Gta-ib 10Q 2006 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý		Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended: March 31, 2006

o		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 333-120538

GTA-IB, LLC
(Exact name of registrant as specified in its charter)

Florida		05-0546226
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

36750 US 19 N., Palm Harbor, Florida 34684
(Address of principal executive offices) (Zip Code)

(727) 942-2000
(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(d) OF THE ACT:

None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

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 (or for such shorter period that the registrant was required to file such report(s) and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ý

No established market exists for the Registrant’s membership interests, so there is no market value for such membership interests. There are no membership interests held by non-affiliates as of March 31, 2006.

Issuer has no common stock subject to this report.

GTA-IB, LLC

FORM 10-Q

FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005

INDEX

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Combined Balance Sheets as of March 31, 2006 (unaudited) and December 31, 2005
	Condensed Combined Statements of Operations and Member’s Deficit (unaudited) for the Three Months Ended March 31, 2006 and 2005
	Condensed Combined Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2006 and 2005
	Notes to Condensed Combined Financial Statements (unaudited)
	Rental Pool Lease Operation Condensed Financial Statements and Note
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings
Item 1.A.	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults Upon Senior Securities
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Other Information
Item 6.	Exhibits
Signatures

Cautionary Note Regarding Forward-Looking Statements

The following report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that predict or describe future events or trends and that do not relate solely to historical matters. All of our projections in this quarterly report are forward-looking statements. You can generally identify forward-looking statements as statements containing the words “believe,” “expect,” “hope,” “may, “will,” “anticipate,” “intend,” “estimate,” “project,” “assume” or other similar expressions. Certain factors that might cause such a difference include the following: changes in general economic conditions; including changes that may influence group conference and guests’ vacation plans; changes in travel patterns; changes in consumer tastes in destinations or accommodations for group conferences and vacations; changes in rental pool participation by the current condominium owners; settlement of the class action lawsuit involving the rental pool agreements; our ability to continue to operate the Westin Innisbrook Golf Resort under our management contracts; and the resale of condominiums to owners who elect neither to participate in the rental pool nor to become members of the Innisbrook Resort and Golf Club. You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known (and unknown) risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the limited information currently available to us and speak only as of the date on which this report was filed with the Securities and Exchange Commission. Our continued internet posting or subsequent distribution of this dated report does not imply continued affirmation of the forward-looking statements included in it. We undertake no obligation, and we expressly disclaim any obligation, to issue any updates to our forward-looking statements, even if subsequent events cause our expectations to change regarding the matters discussed in those statements. Future events are inherently uncertain. Moreover, it is particularly difficult to predict business activity levels at the Resort with any certainty. Accordingly, our projections in this quarterly report are subject to particularly high uncertainty. Our projections should not be regarded as legal promises, representations or warranties of any kind whatsoever. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such differences might be significant and harmful to your interests.

GTA-IB, LLC
CONDENSED COMBINED BALANCE SHEETS
AS OF MARCH 31, 2006 AND DECEMBER 31, 2005
(in thousands)

	March 31, 2006			December 31, 2005
	(unaudited)
Assets
Current assets	$	10,291		$	6,491
Property and equipment, net	27,950			28,322
Intangibles, net	16,206			16,635
Other assets	2,643			2,647
Total Assets	$	57,090		$	54,095
Liabilities
Current liabilities	$	9,662		$	9,242
Long-term debt, less current maturities	42,766			42,841

Other long term liabilities	10,676			10,502
Total Liabilities	63,104			62,585
Commitments and Contingencies
Member’s Deficit	(6,014		)	(8,490		)
Total Liabilities and Member’s Deficit	$	57,090		$	54,095

See accompanying notes to condensed combined financial statements.

GTA-IB, LLC
CONDENSED COMBINED STATEMENTS OF OPERATIONS AND MEMBER’S DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(in thousands) (unaudited)

	Three Months Ended March 31,
	2006			2005
Revenues
Hotel	$	5,845		$	5,281
Food and beverage	5,132			4,244
Golf	5,089			4,666
Other	946			1,289
Total revenues	17,012			15,480
Expenses
Hotel	4,107			3,885
Food and beverage	3,133			2,610
Golf	1,856			1,839
Other	2,835			2,523
General and administrative	1,742			1,601
Depreciation and amortization	491			798
Total expenses	14,164			13,256
Operating income	2,848			2,224
Interest expense, net	373			439
Net income	2,475			1,785
Member’s deficit, beginning of period	(8,489		)	(4,440		)
Member’s deficit, end of period	$	(6,014	)	$	(2,655	)

See accompanying notes to condensed combined financial statements.

GTA-IB, LLC
CONDENSED COMBINED STATEMENTS OF CASH FLOWS FOR THE
THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(in thousands) (unaudited)

	Three Months Ended March 31,
	2006			2005
Cash flows from operating activities:
Net income	$	2,475		$	1,785
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	821			1,130
Provision for bad debts	164			—
Non-cash interest	279			336
Other changes in operating assets and liabilities	(689		)	(1,474		)
Net cash provided by operating activities	3,050			1,777
Cash flows used in investing activities:
Purchases of property and equipment	(20		)	(146		)
Cash flows used in financing activities:
Repayment of long-term debt and capital lease obligations	(304		)	(232		)
Net increase in cash	2,726			1,399
Cash and cash equivalents, beginning of period	1,519			1,832
Cash and cash equivalents, end of period	$	4,245		$	3,231

Supplemental Cash Flow Information:
Cash paid for interest	$	98		$	104

See accompanying notes to condensed combined financial statements.

GTA-IB, LLC

FORM 10-Q

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005

(in thousands) (unaudited)

1. Innisbrook Resort Ownership and Operations

GTA-IB, LLC (the “Company”) is owned by GTA-IB Golf Resort, LLC, which in turn is 100% owned by Golf Trust of America, L.P., (the “Lender”). Golf Trust of America, Inc. (“GTA”) indirectly owns 99.6% of the Lender. The remaining 0.4% of the Lender is owned by its one limited partner. The Lender is an operating partnership of GTA. Golf Host Resorts, Inc. (“GHR”, “the predecessor owner” or “the former borrower”), an entity affiliated with Starwood Capital Group LLC, is the former owner of the Westin Innisbrook Golf Resort (the “Resort”) and the former borrower under a participating mortgage loan funded by the Lender. This participating mortgage loan was secured by the Resort, cash, undeveloped land at the Resort and 368,365 shares of GTA’s common stock. The Resort is a 72-hole destination golf and conference facility located near Tampa, Florida.

The Company entered into a Settlement Agreement dated July 15, 2004 (the “Settlement Agreement”) with the Lender and GHR, Golf Hosts, Inc., Golf Host Management, Inc., Golf Host Condominium, Inc. and Golf Host Condominium, LLC. The Settlement Agreement resolved a number of issues between the parties, including GHR’s default under the $79,000 loan made by the Lender to GHR in June 1997. As part of the Settlement Agreement, the Company took ownership of the Resort on July 15, 2004. In connection with the Settlement Agreement, the Company entered into a management agreement with Westin Management Company South (“Westin”), which provides for Westin’s management of the Resort, and Westin and Troon Golf L.L.C. (“Troon”) entered into a facility management agreement providing for Troon’s management of the golf facilities at the Resort.

In connection with the Settlement Agreement, the Company assumed control and operation of the Rental Pool Lease Operations at the Resort (the “Rental Pool”) which were previously operated and controlled by GHR. On a year-to-year basis, approximately 500 of the 938 condominium units at the Resort are leased by the Company from the condominium owners and used as hotel accommodations for the Resort pursuant to rental pool lease arrangements. The Company is the lessee under the lease operation agreements, which provide for the distribution of a percentage of room revenues to participating condominium owners as lessors under the lease operation agreements. The operations under this arrangement are referred to as the Rental Pool.

The Lender had previously entered into an agreement with GHR and the prospective purchaser of a parcel of undeveloped land within the Resort which is known as Parcel F and owned by GHR. This agreement, known as the Parcel F Development Agreement, was executed on March 29, 2004 and held in escrow pending the closing of the transactions contemplated by the Settlement Agreement. The Parcel F Development Agreement provides for the terms and conditions under which Parcel F may be developed, including restrictions on the owner of Parcel F designed to avoid interference with the ongoing operations of the Resort

On August 10, 2005, the Company and the Lender entered into an amendment to the Parcel F Development Agreement which the Lender believes will allow the Lender to better manage the location of the Parcel F access road and also adds the Company as a party to the Parcel F Development Agreement.

GTA is presently in the process of liquidating pursuant to a plan of liquidation approved by its stockholders on May 22, 2001.

Going Concern

As of March 31, 2006, the Company has working capital of approximately $629 and a member deficit of $6,014. The Company reported net income of approximately $2,475 for the three months ended March 31, 2006. The Company continues to experience seasonal fluctuations in its net working capital position. In July 2004, and after taking possession of the Resort’s operational assets, GTA advanced to the Company $2,000 to support working capital needs. During 2005, GTA

advanced to the Company an additional $1,050. The net proceeds of these loans have been utilized by the Resort’s manager to support operational expenses. Generally, the Company’s only source of cash is from profitable operations of the Resort. While the financial performance of the Resort has shown signs of recovery since the Company assumed title to the Resort on July 15, 2004, current projections provided by Westin indicate an operational cash flow shortfall by the end of the summer of 2006. Further, the Resort’s credit capacity is limited. GTA is currently seeking a buyer for the Resort, pursuant to the stockholder-approved plan of liquidation. In the event that the Resort is not sold, it may become necessary for the Resort to seek further cash infusion from GTA, if available, or to seek some other form of re-capitalization to seek to insure the Company’s ongoing viability. GTA is currently in the process of liquidation. There are no assurances that GTA, or any affiliate, will have the ability to provide future funding to the Resort, nor are there any assurances that the Company will be able to secure a re-capitalization of some other form.

