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to
UNDER
THE SECURITIES ACT OF 1933
GWR OPERATING PARTNERSHIP, L.L.L.P. (Exact name of Registrant as specified in its charter) | GREAT WOLF FINANCE CORP. (Exact name of Registrant as specified in its charter) | |
DELAWARE (State or other jurisdiction of incorporation or organization) | DELAWARE (State or other jurisdiction of incorporation or organization) | |
80-0382558 (IRS Employer Identification No.) | 27-2140154 (IRS Employer Identification No.) |
South Tower, Suite 6000
Madison, WI 53717
(608) 662-4700
(Address, including zip code, and telephone number, including area code, of each Registrant’s principal executive offices)
525 Junction Road
South Tower, Suite 6000
Madison, WI 53717
(608) 662-4700
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York10019-6064
212-373-3000
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
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Primary | ||||||||
State or Other | Standard | IRS | ||||||
Jurisdiction of | Industrial | Employer | ||||||
Incorporation or | Classification | Identification | ||||||
Name | Organization | Code Number | Number | |||||
Great Wolf Resorts, Inc. | Delaware | 7011 | 51-0510250 | |||||
GWR OP General Partner, LLC | Delaware | 7011 | 51-0510250 | |||||
BHMH, LLC | Wisconsin | 7011 | 51-0510250 | |||||
Grapevine Beverage, Inc. | Texas | 7011 | 20-5759894 | |||||
Great Lakes Services, LLC | Delaware | 7011 | 27-1371313 | |||||
Great Wolf Lodge of Grapevine, LLC | Delaware | 7011 | 20-3533122 | |||||
Great Wolf Lodge of Kansas City, LLC | Delaware | 7011 | 39-2041982 | |||||
Great Wolf Lodge of PKI, LLC | Delaware | 7011 | 20-3201706 | |||||
Great Wolf Lodge of Traverse City, LLC | Delaware | 7011 | 39-2041983 | |||||
Great Wolf Lodge of Williamsburg, LLC | Delaware | 7011 | 20-0655682 | |||||
Great Wolf Williamsburg SPE, LLC | Delaware | 7011 | 26-1548790 | |||||
Mason Family Resorts, LLC | Delaware | 7011 | 20-3199977 | |||||
Scooops Tenant, LLC | Delaware | 7011 | 27-2598824 |
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
Great Wolf Finance Corp.
10.875% First Mortgage Notes due 2017 and Related Guarantees
• | We are offering to issue $230,000,000 of our 10.875% First Mortgage Notes due 2017 and certain related guarantees, whose issuance is registered under the Securities Act of 1933, which we refer to as the “exchange notes,” in exchange for a like aggregate principal amount of 10.875% First Mortgage Notes due 2017 and the related guarantees, which were issued on April 7, 2010 and which we refer to as the “initial notes.” The exchange notes will be issued under the existing indenture, which currently governs the initial notes, dated as of April 7, 2010. | |
• | The exchange notes will mature on April 1, 2017. We will pay interest on the exchange notes on each April 1 and October 1, beginning on October 1, 2010. | |
• | The exchange notes will be guaranteed on a senior secured basis by our subsidiaries that own three of our “Generation II” resorts, and those guarantees will be secured by first-priority mortgages on the resorts and first-priority security interests in the other assets of those guarantors, to the extent of the value of the collateral. | |
• | The exchange notes are guaranteed on a senior unsecured basis by Great Wolf Resorts, Inc., which owns 99% of the limited partnership interests in GWR Operating Partnership, L.L.L.P., which we refer to as the “Company,” and GWR OP General Partner, LLC, which owns the 1% general partnership interest in the Company, and certain of our domestic subsidiaries. The guarantees will be the senior obligations, ranking pari passu in right of payment with existing and future indebtedness, of those subsidiaries, Great Wolf Resorts, Inc., which we refer to as “Great Wolf Resorts,” and GWR OP General Partner, LLC. |
• | It will expire at 5:00 p.m., New York City time, on , 2010, unless we extend it. | |
• | If all the conditions to this exchange offer are satisfied, we will exchange all of our 10.875% First Mortgage Notes due 2017 issued on April 7, 2010, that are validly tendered and not withdrawn for new notes, which we refer to as the exchange notes. | |
• | You may withdraw your tender of initial notes at any time before the expiration of this exchange offer. | |
• | The exchange notes that we will issue you in exchange for your initial notes will be substantially identical to your initial notes except that, unlike your initial notes, the exchange notes will have no transfer restrictions or registration rights. | |
• | The exchange notes that we will issue you in exchange for your initial notes are new securities with no established market for trading. |
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• | they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments; | |
• | they do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt; | |
• | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and our EBITDA-based measures do not reflect any cash requirements for such replacements or improvements; | |
• | they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; | |
• | they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations; | |
• | they do not reflect limitations on our costs related to transferring earnings from our subsidiaries to us; and | |
• | other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. |
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Indoor | ||||||||||||||||||||
Ownership | Number of | Number of | Entertainment | |||||||||||||||||
Percentage | Opened | Guest Suites | Condo Units(1) | Area(2) | ||||||||||||||||
(Approx. sq. ft.) | ||||||||||||||||||||
Wisconsin Dells, WI(3) | — | 1997 | 308 | 77 | 102,000 | |||||||||||||||
Sandusky, OH(3) | — | 2001 | 271 | — | 41,000 | |||||||||||||||
Traverse City, MI | 100 | % | 2003 | 280 | — | 57,000 | ||||||||||||||
Kansas City, KS | 100 | % | 2003 | 281 | — | 57,000 | ||||||||||||||
Sheboygan, WI | 100 | % | 2004 | 182 | 64 | 54,000 | ||||||||||||||
Williamsburg, VA(4) | 100 | % | 2005 | 405 | — | 87,000 | ||||||||||||||
Pocono Mountains, PA(4) | 100 | % | 2005 | 401 | — | 101,000 | ||||||||||||||
Niagara Falls, ONT(5) | — | 2006 | 406 | — | 104,000 | |||||||||||||||
Mason, OH(4) | 100 | % | 2006 | 401 | — | 105,000 | ||||||||||||||
Grapevine, TX(4) | 100 | % | 2007 | 605 | — | 110,000 | ||||||||||||||
Grand Mound, WA(6) | 49 | % | 2008 | 398 | — | 74,000 | ||||||||||||||
Concord, NC(4) | 100 | % | 2009 | 402 | — | 97,000 |
(1) | Condominium units are individually owned by third parties and are managed by us. | |
(2) | Our indoor entertainment areas generally include our indoor waterpark, game arcade, children’s activity room, family tech center, MagiQuest® (an interactive game attraction) and fitness room, as well as our spa in the resorts that have such amenities. | |
(3) | These properties are owned by CNL Lifestyle Properties, Inc. (“CNL”), a real estate investment trust focused on leisure and lifestyle properties. Prior to August 2009, these properties were owned by a joint venture between CNL and us. In August 2009 we sold our 30.26% joint venture interest to CNL for $6.0 million. We currently manage both properties and license the Great Wolf Lodge brand to these resorts. | |
(4) | Five of our properties (Great Wolf Lodge resorts in Williamsburg, VA; Pocono Mountains, PA; Mason, OH; Grapevine, TX and Concord, NC) each had a book value of fixed assets equal to ten percent or more of our total assets as of June 30, 2010 and each of those five properties had total revenues equal to ten percent or more of our total revenues for the six moths ended June 30, 2010. |
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(5) | An affiliate of Ripley Entertainment, Inc. (“Ripley”), our licensee, owns this resort. We have granted Ripley a license to use the Great Wolf Lodge name for this resort through April 2016. We managed the resort on behalf of Ripley through April 2009. | |
(6) | This property is owned by a joint venture. The Confederated Tribes of the Chehalis Reservation (“Chehalis”) owns a 51% interest in the joint venture, and we own a 49% interest. We manage the property and license the Great Wolf Lodge brand to the joint venture under long-term agreements through April 2057, subject to earlier termination in certain situations. The joint venture leases the land for the resort from the United States Department of the Interior, which is trustee for Chehalis. |
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• | Leveraging Our Competitive Advantages and Increasing Domestic Geographic Diversification through a Licensing-Based Business Model and Joint Venture Investments in Target Markets. We are seeking to grow our business and diversify our domestic geographic brand footprint in a capital-efficient manner primarily through a licensing-based business model. This business model is designed to further exploit our competitive advantages of being the first-mover in the indoor waterpark resort business, our strong brand equity and our waterpark resort management expertise. We seek opportunities to earn fees through licensing our brand and managing new resorts that are constructed and developed primarily by third-party owners and may also make minority investments in joint ventures that own licensed resorts in order to share in any equity appreciation and profits of those resorts. Our proposed transactions to license and manage new resorts near the Galleria at Pittsburgh Mills in Tarentum, Pennsylvania and in Garden Grove, California, are examples of typical transactions under this strategy. We expect this business model to allow us to deploy our capital resources more efficiently, reduce our overall leverage |
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and diversify our operations geographically, since we will not be fully responsible for the construction and ownership of the licensed resorts, and will generally not be required to incur associated mortgage or construction debt. In addition, this business model is designed to allow us to more quickly expand domestically, reducing our sensitivity to economic conditions affecting any single region. |
• | Expanding Our Brand Footprint Internationally. We also plan to use our licensing-based business model to efficiently expand our business internationally. Similar to our arrangement with Ripley’s in Niagara Falls, Ontario, we seek to enter into licenseand/or management agreements with reputable companies that have local market knowledge in order to increase revenues and expand the international footprint of our Great Wolf Lodge brand. We may also seek to make strategic minority joint venture investments in the licensed resorts in order to share in the profits and equity appreciation of the resorts. We believe this model is the most efficient strategy for international expansion, since it enables us to leverage the local expertise of our joint venture partners while minimizing our capital investment. | |
• | Selective Sales of Ownership Interests/Recycling of Capital. We will selectively consider opportunities to sell partial or whole interests in one or more of our owned and operated properties, as we did in our CNL joint venture. We intend to continue to manageand/or license our Great Wolf Lodge branded resorts, and we will consider transactions that allow us to maintain our management/licensing agreement at a resort while realizing value through our selective sales. In those situations, we expect to recycle capital generated by such transactions for investment in future growth opportunities. | |
• | Expanding and Enhancing Existing Resorts. We will continue to focus on growth opportunities at our existing resorts by adding revenue-enhancing features that drive ancillary spending and that we believe will meet our return on investment requirement, including non-water based attractions. We also intend to continue to evaluate incremental revenue-generating opportunities, such as expanding the number of rooms at certain of our resorts. | |
• | Continuing to Innovate. We intend to leverage our in-house expertise, in conjunction with the knowledge and experience of our third-party suppliers and designers, to develop and implement the latest innovations in family entertainment activities and amenities, including waterpark attractions. We have received numerous industry awards for our guests’ experiences, our operations, innovative development, sales and marketing initiatives and materials and employee retention. We are currently exploring several new concepts that, we believe, will allow us to generate additional revenue without requiring significant capital investment. Among these concepts is an adaptive re-use model, pursuant to which we would license the right to use entertainment features currently used in Great Wolf resorts to existing, full-service hotels, featuring family-oriented activities. While these concepts are still in the initial stages of development, we are seeking to innovatively extend our brand and to take these concepts to market. | |
• | Maximizing Total Resort Revenues. We will continue to employ aggressive yield management techniques and sales and marketing efforts to maximize room revenues at both our owned and managed resorts. During off-peak times (generally in May and September, and during the middle of weeks when schools are in session), we will seek to maintain higher occupancy by holding special events and targeting group sales and conferences. We will also seek to maximize otheron-site revenue, such as food and beverage, entertainment and merchandise revenue through themed restaurants, ice cream shops, snack shops, adult and kids spas, gift shops, game arcades, MagiQuest, mini-golf and teen-themed areas. We have also entered into a number of co-marketing agreements with strategic partners and expect to enter into additional co-marketing agreements in the future in order to increase other revenue. | |
• | Minimizing Total Resort Costs. We seek to reduce operating costs by leveraging our purchasing power with respect to operating supplies, food and beverage, insurance and employee benefits. By centralizing certain of our services, we also seek to reduce ourper-unit costs, while increasing our control over those services in order to deliver a greater quality of service to our customers. Our centralized reservations system is scalable and, together with our web-based reservations system, enables us to |
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efficiently handle high reservation volumes and which we expect to require limited incremental costs over the next several years as we increase our portfolio of resorts. |
• | Building Upon Our Existing Brand Awareness and Loyalty. Our Great Wolf Lodge brand is recognizable by our customers because of our distinctive and easily identifiable theming, from our signature treehouse waterfort, to our mascots and distinctive logos and merchandise. We believe we have fostered strong customer and brand loyalty, which is evidenced by our high levels of repeat and referral guests. We will continue to focus on ensuring that each of our guests associates the Great Wolf Lodge brand with a memorable and consistent family vacation experience. |
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(1) | Issuer of $80.5 million of junior subordinated notes due 2017 and 2035 as of June 30, 2010 (which provide payments with respect to the $80.5 million of trust preferred securities issued by direct subsidiaries of Great Wolf Resorts, Inc.). Obligor on $0.1 million of other indebtedness as of June 30, 2010. Guarantor with respect to the $78.6 million construction loan due 2012, which is secured by the Concord resort (see note (4), below). | |
(2) | Obligor on a mortgage loan due 2015, which is secured by the Traverse City and Kansas City resorts ($68.0 million outstanding as of June 30, 2010). Is not a guarantor of the notes. Subject to a lock-box cash management arrangement, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity Capital Resources.” |
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(3) | Obligor on a mortgage loan due 2017, which is secured by the Pocono Mountains resort ($94.9 million outstanding as of June 30, 2010). Is not a guarantor of the notes. | |
(4) | Obligor on a construction loan due 2012, which is secured by the Concord resort ($78.6 million outstanding as of June 30, 2010). Is not a guarantor of the notes. | |
(5) | Obligor on City of Sheboygan bonds due 2028 payable in the form of minimum room tax payments from the Sheboygan resort ($8.6 million of liabilities recorded as of June 30, 2010). Obligor on a City of Sheboygan loan due 2018, payable in the form of minimum real and personal property tax payments from the Sheboygan resort ($3.2 million of liabilities recorded as of June 30, 2010). Is not a guarantor of the notes. | |
