Table of Contents

Table of Contents

~~Table~~SECURITIES ofAND ~~Contents~~EXCHANGE COMMISSION

~~SECURITIES~~Washington, ~~AND~~D.C. ~~EXCHANGE~~20549 ~~COMMISSION~~

~~Washington,~~FORM ~~D.C.~~10-Q ~~20549~~

~~FORM~~x ~~10-Q~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

xFor ~~QUARTERLY~~the ~~REPORT~~quarterly ~~PURSUANT~~period TOended ~~SECTION~~September 1312, ~~OR 15(d) OF THE~~2003.

~~SECURITIES~~OR ~~EXCHANGE ACT OF 1934.~~

~~For~~¨ ~~the~~TRANSITION ~~quarterly~~REPORT ~~period~~PURSUANT ~~ended~~TO ~~June~~SECTION ~~20,~~13 ~~2003.~~OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

ORCommission File No. 0-16728

¨COURTYARD ~~TRANSITION~~BY ~~REPORT~~MARRIOTT ~~PURSUANT~~II TOLIMITED ~~SECTION~~PARTNERSHIP ~~13 OR 15(d) OF THE~~

~~SECURITIES~~(Exact ~~EXCHANGE~~Name ~~ACT~~of OFRegistrant ~~1934~~as Specified in Its Charter)

Commission File No. 0-16728

Delaware		52-1533559
(State of Incorporation)		(I.R.S. Employer Identification No.)

6903 Rockledge Drive, Suite 1500, Bethesda, Maryland		20817
(Address of Principal Executive Offices)		(Zip Code)

~~COURTYARD~~(240) ~~BY MARRIOTT II LIMITED PARTNERSHIP~~744-1000

(~~Exact Name of~~ Registrant’s astelephone ~~Specified~~number, inincluding ~~Its~~area ~~Charter~~code)

Delaware		52-1533559
(State of Incorporation)		(I.R.S. Employer Identification No.)

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) ¨ Yes x No

6903 Rockledge Drive, Suite 1500, Bethesda, Maryland		20817
(Address of Principal Executive Offices)		(Zip Code)

Indicate by check mark whether the registrant (1) has 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, and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

~~(240)~~The ~~744-1000~~ registrant had 1,470 units of its common limited partnership units outstanding as of October 27, 2003.

~~(Registrant’s~~INDEX ~~telephone number, including area code)~~

~~Indicate~~PART byI. ~~check~~FINANCIAL ~~mark~~INFORMATION ~~whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) ¨ Yes x No~~

		Page No.
Item 1.	Financial Statements (unaudited):

	Condensed Consolidated Balance Sheets-September 12, 2003 and December 31, 2002	1

	Condensed Consolidated Statements of Operations-Quarter Ended and Year-to-Date September 12, 2003 and September 6, 2002	2

	Condensed Consolidated Statements of Cash Flows-Year-to-Date September 12, 2003 and September 6, 2002	3

	Notes to Condensed Consolidated Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	10

Item 4.	Controls and Procedures	11

PART II. OTHER INFORMATION AND SIGNATURE

Item 6.	Exhibits	11

~~The~~COURTYARD ~~registrant~~BY ~~had~~MARRIOTT ~~1,470~~II ~~units of its common limited~~LIMITED ~~partnership~~PARTNERSHIP ~~units outstanding as of August 4, 2003.~~

~~Table~~ CONDENSED ofCONSOLIDATED ~~Contents~~BALANCE SHEETS

(in ~~INDEX~~thousands)

			Page No.
	September12, 2003			December31, 2002
PART I.	FINANCIAL INFORMATION
	(unaudited)
Item 1.	Financial Statements (unaudited):
ASSETS
	Condensed Consolidated Balance Sheets—June 20, 2003 and December 31, 2002		1
Property and equipment, net	$	392,360		$	401,776
	Condensed Consolidated Statements of Operations—Quarter Ended and Year-to-Date June 20, 2003 and June 14, 2002		2
Deferred financing costs, net of accumulated amortization		6,888			7,975
	Condensed Consolidated Statements of Cash Flows—Year-to-Date June 20, 2003 and June 14, 2002		3
Due from Courtyard Management Corporation		7,533			6,387
	Notes to Condensed Consolidated Financial Statements		4
Other assets		6			1
Item 2.	Management’s Discussion and Analysis of financial Condition and Results of Operations		6
Property improvement fund		43,219			39,396
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.		10
Restricted cash		24,371			20,969
Item 4.	Controls and Procedures		10
Cash and cash equivalents		2,736			8,051
PART II.	OTHER INFORMATION AND SIGNATURE
	$	477,113		$	484,555
Item 6.	Exhibits		11
LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT)
Debt	$	415,564		$	429,278
Management fees due to Courtyard Management Corporation		59,621			53,142
Due to Marriott International, Inc. and its affiliates		11,632			8,594
Accounts payable and accrued liabilities		11,785			13,450
Total Liabilities		498,602			504,464
General Partner		8,821			8,900
Limited Partners		(30,310	)		(28,809	)
Total Partners’ Deficit		(21,489	)		(19,909	)
	$	477,113		$	484,555

~~Table~~See ofnotes ~~Contents~~to condensed consolidated financial statements.

~~COURTYARD~~1 ~~BY MARRIOTT II LIMITED PARTNERSHIP AND SUBSIDIARIES~~

~~CONDENSED~~COURTYARD ~~CONSOLIDATED~~BY ~~BALANCE~~MARRIOTT ~~SHEETS~~II LIMITED PARTNERSHIP

~~(in~~ ~~thousands)~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	June 20, 2003			December 31, 2002
	(unaudited)
ASSETS
Property and equipment, net	$	396,424		$	401,776
Deferred financing costs, net of accumulated amortization		7,250			7,975
Due from Courtyard Management Corporation		8,965			6,387
Other assets		10			1
Property improvement fund		40,830			39,396
Restricted cash		22,625			20,969
Cash and cash equivalents		8,483			8,051
	$	484,587		$	484,555
LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT)
LIABILITIES
Debt	$	420,789		$	429,278
Management fees due to Courtyard Management Corporation		57,763			53,142
Due to Marriott International, Inc. and its affiliates		11,615			8,594
Accounts payable and accrued liabilities		15,371			13,450
Total Liabilities		505,538			504,464
PARTNERS’ CAPITAL (DEFICIT)
General Partner		8,848			8,900
Limited Partners		(29,799	)		(28,809	)
Total Partners’ Deficit		(20,951	)		(19,909	)
	$	484,587		$	484,555

(unaudited, in thousands, except unit and per unit amounts)

See notes to condensed consolidated financial statements.

	Quarter Ended						Year-to-Date
	September 12, 2003			September 6, 2002			September 12, 2003			September 6, 2002
REVENUES
Rooms	$	52,599		$	55,372		$	157,412		$	165,108
Food and beverage		3,578			3,378			10,540			10,369
Other		839			1,260			2,775			3,855

Total revenues		57,016			60,010			170,727			179,332

OPERATING COSTS AND EXPENSES
Rooms		12,524			12,684			36,495			37,177
Food and beverage		3,060			2,866			8,823			8,636
Selling, administrative and other		15,977			15,767			47,485			46,217
Depreciation		5,760			5,934			17,527			18,074
Ground rent		2,850			2,884			8,453			8,552
Property taxes		2,761			2,821			8,319			8,459
Partnership expense		191			284			743			778
Insurance and other		505			546			1,502			1,568
Management fees		5,279			5,879			16,184			17,865

Total operating costs and expenses		48,907			49,665			145,531			147,326

OPERATING PROFIT		8,109			10,345			25,196			32,006
Interest expense		(8,704	)		(9,047	)		(26,995	)		(27,469	)
Interest income		57			183			219			416

NET INCOME (LOSS)	$	(538	)	$	1,481		$	(1,580	)	$	4,953

ALLOCATION OF NET INCOME (LOSS)
General Partner	$	(27	)	$	74		$	(79	)	$	248
Limited Partners		(511	)		1,407			(1,501	)		4,705

	$	(538	)	$	1,481		$	(1,580	)	$	4,953

NET INCOME (LOSS) PER LIMITED PARTNER UNIT (1,470 Units)	$	(348	)	$	957		$	(1,021	)	$	3,201

1See notes to condensed consolidated financial statements.