2. Basis of Presentation

The settlement described in Note 1 above, pursuant to which the Company took title to the Resort, was accounted for using methods consistent with purchase accounting in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations. Accordingly, the Company, with the assistance of its independent financial advisor, stated the tangible and identified intangible assets of the Resort at their respective fair values. The long-term liabilities of the Resort were stated at their fair value based on a net present value calculation.

Principles of Combination

The financial statements and footnotes reflect the combined financial results of the Company, GTA-IB Condominium, LLC and GTA-IB Management, LLC. These legal entities are all wholly owned subsidiaries of the Lender, GTA-IB Condominium, LLC holds the title to three condominium units at the Resort that participate in the Rental Pool. GTA-IB Management, LLC is the entity that employs substantially all of the employees working at the Resort. There are no other operations of GTA-IB Condominium, LLC and GTA-IB Management, LLC. The Company holds title to the Resort and is the entity in which all of the Resort operations are recorded. All intercompany transactions and account balances have been eliminated in combination.

Interim Statements

The accompanying condensed combined financial statements have been prepared in accordance with (i) accounting principles generally accepted in the United States of America (“GAAP”) and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements have not been audited by an independent registered accounting firm, however, they include adjustments (consisting of normal recurring adjustments) which are, in the judgment of management, necessary for a fair presentation of financial condition, results of operations and cash flows for the interim periods presented. However, these results are not necessarily indicative of results for any other interim period or for the full year. In particular, it is important to note that the Company’s business is seasonal.

Certain information and footnote disclosures normally included in financial statements in accordance with GAAP have been omitted as allowed in quarterly reports by the rules of the Securities and Exchange Commission. Management believes that the disclosures included in the accompanying interim financial statements and footnotes are adequate to make the information not misleading, but also believes that these statements should be read in conjunction with the summary of significant accounting policies and notes to the combined financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

3. Property and Equipment

Property and equipment consists of the following:

	March 31, 2006			December 31, 2005
	(unaudited)
Land	$	1,968		$	1,968
Buildings	14,722			14,722
Golf course improvements	7,533			7,533
Machinery and equipment	6,250			6,230
	30,473			30,453
Less accumulated depreciation and amortization	(2,523		)	(2,131		)
	$	27,950		$	28,322

At March 31, 2006, machinery and equipment includes certain equipment with a net book value of $926 that is recorded under capital leases. Depreciation expense amounted to approximately $392 and $407 for the three months ended March 31, 2006 and 2005, respectively.

4. Intangibles and Other Assets

Intangible assets represent the value of the following that existed at July 15, 2004: the trademark and tradename of “Innisbrook”; the Rental Pool; the guest room bookings; the club memberships; and the water contract that provides irrigation water for the golf courses at no charge up to certain specified limits. The intangible assets are being amortized over the specific term or benefit period of each related contract.

Intangible Assets	Amortization Period	March 31, 2006			December 31, 2005
		(unaudited)
Water Contract	None since renewable in perpetuity	$	2,300		$	2,300
Rental Pool	89.5 months	9,870			9,870
Guest Bookings	Less than 24 months	1,100			1,100
Club Memberships	144 months	4,400			4,400
Trade Name	None since renewable in perpetuity	2,500			2,500
		20,170			20,170
Less accumulated amortization		(3,964		)	(3,535		)
		$	16,206		$	16,635

Amortization expense amounted to approximately $429 and $723 for the three months ended March 31, 2006 and 2005, respectively. Of these amounts, approximately $330 in both the three months ended March 31, 2006 and 2005, respectively, are included in hotel expenses and are not included in depreciation and amortization in the Statements of Operations. The intangible assets of the predecessor owner consisted of the rental pool refurbishment asset and the management agreement between Westin and the predecessor owner, which was amortized over twenty years on a straight-line basis.

Anticipated amortization expense for the next five years and thereafter is set forth in the table below:

Year	Principal
2006	$	1,300
2007	1,688
2008	1,688
2009	1,688
2010	1,688
Thereafter	3,354
Total	$	11,406

Other assets include the Company’s interest in the net proceeds from any sale of Parcel F, which are estimated to be $2,200 (see Note 1), but could be substantially less in the event of a sale thereof. Also included in other assets are certain design fees for the refurbishment program of $221 and $236 as of March 31, 2006 and December 31, 2005, respectively. The Company has a contractual right to be reimbursed for these design fees by the Rental Pool participants in the form of a deduction from the quarterly rental pool refurbishment payments.

5. Current Liabilities

Current liabilities consist of the following:

	March 31, 2006		December 31, 2005
	(unaudited)
Accounts payable	$	2,035	$	2,008
Accrued payroll costs	1,085		1,554
Other payables and accrued expenses	2,517		1,833
Deposits and deferred revenue	2,525		2,438
Current portion of capital leases	340		336
Current portion of refurbishment liability	1,160		1,073
	$	9,662	$	9,242

6. Long-Term Debt

Long-term debt consists of the following:

	March 31, 2006		December 31, 2005
	(unaudited)
Non-interest bearing mortgage note due to the Lender, maturing in June 2027	$	39,240	$	39,240
Advances from the Lender, net	2,976		2,976
Capital leases	550		625
	$	42,766	$	42,841

7. Other Long-Term Liabilities

Master Lease Refurbishment Obligation

On July 16, 2004, the Company recorded a liability of $4,532 for the refurbishment program pursuant to the master lease agreement, or MLA, of the Rental Pool. This liability represented the Company’s obligation to pay the various participants in the Rental Pool 50% of the costs to refurbish their respective units, at the then net present value (calculated at a discount rate of 15%) of the total principal payments of $7,273. Interest on this liability accrues at a rate of 5% and is paid quarterly. Principal and interest payments are due quarterly over the repayment period of the program, beginning with the first quarter of 2005 and ending with the fourth quarter of 2009. Interest on this liability accrues at a rate of 5% and is paid quarterly. Amortization of the discount is charged to interest expense ratably over the period through 2009. In addition, the Company agreed to provide refurbishment reimbursement for units placed into the rental pool during 2005 at a level of 25% of the condominium owners investment in the refurbishment, with interest at 2.5% per annum. These additional 2005 amounts receive interest currently and principal payments begin in 2008 and are paid out through 2012. The amortization charged to interest expense for the three months ended March 31, 2006 and 2005 is $178 and $236, respectively. The net present value of this liability is $4,587 and $4,647 as of March 31, 2006 and December 31, 2005, respectively, of which $1,160 and $1,073, respectively, is included in current liabilities (see Note 5).

The corresponding benefit from the MLA refurbishment program was included in the valuation of the rental pool intangible asset which is being amortized over the term of the current master lease agreement that expires in 2011. Minimum undiscounted principal payments on the refurbishment program are as follows:

Year	Amount
April 1 – December 31, 2006	$	804
2007	1,428
2008	1,789
2009	2,148
2010	7
Thereafter	20
Total	$	6,196

Westin Termination Fee

The July 15, 2004 management agreement that the Company executed with Westin (the “Management Agreement”) provides for the payment of a termination fee to Westin of $5,900, subject to the terms and conditions of that agreement. If not earlier terminated, the Management Agreement will expire on December 31, 2017. The termination fee is reduced $0.365 for each day that elapses from the effective date until the termination date; provided, however, that the termination fee shall not be reduced to less than $5,500. The obligation, which is included in other long-term liabilities on the balance sheet, was recorded at its net present value on July 16, 2004 of $4,631 (calculated at a discount rate of 7%). Amortization of the discount is charged to interest expense ratably over the period through December 31, 2006. The amortization charged to interest expense was $88 for both the three months ended March 31, 2006 and 2005. As of March 31, 2006 and December 31, 2005, the net present value of this liability is $5,235 and $5,147.

Troon Supplemental Fee

The July 15, 2004 facility management agreement executed with Troon provides for the payment by the Company to Troon of a supplemental fee, subject to the terms and conditions of that facility management agreement, of $800. If not earlier terminated, the facility management agreement will expire in July 15, 2009. The obligation was recorded at its net present value on July 16, 2004. The net present value on that date was $682 (calculated at a discount rate of 7%). Amortization of the discount is charged to interest expense ratably over the period through December 31, 2006. The amortization charged to interest expense for both the three months ended March 31, 2006 and 2005 was $12. As of March 31, 2006 and December 31, 2005, the net present value of this liability is $764 and $752, respectively.

Other

As of March 31, 2006 and December 31, 2005, the Company recorded deferred management fees of $265 and $204, and deferred revenue from member initiation fees of $985 and $825, respectively.

8. Commitments and Contingencies

Employee Benefit Plans

The Company maintains a defined contribution Employee Thrift and Investment Plan, which provides retirement benefits for all eligible employees, including employees of GTA-IB Operations, LLC, who have elected to participate. Employees must fulfill a 90-day service requirement to be eligible to participate in this plan. The Company currently matches one half of the first 6% of an employee’s contribution. The Company made contributions of approximately $63 and $47 for the three months ended March 31, 2006 and 2005, respectively

Westin Management Company South and Troon Golf L.L.C..

The Management Agreement between the Company and Westin provides that Westin will manage the Resort for a fee equal to 2.2% of the Resort’s gross revenue. Contemporaneously with the signing of the Management Agreement, Westin entered into a management contract with Troon providing for Troon to manage the golf facilities of the Resort for a fee equal to 2% of the Resort’s gross golf revenue. Management fees are paid to Westin and Troon on a monthly basis. The Company’s agreements with Westin and Troon also provide for the opportunity for Westin and Troon to earn supplemental fees based on financial performance. The Management Agreement between the Company and Westin will terminate on December 31, 2017, unless it is earlier terminated pursuant to its terms. Troon’s contract with Westin will terminate on July 15, 2009 unless earlier terminated pursuant to its terms.

