<PAGE>
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 October 1, 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 033-73340 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 No.)
300 John Q. Hammons Parkway
Suite 900
Springfield, MO 65806
(Address of principal executive offices)
(Zip Code)
(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 _______
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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>
October 1, January 1,
1999 1999
------------- ------------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS:
Cash and equivalents $ 26,843 $ 46,233
Marketable securities 12,911 6,533
Receivables:
Trade, less allowance for doubtful accounts of $206 9,655 8,852
Construction reimbursements and other 2,416 5,269
Management fees 85 62
Inventories 1,154 1,205
Prepaid expenses and other 329 1,089
---------- ---------
Total current assets 53,393 69,243
PROPERTY AND EQUIPMENT, at cost
Land and improvements 54,214 47,982
Buildings and improvements 659,240 605,586
Furniture, fixture and equipment 262,508 239,648
Construction in progress 68,567 63,078
---------- ---------
1,044,529 956,294
Less-accumulated depreciation and amortization (224,410) (194,860)
---------- ---------
820,119 761,434
RESTRICTED CASH AND RECEIVABLE FROM
PROPERTY DISPOSITIONS 25,591 18,166
DEFERRED FINANCING COSTS, FRANCHISE FEES
AND OTHER, net 27,231 27,643
---------- ---------
TOTAL ASSETS $ 926,334 $ 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>
October 1, 1999 January 1, 1999
--------------- ---------------
(Unaudited) (Audited)
<S> <C> <C>
LIABILITIES:
Current portion of long-term debt $ 16,650 $ 42,256
Accounts payable 8,272 13,141
Accrued expenses
Payroll and related benefits 8,216 6,843
Sales and property taxes 14,504 9,558
Insurance 8,992 10,061
Interest 3,659 12,540
Utilities, franchise fees and other 7,534 5,568
Accrued dividends -- 2,936
-------- --------
Total current liabilities 67,827 102,903
Long-term debt 808,548 717,460
Other obligations and deferred revenue 9,675 10,883
-------- --------
Total liabilities 886,050 831,246
-------- --------
EQUITY:
Contributed capital 96,436 96,436
Partners' and other deficits, net (56,152) (51,196)
-------- --------
Total equity 40,284 45,240
-------- --------
TOTAL LIABILITIES AND EQUITY $926,334 $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 Nine Months Ended
Oct. 1, 1999 Oct. 2, 1998 Oct. 1, 1999 Oct. 2, 1998
--------------- ---------------- -------------- ---------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUES:
Rooms $ 61,132 $ 56,918 $174,599 $162,306
Food and beverage 21,802 20,168 70,001 64,361
Meeting room rental and other 6,272 5,577 18,654 16,759
-------- -------- -------- --------
Total revenues 89,206 82,663 263,254 243,426
OPERATING EXPENSES:
Direct operating costs and expenses
Rooms 15,829 13,580 44,386 40,648
Food and beverage 16,321 14,912 49,428 46,457
Other 907 874 2,764 2,663
General, administrative and sales expenses 27,638 25,491 79,532 73,066
Repairs and maintenance 3,784 3,417 11,115 9,930
Depreciation and amortization 11,913 11,547 33,751 33,900
-------- -------- -------- --------
Total operating expenses 76,392 69,821 220,976 206,664
-------- -------- -------- --------
INCOME FROM OPERATIONS 12,814 12,842 42,278 36,762
OTHER INCOME (EXPENSE):
Gain on property dispositions -- -- 2,365 238
Interest income 1,083 698 2,476 2,093
Interest expense and amortization of deferred
financing fees (17,489) (14,921) (48,404) (43,619)
-------- -------- -------- --------
Loss before extraordinary item and cumulative
effect of change in accounting principle (3,592) (1,381) (1,285) (4,526)
Extraordinary Item: Cost of extinguishment of
debt -- (520) (19) (1,828)
-------- -------- -------- --------
LOSS BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (3,592) (1,901) (1,304) (6,354)
Cumulative effect of change in accounting
principle, net -- -- (1,819) --
-------- -------- -------- --------
NET LOSS $ (3,592) $ (1,901) $ (3,123) $ (6,354)
======== ======== ======== ========
</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>
PARTNERS' AND
CONTRIBUTED OTHER EQUITY
CAPITAL (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 -- (120) -- (120)
Distributions to partner to purchase
treasury stock -- (1,713) -- (1,713)
Net loss -- (884) (2,239) (3,123)
-------- -------- -------- --------
BALANCE, October 1, 1999
(unaudited) $ 96,436 $(81,305) $ 25,153 $ 40,284
======== ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements
5