~~Table~~2 ~~of Contents~~

COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP ~~AND SUBSIDIARIES~~

CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~CASH FLOWS

(unaudited, in thousands~~, except unit and per unit amounts~~)

	Quarter Ended						Year-to-Date
	Year-to-Date
	June 20, 2003			June 14, 2002			June 20, 2003			June 14, 2002
	September 12, 2003			September 6, 2002
REVENUES
OPERATING ACTIVITIES
Rooms	$	53,435		$	57,527		$	104,812		$	109,736
Net income (loss)	$	(1,580	)	$	4,953
Food and beverage		3,689			3,656			6,962			6,991
Depreciation expense		17,527			18,074
Other		898			1,264			1,937			2,595
Amortization of deferred financing costs as interest expense		1,087			1,088
Total hotel revenues		58,022			62,447			113,711			119,322
Straight-line rent adjustment		(82	)		(82	)
OPERATING COSTS AND EXPENSES
Changes in operating accounts:
Rooms		12,021			12,726			23,972			24,493
Due from Courtyard Management Corporation		(1,146	)		229
Food and beverage		2,898			2,953			5,763			5,770
Other assets		(5	)		(10	)
Selling, administrative and other		15,857			15,650			31,507			30,450
Management fees due to Courtyard Management Corporation		6,479			7,104
Depreciation		5,907			6,003			11,767			12,140
Due to Marriott International, Inc. and its affiliates		3,120			—
Ground rent		2,781			2,853			5,603			5,667
Accounts payable and accrued liabilities		(1,665	)		(1,745	)
Property taxes		2,729			2,798			5,558			5,638
Cash provided by operating activities		23,735			29,611
Partnership expense		316			208			527			465
INVESTING ACTIVITIES
Insurance and other		490			605			1,023			1,052
Additions to property and equipment, net		(8,111	)		(3,850	)
Management fees		5,616			6,374			10,905			11,986
Contributions to the property improvement fund		(11,097	)		(11,657	)
Total operating costs and expenses		48,615			50,170			96,625			97,661
Distributions from the property improvement fund		7,274			3,077
OPERATING PROFIT		9,407			12,277			17,086			21,661
Cash used in investing activities		(11,934	)		(12,430	)
Interest expense		(8,883	)		(9,284	)		(18,291	)		(18,422	)
FINANCING ACTIVITIES
Interest income		93			127			163			233
Repayments of debt		(13,714	)		(12,723	)
NET INCOME (LOSS)	$	617		$	3,120		$	(1,042	)	$	3,472
Increase in restricted cash		(3,402	)		(2,302	)
ALLOCATION OF NET INCOME (LOSS)
Capital distributions		—			(9,856	)
General Partner	$	31		$	156		$	(52	)	$	174
Cash used in financing activities		(17,116	)		(24,881	)
Limited Partners		586			2,964			(990	)		3,298
DECREASE IN CASH AND CASH EQUIVALENTS		(5,315	)		(7,700	)
	$	617		$	3,120		$	(1,042	)	$	3,472
CASH AND CASH EQUIVALENTS at beginning of period		8,051			10,489
NET INCOME (LOSS) PER LIMITED PARTNER UNIT (1,470 Units)	$	399		$	2,016		$	(673	)	$	2,244
CASH AND CASH EQUIVALENTS at end of period	$	2,736		$	2,789
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	29,259		$	30,313

See notes to condensed consolidated financial statements.

~~Table~~COURTYARD ofBY ~~Contents~~MARRIOTT II LIMITED PARTNERSHIP

~~COURTYARD~~ NOTES BYTO ~~MARRIOTT~~CONDENSED IICONSOLIDATED ~~LIMITED PARTNERSHIP~~FINANCIAL ~~AND~~STATEMENTS ~~SUBSIDIARIES~~

~~CONDENSED~~(unaudited) ~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(unaudited,~~1. ~~in thousands)~~ Organization

	Year-to-Date
	June 20,2003			June 14,2002
OPERATING ACTIVITIES
Net income (loss)	$	(1,042	)	$	3,472
Depreciation expense		11,767			12,140
Amortization of deferred financing costs as interest expense		725			725
Straight-line rent adjustment		(55	)		(55	)
Changes in operating accounts:
Due from Courtyard Management Corporation		(2,578	)		943
Other assets		(9	)		(3	)
Management fees due to Courtyard Management Corporation		4,621			4,828
Due to Marriott International, Inc. and their affiliates		3,076			—
Accounts payable and accrued liabilities		1,921			409
Cash provided by operating activities		18,426			22,459
INVESTING ACTIVITIES
Additions to property and equipment, net		(6,415	)		(2,171	)
Contributions to the property improvement fund		(7,391	)		(7,756	)
Distributions from the property improvement fund		5,957			1,624
Cash used in investing activities		(7,849	)		(8,303	)
FINANCING ACTIVITIES
Repayments of debt		(8,489	)		(7,878	)
Increase in restricted cash		(1,656	)		(4,022	)
Capital distributions		—			(7,382	)
Cash used in financing activities		(10,145	)		(19,282	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		432			(5,126	)
CASH AND CASH EQUIVALENTS at beginning of period		8,051			10,489
CASH AND CASH EQUIVALENTS at end of period	$	8,483		$	5,363
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	16,661		$	17,305

Courtyard by Marriott II Limited Partnership, a Delaware limited partnership, was formed on August 31, 1987 to acquire and own 70 Courtyard by Marriott hotels and the land on which certain of the hotels are located. The hotels are located in 29 states in the United States and are managed as part of the Courtyard by Marriott hotel system by Courtyard Management Corporation, or the manager, a wholly owned subsidiary of Marriott International, Inc., or MII.

~~See~~All ~~notes~~of toour ~~condensed~~partnership units are owned by CBM Joint Venture LLC, or the ~~consolidated~~Courtyard ~~financial~~JV, ~~statments~~a joint venture between subsidiaries of Host Marriott, L.P. and MII.

32. Summary of Significant Accounting Policies

~~Table~~We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with accounting principles generally accepted in the United States of ~~Contents~~America, or GAAP, in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made are adequate to prevent the information presented from being misleading. However, the unaudited, condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2002.

~~COURTYARD~~In BYour ~~MARRIOTT~~opinion, IIthe ~~LIMITED~~accompanying unaudited, condensed consolidated financial statements ~~PARTNERSHIP~~reflect ~~AND~~all ~~SUBSIDIARIES~~adjustments necessary to present fairly our financial position as of September 12, 2003 and the results of our operations for the quarter ended and year-to-date September 12, 2003 and September 6, 2002 and cash flows for year-to-date September 12, 2003 and September 6, 2002. Interim results are not necessarily indicative of full-year performance because of the impact of seasonal and short-term variations.

~~NOTES~~Certain TOreclassifications ~~CONDENSED~~were ~~CONSOLIDATED~~made ~~FINANCIAL~~to ~~STATEMENTS~~the prior period financial statements to conform to the current presentation.

Our quarterly results are reported on a quarterly schedule that is used by MII. MII’s year ends on the Friday closest to December 31 and reflects twelve weeks of operations in the first three quarters of the year and sixteen or seventeen weeks of operations for the fourth quarter of the year. As a result, in any given quarter, quarter-over-quarter results will cover different calendar dates (~~unaudited~~but the same number of days, other than in a year with a 17-week fourth quarter such as fiscal year 2002).

1.Principles ~~Organization~~of Consolidation

~~Courtyard~~We byconsolidate ~~Marriott~~entities II(in ~~Limited~~the ~~Partnership~~absence ~~and~~of ~~Subsidiaries~~other factors determining control) when we own over 50% of the voting shares of another company or, ain ~~Delaware~~the ~~limited~~case of partnership investments, ~~was~~when ~~formed~~we onown ~~August~~a ~~31,~~majority ~~1987~~of tothe ~~acquire~~general ~~and~~partnership ~~own~~interest. 70The ~~Courtyard~~control byfactors ~~Marriott~~we ~~hotels~~consider ~~and~~include the ~~land~~ability onof ~~which~~minority ~~certain~~shareholders ofor ~~the hotels~~other ~~are~~partners ~~located~~to participate in or block management decisions. ~~The~~Additionally, ~~hotels~~if we determine that we are ~~located~~an owner in 29a ~~states~~variable ininterest entity within the ~~United~~meaning ~~States~~of ~~and~~Financial ~~are~~Accounting ~~managed~~Standards asBoard ~~part~~(“FASB”) Interpretation No. 46, “Consolidation of ~~the~~Variable ~~Courtyard~~Interest byEntities,” ~~Marriott~~and ~~hotel~~that ~~system~~our byvariable ~~Courtyard~~interest ~~Management~~will absorb ~~Corporation,~~a ormajority of the ~~manager~~entity’s expected losses if they occur, receive a ~~wholly~~majority ~~owned~~of ~~subsidiary~~the ofentity’s ~~Marriott~~expected ~~International~~residual returns if they occur, ~~Inc.,~~ or ~~MII~~both, then we will consolidate the entity. All material intercompany transactions and balances have been eliminated.

~~All~~4 ~~of our partnership units are owned by CBM Joint Venture LLC, or the Courtyard JV, a joint venture between subsidiaries of Host Marriott, L.P. and MII.~~

2.COURTYARD ~~Summary~~BY ofMARRIOTT ~~Significant~~II ~~Accounting~~LIMITED PARTNERSHIP ~~Policies~~

WeNOTES ~~have~~TO ~~condensed~~CONDENSED ~~or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with accounting principles~~CONSOLIDATED ~~generally~~FINANCIAL ~~accepted~~STATEMENTS in the United States of America, or GAAP, in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made are adequate to prevent the information presented from being misleading. However, the unaudited, condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2002.

~~In our opinion, the accompanying~~ (unaudited,) condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of June 20, 2003 and the results of our operations for the quarter ended and the year-to-date period ended June 20, 2003 and June 14, 2002 and cash flows for the year-to-date period ended June 20, 2003 and June 14, 2002. Interim results are not necessarily indicative of full-year performance because of the impact of seasonal and short-term variations.

