<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 March 31, 2000
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 registrants as specified in their charters)
Delaware 43-1523951
Missouri 43-1680322
Missouri 43-1720400
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
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
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.
Yes X No
------- -------
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED BALANCE SHEETS
(000's omitted)
ASSETS
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS:
CASH AND EQUIVALENTS $ 39,781 $ 49,727
MARKETABLE SECURITIES 5,081 4,982
RECEIVABLES
Trade, less allowance for doubtful accounts of $226 14,526 11,677
Construction reimbursements and other 3,116 2,370
Management fees 77 63
INVENTORIES 1,366 1,349
PREPAID EXPENSES AND OTHER 1,280 1,699
---------- ----------
Total current assets 65,227 71,867
PROPERTY AND EQUIPMENT, at cost
Land and improvements 54,468 55,818
Buildings and improvements 736,179 683,462
Furniture, fixture and equipment 284,599 270,146
Construction in progress 5,229 53,462
---------- ----------
1,080,475 1,062,888
Less-accumulated depreciation and amortization (239,565) (227,411)
---------- ----------
840,910 835,477
DEFERRED FINANCING COSTS, FRANCHISE FEES AND OTHER, net 26,562 26,968
---------- ----------
TOTAL ASSETS $ 932,699 $ 934,312
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED BALANCE SHEETS
(000's omitted)
LIABILITIES AND EQUITY
<TABLE>
<CAPTION>
March 31, 2000 December 31,1999
-------------- ----------------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT LIABILITIES
Current portion of long-term debt $ 23,355 $ 16,569
Accounts payable 4,776 11,877
Accrued expenses
Payroll and related benefits 5,245 7,720
Sales and property taxes 11,810 10,368
Insurance 7,333 7,576
Interest 8,295 12,873
Utilities, franchise fees and other 7,282 6,546
-------- --------
Total current liabilities 68,096 73,529
Long-term debt 825,366 812,274
Other obligations and deferred revenue 3,215 9,402
-------- --------
Total liabilities 896,677 895,205
-------- --------
EQUITY
Contributed capital 96,436 96,436
Partners' and other deficits, net (60,414) (57,329)
-------- --------
Total equity 36,022 39,107
-------- --------
$932,699 $934,312
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
(000's omitted)
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
March 31, 2000 April 2, 1999
-------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C>
REVENUES:
Rooms $ 63,273 $ 54,255
Food and beverage 28,620 23,305
Meeting room rental and other 7,559 6,035
-------- --------
Total revenues 99,452 83,595
OPERATING EXPENSES
Direct operating costs and expenses
Rooms 16,117 13,757
Food and beverage 19,125 16,314
Other 892 864
General, administrative, sales and management service expenses 31,018 24,738
Repairs and maintenance 4,061 3,533
Depreciation and amortization 12,826 10,695
-------- --------
Total operating expenses 84,039 69,901
-------- --------
INCOME FROM OPERATIONS 15,413 13,694
OTHER INCOME (EXPENSE)
Interest income 381 842
Interest expense and amortization of deferred financing fees (18,366) (15,801)
-------- --------
LOSS BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (2,572) (1,265)
Extraordinary item; Cost of extinguishment of debt -- (125)
-------- --------
LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (2,572) (1,390)
Cumulative effect of change in accounting principle, net -- (1,819)
-------- --------
NET LOSS $ (2,572) $ (3,209)
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(000's omitted)
<TABLE>
<CAPTION>
CONTRIBUTED PARTNERS' AND OTHER EQUITY
CAPITAL (DEFICIT)
----------- -------------------------------
General General Limited
Partner Partner Partner Total
----------- --------- ------- -------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1999 (audited) $96,436 $(82,580) $25,251 $39,107
Distributions - (30) - (30)
Distributions to Partner to purchase treasury stock - (483) - (483)
Net loss - (728) (1,844) (2,572)
------- -------- ------- -------
BALANCE, March 31, 2000 (unaudited) $96,436 $(83,821) $23,407 $36,022
======= ======== ======= =======
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
JOHN Q. HAMMONS HOTELS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOW
(000's omitted)
<TABLE>
<CAPTION>
Three months ended
------------------------------
March 31, 2000 April 2, 1999
-------------- -------------
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,572) $ (3,209)
Adjustment to reconcile net loss to cash used in
operating activities -
Depreciation, amortization and loan cost amortization 13,389 11,287
Extraordinary item - 125
Cumulative effect of change in accounting principle - 1,819