(6) | Co-Issuer of the notes. | |
(7) | Guarantor of the notes. The guarantee of each relevant entity is secured by a first mortgage on the resort owned by such entity, along with a first-priority security interest in other assets held by such entity, subject to certain exceptions. See “Description of Notes — Security.” | |
(8) | Guarantor of the notes on a senior unsecured basis. | |
(9) | Guarantor of the notes on a senior unsecured basis. Great Lakes Services, LLC (“Great Lakes Services”) is the holder of substantially all of our intellectual property, including our trade names, as well as substantially all of our currently outstanding management and licensing agreements. It is also a guarantor with respect to any shortfalls on the minimum payments under the Sheboygan bonds and the Sheboygan loan (see Note (5)). | |
(10) | Is not a guarantor of the notes. | |
(11) | Is not a guarantor of the notes. Obligor on a mortgage loan due August 2012, which is secured by the Grand Mound resort ($99.6 million outstanding as of June 30, 2010). |
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Exchange Offer | We will issue our exchange notes and certain related guarantees in exchange for a like aggregate principal amount of our initial notes and the related guarantees. | |
Expiration Date | This exchange offer will expire at 5:00 p.m., New York City time, on , 2010, unless we decide to extend it. | |
Conditions to the Exchange Offer | We will complete this exchange offer only if: | |
• there is no change in the laws and regulations which would impair our ability to proceed with this exchange offer, | ||
• there is no change in the current interpretation of the staff of the Commission which permits resales of the exchange notes, | ||
• there is no stop order issued by the Commission which would suspend the effectiveness of the registration statement which includes this prospectus or the qualification of the exchange notes under the Trust Indenture Act of 1939, | ||
• there is no litigation or threatened litigation which would impair our ability to proceed with this exchange offer, and | ||
• we obtain all the governmental approvals we deem necessary to complete this exchange offer. | ||
Please refer to the section in this prospectus entitled “The Exchange Offer — Conditions to the Exchange Offer.” | ||
Procedures for Tendering Initial Notes | To participate in this exchange offer, you must complete, sign and date the letter of transmittal or its facsimile and transmit it, together with your initial notes to be exchanged and all other documents required by the letter of transmittal, to U.S. Bank National Association, as exchange agent, at its address indicated under “The Exchange Offer — Exchange Agent.” In the alternative, you can tender your initial notes by book-entry delivery following the procedures described in this prospectus. For more information on tendering your notes, please refer to the section in this prospectus entitled “The Exchange Offer — Procedures for Tendering Initial Notes.” | |
Special Procedures for Beneficial Owners | If you are a beneficial owner of initial notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your initial notes in the exchange offer, you should contact the registered holder promptly and instruct that person to tender on your behalf. | |
Guaranteed Delivery Procedures | If you wish to tender your initial notes and you cannot get the required documents to the exchange agent on time, you may tender your notes by using the guaranteed delivery procedures described under the section of this prospectus entitled “The Exchange |
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Offer — Procedures for Tendering Initial Notes — Guaranteed Delivery Procedure.” | ||
Withdrawal Rights | You may withdraw the tender of your initial notes at any time before 5:00 p.m., New York City time, on the expiration date of the exchange offer. To withdraw, you must send a written or facsimile transmission notice of withdrawal to the exchange agent at its address indicated under “The Exchange Offer — Exchange Agent” before 5:00 p.m., New York City time, on the expiration date of the exchange offer. | |
Acceptance of Initial Notes and Delivery of Exchange Notes | If all the conditions to the completion of this exchange offer are satisfied, we will accept any and all initial notes that are properly tendered in this exchange offer on or before 5:00 p.m., New York City time, on the expiration date. We will return any initial note that we do not accept for exchange to you without expense promptly after the expiration date. We will deliver the exchange notes to you promptly after the expiration date and acceptance of your initial notes for exchange. Please refer to the section in this prospectus entitled “The Exchange Offer — Acceptance of Initial Notes for Exchange; Delivery of Exchange Notes.” | |
Federal Income Tax Considerations Relating to the Exchange Offer | Exchanging your initial notes for exchange notes will not be a taxable event to you for United States federal income tax purposes. Please refer to the section of this prospectus entitled “United States Federal Income Tax Considerations.” | |
Exchange Agent | U.S. Bank National Association is serving as exchange agent in the exchange offer. | |
Fees and Expenses | We will pay all expenses related to this exchange offer. Please refer to the section of this prospectus entitled “The Exchange Offer — Fees and Expenses.” | |
Use of Proceeds | We will not receive any proceeds from the issuance of the exchange notes. We are making this exchange offer solely to satisfy certain of our obligations under our registration rights agreement entered into in connection with the offering of the initial notes. | |
Consequences to Holders Who Do Not Participate in the Exchange Offer | If you do not participate in this exchange offer: | |
• except as set forth in the next paragraph, you will not necessarily be able to require us to register your initial notes under the Securities Act, | ||
• you will not be able to resell, offer to resell or otherwise transfer your initial notes unless they are registered under the Securities Act or unless you resell, offer to resell or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act, and | ||
• the trading market for your initial notes will become more limited to the extent other holders of initial notes participate in the exchange offer. |
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You will not be able to require us to register your initial notes under the Securities Act unless: | ||
• the exchange offer is not permitted by applicable law or SEC policy; | ||
• the exchange offer is not consummated within 270 days after the closing date of the offering of initial notes; | ||
• you are prohibited by applicable law or SEC policy from participating in the exchange offer; | ||
• you are not eligible to participate in the exchange offer by law or SEC policy; | ||
• you may not resell the exchange notes you acquire in the exchange offer to the public without delivering a prospectus and that the prospectus contained in the exchange offer registration statement is not appropriate or available for such resales by you; or | ||
• you are a broker-dealer and hold initial notes acquired directly from us or one of our affiliates. | ||
In these cases, the registration rights agreement requires us to file a registration statement for a continuous offering in accordance with Rule 415 under the Securities Act for the benefit of the holders of the initial notes described in this paragraph. We do not currently anticipate that we will register under the Securities Act any notes that remain outstanding after completion of the exchange offer. | ||
Please refer to the section of this prospectus entitled “Risk Factors — Your failure to participate in the exchange offer will have adverse consequences.” | ||
Resales | It may be possible for you to resell the notes issued in the exchange offer without compliance with the registration and prospectus delivery provisions of the Securities Act, subject to the conditions described under “— Obligations of Broker-Dealers” below. | |
To tender your initial notes in this exchange offer and resell the exchange notes without compliance with the registration and prospectus delivery requirements of the Securities Act, you must make the following representations: | ||
• you are authorized to tender the initial notes and to acquire exchange notes, and that we will acquire good and unencumbered title to those initial notes, | ||
• the exchange notes acquired by you are being acquired in the ordinary course of business, | ||
• you have no arrangement or understanding with any person to participate in a distribution of the exchange notes and are not participating in, and do not intend to participate in, the distribution of such exchange notes, | ||
• you are not an “affiliate,” as defined in Rule 405 under the Securities Act, of ours, or you will comply with the registration and |
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prospectus delivery requirements of the Securities Act to the extent applicable, | ||
• if you are not a broker-dealer, you are not engaging in, and do not intend to engage in, a distribution of exchange notes, and | ||
• if you are a broker-dealer, initial notes to be exchanged were acquired by you as a result of market-making or other trading activities and you will deliver a prospectus in connection with any resale, offer to resell or other transfer of such exchange notes. | ||
Please refer to the sections of this prospectus entitled “The Exchange Offer — Procedure for Tendering Initial Notes — Proper Execution and Delivery of Letters of Transmittal,” “Risk Factors — Risks Relating to the Exchange Offer — Some persons who participate in the exchange offer must deliver a prospectus in connection with resales of the exchange notes” and “Plan of Distribution.” | ||
Obligations of Broker-Dealers | If you are a broker-dealer that receives exchange notes, you must acknowledge that you will deliver a prospectus in connection with any resales of the exchange notes. If you are a broker-dealer who acquired the initial notes as a result of market making or other trading activities, you may use the exchange offer prospectus as supplemented or amended, in connection with resales of the exchange notes. If you are a broker-dealer who acquired the initial notes directly from the issuers in the initial offering and not as a result of market making and trading activities, you must, in the absence of an exemption, comply with the registration and prospectus delivery requirements of the Securities Act in connection with resales of the exchange notes. |
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Issuers | GWR Operating Partnership, L.L.L.P. Great Wolf Finance Corp. | |
Exchange Notes | $230 million aggregate principal amount of 10.875% First Mortgage Notes due 2017. The forms and terms of the exchange notes are the same as the form and terms of the initial notes except that the issuance of the exchange notes is registered under the Securities Act, will not bear legends restricting their transfer and the exchange notes will not be entitled to registration rights under our registration rights agreement. The exchange notes will evidence the same debt as the initial notes, and both the initial notes and the exchange notes will be governed by the same indenture. | |
Maturity | April 1, 2017. | |
Interest Rate | 10.875% per year. | |
Interest Payment Dates | April 1 and October 1 of each year, beginning on October 1, 2010. Interest will accrue from the issue date of the exchange notes. | |
Subsidiary Guarantees | The exchange notes will be fully and unconditionally guaranteed on a senior basis, jointly and severally, by Great Wolf Resorts and GWR OP General Partner, LLC (the “Parent Guarantors”) and certain of our subsidiaries. | |
Security | The note guarantees from our subsidiaries that own the Grapevine, Mason and Williamsburg Generation II resorts, which we refer to as the secured guarantors, will be secured by mortgages on our Grapevine, Mason and Williamsburg Generation II resorts and by a perfected (to the extent perfection can be achieved by the filing of UCC financing statements) first priority security interest in the existing and future assets of such subsidiaries, subject to certain exceptions. | |
Only the note guarantees of the secured guarantors will be secured by the foregoing collateral. The exchange notes will not be secured by any of the assets of us, the Parent Guarantors or our subsidiaries. Furthermore, the exchange notes and the note guarantees are not secured by a pledge of any equity interests of the Company or any of our subsidiaries. The collateral securing the note guarantees will be pledged in favor of either the trustee or a collateral agent appointed under the indenture. | ||
Ranking | The exchange notes will be our senior obligations. As to right of payment, the exchange notes will rank (i) pari passuwith our existing and future senior debt, (ii) senior to our future subordinated debt and (iii) effectively junior to all existing and future liabilities of our subsidiaries that do not guarantee the notes and (iv) effectively junior to all of our future secured debt. | |
The note guarantees will be (i) senior obligations of each unsecured guarantor and (ii) senior secured obligations of each secured guarantor. The senior unsecured guarantees will rank (i) pari passuin |
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right of payment with all existing and future senior debt, (ii) senior in right of payment with any existing and future subordinated debt and (iii) effectively junior in right of payment with all existing and future secured debt of the applicable guarantors to the extent of the value of the assets securing such debt. The senior secured guarantees will rank (i) pari passuin right of payment with all existing and future senior debt, (ii) senior in right of payment with all existing and future subordinated debt and (iii) senior in right of payment with any unsecured senior debt of the applicable subsidiary guarantors to the extent of the value of the assets securing such debt. For additional information regarding the notes, see the “Description of Notes” section of the this prospectus. | ||
As of June 30, 2010, we have consolidated assets of $805.9 million and consolidated total liabilities of $611.3 million (based on the $230.0 million principal amount of the notes), and the non-guarantor subsidiaries would have had total assets of $529.9 million and total liabilities of $390.1 million. | ||
For the year ended December 31, 2009, we had: | ||
• consolidated total revenues of $264.0 million, and the non-guarantor subsidiaries had total revenues of $115.5 million; | ||
• consolidated total operating loss of $(24.5) million, and the non-guarantor subsidiaries had total operating loss of $(31.0) million; | ||
• consolidated net loss attributable to Great Wolf Resorts, Inc. of $(58.5) million, and the non-guarantor subsidiaries had total net loss of $(46.1) million; and | ||
• consolidated Adjusted EBITDA of $66.0 million, and the non-guarantor subsidiaries had Adjusted EBITDA of $25.7 million. | ||
For the six months ended June 30, 2010, we had: | ||
• consolidated total revenues of $139.1 million, and the non-guarantor subsidiaries had total revenues of $64.7 million; | ||
• consolidated total operating income of $0.2 million, and the non-guarantor subsidiaries had total operating income of $2.2 million; | ||
• consolidated net loss attributable to Great Wolf Resorts, Inc. of $(20.8) million, and the non-guarantor subsidiaries had total net loss of $(6.0) million; and | ||
• consolidated Adjusted EBITDA of $32.0 million, and the non-guarantor subsidiaries had Adjusted EBITDA of $14.9 million. | ||
For a reconciliation of Adjusted EBITDA of our non-guarantor subsidiaries to their operating income, see note (5) to the statement of operations of Great Wolf Resorts for the years ended December 31, 2009, 2008 and 2007 and six months ended June 30, 2010 and 2009, set forth under “Summary Consolidated Financial Data of Great Wolf Resorts.” | ||
Optional Redemption | At any time prior to April 1, 2014, we may redeem the exchange notes, in whole or in part, at a price equal to 100% of the principal amount of exchange notes, redeemed, plus a “make-whole” |
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premium as described under “Description of the Notes — Optional Redemption,” plus accrued and unpaid interest and Special Interest, if any, to the date of redemption. Commencing April 1, 2014, we may redeem the exchange notes, in whole or in part, at any time at a premium declining ratably to zero as described under “Description of Notes — Optional Redemption,” plus accrued and unpaid interest and Special Interest, if any, to the date of redemption. | ||