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JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOW
(000's omitted)
<TABLE>
<CAPTION>
Nine Months Ended
October 1, 1999 October 2, 1998
--------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES: (Unaudited)
<S> <C> <C>
Net loss $ (3,123) $ (6,354)
Adjustments to reconcile net loss to cash provided by
operating activities-
Depreciation, amortization, and loan cost amortization 35,178 35,350
Extraordinary item 19 1,828
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 2,027 (4,312)
Inventories 51 (103)
Prepaid expenses and other 760 695
Accounts payable (4,869) (527)
Accrued expenses (1,665) (5,795)
Other obligations and deferred revenue (1,208) 2,795
--------- ---------
Net cash provided by operating activities 26,624 23,339
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment, net (96,396) (103,415)
Proceeds from dispositions of hotels 6,500 39,387
Restricted cash remaining from property dispositions (7,425) (2,039)
Franchise fees and other (3,028) (5,744)
Purchase of marketable securities, net (6,378) (19)
--------- ---------
Net cash used in investing activities (106,727) (71,830)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 83,191 223,390
Repayments of debt (17,709) (183,624)
Distributions to partners (3,056) (1,553)
Distributions to partner to purchase treasury stock (1,713) --
--------- ---------
Net cash provided by financing activities 60,713 38,213
--------- ---------
Decrease in cash and equivalents (19,390) (10,278)
CASH AND EQUIVALENTS, beginning of period 46,233 41,961
--------- ---------
CASH AND EQUIVALENTS, end of period $ 26,843 $ 31,683
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION;
CASH PAID FOR INTEREST, net of amounts capitalized $ 51,727 $ 51,689
========= =========
</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.
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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 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. In
June 1999, the Financial Accounting Board issued Statement of Financial
Accounting Standards No. 137, Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective Date of FASB Statement No. 133 ("SFAS
137"). SFAS 137 amends SFAS 133's effective date. SFAS 137 states the statement
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.
8
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5. PROPERTY DISPOSITION
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 and 1995 first mortgage 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. 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 Partnership completed the sale of an additional hotel
property 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 outstanding. The Partnership intends to provide replacement
collateral in accordance with the indenture provisions.
As of October 1, 1999, approximately $25.6 million of cash was 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 then under construction. As of
October 1, 1999, the Partnership had three hotels under construction: Marriott
Renaissance Hotel at the Charlotte, North Carolina airport; 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. On August 3, 1999, the Partnership opened the Embassy Suites Hotel,
Grapevine, Texas, adjacent to the Bass Pro Shop's Outdoor World, near the
Dallas-Fort Worth airport
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
9
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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.
Results Of Operations - Quarter Ended October 1, 1999
The following discussion and analysis addresses results of operations for
the quarters ended October 1, 1999 (the "1999 Quarter") and October 2, 1998 (the
"1998 Quarter").
For the 1999 Quarter, the Partnership's total earnings before interest
expense, taxes, depreciation and amortization (EBITDA) were $24.7 million, an
increase of 1.2% compared to the 1998 Quarter EBITDA of $24.4 million. The
Mature Hotels' EBITDA was $22.6 million in the 1999 Quarter, up 24.2% from $18.2
million in the 1998 Quarter primarily due to six hotels moving into 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 Mature Hotels in 1999 provided $4.8 million of EBITDA in the 1999
Quarter. As a percentage of total revenues EBITDA related to the Mature Hotels
increased to 29.1% in the 1999 Quarter from 28.4% in the 1998 Quarter. The New
Hotels' EBITDA for the 1999 Quarter was $(0.7) million compared to $3.2 million
in the 1998 Quarter. This decrease was due primarily to the shift of six (6)
hotels from New Hotels to Mature Hotels.