For the three months ended March 31, 2006 and 2005, the payments made to Westin and Troon under their respective management agreements are reflected in the table below:

	Three months ended March 31,
	2006		2005
	(unaudited)
Westin	$	364	$	328
Troon	102		93
Total	$	466	$	421

Land Use Lawsuit

development rights of a tract of land known as Parcel F. Parcel F is a parcel of land located within the Resort. The Plaintiffs allege that there are no remaining development units (residential units) available to be developed within the Resort property. On March 29, 2005, the Company filed a Motion to Intervene as a defendant in the Initial Land Use Lawsuit in order to protect the Company’s property, and the Company’s land use and development rights with respect to Parcel F and its property. The court ruled in favor of all Defendants and against all Plaintiffs as to each count in both cases. Subsequent to the court’s oral rulings, defense counsel prepared a proposed final judgment which reflects the court’s factual findings and legal conclusions. On March 8, 2006, the court formally entered its final judgment on the record ruling in favor of the defendants on all counts and denying all claims asserted by the plaintiffs in both cases. On March 31, 2006, the plaintiffs in the consolidated cases filed a notice of appeal.

As an intervenor in the Initial Land Use Lawsuit, the Company will seek to obtain a ruling from the court which preserves and protects the Company’s property, the Company’s land use and development rights with respect to Parcel F and the Company’s property in order to maximize the value of those rights as they relate both to Parcel F and the Resort in general. The Company refers to these two matters as the “Land Use Lawsuits.”

In the event that the defendants in the Land Use Lawsuits do not prevail in the appeal, the owner of Parcel F may lose substantially all of its land use and development rights with respect to Parcel F. As a result, the Company may experience reduced club memberships at the Resort, and its ability to realize the benefits from proposed development of Parcel F would be adversely impacted. In addition, failure by the defendants to prevail in the Land Use Lawsuits could jeopardize the Company’s land use and development rights in the remaining units that the Company may have the opportunity to develop at the Resort if a court subsequently applied a similar interpretation of the Company’s rights with respect to those units. In that instance, the Company might lose all or substantially all of those rights with respect to the remaining units. As a result of a successful challenge to the Company’s land use and development rights relating to the remaining units at the Resort, the Company’s ability to develop the Resort would be adversely affected.

Property Tax Lawsuit

We filed a lawsuit against the property appraiser of Pinellas County Florida, or Pinellas County to challenge the 2004 and 2005 real estate assessment on the Resort property. Pinellas County filed a motion to dismiss, which was denied by the court. No trial date has been set. If Pinellas County were to prevail, management believes that there would be no material adverse effect upon our financial statements, as the entire Pinellas County assessment is fully accrued and accounted for at March 31, 2006.

10. Subsequent Events

On April 25, 2006, the Company entered into an agreement with Suncoast Charities, Inc., or Suncoast, which provides for Suncoast to lease the Copperhead golf course for seven and one half days during the month of March for a PGA TOUR event, and for the same period during each of the years 2007 through 2012. The agreement provides, among other things, for a base fee plus a participation fee in the event the aggregate ticket sales during any tournament year exceed the greater of 115% of the 2005 or 2006 tournament ticket sales.

INNSBROOK RENTAL POOL LEASE OPERATION
CONDENSED BALANCE SHEETS
AS OF MARCH 31, 2006 AND DECEMBER 31, 2005
(in thousands)

	March 31, 2006		December 31, 2005
	(unaudited)
DISTRIBUTION FUND
Assets
Receivable from GTA-IB, LLC for distribution	$	2,044	$	918
Interest receivable from maintenance escrow fund	18		17
Total assets	$	2,062	$	935
Liabilities
Due to participants for distribution	$	1,661	$	688
Due to maintenance escrow fund	401		247
Total liabilities	$	2,062	$	935
MAINTENANCE ESCROW FUND
Assets
Cash and cash equivalents	$	290	$	202
Short-term investments	1,615		1,595
Receivable from distribution fund	401		247
Inventory	1		—
Interest receivable	18		18
Total assets	$	2,325	$	2,062
Liabilities and participants’ fund balances
Accounts payable	$	13	$	9
Construction retainage	5		6
Interest payable to distribution fund	18		17
Carpet care reserve	67		55
Participants’ fund balances	2,222		1,975
Total liabilities and participants’ fund balances	$	2,325	$	2,062

See accompanying notes to these condensed financial statements.

INNISBROOK RENTAL POOL LEASE OPERATION
CONDENSED STATEMENTS OF CHANGES IN PARTICIPANTS’ FUND BALANCES
FOR THREE ENDED MARCH 31, 2006 AND 2005
(in thousands) (unaudited)

	Three months ended March 31,
	2006			2005
DISTRIBUTION FUND
Balance, beginning of period	$	—		$	—
Additions:
Amounts available for distribution	2,044			1,899
Interest received or receivable from Maintenance Escrow Fund	18			8
Reductions:
Amounts withheld for Maintenance Escrow Fund	(401		)	(416		)
Distribution accrued or paid to participants	(1,661		)	(1,491		)
Balance, end of period	$	—		$	—

See accompanying notes to these condensed financial statements.

INNISBROOK RENTAL POOL LEASE OPERATION
CONDENSED STATEMENTS OF CHANGES IN PARTICIPANTS’ FUND BALANCES
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(in thousands) (unaudited)

	Three months ended March 31,
	2006			2005
MAINTENANCE ESCROW FUND
Balance, beginning of period	$	1,975		$	1,998
Additions:
Amounts withheld from occupancy fees	401			416
Interest earned	18			8
Charges to participants to establish or restore escrow balances	175			70
Reductions:
Maintenance charges	(216		)	(215		)
Carpet care reserve deposit	(20		)	(23		)
Interest accrued or paid to Distribution Fund	(18		)	(8		)
Refunds to participants pursuant to the Master Lease Agreements	(93		)	(49		)
Balance, end of period	$	2,222		$	2,197

See accompanying notes to these condensed financial statements.

INNISBROOK RENTAL POOL LEASE OPERATION
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(in thousands) (unaudited)

	Three months ended March 31,
	2006			2005
DISTRIBUTION FUND
Gross revenue	$	5,755		$	5,197
Deductions:
Agents’ commissions	294			284
Resort fees	112			—
Credit card fees	132			119
Professional fees	6			6
Linen replacements	75			52
Rental pool complimentary fees	1			—
	620			461
Adjusted gross revenue	5,135			4,736
Amount retained by lessee	(3,081		)	(2,841		)
Gross income distribution	2,054			1,895
Adjustments to gross income distribution:
General pooled expense	(1		)	—
Corporate complimentary occupancy fees	6			6
Interest	(3		)	(3		)
Occupancy fees	(446		)	(462		)
Advisory committee expenses	(54		)	(48		)
Net income distribution	1,556			1,388
Adjustments to net income distribution:
Occupancy fees	446			462
Westin Associate room fees	42			49
Available for distribution to participants	$	2,044		$	1,899

See accompanying notes to these condensed financial statements.

INNISBROOK RENTAL POOL LEASE OPERATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005

(unaudited)

1. Rental Pool Lease Operations

Organization and Operations

GTA-IB, LLC (the “Company”) is a single member limited liability company, wholly owned by GTA-IB Golf Resorts, LLC. GTA-IB Golf Resorts, LLC is itself a wholly owned subsidiary of Golf Trust of America, L.P. There is no established market for the Company’s membership interests. The preceding unaudited financial statements of the Rental Pool Lease Operations (the “Rental Pool”) at the Westin Innisbrook Golf Resort (the “Resort”) are for the periods ended March 31, 2006 and 2005. The Rental Pool consists of condominiums at the Resort which are provided as resort accommodations by their owners.

Historically, GHR and the GTA-IB, LLC have offered several different Rental Pool programs to the condominium owners. Effective January 1, 2002, GHR offered a new Master Lease Agreement (“NMLA”) which permitted all Rental Pool participants the opportunity to convert to the new agreement. Each condominium owner may elect to participate in either the NMLA or a prior agreement. The only existing prior agreement that an owner may elect to participate in is the Guaranteed Master Lease Agreement (“GMLA”) dated January 1, 1998. As of January 1, 2004, there are no longer any condominium owners participating under the GMLA agreement. If an owner elected to participate in the NMLA, the owner is prohibited from returning to the any previous agreement. Effective January 1, 2003, all but one Rental Pool participants elected to convert to the NMLA. In addition as part of the MLA process, each owner on an annual basis may elect to participate in the rental pool for the following year by signing an Annual Lease Agreement (“ALA”). The NMLA provides for Adjusted Gross Revenues, as defined, to be divided 40% to the Innisbrook Rental Pool participants and 60% to the Resort.

The Rental Pool consists of the Distribution Fund and the Maintenance Escrow Fund. The Distribution Fund’s balance sheets primarily reflect amounts receivable from the Company for the Rental Pool distribution payable to Participants and amounts due to the Maintenance Escrow Fund. The operations of the Distribution Fund reflect Participants’ earnings in the Rental Pool. The Maintenance Escrow Fund reflects the accounting for certain escrowed assets of the Participants and, therefore, has no operations. It consists primarily of amounts escrowed by Participants or due from the Distribution Fund to meet escrow requirements, fund the carpet care reserve and maintain the interior of the unit.

Under the NMLA, the Resort pays the owner a fee equal to 40% of the Adjusted Gross Revenues in accordance with the terms of the agreement. Adjusted Gross Revenues are defined as Gross Revenues less agent’s commissions, audit fees, occupancy fees when the unit is used by the Resort owner for non-rental purposes, linen replacements and credit card fees. Each Participant receives a fixed occupancy fee, based upon apartment size, for each day of unit specific occupancy. After allocation of occupancy fees and the payment of general Rental Pool expenses, the balance is allocated proportionally to the Participants, based on the Participation Factor as defined in the Agreement.