Optional Redemption after Equity Offerings | At any time prior to April 1, 2013, we may redeem up to 35% of the outstanding exchange notes at a redemption price of 110.875% of the principal amount, plus accrued and unpaid interest, with the net cash proceeds of one or more equity offerings by Great Wolf Resorts that are contributed to us;providedthat at least 50% of the aggregate principal amount of notes issued under the indenture remains outstanding immediately after the occurrence of such redemption and such redemption occurs within 60 days of the closing of the equity offering. | |
Change of Control Offer | If a change of control occurs, we must offer to repurchase the exchange notes at 101% of their principal amount, plus accrued and unpaid interest. We may not have sufficient funds available at the time of any change of control to effect the repurchase, if required. | |
Asset Sales and Events of Loss | If we or any of our restricted subsidiaries sell certain assets, we may be required to repurchase the exchange notes on the terms set forth in the “Description of Notes” section of this prospectus. | |
In addition, if we or any of our subsidiaries that own the Grapevine, Mason and Williamsburg Generation II resorts experience certain events of loss in respect of those Generation II resorts, we may be required to repurchase the exchange notes on the terms set forth in the “Description of Notes” section of this prospectus. | ||
Certain Indenture Provisions | The indenture governing the exchange notes contains covenants restricting our, our restricted subsidiaries’ and, for certain covenants, our Parent Guarantors’ ability to: | |
• pay dividends or distributions or repurchase equity; | ||
• incur additional debt; | ||
• make investments; | ||
• create liens on assets to secure debt; | ||
• merge or consolidate with another company; | ||
• transfer and sell assets; | ||
• enter into transactions with affiliates; | ||
• engage in other businesses; | ||
• issue disqualified stock; | ||
• create dividend and other payment restrictions affecting subsidiaries; and | ||
• designate restricted and unrestricted subsidiaries. |
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Use of Proceeds | We will not receive any proceeds from the issuance of the exchange notes in exchange for the outstanding initial notes. We are making this exchange offer solely to satisfy our obligations under the registration rights agreement entered into in connection with the offering of the initial notes. | |
Original Issue Discount | Because the initial notes were issued with original issue discount, the exchange notes should be treated as having been issued with original issue discount for U.S. federal income tax purposes. Thus, U.S. Holders (as defined in “Certain United States Federal Income Tax Considerations”) will be required to include amounts representing any such original issue discount in gross income on a constant yield basis for United States federal income tax purposes in advance of the receipt of cash payments to which such income is attributable. See “Certain United States Federal Income Tax Considerations.” | |
Governing Law | The laws of the State of New York. | |
Absence of a Public Market for the Exchange Notes | The exchange notes are new securities with no established market for them. We cannot assure you that a market for these exchange notes will develop or that this market will be liquid. Please refer to the section of this prospectus entitled “Risk Factors — Risks Relating to the Exchange Offer — There may be no active or liquid market for the exchange notes.” | |
Form of the Exchange Notes | The exchange notes will be represented by one or more permanent global securities in registered form deposited on behalf of The Depository Trust Company with U.S. Bank National Association, as custodian. You will not receive exchange notes in certificated form unless one of the events described in the section of this prospectus entitled “Description of Notes — Book Entry; Delivery and Form — Exchange of Book Entry Notes for Certificated Notes” occurs. Instead, beneficial interests in the exchange notes will be shown on, and transfers of these exchange notes will be effected only through, records maintained in book-entry form by The Depository Trust Company with respect to its participants. | |
Risk Factors | You should refer to the section entitled “Risk Factors,” beginning on page 23, for a discussion of certain risks involved in investing in the notes. |
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• | our subsidiary entity that provides resort development and management/licensing services; | |
• | our Traverse City, Kansas City, Sheboygan, Williamsburg, Pocono Mountains, Mason, Grapevine and Concord operating wholly-owned resorts; | |
• | our subsidiary that is the developer of experiential gaming products, less our noncontrolling interest, beginning in June 2010; and | |
• | our ownership interests in the Wisconsin Dells and Sandusky resorts through August 2009, when we sold our minority ownership interests in those resorts, and our equity interest in the Grand Mound resort in which we have an ownership interest but which we do not consolidate. |
• | the Company is not liable for any of the $80.5 million of junior subordinated notes outstanding as of June 30, 2010 which are issued by Great Wolf Resorts; | |
• | the Company’s interest expense for the years ended December 31, 2009, 2008 and 2007 and the six months ended June 30, 2010 and 2009 does not include $6.3 million, $6.3 million and $5.3 million and $3.2 million and $3.0 million, respectively, which represents Great Wolf Resorts’ interest payments on the junior subordinated notes; | |
• | the Company is not liable with respect to Great Wolf Resorts’ guarantee of the $78.6 million mortgage loan owed by our subsidiary that owns the Concord resort nor the environmental indemnity granted by Great Wolf Resorts pursuant to the Concord loan; | |
• | the Company is not liable for the non-recourse carve-out provisions and environmental indemnities provided by Great Wolf Resorts with respect to our Pocono Mountains resort nor the non-recourse carve-out provisions provided by Great Wolf Resorts with respect to our Wisconsin Dells and Sandusky resorts or the environmental indemnity provided by Great Wolf Resorts with respect to our Grand Mound (Chehalis) resort; and | |
• | various ordinary course expenses, franchise taxes, corporate overhead and director fees are incurred by Great Wolf Resorts and not by the Company. |
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Years Ended December 31, | Six Months Ended June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Statement of Operations: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Rooms | $ | 154,751 | $ | 143,395 | $ | 112,261 | $ | 81,248 | $ | 76,655 | ||||||||||
Food, beverage and other | 81,020 | 74,173 | 56,673 | 43,660 | 40,332 | |||||||||||||||
Management and other fees | 1,990 | 2,798 | 2,855 | 1,195 | 991 | |||||||||||||||
Management and other fees — affiliates | 4,973 | 5,346 | 4,314 | 1,980 | 2,434 | |||||||||||||||
242,734 | 225,712 | 176,103 | 128,083 | 120,412 | ||||||||||||||||
Other revenue from managed properties(1) | 21,298 | 19,826 | 11,477 | 11,024 | 10,520 | |||||||||||||||
Total revenues | 264,032 | 245,538 | 187,580 | 139,107 | 130,932 | |||||||||||||||
Net operating income (loss) | (24,463 | ) | (25,666 | ) | (2,883 | ) | 221 | (3,031 | ) | |||||||||||
Net loss | (58,476 | ) | (40,725 | ) | (10,033 | ) | (20,785 | ) | (11,351 | ) | ||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | $ | (58,476 | ) | $ | (40,725 | ) | $ | (9,581 | ) | $ | (20,825 | ) | $ | (11,351 | ) | |||||
Non-GAAP Financial Measures: | ||||||||||||||||||||
EBITDA(2)(4) | $ | 31,791 | $ | 18,181 | $ | 32,305 | $ | 31,899 | $ | 23,050 | ||||||||||
Adjusted EBITDA(3)(4) | 66,009 | 67,567 | 51,070 | 32,041 | 32,421 | |||||||||||||||
Cash Flows: | ||||||||||||||||||||
Net cash provided by operating activities | $ | 12,215 | $ | 33,534 | $ | 29,751 | $ | 18,270 | $ | 8,335 | ||||||||||
Net cash used in investing activities | (36,659 | ) | (144,612 | ) | (206,967 | ) | (2,607 | ) | (38,115 | ) | ||||||||||
Net cash provided by (used in) financing activities | 31,126 | 106,712 | 99,035 | (6,166 | ) | 38,584 | ||||||||||||||
Balance Sheet Data (end of period): | ||||||||||||||||||||
Total assets | $ | 805,744 | $ | 840,061 | $ | 770,805 | $ | 805,872 | $ | 805,744 | ||||||||||
Total debt | 550,071 | 507,051 | 396,302 | 553,467 | 550,071 | |||||||||||||||
Total liabilities | 590,988 | 568,121 | 460,412 | 611,279 | 590,988 | |||||||||||||||
Total equity | 214,756 | 271,940 | 310,393 | 194,593 | 214,756 |
(1) | Reflects reimbursement of payroll, benefits and costs related to the operations of properties managed by Great Wolf Resorts. | |
(2) | EBITDA is a non-GAAP performance measure. Great Wolf Resorts defines EBITDA as net income (loss) attributable to Great Wolf Resorts, Inc., adjusted to exclude the following items: | |
• interest expense, net of interest income, | ||
• income tax expense or benefit, and | ||
• depreciation and amortization. | ||
Our management uses EBITDA: (i) as a measurement of operating performance because it assists in comparing Great Wolf Resorts’ operating performance on a consistent basis by removing the impact of items directly resulting from Great Wolf Resorts’ asset base (primarily depreciation and amortization) from Great Wolf Resorts’ operating results; (ii) for planning purposes, including the preparation of Great Wolf Resorts’ annual operating budget; (iii) as a valuation measure for evaluating Great Wolf Resorts’ operating performance and its capacity to incur and service debt, fund capital expenditures and expand its business; and (iv) as one measure in determining the value of other acquisitions and dispositions. | ||
We believe that EBITDA is an operating performance measure, and not a liquidity measure, that provides investors and analysts with a measure of operating results unaffected by differences in capital structures, |
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capital investment cycles and ages of related assets among otherwise comparable companies. Great Wolf Resorts also presents EBITDA because it is used by some investors as a way to measure its ability to incur and service debt, make capital expenditures and meet working capital requirements. We believe EBITDA is useful to an investor in evaluating Great Wolf Resorts’ operating performance because: (i) a significant portion of Great Wolf Resorts’ assets consists of property and equipment that are depreciated over their remaining useful lives in accordance with U.S. GAAP; (ii) it is widely used in the hospitality and entertainment industries to measure operating performance without regard to items such as depreciation and amortization; and (iii) we believe it helps investors meaningfully evaluate and compare the results of Great Wolf Resorts’ operations from period to period by removing the impact of items directly resulting from its asset base (primarily depreciation and amortization) from Great Wolf Resorts’ operating results. EBITDA is a measure commonly used in our industry, and we present EBITDA to enhance your understanding of Great Wolf Resorts’ operating performance. We use EBITDA as one criterion for evaluating Great Wolf Resorts’ performance relative to that of our peers. | ||
See “Non-GAAP Financial Information” for more information regarding EBITDA, including a discussion of the limitations of using EBITDA as an analytic tool. | ||
(3) | Adjusted EBITDA is also a non-GAAP performance measure. Great Wolf Resorts defines Adjusted EBITDA as net income (loss) attributable to Great Wolf Resorts, Inc., adjusted to exclude the following items: | |
• interest expense, net of interest income, | ||
• income tax expense or benefit, | ||
• depreciation and amortization, | ||
• non-cash employee and director compensation, | ||
• costs associated with early extinguishment of debt or postponement of capital markets offerings, | ||
• opening costs of projects under development, | ||
• equity in earnings (loss) of unconsolidated related parties, | ||
• gain or loss on disposition of property or investments, | ||
• separation payments to senior executives, | ||
• environmental liability costs, | ||
• asset impairment charges, | ||
• acquisition related expenses, | ||
• debt extinguishment costs, | ||
• non-controlling interests, and | ||
• other appropriate items. | ||
Our management uses Adjusted EBITDA for purposes similar to those for which it uses EBITDA. In addition, our management uses Adjusted EBITDA to evaluate Great Wolf Resorts’ performance, and the compensation committee of Great Wolf Resorts’ board of directors determines the annual variable compensation for certain members of our management based in part on Adjusted EBITDA. | ||
We believe Adjusted EBITDA is useful to an investor in evaluating Great Wolf Resorts’ operating performance for the same reasons we believe EBITDA is useful and because it also eliminates a number of non-cash items and other items that do not reflect Great Wolf Resorts’ core operating performance on a consolidated basis, which allows investors to more easily compare Great Wolf Resorts’ performance over various reporting periods on a consistent basis. Although we believe that Adjusted EBITDA can make an evaluation of Great Wolf Resorts’ operating performance more consistent because it removes items that do not reflect its core operations, other companies in the hospitality industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to compare the performance of other companies to Great Wolf Resorts’ performance by using Adjusted EBITDA or similarly named non-GAAP measures that other companies may use. |
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See “Non-GAAP Financial Information” for more information regarding Adjusted EBITDA, including a discussion of the limitations of using Adjusted EBITDA as an analytic tool. | ||
(4) | The following tables reconcile net loss attributable to Great Wolf Resorts, Inc. to EBITDA and Adjusted EBITDA for the periods presented: |
Years Ended December 31, | Six Months Ended June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Net loss attributable to Great Wolf Resorts Inc. | $ | (58,476 | ) | $ | (40,725 | ) | $ | (9,581 | ) | $ | (20,825 | ) | $ | (11,351 | ) | |||||
Interest expense, net of interest income | 33,430 | 25,853 | 12,129 | 21,225 | 14,078 | |||||||||||||||
Income tax expense (benefit) | 459 | (13,028 | ) | (6,615 | ) | 369 | (7,523 | ) | ||||||||||||
Depreciation and amortization | 56,378 | 46,081 | 36,372 | 31,130 | 27,216 | |||||||||||||||
EBITDA | $ | 31,791 | $ | 18,181 | $ | 32,305 | $ | 31,899 | $ | 23,050 | ||||||||||
Opening costs for resorts under development(a) | 6,877 | 6,685 | 10,228 | 7 | 6,824 | |||||||||||||||
Non-cash employee and director compensation(b) | 1,139 | 222 | 5,080 | 1,061 | 469 | |||||||||||||||
Separation payments(c) | 467 | 1,258 | — | — | — | |||||||||||||||
Environmental liability costs(d) | 26 | 276 | 320 | (1,227 | ) | 32 | ||||||||||||||
Loss on disposition of property(e) | 255 | 317 | 1,286 | 19 | 191 | |||||||||||||||
Asset impairment loss(f) | 24,000 | — | — | — | — | |||||||||||||||
Impairment loss on investment in affiliates(g) | — | 18,777 | — | — | — | |||||||||||||||
Goodwill impairment(h) | — | 17,430 | — | — | — | |||||||||||||||
Gain on sale of investment(i) | (962 | ) | — | — | — | — | ||||||||||||||
Net loss attributable to noncontrolling interest | — | — | (764 | ) | 40 | — | ||||||||||||||
Equity in loss of unconsolidated affiliates | 2,416 | 4,421 | 2,615 | (23 | ) | 1,115 | ||||||||||||||
Adjusted EBITDA | $ | 66,009 | $ | 67,567 | $ | 51,070 | $ | 32,041 | $ | 32,421 | ||||||||||
(a) | Reflects expenses related to resorts under development or construction, including costs related to the opening of resorts or significant expansions of resorts. Expenses of $6,877 in 2009 primarily related to the development, construction and opening of the Concord resort and the expansion of the Grapevine resort. Expenses of $6,685 in 2008 primarily related to the development, construction and opening of the Grapevine, Grand Mound and Concord resorts. Expenses of $10,228 in 2007 primarily related to the development, construction and opening of the Mason and Grapevine resorts. | |
(b) | Reflects stock based compensation amounts for employees and directors. | |
(c) | Reflects severance payments made to named executive officers upon their termination of employment. | |