Total revenues for the 1999 Quarter were $89.2 million, an increase of $6.5
million, or 7.9%, compared to the 1998 Quarter, primarily as a result of the
continued growth of the New Hotels' including the four hotels opened in 1998,
and the three hotels opened in 1999. The Partnership's Mature Hotels generated
total revenues of $77.5 million in the 1999 Quarter, an increase of $13.3
million, or 20.7%, compared to the 1998 Quarter. The Partnership's New Hotels
generated total revenues of $10.6 million during the 1999 Quarter compared to
$17.8 million in the 1998 Quarter.
Rooms revenues increased $4.2 million, or 7.4%, from the 1998 Quarter, but
decreased slightly as a percentage of total revenues, to 68.5% from 68.9%. The
dollar increase was primarily due to increased rooms revenues from the New
Hotels and increases in the Partnership's average room rate to $94.64, a 3.0%
increase compared to the 1998 Quarter average room rate of $91.89. In
comparison, the average room rate for the hotel industry was $80.80 in the 1999
Quarter, up 4.1% from the 1998 Quarter. The Partnership's occupancy rate for
both the 1999 Quarter and the 1998 Quarter was 66.4%. Occupancy for the hotel
industry was 69.7% in the 1999 Quarter, down from 70.0% in the 1998 Quarter. The
Partnership's Revenue per Available Room was $62.86 in the 1999 Quarter, up 3.1%
from $60.98 in the 1998 Quarter. RevPAR for the hotel industry was $56.29, up
4.0% from the 1998 Quarter.
Food and beverage revenues increased $1.6 million, or 8.1%, compared to the
1998 Quarter, and remained stable as a percentage of total revenues, at 24.4%.
Sales at the New Hotels with full food and beverage services accounted for the
overall dollar increase in food and beverage revenues.
Meeting room rental and other revenues increased $0.7 million, or 12.5%,
from the 1998 Quarter, and increased as a percentage of revenues, to 7.0% from
6.7%. The majority of this
10
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increase related to sales at New Hotels as well as increased meeting convention
business in the Mature Hotels.
Rooms operating expenses increased $2.2 million, or 16.6%, compared to the
1998 Quarter, and increased as a percentage of rooms revenues, to 25.9% from
23.9% in the 1998 Quarter. The increase related primarily to expenses for New
Hotels. For the Mature Hotels, rooms operating expenses as a percentage of rooms
revenues, were 23.9% in the 1999 Quarter compared to 25.2% in the 1998 Quarter.
Food and beverage operating expenses increased to $16.3 million compared to
$14.9 million in the 1998 Quarter, and increased slightly as a percentage of
food and beverage revenues, to 74.9% from 73.9%. The dollar increase was
attributable to expenses associated with food and beverage revenues at the New
Hotels.
Other operating expenses remained stable at $0.9 million compared to the
1998 Quarter, but decreased as a percentage of meeting room rental and other
revenues, to 14.5% from 15.7% in the same period of the prior year.
General, administrative and sales expenses increased $2.1 million, or 8.4%,
over the 1998 Quarter, and increased slightly as a percentage of revenues to
31.0% from 30.8%. The increase was primarily attributable to expenses associated
with New Hotel development and a larger number of hotels in the 1999 Quarter.
Approximately $0.8 million of preopening expenses were incurred and expensed in
the 1999 Quarter.
Repairs and maintenance expenses increased $0.4 million, or 10.7%, compared
to the 1998 Quarter, and increased slightly as a percentage of revenues, to 4.2%
from 4.1% in the 1998 Quarter.
Depreciation and amortization expenses increased $0.4 million, or 3.2%,
compared to the 1998 Quarter, but decreased as a percentage of revenues to 13.4%
from 14.0%, in the 1998 Quarter. The dollar increase in depreciation and
amortization is related to the New Hotels, as depreciation and amortization
expenses are higher in the initial years of a New Hotel's operation.
Income from operations remained stable at $12.8 million, compared to the
1998 Quarter, but decreased as a percentage of revenues, to 14.4% from 15.5%.
Expenses related to opening the New Hotels, primarily general, administration
and sales expenses, increased more rapidly than revenues from those New Hotels.
Interest expense (net) increased $2.2 million, or 15.3%, from the 1998
Quarter, and increased as a percentage of total revenues to 18.4% from 17.2%.
These increased costs reflected interest expense for the New Hotels.
