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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 2, 1999
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 033-7334001
John Q. Hammons Hotels, L.P.
John Q. Hammons Hotels Finance Corporation
John Q. Hammons Hotels Finance Corporation II
(Exact name of registrant as specified in its charter)
Delaware 43-1523951
Missouri 43-1680322
Missouri 43-1720400
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification No.)
300 John Q. Hammons Parkway
Suite 900
Springfield, MO 65806
(Address of principal executive offices)
(Zip Code)
(417) 864-4300
(Registrant's 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
registrant was required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED BALANCE SHEETS
(000's omitted)
ASSETS
<TABLE>
<CAPTION>
July 2, 1999 January 1, 1999
------------ ---------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS:
Cash and equivalents $ 43,325 $ 46,233
Marketable Securities 10,894 6,533
Receivables:
Trade, less allowance for doubtful
accounts of $206 9,593 8,852
Construction reimbursements and other 3,234 5,269
Management fees 96 62
Inventories 1,094 1,205
Prepaid Expenses and Other 749 1,089
---------- ----------
Total current assets 68,985 69,243
PROPERTY AND EQUIPMENT, at cost:
Land and improvements 48,774 47,982
Buildings and improvements 623,716 605,586
Furniture, fixture and equipment 250,891 239,648
Construction in progress 86,417 63,078
---------- ----------
1,009,798 956,294
Less-accumulated depreciation and
amortization (212,447) (194,860)
---------- ----------
797,351 761,434
RESTRICTED CASH AND RECEIVABLE FROM
PROPERTY DISPOSITIONS 25,232 18,166
DEFERRED FINANCING COSTS, FRANCHISE
FEES AND OTHER, net 26,822 27,643
---------- ----------
TOTAL ASSETS $ 918,390 $ 876,486
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
2
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JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED BALANCE SHEETS
(000's omitted)
LIABILITIES AND EQUITY
<TABLE>
<CAPTION>
July 2, 1999 January 1, 1999
---------------- -------------------
(Unaudited) (Audited)
LIABILITIES:
<S> <C> <C>
Current portion of long-term debt $ 39,650 $ 42,256
Accounts payable 3,727 13,141
Accrued expenses:
Payroll and related benefits 8,068 6,843
Sales and property taxes 12,583 9,558
Insurance 9,242 10,061
Interest 12,471 12,540
Utilities, franchise fees and other 7,497 5,568
Accrued dividends - 2,936
-------- --------
Total current liabilities 93,238 102,903
Long-term debt 769,736 717,460
Other obligations and deferred revenue 10,853 10,883
-------- --------
Total liabilities 873,827 831,246
-------- --------
EQUITY:
Contributed capital 96,436 96,436
Partners' and other deficits, net (51,873) (51,196)
-------- --------
Total equity 44,563 45,240
-------- --------
TOTAL LIABILITIES AND EQUITY $918,390 $876,486
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
3
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JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
July 2, 1999 July 3, 1998 July 2, 1999 July 3, 1998
------------- ------------- ------------- -------------
(Unaudited) (Unaudited)
REVENUES:
<S> <C> <C> <C> <C>
Rooms $ 59,211 $ 54,110 $113,467 $105,388
Food and beverage 24,894 22,255 48,199 44,193
Meeting room rental and other 6,347 5,446 12,382 11,182
-------- -------- -------- --------
Total revenues 90,452 81,811 174,048 160,763
OPERATING EXPENSES:
Direct operating costs and expenses
Rooms 14,800 13,873 28,557 27,068
Food and Beverage 16,793 16,094 33,107 31,545
Other 993 913 1,857 1,789
General, administrative and sales expenses 27,157 23,591 51,894 47,575
Repairs and maintenance 3,797 3,276 7,331 6,513
Depreciation and amortization 11,142 11,276 21,838 22,353
-------- -------- -------- --------
Total operating expenses 74,682 69,023 144,584 136,843
-------- -------- -------- --------
INCOME FROM OPERATIONS 15,770 12,788 29,464 23,920
OTHER INCOME (EXPENSE)
Gain on property dispositions 2,365 - 2,365 238
Interest income 551 507 1,393 1,395
Interest expense and amortization of deferred financing fees (15,113) (14,241) (30,915) (28,698)
-------- -------- -------- --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF CHANGE ACCOUNTING PRINCIPLE 3,573 (946) 2,307 (3,145)
Extraordinary Item; Cost of extinguishment of debt 106 (191) (19) (1,308)
-------- -------- -------- --------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 3,679 (1,137) 2,288 (4,453)
Cumulative effect of Change in Accounting Principle - - (1,819) -
-------- -------- -------- --------
NET INCOME (LOSS) $ 3,679 $ (1,137) $ 469 $ (4,453)
======== ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements
4
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JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(000's omitted)
<TABLE>
<CAPTION>
CONTRIBUTED PARTNERS' AND OTHER
CAPITAL EQUITY (DEFICIT)
------- ---------------------------------------------------
General General Limited
Partner Partner Partner Total
------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
BALANCE, January 1, 1999 (audited) $96,436 $(78,588) $27,392 $45,240
Distributions - (90) - (90)
Distributions to Partner to purchase treasury stock - (1,056) - (1,056)
Net income - 133 336 469
------- -------- ------- -------
Balance, July 2, 1999 (unaudited) $96,436 $(79,601) $27,728 $44,563
======= ======== ======= =======
</TABLE>
See Notes to Consolidated Financial Statements
5
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JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted)
<TABLE>
<CAPTION>
Six months ended
-------------------------------------------
July 2, 1999 July 3, 1998
------------------- ------------------
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $ 469 $ (4,453)
Adjustment to reconcile net income (loss) to cash provided