(d) | Reflects costs incurred at the Pocono Mountains resort related to remediation of wastewater discharges that were out of compliance with applicable permits and to prevent furtherout-of-compliance discharges. | |
(e) | Reflects losses on sales or disposition of fixed assets. | |
(f) | Represents a non-cash impairment charge recorded to decrease the carrying value of the Sheboygan resort to its estimated fair value. |
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(g) | Represents a non-cash impairment charge with respect to a 30.32% interest in the joint venture with CNL that owned the Wisconsin Dells and Sandusky resorts. | |
(h) | Represents a non-cash goodwill impairment charge related to the Kansas City and Mason resorts. | |
(i) | Reflects a gain recorded on the sale in August 2009 of the 30.26% interest in the joint venture with CNL. |
Adjusted EBITDA of our non-guarantor subsidiaries is also a non-GAAP performance measure. We define Adjusted EBITDA of our non-guarantor subsidiaries as net operating income (loss) of our non-guarantor subsidiaries, plus investment income of non-guarantor subsidiaries, adjusted to exclude (i) depreciation and amortization of our non-guarantor subsidiaries, (ii) opening costs for resorts of our non-guarantor subsidiaries, (iii) environmental liability costs of our non-guarantor subsidiaries, (iv) loss on disposition of property of our non-guarantor subsidiaries and (v) asset impairment loss of our non-guarantor subsidiaries. The following table reconciles net operating income of our non-guarantor subsidiaries to Adjusted EBITDA of our non-guarantor subsidiaries for the year ended December 31, 2009 and six months ended June 30, 2010: |
Year Ended | Six Months Ended | |||||||
December 31, 2009 | June 30, 2010 | |||||||
(Unaudited) | ||||||||
Net operating (loss) income of non-guarantor subsidiaries | $ | (31,024 | ) | $ | 2,175 | |||
Investment income of non-guarantor subsidiaries | 1,330 | 565 | ||||||
Depreciation and amortization of non-guarantor subsidiaries | 26,352 | 13,122 | ||||||
Opening costs for projects under development of non-guarantor subsidiaries | 4,976 | 7 | ||||||
Environmental liability costs of non-guarantor subsidiaries | 26 | (1,227 | ) | |||||
Acquisition-related expenses | — | 265 | ||||||
Loss on disposition of property of non-guarantor subsidiaries | 64 | 9 | ||||||
Asset impairment loss of non-guarantor subsidiaries | 24,000 | — | ||||||
Adjusted EBITDA of non-guarantor subsidiaries | $ | 25,724 | $ | 14,916 | ||||
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• | approximately $230.0 million principal amount of notes due April 2017; | |
• | approximately $68.0 million of mortgage loan debt due January 2015 that is secured by our Traverse City and Kansas City resorts; | |
• | approximately $94.9 million of mortgage loan debt due December 2016 that is secured by our Pocono Mountains resort; | |
• | approximately $78.6 million of mortgage loan debt due April 2012 that is secured by our Concord resort; and | |
• | approximately $11.8 million in other debt. |
• | make it more difficult for us to satisfy our obligations with respect to the notes; | |
• | limit our ability to obtain additional financing for funding our growth strategy, capital expenditures, acquisitions, working capital or other purposes, or require us to agree to additional restrictions and limitations on our business operations and capital structure to obtain additional financing; | |
• | limit our ability to refinance our existing debt; | |
• | require us to dedicate a substantial portion of our operating cash flow to service our debt, thereby reducing funds available for our growth strategy, capital expenditures, acquisitions, working capital and other purposes; | |
• | increase our vulnerability to adverse economic, regulatory and industry conditions and to interest rate fluctuations; | |
• | limit our flexibility in planning for, or responding to, changing business and economic conditions, including reacting to the current global economic recession; | |
• | place us at a competitive disadvantage relative to our competitors with less indebtedness; and | |
• | subject us to financial and other restrictive covenants, and our failure to comply with these covenants could result in an event of default, which, if not cured or waived, could result in the acceleration of our indebtedness. |
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• | consolidated total revenues of $264.0 million, and the non-guarantor subsidiaries had total revenues of $115.5 million; | |
• | consolidated total operating loss of $(24.5) million, and the non-guarantor subsidiaries had total operating loss of $(31.0) million; | |
• | consolidated net loss attributable to Great Wolf Resorts, Inc. of $(58.5) million, and the non-guarantor subsidiaries had total net loss of $(46.1) million; and | |
• | consolidated Adjusted EBITDA of $66.0 million, and the non-guarantor subsidiaries had Adjusted EBITDA of $25.7 million. |
• | consolidated total revenues of $139.1 million, and the non-guarantor subsidiaries had total revenues of $64.7 million; | |
• | consolidated total operating income of $0.2 million, an the non-guarantor subsidiaries had total operating income of $2.2 million; | |
• | consolidated net loss attributable to Great Wolf Resorts, Inc. of $(20.8) million, and the non-guarantor subsidiaries had total net loss of $(6.0) million; and | |
• | consolidated Adjusted EBITDA of $32.0 million, and the non-guarantor subsidiaries had Adjusted EBITDA of $14.9 million. |
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• | a non-recourse carve-out guarantee and environmental indemnity with respect to the loan secured by our Kansas City and Traverse City resort, which loan had an outstanding principal balance at June 30, 2010 of $68.0 million; | |
• | a non-recourse carve-out guarantee and environmental indemnity with respect to the loans secured by our Pocono Mountains resort, which loan had an outstanding principal balance at June 30, 2010 of $94.9 million; | |
• | a non-recourse carve-out guarantee with respect to 30% of the loan secured by the Wisconsin Dells and Sandusky resorts owned by a subsidiary of CNL (in which we formerly owned a 30.26% joint venture interest, which was sold to CNL in August 2009), which loan had an outstanding principal balance of $62.8 million at August 6, 2009, the day on which we sold our interest in the Wisconsin Dells and Sandusky resorts to CNL; | |
• | an environmental indemnity with respect to the loans secured by the Concord and Grand Mound resorts, which loans had outstanding principal balances at June 30, 2010 of $78.6 million and $99.6 million, respectively. |
• | received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee; and | |
• | was insolvent or rendered insolvent by reason of such incurrence; or |
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• | was engaged in a business or transaction for which the guarantor’s remaining assets constituted unreasonably small capital; or | |
• | intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature. |
• | the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets; or | |
• | if the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or | |
• | it could not pay its debts as they become due. |
• | the holder of the notes engaged in some type of inequitable conduct; | |
• | such inequitable conduct resulted in injury to our other creditors or conferred an unfair advantage upon the holder of the notes; and | |
• | equitable subordination is not inconsistent with federal bankruptcy laws. |
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• | incur additional indebtedness; | |
• | make any restricted payments, such as dividends or distributions on, or redeem or repurchase, capital stock; | |
• | prepay, redeem or repurchase specified indebtedness; | |
• | merge, consolidate or sell assets or enter into other business combination transactions; | |
• | make acquisitions, capital expenditure investments or other investments; | |
• | enter into transactions with affiliates; | |
• | incur certain liens; | |
• | use proceeds from sale of assets; |
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• | permit limitations on the ability of our subsidiaries to make payments to us and our restricted subsidiaries; | |
• | impair the collateral; and | |
• | change our business. |
• | the distribution of cash or the payment of dividends by our subsidiaries to us; | |
• | incurring or guaranteeing additional indebtedness; | |
• | transferring or selling assets currently held by us; | |
• | transferring ownership interests in certain of our subsidiaries; and | |
• | reducing our tangible net worth below specified levels. |
• | general capital market conditions; | |
• | capital providers’ perception of our growth potential and growth potential in the real estate sector in general; | |
• | our then-current debt levels; | |
• | our then-current and expected future earnings; | |
• | our cash flow; and | |
• | the market price per share of our common stock. |
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• | the original issue price for the notes; and | |
• | that portion of the original issue discount that does not constitute “unmatured interest” for purposes of the U.S. Bankruptcy Code. |
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• | severe turbulence in the banking and lending sectors, which has led to a general lessening of the availability of credit to consumers; | |
• | an increased national unemployment rate; | |
• | a continuing decline in the national average of home prices and an increase in the national foreclosure rate; and | |
• | high volatility in the stock market that led to substantial declines in stock values and aggregate household wealth from 2007 to 2010. |
• | development costs may exceed budgeted or contracted amounts or may exceed available capital; | |
• | increases in the costs of materials or supplies used in construction of our resorts; |
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• | changes in applicable building codes, construction materials, labor costs or construction methodologies may increase development costs; | |
• | delays in architectural or other design-related services, or in the commencement or completion of construction; | |
• | failure to obtain all necessary zoning, land use, occupancy, construction, operating and other required governmental permits and authorizations; | |
• | changes in real estate, zoning, land use, environmental and tax laws; | |
• | unavailability to us and other investorsand/or developers of financing on favorable or any terms; | |
• | failure of developed properties to achieve desired revenue or profitability levels once opened; | |
• | negative changes in the local markets, the local competitive environment or in local economic conditions that occur between the commencement of development and the completion of the resort; | |
• | scarcity of suitable development sites, due to existing development, physical limitation or competition for sites from competitors that may have greater financial resources or risk tolerance than we do or other factors; and | |
• | incurrence of substantial costs in the event a development project is abandoned or modified prior to completion. |
• | location, | |
• | room rates, | |
• | name recognition, | |
• | reputation, | |
• | the uniqueness and perceived quality of the attractions and amenities, | |
• | the atmosphere and cleanliness of the attractions and amenities, | |
• | the quality and perceived value of the lodging accommodations, | |
• | the quality and perceived value of the food and beverage service, | |
• | convenience, | |
• | service levels, and | |
• | reservation systems. |
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• | instability or changes in social, politicaland/or economic conditions that could disrupt the trade activity in the countries where our resorts are located; | |
• | the imposition of additional duties, taxes and other charges on imports and exports; | |
• | changes in foreign laws and regulations; | |
• | any inability to enforce contracts or intellectual property protections under the laws of the relevant jurisdiction; |
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• | the availability of qualified labor and other resources in the relevant region; | |
• | potential and actual international terrorism and hostilities; | |
• | the adoption or expansion of trade sanctions or other similar restrictions; | |
• | tax laws and other regulations that may impede our ability to receive revenues from international resorts; | |
• | recessions in foreign economies or changes in local economic conditions; and | |
• | changes in currency valuations in specific countries or markets. |
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Sources | Amount | Uses | Amount | |||||||
Initial notes | $ | 219.3 | Repay existing debt | |||||||
Cash on hand | 2.4 | Williamsburg mortgage loan(1) | $ | 62.3 | ||||||
Mason mortgage loan(2) | 69.8 | |||||||||
Grapevine mortgage loan(3) | 76.3 | |||||||||
Mortgage exit fees(4) | 3.3 | |||||||||
Transaction fees and expenses(5) | 10.0 | |||||||||
Total sources of funds | $ | 221.7 | Total uses of funds | $ | 221.7 | |||||
(1) | The Williamsburg mortgage loan bears interest at a floating rate of30-day LIBOR plus a spread of 350 basis points with a minimum rate of 6.25% per annum (effective rate of 6.25% as of April 7, 2010). This loan matures in August 2011. This loan requires principal amortization of $0.4 million per quarter, and the amounts reflected in the table above give effect to $0.8 million of amortization payments we made in January and April 2010. | |
(2) | The Mason mortgage loan bears interest at a floating rate of90-day LIBOR plus a spread of 425 basis points with an interest rate floor of 6.50% (effective rate of 6.50% as of April 7, 2010). This loan matures on July 1, 2011. This loan requires principal amortization payments of $2.0 million per quarter, and the amounts reflected in the table above give effect to $4.0 million of amortization payments we made in January and April 2010. | |
(3) | The Grapevine mortgage loan bears interest at a floating rate of90-day LIBOR plus a spread of 400 basis points with an interest rate floor of 7.00% (effective rate of 7.00% as of April 7, 2010). This loan matures on July 1, 2011. This loan requires principal amortization payments of $0.8 million per quarter, and the amounts reflected in the table above give effect to $1.6 million of amortization payments we made in January and April 2010. | |
(4) | Represents prepayment fees of $1.7 million with respect to the Mason mortgage loan and $1.6 million with respect to the Grapevine mortgage loan. | |
(5) | Transaction fees and expenses include the initial purchasers’ discount and estimated fees and expenses related to the offering of initial notes. |
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As of June 30, 2010 | ||||
(Unaudited, dollars in | ||||
millions, except share and | ||||
per share data) | ||||
Cash and cash equivalents | $ | 30.4 | ||
Indebtedness: | ||||
Long-term debt of the Issuers: | ||||
10.875% first mortgage notes due 2017 offered hereby(1) | $ | 219.7 | ||
Traverse City/Kansas City mortgage loan due 2015 | 68.0 | |||
Pocono Mountains mortgage loan due 2017 | 94.8 | |||
Concord mortgage loan due 2012 | 78.6 | |||
Other Debt of the Issuers: | ||||
City of Sheboygan bonds due 2028 | 8.6 | |||
City of Sheboygan loan due 2018 | 3.2 | |||
Other | 0.1 | |||
Total indebtedness of the Issuers | $ | 473.0 | ||
Long-term debt of Great Wolf Resorts: | ||||
Junior subordinated notes due 2017 and 2035 | 80.5 | |||
Total consolidated indebtedness of Great Wolf Resorts | $ | 553.5 | ||
Equity: | ||||
Common stock, $0.01 par value, 250,000,000 shares authorized, 32,445,206 shares issued actual and as adjusted | $ | 0.3 | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued actual and as adjusted | — | |||
Additional paid-in capital | 401.5 | |||
Accumulated deficit | (207.1 | ) | ||
Deferred compensation | (0.2 | ) | ||
Total Great Wolf Resorts stockholders’ equity | $ | 194.5 | ||
Noncontrolling interest | $ | — | ||
Total capitalization | $ | 748.1 | ||
(1) | Reflects $230.0 aggregate principal amount of notes, net of original issue discount of $10.3. |
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• | our subsidiary entity that provides resort development and management/licensing services; | |
• | our Traverse City, Kansas City, Sheboygan, Williamsburg, Pocono Mountains, Mason, Grapevine and Concord wholly-owned resorts; | |
• | our subsidiary that is the developer of experiential gaming products, less our noncontrolling interest, beginning in June 2010; and | |