Net loss was $3.6 million in the 1999 Quarter, compared to $1.9 million in
the 1998 Quarter. The loss was primarily attributable to higher interest expense
and, to a lesser extent, increased depreciation and amortization associated with
the Partnership's New Hotels.
11
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Results Of Operations - Nine Month Period Ended October 1, 1999
The following discussion addresses results of operations for the nine month
periods ended October 1, 1999 (the "1999 Nine Months") and October 2, 1998 (the
"1998 Nine Months").
For the 1999 Nine Months the Partnership's total EBITDA was $76.0 million,
a 7.6% increase compared to the 1998 Nine Months EBITDA of $70.7 million. The
Mature Hotels' EBITDA was $67.1 million in the 1999 Nine Months, up $11.9
million from the 1998 Nine 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 $12.5
million of EBITDA in the 1999 Nine Months.
Total revenues increased to $263.3 million in the 1999 Nine Months from
$243.4 million in the 1998 Nine Months, an increase of $19.9 million or 8.1%.
The increase is primarily from the continued growth of New Hotels.
Rooms revenues increased to $174.6 million in the 1999 Nine Months from
$162.3 million in the 1998 Nine Months, an increase of $12.3 million or 7.6% 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 66.3%
compared to 66.7% in the 1998 Nine Months. The Partnership's average room rate
increased to $94.93 in the 1999 Nine Months from $91.31 in the 1998 Nine Months,
an increase of $3.62 or 4.0%. Occupancy decreased to 64.1% in the 1999 Nine
Months from 64.2% in the 1998 Nine Months.
Food and Beverage revenues increased to $70.0 million in the 1999 Nine
Months from $64.4 million in the 1998 Nine Months, an increase of $5.6 million
or 8.8%, and increased slightly as a percentage of total revenues to 26.6% from
26.4% in the 1998 Nine Months. The increase in revenues was attributable
primarily to sales at the New Hotels, including at the additional full service
hotels, and menu pricing adjustments.
Meeting room rental and other revenues increased to $18.7 million in the
1999 Nine Months from $16.8 million in the 1998 Nine Months, an increase of $1.9
million or 11.3%. Meeting room rental and other revenues increased slightly as a
percentage of total revenues to 7.1% from 6.9% in the 1998 Nine Months. The
increases are primarily attributable to the New Hotels.
Rooms operating expenses increased to $44.4 million in the 1999 Nine Months
from $40.6 million in the 1998 Nine Months, an increase of $3.8 million or 9.2%.
This expense represented 25.4% of rooms revenues in the 1999 Nine Months and
25.0% in the 1998 Nine Months. The increase relates to the hotels opened in the
last twelve months.
Food and beverage operating expenses increased to $49.4 million in the 1999
Nine Months from $46.5 million in the 1998 Nine Months, an increase of $2.9
million or 6.4%. These expenses decreased as a percentage of food and beverages
revenues in the 1999 Nine Months to 70.6%, from 72.2% in the 1998 Nine Months.
Profit margins improved due to reductions in food and labor costs as a
percentage of food and beverage revenues.
12
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Other operating expenses increased to $2.8 million in the 1999 Nine Months
from $2.7 million in the 1998 Nine Months, an increase of $0.1 million, or 3.8%,
but decreased as a percentage of meeting room rental and other income to 14.8%
from 15.9%.
General, administrative and sales expenses increased to $79.5 million in
the 1999 Nine Months from $73.1 million in the 1998 Nine Months, an increase of
$6.4 million, or 8.8%, and increased slightly as a percentage of total revenues
to 30.2% from 30.0% in the 1998 Nine Months. The increase in these expenses was
primarily the result of expenses associated with the opening of New Hotels.
Approximately $2.7 million of pre-opening expenses were incurred and expensed in
the 1999 Nine Months.
Repairs and maintenance expenses increased to $11.1 million in the 1999
Nine Months from $9.9 million in the 1998 Nine Months, an increase of $1.2
million or 11.9%. The increase was a result of the increases in the total number
of hotels open and rooms available.
Depreciation and amortization expenses decreased slightly to $33.8 million
in the 1999 Nine Months from $33.9 million in the 1998 Nine Months, a decrease
of $0.1 million or 0.4%. These expenses represented 12.8% of total revenues in
the 1999 Nine Months compared to 13.9% of total revenues in the 1998 Nine
Months. The depreciation and amortization decrease related to a change in
accounting principle which required the Partnership to write off unamortized
pre-opening costs in the 1999 Nine Months. In previous years, these amounts were
deferred and amortized over a one year period.