Corporate complimentary occupancy fees are rental fees paid by the Resort owner to the Participants for complimentary rooms unrelated to Rental Pool operations. Westin Associate Room Fees represent total room revenues earned from the rental of condominiums by Westin employees passed through to the Rental Pool.

In addition, the predecessor Resort owner has agreed, as part of the NMLA, to reimburse Rental Pool participants in the NMLA for up to 50% of the actual unit refurbishment costs, plus interest at a rate of 5% per annum on the 50% of the refurbishment costs, beginning in 2002, so long as the minimum participation threshold as defined, is maintained. The NMLA and ALAs are referred to collectively as the “Agreements.” The Company assumed the obligations of GHR under the Agreements.

Maintenance Escrow Fund Accounts

The NMLA provides that 90% of the Occupancy Fees earned by each Participant are deposited in the Participant’s Maintenance Escrow Fund account. This account provides funds for payment of amounts that are due from Participants under the Agreements for maintenance and refurbishment services. Should a Participant’s balance fall below that necessary to provide adequate funds for maintenance and replacements, the Participant is required to restore the escrow balance to a defined minimum level. The NMLA provides for specific fund balances to be maintained, by unit type, size and age of refurbishment, as defined in the Agreement. Under the NMLA, a percentage of the Occupancy Fees are deposited into the carpet care reserve in the Maintenance Escrow Fund, which bears the expenses of carpet cleaning for all Participants. This percentage is estimated to provide the amount necessary to fund carpet cleaning expenses and may be adjusted annually. The amounts expended for carpet care were approximately $36,000, $37,000 and $35,000 for the years ended for 2005, 2004 and 2003.

The Lessors’ Advisory Committee invests the maintenance escrow funds on behalf of the Participants and in compliance with restrictions in the Agreements. The Lessors’ Advisory Committee consists of nine Participants elected to advise the Resort owner in Rental Pool matters and negotiate amendments to the lease agreement. Income earned on these investments is allocated proportionately to Participants’ Maintenance Escrow Fund accounts and paid quarterly through the Distribution Fund. At March 31, 2006 and 2005, the Maintenance Escrow Fund held certificates of deposit of $1,615,000 and $1,520,000 respectively, with maturity terms ranging from three months to twelve months and bearing interest at rates from 3.65% to 4.85% and 1.8% to 3.45, respectively, At March 31, 2006 and 2005, the cost of these investments approximates fair value.

Going Concern

The continuation and success of the Rental Pool is contingent upon the continuation of the operations of the Resort. In turn, the success of Resort operations is contingent upon the continued participation of condominium owners in the Rental Pool. The Company had income from operations of approximately $2,475 for the three months ended March 31, 2006; however, the impact of seasonality on the Resort’s operations and the projections from the Resort’s manager of the Resort’s cash flow through the end of 2006 raise substantial doubt about the Company’s ability to continue as a going concern. Items related to the continuation of the Resort as a going concern include such issues as: the sale of condominium units which do not participate in the Rental Pool or through a sale are removed from the Rental Pool, owners of units opting to live in their units, owners renting their units outside of the Rental Pool, and general economic conditions related to the destination resort industry. The Company’s parent is currently seeking a buyer for the Resort, pursuant to the stockholder-approved plan of liquidation. In the event that the Resort is not sold, it may become necessary for the Resort to seek further cash infusion from its parent, if available, or to seek some other form of re-capitalization to seek to insure the Company’s ongoing viability. The Company’s parent is currently in the process of liquidation. There are no assurances that the Company’s parent, or any affiliate, will have the ability to provide future funding to the Resort, nor are there any assurances that the Company will be able to secure a re-capitalization of some other form.

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

We were formed on December 30, 2002 as a wholly-owned subsidiary of GTA-IB Golf Resort, LLC, or our parent, which in turn is a wholly-owned subsidiary of Golf Trust of America, L.P. Golf Trust of America, L.P. is an operating partnership of Golf Trust of America, Inc., or GTA. Golf Host Resorts, Inc., or GHR, is the former owner of the Resort and the former borrower under a $79 million participating mortgage loan funded by Golf Trust of America, L.P. in June 1997.

We, Golf Trust of America, L.P. and one of its subsidiaries entered into a Settlement Agreement dated July 15, 2004, or the Settlement Agreement, with GHR, Golf Hosts, Inc., Golf Host Management, Inc. and Golf Host Condominium, Inc. The Settlement Agreement resolved a number of issues between the parties, including GHR’s default under the $79 million loan made by Golf Trust of America, L.P. to GHR in June 1997. As part of the Settlement Agreement, we took ownership of the Westin Innisbrook Golf Resort, or the Resort, effective at the close of business on July 15, 2004. Additionally, in connection with the Settlement Agreement, we entered into a management agreement with Westin Management Company South, or Westin, providing for Westin’s management of the Resort, and Westin and Troon Golf L.L.C., or “Troon”, entered into a facility management agreement providing for Troon’s management of the golf facilities at the Resort.

Golf Trust of America, L.P. had previously entered into an agreement with GHR and the prospective purchaser of a parcel of undeveloped land within the Resort, which is owned by GHR, known as Parcel F. This agreement, known as the Parcel F Development Agreement, was executed on March 29, 2004 and held in escrow pending the closing of the transactions contemplated by the Settlement Agreement. The Parcel F Development Agreement sets forth the terms and conditions under which Parcel F may be developed and includes restrictions on the owner of Parcel F designed to avoid interference with the operations of the Resort. On August 10, 2005, we and Golf Trust of America, L.P. entered into an amendment to the Parcel F Development Agreement which we believe will allow us to better manage the location of the Parcel F access road and adds us as a party to the Parcel F Development Agreement.

Results of Operations

Forward Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are statements that predict or describe future events or trends and that do not relate solely to historical matters. All of our projections in this quarterly report are forward-looking statements. You can generally identify forward-looking statements as statements containing the words “believe,” “expect,” “hope,” “may,” “will,” “anticipate,” “intend,” “estimate,” “project,” “assume” or other similar expressions. Certain factors that might cause such a difference include the following: changes in general economic conditions, including changes that may influence group conferences and guests’ vacation plans, changes in travel patterns, changes in consumer tastes in destinations or accommodations for group conferences and vacations, our ability to continue to operate the Resort under our management contracts, changes in Rental Pool participation by the current condominium owners, settlement of the class action lawsuit involving the Rental Pool agreements, and the resale of condominiums to owners who elect neither to participate in the Rental Pool nor to become club members. You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known (and unknown) risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the limited information currently available to us and speak only as of the date on which this report was filed with the SEC. Our continued internet posting or subsequent distribution of this dated report does not imply continued affirmation of the forward-looking statements included in it. We undertake no obligation, and we expressly disclaim any obligation, to issue any updates to our forward-looking statements, even if subsequent events cause our expectations to change regarding the matters discussed in those statements. Future events are inherently uncertain. Moreover, it is particularly difficult to predict business activity levels at the Resort with any certainty. Accordingly, our projections in this quarterly report are subject to particularly high uncertainty. Our projections should not be regarded as legal promises, representations or warranties of any kind whatsoever. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such differences might be significant and harmful to your interests.

Results of operations

Because the Resort is a destination golf resort, we believe it appeals to a different market than the market to which a stand-alone hotel located in a downtown metropolitan area appeals. The Resort provides recreation, food and beverages to business meetings or group travelers, transient guests who play golf and golf package purchasers and guests who bring their families to the Resort. As a destination golf resort, the Resort’s performance is sensitive to weather conditions and seasonality. The Resort had higher realized revenue and fewer room nights during the first three months of 2006 than during the corresponding period in 2005. We believe that this increase in realized revenue, even though room nights were down, resulted from continuing improved sales and marketing efforts directed towards improving retail sales to group and transient business in addition to increasing sales of golf packages and golf memberships at the Resort. These market segments produce a greater aggregate spending level per room night. While overall room nights and golf rounds were down 5.1% and 1.8%, respectively, overall gross revenue per room night increased by $73.25 to $535.40.

The following table shows utilization of the Resort facilities broken into facility type, results of operations and selected Rental Pool statistical data during the three month period ended March 31, 2006 and March 31, 2005:

	Three Months Ended March 31,
	2006	2005	Increase (decrease)		Percentage Change
Utilization of Resort facilities:
Available room nights	51,067	52,158	(1,091	)	(2.1	)%
Actual room nights
Group	23,093	21,129	1,964		9.3	%
Transient	8,683	12,368	(3,685	)	(29.8	)%
Total room nights	31,776	33,497	(1,721	)	(5.1	)%
Food and beverage meals	158,709	143,017	15,692		11.0	%
Golf rounds
Resort guests	23,421	25,373	(1,952	)	(7.7	)%
Member/guests	12,858	11,582	1,276		11.0	%
Total golf rounds	36,279	36,955	(676	)	(1.8	)%

	Three Months Ended March 31
	2006			2005			Increase (decrease)			Percentage Change
Results of operations (in thousands):
Revenues
Hotel	$	5,845		$	5,281		$	564		10.7	%
Food and beverage	5,132			4,244			888			20.9	%
Golf	5,089			4,666			423			9.1	%
Other	946			1,289			(343		)	(26.6	)%
Total revenues	17,012			15,480			1,532			9.9	%
Expenses
Hotel	4,107			3,885			222			5.7	%
Food and beverage	3,133			2,610			523			20.1	%
Golf	1,856			1,839			17			0.9	%
Other	2,835			2,523			312			12.4	%
General and administrative	1,742			1,601			141			8.8	%
Depreciation and amortization	491			798			(307		)	(38.5	)%
Total expenses	14,164			13,256			908			6.8	%
Operating income	2,848			2,224			624			28.0	%
Interest expense, net	373			439			(66		)	(15.0	)%
Net income	$	2,475		$	1,785		$	690		38.7	%
Selected Rental Pool statistical data:
Average daily distribution	$	40.03		$	36.40		$	3.63		10.0	%
Average room rate	$	183.95		$	157.66		$	26.30		16.7	%
Occupancy percentage	62.2		%	64.2		%	(2.0		)%	(3.1	)%
Average number of available units	567			580			(13		)	(2.2	)%

Three months ended March 31, 2006 and 2005.

