Months,
an increase of $3.1 million or 25.9%. These expenses represented
10.2% of total revenues in the 1997 first half and 9.0% of total
revenues in the first half of 1996.
Income from Operations increased to $29.9 million in the 1997 Six
Months from $26.3 million in the 1996 Six Months, an increase of
$3.6 million or 13.9%. The increase was due primarily to the higher
amount of total revenue offset in part by higher depreciation from
new hotels.
Interest income decreased to $0.5 million in the 1997 Six Months
from $1.2 million in the 1996 Six Months, a decrease of $0.7
million. The decrease was attributable to lower balances in cash
and equivalents and in marketable securities as a result of amounts
spent for new construction.
Interest expense and amortization of deferred financing fees
increased to $19.9 million in the 1997 Six Months from $19.4
million in the 1996 Six Months, an increase of $0.5 million or 2.4%.
As a percentage of total revenues, this expense increased to
13.6% in the 1997 Six Months from 14.6% in the 1996 Six Months.
Net Income increased to $10.5 million in the 1997 Six Months from
$8.1 million in the 1996 Six Months, an increase of $2.4 million or
30.6%. As a percentage of total revenues, net income increased to
7.2% in the 1997 Six Months from 6.1% in the 1996 Six Months.
The increase was due primarily to an increase in total revenue
offset in part by depreciation and interest expense associated with
the opening of hotels in 1995 and 1996 that have not reached
normal occupancy levels.
Liquidity and Capital Resources
In general, the Partnership has financed its operations through
internal cash flow, loans from financial institutions, the issuance of
public debt and equity and the issuance of industrial revenue
bonds. Twenty of the Partnership's hotels are pledged to secure
the 1994 Notes (the "1994 Collateral Hotels"). Eight of the
Partnership's hotels are pledged to secure the 1995 Notes (the
"1995 Collateral Hotels"). The Partnership in the future may obtain
mortgage financing secured by unencumbered hotels and
construction in progress to provide additional liquidity, if necessary.
The Partnership's principal uses of cash are to pay operating
expenses, to service debt, and to fund capital expenditures, new
hotel development and partnership distributions.
At July 4, 1997 the Partnership had $25.5 million of cash and
equivalents, and also had $5.1 million of marketable securities.
Net cash provided by operating activities was $21.9 million for the
first Six months of 1997 compared to $26.6 million for the first Six
months of 1996, a decrease of $4.7 million. A majority of the
decrease was due to an increase in trade and construction related
receivables and decreases in construction payables at July 4,
1997.
The Partnership incurred net capital expenditures of $ 99.5 million
during the first six months of 1997 and $ 50.7 million during the
first six months of 1996. Capital expenditures include
expenditures for development of new hotels and capital
improvements on existing hotel properties. During the remainder of
1997 the Partnership expects capital expenditures to total
approximately $106 million, representing $13 million for capital
improvements on existing hotels and $93 million for continued new
hotel development.
The Partnership currently has six hotels under construction. The
Partnership estimates the remaining building and pre-opening
costs of the six hotels will require funding of approximately $111
million. Construction in progress at July 4, 1997 included $99
million expended for these projects.
The Partnership has received loans and loan commitments for the
projects under construction in the amount of $144 million.
Ninety-nine million was available to draw as of July 4, 1997.
In addition to the capital expenditures for the hotels under
construction, the Partnership is at various stages in other new
hotel development. Capital requirements for the hotels under
development are expected to be provided by (i) mortgage
financing secured by the Owned Hotels which are unencumbered;
(ii) mortgage financing secured by the Scheduled Hotels as
described above; and (iii) contributions from third parties.
The Partnerships' development activity restricts its ability to grow
Net Income in the short term. This is due to fixed charges such as
depreciation and interest that exceed "New" hotels operating cash flow
in the first one to two years of operation after opening. The Partnership
plans to continue with its development of full-service, and all-suite
hotels based on favorable market fundamentals and because few hotels are
being constructed in the upscale sector of the overall hotel industry.
The Partnership expects to fund development of new hotels
through limited partnerships in which the Partnership will be the
general partner and a wholly owned corporate subsidiary of the
Partnership will be the limited partner. As permitted by the
Indentures related to the 1994 Notes and 1995 Notes (the "1994
and 1995 Note Indentures"), each of these entities will be an
"Unrestricted Subsidiary" for purposes thereof, and accordingly,
the ability of the Partnership to fund these entities is subject to
certain limitations contained in the 1994 and 1995 Note
Indentures. All of the indebtedness of these entities will be
non-recourse to the Partnership. The Partnership believes that funding
permitted under the 1994 and 1995 Note Indentures will be
sufficient to meet its current development plans.
Based upon current plans relating to the timing of new hotel
development, the Partnership anticipates that its capital resources
will be adequate to satisfy its 1997 capital requirements for the
currently planned projects and normally recurring capital
improvement projects through the end of 1997 for hotels currently
under construction and normally recurring capital improvement
projects.