Income from operations increased to $42.3 million in the 1999 Nine Months
from $36.8 million in the 1998 Nine Months, an increase of $5.5 million or
15.0%. The increase was due to increased revenues and improved operating
margins.
Gain on property disposition was $2.4 million in the 1999 Nine Months and
$0.2 million in the 1998 Nine Months. See Note 5 of Notes to Consolidated
Financial Statements.
Interest expense (net) increased to $45.9 million in the 1999 Nine Months
from $41.5 million in the 1998 Nine Months, an increase of $4.4 million or
10.6%, reflecting hotels opened within the last year. As a percentage of total
revenues, this expense increased to 17.4% in the 1999 Nine Months from 17.1% in
the 1998 Nine Months.
Net loss was $3.1 million in the 1999 Nine Months, compared to $6.4 million
in the 1998 Nine Months. The losses were driven by fixed charges associated with
the Partnership's new hotels opened in 1998 and 1999.
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
existing capital expenditures and new hotel development, and to make
distributions to partners to fund some of the taxes associated with income
allocable to the partners.
13
<PAGE>
At October 1, 1999, the Partnership had $26.8 million of cash and
equivalents and $12.9 million of marketable securities, compared to $46.2
million and $6.5 million, respectively, at the end of 1998. Total current assets
at October 1, 1999, decreased $15.8 million, as the result of the decrease in
cash and cash equivalents, partially offset by an increase in receivables. As of
October 1, 1999, the Partnership also had $25.6 million of restricted cash which
is available for replacement collateral in accordance with the terms of the 1994
and 1995 Note Indentures.
Net cash provided by operating activities was $26.6 million for the 1999
Nine Months compared to $23.3 million for the 1998 Nine Months.
At October 1, 1999, total debt was $825.2 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 $16.7 million, compared to $42.3 million at the end of 1998 due to
refinancing of the Topeka Capitol Plaza Hotel and an extension of the maturity
date on the Omaha Embassy Suites mortgage. The Partnership incurred net capital
expenditures of approximately $96.4 million during the 1999 Nine Months and
$103.4 million during the 1998 Nine Months. Of the $96.4 million incurred during
the 1999 Nine Months, approximately $10.1 million was for capital improvements
on existing hotel properties and approximately $86.3 million was for development
of new hotels. During the remainder of 1999, the Partnership expects capital
expenditures to total approximately $48.7 million, including approximately $5.4
million for capital improvements on existing hotels and approximately $43.3
million for continued new hotel development.
As of October 1, 1999 the Partnership had three hotels under construction.
The Partnership estimates the remaining building costs of these hotels will
require additional capital expenditures of approximately $52.9 million during
1999. Construction in progress at October 1, 1999 included $68.6 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 $78.8 million, with $51.4 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 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 Year 2000 issues. Virtually all such upgrades
were anticipated by the Partnership and would have been implemented within the
next few years even absent a Year 2000 issue.
The Partnership is requiring vendors and suppliers to certify Year 2000
compliance of supplied information technology systems and devices. Compliance is
defined as no failures or
14
<PAGE>
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 Year 2000 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 corporate
operation, given that the current systems used are believed to be Year 2000,
compliant, except for its timekeeping and payroll systems which are being
replaced, and are now currently scheduled for completion during November, 1999.
Corporate Systems
Hardware. Computer systems were tested for Year 2000 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 spread sheet software packages were deemed materially
compliant and will not be replaced. The accounting and payroll system was not
Year 2000 compliant and was replaced during January 1998. Maintenance upgrades
to the accounting and payroll systems are scheduled for implementation during
the fourth quarter of 1999.
Hotel Systems
Hardware. Testing of Partnership-owned computer hardware was started
during the first quarter of 1998. All systems have been tested and those systems
deemed not Year 2000 compliant have been identified and have either been
replaced or are scheduled to be replaced with equipment currently on order.
Software
Bass Hotels and Resorts use the Encore Property Management System. The
current version has been updated and is now materially Year 2000 compliant.
During testing, some hardware issues have been identified. BIOS patches from IBM
were tested to correct these issues and these patches will be installed during
the fourth quarter. No expense to the Partnership is anticipated at this time.