~~Certain reclassifications were made to the prior period financial statements to conform to the current presentation~~3. Restricted Cash

~~Our~~We ~~quarterly results~~ are ~~reported~~required onto aestablish ~~quarterly schedule~~certain ~~that~~escrow isreserves ~~used~~pursuant ~~by MII. MII’s year ends on the Friday closest~~ to ~~December 31 and reflects twelve weeks of operations in~~ the ~~first~~terms ~~three quarters~~ of ~~the~~our ~~year~~debt and ~~sixteen~~management oragreements. ~~seventeen~~The ~~weeks~~balances ofin ~~operations~~those ~~for~~reserves ~~the~~as ~~fourth quarter~~ of ~~the~~September ~~year. As a result~~12, in2003 and ~~any~~December ~~given quarter~~31, ~~quarter-over-quarter~~2002 ~~results~~are ~~will~~as ~~cover~~follows ~~different calendar dates~~ (~~but the same number of days, other than~~ in ~~a year with a 17-week fourth quarter such as fiscal year 2002~~thousands).:

Principles of Consolidation

	September 12, 2003		December 31, 2002
Debt service reserve (1)	$	3,099	$	6,848
Supplemental debt service reserve		1,427		1,416
Real estate tax and insurance reserve		8,500		7,700
Deposit reserve required by the multi-class commercial mortgage pass-through certificates		6,342		3
Working capital reserve		5,003		5,002

	$	24,371	$	20,969

~~We consolidate entities~~ (~~in the absence of other factors determining control~~1) ~~when~~We weused ~~own~~approximately ~~over~~$5.7 ~~50%~~million of the ~~voting~~reserve ~~shares~~ of ~~another~~$6.8 ~~company~~million ~~or,~~at inDecember ~~the case of partnership investments~~31, ~~when~~2002 wetowards ~~own a majority of~~ the ~~general~~semi-annual ~~partnership~~payment ~~interest.~~on ~~The~~our ~~control~~senior ~~factors~~notes wedue ~~consider~~on ~~include~~February ~~the~~3, ~~ability~~2003. ofWe ~~minority shareholders~~are orobligated ~~other~~to ~~partners~~replenish tothese ~~participate~~amounts in orthe ~~block~~future ~~management~~to ~~decisions.~~the ~~Additionally,~~extent if we ~~determine~~have ~~that~~Consolidated weExcess ~~are~~Cash anFlow, ~~owner~~as defined in ~~a variable interest entity within~~ the ~~meaning~~senior ofnotes ~~FASB Interpretation No~~indenture. 46We ~~and~~replenished ~~that~~approximately ~~our~~$2.0 ~~variable~~million ~~interest will absorb a majority~~ of the ~~entity’s~~reserve ~~expected~~in ~~losses if they occur, receive a majority of~~ the ~~entity’s~~third ~~expected~~quarter ~~residual returns if they occur, or both, then we will consolidate the entity~~2003. ~~All material intercompany transactions and balances have been eliminated.~~

4. Amounts Paid to the General Partner and Marriott International, Inc.

~~Table~~The ofchart ~~Contents~~below summarizes amounts paid or received by us to our general partner and MII (in thousands).

COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP AND SUBSIDIARIES

	Year-to-Date
	September 12, 2003			September 6, 2002
Marriott International, Inc.:
Base management fee (1)	$	5,639		$	6,277
Chain services and Marriott Rewards Program		4,976			5,585
Courtyard by Marriott system fee		4,268			4,483
Marketing fund contribution		3,649			3,728
Ground rent (2)		5,351			6,980
Ground rent refunds received		(1,207	)		—

	$	22,676		$	27,053

General Partner:
Administrative expenses reimbursed	$	318		$	585

~~NOTES~~(1) ~~TO CONDENSED~~We ~~CONSOLIDATED~~have ~~FINANCIAL~~deferred ~~STATEMENTS~~$.3 million of base management fees in 2003 year-to-date.

(~~unaudited~~2) We have deferred $1.1 million of ground lease payments in 2003 year-to-date.

3.5 ~~Restricted Cash~~

WeCOURTYARD ~~are~~BY ~~required~~MARRIOTT toII ~~establish~~LIMITED ~~certain~~PARTNERSHIP ~~escrow reserves pursuant to the terms of our debt and management agreements. The balances in those reserves as of June 20, 2003 and December 31, 2002 are as follows (in thousands):~~

	June 20,2003		December 31,2002
Debt service reserve (1)	$	1,105	$	6,848
Supplemental debt service reserve		1,423		1,416
Real estate tax and insurance reserve		7,843		7,700
Deposit reserve required by the multi-class commercial mortgage pass-through certificates		7,251		3
Working capital reserve		5,003		5,002
	$	22,625	$	20,969

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~(1)~~Forward WeLooking ~~used~~Statements approximately $5.7 million of the debt service reserve of $6.8 million at December 31, 2002 towards the semi-annual payment on our senior notes due on February 3, 2003. We are obligated to replenish these amounts in the future to the extent we have Consolidated Excess Cash Flow, as defined in the senior notes indenture.

4This discussion includes forward-looking statements about our business and operations. ~~Amounts~~We ~~Paid~~identify forward-looking statements in this report by using words or phrases such as “believe,” “expect,” “may be,” “intend,” “predict,” “project,” “plan,” “objective,” “will be,” “should,” “estimate,” or “anticipate,” or similar expressions. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from these anticipated at the ~~General~~time ~~Partner~~the forward-looking statements are made. These risks and ~~Marriott~~uncertainties ~~International~~include those risk factors discussed in our annual report on Form 10-K for the year ended December 31, ~~Inc~~2002 and in other filings with the Securities and Exchange Commission, or the SEC. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material. Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this report to conform the statement to actual results on changes in our expectations.

~~The~~Overview ~~chart below summarizes amounts paid by us to our general partner and Marriott International, Inc (in thousands).~~

	Year-to-Date
	June 20,2003		June 14,2002
Marriott International, Inc.:
Base management fee (1)	$	3,441	$	4,176
Chain services and Marriott Rewards Program		3,273		3,738
Courtyard by Marriott system fee		2,843		2,983
Marketing fund contribution		2,438		2,488
Ground leases, net (2)		1,781		3,584
	$	13,776	$	16,969
General Partner:
Administrative expenses reimbursed	$	216	$	349

Courtyard by Marriott II Limited Partnership, a Delaware limited partnership, is the owner of 70 Courtyard by Marriott hotels, which operate in the upscale segment of the lodging industry. All of our limited and general partner interests are indirectly owned by CBM Joint Venture LLC, a joint venture between Host Marriott, L.P., and certain of its subsidiaries and a subsidiary of MII.

~~(1)~~Our Weresults ~~have~~of ~~deferred~~operations primarily ~~$337~~represent hotel-level sales,~~000~~ which are room, food and beverage and other ancillary income such as telephone, meeting room central and other guest services. Operating expenses consist of ~~base~~the costs to provide these services as well as depreciation, management fees, inreal ~~2003~~and topersonal ~~date~~property taxes, ground rent, equipment rent, property insurance and other costs.

~~(2)~~A Wesignificant ~~have~~component ~~deferred~~of ~~$1.1~~the ~~million~~cost of ~~ground~~owning ~~lease~~and ~~payments~~operating inhotels ~~2003~~is tofixed ~~date~~in nature and ~~the~~does ~~payments~~not ~~are~~necessarily ~~net~~decrease ofwhen ~~approximately~~there $1is a reduction in property revenues.2 ~~million~~As a ofresult, ~~ground~~a ~~rent~~change ~~paid~~in revenues may result in ~~2002~~a ~~which~~greater ~~was~~percentage ~~returned~~change in our earnings and cash flows. In response to usthe decline in the ~~first~~operations ~~quarter~~ of our hotels, we have been working with our hotel manager to achieve certain cost reductions at the properties. We believe that these efforts have slowed the decline in our operating margins. In 2003, our operating margin has continued to decrease from comparable periods in 2002 due to declining revenues as a ~~provision~~result ~~available~~of tothe useffect ~~under~~on travel of such factors as the weak economy, the war in Iraq, terrorist threat levels and because certain of our ~~ground~~costs ~~leases~~such as insurance, utilities, wages and benefits have increased at a rate greater than inflation.

5Our quarterly results are reported on a quarterly schedule that is used by MII. MII’s fiscal year ends on the Friday closest to December 31 and reflects twelve weeks of operations in the first three quarters of the year and sixteen or seventeen weeks of operations for the fourth quarter of the year. As a result, in any given quarter, quarter-over-quarter results will cover different calendar dates (but the same number of days, other than in a year with a 17-week fourth quarter such as fiscal year 2002).