• | our equity interests in the Wisconsin Dells and Sandusky resorts through August 2009, when we sold our minority ownership interests in those resorts, and our equity interest in the Grand Mound resort in which we have an ownership interest but which we do not consolidate. |
• | the Company is not liable for any of the $80.5 million of junior subordinated notes outstanding as of June 30, 2010, which are issued by Great Wolf Resorts; | |
• | the Company’s interest expense for the years ended December 31, 2009, 2008 and 2007 and the six months ended June 30, 2010 and 2009 does not include $6.3 million, $6.3 million and $5.3 million and $3.2 million and $3.0 million, respectively, which represents Great Wolf Resorts’ interest payments on the junior subordinated notes; | |
• | the Company is not liable with respect to Great Wolf Resorts’ guarantee of the $78.6 million mortgage loan owed by our subsidiary that owns the Concord resort nor the environmental indemnity granted by Great Wolf Resorts pursuant to the Concord loan; | |
• | the Company is not liable for the non-recourse carve-out provisions and environmental indemnities provided by Great Wolf Resorts with respect to our Pocono Mountains resort nor the non-recourse carve-out provision provided by Great Wolf Resorts with respect to our Wisconsin Dells and Sandusky resorts or the environmental indemnity provided by Great Wolf Resorts with respect to our Grand Mound (Chehalis) resort; and | |
• | various ordinary course expenses, franchise taxes, corporate overhead and director fees are incurred by Great Wolf Resorts and not by the Company. |
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Years Ended December 31, | Six Months Ended June 30, | |||||||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | 2010 | 2009 | ||||||||||||||||||||||
(Dollars in thousands) | (Unaudited) | |||||||||||||||||||||||||||
Statement of Operations: | ||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Rooms | $ | 154,751 | $ | 143,395 | $ | 112,261 | $ | 87,775 | $ | 73,207 | $ | 81,248 | $ | 76,665 | ||||||||||||||
Food, beverage and other | 81,020 | 74,173 | 56,673 | 43,137 | 36,846 | 43,660 | 40,332 | |||||||||||||||||||||
Management and other fees | 1,990 | 2,798 | 2,855 | 2,087 | 494 | 1,195 | 991 | |||||||||||||||||||||
Management and other fees-affiliates | 4,973 | 5,346 | 4,314 | 3,729 | 482 | 1,980 | 2,434 | |||||||||||||||||||||
242,734 | 225,712 | 176,103 | 136,728 | 111,029 | 128,083 | 120,412 | ||||||||||||||||||||||
Other revenue from managed properties(1) | 21,298 | 19,826 | 11,477 | 11,920 | 2,524 | 11,024 | 10,520 | |||||||||||||||||||||
Total revenues | 264,032 | 245,538 | 187,580 | 148,648 | 139,415 | 139,107 | 130,932 | |||||||||||||||||||||
Net operating income (loss) | (24,463 | ) | (25,666 | ) | (2,883 | ) | (53,691 | ) | (26,341 | ) | 221 | (3,031 | ) | |||||||||||||||
Net loss | (58,476 | ) | (40,725 | ) | (10,033 | ) | (49,752 | ) | (24,417 | ) | (20,785 | ) | (11,351 | ) | ||||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | $ | (58,476 | ) | $ | (40,725 | ) | $ | (9,581 | ) | (49,250 | ) | (24,413 | ) | (20,825 | ) | (11,351 | ) | |||||||||||
Cash Flows: | ||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 12,215 | $ | 33,534 | $ | 29,751 | $ | 29,723 | 17,788 | $ | 18,270 | 8,335 | ||||||||||||||||
Net cash used in investing activities | (36,659 | ) | (144,612 | ) | (206,967 | ) | (107,123 | ) | (65,496 | ) | (2,607 | ) | (38,115 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | 31,126 | 106,712 | 99,035 | 119,396 | 23,081 | (6,166 | ) | 38,584 | ||||||||||||||||||||
Balance Sheet Data (end of period): | ||||||||||||||||||||||||||||
Total assets | $ | 805,744 | $ | 840,061 | $ | 770,805 | $ | 683,439 | $ | 605,526 | $ | 805,872 | $ | 805,744 | ||||||||||||||
Total debt | 550,071 | 507,051 | 396,302 | 289,389 | 168,328 | 553,467 | 550,071 | |||||||||||||||||||||
Total liabilities | 590,988 | 568,121 | 460,412 | 360,173 | 235,022 | 611,279 | 590,988 | |||||||||||||||||||||
Total equity | 214,756 | 271,940 | 310,393 | 323,266 | 370,504 | 194,593 | 214,756 |
(1) | Reflects reimbursement of payroll, benefits and costs related to the operations of properties managed by Great Wolf Resorts. |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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• | leveraging our competitive advantages and increasing domestic geographic diversification through a licensing-based business model and joint venture investments in target markets; | |
• | expanding our brand footprint internationally; | |
• | selective sales of ownership interests/recycling of capital; | |
• | expanding and enhancing existing resorts; | |
• | continuing to innovate; | |
• | maximizing total resort revenues; |
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• | minimizing total resort costs; and | |
• | building upon our existing brand awareness and loyalty. |
• | severe turbulence in the banking and lending sectors, which has led to a general lessening of the availability of credit to consumers; | |
• | an increased national unemployment rate; | |
• | a continuing decline in the national average of home prices and an increase in the national home foreclosure rate; and | |
• | high volatility in the stock market that led to substantial declines in leading market averages and aggregate household savings from 2007 to 2010. |
• | we believe that our Traverse City and Sandusky resorts have been and will continue to be affected by especially adverse general economic circumstances in the Michigan/Northern Ohio region (such as bankruptcies of several major companiesand/or large announced layoffs by major employers) and increased competition that has occurred in these markets over the past few years. TheMichigan/Northern Ohio region includes cities that have historically been the Traverse City and Sandusky resorts’ largest source of customers. We believe the adverse general economic circumstances in the region have negatively impacted overall discretionary consumer spending in that region over the past few years and may continue to do so going forward. Although we have taken steps to reduce our operating costs at these resorts, we believe the general regional economic downturn has and may continue to have an impact on the operating performance of our Traverse City and Sandusky resorts. | |
• | our Wisconsin Dells property has been significantly impacted by the abundance of competing indoor waterpark resorts in that market. The Wisconsin Dells market has approximately 16 indoor waterpark resorts that compete with us. We believe this large number of competing properties in a relatively small tourist destination location has and will likely continue to have an adverse impact on the operating performance of our Wisconsin Dells resort. | |
• | we have experienced much lower than expected occupancy and lower than expected average daily room rates at our Sheboygan, Wisconsin property since its opening in 2004. We believe this operating weakness has been primarily attributable to the fact that the overall development of Sheboygan as a |
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tourist destination continues to lag significantly behind our initial expectations. We believe this has materially impacted and will likely continue to impact the consumer demand for our indoor waterpark resort in that market and the operations of the resort. As a result of those conditions, we recorded an impairment charge in 2009 to decrease the resort’s carrying value to its estimated fair value (net of disposal costs). In May 2010, we listed the resort for sale. |
• | monitoring our historical trends for occupancy and estimating our high occupancy nights; | |
• | offering the highest discounts to previous guests in off-peak periods to build customer loyalty and enhance our ability to charge higher rates in peak periods; | |
• | structuring rates to allow us to offer our previous guests the best rate while simultaneously working with a promotional partner or offering internet specials; | |
• | monitoring sales of room types daily to evaluate the effectiveness of offered discounts; and | |
• | offering specials on standard suites and yielding better rates on larger suites when standard suites sell out. |
• | occupancy; | |
• | average daily room rate, or ADR; | |
• | revenue per available room, or RevPAR; | |
• | total revenue per available room, or Total RevPAR; | |
• | total revenue per occupied room, or Total RevPOR; and | |
• | earnings before interest, taxes, depreciation and amortization, or EBITDA. |
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• | occupancy is calculated by dividing total occupied rooms by total available rooms. | |
• | ADR is calculated by dividing total rooms revenue by total occupied rooms. | |
• | RevPAR is the product of occupancy and ADR. |
• | Total RevPAR is calculated by dividing total revenue by total available rooms. | |
• | Total RevPOR is calculated by dividing total revenue by total occupied rooms. |
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Buildings and improvements | 20-40 years | |||
Fixtures and equipment, including waterpark equipment | 5-15 years |
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June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Goodwill | $ | 2,276 | 130,496 | |||||
Accumulated impairment losses | — | (68,405 | ) | |||||
Goodwill related to sale of affiliate | — | (62,091 | ) | |||||
$ | 2,276 | $ | — | |||||
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• | our subsidiary entity that provides resort development and management/licensing services; | |
• | our Traverse City, Kansas City, Sheboygan, Williamsburg, Pocono Mountains, Mason, Grapevine and Concord wholly-owned resorts; | |
• | our subsidiary that is a developer of experiential gaming products, less our noncontrolling interest, beginning in June 2010; and | |
• | our equity interests in the Wisconsin Dells and Sandusky resorts through August 2009, when we sold our minority ownership interests in those resorts, and our equity interest in the Grand Mound resort in which we have an ownership interest but which we do not consolidate. |
• | lodging revenue, which includes rooms, food and beverage, and other department revenues from our resorts; | |
• | management fee and other revenue from resorts, which includes fees received under our management, license, development and construction management agreements; and | |
• | other revenue from managed properties. We employ the staff at our managed properties. Under our management agreements, the resort owners reimburse us for payroll, benefits and certain other costs related to the operations of the managed properties. We include the reimbursement of payroll, benefits and costs, recorded as revenue on our statements of operations, with a corresponding expense recorded as “other expenses from managed properties.” |
• | selling, general and administrative expenses, which are associated with the operations and management of resorts and which consist primarily of expenses such as corporate payroll and related benefits, operations management, sales and marketing, finance, legal, information technology support, human resources and other support services, as well as general corporate expenses; | |
• | property operation and maintenance expenses, such as utility costs and property taxes; | |
• | depreciation and amortization; and | |
• | other expenses from managed properties. |
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All | Same Store Comparison(b) | |||||||||||||||||||
Properties(a) | Increase (Decrease) | |||||||||||||||||||
2010 | 2010 | 2009 | $ | % | ||||||||||||||||
Occupancy | 59.2 | % | 59.9 | % | 60.4 | % | N/A | (0.8 | )% | |||||||||||
ADR | $ | 248.42 | $ | 247.87 | $ | 240.88 | $ | 6.99 | 2.9 | % | ||||||||||
RevPAR | $ | 147.14 | $ | 148.60 | $ | 145.47 | $ | 3.13 | 2.2 | % | ||||||||||
Total RevPOR | $ | 384.97 | $ | 384.62 | $ | 373.31 | $ | 11.31 | 3.0 | % | ||||||||||
Total RevPAR | $ | 228.02 | $ | 230.58 | $ | 225.44 | $ | 5.14 | 2.3 | % | ||||||||||
Non-rooms revenue per occupied room | $ | 136.55 | $ | 136.75 | $ | 132.43 | $ | 4.32 | 3.3 | % |
(a) | Includes results for properties that were open for any portion of the period, for all owned, managed and/or licensed resorts. | |
(b) | Same store comparison includes properties that were open for the full and with comparable number of rooms in 2010 and 2009 (that is, all properties other than our Concord resort). |
Increase | ||||||||||||
2010 | 2009 | (Decrease) | ||||||||||
Revenues | $ | 139,107 | $ | 130,932 | $ | 8,175 | ||||||
Operating expenses: | ||||||||||||
Departmental operating expenses | 46,281 | 42,949 | 3,332 | |||||||||
Selling, general and administrative | 33,228 | 31,631 | 1,597 | |||||||||
Property operating costs | 17,204 | 21,456 | (4,252 | ) | ||||||||
Depreciation and amortization | 31,130 | 27,216 | 3,914 | |||||||||
Net operating income (loss) | 221 | (3,031 | ) | 3,252 | ||||||||
Interest expense, net of interest income | 21,225 | 14,708 | 6,517 | |||||||||
Income tax expense (benefit) | 369 | (6,783 | ) | 7,152 | ||||||||
Net loss attributable to Great Wolf Resorts, Inc. | (20,825 | ) | (11,351 | ) | (9,474 | ) |
• | Departmental expenses increased by $3,332 for the six months ended June 30, 2010, as compared to the six months ended June 30, 2009, due primarily to the opening of our Concord resort. | |
• | Total selling, general and administrative expenses increased by $1,597 in the six months ended June 30, 2010, as compared to the six months ended June 30, 2009, due primarily to the opening of our Concord resort offset by a settlement received at our Poconos resort related to wastewater treatment litigation during the six months ended June 30, 2010 as compared to the six months ended June 30, 2009. |
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• | Opening-related costs (included in total property operating costs) related to our resorts were $5,583 for the six months ended June 30, 2009, due primarily to the expansion of our Grapevine property in January 2009 and opening of our Concord resort in March 2009. There were no similar opening-related costs for the six months ended June 30, 2010. | |
• | Total depreciation and amortization increased for the six months ended June 30, 2010, as compared to the six months ended June 30, 2009, primarily due to unamortized loan fees expensed in the amount of $3,500 related to our existing Williamsburg, Mason and Grapevine loans that were repaid with the net proceeds of the first mortgage notes. This increase was partially offset by a decrease in depreciation on our Sheboygan resort due to the asset impairment loss recorded in 2009. |
• | An increase in net interest expense of $6,517, mainly due to interest expense on the notes, whose interest rate is higher than the interest rates of the mortgage loans that were repaid with the proceeds of the notes, and less interest being capitalized to development properties in 2010 as compared to 2009 due to fewer properties being developed. | |
• | An increase in income tax expense of $7,152 recorded in the six months ended June 30, 2010 as compared to the six months ended June 30, 2009 as a result of fully reserving deferred tax assets resulting from net operating losses in 2010. We did not record a similar reserve in the six months ended June 30, 2009. |
All | Same Store Comparison(b) | |||||||||||||||||||
Properties(a) | Increase (Decrease) | |||||||||||||||||||
2009 | 2009 | 2008 | $ | % | ||||||||||||||||
Occupancy | 59.0 | % | 58.9 | % | 61.9 | % | N/A | (4.8 | )% | |||||||||||
ADR | $ | 242.07 | $ | 235.14 | $ | 243.81 | $ | (8.67 | ) | (3.6 | )% | |||||||||
RevPAR | $ | 142.79 | $ | 138.59 | $ | 151.02 | $ | (12.43 | ) | (8.2 | )% | |||||||||
Total RevPOR | $ | 374.21 | $ | 359.79 | $ | 369.61 | $ | (9.82 | ) | (2.7 | )% | |||||||||
Total RevPAR | $ | 220.74 | $ | 212.07 | $ | 228.95 | $ | (16.88 | ) | (7.4 | )% | |||||||||
Non-rooms revenue per occupied room | $ | 132.14 | $ | 124.65 | $ | 125.80 | $ | (1.15 | ) | (0.9 | %) |
(a) | Includes results for properties that were open for any portion of the period, for all owned, managed and/or licensed resorts. | |
(b) | Same store comparison includes properties (other than properties that had significant expansions) that were open for the full periods in 2009 and 2008 (that is, our Wisconsin Dells, Sandusky, Traverse City, Kansas City, Sheboygan, Williamsburg, Pocono Mountains, Niagara Falls, and Mason resorts). |
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Increase | ||||||||||||
2009 | 2008 | (Decrease) | ||||||||||
Revenues | $ | 264,032 | $ | 245,538 | $ | 18,494 | ||||||
Operating expenses: | ||||||||||||
Departmental operating expenses | 87,790 | 80,083 | 7,707 | |||||||||
Selling, general and administrative | 60,986 | 51,902 | 9,084 | |||||||||
Depreciation and amortization | 56,378 | 46,081 | 10,297 | |||||||||