by operating activities -
Depreciation, amortization and loan cost amortization 22,534 23,498
Extraordinary item 19 1,308
Cumulative effect of change in accounting principle 1,819 -
Gain on sales of property and equipment (2,365) (238)
Changes in certain assets and liabilities
Receivables 1,261 692
Inventories 111 (6)
Prepaid expenses and other 340 676
Accounts payable (9,414) (777)
Accrued expenses 5,291 3,497
Other obligations and deferred revenue (30) 3,030
-------- ---------
Net cash provided by operating activities 20,035 27,227
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment, net (61,594) (65,700)
Proceeds from disposition of hotels 6,500 39,387
Restricted cash and receivable remaining from property dispositions (7,066) (27,261)
Franchise fees and other (2,010) (4,171)
(Purchase) sale of marketable securities, net (4,361) 975
-------- ---------
Net cash used in investing activities (68,531) (56,770)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 65,723 177,027
Repayments of debt (16,053) (128,548)
Distributions to partners (3,026) (1,523)
Distributions to Partner to purchase treasury stock (1,056) -
-------- ---------
Net cash provided by financing activities 45,588 46,956
-------- ---------
Increase (decrease) in cash and equivalents (2,908) 17,413
CASH AND EQUIVALENTS, beginning of period 46,233 41,961
-------- ---------
CASH AND EQUIVALENTS, end of period $ 43,325 $ 59,374
======== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID FOR INTEREST, net of amounts capitalized $ 29,257 $ 27,855
======== =========
</TABLE>
See Notes to Consolidated Financial Statements
6
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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 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
(the "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 hotel
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 (GAAP) 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 fiscal year ended January 1, 1999 which included
financial statements for the fiscal years ended January 1, 1999, January 2,
1998, and January 3, 1997.
The information contained herein reflects all normal and recurring adjustments
which, 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
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commercial paper and governmental agency obligations which mature or will be
available for use in operations in 1999. 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.
4. NEW ACCOUNTING PRONOUNCEMENTS
In April 1998, the American Institute of Certified Public Accountants released
Statement of Position (SOP) 98-5 "Reporting on the Costs of Start-Up
Activities." The SOP requires costs of start-up activities, including
preopening expenses, to be expensed as incurred. The Partnership's past
practice was to defer these expenses until a hotel commenced operations, at
which time the costs, other than advertising costs that are expensed upon
opening, were amortized over a one-year period. The Partnership adopted the
provisions of this statement in the first quarter of fiscal 1999 and, as a
result, cumulative unamortized preopening costs of $1.8 million were charged to
expense.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). SFAS 133 establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
133 is effective for all fiscal quarters of all fiscal years beginning after
June 15, 2000. Upon adoption of this statement, the Partnership anticipates no
impact on its reported consolidated financial position, results of operations,
cash flows or related disclosures.
5. PROPERTY DISPOSITIONS
Effective February 6, 1998, the Partnership completed the sale of six hotels to
an unrelated party for $39.4 million, resulting in a gain of approximately
$0.2 million. Certain of these hotels served as collateral under the 1994 Notes
and 1995 Notes. Under the terms of these indentures, the Partnership provided
replacement collateral in accordance with the indenture provisions.
On December 31, 1998, the Partnership completed the sale of an additional hotel
property to an unrelated party for $16.1 million, resulting in a gain of
approximately $8.0 million. In addition to cash received upon closing, the
sales price included a note receivable for $11.9 million, bearing 8.0% interest,
due in 1999. The note receivable is secured by the hotel and a personal
guarantee by a shareholder of the buyer. This hotel served as collateral under
the 1995 first mortgage notes. Under the terms of this indenture, the
Partnership must provide replacement collateral of equivalent value or apply the
net proceeds from the sale to amounts outstanding. The Partnership intends to
provide replacement collateral in accordance with the indenture provisions.
On June 16, 1999, the Holiday Inn Express Hotel and Conference Center in Joliet,
Illinois was sold to an unrelated party for $6.5 million, resulting in a gain of
approximately $2.4 million. This hotel served as collateral under the 1994
first mortgage notes. Under the terms of this indenture, the Partnership must
provide replacement collateral of equivalent value or apply the proceeds from
the sale to amounts
8
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outstanding. The Partnership intends to provide replacement collateral in
accordance with the indenture provisions.
As of July 2, 1999, $25.2 million of cash and a receivable were restricted for
the purpose of replacement collateral in accordance with the provisions of the
indentures.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
General. For purposes of this discussion, the Partnership classifies new hotels
(New Hotels) as those hotels opened during the current year and the prior year,
and defines all other hotels as mature hotels (Mature Hotels).