During the first quarter of 2006, there were 1,721, or 5.1%, fewer occupied room nights than there were for the first quarter of 2005. As compared to the first quarter of 2005, during the first quarter of 2006 there were 3,685 fewer transient room nights and 1,964 more group room nights, resulting in an aggregate of 1,721 fewer occupied room nights. Group room nights consist of conference room nights, or room nights which are booked and correlated to a meeting or convention at the Resort, and transient room nights, which are room nights which are booked and do not correlate to a meeting or convention at the Resort. Transient room nights are often booked 24 hours or less from the date of stay, while group room nights are typically booked no less than 120 days in advance of the date of a stay, with larger groups typically booking 16 to 18 months in advance of a stay. Transient room nights are often booked as part of golf packages and Internet bookings, among others, but during the first quarter of 2005 a significant number of transient rooms were attributable to the consumption of golf packages at the Resort. Management believes that transient room nights were lower in the first quarter of 2006 than in the corresponding period in 2005, due primarily to the mild winter months experienced during 2006 in the northern states. Because the winter months were much warmer in the northern states during the first quarter of 2006 than in 2005, we believe the desire of the transient guest and more particularly the golf package guest, to “get away” was reduced. This, in turn, resulted in reduced transient business in the first quarter of 2006. Current booking patterns for 2006 continue to suggest that group business is returning to the Resort. Booked group and conference room nights at the Resort for the quarter ended March 31, 2006 have increased by approximately 1,964, or 9.3%, as compared to the same period last year.

The effect of the reduction in the occupied room nights during the first quarter of 2006 was offset by improved average room rates and ancillary spending patterns of the guests, specifically, increased golf package nights with their significantly higher food and beverage spending, coupled with increases in banquet sales. Total revenue for the Resort was greater during the three months ended March 31, 2006 than in the three months ended March 31, 2005. An overall increase in spending by the Resort’s guests, for rooms and food and beverage spending attributable to package nights, offset the reduction in gross revenue that resulted from the lower number of room nights in the first quarter of 2006 as compared to the first quarter of 2005. The average room rate increased from $157.66 in 2005 to $183.95 in 2006. Aggregate spending during the first quarter of 2006, per room night was, as compared to the same period in 2005, was $535.40 versus $462.14. The most significant increase in revenues at the Resort occurred in the Food & Beverage department. Revenues of that department increased by approximately $888,000, or 21%, for the three months ended March 31, 2006, as compared to the same period in 2005. Overall food and

beverage revenues increased as the food and beverage total covers (meals) increased by 15,692 or 11.0%. This aggregate increase in covers served was primarily attributed to the Resort’s banquets, catering and room service, with a combined increase of approximately 16,034 covers. Covers attributed to the Resort’s casual restaurants and pool service decreased by approximately 342. Golf revenue increased by approximately $423,000, primarily as a result of the utilization of the specific golf-marketing fund to promote the sale of golf packages throughout the eastern United States. As a result, golf package business increased by 801 rounds or 7.0% for the three months ended March 31, 2006 as compared to the three months ended March 31, 2005. In the aggregate, golf rounds were down by 676 while revenues were higher as a result of the capture of higher greens fees and ancillary spending in the pro shops. The net reduction in aggregate rounds resulted primarily from 2,221 fewer rounds played by the transient resort guest, while other player categories, including packages, experienced increases in round play in the aggregate of 1,545 rounds played. The number of total golf rounds played in the three months ended March 31, 2006 was 36,279 compared to 36,955 in the same period of 2005. Golf revenue does not necessarily increase or decrease exactly in proportion to occupied room nights because golf revenue also includes member dues and fees and day golf group fees, neither of which is directly related to occupied room nights. Increases in total revenue due to improved spending of the Resort’s guests in the first quarter or 2006 as compared to the first quarter of 2005 were offset by a decrease in Other Revenue of approximately $343,000, primarily as a result of the Resort no longer charging a resort fee.

We continue to monitor total operating expenses in an attempt to insure that the Resort manager controls expenses and that the expenses bear a direct correlation to the room nights, food and beverage covers and golf round demand. Aggregate total operating expenses do not generally increase or decrease on a one-to-one basis with total operating revenue because the Resort must carry a minimum fixed operating staff and other support expenses at all times. In those operating departments where the variable costs can best be managed, we manage these costs consistent with room, food and beverage and golf demand. Total Resort operating expenses, before depreciation and amortization and excluding the Rental Pool amortization in hotel operations, increased by approximately $1,215,000, or 9.9%, for the three month period ended March 31, 2006 as compared to the corresponding period in the prior year. This increase of 9.9% is primarily attributable to the increase in total operating revenue of approximately 9.9% during the three-month comparative period.

Depreciation and amortization expense, excluding the Rental Pool amortization included in hotel expenses, was approximately $491,000 and $798,000 for the three months ended March 31, 2006 and 2005, respectively. The net decrease in this expense is primarily related to certain intangible assets being fully amortized prior to the three months ended March 31, 2006.

Interest expense, net of interest income, was approximately $373,000 and $439,000 for the three months ended March 31, 2006 and 2005, respectively, and reflect amortization of the discount on the Rental Pool obligation, Westin Long-Term liability and the Troon Long-Term liability. The participating mortgage loan that was assumed by us from GHR was amended to adjust the outstanding balance to $39,240,000. That note is now non-interest bearing.

The net income for the three months ended March 31, 2006 was approximately $2,475,000, compared to a net income for the three months ended March 31, 2005 of approximately $1,785,000.

During the three months ended March 31, 2006, approximately $226,000 of the capital reserve funds were disbursed. Of those disbursed funds, $207,000 was used to pay lease payments on existing and additional equipment consisting of bellman vehicles, golf cart leases, golf course equipment leases, telephone equipment leases and cable leases and the balance was for various capital improvement projects and replacements throughout the Resort. During the three months ended March 31, 2005, approximately $319,000 of the capital reserve funds were disbursed to (i) pay lease payments on existing equipment consisting of bellman vehicles, golf cart leases, golf course equipment leases, telephone equipment leases and cable leases, (ii) replace carpet in the Edinburgh conference center, (iii) replace aging fuel tanks, (iv) repair the roof of the Highlands clubhouse and (v) repair to the driving range tents, nature walks, electrical systems and tennis center air conditioning.

Other Matters

Contractual Obligations, Contingent Liabilities and Commitments

The following table summarizes our contractual obligations at March 31, 2006, and the effect such obligations are expected to have on our liquidity and cash flow (or upon our successors in interest under the applicable contracts, if the contracts are not terminated) in future periods:

	Payments Due by Period (in thousands)
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
Master lease agreement with the condominium owners participating in the Rental Pool	$	6,854	$	1,435	$	3,739	$	1,662	$	18
Management agreements(1)	20,685		1,900		5,585		3,300		9,900
Troon supplemental fee	800		—		—		—		800
Mortgage Note payable to Golf Trust of America, L.P.	39,240		—		—		—		39,240
Operating and capital leases	1,689		530		1,159		—		—
Service agreements and other	2,639		1,056		1,528		55		—
Working capital advances from Golf Trust of America, L.P., net	2,976		—		2,976		—		—

Total of the Resort’s obligations	$	74,883	$	4,921	$	14,987	$	5,017	$	49,958

(1) If our management agreement with Westin is terminated prior to its expiration date of December 31, 2017, a minimum termination fee of $5,500 will be due at termination in lieu of fees otherwise payable to Westin pursuant to that management agreement.

Interest is reflected, as applicable, in the commitments and obligations listed above.

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations, Contingent Liabilities and Commitments” in our Form 10-K for the year ended December 31, 2005, filed on April 17, 2006, for a description of our contractual obligations.

Liquidity and Capital Resources

Our working capital position is approximately $629,000 as of March 31, 2006. We continue to experience seasonal fluctuations in our net working capital position. Seasonality impacts our liquidity because there is more available cash during the winter months, specifically in the first quarter, than in the late summer months when cash becomes very limited. We received intercompany advances from Golf Trust of America, L.P. to support working capital needs in the amounts of $2,000,000, $400,000 and $650,000 in July 2004, September 2005 and November 2005, respectively. The net proceeds of these loans have been fully expended by Westin to support operational expenses of the Resort. Generally, our only source of cash is from any profitable operations of the Resort. While the financial performance of the Resort is showing signs of recovery since the Company assumed title to the Resort on July 15, 2004, current projections provided by Westin indicate an operational cash flow shortfall by August 2006. Further, the Resort’s credit capacity is limited. Working capital needs may require us to seek a further intercompany advance from Golf Trust of America, L.P.; however, there can be no assurances as to the specific timing or amount of any such intercompany advance.

Item 3. Quantitative And Qualitative Disclosures About Market Risk

We do not have significant market risk with respect to foreign currency exchanges or other market rates. Our debt to Golf Trust of America, L.P. is non-interest bearing and, accordingly, fluctuations in interest rates are not expected to affect financial results.

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 Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management assesses the costs and benefits of such controls and procedures based upon the prevailing facts and circumstances, including management’s reasonable judgment of such facts. As we neither controlled nor managed the Resort prior to July 16, 2004, our disclosure controls and procedures with respect to the Resort and its employees are necessarily more limited than those we maintain with respect to our own corporate operations. At close of business on July 15, 2004, we took title to the Resort; however, despite the fact that our amended management agreement with Westin provides us with heightened control and access to information, we do not directly assemble the financial information for the Resort (although we have taken steps that we deem to be reasonable under the circumstances to seek to verify such financial information) and consequently, our disclosure controls and procedures with respect to the Resort, while strengthened, remain necessarily more limited than those we maintain with respect to our own corporate operations. Since taking title to the Resort, we have focused upon integrating operations at the Resort into our disclosure controls and procedures and internal control procedures. In particular, those controls and procedures have been updated to account for the challenges presented by the increased size and scope of our operations now that we own the Resort.