Impairment loss on investment in affiliates | — | 18,777 | (18,777 | ) | ||||||||
Goodwill impairment | — | 17,430 | (17,430 | ) | ||||||||
Asset impairment loss | 24,000 | — | 24,000 | |||||||||
Net operating loss | (24,463 | ) | (25,666 | ) | 1,203 | |||||||
Gain on sale of unconsolidated affiliate | (962 | ) | — | (962 | ) | |||||||
Interest expense, net of interest income | 33,430 | 25,853 | 7,577 | |||||||||
Income tax expense (benefit) | 440 | (11,956 | ) | 12,396 | ||||||||
Net loss attributable to Great Wolf Resorts, Inc. | (58,476 | ) | (40,725 | ) | (17,751 | ) |
• | an increase in revenue from our Grapevine resort, due primarily to the completion of its expansion in early 2009; and | |
• | an increase in revenue from our Concord resort, which opened in March 2009. |
• | departmental expenses increased by $7,707 for the year ended December 31, 2009, as compared to the year ended December 31, 2008, due primarily to the opening of our Concord resort. | |
• | total selling, general and administrative expenses increased by $9,084 in the year ended December 31, 2009, as compared to the year ended December 31, 2008, due primarily to the opening of our Concord resort in March 2009, the expansion at our Grapevine resort, which was completed in January 2009, and lower labor and overhead expenses allocated to properties under development during the year ended December 31, 2009 than in the year ended December 31, 2008 due to fewer properties under development. | |
• | total depreciation and amortization increased for the year ended December 31, 2009, as compared to the year ended December 31, 2008, primarily due to the expansion of our Grapevine resort as well as the opening of our Concord resort. Also, loan fees incurred during the year ended December 31, 2009 were higher than in the year ended December 31, 2008 due to fees incurred in connection with the extensions of our Mason and Grapevine mortgage loans. | |
• | for the year ended December 31, 2008, we recorded an aggregate $18,777 impairment loss related to our 30.26% interest in the joint venture that owed Wisconsin Dells and Sandusky resorts. There was no similar charge recorded in the year ended December 31, 2009. | |
• | for the year ended December 31, 2008, we recorded a goodwill impairment charge of $17,430 related to our Kansas City and Mason resorts. We had no similar charge in the year ended December 31, 2009. |
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• | we recorded a $24,000 asset impairment loss related to our resort in Sheboygan during the year ended December 31, 2009. We had no similar loss in the year ended December 31, 2008. |
• | an increase in net interest expense of $7,577, mainly due to interest expense on our Concord loan, and less interest being capitalized to development properties in 2009 as compared to 2008; and | |
• | a decrease in income tax benefit mainly due to a $23,008 income tax expense related to our net operating loss valuation allowance. |
Same Store Comparison(b) | ||||||||||||||||||||
All | Increase | |||||||||||||||||||
Properties(a) | (Decrease) | |||||||||||||||||||
2008 | 2008 | 2007 | $ | % | ||||||||||||||||
Occupancy | 62.9 | % | 61.9 | % | 61.5 | % | N/A | 0.7 | % | |||||||||||
ADR | $ | 249.92 | $ | 243.81 | $ | 244.16 | $ | (0.35 | ) | (0.1 | )% | |||||||||
RevPAR | $ | 157.19 | $ | 151.02 | $ | 150.16 | $ | 0.86 | 0.6 | % | ||||||||||
Total RevPOR | $ | 383.75 | $ | 369.61 | $ | 370.77 | $ | (1.16 | ) | (0.3 | )% | |||||||||
Total RevPAR | $ | 241.36 | $ | 228.95 | $ | 228.02 | $ | 0.93 | 0.4 | % | ||||||||||
Non-rooms revenue per occupied room | $ | 133.83 | $ | 125.80 | $ | 126.61 | $ | (0.81 | ) | (0.6 | %) |
(a) | includes results for properties that were open for any portion of the period, for all owned and/or managed resorts. | |
(b) | Same store comparison includes properties that were open for the full periods in 2008 and 2007 (that is, our Wisconsin Dells, Sandusky, Traverse City, Kansas City, Sheboygan, Williamsburg, Pocono Mountains, Niagara Falls, and Mason resorts). |
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Increase | ||||||||||||
2008 | 2007 | (Decrease) | ||||||||||
Revenues | $ | 245,538 | $ | 187,580 | $ | 57,958 | ||||||
Operating expenses: | ||||||||||||
Departmental operating expenses | 80,083 | 64,016 | 16,067 | |||||||||
Selling, general and administrative | 51,902 | 47,915 | 3,987 | |||||||||
Property operating costs | 37,086 | 30,555 | 6,531 | |||||||||
Depreciation and amortization | 46,081 | 36,372 | 9,709 | |||||||||
Impairment loss on investment in affiliates | 18,777 | — | 18,777 | |||||||||
Goodwill impairment | 17,430 | — | 17,430 | |||||||||
Net operating loss | (25,666 | ) | (2,883 | ) | (22,783 | ) | ||||||
Interest expense, net of interest income | 25,853 | 12,129 | 13,724 | |||||||||
Income tax benefit | (11,956 | ) | (5,859 | ) | (6,097 | ) | ||||||
Net loss attributable to Great Wolf Resorts, Inc. | (40,725 | ) | (9,581 | ) | (31,144 | ) |
• | departmental expenses increased $16,067 for the year ended December 31, 2008, as compared to the year ended December 31, 2007, due primarily to the opening of our Grapevine resort. | |
• | total selling, general and administrative expenses increased $3,987 for the year ended December 31, 2008, as compared to the year ended December 31, 2007, due primarily to the opening of our Grapevine resort. This increase was offset by a decrease in corporate selling, general and administrative expenses. Corporate selling, general and administrative expenses decreased due to decreases in bonus expense and restricted stock expense, primarily due to the resignation of two senior officers in 2008; and a decrease in stock option expense, as most options were fully vested as of December 31, 2007. | |
• | total property operating costs (exclusive of opening costs) increased $9,614 for the year ended December 31, 2008, as compared to the year ended December 31, 2007, due primarily to the opening of our Grapevine resort, as well as increased repairs and maintenance expense and increased utilities expense related to the expansion of our Williamsburg resort. Opening costs related to our resorts were $6,301 for the year ended December 31, 2008, as compared to $9,384 for the year ended December 31, 2007. | |
• | total depreciation and amortization increased mainly due to the opening of our Grapevine resort and the expansion of our Williamsburg resort as well as the write off of loan fees of $615 related to our Williamsburg mortgage loan that we paid off in August 2008. We had no similar loan fee write offs for the year ended December 31, 2007. | |
• | for the year ended December 31, 2008, we recorded an aggregate $18,777 impairment loss related to our 30.32% interest in the joint venture that owns the Wisconsin Dells and Sandusky resorts. There was no similar charge recorded in the year ended December 31, 2007. | |
• | for the year ended December 31, 2008, we recorded a goodwill impairment charge of $17,430 related to our Kansas City and Mason resorts. There was no similar charge recorded in the year ended December 31, 2007. |
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• | resort ownership/operation — revenues derived from our consolidated owned resorts; | |
• | resort third-party management/licensing — revenues derived from management, license and other related fees from unconsolidated managed resorts; and | |
• | condominium sales — revenues derived from sales of condominium units to third-party owners. This segment had no activity in 2008, 2009 or 2010. |
Six Months Ended | Increase | |||||||||||
June 30, | (Decrease) | |||||||||||
2010 | 2009 | 2010 — 2009 | ||||||||||
Resort Ownership/Operation | ||||||||||||
Revenues | $ | 124,041 | $ | 116,987 | $ | 7,054 | ||||||
EBITDA | 29,569 | 23,185 | 6,384 | |||||||||
Resort Third-Party Management/Licensing | ||||||||||||
Revenues | 14,199 | 13,945 | 254 | |||||||||
EBITDA | 3,175 | 3,425 | (250 | ) | ||||||||
Condominium Sales | ||||||||||||
Revenues | — | — | — | |||||||||
EBITDA | — | — | — | |||||||||
Other | ||||||||||||
Revenues | 867 | — | 867 | |||||||||
EBITDA | (845 | ) | 3,560 | 2,715 |
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Year Ended December 31, | Increase (Decrease) | |||||||||||||||||||
2009 | 2008 | 2007 | 2009 — 2008 | 2008 — 2007 | ||||||||||||||||
Resort Ownership/Operation | ||||||||||||||||||||
Revenues | $ | 235,771 | $ | 217,568 | $ | 168,934 | $ | 18,203 | $ | 48,634 | ||||||||||
EBITDA | 27,350 | 33,756 | 32,179 | (6,406 | ) | 1,577 | ||||||||||||||
Resort Third-Party Management/Licensing | ||||||||||||||||||||
Revenues | 28,261 | 27,970 | 18,646 | 291 | 9,324 | |||||||||||||||
EBITDA | 6,963 | 8,144 | 7,169 | (1,181 | ) | 975 | ||||||||||||||
Condominium Sales | ||||||||||||||||||||
Revenues | — | — | — | — | — | |||||||||||||||
EBITDA | — | — | (682 | ) | — | 682 | ||||||||||||||
Other | ||||||||||||||||||||
Revenues | — | — | — | — | — | |||||||||||||||
EBITDA | (2,522 | ) | (23,719 | ) | (6,361 | ) | 21,197 | (17,358 | ) |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Long-Term Debt of the Issuers: | ||||||||
First Mortgage Notes due 2017 (net of discount of $10,343)(1) | $ | 219,657 | $ | — | ||||
Traverse City/Kansas City mortgage loan | 68,011 | 68,773 | ||||||
Mason mortgage loan(2) | — | 73,800 | ||||||
Pocono Mountains mortgage loan | 94,867 | 95,458 | ||||||
Williamsburg mortgage loan(2) | — | 63,125 | ||||||
Grapevine mortgage loan(2) | — | 77,909 | ||||||
Concord mortgage loan | 78,588 | 78,549 | ||||||
Other Debt of the Issuers: | ||||||||
City of Sheboygan bonds | 8,564 | 8,544 | ||||||
City of Sheboygan loan | 3,172 | 3,290 | ||||||
Other | 63 | 78 | ||||||
Total Debt of the Issuer | $ | 472,922 | $ | 469,526 | ||||
Long-Term Debt of Great Wolf Resorts: | ||||||||
Junior subordinated notes due 2017 and 2035 | 80,545 | 80,545 | ||||||
Total consolidated indebtedness of Great Wolf Resorts | $ | 553,467 | $ | 550,071 | ||||
(1) | The First Mortgage Notes were issued on April 7, 2010. | |
(2) | The Mason mortgage loan, Williamsburg mortgage loan and Grapevine mortgage loan were repaid in their entirety on April 7, 2010 using the proceeds of the issuance of the First Mortgage Notes. |
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2011 | $ | 4,186 | ||
2012 | 80,780 | |||
2013 | 3,538 | |||
2014 | 3,818 | |||
2015 | 63,003 | |||
Thereafter(1) | 408,485 | |||
Total | $ | 563,810 | ||
(1) | Excluding $80,545 of junior subordinated notes due 2017 and 2035 of Great Wolf Resorts, the Issuers’ requirements for periods after 2015 would be $327,940, and the Issuers’ total maturities would be $483,265. |
• | recurring maintenance, repairs and other operating expenses necessary to properly maintain and operate our resorts; | |
• | recurring capital expenditures we make at our resorts; | |
• | debt maturities within the next year; | |
• | property taxes and insurance expenses; | |
• | interest expense and scheduled principal payments on outstanding indebtedness; | |
• | general and administrative expenses; and | |
• | income taxes. |
• | scheduled debt maturities; | |
• | costs associated with the development of new resorts; | |
• | renovations, expansions and other non-recurring capital expenditures that need to be made periodically to our resorts; and | |
• | capital contributions and loans to unconsolidated joint ventures. |
• | existing working capital, | |
• | cash provided by operations, | |
• | proceeds from investing activities, including sales of partial or whole ownership interests in certain of our resorts; and |
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• | proceeds from financing activities, including mortgage financing on properties being developed, additional or replacement borrowings under future credit facilities, contributions from joint venture partners, and the issuance of equity instruments, including common stock, or additional or replacement debt, including debt securities, as market conditions permit. |
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Payment Terms | ||||||||||||||||||||
Less Than | More Than | |||||||||||||||||||
Total | 1 Year | 1-3 Years | 3-5 Years | 5 Years | ||||||||||||||||
Debt obligations(1)(2) | $ | 796,304 | $ | 39,392 | $ | 155,011 | $ | 134,870 | $ | 467,031 | ||||||||||
Operating lease obligations | 4,787 | 1,030 | 1,816 | 1,282 | 659 | |||||||||||||||
Reserve on unrecognized tax benefits | 1,268 | — | — | — | 1,298 | |||||||||||||||
Total(2) | $ | 802,359 | $ | 40,422 | $ | 156,827 | $ | 136,152 | $ | 468,958 | ||||||||||
(1) | Amounts include interest (for fixed rate debt) and principal. They also include $8,564 of fixed rate debt recognized as a liability related to certain bonds issued by the City of Sheboygan and $3,172 of fixed rate debt recognized as a liability related to a loan from the City of Sheboygan. These liabilities will be satisfied by certain future minimum guaranteed amounts of real and personal property tax payments and room tax payments to be made by our Sheboygan resort. | |
(2) | Excluding $80,545 of junior subordinated notes due 2017 and 2035 of Great Wolf Resorts and interest on those junior subordinated notes, the Issuers’ debt obligations (including interest for fixed rate debt) due in more than 5 years would be $386,486, and the Issuers’ total debt obligations would be $715,759. |
Six Months Ended June 30, | ||||||||||||
Increase | ||||||||||||
2010 | 2009 | (Decrease) | ||||||||||
Net cash provided by operating activities | $ | 18,270 | $ | 8,335 | $ | 9,935 | ||||||
Net cash used in investing activities | (2,607 | ) | (38,115 | ) | (35,508 | ) | ||||||
Net cash (used in) provided by financing activities | (6,166 | ) | 38,584 | (44,750 | ) |
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Year Ended December 31, | ||||||||||||
Increase | ||||||||||||
2009 | 2008 | (Decrease) | ||||||||||
Net cash provided by operating activities | $ | 12,215 | $ | 33,534 | $ | (21,319 | ) | |||||
Net cash used in investing activities | (36,659 | ) | (144,612 | ) | 107,953 | |||||||
Net cash provided by financing activities | 31,126 | 106,712 | (75,586 | ) |
Year Ended December 31, | ||||||||||||
Increase | ||||||||||||
2008 | 2007 | (Decrease) | ||||||||||
Net cash provided by operating activities | $ | 33,534 | $ | 29,751 | $ | 3,783 | ||||||
Net cash used in investing activities | (144,612 | ) | (206,967 | ) | 62,355 | |||||||
Net cash provided by financing activities | 106,712 | 99,035 | 7,677 |
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• | $68,011 of fixed rate debt secured by two of our resorts. This debt bears interest at 6.96%. | |
• | $94,867 of fixed rate debt secured by one of our resorts. This debt bears interest at 6.10%. | |
• | $78,588 of variable rate debt secured by one of our resorts. This debt bears interest at a floating annual rate of LIBOR plus a spread of 310 basis points, with a minimum rate of 6.50% per annum. The effective rate was 6.50% at June 30, 2010. | |
• | $219,657 (net of discount of $10,343) of first mortgage notes that are secured by first priority liens on three of our resorts. This debt bears interest at 10.875%. The notes are due April 2017. | |
• | $51,550 of subordinated debentures that bear interest at a fixed rate of 7.80% through March 2015 and then at a floating rate of LIBOR plus 310 basis points thereafter. The securities mature in March 2035. | |
• | $28,995 of subordinated debentures that bear interest at a fixed rate of 7.90% through June 2012 and then at a floating rate of LIBOR plus 300 basis points thereafter. The securities mature in June 2017. | |
• | $8,564 of fixed rate debt (effective interest rate of 10.67%) recognized as a liability related to certain bonds issued by the City of Sheboygan and $3,172 of non-interest bearing debt recognized as a liability related to a loan from the City of Sheboygan. These liabilities will be satisfied by certain future minimum guaranteed amounts of real and personal property tax payments and room tax payments to be made by the Sheboygan resort. | |
• | $63 related to a capital lease that was entered into in June 2009. The lease matures in May 2012. |