The Partnership announced on September 11, 1998, that it was ceasing new
development activity except for the hotels under construction. As of July 2,
1999, the Partnership had four hotels under construction: Marriott Renaissance
Hotel at the Charlotte, North Carolina airport; Embassy Suites Hotel, Grapevine,
Texas, adjacent to the Bass Pro Shop's Outdoor World, near the Dallas-Fort Worth
airport (opened on August 3, 1999); Renaissance Hotel in Oklahoma City, Oklahoma
and Embassy Suites Hotel in Charleston, South Carolina. On April 15, 1999, the
Partnership opened the Mesquite Hampton Inn and Suites Hotel. The Partnership
opened the Coral Springs Radisson Plaza Hotel on May 1, 1999.
The Partnership's development activity limits its ability to grow net income.
Fixed charges for New Hotels (such as depreciation and amortization expense and
interest expense) exceed New Hotel operating cash flow in the first one to three
years of operations. As New Hotels mature, the Partnership expects that the
operating expenses for these hotels will decrease as a percentage of revenues,
although there can be no assurance that this will occur.
Three-Month Period
The following discussion and analysis addresses results of operations for the
three month periods ended July 2, 1999 (the "1999 Quarter") and July 3, 1998
(the "1998 Quarter").
For the 1999 Quarter, the Partnership's total earnings before interest expense,
taxes, depreciation and amortization (EBITDA) were $26.9 million, an increase of
11.8% compared to the 1998 Quarter EBITDA of $24.1 million. The Mature Hotels'
EBITDA was $24.5 million in the 1999 Quarter, up 29.6% from $18.9 million in the
1998 Quarter primarily due to six hotels moving to the Mature Hotels category
from the New Hotels category. The six hotels (Omaha Embassy Suites, Branson
Chateau, Cary Embassy Suites, Charleston Embassy Suites, Kansas City Homewood,
and Little Rock Embassy Suites) that were included in New Hotels in 1998 and in
Mature Hotels in 1999 provided $4.9 million of EBITDA in the 1999 Quarter. As a
percentage of total revenues, EBITDA related to the Mature Hotels (excluding the
hotels sold) increased to 30.4% in the 1999 Quarter from 29.0% in the 1998
Quarter. The New Hotels' EBITDA for the 1999 Quarter was $(0.1) million compared
to $2.9 million in the 1998 Quarter. This decrease is due primarily to the shift
of six hotels from New Hotels to Mature Hotels.
Total revenues for the 1999 Quarter were $90.5 million, an increase of
$8.6 million, or 10.6%, compared to the 1998 Quarter, primarily as a result of
the continued growth of the New Hotels, including the four hotels opened late in
1998 and during 1999, and, to a lesser extent, revenue growth at the Mature
Hotels. The Partnership's Mature Hotels generated total revenues of
$80.2 million in the 1999 Quarter, an increase of $14.7 million, or 22.4%,
compared to the 1998 Quarter. The Partnership's New Hotels generated total
revenues of $9.8 million during the 1999 Quarter compared to $15.9 million in
the 1998
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Quarter. There are six New Hotels in the 1999 Quarter compared to eight
New Hotels in the 1998 Quarter.
Rooms revenues increased $5.1 million, or 9.4%, from the 1998 Quarter, but
decreased slightly as a percentage of total revenues, to 65.5% from 66.1%. The
dollar increase was primarily due to increased rooms revenues from the New
Hotels, and the resulting increase in the Partnership's average room rate to
$95.09, a 3.6% increase compared to the 1998 Quarter average room rate of
$91.78. In comparison, the average room rate for the hotel industry was $80.38
in the 1999 Quarter, up 3.4% from the 1998 Quarter. The increased average room
rate was supplemented by a 0.1 percentage point increase in the Partnership's
occupancy for the 1999 Quarter to 65.0%. Occupancy for the hotel industry was
66.5%, down 1.2 percentage points from the 1998 Quarter. The Partnership's
Revenue Per Available Room (RevPAR) was $61.76 in the 1999 Quarter, up 3.7% from
$59.56 in the 1998 Quarter. RevPAR for the hotel industry was $53.48, up 2.0%
from the 1998 Quarter.
Food and beverage revenues increased $2.6 million, or 11.9%, compared to the
1998 Quarter, and increased slightly as a percentage of total revenues, to 27.5%
from 27.2% in the 1998 Quarter. Sales at the New Hotels with full food and
beverage services along with menu pricing adjustments accounted for
substantially all of the increase in food and beverage revenues.
Meeting room rental and other revenues increased $0.9 million, or 16.5%, from
the 1998 Quarter, and increased as a percentage of revenues, to 7.0% from 6.7%.
The majority of the increase was a result of revenues from the New Hotels as
well as increased meeting and convention business in the Mature Hotels.
Rooms operating expenses increased $0.9 million, or 6.7%, compared to the 1998
Quarter, and decreased slightly as a percentage of rooms revenues to 25.0% from
25.6%. The dollar increase related primarily to expenses for New Hotels. For the
Mature Hotels, excluding the seven hotels sold in 1998 and the hotel sold in
1999, rooms operating expenses as a percentage of rooms revenues were 24.3% in
the 1999 Quarter, compared to 24.7% in the 1998 Quarter.
Food and beverage operating expenses increased $0.7 million, or 4.3%, compared
to the 1998 Quarter, but decreased as a percentage of food and beverage
revenues, to 67.5% from 72.3%. The dollar increase was attributable to expenses
associated with food and beverage revenues at the New Hotels. Profit margins
improved due to reductions in both food costs and labor costs, as a percentage
of food and beverage revenues.