The integration of a new business of significant size and scope of operations increases the risk that conditions may have been introduced that we did not anticipate in our design of our systems of control. Any pre-existing deficiencies in the predecessor owner’s financial systems, processes and related internal controls increase the risk that the historical unaudited financial statements of the Resort’s operations and cash flows which the predecessor owner has provided to us may not be accurate. We have out of necessity placed a certain amount of reliance on the historical financial information and reports of the Resort’s predecessor owner for the periods prior to July 16, 2004, and continue to rely on the information provided by Westin as manager of the Resort.

As of March 31, 2006, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-15. With the assistance of Westin, our Chief Executive Officer and our Chief Financial Officer concluded that as of March 31, 2006 our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) required to be included in our Exchange Act reports. Except as described above, there have been no significant changes in our internal controls or in other factors which could significantly affect internal controls subsequent to the date we carried out our evaluation.

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 controls over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

Land Use Lawsuits

On March 10, 2005 in the Circuit Court of the Sixth Judicial Circuit, in and for Pinellas County, Florida, Civil Division, the Company filed a Motion to Intervene in the suit titled Innisbrook Condominium Association, Inc., C. Frank Wreath, Meredith P. Sauer, and Mark Banning, Plaintiffs vs. Pinellas County, Florida, Golf Host Resorts, Inc. and Innisbrook F LLC, Defendants, Case No. 043388CI-15. In this report, we refer to this matter as the “Initial Land Use Lawsuit.” The plaintiffs in the Initial Land Use Lawsuit have filed a multi-count complaint seeking injunctive and declaratory relief with respect to the land use and development rights of a tract of land known as Parcel F. Parcel F is a parcel of land located within the Resort. The plaintiffs allege that there are no remaining development units (residential units) available to be developed within the Resort property. On March 29, 2005, we filed a Motion to Intervene as a defendant in the Initial Land Use Lawsuit in order to protect our property, and our land use and development rights with respect to Parcel F and our property. A hearing on the Motion to Intervene was held on April 4, 2005, after which the court granted our Motion to Intervene. On April 5, 2005, we joined in the filing of a Motion to Dismiss and Motion to Strike three of the seven counts of the plaintiffs’ complaint. The court granted the Motion to Dismiss on April 26, 2005. On that same date, four individuals (Joseph E. Colwell, Marcia G. Colwell, Kirk E. Covert, Deborah A. Covert) and Autumn Woods Homeowner’s Association, Inc. moved to intervene in the Initial Land Use Lawsuit. The court has not ruled on that motion. On April 8, 2005, a separate suit was filed by James M. and Mary H. Luckey and Andrew J. and Aphrodite B. McAdams against Pinellas County, a political subdivision of the State of Florida, Golf Host Resorts, Inc., a foreign corporation and Bayfair Innisbrook, LLC, a Florida limited liability corporation. In this report we refer to this matter as the “Subsequent Land Use Lawsuit.” The Subsequent Land Use Lawsuit seeks injunctive and declaratory relief in six separate counts, all relating to the land use and development rights of Parcel F. This suit was consolidated with the Initial Land Use Lawsuit on May 3, 2005. After May 6, 2005 we have filed our Motion to Dismiss the Subsequent Land Use Lawsuit. The motion was heard by the court on May 31, 2005. Since that hearing, we have filed an Answer and Affirmative Defenses to both complaints that have been filed in the consolidated action. On August 3, 2005, a case management conference was held before the judge who is now presiding over this case. At that hearing, the court scheduled a hearing on the defense motions for summary judgment for August 30, 2005, and a trial starting on December 12, 2005. On August 30, 2005, the judge heard extensive argument on the defense motions for summary judgment and entered a number of rulings in the defendants’ favor. In summary, the court dismissed those claims in the Initial Land Use Lawsuit and the Subsequent Land Use Lawsuit which are founded upon the theory that the proposed development is inconsistent with the Pinellas Countywide Plan and Rules adopted pursuant to Chapter 73-594, Laws of Florida. The court further dismissed for lack of jurisdiction those claims of the plaintiffs’ in the Subsequent Land Use Lawsuit that are based on the theory that the proposed development is inconsistent with the Pinellas Comprehensive Plan. The court entered a similar ruling on certain counts of the Third Amended Complaint as to some, but not all, of the Plaintiffs in the Initial Land Use Lawsuit.

The defendants in the Initial Land Use Lawsuit also filed a Motion to Strike the plaintiffs’ Demand for Jury Trial. In the face of that motion, the plaintiffs dropped their jury trial demand and the court confirmed by order dated September 21, 2005 that this case would not be tried by a jury. The court then entered an order scheduling the remaining claims for non-jury trial during December 2005.

In addition, the plaintiffs in the Initial Land Use Lawsuit have filed a motion for summary judgment. The court set the hearing date for the summary judgment review for December 7, 2005.

As an intervenor in the Initial Land Use Lawsuit, we will seek to obtain a ruling from the court which preserves and protects our property, and our land use and development rights with respect to Parcel F and our property, in order to maximize the value of those rights as they relate both to Parcel F and the Resort in general. We refer to these two matters as the “Land Use Lawsuits.” See further discussion of the Land Use Lawsuits under the heading “Risk Factors” in Part I, Item 1A of this report.

From December 19 through December 23, 2005, the court tried these consolidated cases in a non-jury trial. At the conclusion of the evidentiary portion of the trial, the court deferred final argument until Friday, January 6, 2006. On that date, the court heard final arguments and rendered its decision. The court ruled in favor of all defendants and against all plaintiffs as to each count in both Land Use Lawsuits. On March 8, 2006, the court formally entered its final judgment on the record ruling in favor of the defendants on all counts and denying all claims asserted by the plaintiffs in both Land Use Lawsuits. On March 31, 2006, the plaintiffs in the consolidated cases filed a notice of appeal.

Property Tax Lawsuit

Item 1A. Risk Factors

In the event that the Resort does not provide sufficient cash flow to us, we may be forced to reduce capital expenditures and improvements at the Resort, diminishing the value of the Rental Pool units.

As the owner of the Resort, we will be responsible for any negative cash flow associated with the ownership and operation of the Resort. As a result of our assumption of these liabilities and our responsibility for any negative cash flow of the Resort, we may be exposed to liabilities and expenditures exceeding our expectations or ability to pay. In the event cash flow is insufficient to fund planned improvements, the ability of the participants in the Rental Pool to rent their units may decline. A decline in the rental rates that can be charged for the units or related vacancies resulting from our inability to make necessary capital expenditures may cause the value of the Rental Pool units, and the Resort, to decline.

We have been unsuccessful in our attempts to sell the Resort and the terms of a sale of the Resort, if any, remain uncertain.

We cannot guarantee that we will be able to sell the Resort on reasonable terms, if at all. Further, we cannot predict the amount of time that will be required to negotiate and close a sale of the Resort. In the event that GTA experiences liquidity constraints or other financial pressures due to the protracted negotiation of the sale of the Resort, GTA may be unwilling or unable to fund the Resort and the Rental Pool refurbishment. Even in the event that we successfully sell the Resort in the near term, we expect that the party who purchases the Resort will assume responsibility for the operational costs of the Resort and the Rental Pool. We cannot guarantee the level of funding and management attention that will be given to the Resort and the Rental Pool after we sell it. In the event that we, GTA and, if applicable, the Resort’s ultimate owner do not devote sufficient management resources and funding to the Resort and the Rental Pool, distributions to the Rental Pool participants could be substantially reduced.

The Resort’s performance may not provide adequate resources to fund the refurbishment reimbursement to the Rental Pool participants.

Pursuant to the former borrower’s arrangement with many of the persons who own condominium units at the Resort, the condominiums owned by these participating persons are placed in a securitized pool and rented as hotel rooms to guests of the Resort. We refer to this securitized pool of participating condominiums as the Rental Pool. In addition to the current Rental Pool agreement, the former owner of the Resort agreed with the Association that the former owner of the Resort would reimburse 50% of the refurbishment costs, plus accrued interest at 5% per annum on the unpaid balance of that portion of the unpaid refurbishment costs which we are required to reimburse. This amount will be reimbursed to participating condominium owners (or transferees of their condominium unit(s)) over the five-year period beginning in 2005. The reimbursement is contingent on the units remaining in the Rental Pool from the time of their refurbishment through 2009. If the unit does not remain in the Rental Pool during the reimbursement period from 2005 through 2009, the owner or successor owner forfeits any unpaid installments at the time the unit is removed from the Rental Pool.

Accordingly, maintaining condominium owner participation in the Rental Pool is very important to the continued economic success of the Resort. We assumed certain existing or modified financial obligations of the former borrower, including its responsibilities regarding the administration of the condominium unit Rental Pool, when we took ownership of the Resort pursuant to the Settlement Agreement. Also as part of the Settlement Agreement, we assumed GHR’s obligation to reimburse the refurbishment expenses paid by the condominium owners.

As owner of the Resort, we are responsible for any negative cash flow associated with the ownership and operation of the Resort. As a result of the assumption of these liabilities and our responsibility for any negative cash flow, we face the risk that our ultimate liabilities and expenditures might be greater than we expected. In that case, we may not have sufficient cash available for the payment of the refurbishment expenses relating to the Rental Pool units, or we may otherwise decide not to use our funds in this manner. If this occurs, a disagreement involving the funding for the Rental Pool may arise, and this disagreement could both divert our management’s attention from the operation of the Resort and prove costly to the parties to any such dispute.

In the event that we sell the Resort, we expect that we will no longer be responsible for the Rental Pool obligations, and that the party who acquires the Resort will determine the funding for the Rental Pool based upon its willingness and ability to pay these obligations. We cannot guarantee that the party who acquires the Resort will provide adequate funding for the Resort in general or for refurbishment expenses in particular.