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• | Leveraging Our Competitive Advantages and Increasing Domestic Geographic Diversification through a Licensing-Based Business Model and Joint Venture Investments in Target Markets. We are seeking to grow our business and diversify our domestic geographic brand footprint in a capital-efficient manner primarily through a licensing-based business model. This business model is designed to further exploit our competitive advantages of being the first-mover in the indoor waterpark resort business, our strong brand equity and our waterpark resort management expertise. We seek opportunities to earn fees through licensing our brand and managing new resorts that are constructed and developed primarily by third-party owners and may also make minority investments in joint ventures that own licensed resorts in order to share in any equity appreciation and profits of those resorts. Our proposed transactions to license and manage new resorts near the Galleria at Pittsburgh Mills in Tarentum, Pennsylvania and in Garden Grove, California, are examples of typical transactions under this strategy. We expect this business model to allow us to deploy our capital resources more efficiently, reduce our overall leverage and diversify our operations geographically, since we will not be fully responsible for the construction and ownership of the licensed resorts, and will generally not be required to incur associated mortgage or construction debt. In addition, this business model is designed to allow us to more quickly expand domestically, reducing our sensitivity to economic conditions affecting any single region. | |
• | Expanding Our Brand Footprint Internationally. We also plan to use our licensing-based business model to efficiently expand our business internationally. Similar to our arrangement with Ripley’s in Niagara Falls, Ontario, we seek to enter into licenseand/or management agreements with reputable companies that have local market knowledge in order to increase revenues and expand the international footprint of our Great Wolf Lodge brand. We may also seek to make strategic minority joint venture |
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investments in the licensed resorts in order to share in the profits and equity appreciation of the resorts. We believe this model is the most efficient strategy for international expansion, since it enables us to leverage the local expertise of our joint venture partners while minimizing our capital investment. |
• | Selective Sales of Ownership Interests/Recycling of Capital. We will selectively consider opportunities to sell partial or whole interests in one or more of our owned and operated properties, as we did in our CNL joint venture. We intend to continue to manageand/or license our Great Wolf Lodge branded resorts, and we will consider transactions that allow us to maintain our management/licensing agreement at a resort while realizing value through our selective sales. In those situations, we expect to recycle capital generated by such transactions for investment in future growth opportunities. | |
• | Expanding and Enhancing Existing Resorts. We will continue to focus on growth opportunities at our existing resorts by adding revenue-enhancing features that drive ancillary spending and that we believe will meet our return on investment requirement, including non-water based attractions. We also intend to continue to evaluate incremental revenue-generating opportunities, such as expanding the number of rooms at certain of our resorts. | |
• | Continuing to Innovate. We intend to leverage our in-house expertise, in conjunction with the knowledge and experience of our third-party suppliers and designers, to develop and implement the latest innovations in family entertainment activities and amenities, including waterpark attractions. We have received numerous industry awards for our guests’ experiences, our operations, innovative development, sales and marketing initiatives and materials and employee retention. We are currently exploring several new concepts that, we believe, will allow us to generate additional revenue without requiring significant capital investment. Among these concepts is an adaptive re-use model, pursuant to which we would license the right to use entertainment features currently used in Great Wolf resorts to existing, full-service hotels, featuring family-oriented activities. While these concepts are still in the initial stages of development, we are seeking to innovatively extend our brand and to take these concepts to market. | |
• | Maximizing Total Resort Revenues. We will continue to employ aggressive yield management techniques and sales and marketing efforts to maximize room revenues at both our owned and managed resorts. During off-peak times (generally in May and September, and during the middle of weeks when schools are in session), we will seek to maintain higher occupancy by holding special events and targeting group sales and conferences. We will also seek to maximize otheron-site revenue, such as food and beverage, entertainment and merchandise revenue through themed restaurants, ice cream shops, snack shops, adult and kids spas, gift shops, game arcades, MagiQuest, mini-golf and teen-themed areas. We have also entered into a number of co- marketing agreements with strategic partners and expect to enter into additional co-marketing agreements in the future in order to increase other revenue. | |
• | Minimizing Total Resort Costs. We seek to reduce operating costs by leveraging our purchasing power with respect to operating supplies, food and beverage, insurance and employee benefits. By centralizing certain of our services, we also seek to reduce ourper-unit costs, while increasing our control over those services in order to deliver a greater quality of service to our customers. Our centralized reservations system is scalable and, together with our web-based reservations system, enables us to efficiently handle high reservation volumes and which we expect to require limited incremental costs over the next several years as we increase our portfolio of resorts. | |
• | Building Upon Our Existing Brand Awareness and Loyalty. Our Great Wolf Lodge brand is recognizable by our customers because of our distinctive and easily identifiable theming, from our signature treehouse waterfort, to our mascots and distinctive logos and merchandise. We believe we have fostered strong customer and brand loyalty, which is evidenced by our high levels of repeat and referral guests. We will continue to focus on ensuring that each of our guests associates the Great Wolf Lodge brand with a memorable and consistent family vacation experience. |
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Number of | Number of | Indoor | ||||||||||||||||||
Ownership | Guest | Condo | Entertainment | |||||||||||||||||
Percentage | Opened | Suites | Units(1) | Area(2) | ||||||||||||||||
(Approx. sq. ft.) | ||||||||||||||||||||
Wisconsin Dells, WI(3) | — | 1997 | 308 | 77 | 102,000 | |||||||||||||||
Sandusky, OH(3) | — | 2001 | 271 | — | 41,000 | |||||||||||||||
Traverse City, MI | 100 | % | 2003 | 280 | — | 57,000 | ||||||||||||||
Kansas City, KS | 100 | % | 2003 | 281 | — | 57,000 | ||||||||||||||
Sheboygan, WI | 100 | % | 2004 | 182 | 64 | 54,000 | ||||||||||||||
Williamsburg, VA(4) | 100 | % | 2005 | 405 | — | 87,000 | ||||||||||||||
Pocono Mountains, PA(4) | 100 | % | 2005 | 401 | — | 101,000 | ||||||||||||||
Niagara Falls, ONT(5) | — | 2006 | 406 | — | 104,000 | |||||||||||||||
Mason, OH(4) | 100 | % | 2006 | 401 | — | 105,000 | ||||||||||||||
Grapevine, TX(4) | 100 | % | 2007 | 605 | — | 110,000 | ||||||||||||||
Grand Mound, WA(6) | 49 | % | 2008 | 398 | — | 74,000 | ||||||||||||||
Concord, NC(4) | 100 | % | 2009 | 402 | — | 97,000 |
(1) | Condominium units are individually owned by third parties and are managed by us. | |
(2) | Our indoor entertainment areas generally include our indoor waterpark, game arcade, children’s activity room, family tech center, MagiQuest (an interactive game attraction) and fitness room, as well as our spa in the resorts that have such amenities. | |
(3) | These properties are owned by CNL, a real estate investment trust focused on leisure and lifestyle properties. Prior to August 2009, these properties were owned by a joint venture between CNL and us. In August 2009 we sold our 30.26% joint venture interest to CNL for $6.0 million. We currently manage both properties and license the Great Wolf Lodge brand to these resorts. | |
(4) | Five of our properties (Great Wolf Lodge resorts in Williamsburg, VA; Pocono Mountains, PA; Mason, OH; Grapevine, TX and Concord, NC) each had a book value of fixed assets equal to ten percent or more of our total assets as of June 30, 2010. Four of our properties (Great Wolf Lodge resorts in Williamsburg, VA; Pocono Mountains, PA; Mason, OH and Grapevine, TX) each had revenues equal to ten percent or more of our total revenues for the six months ended June 30, 2010. | |
(5) | An affiliate of Ripley’s, our licensee, owns this resort. We have granted Ripley’s a license to use the Great Wolf Lodge name for this resort through April 2016. We managed the resort on behalf of Ripley’s through April 2009. | |
(6) | This property is owned by a joint venture. Chehalis owns a 51% interest in the joint venture, and we own a 49% interest. We operate the property and license the Great Wolf Lodge brand to the property under long-term agreements through April 2057, subject to earlier termination in certain situations. The joint venture leases the land for the resort from the United States Department of the Interior, which is trustee for Chehalis. |
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• | Themed Restaurants. Our resorts feature one or more full-service, themed restaurants and a themed bar and grille that serves alcoholic beverages and sandwiches. Our themed restaurants include the Gitchigoomie Grilltm, with a life-sized sea plane suspended over the dining area, Lumber Jack’s Cook Shantytm, the Loose Moose Bar & Grilltm, and the Camp Critter Bar & Grilletm, which features a two-story realistic tree with a canopy of leaves and canvas-topped booths with hanging lanterns, giving guests the impression that they are dining in a Northwoods forest campsite. Our Blue Harbor Resort features our On the Rocks Bar & Grille and Rusty Anchortm Buffet. | |
• | Ice Cream Shop and Confectionery. Each of our Great Wolf Lodge resorts has a Bear Claw Cafétm or Bear Paw Sweets & Eatstm ice cream shop and confectionery that provides sandwiches, coffee, pastries, ice cream, candies, home-made fudge and other snacks that families can share together. Our Blue Harbor Resort has a Sweetshop Landing confectionery. | |
• | Coffee Shop. Some of our resorts have a separate coffee shop that offers Starbucks® or Dunkin Donuts® coffee, as well as other pastry items provided by those brands. | |
• | Snack Bar. Each of our waterparks has a snack bar that offers a variety of sandwiches, pizzas and similar foods with ample seating so that our guests do not have to leave the warmth and comfort of the waterpark. | |
• | Gift Shop. Each of our resorts has a Buckhorn Exchange or Precious Cargo gift shop that provides distinctive themed gifts, including Great Wolf Lodge or Blue Harbor Resort logo merchandise, souvenirs, collectibles and stuffed animals. The gift shop also offers resort toys, swimwear and personal necessities. Our resorts also have a Bear Essentialstm or Washed Ashore gift shop located in the waterpark. | |
• | Full-Service Spa. Each of our resorts, with the exception of our Sandusky resort, has an Elements Spa and Salon that provides a relaxingget-a-way with a full complement of massages, facials, manicures, pedicures and other spa treatments and a wide selection of Aveda® products. Each of our spas also includes our Scooops Kid Spa. The furnishings for the kid-friendly spa have the look of a modern ice cream parlor, with chocolate-colored walls, retro swivel stools and a pedicure sofa that looks like an oversized ice cream sundae. While enjoying their treatments, kids can listen to music with a provided CD player and speakers or with their own digital music player. | |
• | Game Arcade. Our Youkon Jack’s Game Parlor or Northern Lights Arcade range in size from approximately 3,900 to 7,000 square feet, generally feature over 70 games and are divided into distinct areas with video and skill games that appeal to children of different ages. Tickets won from the skill games may be exchanged for a wide selection of merchandise that appeals to our younger guests. |
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• | Cub Club. Our Cub Club rooms are professionally staffed children’s activity rooms with programmed activities, including arts and crafts, games and nature hikes. Our Blue Harbor Resort features activities that are similar to our Cub Club. | |
• | Animated Clock Tower. Each of our Great Wolf Lodge resorts has a two-story animated Clock Tower located in the resort’s main atrium lobby. The Clock Tower provides daily theatrical entertainment through talking and singing trees, animals and Northwoods figures. Our Blue Harbor Resort features a 2,000-gallon water fountain featuring a hand-blown glass sculpture and a music and light show located in its main atrium lobby. | |
• | Outdoor Water Amenities. Outdoor water amenities complement our indoor waterpark facilities and allow our guests to take advantage of favorable weather conditions. Our outdoor water amenities include activity pools and a large deck or patio area and are generally open from May until September, longer if the weather is favorable. Our Wisconsin Dells and Grapevine resorts also have outdoor waterslides. | |
• | Fitness Room. Our fitness rooms contain aerobic exercise equipment, weight-lifting machines, and numerous televisions for active viewing. | |
• | Meeting Space. Our resorts offer meeting space ranging from approximately 3,000 to over 7,000 square feet that are available for guest meetings, including a 99-seat,state-of-the-art, symposium-style room at our Traverse City, Mason and Niagara Falls resorts. | |
• | Conference Facility. Many of our resorts feature conference facility space. Our Traverse City, Sheboygan, Williamsburg, Mason, Grapevine Grand Mound and Concord resorts feature conference facilities that range in size from approximately 10,000 — 40,000 square feet. Each of these conference facilities also feature some if not all, of the following additional aspects to their conference facilities: Grand Ballroom, flexible meeting spaces, executive boardroom, audio visual systems, and multiple pre-function concourses including an outdoor patio. | |
• | MagiQuest. Nine of our resorts feature a MagiQuest attraction. MagiQuest is an interactive, live-action, fantasy adventure game that guests can play throughout the resort. | |
• | Minigolf. Five of our resorts feature a custom-designed, outdoor 18-hole miniature golf course. | |
• | gr8_space. Five of our resorts feature an approximately 1,000 square foot interactive family tech center, gr8_space, which features multiple computer stations offering Internet access, docking stations for digital music players, as well as multiple gaming stations. Gr8_space also features family events, like rock star karaoke and family challenge games. In the evening, gr8_space features dedicated teen time and activities for fun on their terms. |
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• | Large target customer base. We select and approve development sites that generally have a minimum of five million target customers within a convenient driving distance. Because we offer an affordable vacation experience, we appeal to families in a variety of income ranges. | |
• | Recognized tourist destination. We generally focus on drive-to destinations that attract a large number of tourists, including both emerging and traditional family vacation markets. We believe we can charge premium rates in these markets due to the high quality of our resorts and our family-oriented amenities and activities. In addition, the indoor nature of many of our amenities and activities allows us to reduce the impact of seasonality that negatively affects other attractions in these areas. These areas also often have active an effective local visitors and convention bureaus that complement our marketing and advertising efforts at little or no cost to us. | |
• | Highly visible and large sites. We generally develop and license resorts in highly visible locations along major roadways. Visibility from highways enhances easy drive-to access, provides marketing benefits due to high volumes of traffic and often produces synergies from adjacent land uses or complementary developments. We generally choose and approve sites that have enough acreage to allow for potential expansions and future sales of out-lots. |
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Name | Age | Position | ||||
Joseph V. Vittoria | 75 | Chairman of the Board | ||||
Elan Blutinger | 55 | Director and Chairman of the Nominating and Corporate Governance Committee | ||||
Randy L. Churchey | 49 | Director | ||||
Edward H. Rensi | 66 | Director and Chairman of the Compensation Committee | ||||
Howard A. Silver | 55 | Director and Chairman of the Audit Committee | ||||
Kimberly K. Schaefer | 44 | Chief Executive Officer and Director | ||||
Timothy D. Black | 45 | Executive Vice President of Operations | ||||