Changes in certain assets and liabilities
Receivables (3,609) (88)
Inventories (17) 26
Prepaid expenses and other 419 77
Accounts payable (7,101) (8,972)
Accrued expenses (5,118) (7,983)
Other obligations and deferred revenue (6,187) (2,950)
-------- --------
Net cash used in operating activities (10,796) (9,898)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (18,208) (25,139)
Franchise fees and other (208) (1,874)
Purchase of marketable securities, net (99) (1,586)
-------- --------
Net cash used in investing activities (18,515) (28,599)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 21,480 40,146
Repayments of debt (1,602) (13,551)
Distributions to Partners (30) (2,936)
Distributions to Partner to purchase treasury stock (483) (542)
-------- --------
Net cash provided by financing activities 19,365 23,117
-------- --------
Decrease in cash and equivalents (9,946) (15,380)
CASH AND EQUIVALENTS, beginning of period 49,727 46,233
-------- --------
CASH AND EQUIVALENTS, end of period $ 39,781 $ 30,853
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID FOR INTEREST, net of amounts capitalized $ 22,591 $ 24,056
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE>
JOHN Q. HAMMONS HOTELS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. ENTITY MATTERS
The accompanying consolidated financial statements include the accounts of John
Q. Hammons Hotels, L.P. and its wholly owned subsidiaries ("Partnership"),
consisting of John Q. Hammons Hotels Finance Corporation ("Finance Corp.") and
John Q. Hammons Hotels Finance Corporation II ("Finance Corp. II"), both
corporations with nominal assets and no operations, the catering corporations
(which are separate corporations for each hotel location chartered to own the
respective food and liquor licenses and operate the related food and beverage
facilities), and certain other wholly-owned subsidiaries conducting certain
hotel operations.
In conjunction with a public offering of first mortgage notes in February 1994
(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 December 31, 1999, which
included financial statements for the fiscal years ended December 31, 1999,
January 1, 1999 and January 2, 1998.
7
<PAGE>
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 2000. 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.
During the first quarter of 2000, the Partnership provided $0.5 million in
distributions to John Q. Hammons Hotels, Inc. for the purchase of treasury
stock.
4. NEW ACCOUNTING PRONOUNCEMENTS
In April 1998, the American Institute of Certified Public Accountants released
Statement of Position "Reporting on the Costs of Start-Up Activities" which
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 had 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 No. 133"). SFAS No. 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. This
statement requires that changes in the derivative's fair value be recognized
currently in earnings, unless specific hedge accounting criteria are met. In
June 1999, the Financial Accounting Standards 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
8
<PAGE>
137 states the statement is effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. Upon adoption in this statement, the
Partnership anticipates no impact on its reported consolidated financial
position, results of operations, cash flows or related disclosures.
5. PROPERTY DISPOSITION
On June 16, 1999, the Partnership sold the Holiday Inn Express Hotel and
Conference Center in Joliet, Illinois 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 provided replacement collateral in accordance with the indenture
provisions.
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. The
Partnership opened the last two hotels under construction in the first quarter
of 2000, and currently has no hotels under construction. The following table
sets forth information as to the hotels opened in 2000:
<TABLE>
<CAPTION>
Number of
Location Franchise/Name Rooms/Suits Description Completion Date
- ----------------- ------------------ ---------------- ------------------------ --------------------
<S> <C> <C> <C> <C>
Oklahoma City, OK Renaissance 311 Atrium, Opened January 28,
Convention Center 2000
Charleston, SC Embassy Suites 255 Atrium, Opened February 18,
Convention Center 2000
</TABLE>
Although the Partnership is not developing new hotels, Mr. Hammons is personally
developing several new projects which the Partnership plans to manage, including
a Renaissance Hotel in Richardson, Texas; an Embassy Suites Hotel in Franklin,
Tennessee; and an Embassy Suites Hotel in Lincoln, Nebraska (that opened May 1,
2000). Another managed hotel, the Marriott Courtyard in Springfield, Missouri,
opened on April 10, 2000.