The number of Rental Pool units may decline if current owners find alternative uses of the units that are more attractive than participating in the Rental Pool, thereby reducing the number of available Rental Pool units and diminishing the value of the remaining units.

Participants in the Rental Pool may decide that alternative uses of their condominium units are more attractive than participating in the Rental Pool. In particular, condominium owners may determine that it is more financially advantageous to rent their units to longer term tenants, or to live in their units rather than paying to live elsewhere and allowing their units to participate in the Rental Pool. Any such reduction in the number of participants in the Rental Pool may result in increased pro-rata costs and reduced revenues for the remaining Rental Pool participants. In particular, a decrease in the number of participants in the Rental Pool will result in higher per capita costs relating to fixed costs that are incurred in connection with the administration of the Rental Pool. In the event that the number of units in the Rental Pool declines below 575, our obligation to reimburse refurbishment expenses for the units will be abated until the number of units in the Rental Pool is restored to 575 or higher.

If we are not able to sell the Resort, obtain some form of financing or receive additional intercompany advances from our parent if we indeed experience the anticipated operating cash shortfall at the end of the summer of 2006, we may experience severe liquidity problems, not be able to meet the demands of our creditors and, ultimately become subject to bankruptcy proceedings.

Generally, the Company’s only source of cash is from profitable operations of the Resort. While the financial performance of the Resort has shown signs of recovery since the Company assumed title to the Resort on July 15, 2004, current projections provided by Westin indicate an operational cash flow shortfall by the end of the summer of 2006. Further, the Resort’s credit capacity is limited. If the Resort experiences the currently projected cash flow shortfall in 2006, we may be required to seek to provide additional capital to the Resort. In 2005, our parent funded $1,050,000 to address seasonal cash flow shortfalls. However, there are no assurances that additional intercompany advances will not be necessary prior to the consummation of a sale of the Resort. In the event that we are unable to sell the Resort, obtain some form of financing or receive additional intercompany advances from our parent, we may be unable to pay our obligations as they become due or upon demand.,We may experience liquidity problems and not be able to meet our financial obligations of our creditors. If we cannot meet our obligations to our creditors, we could ultimately become subject to bankruptcy proceedings.

Severe weather patterns experienced by Florida during 2004 and the southeastern portion of the United States during 2005 could result in depressed bookings, adversely affecting the Resort’s results of operations and reducing proceeds to the participants in the Rental Pool.

We expect that bookings at the Resort during the late summer and early fall of future years may be adversely affected as a result of a series of hurricanes that affected Florida during 2004 and the southeastern portion of the United States during 2005. In particular, the hurricanes that occurred during 2005 may have increased the awareness of potential guests, particularly those not residing in the southeastern portion of the United States, to the danger that hurricanes and tropical storms present. We expect that potential guests may be more reluctant to book rooms in regions subject to such weather patterns. In particular, it is possible that groups will choose alternative destinations for travel during the hurricane season. In the event that potential guests and groups choose alternative destinations as a result of these weather-related concerns, the Resort may experience lower bookings and reduced revenues, which in turn will result in reduced distributions to the Rental Pool participants.

Recent severe weather patterns could further intensify the seasonal nature of the results of the Resort.

The hotel industry is cyclical in nature. Our business has historically been weaker during the third quarter of each year. In the event that we suffer from reduced bookings during the third quarter as a result of hurricane-related concerns of potential guests, this effect could reduce the revenues to the Resort in the third quarter of each year, increasing the disparity between our results in the third quarter as compared to other quarters. This increased cyclicality could make it more difficult for us to project the results of the Resort, and may result in a lower than expected percentage of the Resort’s fixed costs being offset by revenue during the third quarter.

We are subject to all the operating risks common to the hotel industry which could adversely affect our results of operations.

Operating risks common to the Resort include:

•		changes in general economic conditions, including the timing and robustness of the apparent recovery in the United States from the recent economic downturn and the prospects for improved performance in other parts of the world;

•		the impact of war and terrorist activity (including threatened terrorist activity) and heightened travel security measures instituted in response thereto;

•		domestic and international political and geopolitical conditions;

•		decreases in the demand for transient rooms and related lodging services, including a reduction in business travel as a result of general economic conditions;

•		the impact of internet intermediaries on pricing and our increasing reliance on technology;

•		cyclical over-building in the hotel industry which increases the supply of hotel rooms;

•		changes in travel patterns;

•		changes in operating costs, including, but not limited to, energy, labor costs (including the impact of unionization), workers’ compensation and health-care related costs, insurance and unanticipated costs such as acts of nature and their consequences;

•		disputes with the managers of the Resort which may result in litigation;

•		the availability of capital to allow us to fund renovations and investments at the Resort; and

•		the financial condition of the airline industry and the impact on air travel.

General economic downturns, or an increase in labor or insurance costs, may negatively impact our results.

Moderate or severe economic downturns or adverse conditions may negatively affect the operations of the Resort. These conditions may be widespread or isolated to one or more geographic regions. A tightening of the labor markets in Florida may result in fewer and/or less qualified applicants for job openings at the Resort. Higher wages, related labor costs and the increasing cost trends in the insurance markets may negatively impact our results as these costs increase. A general economic downturn, or increase in expenditures on insurance and labor costs, would adversely impact the operations of the Resort, potentially reducing funding that we provide to the Rental Pool and reducing the distributions to the Rental Pool participants.

If we are unable to successfully compete for customers, it may adversely affect our operating results and reduce the proceeds to participants in the Rental Pool.

The hotel industry is highly competitive. The Resort competes for customers with other hotel and resort properties. Some of our competitors may have substantially greater marketing and financial resources than we do, and they may improve their facilities, reduce their prices, or expand or improve their marketing programs in ways that adversely affect the Resort and our operating results, and reduce the proceeds to participants in the Rental Pool.

Internet reservation channels may negatively impact our bookings and results of operations.

Internet travel intermediaries such as Travelocity.com®, Expedia.com® and Priceline.com® are attempting to commoditize hotel rooms by increasing the importance of price and general indicators of quality at the expense of brand or property-specific identification. These travel intermediaries hope that consumers will eventually develop brand loyalties to their reservations system rather than to lodging brands. Although we expect to derive most of our business from traditional channels, if the amount of sales made through internet intermediaries increases significantly, our business and profitability may be significantly harmed, and proceeds to participants in the Rental Pool may be reduced.

The Resort places significant reliance on technology.

The hospitality industry continues to demand the use of sophisticated technology and systems including technology utilized for property management, procurement, reservation systems, operation of customer loyalty programs, distribution and guest amenities. These technologies can be expected to require refinements and there is the risk that advanced new technologies will be introduced. There can be no assurance that as various systems and technologies become outdated or new technology is required we will be able to replace or introduce them as quickly as our competition or within budgeted costs for such technology. Further, there can be no assurance that we will achieve the benefits that may have been anticipated from any new technology or system.

The Resort is capital intensive, and may become uncompetitive in the event that sufficient financing is not available.

For the Resort to remain attractive and competitive, we must spend money periodically to keep the properties well maintained, modernized and refurbished. These expenditures result in an ongoing need for cash. To the extent we cannot fund expenditures from cash generated by the Resort’s operations, we must seek to obtain funds by borrowing or otherwise. We may be unable to find such financing on favorable terms, if at all. To the extent that we are unsuccessful in obtaining such financing, it could adversely impact the Resort’s results from operations and proceeds to the Rental Pool participants.

Our investment in the Resort is subject to numerous risks, which could adversely affect our income.

As a result of our ownership of the Resort, we are subject to the risks that generally relate to investments in real property. The investment returns available from equity investments in real estate such as the Resort depends in large part on the amount of income earned and capital appreciation generated by the Resort, reduced by the expenses incurred to operate it. In addition, a variety of other factors affect both income from the Resort and the Resort’s real estate value, including governmental regulations, real estate, insurance, zoning, tax and eminent domain laws, interest rate levels and the availability of financing. When interest rates increase, the cost of developing, expanding or renovating real property increases and real property values may decrease as the number of potential buyers decreases. Any of these factors could have a material adverse impact on our results of operations or financial condition. If the Resort does not generate revenue sufficient to meet operating expenses, including debt service and capital expenditures, our income will be adversely affected.

Environmental regulations may increase the Resort’s costs, or limit our ability to develop, use or sell the Resort.

Environmental laws, ordinances and regulations of various federal, state, local and foreign governments impact our properties and could make us liable for the costs of removing or cleaning up hazardous or toxic substances on, under, or in property we currently own or operate. These laws could impose liability without regard to whether we knew of, or were responsible for, the presence of hazardous or toxic substances. The presence of hazardous or toxic substances, or the failure to properly clean up such substances when present, could jeopardize our ability to develop, use, sell or rent the real property or to borrow using the real property as collateral. If we arrange for the disposal or treatment of hazardous or toxic wastes, we could be liable for the costs of removing or cleaning up wastes at the disposal or treatment facility, even if we never owned or operated that facility. Other laws, ordinances and regulations could require us to manage, abate or remove lead or asbestos containing materials. Certain laws, ordinances and regulations, particularly those governing the management or preservation of wetlands, coastal zones and threatened or endangered species, could limit our ability to develop, use, or sell the Resort. Further, in the event that environmental obligations prevent us from developing, using or selling the Resort, distributions to the Rental Pool participants may be adversely affected either directly or as a result of reduced funding for the marketing and operation of the Rental Pool.

Although the courts have recently delivered favorable rulings in the Land Use Lawsuits to which we are a party, in the event that the ultimate rulings in these matters are unfavorable to us, the value of Parcel F and the Resort would be adversely effected.