~~Table~~Operating ofStatistics ~~Contents~~

~~COURTYARD~~We BYuse ~~MARRIOTT~~a IImeasure ~~LIMITED~~common ~~PARTNERSHIP~~in ~~AND~~the ~~SUBSIDIARIES~~industry to evaluate the operations of a hotel, room revenue per available room, or RevPAR. RevPAR is defined as the product of the average daily room rate charged and the average daily occupancy achieved. RevPAR does not include food and beverage or other ancillary revenues such as parking, telephone, or other guest services generated by the property. Our reported hotel operating statistics (i.e., RevPAR, average daily rate and average occupancy) for the quarters ended September 12, 2003 and September 6, 2002 reflect results for the twelve-week periods from June 21, 2003 to September 12, 2003 and June 15, 2002 to September 6, 2002, respectively.

Our reported hotel operating statistics for ~~MANAGEMENT’S~~year-to-date ~~DISCUSSION~~September ~~AND~~12, ~~ANALYSIS~~2003 OFand ~~FINANCIAL~~year-to-date ~~CONDITION~~September 6, 2002 reflect results for the thirty-six week periods from January 4, 2003 to September 12, 2003 and December 29, 2001 to September 6, 2002, respectively.

~~AND~~6 ~~RESULTS OF OPERATIONS~~

~~Overview~~COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP

~~The~~RESULTS ~~following~~OF ~~discussion~~OPERATIONS and analysis of our financial condition and the results of operations should be read in conjunction with the condensed consolidated financial statements included elsewhere in this report. This discussion includes forward-looking statements about our business and operations. We identify forward-looking statements in this report by using words or phrases such as “believe,” “expect,” “may be,” “intend,” “predict,” “project,” “plan,” “objective,” “will be,” “should,” “estimate,” or “anticipate,” or the negative thereof or other variations thereof or comparable terminology. All forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause our actual transactions, results, performance or achievements to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include those risk factors included in our 2002 annual report on Form 10-K dated March 31, 2003 and in other filings with the Securities and Exchange Commission, or the SEC. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material. Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

~~Courtyard~~Financial byPerformance ~~Marriott II Limited Partnership, a Delaware limited partnership, is the owner of 70 Courtyard by Marriott hotels, which operate in the upscale segment of the lodging industry.~~

~~Our~~2003 ~~results~~Compared of operations primarily represent hotel-level sales, which are room, food and beverage and other ancillary income such as telephone, parking and other guest services. Operating expenses consist of the costs to ~~provide~~2002 ~~these services as well as depreciation, management fees, real and personal property taxes, ground rent, property insurance and other costs.~~

~~Our~~Hotel Revenues. ~~quarterly~~Hotel ~~results~~revenues ~~are~~for ~~reported~~the onthird aquarter ~~quarterly~~of ~~schedule~~2003 ~~that~~decreased isby ~~used~~$3.0 bymillion, ~~MII~~or 5.0%, ~~MII’s fiscal~~to ~~year~~$57.0 ~~ends~~million oncompared to the ~~Friday~~same ~~closest~~period toin ~~December~~2002. 31Year-to-date ~~and~~2003, ~~reflects~~hotel ~~twelve~~revenues ~~weeks~~decreased ofby ~~operations~~$8.6 inmillion, ~~the~~or ~~first~~4.8%, ~~three~~to ~~quarters~~$170.7 ofmillion, from the same ~~year~~period ~~and~~in ~~sixteen~~2002. orThis ~~seventeen~~decrease ~~weeks~~in ofhotel ~~operations~~revenues for the ~~fourth~~third quarter ofand ~~the~~ year.-to-date As2003 is primarily due to a ~~result,~~decrease in ~~any~~room ~~given~~revenues. ~~quarter, quarter-over-quarter~~The results ~~will~~reflect ~~cover~~the ~~different~~continued ~~calendar~~weakness ~~dates~~for ~~(but~~our segment of the ~~same~~lodging ~~number~~industry primarily due to the continued low levels of ~~days~~business travel. Additionally, ~~other~~increased ~~than~~competition inresulting afrom ~~year~~lower ~~with~~room arates 17at many of the full-~~week~~service ~~fourth~~hotels ~~quarter~~that ~~such~~operate asin ~~fiscal~~our ~~year~~markets ~~2002)~~have placed many of our hotels at a competitive disadvantage.

WeOperating ~~have~~Costs aand ~~significant~~Expenses. ~~fixed-cost~~Operating ~~component~~costs ~~associated with owning~~ and ~~operating~~expenses ~~these~~for ~~hotels,~~the ~~which~~third ~~does~~quarter ~~not necessarily decrease when~~of ~~circumstances~~2003 ~~such~~decreased asby ~~market factors cause a reduction in property revenues~~$.8 ~~As a result~~million, ~~changes~~or in1.5% ~~RevPAR~~compared ~~(defined~~to ~~below)~~the ~~can~~same ~~result~~period in ~~a greater percentage change in our earnings and cash flows~~2002. InFor ~~response~~ year-to-date, the ~~decline~~operating incosts ~~the~~and ~~operations~~expenses ofdecreased ~~our hotels,~~by we$1.8 ~~have~~million, ~~been~~or ~~working~~1.2% ~~with~~when ~~our~~compared ~~hotel manager~~ to ~~achieve~~the ~~certain~~same ~~cost~~period ~~reductions~~in ~~at the properties~~2002. WeOur ~~believe~~costs ~~that~~decreased ~~these~~primarily ~~efforts~~as ~~have~~a ~~slowed~~result ~~the~~of a ~~decline~~decrease in ~~our~~rooms’ ~~operating~~expenses ~~margins~~related ~~and~~to ~~that~~lower weoccupancy, ~~have~~as ~~created~~well ~~meaningful~~as ~~long-term~~a ~~efficiencies.~~decrease ~~In 2003,~~in ~~our~~management ~~operating~~fees ~~margin~~related ~~has~~to ~~continued~~decreased tohotel ~~decrease~~revenues ~~from~~and ~~comparable~~operating ~~periods~~profit. inThese ~~2002~~decreases ~~due~~in torooms’ ~~declining~~expenses ~~revenues.~~do ~~Our~~not ~~revenues~~fully ~~have~~offset ~~been~~the ~~negatively~~declines ~~affected~~in byrevenues related ~~the~~to ~~impact~~decreases ~~that~~in ~~the~~occupancy ~~war~~at inour ~~Iraq~~hotels, ~~terrorist~~and, ~~threats~~as ~~and~~a ~~the~~result, ~~weak~~operating ~~economy~~margins ~~have~~declined ~~had~~as ondetailed ~~travel~~below.

Operating ~~Statistics~~Profit. Operating profit for the third quarter of 2003 declined by $2.2 million compared to the third quarter 2002. For year-to-date 2003, operating profit decreased $6.8 million compared to the same period in 2002. Operating profit represented 14.2% of total revenues for the third quarter of 2003 and 17.2% for the third quarter of 2002. Year-to-date operating profit represented 14.8% and 17.8%, respectively, of total revenues for 2003 and 2002.

~~Our~~Net ~~reported~~Income ~~hotel~~(Loss). Net ~~operating~~loss ~~statistics~~of (i$.~~e.,~~5 ~~RevPAR,~~million ~~average~~for ~~daily~~the ~~rate~~third ~~and~~quarter ~~average occupancy)~~of ~~for~~2003 ~~the~~represents ~~quarters~~a ~~ended~~decrease ~~June~~of ~~20,~~$2.0 ~~2003~~million ~~and~~when ~~June~~compared ~~14,~~to ~~2002~~the ~~reflect~~same ~~results~~period ~~for~~in ~~the~~2002. ~~twelve~~For year-~~week~~to-date ~~periods~~2003, ~~from~~operations ~~March~~resulted 29in a net loss of $1.6 million, ~~2003~~compared to ~~June~~net ~~20,~~income ~~2003~~of ~~and~~$5.0 ~~March~~million for ~~23,~~the same period in 2002. toThe ~~June~~decrease ~~14,~~is ~~2002,~~a ~~respectively~~result of the factors discussed above.

~~Our~~Lodging ~~reported~~Performance hotel operating statistics for year-to-date June 20, 2003 and year-to-date June 14, 2002 reflect results for the twenty-four-week periods (or 168 days) from January 4, 2003 to June 20, 2003 and December 29, 2001 to June 14, 2002, respectively.

~~Recent~~The ~~Events~~current operating environment for our hotels remains challenging as a result of lower levels of demand and an increase in supply, particularly within the markets in which we operate. The combination of these factors has caused a decline in RevPAR and operating profits for our portfolio. We believe the remainder of 2003 will be difficult with continuing declines in revenue and flat to declining RevPAR. For the third quarter of 2003, RevPAR for our hotels decreased 5.0% when compared to the same period in 2002. The decline is the result of a decrease in average occupancy of 2.6 percentage points and the decline in average room rates of 1.5%.