The Partnership's past development activity limits its ability to grow per share
income in the near term. 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 believes, based on past experience, that the operating expenses for
these hotels will decrease as a percentage of revenues, although there can be no
assurance that this will occur.
9
<PAGE>
Results of Operations. The following discussion and analysis addresses results
of operations for the three month periods ended March 31, 2000 (the "2000
Quarter") and April 2, 1999 (the "1999 Quarter").
For the 2000 Quarter, the Partnership's total earnings before interest expense,
taxes, depreciation and amortization (EBITDA) were $28.2 million, a 15.6%
increase over the 1999 Quarter EBITDA of $24.4 million. As a percentage of
total revenues, EBITDA decreased to 28.4% in the 2000 Quarter from 29.1% in the
1999 Quarter, in part because of more favorable insurance experience in the 1999
Quarter of $0.8 million, compared to the 2000 Quarter. The Mature Hotels'
EBITDA was $24.6 million in the 2000 Quarter, up 22.4% from $20.1 million in the
1999 Quarter. As a percentage of total revenues, EBITDA related to the Mature
Hotels increased to 28.6% in the 2000 Quarter from 27.3% in the 1999 Quarter.
The New Hotels' EBITDA for the 2000 Quarter was $1.3 million compared to $2.3
million in the 1999 Quarter. In the 2000 Quarter, the Partnership had six New
Hotels, compared to four New Hotels in the 1999 Quarter. The 2000 Quarter
results include $0.5 million in preopening expenses related to two hotels then
under construction and the 1999 Quarter results include $0.8 million in
preopening expenses related to six hotels then under construction.
Total revenues for the 2000 Quarter were $99.5 million, an increase of $15.9
million, or 19.0%, compared to the 1999 Quarter, primarily as a result of the
continued growth of the Mature Hotels and the hotels opened during 1999. The
Partnership's Mature Hotels generated total revenues of $86.2 million in the
2000 Quarter, an increase of $12.6 million, or 17.1%, compared to the 1999
Quarter. The Partnership's six New Hotels generated total revenues of $12.8
million during the 2000 Quarter compared to $9.6 million from the four New
Hotels in the 1999 Quarter.
Rooms revenues increased $9.0 million, or 16.6%, from the 1999 Quarter, but as a
percentage of total revenues fell to 63.9% from 64.9%. The dollar increase was
primarily due to increased rooms revenues from the Mature Hotels, from an
increase in the Partnership's average room rate to $98.35, a 3.5% increase
compared to the 1999 Quarter average room rate of $95.02, and a 1.0 percentage
point increase in the Partnership's occupancy for the 2000 Quarter to 62.0%. In
comparison, the average room rate for the hotel industry was $85.16 in the 2000
Quarter, up 3.6% from the 1999 Quarter. Occupancy for the hotel industry was
59.1% down 0.1 percentage point from the 1999 Quarter. The Partnership's
Revenue Per Available Room (RevPAR) was $60.96 in the 2000 Quarter, up 5.2% from
$57.94 in the 1999 Quarter. RevPAR for the hotel industry was $50.33, up 3.4%
from the 1999 Quarter.
Food and beverage revenues increased $5.3 million, or 22.8%, compared to the
1999 Quarter, and increased as a percentage of total revenues, to 28.9%, from
27.9%.
Meeting room rental and other revenues increased $1.5 million, or 25.3%, from
the 1999 Quarter as the result of increased use of convention facilities, and
increased as a percentage of revenues, to 7.6% from 7.2%.
Rooms operating expenses increased $2.4 million, or 17.2%, compared to the 1999
Quarter, and remained stable as a percentage of rooms revenues at 25.4%.
10
<PAGE>
Food and beverage operating expenses increased $2.8 million, or 17.2%, compared
to the 1999 Quarter, but decreased as a percentage of food and beverage
revenues, to 66.8% from 70.0%. The dollar increase was attributable to expenses
associated with increased food and beverage sales.