The Partnership accrued distributions of approximately $ 1.8 million
during the first six months of 1997 to its partners. Distributions by
the Partnership to its partners must be made in accordance with
provisions of the 1994 and 1995 Note Indentures.
Supplemental Financial Information Relating to the 1994 and 1995
Collateral Hotels
The following tables set forth, as of July 4, 1997, unaudited selected
financial information with respect to the 20 hotels collateralizing the 1994
Notes (the "1994 Collateral Hotels") and the eight hotels collateralizing
the 1995 notes ("the 1995 Collateral Hotels") and the Partnership,
excluding Unrestricted Subsidiaries (as defined in the indentures relating
to the 1994 Notes and the 1995 Indentures) (the "Restricted Group"). Under
the heading "Management Operations," information with respect to revenues
and expenses generated by the Company as manager of the 1994 Collateral
Hotels, the 1995 Collateral Hotels, the other Owned Hotels owned by
John Q. Hammons Hotels Two, L.P. ("L.P.Two"), and the Managed Hotels
is provided.
<TABLE>
<CAPTION>
Trailing 12 Months Ended July 4, 1997
_______ ________ ________ ________
1994 1995 Management Total
Collateral Collateral Operations Restricted
Hotels Hotels Group
------- --------- --------- ---------
(Dollars in thousands, except operating data)
Statement of Operations Data:
<S> <C> <C> <C> <C>
Operating Revenues $153,861 $ 62,552 $ 3,913(a) $220,326
Operating Expenses:
Direct operating costs and expenses 58,607 24,570 -- 83,177
General, administrative, sales
and management expenses (b) 42,721 18,285 (3,077)(c) 57,929
Repairs and maintenance 6,253 2,834 -- 9,087
Depreciation and amortization 11,172 5,044 157 16,373
Total operating expenses 118,753 50,733 (2,920) 166,566
Income from operations $ 35,108 $ 11,819 $ 6,833 $ 53,760
======= ======= ======= =======
Operating Data:
Occupancy 66.3% 66.2%
Average daily room rate $78.32 $73.32
RevPAR $51.91 $48.53
</TABLE>
<TABLE>
<CAPTION>
12 Months Ended January 3, 1997
_________ __________ _________ _________
1994 1995 Management Total
Collateral Collateral Operations Restricted
Hotels Hotels Group
--------- ---------- ---------- ---------
(Dollars in thousands, except operating data)
Statement of Operations Data:
<S> <C> <C> <C> <C>
Operating Revenues $153,000 $ 61,375 $ 3,211(a) $217,586
Operating Expenses:
Direct operating costs and
expenses 59,013 24,255 -- 83,268
General, administrative, sales
and management expenses (b) 42,196 18,193 (2,451)(c) 57,938
Repairs and maintenance 6,322 2,835 -- 9,157
Depreciation and amortization 10,235 4,714 120 15,069
Total operating expenses 117,766 49,997 (2,331) 165,432
Income from operations $ 35,234 $ 11,378 $ 5,542 $ 52,154
======= ======= ======= =======
Operating Data:
Occupancy 66.5% 67.1%
Average daily room rate $77.06 $71.40
RevPAR $51.23 $47.92
</TABLE>
- ---------------------------------------------------------
(a)Represents management revenues derived from the Owned Hotels owned by
Two L.P. and the Managed Hotels.
(b)General, administrative, sales and management expenses for the 1994 and
1995 Collateral Hotels includes management expenses allocated to the
respective hotels.
(c)General, administrative, sales and management expenses applicable to
management operations is net of management revenues allocated to the 1994
and 1995 Collateral Hotels.
Part II. OTHER INFORMATION AND SIGNATURES
Item 1. Legal Proceedings
At July 4, 1997 there were no material pending legal proceedings.
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which this
report is filed
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on their
behalf by the undersigned, thereunto duly authorized, in the City of
Springfield, Missouri on the 14th day of August, 1997.
JOHN Q. HAMMONS HOTELS, L.P.
By: John Q. Hammons Hotels, Inc.,
its General Partner
By: /s/ John Q. Hammons
John Q. Hammons
Chairman, Founder,
and Chief Executive
Officer
By: /s/ Mel J. Volmert
Mel J. Volmert
Executive Vice President
and
Chief Financial Officer
JOHN Q. HAMMONS HOTELS JOHN Q. HAMMONS HOTELS
FINANCE FINANCE
CORPORATION CORPORATION II
By: /s/ John Q. Hammons By: /s/ John Q. Hammons
John Q. Hammons John Q. Hammons
Chairman, Founder, Chairman, Founder,
and Chief Executive Officer and Chief Executive
Officer
By: /s/ Mel J. Volmert By: /s/ Mel J. Volmert
Mel J. Volmert Mel J. Volmert
Executive Vice President and Executive Vice President and
Chief Financial Officer Chief Financial Officer
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