Promus Hotels, Inc. uses the System21 Property Management System. This
system is Year 2000 compliant.
Radisson Hotels and some other Partnership hotels use the Fidelio Property
Management System. The current version of this software is Year 2000 compliant.
The operating system on the file servers will be compliant with the installation
of software patches at no expense to the Partnership. During the third quarter,
some hardware was replaced to maintain current levels of technology. The total
amount of expense to the Partnership was less than $50,000. These systems were
scheduled for upgrade in the year 2000 independent of the Year 2000 situation.
Other Partnership hotels use the Multi Systems, Inc. Property Management
System. This system is Year 2000 compliant. Independent of Year 2000 issues,
some of these properties
15
<PAGE>
implemented hardware upgrades to maintain technology levels during the third
quarter. The total cost to the Partnership for these expenses was less than
$30,000.
Embedded Systems
Non-critical. Fax machines, copiers and similar equipment are generally
leased. The majority of these devices have been tested and deemed Year 2000
compliant. Those failing the Year 2000 testing will be replaced by the lessor
during 1999 under current leasing agreements as required in order to be Year
2000 compliant.
Critical. Systems in this category include elevators, fire control,
security, energy management, credit card processing and telecommunications. The
Partnership has completed initial testing and will continue to evaluate these
systems during the rest of 1999. Systems requiring modifications to be Year 2000
compliant have been identified and have been upgraded or replaced. Continued
testing and evaluation of these systems will continue during the fourth quarter.
Timekeeping and Payroll Systems
The Partnership currently uses Time Resource Management software from ADP
for timekeeping. The currently installed version of this software is not Year
2000 compliant and was scheduled for replacement during the third quarter of
1999. Delays related to training and testing required moving the installation to
November, 1999. Payroll processing is out-sourced and a Year 2000 compliance
certificate from the processor is on file.
Vendor Compliance Certifications
Strategic Relationships. Requests for Year 2000 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 Year 2000 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 Year 2000 compliance
certifications from the majority of its property management system vendors.
These certifications are on file in the Partnership offices.
Field Testing. The Partnership has received Year 2000 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.
16
<PAGE>
Evaluation. The Partnership will monitor all systems currently in place
and those Year 2000 upgrades that were installed during the first half of 1999,
to insure Year 2000 integrity. This evaluation will continue throughout the
year 2000.
Embedded Systems.
- ----------------
Vendor Certification. The Partnership has received Year 2000 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
Year 2000 compliance field testing during the fourth quarter of 1998 and will
continue testing and evaluating throughout the year 2000.
Evaluation. The Partnership will monitor all systems currently in place
and those Year 2000 upgrades that were installed during the first half of 1999,
to insure Year 2000 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 Year 2000 compliance were less than $75,000.
Embedded Systems. The Partnership has no current expenses directly
attributed to Year 2000 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.
Year 2000 compliance was an ancillary benefit of these upgrades. Some
additional hardware upgrades are expected to occur during the fourth quarter 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 Year 2000 compliance at these hotels.
Embedded Systems. The Partnership has not expended any funds directly
attributed to Year 2000 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 Year 2000 compliance.
Future Costs
Corporate Office
- ----------------
17
<PAGE>
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 (fifteen 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 Year 2000 compliant hardware from other
hotels that are receiving technology-driven upgrades.
Promus Hotels, Inc. - Hotels operating under this flag (eighteen hotels)
have received new hardware and software as part of a technology and Year 2000
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 Year 2000 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 are Year 2000 compliant.
Embedded Systems. Analysis of all embedded systems has been completed.
Testing and evaluation will continue during the fourth quarter of 1999. 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 operations. To
date, no strategic vendor or supplier has reported that it will not be Year 2000
compliant by the end of 1999. Based upon these reports, risk to the operations
of the Partnership is considered to be low.
Contingency Plans
Information Technology
- ----------------------
Hardware. A number of non-critical (time/date critical operations are not
dependent on these systems) hardware systems have failed Year 2000 compliance
testing. These systems were replaced during the first half of 1999.