ToThe ~~maintain~~changes in RevPAR reflect a decline in operations in most regions for the ~~overall~~quarter ~~quality~~and ofyear-to-date. ~~our~~For ~~lodging~~the ~~properties~~year, wethe ~~annually~~South ~~assess~~Central region has suffered the ~~need~~most significant decline in RevPAR, down 5.8% for ~~refurbishments~~the quarter and ~~capital~~9.0% ~~improvements~~year-to-date 2003. ~~Typically~~For the third quarter, ~~refurbishments~~the ~~occur~~Northeast ~~at intervals~~and Midwest regions had RevPAR declines of ~~approximately~~2.7% ~~seven~~and ~~years~~5.0%, ~~based~~respectively, onwhen ancompared ~~annual~~to ~~review~~prior ofyear, ~~the~~while ~~condition~~year-to-date, ofthese regions ~~each~~are ~~property~~only down 4.1% ~~Our~~and ~~management~~2.2%, ~~agreements~~respectively, ~~require~~2003 uscompared to ~~escrow 6~~2002.5% The declines are due to the overall decrease in business travel as a result of ~~hotel~~the ~~sales~~weak economy and, ona ~~average,~~decrease wein ~~contribute~~leisure ~~approximately~~travel ~~$17~~in ~~million~~certain ~~annually~~markets. toThe ~~this~~South ~~reserve~~Central region continues to be affected by the difficult economic conditions in Dallas. The Southeast and Western regions had a decrease in RevPAR, for ~~these~~the ~~refurbishments~~quarter, of 4.4% and ~~capital~~8.1%, ~~improvements~~respectively, and had declines of 1.5% ~~However~~and 7.5% respectively, ~~for~~year-to-date. ~~2003~~We anticipate that there will be continued pressure on room rates and occupancy levels throughout the United States until economic growth improves, wedriving increases in lodging demand, particularly among individual business travelers.

~~Table~~COURTYARD ofBY ~~Contents~~MARRIOTT II LIMITED PARTNERSHIP

~~COURTYARD~~The BYfollowing ~~MARRIOTT~~table IIsets ~~LIMITED~~forth ~~PARTNERSHIP~~performance ~~AND~~information ~~SUBSIDIARIES~~for our properties by geographic region:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

	Quarter Ended
	As of September 12, 2003		September 12, 2003						September 6, 2002
	No. of Properties	No. of Rooms	Average Daily Rate		Average Occupancy Percentages		RevPAR		Average Daily Rate		Average Occupancy Percentages		RevPAR		Percent Change in RevPAR
Northeast	6	880	$	101.79	78.5	%	$	79.86	$	102.74	79.9	%	$	82.99	(2.7	)%
Mid-Atlantic	9	1,336		86.74	70.0			60.74		88.74	70.7			62.79	(3.3	)
Midwest	19	2,645		85.94	73.4			63.06		86.32	76.9			66.38	(5.0	)
South Central	9	1,490		79.80	68.2			54.45		81.77	70.6			57.78	(5.8	)
Southeast	14	2,062		85.09	67.5			57.40		81.15	70.5			60.02	(4.4	)
Western	13	1,924		89.59	69.9			62.65		91.33	74.6			68.16	(8.1	)

All Regions	70	10,337		85.95	70.5			60.58		87.26	73.1			63.77	(5.0	)

AND RESULTS OF OPERATIONS

	Year-to-date
	As of September 12, 2003		September 12, 2003						September 6, 2002
	No. of Properties	No. of Rooms	Average Daily Rate		Average Occupancy Percentages		RevPAR		Average Daily Rate		Average Occupancy Percentages		RevPAR		Percent Change in RevPAR
Northeast	6	880	$	109.50	72.7	%	$	79.62	$	110.56	75.1	%	$	83.02	(4.1	)%
Mid-Atlantic	9	1,336		86.11	67.4			58.03		90.30	67.5			60.92	(4.7	)
Midwest	19	2,645		85.87	69.9			60.01		85.04	72.2			61.35	(2.2	)
South Central	9	1,490		79.99	65.5			52.41		83.81	68.7			57.61	(9.0	)
Southeast	14	2,062		86.18	69.1			59.57		87.86	68.8			60.50	(1.5	)
Western	13	1,924		89.72	67.7			60.70		92.80	70.7			65.59	(7.5	)

All Regions	70	10,337		88.05	68.6			60.43		89.98	70.4			63.38	(4.8	)

~~only~~LIQUIDITY ~~expect~~AND toCAPITAL ~~contribute~~RESOURCES ~~approximately $15.7 million due to reduced operating levels. Our capital expenditures have been focused on property maintenance and improvements designed to maintain appropriate levels of quality.~~

~~During~~As ~~2002~~of September 12, 2003, we ~~began~~have an$2.7 ~~effort~~million toof unrestricted ~~reposition~~cash, which is lower than our ~~properties~~historical tobalances ~~compete~~have ~~with~~been. ~~newer~~Based ~~properties in~~on ~~certain~~our ofcurrent forecast, we believe that our ~~markets.~~sources Weof ~~have~~cash ~~undertaken~~are ~~these~~sufficient ~~repositionings~~to inmeet ~~response~~our near-term liquidity needs; however, our ability to ~~changing~~meet ~~consumer~~our ~~tastes~~long-term ~~and~~liquidity needs ~~trends~~will independ ~~the~~on ~~industry~~our future results of operations. ByIn addition, to the ~~end~~extent our sources of ~~2002,~~cash weare ~~completed~~insufficient to meet debt service or fund the ~~repositioning~~property ofimprovement ~~three~~fund, ~~properties~~our atpartners aare ~~cost~~not ofobligated ~~approximately~~to ~~$6.8~~provide ~~million~~additional ~~(or~~sources of ~~approximately~~capital ~~$15,500~~to ~~per~~the ~~room)~~partnership. ~~While~~Our weprincipal ~~are~~source ~~evaluating~~of ~~the~~cash ~~effect~~is oncash from operations including cash available to us by virtue of the ~~refurbishments~~subordination ~~completed~~and ondeferral ~~the~~features ~~three~~in ~~properties,~~certain weof ~~have~~our ~~modified~~ground ~~the~~leases ~~scope~~and ofour ~~the~~management ~~project~~agreements. toOur ~~see~~principal ifuses weof cash ~~can~~are ~~gain~~to ~~the~~make ~~same~~debt ~~benefits~~service atpayments, afund ~~lower~~our ~~cost~~required ~~per~~reserves, ~~room~~repay certain deferred expenses and ~~thus~~ ~~reposition~~fund ~~additional~~capital ~~properties~~expenditures for property improvements. ~~The~~Our ~~revised~~annual ~~scope~~debt service includes: interest payments on our senior notes of approximately $13.7 million and principal and interest payments on our multi-class commercial mortgage pass-through certificates (CMBS) of approximately $43.9 million.

•Capital ~~guest~~Expenditures. ~~room~~We ~~renovations~~annually ~~that~~assess ~~include~~the need for refurbishments and capital improvements. Typically, refurbishments occur at intervals of approximately seven years, based on an annual review of the ~~replacement~~condition of ~~select~~each ~~pieces~~property. Our capital expenditures have been focused on property maintenance and improvements designed to maintain appropriate levels of ~~furniture~~quality. ~~along~~Our management ~~with~~agreements ~~the~~require ~~complete~~us ~~replacement~~to escrow 6.5% of ~~draperies~~hotel sales for these refurbishments and capital improvements. We typically have contributed on average approximately $17 million annually to the reserve. However, ~~carpets~~due to reduced hotel revenues in 2003, ~~lighting~~we ~~and~~only ~~bed~~expect ~~coverings~~to ~~with~~contribute aapproximately ~~more~~$15.7 ~~contemporary~~million ~~décor;~~to the reserve.

•During a2002, ~~reconfiguration~~we began an effort to reposition our properties to compete with newer properties in certain of our markets. We have undertaken these repositionings in response to changing consumer tastes and trends in the ~~lobby~~industry. ~~dining~~At year-end 2002, we had completed the repositioning of three properties at a cost of approximately $6.8 million (or approximately $15,500 per room). ~~and~~While ~~adjoining~~we ~~lounge~~are ~~area~~evaluating tothe ~~make~~effect on operations of the ~~space~~refurbishments ~~more~~completed ~~flexible~~on ~~with~~the ~~updated~~three ~~furniture~~properties, ~~and~~we have ~~other~~modified ~~décor~~the scope of the project to ~~provide~~determine if we can attain the same benefits at a ~~more~~lower ~~inviting~~cost ~~feel;~~per room and thus reposition additional properties. The revised scope includes:

• guest room renovations that include the ~~renovation~~replacement of ~~guest~~select ~~room~~pieces ~~corridors~~of furniture along with ~~new~~the ~~carpet~~complete replacement of draperies, ~~wall~~carpets, ~~vinyl~~lighting and ~~brighter~~bed ~~lighting~~coverings ~~systems~~with a more contemporary décor;

•8 ~~refurbishment of the exercise room; and~~

•COURTYARD ~~adding~~BY aMARRIOTT ~~pantry~~II ~~that~~LIMITED ~~will~~PARTNERSHIP ~~offer 24-hour access to a variety of food and beverage items.~~