Other operating expenses increased $0.1 million, or 8.8%, compared to the 1998
Quarter, but decreased as a percentage of meeting room rental and other
revenues, to 15.6% from 16.8%.
General, administrative and sales expenses increased $3.6 million, or 15.1%,
over the 1998 Quarter, and increased as a percentage of revenues to 30.0% from
28.8%. The increase was primarily attributable to preopening expenses associated
with New Hotel development and a greater number of hotels in the 1999 Quarter.
Approximately $1.3 million of preopening expenses were incurred and expensed in
the 1999 Quarter.
Repairs and maintenance expenses increased $0.5 million, or 15.9%, compared to
the 1998 Quarter and increased slightly as a percentage of revenues, to 4.2%
from 4.0% in the 1998 Quarter. The increase related to the net increase in
number of hotels and rooms in 1999 compared to 1998.
Depreciation and amortization expenses decreased $0.1 million, or 1.2%, compared
to the 1998 Quarter, and decreased as a percentage of revenues to 12.3% from
13.8%. The depreciation and amortization decrease related to a change in
accounting principle which required the Partnership to write-off
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unamortized preopening costs in the 1999 Quarter. In previous years these
amounts were deferred and amortized over a one-year period.
Income from operations increased $3.0 million, or 23.3%, compared to the
1998 Quarter. Expenses, particularly depreciation and amortization, increased
less rapidly than revenues, and the Partnership began to realize increased
benefits from the hotels opened over the past few years.
Interest expense, net increased $0.8 million, or 6.0%, from the 1998 Quarter,
but decreased as a percentage of total revenues to 16.1% from 16.8%. The dollar
increase in these costs related to interest expense for the New Hotels.
Income (loss) before extraordinary item and cumulative effect of change in
accounting principle was $3.6 million in the 1999 Quarter, compared to
$(0.9) million in the 1998 Quarter. The 1999 results were attributable, in part,
to a $2.4 million gain on the sale of a hotel in June, 1999, as well as to
improved operating margins.
Six-Month Period
The following discussion addresses results of operations for the six month
periods ended July 2, 1999 (the "1999 Six Months") and July 3, 1998 (the "1998
Six Months").
For the 1999 Six Months the Partnership's total EBITDA was $51.3 million, a
10.9% increase compared to the 1998 Six Months EBITDA of $46.3 million. The
Mature Hotels' EBITDA was $44.5 million in the 1999 Six Months, up $7.5 million
from the 1998 Six Months, primarily due to six hotels moving to the
Mature Hotels category from the New Hotels category. The six hotels that were
included in New Hotels in 1998 and in Mature Hotels in 1999 provided $7.7
million of EBITDA in the 1999 Six Months.
Total revenues increased to $174.0 million in the 1999 Six Months from
$160.7 million in the 1998 Six Months, an increase of $13.3 million or 8.3%. The
increase is primarily attributed to the continued growth of New Hotels.
Rooms revenues increased to $113.5 million in the 1999 Six Months from
$105.4 million in the 1998 Six Months, an increase of $8.1 million or 7.7% as a
result of increases in average room rates and total number of available rooms.
Rooms revenues as a percentage of total revenues decreased slightly, to 65.2%,
compared to 65.6% in the 1998 Six Months. The Partnership's average room rate
increased to $95.08 in the 1999 Six Months from $91.00 in the 1998 Six Months,
an increase of $4.08 or 4.5%. Occupancy decreased slightly to 63.0% in the 1999
Six Months from 63.1% in the 1998 Six Months, a decrease of 0.1 percentage
points.
Food and beverage revenues increased to $48.2 million in the 1999 Six Months
from $44.2 million in the 1998 Six Months, an increase of $4.0 million or 9.1%,
and increased slightly as a percentage of total revenues to 27.7% from 27.5% in
the 1998 Six Months. The increase was attributable primarily to sales at the New
Hotels and menu pricing adjustments.
Meeting room rental and other revenues increased to $12.4 million in the 1999
Six Months from $11.2 million in the 1998 Six Months, an increase of
$1.2 million or 10.7%. Meeting room rental and other revenues also increased as
a percentage of total revenues to 7.1% from 7.0% in the 1998 Six Months. The
majority of the increase was the result of revenues from the New Hotels.
Rooms operating expenses increased to $28.6 million in the 1999 Six Months from
$27.1 million in the 1998 Six Months, an increase of $1.5 million or 5.5%. This
expense decreased to 25.2% of rooms
11
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revenues in the 1999 Six Months compared to 25.7% in the 1998 Six Months. The
dollar increase related to the additional hotels opened in the last twelve
months.
Food and beverage operating expenses increased to $33.1 million in the 1999 Six
Months from $31.5 million in the 1998 Six Months, an increase of $1.6 million or
5.0%. These expenses decreased as a percentage of food and beverages revenues in
the 1999 Six Months to 68.7%, from 71.4% in the 1998 Six Months. Profit margins
improved due to reductions in both food costs and labor costs, as a percentage
of food and beverage revenues.
Other operating expenses increased to $1.9 million in the 1999 Six Months from
$1.8 million in the 1998 Six Months, an increase of $0.1 million or 3.8%, but
declined as a percentage of meeting room rental and other income, to 15.0% in
the 1999 Six Months from 16.0% in the 1998 Six Months.