As discussed in further detail under the heading “Legal Matters” in Part I, Item 3 of this report, on March 10, 2005 we filed a motion to intervene as a defendant in the lawsuit styled Innisbrook Condominium Association, Inc., C. Frank Wreath, Meredith P. Sauer, and Mark Banning (as plaintiffs) vs. Pinellas County, Florida, Golf Host Resorts, Inc. and Innisbrook F LLC (as defendants), Case No. 043388CI-15. This matter relates to a tract of land within the Resort known as Parcel F. In April 2005, a subsequent lawsuit relating to this matter was filed. We are also a defendant in this subsequent lawsuit. In this report, we refer to the March 2005 and the April 2005 lawsuits collectively as the Land Use Lawsuits.

On January 6, 2006, the court ruled in favor of all defendants and against all plaintiffs as to each count in both cases. While we believe that the January 6, 2006 ruling is a favorable result for us and for the other defendants, the plaintiffs in the Land Use Lawsuits filed an appeal of that ruling on March 31, 2006.

In the event that the plaintiffs convince a court to overturn the January 6, 2006 ruling, we could lose all or substantially all of our land use and development rights with respect to Parcel F. Such an unfavorable result could also cause us to experience reduced club memberships at the Resort and could adversely impact our ability to realize the benefits from

the proposed development of Parcel F. In addition, if the defendants do not ultimately prevail in the Land Use Lawsuits and a court subsequently applies a similar interpretation of our rights with respect to the remaining developable units at the Resort, our land use and development rights in those remaining units could be jeopardized, adversely effecting both our ability to develop the Resort and the value of the Rental Pool units.

So-called acts of God, terrorist activity and war could adversely affect the Resort.

The Resort’s financial and operating performance may be adversely affected by so-called acts of God, such as natural disasters, in Florida and in areas of the world from which we draw a large number of guests. Similarly, wars (including the potential for war), terrorist activity (including threats of terrorist activity), political unrest and other forms of civil strife and geopolitical uncertainty have caused in the past, and may cause in the future, our results to differ materially from anticipated results. The returns to participants in the Rental Pool could be adversely impacted in the event that acts of God, war or terrorism impact the Resort’s ability to attract guests.

Some potential losses of the Resort are not covered by insurance.

We carry comprehensive insurance coverage for general liability, property, business interruption and other risks with respect to the Resort. Our policies offer coverage features and insured limits that we believe are customary for similar types of property. Generally, our “all-risk” property policies provide that coverage is available on a per occurrence basis and that, for each occurrence, there is a limit as well as various sub-limits on the amount of insurance proceeds we can receive. In addition, there may be overall limits under the policies. Sub-limits exist for certain types of claims such as service interruption, abatement, expediting costs or landscaping replacement, and the dollar amounts of these sub-limits are significantly lower than the dollar amounts of the overall coverage limit.

In addition, there are also other risks such as war, certain forms of terrorism such as nuclear, biological or chemical terrorism, acts of God such as hurricanes and earthquakes and some environmental hazards that may be deemed to fall completely outside the general coverage limits of our policies or may either be uninsurable or too expensive to justify insuring against.

Our operations at the Resort are dependent upon outside managers, and if those managers are less successful than expected, the Resort’s results of operations and the proceeds available for distribution to the Rental Pool participants will be adversely affected, potentially in a material way.

Westin manages the daily operations of the Resort pursuant to our management agreement with Westin, and Troon manages the golf facilities at the Resort pursuant to related contractual commitments with Westin. In the event that these third party managers fail to perform under their respective contracts as expected, or in the event that they default on their obligations, the Resort’s results of operations and proceeds available for distribution to the Rental Pool participants will be adversely affected, potentially in a material way.

A sustained increase in energy costs may negatively impact the Resort’s results by increasing its energy-related costs and by discouraging potential guests from traveling and taking part in recreational activities.

During the past year, energy costs in the United States have increased substantially. Energy costs represent an increasingly larger percentage of the costs of the Resort, and we expect energy costs to increase in both absolute and relative terms in future periods. In addition, we expect that higher energy costs will negatively affect the Resort by discouraging travel and recreational activities. In particular, potential guests of the Resort are less likely to travel as they bear the affects of higher energy costs as either higher airline fares or in an increased cost per gallon of gasoline. In addition, higher energy costs may reduce the disposable income of potential guests, making them less likely to spend money for travel and recreational activities. As a result of these factors, a sustained increase in energy costs may negatively impact the Resort’s results by increasing its energy-related costs and by discouraging traveling and taking part in recreational activities.

Risk factors relating to GTA and GTA’s operating partnership

Our parent is a subsidiary of GTA’s operating partnership. GTA is a public reporting company under the Exchange Act. Due to our relationship with GTA, including our dependence upon GTA, its operating partnership or its subsidiaries for funding that we may require, we believe that its risk factors are relevant to our sole member and to the participants in the Rental Pool. You should note that certain of the information contained in GTA’s risk factors from GTA’s Form 10-Q for the quarter ended March 31, 2006, which are filed as Exhibit 99.1 hereto, particularly those specific to GTA’s liquidating distributions, are not relevant to you unless you are a holder of GTA’s common stock; however, such risk factors are informative in that they may indicate certain factors or events that may impact GTA and reduce GTA’s willingness or ability to provide funding to the Resort and the Rental Pool units.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

EXHIBIT INDEX

Exhibit No.		Description
3.1		Articles of Organization of GTA-IB, LLC(1)
3.2		Amended and Restated Operating Agreement of GTA-IB, LLC(1)
10.1		Settlement Agreement dated July 15, 2004 by and among Golf Trust of America, L.P., GTA-IB, LLC, Golf Host Resorts, Inc., Golf Hosts, Inc., Golf Host Management, Inc., Golf Host Condominium, Inc. and Golf Host Condominium, LLC(2)
10.2		Defense and Escrow Agreement dated July 15, 2004 by and among Golf Host Resorts, Inc., GTA-IB, LLC, Golf Trust of America, L.P., Golf Trust of America, Inc. and Chicago Title Insurance Company(2)
10.3		Operational Benefits Agreement dated July 15, 2004 by and among Golf Host Resorts, Inc., Golf Hosts, Inc., GTA-IB, LLC, and Golf Trust of America, L.P.(2)
10.4		Management Agreement dated July 15, 2004 by and between Westin Management Company South and GTA-IB, LLC(2)
10.5		Assignment, Consent, Subordination and Nondisturbance Agreement dated July 15, 2004 by and among GTA-IB, LLC, Golf Trust of America, L.P. and Westin Management Company South(2)
10.6		Facility Management Agreement dated July 15, 2004 by and between Troon Golf L.L.C. and Westin Management Company South(2)
10.7		Loan Agreement dated July 15, 2004 by and between Golf Trust of America, L.P. and Elk Funding, L.L.C. and related Notes A and B(2)
10.8.1		Parcel F Development Agreement dated March 29, 2004 by and among Golf Hosts Resorts, Inc., Golf Trust of America, L.P. and Parcel F, LLC, formerly known as Innisbrook F, LLC, formerly known as Bayfair Innisbrook, L.L.C.(2)
10.8.2		First Amendment to Parcel F Development Agreement by and among Golf Hosts Resorts, Inc., Golf Trust of America, L.P. and Parcel F, LLC (formerly known as Innisbrook F, LLC)(3)
10.8.3		Second Amendment to Parcel F Development Agreement by and among Golf Hosts Resorts, LLC (formerly known as Golf Host Resorts, Inc.), Golf Trust of America, L.P., GTA-IB, LLC and Parcel F, LLC (formerly known as Innisbrook F, LLC)(3)
10.9		Amendment to Loan Agreement between GTA-IB, LLC and Golf Trust of America, L.P.(1)
10.10		Loan Agreement dated June 20, 1997 between Golf Host Resorts, Inc. and Golf Trust of America, L.P.(1)
10.11		Promissory Note issued by GTA-IB, LLC to Golf Trust of America, L.P.(1)
10.12	*	Asset Purchase Agreement by and between Golf Trust of America, Inc., Golf Trust of America, L.P., GTA-IB, LLC, GTA-IB Golf Resort, LLC, GTA-IB Condominium, LLC, GTA-IB Management, LLC and CMI Financial Network, LLC dated October 27, 2005
31.1	**	Certification of the Registrant’s President and Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
31.2	**	Certification of the Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	**	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	**	Risk Factors of Golf Trust of America, Inc.

(1) Previously filed as Exhibits (same Exhibit numbers as referenced above) to our Quarterly Report on Form 10-Q, filed on November 23, 2004, and incorporated herein by reference.

(2) Previously filed as Exhibits 10.1 through 10.8 to our Current Report on Form 8-K, filed November 16, 2004, and incorporated herein by reference.

(3) Previously filed as Exhibits 10.8.2 and 10.8.3 to our Quarterly Report on Form 10-Q, filed August 15, 2005, and incorporated herein by reference.

* This agreement was terminated pursuant to its terms on November 23, 2005.

** Filed as an exhibit hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GTA-IB, LLC, registrant


Date: May 15, 2006	/s/ W. Bradley Blair, II
	W. Bradley Blair, II
	President and Chief Executive Officer

Date: May 15, 2006	/s/ Scott D. Peters
	Scott D. Peters
	Secretary and Chief Financial Officer

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. sophomore Good

Gta-ib Inactive 10-Q2006 Q1 Quarterly report

Content analysis

GTA-IB, LLC
CONDENSED COMBINED STATEMENTS OF CASH FLOWS FOR THE
THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(in thousands) (unaudited)

Going Concern

Gta-ib Inactive 10-Q2006 Q1 Quarterly report

Content analysis

GTA-IB, LLCCONDENSED COMBINED STATEMENTS OF CASH FLOWS FOR THETHREE MONTHS ENDED MARCH 31, 2006 AND 2005(in thousands) (unaudited)

Going Concern

GTA-IB, LLC
CONDENSED COMBINED STATEMENTS OF CASH FLOWS FOR THE
THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(in thousands) (unaudited)