~~Work~~• ona ~~the~~reconfiguration ~~revised refurbishment plans is scheduled to begin in August~~ of ~~2003. We will continue to monitor~~ the ~~effect~~lobby ofdining ~~the~~room ~~scope of renovations~~ and ~~make~~adjoining ~~modifications~~lounge asarea ~~necessary. We have approximately $41 million in our property improvement fund, of which $34 million is budgeted~~ to ~~upgrade~~make ~~18 additional hotels in 2003 and 2004. While a portion of~~ the ~~portfolio~~space ~~can~~more ~~be repositioned~~flexible with ~~the~~updated ~~amounts~~furniture ~~expected~~and toother bedécor ~~in the property improvement fund, the total capital expenditure budget proposed by the manager exceeds the amount expected~~ to beprovide ina ~~the~~more ~~property~~inviting improvement fund. Generally, the partners are not obligated to fund improvements to the extent that they exceed the amounts reserved for in the property improvement fund under the management agreement. Therefore, the pace at which we reposition additional properties in future years will depend upon the results of our operations and the ultimate benefits that we receive from these improvements. feel;

~~Lodging~~• ~~Performance~~the renovation of guest room corridors with new carpet, wall vinyl and brighter lighting systems;

~~The~~• ~~current operating~~refurbishment ~~environment for our hotels remains challenging as demand continues to be soft and booking cycles short. We use a measure common in the industry to evaluate the level~~ of ~~business~~exercise ofrooms; ~~a hotel known as room revenue per available room or RevPAR. RevPAR is defined as the product of the average daily room rate charged~~ and ~~the average daily occupancy achieved. RevPAR does not include food and beverage or other ancillary revenues such as telephone or other guest services generated by the property.~~

~~The~~• ~~operating environment during~~ the ~~second~~addition ~~quarters~~ of ~~2003 and 2002 were difficult due to reduced airline travel, weak economic conditions and the general unrest as~~ a ~~result~~pantry ofthat ~~the~~will ~~increased~~offer ~~terror~~24-~~alert~~hour ~~levels.~~access During the second quarter of 2003, the operating environment was further strained by the war in Iraq. These factors have reduced overall lodging demand, causing a decline in RevPAR and operating profits for our portfolio. Although the war in Iraq has abated we expect operating conditions to ~~remain challenging throughout 2003. For the second quarter of 2003, RevPAR for our hotels decreased 7.1% when compared to the same period in 2002. The decline is the result of~~ a ~~decrease~~variety ~~in average occupancy~~ of ~~3.1~~food ~~percentage points~~ and ~~the~~beverage ~~decline in average room rates of 3~~items.~~0%. Also, year-to-date RevPAR decreased 4.5%, as occupancy decreased 1.4 percentage points and room rates declined by 2.5%.~~

~~The~~Work ~~changes~~on inthe ~~RevPAR~~revised ~~reflect~~refurbishment aplans ~~decline~~began in ~~operations~~August of 2003, and construction is expected to begin in ~~every~~January ~~region~~2004. ~~for~~We will continue to monitor the ~~quarter~~effect of the scope of these renovations and ~~year-to-date~~make modifications as necessary. ~~For~~We ~~the~~have ~~year~~approximately $43 million in our property improvement fund, ~~the~~with ~~South~~which ~~Central~~we ~~region~~plan ~~has~~to ~~suffered~~upgrade ~~the~~approximately ~~most~~25 ~~significant~~additional ~~decline~~hotels in(at ~~RevPAR~~a cost of approximately $11,000 ~~down~~per 10room) in 2004 and 2005.4% ~~from~~While a portion of the ~~prior~~ ~~year.~~portfolio ~~For~~can be repositioned with the ~~quarter~~amounts ~~ended~~expected ~~June~~to ~~20,~~be ~~2003~~in the property improvement fund, the ~~Mid-Atlantic~~total ~~and~~capital ~~Western~~expenditure ~~regions~~budget ~~had~~proposed ~~RevPAR~~by ~~declines~~the ofmanager ~~9.4%~~exceeds ~~and~~the 8amount expected to be in the property improvement fund.~~5%,~~ ~~respectively~~Under the management agreement, ~~when~~the ~~compared~~partnership is not generally obligated to fund improvements to the ~~quarter~~extent ~~ended~~that ~~June~~they ~~14,~~exceed ~~2002.~~the ~~Operating~~amounts ~~results~~reserved for in the ~~Western~~property ~~region~~improvement ~~continue~~fund. toTherefore, the ~~deteriorate~~pace ~~due~~at which we reposition additional properties in ~~part~~future toyears will depend upon the ~~prolonged~~results ~~slump~~of our operations and the benefits that we receive from these improvements.

7Debt. The decline in lodging demand has reduced the cash flow levels at our properties significantly from prior-year levels. As a result, beginning in the fourth quarter of 2002, we have made use of certain reserves and deferred a portion of our management fees and ground rent to make our required debt service payments. Under the terms of the management agreements and the ground leases with MII and its affiliates, a portion of the base management fees and all of the ground rent and incentive management fees due MII and its affiliates are subordinate to debt service payments on our CMBS and senior notes debt. These terms include the ability to defer the payment of certain amounts due under our ground lease and management agreement, as well as, the ability to refund those amounts made in prior periods to the extent that cash from operations, as defined in the respective agreements, if not sufficient to pay debt service. The following events occurred by the end of the first quarter of 2003:

~~Table~~• We deferred $0.1 million of ~~Contents~~ground lease payments in 2002 and deferred an additional $1.1 million of ground lease payments related to 2003. We were also refunded $1.2 million of ground rent paid in 2002 but returned to us during the first quarter of 2003. The total $2.4 million of refunded and deferred ground lease payments due to MII and its affiliates have been included in “Due to Marriott International, Inc. and its affiliates.”

~~COURTYARD~~• BYWe ~~MARRIOTT~~deferred II$0.3 ~~LIMITED~~million ~~PARTNERSHIP~~of ~~AND~~base ~~SUBSIDIARIES~~management fees thus far in 2003, and $0.2 million in 2002. The total $0.5 million of deferred base management fees have been included in “Management fees due to Courtyard Management Corporation.”

~~MANAGEMENT’S~~• ~~DISCUSSION~~We ~~AND~~utilized ~~ANALYSIS~~$5.7 OFmillion ~~FINANCIAL~~of ~~CONDITION~~our senior note debt service reserve to fund the semi-annual interest payment on our senior notes.

~~AND~~Our ~~RESULTS~~semi-annual OFpayment ~~OPERATIONS~~on our senior notes in the third quarter of 2003 was made with cash from operations and no further deferrals or refunds of either ground rent or management fees have been required subsequent to the first quarter of 2003. In addition, we are required to replenish the debt service reserve to the extent we had Consolidated Excess Cash Flow, as defined in the senior notes indenture, and we replenished approximately $2.0 million of the reserve during the third quarter of 2003, bringing the current balance in the reserve to $3.1 million. However, based on our current forecasts for the full-year 2003, we do not expect to further replenish the debt service reserve this year. Furthermore, to the extent operations do not improve significantly, we expect to make use of the debt service reserves and defer additional amounts of ground rent and management fees to meet our debt-service obligations in 2004.

in9 the technology sector. The South Central region continues to be impacted by the difficult economic conditions in Dallas. Our most stable regions were the Midwest and Southeast, where the year-to-date declines in RevPAR were 2.1% and .8%, respectively. These markets rely heavily on drive-in transient business, and therefore demand at these hotels was not significantly affected by the decline in airline travel during this period. We anticipate that there will be continued pressure on room rates and occupancy levels until economic growth increases lodging demand, particularly among individual business travelers.

~~The~~COURTYARD ~~following~~BY ~~table~~MARRIOTT ~~sets~~II ~~forth~~LIMITED ~~performance~~PARTNERSHIP ~~information for all our properties by geographic region as of June 20, 2003 and June 14, 2002:~~

~~All~~We ~~Properties~~are byrequired ~~Region~~to replenish the debt service reserve and achieve certain levels of Consolidated Excess Cash Flow and thereafter to repay deferred ground rent and management fee amounts prior to making equity distributions to our partners. We have not made and will not make distributions to the partners until we again satisfy the Consolidated Excess Cash Flow covenants, fully replenish the $6.8 million debt-service reserve and repay certain deferred ground rent and management fee amounts. Based on our outlook for 2004, we do not expect to be in compliance with these provisions and therefore, we do not expect to make any distributions to our partners until 2005, at the earliest.

			Quarter Ended
	As of June 20, 2003		June 20, 2003						June 14, 2002
	No. of Properties	No. of Rooms	Average Daily Rate		Average Occupancy Percentages		RevPAR		Average Daily Rate		Average Occupancy Percentages		RevPAR		Percent Change in RevPAR
Northeast	6	880	$	113.97	80.7	%	$	91.94	$	118.34	82.5	%	$	97.62	(5.8	)%
Mid-Atlantic	9	1,336		88.17	73.6			64.93		94.82	75.5			71.64	(9.4	)
Midwest	19	2,645		86.70	73.2			63.46		85.30	76.5			65.27	(2.8	)
South Central	9	1,490		78.10	69.5			54.24		82.25	69.9			57.46	(5.6	)
Southeast	14	2,062		79.43	68.0			54.02		82.89	68.0			56.35	(4.1	)
Western	13	1,924		84.79	67.8			57.46		88.86	70.7			62.82	(8.5	)
All Regions	70	10,337		88.07	69.9			61.54		90.78	73.0			66.25	(7.1	)

Further, to the extent the debt service reserve is fully funded, we are required to fund a separate supplemental debt service reserve account in an amount equal to Consolidated Excess Cash Flow for each quarter until excess cash flow meets specific levels. Through September 12, 2003, we have reserved $1.4 million of Consolidated Excess Cash Flow, all of which was funded during 2002. To the extent that the supplemental debt service reserve exceeds two semi-annual interest payments (approximately $13.7 million), we are required to offer to purchase the senior notes at par in an amount equal to the greater of (i) the amount by which the supplemental debt service reserve exceeds two semi-annual interest payments, and (ii) $5 million.