General, administrative and sales expenses increased to $51.9 million in the
1999 Six Months from $47.6 million in the 1998 Six Months, an increase of
$4.3 million or 9.1%, and increased slightly as a percentage of total revenues
to 29.8% from 29.6% in the 1998 Six Months. The increase in these expenses was
primarily the result of expenses associated with New Hotel development.
Approximately $1.9 million of preopening expenses were incurred and expensed in
the 1999 Six Months.
Repairs and maintenance expenses increased to $7.3 million in the 1999 Six
Months from $6.5 million in the 1998 Six Months, an increase of $0.8 million or
12.6%. The increase was a result of the increase in the total number of hotels
open and rooms available.
Depreciation and amortization expenses decreased to $21.8 million in the 1999
Six Months from $22.4 million in the 1998 Six Months, a decrease of $0.5 million
or 2.3%. These expenses represented 12.5% of total revenues in the 1999 Six
Months compared to 13.9% of total revenues in the 1998 Six Months. The
depreciation and amortization decrease related to a change in accounting
principle which required the Partnership to write-off unamortized preopening
costs in the 1999 Six Months. In previous years these amounts were deferred and
amortized over a one-year period.
Income from operations was $29.5 million in the 1999 Six Months compared to
$23.9 million in the 1998 Six Months, an increase of $5.5 million or 23.2%. The
increase was due to increased revenues coupled with controls of operating
expenses.
Interest expense, net increased to $29.5 million in the 1999 Six Months from
$27.3 million in the 1998 Six Months, an increase of $2.2 million or 8.1%,
reflecting hotels opened within the last year. As a percentage of total
revenues, this expense remained stable at 17.0%.
Income (loss) before extraordinary item and cumulative effect of change in
accounting principle was $2.3 million in the 1999 Six Months, compared to
$(3.1) million in the 1998 Six Months. The 1999 results were attributable, in
part, to a $2.4 million gain on the sale of a hotel in June, 1999, as well as to
improved operating margins.
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. The Partnership's principal uses
of cash are to pay operating expenses, to service debt, to fund capital
expenditures and new hotel development and to make Partnership distributions to
fund some of the taxes associated with income allocable to the partners.
12
<PAGE>
At July 2, 1999, the Partnership had $43.3 million of cash and equivalents and
$10.9 million of marketable securities, compared to $46.2 million and
$6.5 million, respectively, at the end of 1998. As of July 2, 1999, the
Partnership also had $13.3 million of restricted cash and an $11.9 million note
receivable from sales of hotels by the Partnership, which was available for
replacement collateral in accordance with the terms of the 1994 and the 1995
Note Indentures. The remaining amounts of cash and equivalents are available for
completion of hotels under construction and other working capital requirements
of the Partnership.
Net cash provided by operating activities was $19.9 million for the 1999 Six
Months compared to $27.1 million for the 1998 Six Months. The decrease of
$7.2 million is primarily attributable to the payment of construction accounts
payable which were funded through borrowings secured in 1999.
At July 2, 1999, total debt was $809.4 million compared with $759.7 million at
the end of 1998. The increase is attributable to the new hotels under
construction and the newly-opened hotels. The current portion of long-term debt
was $39.7 million, compared to $42.3 million at the end of 1998 partially due to
refinancing of the Topeka Capitol Plaza Hotel. The Partnership incurred net
capital expenditures of approximately $61.6 million during the 1999 Six Months
and $65.7 million during the 1998 Six Months. Of the $61.6 million incurred
during the 1999 Six Months, approximately $5.5 million was for capital
improvements on existing hotel properties and approximately $56.1 million was
for development of new hotels. During the remainder of 1999, the Partnership
expects capital expenditures to total approximately $80.5 million, including
approximately $10.0 million for capital improvements on existing hotels and
approximately $70.5 million for continued new hotel development.
As of July 2, 1999, the Partnership had four hotels under construction, one of
which opened on August 3, 1999. The Partnership estimates the remaining building
costs of these hotels will require additional capital expenditures of
approximately $79.1 million during 1999 and 2000. Construction in progress at
July 2, 1999 included $86.4 million expended for these projects and other hotel
refurbishments. The Partnership has received loans and loan commitments for
projects under construction in the amount of $114 million, with $71.4 million
available, and expects the remaining 1999 capital requirements to be funded by
cash, operating income and refinancing of certain existing hotels. Based upon
current plans relating to the timing of new hotel development, loan draw
schedules, and additional loans on unencumbered developments, the Partnership
anticipates that its capital resources will be adequate to satisfy its 1999
capital requirements for the currently planned projects and normal recurring
capital improvements.
Year 2000
State Of Readiness
The Partnership is actively addressing the impact of the Year 2000 (Y2K) as it
relates to the processes of its information technology environment. Potential
problems with internal, external and embedded systems are being addressed.
Capital budget funds have been set aside for software and hardware upgrades
and/or replacements to address Y2K issues. Virtually all such upgrades were
anticipated by the Partnership and would have been implemented within the next
few years even absent a Y2K issue.
The Partnership is requiring vendors and suppliers to certify Y2K compliance of
supplied information technology systems and devices. Compliance is defined as no
failures or interruptions occurring due to the processing of date information or
data between the years through 1999 and years beginning with the year 2000.