Software. Manual operation of guest services, reservations, credit card
processing and time keeping systems can be accomplished with existing personnel
and equipment. Since all
18
<PAGE>
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 have been finalized and testing
successfully concluded during the third quarter of 1999. All known embedded
systems can be manually over-ridden if necessary, in the event of a failure due
to a Year 2000 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 Year 2000 compliance issue. The Partnership
maintains a list of alternative vendors and suppliers. These vendors and
suppliers will be certified as Year 2000 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 October 1, 1999, unaudited selected
financial information with respect to the 1994 Collateral Hotels and the 1995
Collateral Hotels and the Partnership, excluding the 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
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 in the chart below:
19
<PAGE>
<TABLE>
<CAPTION>
Trailing 12 Months Ended October 1, 1999
---------- ---------- ---------- ----------
1994 1995 Management Total
Collateral Collateral Operations Restricted
Hotels Hotels Group Group
---------- ---------- ---------- ----------
(Dollars in thousands, except operating data)
<S> <C> <C> <C> <C>
Statement of Operations Data:
Operating revenues $144,372 $48,060 $8,167(a) $200,599
Operating expenses:
Direct operating costs and expenses 52,171 17,960 -- 70,131
General, administrative, sales and
management expenses(b) 39,829 15,197 (264)(c) 54,762
Repairs and maintenance 5,713 2,200 -- 7,914
Depreciation and amortization 12,449 4,764 410 17,622
-------- ------- ------ --------
Total operating expenses 110,162 40,121 146 150,429
-------- ------- ------ --------
Income from operations: $ 34,210 $ 7,939 $8,021 $ 50,170
======== ======= ====== ========
Operating Data:
Occupancy 67.3% 61.0%
Average daily room rate $ 90.43 $ 81.46
RevPAR $ 60.89 $ 49.73
Trailing 12 Months Ended January 1, 1999
---------- ---------- ---------- ----------
1994 1995 Management Total
Collateral Collateral Operations Restricted
Hotels Hotels Group Group
---------- ---------- ---------- ----------
(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 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.
20
<PAGE>
(c) General, administrative, sales and management expenses applicable to
management operations is net of management revenues allocated to the 1994 and
1995 Collateral Hotels.
Item 3. Qualitative and Quantitative 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
October 1, 1999:
Expected Maturity Date
(in millions)
<TABLE>
<CAPTION>
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 $ - $ - $ - $ - $ - $300 $300 $313
Notes
Average interest rate (b) 8.9% 8.9% 8.9% 8.9% 8.9% 8.9% 8.9%
$90 Million 1st Mortgage $ - $ - $ - $ - $ - $ 90 $ 90 $ 94
Notes
Average interest rate (b) 9.8% 9.8% 9.8% 9.8% 9.8% 9.8% 9.8%
Other fixed-rate debt $ 6 $ 6 $ 13 $ 53 $ 24 $230 $332 $332
obligations
Average interest rate (b) 8.4% 8.4% 8.2% 8.8% 8.6% 8.6% 8.6%
Other variable-rate debt $ 1 $ 11 $ 22 $ 1 $ 15 $ 53 $103 $103
obligations
Average interest rate (c) 8.1% 8.1% 8.1% 8.1% 8.1% 8.1% 8.1%
</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 October 1, 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.
21
<PAGE>
(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.
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.
22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its 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: November 12, 1999
23
<PAGE>
Exhibit Index
-------------
27 Financial Data Schedule
24
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-02-1999
<PERIOD-END> OCT-01-1999
<CASH> 26,843
<SECURITIES> 12,911
<RECEIVABLES> 12,156
<ALLOWANCES> 206
<INVENTORY> 1,154
<CURRENT-ASSETS> 53,393
<PP&E> 1,044,529
<DEPRECIATION> 224,410
<TOTAL-ASSETS> 926,334
<CURRENT-LIABILITIES> 67,827
<BONDS> 808,548
0
0
<COMMON> 0
<OTHER-SE> 40,284
<TOTAL-LIABILITY-AND-EQUITY> 926,334
<SALES> 0
<TOTAL-REVENUES> 263,254
<CGS> 0
<TOTAL-COSTS> 96,578
<OTHER-EXPENSES> 124,398
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,928
<INCOME-PRETAX> (1,285)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,285)
<DISCONTINUED> 0
<EXTRAORDINARY> (19)
<CHANGES> (1,819)
<NET-INCOME> (3,123)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