Other operating expenses remained relatively stable compared to the 1999 Quarter
and decreased as a percentage of meeting room rental and other revenues, to
11.8% from 14.3% in the same period of the prior year.
General, administrative and sales expenses increased $6.3 million, or 25.4%,
over the 1999 Quarter, and increased as a percentage of revenues to 31.2% from
29.6%. The increase was primarily attributable to expenses associated with the
four New Hotels opened in 1999 and the two New Hotels opened in 2000.
Repairs and maintenance expenses increased $0.5 million, or 14.9%, compared to
the 1999 Quarter and decreased slightly as a percentage of revenues to 4.1% from
4.2% in the 1999 Quarter.
Depreciation and amortization expenses increased $2.1 million, or 19.9%,
compared to the 1999 Quarter, and increased slightly as a percentage of revenues
to 12.9% from 12.8%. The increase is primarily attributable to the four New
Hotels opened in 1999 and the two New Hotels opened in 2000.
Income from operations increased $1.7 million, or 12.6%, compared to the 1999
Quarter, but decreased as a percentage of revenues, to 15.5% from 16.4% in the
1999 Quarter.
Interest income decreased by $0.5 million from the 1999 Quarter, to $0.4 million
as the Partnership reinvested cash from the sale of hotels in 1998 and 1999 into
new collateral.
Interest expense and amortization of deferred financing fees increased $2.6
million, or 16.2%, from the 1999 Quarter, and decreased slightly as a percentage
of total revenues to 18.5% from 18.9%. The dollar increase related to interest
expense for the New Hotels.
Loss before extraordinary item and cumulative effect of change in accounting
principle was $2.6 million in the 2000 Quarter, compared to $1.3 million in the
1999 Quarter. The increased loss was primarily attributable to increases in
depreciation and interest expense.
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, to make partnership distributions to
fund some of the taxes associated with income allocable to the partners and to
enable the General Partner to purchase treasury stock.
11
<PAGE>
At March 31, 2000, the Partnership had $39.8 million of cash and equivalents and
$5.1 million of marketable securities, compared to $49.7 million and $5.0
million, respectively, at the end of 1999. The cash and equivalents are
available for working capital requirements of the Partnership.
Net cash used in operating activities was $10.8 million for the 2000 Quarter
compared to $9.9 million for the 1999 Quarter. The Partnership used more cash
in the 2000 Quarter as receivables increased and other obligations decreased
from the end of the year.
At March 31, 2000, total debt was $848.7 million compared with $828.8 million at
the end of 1999. The increase is attributable to completion of new hotel
development. The current portion of long-term debt was $23.4 million, compared
with $16.6 million at the end of 1999. The Partnership incurred net capital
expenditures of approximately $18.2 million during the 2000 Quarter and $25.1
million during the 1999 Quarter. Of the $18.2 million incurred during the 2000
Quarter, approximately $2.2 million was for capital expenditures on existing
hotels, and approximately $16.0 million was for new hotel development, while in
the 1999 Quarter, approximately $1.6 million was for capital improvements on
existing hotel properties and approximately $23.5 million was for development of
new hotels. During the remainder of 2000, the Partnership expects capital
expenditures to total approximately $20.2 million, including $16.8 million for
capital improvements on existing hotels and approximately $3.4 million for
amounts to be incurred for the two hotels opened in the first quarter of 2000.
At the end of the 2000 Quarter, the Partnership had no hotels under
construction, while at the end of the 1999 Quarter, the Partnership had six
hotels under construction. Based upon current plans relating to capital
expenditures, the Partnership anticipates that its capital resources will be
adequate to satisfy its 2000 capital requirements for the currently planned
projects and normal recurring capital improvement.
NOTE: In addition to historical information, this document contains certain
forward-looking statements within the meaning of the Private Securities
Litigation 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, or revenues at New Hotels not reaching expected levels as
quickly as planned as the result of competitive factors.
Supplemental Financial Information Relating to the 1994 and 1995 Collateral
Hotels
The following tables set forth, as of March 31, 2000, unaudited selected
financial information with respect to the seventeen 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 1994 and 1995 Note
12
<PAGE>
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.