The Partnership has reviewed the effects of the upcoming Y2K on its computer
systems and operations, as well as on those of the hotels it operates. The
Partnership does not anticipate any material impact on its
13
<PAGE>
corporate operation, given that the current systems used are believed to be Y2K
compliant except for its timekeeping and payroll systems which will be replaced
during the third quarter of 1999.
Corporate Systems
Hardware-Computer systems were tested for Y2K compliance during the first
quarter of 1998. Ninety percent of those systems not compliant were replaced by
the end of the third quarter of 1998. The remaining systems were replaced during
the fourth quarter of 1998.
Software-All software systems were tested during the first quarter of 1998. Word
processing and spreadsheet software packages were deemed materially compliant
and will not be replaced. The accounting and payroll system was not Y2K
compliant and was replaced during January 1998.
Hotel Systems
Hardware-Testing of Partnership-owned computer hardware was started during the
first quarter of 1998. Ninety percent of all systems have been tested and those
systems deemed not Y2K compliant have been identified and replaced.
Software-Bass Hotels and Resorts use the Encore Property Management System. The
current version has been updated and is now materially Y2K compliant. During
testing, some hardware issues have been identified and BIOS patches from IBM are
being tested at this time to correct these issues. No expense to the Partnership
is anticipated at this time.
Promus Hotels, Inc. uses the System21 Property Management System. This system is
Y2K compliant.
Radisson Hotels and some Partnership hotels use the Fidelio Property Management
System. This software is Y2K compliant. The operating system on the file servers
will be compliant with the installation of software patches at no expense to the
Partnership. These systems are scheduled for upgrade in the year 2000
independent of the Y2K situation.
Other Partnership hotels use the Multi-Systems, Inc. Property Management System.
This system is Y2K compliant.
Embedded Systems
Non-Critical-Fax machines, copiers and similar equipment are generally leased.
The majority of these devices have been tested and deemed Y2K compliant. Those
failing the Y2K testing will be replaced by the lessor during 1999 under current
leasing agreements as required in order to be Y2K compliant.
Critical-Systems in this category include elevators, fire control, security,
energy management, credit card processing and telecommunications. The
Partnership is currently testing and evaluating these systems. These evaluations
are approximately 98% complete. Systems requiring modifications to be Y2K
compliant have been identified and will be upgraded or replaced during the third
quarter of 1999.
Timekeeping and Payroll Systems
The Partnership currently uses Time Resource Management software for
timekeeping. This software is not Y2K compliant and will be replaced during the
third quarter of 1999. Payroll processing is out-sourced and a Y2K compliance
certificate from the processor is on file.
Vendor Compliance Certifications
14
<PAGE>
Strategic Relationships-Requests for Y2K compliance have been sent to those
vendors which have a strategic relationship with the Partnership specifically
and with the hotels in general. Those compliance letters will be on file in the
Partnership's offices.
Utility Suppliers-Requests for Y2K compliance have been sent to those suppliers
which have a strategic relationship with the Partnership specifically and with
the hotels in general. Those compliance letters will be on file in the
Partnership's offices.
Compliance Testing
Information Technology
Vendor Certification-The Partnership has received Y2K compliance certifications
from the majority of its property management system vendors. These
certifications are on file in the Partnership's offices.
Field Testing-The Partnership has received Y2K compliance testing software from
the Partnership's property management system vendors. These tests were completed
during the fourth quarter of 1998 and no further action is required.
Evaluation-The Partnership will monitor all systems currently in place and those
Y2K upgrades that were installed during the first half of 1999 to insure Y2K
integrity. This evaluation will continue throughout the year 2000.
Embedded Systems
Vendor Certification-The Partnership has received Y2K compliance certifications
from the majority of its vendors. These certificates are on file in the
Partnership's offices.
Field Testing-The Partnership or its authorized vendors began conducting Y2K
compliance field testing during the fourth quarter of 1998 and will continue
testing throughout 1999.
Evaluation-The Partnership will monitor all systems currently in place and those
Y2K upgrades that were installed during the first half of 1999, to insure Y2K
integrity. This evaluation will continue throughout the year 2000.
Cost of Implementation
Corporate Office
Information Technology-Expenses for hardware and software that were directly
attributed to Y2K compliance were less than $75,000.
Embedded Systems-The Partnership has no current expenses directly attributed to
Y2K compliance for embedded systems.
Hotels
Information Technology
Bass Hotels & Resorts-The Partnership has upgraded hardware and software systems
over the last two years that were required from a technology standpoint. Y2K
compliance was an ancillary benefit of these
15
<PAGE>
upgrades. Some additional hardware upgrades are expected to occur during the
last half of 1999. These expenses are expected to be less than $10,000.
Promus Hotels, Inc.-The Partnership has allocated approximately $50,000 to date
for upgrades necessary to meet Y2K compliance at these hotels.
Embedded Systems-The Partnership has not expended any funds directly attributed
to Y2K compliance for these systems. Those upgrades and replacements of
equipment that have occurred over the last two years were required to replace
equipment that had reached the end of the normal life cycle and not specifically
for Y2K compliance.
Future Costs
Corporate Office
Additional software upgrades are anticipated to maintain current technology
levels but are not directly attributed to Y2K compliance.