~~All~~We ~~Properties~~have $288.2 million of CMBS debt secured by our properties as of September 12, 2003, and we have $127.4 million of senior notes secured by equity interests in the partnership that owns the hotels. The CMBS debt, which matures in January ~~Region~~2008 bears interest at a weighted average interest rate of 7.85% and has a weighted average term of 17 years. Principal payments for 2003 will total approximately $20.8 million. Our senior notes are currently rated by Moody’s and Standard & Poor’s. As a result of the significantly reduced operating levels, the credit rating assigned to these senior notes was downgraded from B1 to B2 by Moody’s and from B- to CCC+ by Standard & Poor’s in March 2003. Additionally, Standard & Poor’s has placed these senior notes on a negative credit watch. If operations were to decline further, or if our credit ratios do not otherwise improve, the ratings on our senior notes could be reduced further. If we were unable to subsequently improve our credit ratings, our cost to refinance this debt as it comes due would likely increase. The senior notes, which mature in February 2008, are interest only and bear interest at a rate of 10.75%.

			Year-to-date
	As of June 20, 2003		June 20, 2003						June 14, 2002
	No. of Properties	No. of Rooms	Average Daily Rate		Average Occupancy Percentages		RevPAR		Average Daily Rate		Average Occupancy Percentages		RevPAR		Percent Change in RevPAR
Northeast	6	880	$	109.60	69.8	%	$	76.47	$	110.22	72.3	%	$	79.66	(4.0	)%
Mid-Atlantic	9	1,336		86.49	66.6			57.63		91.84	65.8			60.48	(4.7	)
Midwest	19	2,645		85.44	67.2			57.45		85.15	68.9			58.68	(2.1	)
South Central	9	1,490		80.46	63.9			51.40		84.90	67.6			57.38	(10.4	)
Southeast	14	2,062		89.45	70.6			63.13		91.27	69.8			63.65	(0.8	)
Western	13	1,924		92.08	67.7			62.37		95.72	70.6			67.66	(7.8	)
All Regions	70	10,337		89.15	67.7			60.35		91.41	69.1			63.19	(4.5	)

Cash Provided by Operations. Year-to-date 2003, our cash provided by operations decreased by $5.9 million when compared to the same period in 2002. The decrease is due to the declining operating results at our hotels, partially offset by the deferral of the payment of certain management fees and ground rent due to Marriott International.

~~RESULTS~~Cash OFUsed ~~OPERATIONS~~in Investing Activities. Investing activities consist primarily of contributions to and distributions from the property improvement fund. In accordance with our management agreements, contributions to the property improvement fund are 6.5% of total hotel revenues. As of September 12, 2003, the balance in the property improvement fund was $43.2 million. For the year-to-date periods ended September 12, 2003 and September 6, 2002, contributions to the property improvement fund were $11.1 million and $11.7 million, respectively. Distributions from the property improvement fund reflect capital expenditures for the replacement of furniture, fixtures and equipment offset by interest income earned by the fund. Additions to property and equipment, net were $8.1 million and $3.9 million, respectively, for the year-to-date periods ended September 12, 2003 and September 6, 2002. The increase in capital expenditures for 2003 is due to refurbishments at certain of our properties to reposition them to compete with newer properties.

~~Hotel~~Cash ~~Revenues.~~Used ~~Hotel~~in ~~revenues~~Financing ~~for~~Activities. ~~the~~Financing ~~second~~activities ~~quarter of 2003~~primarily ~~decreased~~include bythe ~~$4.4~~repayment ~~million,~~of orprincipal ~~7.1%,~~on toour ~~$58.0~~CMBS ~~million~~debt ~~compared~~and distributions to ~~the~~general ~~same~~and ~~period~~limited ~~in 2002~~partners. ~~Year-to-date~~We ~~2003,~~repaid ~~hotel revenues decreased by~~ $513.67 million, orand ~~4.7%, to~~ $~~113~~12.7 million, ~~from~~respectively, ~~the~~of ~~same~~principal ~~period~~on inthe ~~2002.~~CMBS ~~This~~debt ~~decrease~~during ~~in hotel revenues for~~ the ~~second~~ ~~quarter and~~ year-to-date ~~2003~~periods isended ~~primarily~~September ~~due~~12, to2003 and aSeptember ~~decrease~~6, ~~in room revenues~~2002. ~~The~~We ~~results~~used ~~reflect~~approximately ~~the~~$5.7 ~~continued~~million ~~weakness~~of ~~for~~ our ~~segment~~senior ofnote ~~the~~debt ~~lodging~~service ~~industry~~reserve ~~primarily due~~ to ~~reduced~~make ~~business~~our ~~travel.~~semi-annual ~~Additionally,~~interest ~~increased~~payment ~~competition resulting~~on ~~from~~these ~~lower~~senior ~~room~~notes ~~rates~~in atFebruary ~~many~~2003. ofWe ~~the~~used ~~full-service~~cash ~~hotels~~from ~~that~~operations ~~operate~~to inmake our ~~markets~~August ~~have~~2003 ~~caused room~~semi-~~rate~~annual interest ~~reductions~~payment aton ~~many~~the ofsenior ~~our hotels~~notes.

~~Operating~~ITEM ~~Costs and Expenses. Operating costs and expenses decreased by $1.6 million, or~~ 3.1% ~~quarter~~QUANTITATIVE ~~over~~AND ~~quarter.~~QUALITATIVE ~~For~~DISCLOSURES ~~year-to-date,~~ABOUT ~~the~~MARKET operating costs and expenses decreased by $1.0 million, or 1.1% when compared to the same period in 2002. Our costs decreased primarily as a result of a decrease in rooms’ expenses related to lower occupancies, as well as a decrease in management fees related to decreased hotel revenues and operating profit. These decreases in rooms’ expenses do not fully offset the declines in occupancy at our hotels, and, as a result, operating margins declined as detailed below. RISK

8We do not have significant market risk with respect to interest rates, foreign currency exchanges or other market rate or price risks, and we do not hold any financial instruments for trading purposes. As of September 12, 2003, all of our debt is fixed rate.

~~Table~~10 ~~of Contents~~

COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP ~~AND SUBSIDIARIES~~

~~MANAGEMENT’S~~ITEM ~~DISCUSSION~~4. CONTROLS AND ~~ANALYSIS OF FINANCIAL CONDITION~~ PROCEDURES

~~AND~~We ~~RESULTS~~maintain disclosure OFcontrols ~~OPERATIONS~~and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

~~Operating Profit.~~As ~~Operating~~of ~~profit~~September ~~for~~12, 2003, the ~~second~~end ~~quarter~~ of ~~2003~~the ~~declined~~quarter covered by ~~$2.9~~this ~~million~~report, ~~compared~~we tocarried ~~the~~out ~~second~~an ~~quarter~~evaluation, ~~2002.~~under ~~For~~the ~~year-to-date~~supervision ~~2003,~~and ~~operating~~with ~~profit~~the ~~decreased~~participation ~~$4.6~~of ~~million~~our ~~compared~~management, including toour ~~the~~Principal ~~same~~Executive ~~period~~Officer inand ~~2002.~~our ~~Operating~~Principal ~~profit represented~~Financial ~~16%~~Officer, of ~~total~~the ~~revenues~~effectiveness ~~for~~of the ~~second~~design ~~quarter~~and operation of ~~2003~~our disclosure controls and ~~20%~~procedures. ~~for~~Based on the ~~second~~foregoing, ~~quarter~~our ofPrincipal ~~2002.~~Executive ~~Year-to-date~~Officer ~~operating~~and ~~profit~~Principal Financial ~~represented~~Officer ~~15%~~concluded ~~and~~that ~~18%,~~our ~~respectively,~~disclosure ofcontrols ~~total~~and ~~revenues~~procedures ~~for~~were ~~2003~~effective ~~and~~at ~~2002~~the reasonable assurance level.