<TABLE>
<CAPTION>
Trailing 12 Months Ended March 31, 2000
-------------------------------------------------
1994 1995 Total
Collateral Collateral Management Restricted
Hotels Hotels Operations Group
---------- ---------- ---------- ----------
(Dollars in thousands, except operating data)
<S> <C> <C> <C> <C>
Statement of Operations Data:
Operating Revenues $147,638 $51,516 $8,748(a) $207,902
Operating Expenses:
Direct operating costs and expenses 52,377 19,169 -- 71,546
General, administrative, sales and
management expenses(b) 40,177 16,741 (283)(c) 56,635
Repairs and maintenance 5,855 2,431 -- 8,286
Depreciation and amortization 13,055 5,325 424 18,804
-------- ------- ------ --------
Total operating expenses 111,464 43,666 141 155,271
-------- ------- ------ --------
Income from operations: $ 36,174 $ 7,850 $8,607 $ 52,631
======== ======= ====== ========
Operating Data:
Occupancy 68.7% 61.3%
Average Daily Room Rate $ 91.32 $ 80.10
RevPAR $ 62.74 $ 49.10
</TABLE>
<TABLE>
<CAPTION>
12 Months Ended December 31, 1999
-------------------------------------------------
1994 1995 Total
Collateral Collateral Management Restricted
Hotels Hotels Operations Group
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Statement of Operations Data:
Operating Revenues $146,148 $50,368 $8,208(a) $204,724
Operating Expenses:
Direct operating costs and expenses 52,440 18,846 -- 71,286
</TABLE>
13
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
General Administrative, Sales and
Mgmt expenses(b) 39,570 16,286 (473)(c) 55,383
Repairs and Maintenance 5,779 2,382 -- 8,161
Depreciation and Amortization 12,902 5,173 395 18,470
-------- ------- ------ --------
Total Operating Expense 110,691 42,687 (78) 153,300
-------- ------- ------ --------
Income from Operations $ 35,457 $ 7,681 $8,286 $ 51,424
======== ======= ====== ========
Operating Data:
Occupancy 68.0% 60.9%
Average Daily Room Rate $ 90.79 $ 80.51
RevPAR $ 61.74 $ 49.03
</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 management operations is net of management revenues allocated to the
1994 and 1995 Collateral 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.
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 March 31, 2000:
<TABLE>
<CAPTION>
Expected Maturity Date
(in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fair
There- Value
2000(d) 2001 2002 2003 2004 After Total (e)
Long-Term Debt (a)
</TABLE>
14
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$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 $ 6 $ 14 $ 31 $ 38 $ 6 $224 $319 $319
Average interest rate (b) 8.4% 8.2% 8.7% 8.8% 8.5% 8.6% 8.6%
Other variable-rate debt obligations $ 17 $ 33 $ 1 $ 16 $ 29 $ 44 $140 $140
Average interest rate (c) 8.8% 8.8% 8.8% 8.8% 8.8% 8.8% 8.8%
</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 March 31, 2000, that is maturing in the
year reported. The weighted average interest rate excludes the effect of
the amortization of deferred financing costs.
(d) The 2000 balances include actual and projected principal payments and
weighted average interest rates for the years.
(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
15
<PAGE>
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.
16
<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
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
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
Dated: May 12, 2000
17
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
- ------------ -------
27 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 39,781
<SECURITIES> 5,081
<RECEIVABLES> 17,719
<ALLOWANCES> 226
<INVENTORY> 1,366
<CURRENT-ASSETS> 65,227
<PP&E> 1,080,475
<DEPRECIATION> 239,565
<TOTAL-ASSETS> 932,699
<CURRENT-LIABILITIES> 68,096
<BONDS> 825,366
0
0
<COMMON> 0
<OTHER-SE> 36,022
<TOTAL-LIABILITY-AND-EQUITY> 932,699
<SALES> 0
<TOTAL-REVENUES> 99,452
<CGS> 0
<TOTAL-COSTS> 36,134
<OTHER-EXPENSES> 47,905
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,985
<INCOME-PRETAX> (2,572)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,572)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,572)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