Hotels
Information Technology
Bass Hotels & Resorts-Hotels operating under this flag (eighteen hotels) will
incur minimal costs to replace some computer systems. Average cost per hotel is
estimated to be less than $10,000. Hardware requirements will be offset with the
transfer of existing Y2K compliant hardware from other hotels that are receiving
technology-driven upgrades.
Promus Hotels, Inc.-Hotels operating under this flag (sixteen hotels) have
received new hardware and software as part of a technology and Y2K compliant
upgrade. The estimated total cost for this upgrade is approximately $625,000,
which the Partnership plans to acquire by purchasing and/or leasing.
The balance of the Partnership's hotels have budgeted approximately $400,000 in
capital funds for technology replacements and Y2K compliance issues.
Embedded Systems-Final evaluation of these systems has not been completed at
this time. No major replacements are expected based upon the results of early
testing.
Risk Factors
Information Technology-Based upon current testing results and evaluation of
those results, it is believed that all hardware and software systems in the
Partnership's corporate office and hotels will be Y2K compliant by the end of
the third quarter, 1999. Risk to the operation of the Partnership is therefore
considered to be low.
Embedded Systems-Complete analysis of all embedded systems has not been
completed at this time. Testing and evaluation will continue during the third
quarter of 1999. Based upon early reports, risk to the operation of the
Partnership is considered to be low.
Vendors and Suppliers-The Partnership does not rely on the services of any one
single vendor or supplier that will materially impact its operations. To date,
no strategic vendor or supplier has reported that it will not be Y2K compliant
by the end of 1999. Based upon these reports, risk to the operations of the
Partnership is considered to be low.
16
<PAGE>
Contingency Plans
Information Technology
Hardware-A number of non-critical (time/date critical operations are not
dependent on these systems) hardware systems have failed Y2K compliance testing.
These systems were replaced during the first half of 1999.
Software-Manual operation of guest services, reservations, credit card
processing and timekeeping systems can be accomplished with existing personnel
and equipment. Since all known, non-compliant software systems were replaced
during the first half of 1999, no material impact to the operation of the
Partnership is expected.
Embedded Systems
Contingency plans will be finalized and testing conducted during the third
quarter of 1999, when evaluation of these systems is complete. All known
embedded systems can be manually over-ridden if necessary, in the event of a
failure due to a Y2K issue.
Vendors and Suppliers
The Partnership will use alternative vendors and suppliers in the event any one
strategic vendor or supplier is incapable of operating as a result of a Y2K
compliance issue. The Partnership maintains a list of alternative vendors and
suppliers. These vendors and suppliers will be certified as Y2K compliant in the
event their services are required.
Forward-Looking Statements
NOTE: In addition to historical information, this document contains certain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements typically, but not exclusively,
are identified by the inclusion of phrases such as "the Partnership believes,"
"the Partnership plans," "the Partnership intends," and other phrases of similar
meaning. These forward-looking statements involve risks and uncertainties and
are based on current expectations. Consequently, actual results could differ
materially from the expectations expressed in the forward-looking statements.
Among the various factors that could cause actual results to differ include a
downturn in the economy (either regionally or nationwide) affecting overall
hotel occupancy rates, revenues at New Hotels not reaching expected levels as
quickly as planned as the result of competitive factors or the Partnership's
inability to obtain permanent financing for New Hotels on terms similar to those
available in the past.
Supplemental Financial Information Relating to the 1994 and 1995 Collateral
Hotels
The following tables set forth, as of July 2, 1999, unaudited selected financial
information with respect to the 17 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 Notes) (the "Restricted Group"). Under the heading "Management
Operations," information with respect to revenues and expenses generated by the
Partnership 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.
17
<PAGE>
<TABLE>
<CAPTION>
Trailing 12 Months Ended July 2, 1999
---------- ---------- ---------- ----------
1994 1995 Management Total
Collateral Collateral Operations Restricted
Hotels Hotels Group Group
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
(Dollars in thousands, except operating data)
Statement of Operations Data:
Operating Revenues $140,156 $51,945 $7,824 $199,925
Operating Expenses:
Direct operating costs and expenses 51,469 19,322 - 70,791
General, administrative, sales
and management expenses(b) 38,544 17,154 (110)(c) 55,588
Repairs and maintenance 5,518 1,337 - 6,855
Depreciation and amortization 11,798 5,022 412 17,232
-------- ------- ------ --------
Total operating expenses 107,329 42,835 302 150,466
-------- ------- ------ --------
Income from operations: $ 32,827 $ 9,110 $7,522 $ 49,459
======== ======= ====== ========
Operating Data:
Occupancy 66.8% 60.7%
Average daily room rate $ 88.90 $ 80.81
RevPAR $ 58.26 $ 49.07
</TABLE>
<TABLE>
<CAPTION>
Trailing 12 Months Ended January 1, 1999
---------- ---------- ---------- ----------
1994 1995 Management Total
Collateral Collateral Operations Restricted
Hotels Hotels Group Group
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
(Dollars in thousands, except operating data)
Statement of Operations Data:
Operating Revenues $139,721 $57,528 $6,783(a) $204,032
Operating Expenses:
Direct operating costs and expenses 51,997 21,611 -- 73,608
General, administrative, sales and
management expenses(b) 39,292 18,617 (917)(c) 56,992
Repairs and maintenance 5,448 1,549 -- 6,997
Depreciation and amortization 11,922 5,402 412 17,736
-------- ------- ------ --------
Total operating expenses 108,659 47,179 (505) 155,333
-------- ------- ------ --------
Income from operations: $ 31,062 $10,349 $7,288 $ 48,699
======== ======= ====== ========
Operating Data:
Occupancy 66.0% 61.6%
Average daily room rate $ 87.51 $ 80.16
RevPAR $ 56.70 $ 49.34
</TABLE>
(a) Represents management revenues derived from the Owned Hotels owned by L.P.