~~Net~~There ~~Income~~has ~~(Loss).~~been ~~Net~~no ~~income~~change ~~for~~in ~~the~~our ~~second~~internal ~~quarter~~controls ofover ~~2003~~financial ~~decreased~~reporting byduring ~~$2.5~~our ~~million to~~most ~~$617,000~~recent ~~when~~fiscal ~~compared~~quarter tothat ~~the~~has ~~same~~materially ~~period in 2002. For year-to-date 2003~~affected, ~~operations~~or ~~resulted~~is inreasonably alikely ~~net loss of $1.0 million, compared~~ to materially ~~net~~affect ~~income~~our ofinternal ~~$3.5~~control ~~million~~over ~~for~~financial ~~the same period in 2002~~reports. ~~The decrease is a result of the factors discussed above.~~

~~LIQUIDITY~~PART ~~AND~~II. ~~CAPITAL~~OTHER ~~RESOURCES~~INFORMATION AND SIGNATURES

AsITEM ~~of June 20, 2003, we have $8~~6.5 million of unrestricted cash. Our principal source of cash is cash from operations including cash available to us by virtue of the subordination and deferral features in certain of our ground leases and our management agreements. Our principal uses of cash are to make debt service payments, fund our required reserves, repay certain deferred expenses and fund capital expenditures for property improvements. Our annual debt service includes interest payments on our senior notes of approximately $13.7 million and principal and interest payments on our multi-class commercial mortgage pass-through certificates (CMBS) of approximately $43.9 million. We believe our sources of cash are sufficient to meet our near-term liquidity needs, however, our ability to meet our long-term liquidity needs will depend on our future results of operations. EXHIBITS

~~The weak economy and the resultant decline in demand have reduced the cash flow levels at our properties significantly from prior-year levels. As~~ (a) ~~result,~~The ~~beginning~~exhibits ~~in the~~listed ~~fourth~~on ~~quarter of 2002, we have made use of certain reserves and deferred a portion of our management fees and ground rent to make our required debt service payments. Under~~ the ~~terms~~accompanying ofExhibit ~~the~~Index management agreements and the ground leases with Marriott International, Inc. and its affiliates, a portion of the base management fees and all of the ground rent and incentive management fees due Marriott International, Inc. and its affiliates are ~~subordinate~~filed toas ~~debt~~part ~~service payments on our senior notes and CMBS debt. We deferred $.1 million~~ of ~~ground~~this ~~lease~~report ~~payments~~ and ~~$.2~~such ~~million~~Exhibit ofIndex base management fees in 2002. During the first quarter of 2003, we drew $5.7 million from the debt service reserve. Additionally, we deferred $2.3 million of ground lease payments and $.3 million of base management fees thus far in 2003. The $2.4 million of deferred ground lease payments due to Marriott International and its affiliates have been included in “Due to Marriott International, Inc. and its affiliates”, and $.5 million of deferred base management fees have been included in “Management fees due to Courtyard Management Corporation”. Included in the $2.4 million of deferred ground rent described above is ~~approximately~~ ~~$1.2~~incorporated ~~million~~herein ~~of ground rent paid in 2002 but returned under the terms of the lease~~ by ~~our ground lessor during the first quarter of 2003~~reference. Based on our current forecasts for the full-year 2003, it is likely that we will have insufficient cash flow from operations to fund our debt service requirements without the subordination of management fees and ground lease payments discussed above. Depending upon the degree of the shortfall, if any, we may draw additional debt service reserves and/or defer additional amounts of ground rent and management fees.

We(c) are required to replenish the debt service reserve and achieve certain levels of excess cash flow before we can repay deferred ground rent and management fee amounts and make equity distributions to our partners. Based on our outlook for 2003, we do not expect to replenish the debt service reserve by year end. Thus, we currently do not expect to make any distributions to our partners until 2004 at the earliest. Exhibits

We also are subject to certain restrictions on the use of our cash under our senior notes indenture. Under the terms of the senior notes indenture, our ability to make certain distributions and payments is dependent on our maintaining certain levels of cash flow. These levels have not been reached since the third quarter of 2002. Additionally, to the extent the debt service reserve is fully funded, we are required to fund a separate supplemental debt service reserve account in an amount equal to Consolidated Excess Cash Flow, as defined in the senior notes indenture, for each quarter until excess cash flow meets specific levels. Through June 20, 2003, we have reserved $1.4 million of Consolidated Excess Cash Flow, all of which was funded during 2002. To the extent that the supplemental debt service reserve exceeds two semi-annual interest payments (approximately $13.7 million), we are required to offer to purchase the senior notes at par in an amount equal to the greater of (i) the amount by which the supplemental debt service reserve exceeds two semi-annual interest payments, and (ii) $5 million.

Exhibit No.		Description
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.0		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.*

~~Cash~~* ~~Provided~~This bycertification ~~Operations.~~is ~~Year-~~being furnished solely to~~-date~~ ~~2003~~accompany the Report pursuant to 18 U.S. 1350, ~~our~~and ~~cash~~is ~~provided~~not ~~by operations~~being ~~decreased~~filed byfor ~~$4.0~~purpose ~~million~~of ~~when~~Section ~~compared~~18 toof the ~~same~~Securities ~~period~~Exchange inAct ~~2002.~~of ~~The~~1934, ~~decrease~~as isamended, ~~due~~and ~~primarily~~is not to ~~the~~be ~~declining~~incorporated ~~operating~~by ~~results~~reference atinto ~~our~~any ~~hotels,~~filing ~~partially~~of ~~offset~~the byCompany ~~the~~whether ~~deferral~~made before of after the ~~payment~~date hereof, regardless of ~~certain~~any ~~management~~general ~~fees~~incorporation ~~and~~language ~~ground rent.~~in such filing.

911

~~Table~~SIGNATURE ~~of Contents~~

~~COURTYARD~~Pursuant BYto ~~MARRIOTT~~the IIrequirements ~~LIMITED~~of ~~PARTNERSHIP~~the ~~AND~~Securities ~~SUBSIDIARIES~~Exchange Act of 1934, the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

October 24, 2003	COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP

	By:	/s/ CBM TWO LLC

		CBM TWO LLC General Partner

~~AND~~By: ~~RESULTS~~/s/ OFLARRY ~~OPERATIONS~~K. HARVEY Larry K. Harvey Vice President (Principal Financial Officer)

~~Cash~~12 Used in Investing Activities. Investing activities consist primarily of contributions to and distributions from the property improvement fund. In accordance with our management agreements, contributions to the property improvement fund are 6.5% of total hotel revenues. As of June 20, 2003, the balance in the property improvement fund was $40.8 million. For the year-to-date periods ended June 20, 2003 and June 14, 2002 contributions to the property improvement fund were $7.4 million and $7.8 million, respectively. Distributions from the property improvement fund reflect capital expenditures for the replacement of furniture, fixtures and equipment offset by interest income earned by the fund. Capital expenditures were $6.4 million and $2.2 million, respectively, for the year-to-date periods ended June 20, 2003 and June 14, 2002. The increase in capital expenditures for 2003 is due to refurbishments currently being implemented at certain of our properties to reposition them to compete with newer properties.

Cash Used in Financing Activities. Financing activities primarily include the repayment of principal on our CMBS debt and distributions to general and limited partners. We repaid $8.5 million and $7.9 million, respectively, of principal on the CMBS debt during the year-to-date periods ended June 20, 2003 and June 14, 2002. Due to our failure to reach certain cash flow thresholds required by the senior notes indenture, no distributions to the partners have been made and will not be made until we again satisfy the cash flow covenants, fully replenish the $6.8 million debt-service reserve and pay ground lease payments deferred in prior years. Also, as previously noted, we used approximately $5.7 million of our senior note debt service reserve to make our semi-annual interest payment on these senior notes in February 2003.

Debt. We have $293.4 million of CMBS debt secured by our properties as of June 20, 2003, and we have $127.4 million of senior notes secured by equity interests in the partnership that owns the hotels. The CMBS debt, which matures in January 2008, bears interest at a weighted average interest rate of 7.85% and has a weighted average term of 17 years. Principal payments for 2003 will total approximately $20.8 million.

Our senior notes are currently rated by Moody’s and Standard & Poor’s. As a result of the significantly reduced operating levels the credit rating assigned to these senior notes was downgraded from B1 to B2 by Moody’s and from B- to CCC+ by Standard & Poor’s in March 2003. Additionally, Standard & Poor’s has placed these senior notes on a negative credit watch. If operations were to decline further, or if our credit ratios do not otherwise improve, the ratings on our senior notes could be reduced further. If we were unable to subsequently improve our credit ratings, our cost to refinance this debt as it comes due would likely increase. The senior notes, which mature in February 2008, are interest only and bear a rate of 10.75%.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not have significant market risk with respect to interest rates, foreign currency exchanges or other market rate or price risks, and we do not hold any financial instruments for trading purposes. As of June 20, 2003, all of our debt is fixed rate.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of June 20, 2003, the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and our Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reports.

PART II. OTHER INFORMATION AND SIGNATURES

ITEM 6. EXHIBITS

(a) The exhibits listed on the accompanying Exhibit Index are filed as part of this report and such Exhibit Index is incorporated herein by reference.

Exhibit No.		Description
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.0		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.*

* This certification is being furnished solely to accompany the Report pursuant to 18 U.S. 1350, and is not being filed for purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company whether made before of after the date hereof, regardless of any general incorporation language in such filing.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

August 4, 2003

COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP

/s/ CBM TWO LLC

CBM TWO LLC

General Partner

/s/ MATHEW J. WHELAN

Mathew J. Whelan Vice President (Chief Accounting Officer)

Filing Compare · COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP /DE/