Two 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.
18
<PAGE>
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Partnership is exposed to changes in interest rates primarily as a result
of its investing and financing activities. Investing activity includes
operating cash accounts and investments, with an original maturity of three
months or less, and certain balances of various money market and common bank
accounts. The financing activities of the Partnership are comprised of long-
term fixed and variable rate debt obligations utilized to fund business
operations and maintain liquidity. The following table presents the principal
cash repayments and related weighted average interest rates by maturity date for
the Partnership's long-term fixed and variable rate debt obligations as of
July 2, 1999:
<TABLE>
<CAPTION>
Expected Maturity Date
(in millions)
Fair
There- Value
1999(d) 2000 2001 2002 2003 after Total (e)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Long-Term Debt (a)
$300 Million 1st Mortgage Notes $ - $ - $ - $ - $ - $300 $300 $313
Average interest rate (b) 8.9% 8.9% 8.9% 8.9% 8.9% 8.9% 8.9%
$90 Million 1st Mortgage Notes $ - $ - $ - $ - $ - $ 90 $ 90 $ 94
Average interest rate (b) 9.8% 9.8% 9.8% 9.8% 9.8% 9.8% 9.8%
Other fixed-rate debt obligations $ 29 $ 6 $ 13 $ 30 $ 23 $230 $331 $331
Average interest rate (b) 8.7% 8.4% 8.2% 8.8% 8.6% 8.6% 8.6%
Other variable-rate debt obligations $ 1 $ 10 $ 17 $ 1 $ 15 $ 44 $ 88 $ 88
Average interest rate (c) 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0%
</TABLE>
(a) Includes amounts reflected as long-term debt due within one year.
(b) For the long-term fixed rate debt obligations, the weighted average
interest rate is based on the stated rate of the debt that is maturing in
the year reported. The weighted average interest rate excludes the effect
of the amortization of deferred financing costs.
(c) For the long-term variable rate debt obligations, the weighted average
interest rate assumes no changes in interest rates and is based on the
variable rate of the debt, as of July 2, 1999, that is maturing in the
year reported. The weighted average interest rate excludes the effect of
the amortization of deferred financing costs.
(d) The 1999 balances include actual and projected principal repayments and
weighted average interest rates for the year.
(e) The fair values of long-term debt obligations approximate their respective
historical carrying amounts except with respect to the $300 million 1st
Mortgage Notes and the $90 million 1st Mortgage Notes. The fair value of
the first mortgage note issues is estimated by obtaining quotes from
brokers.
19
<PAGE>
PART II. OTHER INFORMATION AND SIGNATURES
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities and Use of Proceeds
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Securities Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index incorporated by reference
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for
which this report is filed.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrants have duly caused this report to be signed on their behalf by the
undersigned thereto duly authorized.
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/ Kenneth J. Weber
---------------------
Kenneth J. Weber, Chief Financial
Officer and Executive Vice President
(Principal Financial Officer)
JOHN Q. HAMMONS HOTELS FINANCE CORPORATION
By: /s/ John Q. Hammons
--------------------
John Q. Hammons, Chairman,
Founder, and Chief Executive Officer
By: /s/ Kenneth J. Weber
---------------------
Kenneth J. Weber, Chief Financial Officer
and Executive Vice President (Principal
Financial Officer)
JOHN Q. HAMMONS HOTELS FINANCE CORPORATION II
By: /s/ John Q. Hammons
--------------------
John Q. Hammons, Chairman,
Founder, and Chief Executive Officer
By: /s/ Kenneth J. Weber
---------------------
Kenneth J. Weber, Chief Financial Officer
and Executive Vice President (Principal
Financial Officer)
Dated: August 13, 1999
21
<PAGE>
Exhibit Index
-------------
27 Financial Data Schedule
22
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-02-1999
<PERIOD-END> JUL-02-1999
<CASH> 43,325
<SECURITIES> 10,894
<RECEIVABLES> 12,923
<ALLOWANCES> 206
<INVENTORY> 1,094
<CURRENT-ASSETS> 68,985
<PP&E> 1,009,798
<DEPRECIATION> 212,447
<TOTAL-ASSETS> 918,390
<CURRENT-LIABILITIES> 93,238
<BONDS> 769,736
0
0
<COMMON> 0
<OTHER-SE> 44,563
<TOTAL-LIABILITY-AND-EQUITY> 918,390
<SALES> 0
<TOTAL-REVENUES> 174,048
<CGS> 0
<TOTAL-COSTS> 63,521
<OTHER-EXPENSES> 81,063
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,522
<INCOME-PRETAX> 2,307
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,307
<DISCONTINUED> 0
<EXTRAORDINARY> (19)
<CHANGES> (1,819)
<NET-INCOME> 469
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