James A. Calder | 48 | Chief Financial Officer | ||||
Alexander P. Lombardo | 41 | Treasurer | ||||
J. Michael Schroeder | 43 | General Counsel and Corporate Secretary |
Kimberly K. Schaefer | Ms. Schaeferhas served as our Chief Executive Officer since January 2009, and was elected to our Board of Directors in February 2009. She previously served as our Chief Operating Officer since 2005, and also our Chief Brand Officer since we commenced operations in 2004. From 1997 until completion of the our initial public offering (IPO) in December 2004, Ms. Schaefer served as Senior Vice President of Operations of The Great Lakes Companies, Inc. and its predecessor companies. At Great Lakes, Ms. Schaefer was involved in site selection and brand development and oversaw all resort operations. Ms. Schaefer has over 20 years of hospitality experience and holds a Bachelor of Science degree in Accounting from Edgewood College in Madison, Wisconsin. Ms. Schaefer sits on the advisory board for Edgewood College Business School. Ms. Schaefer is a certified public accountant. | |
The Nominating and Corporate Governance Committee concluded that Ms. Schaefer should continue to serve as a director, in part, because of her previous experience in operations and as chief executive of the company and the knowledge she has acquired from years of involvement with the company since its inception. | ||
Timothy D. Black | Mr. Blackhas served as Executive Vice President of Operations since January 2009. Mr. Black previously served as our Senior Vice President of Operations since June 2008, and as our Regional Vice President of Operations from December 2005 through June 2008. From October 2004 through December 2005, Mr. Black served as the General Manager of our Great Wolf Lodge resort located in Lake Delton, Wisconsin. Prior to that, Mr. Black spent eighteen years at Six Flags Theme Park in various Senior Management |
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positions, serving most recently as Vice President and General Manager of Six Flags Great America from August 2003 through October 2004. | ||
James A. Calder | Mr. Calder has served as our Chief Financial Officer since we commenced operations in May 2004. From 1997 to 2004, Mr. Calder served in a number of management positions with Interstate Hotels & Resorts, Inc., a public company, and its predecessor company, serving most recently as chief financial officer. Additionally, from 2001 to 2002, Mr. Calder served as chief accounting officer of MeriStar Hospitality Corporation, a public company. Mr. Calder holds a B.S. degree in Accounting from The Pennsylvania State University. Mr. Calder is a certified public accountant and is president and treasurer of the Thomas W. Hetrick Memorial Scholarship Fund, a private, non-profit organization, and is treasurer of Harvest Resources Associates, LLC, a private organization. | |
Alexander P. Lombardo | Mr. Lombardohas served as our Treasurer since 2004. From 1998 to 2004, Mr. Lombardo served in a number of positions with Interstate Hotels & Resorts, Inc., a public company, and its predecessor company, serving most recently as vice president of finance. Additionally, from 1998 to 2002, Mr. Lombardo served in a number of positions with MeriStar Hospitality Corporation, a public company, serving most recently as assistant treasurer. From 1996 to 1998, Mr. Lombardo served as cash manager of ICF Kaiser International, Inc., a public company. Mr. Lombardo holds a B.B.A. degree from James Madison University. | |
J. Michael Schroeder | Mr. Schroeder has served as our General Counsel and Corporate Secretary since we commenced operations in May 2004. From 1999 until 2004, Mr. Schroeder served in several senior management positions for The Great Lakes Companies, Inc., most recently as Senior Vice President and General Counsel. From 1993 to 1999, Mr. Schroeder was associated with several law firms in New York, New York and Greenwich, Connecticut, where he specialized in real estate, real estate finance and corporate law, with a focus on the hospitality industry. Mr. Schroeder holds a J.D. degree from Duke University School of Law and a B.S. degree in Finance from the University of Colorado. | |
Directors | ||
Joseph V. Vittoria | Mr. Vittoriahas served as Chairman of the Board and a director of our company since 2006. Mr. Vittoria is the retired chairman and chief executive officer of Travel Services International, a company he founded and took public in July 1997 and later sold to a large British tour operator. In 1982, he joined Avis, Inc., as chief operating officer, and later was named chairman and chief executive officer. His success at Avis led to his selection as the salaried and management representative to the board of United Airlines in 1994 when it created its ESOP. He now is Chairman and CEO of Puradyn Filter Technologies, Inc. and a member of the boards of Vectrix, Inc. Active in community-enhancement programs, Vittoria served as a director of the National Crime Prevention Counsel in Washington, D.C. He later served on President Reagan’s Child |
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Safety Partnership in recognition of his efforts on behalf of missing children. He also is a former member of the Board of Directors of the National Center for Disability Services. A40-year travel industry veteran, Mr. Vittoria was elected to the Travel Industry Association Hall of Leaders in 2000. He holds a B.S. in civil engineering from Yale University and an M.B.A. from Columbia University. Mr. Vittoria currently serves as one of our independent directors and as a member of our Audit, Compensation and Nominating and Corporate Governance Committee. | ||
The Nominating and Corporate Governance Committee concluded that Mr. Vittoria should continue to serve as a director, in part, because of his extensive experience in the travel industry. | ||
Elan Blutinger | Mr. Blutingerhas been a managing director of Alpine Consolidated, LLC, a merchant bank specializing in consolidating fragmented industries, since 1996. Mr. Blutinger serves as a director of AudioNow and Vacanza Technology. Mr. Blutinger served as a director of Hotels.com, from 2001 to 2003. Mr. Blutinger was a founder and director of Resortquest International, a public company, from 1997 to 2003, a founder and director of Travel Services International, a public company, from 1996 to 2001, and a director of Online Travel Services (UK), a public company from 2000 to 2004. Mr. Blutinger is chairman of the board of trustees of the Washington International School in Washington, D.C. He holds B.A. and J.D. degrees from American University and an M.A. degree from the University of California at Berkeley. Mr. Blutinger currently serves as one of our independent directors and as chair of our Nominating and Corporate Governance Committee. Mr. Blutinger has been a director of our company since 2004. | |
The Nominating and Corporate Governance Committee concluded that Mr. Blutinger should continue to serve as a director, in part, because of his extensive experience in the travel industry and his knowledge of corporate governance. | ||
Randy L. Churchey | Mr. Churcheywas Interim Chief Executive Office of our company from May 2008 until December 2008. He has continued his responsibilities as one of our directors, and has served in this capacity since we commenced operations in 2004. In January 2010, Mr. Churchey because President, CEO and Director of Education Realty Trust. Mr. Churchey is also co-chairman of the board of MCR Development, LLC, a private hotel construction and management company. He was President and Chief Executive Officer of Golden Gate National Senior Care (the successor to Beverly Enterprises), from March 2006 to September 2007. Mr. Churchey served as President and Chief Operating Office of RFS Hotel Investors, Inc., a NYSE-listed hotel real estate investment trust, from 1999 to 2003. Mr. Churchey served as a director of RFS from 2000 through 2003. From 1997 to 1999, he was Senior Vice President and Chief Financial Officer of FelCor Lodging Trust, Inc., a NYSE-listed hotel real estate investment trust. For nearly 15 years prior to joining FelCor, Mr. Churchey held various positions in the audit practice of Coopers & Lybrand, LLP. Mr. Churchey holds a B.S. degree in accounting from the |
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University of Alabama and is a Certified Public Accountant. Mr. Churchey currently serves as one of our independent directors and is a member of our Audit and Nominating and Corporate Governance committees. Mr. Churchey has been a director of our company since 2004. | ||
The Nominating and Corporate Governance Committee concluded that Mr. Churchey should continue to serve as a director, in part, because of his extensive experience in the real estate and hospitality industries, his understanding of corporate finance, and his prior experience as the company’s Interim Chief Executive Officer. | ||
Edward H. Rensi | Mr. Rensispent 33 years at McDonald’s, where he rose from grill man up through the management ranks to positions of increasing scope and responsibility, as regional vice president, senior vice president operations and training, senior executive vice president, chief operating officer of McDonald’s World Wide, and, from 1984 to 1998, president and CEO of McDonald’s USA. Following his retirement from McDonald’s in 1998, Mr. Rensi began a second career as chairman and CEO of Team Rensi Motorsports. Mr. Rensi has been actively involved in numerous charity initiatives throughout his career. In 1998, President Ronald Reagan honored Rensi with the President’s Volunteer Aware, which recognized his body of charitable work, including co-founding the world-famous Ronald McDonald House and serving as chairman of the Ronald McDonald Children’s Charities. Mr. Rensi’s volunteer work for numerous educational charities was cited in 1997 when he was chosenItalian-American Man of the Year. Mr. Rensi graduated from The Ohio State University with a degree in business education. He serves on the boards of directors of Snap On Tools and International Speedway Corporation (ISC). He also serves on the Compensation Committees for the ISC and Snap On boards. Mr. Rensi currently serves as one of our independent directors and as the chairman of our Compensation Committee. Mr. Rensi has been a director of our company since 2006. | |
The Nominating and Corporate Governance Committee concluded that Mr. Rensi should continue to serve as a director, in part, because of his extensive experience in operations with consumer-oriented companies and brands. | ||
Howard A. Silver | Mr. Silverwas the president and chief executive officer of Equity Inns, Inc., a public, self-advised hotel real estate investment trust, until its sale to Whitehall Global Real Estate Funds in October 2007. Mr. Silver joined Equity Inns in 1994 and served in various capacities including: executive vice president of finance, secretary, treasurer, chief financial officer and chief operating officer. Mr. Silver is a certified public accountant. Mr. Silver is a director of Capital Lease Funding, Inc., a public triple net lease real estate investment trust, and serves on its audit committee as chairman, as well as serving on the nomination and investment committees and is also lead independent director. Mr. Silver is also a director of Education Realty Trust, a student housing real estate investment trust, and serves on its compensation and nominating and corporate governance committees. Mr. Silver currently serves as one of our |
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independent directors and as chair of our Audit Committee and as a member of our Compensation Committee. Mr. Silver has been a director of our company since 2004. | ||
The Nominating and Corporate Governance Committee concluded that Mr. Silver should continue to serve as a director, in part, because of his extensive experience in the real estate and hospitality industries and his understanding of corporate finance. |
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• | reviews and discusses with management and our independent registered public accounting firm our financial reports, financial statements and other financial information; | |
• | makes decisions concerning the appointment, retention, compensation, evaluation and dismissal of our independent registered public accounting firm; | |
• | reviews with our independent registered public accounting firm the scope and results of the audit engagement; | |
• | approves all professional services provided by our independent registered public accounting firm; | |
• | reviews the experience, performance and independence of our independent registered public accounting firm; | |
• | considers appropriateness of the audit and non-audit fees; | |
• | reviews the adequacy of our internal accounting and financial controls; and | |
• | reviews any significant disagreements among the company’s management and our independent registered public accounting firm in connection with preparation of our company’s financial statements. |
• | determines our executive officers’ and Board members’ compensation; | |
• | establishes salaries of and awards of performance-based bonuses to our executive officers; and | |
• | determines awards of equity instruments to our officers and employees. |
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• | identifies, selects, evaluates and recommends to our candidates for service on our Board of Directors; | |
• | oversees the composition of our Board of Directors and its committees and makes recommendations to our Board of Directors for appropriate changes; | |
• | advises and makes recommendations to our Board of Directors on matters concerning corporate governance; and | |
• | oversees an annual self-evaluation of our Board of Directors. |
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• | establishing and administering compensation policies, | |
• | setting base salaries and awarding performance-based cash bonuses, | |
• | determining grants of equity awards under our equity award plan, and | |
• | reviewing the performance and development of senior executives. |
• | structuring our various compensation programs; | |
• | determining appropriate levels of salary, bonus and other awards payable to our NEOs consistent with our competitive strategy, corporate governance principles and stockholder interests; and | |
• | guiding us in the development of near-term individual performance objectives necessary to achieve long-term performance goals. |
• | design and implement a compensation program to attract, retain and motivate talented executives; | |
• | provide incentives for the attainment of short-term operating objectives and strategic long-term performance goals; and | |
• | place emphasis on, and reward achievement of, long-term objectives that are consistent with the nature of our company as an enterprise focused on revenue growth, resort operations and brand expansion/development over the next several years. |
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• | Kimberly K. Schaefer, Chief Executive Officer (Principal Executive Officer) | |
• | Timothy D. Black, Executive Vice President of Operations | |
• | James A. Calder, Chief Financial Officer (Principal Financial Officer) | |
• | Alexander P. Lombardo, Treasurer | |
• | J. Michael Schroeder, General Counsel and Corporate Secretary |
• | base salary, | |
• | annual incentives, and | |
• | long-term incentives. |
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Bluegreen Corporation | Red Lion Hotels Corporation | |
Cedar Fair | Silverleaf Resorts, Inc. | |
Gaylord Entertainment Company | Six Flags, Inc. | |
ILX Resorts Incorporated | Steiner Leisure Limited | |
Isle of Capri Casinos, Inc. | Vail Resorts, Inc. | |
Nevada Gold & Casinos, Inc. |
• | base salaries at a level commensurate with each executive’s role/responsibilities, tenure and other factors, based on median market practices. | |
• | short-term incentive compensation consisting of annual cash incentive bonuses based on specified threshold, target and high earnings levels, defined as follows: |
• | threshold performance — solid achievement but falls short of expectations. Would be considered less than meeting a budget plan. This represents the minimum level of performance that must be achieved before any bonus will be earned. | |
• | target performance — achievement that normally signifies meeting business objectives. In many situations, represents budget level performance. | |
• | high performance — significant achievement that would be considered upper-tier or exceptional performance by industry standards. |
• | long-term incentive compensation in the form of restricted stock grants based on specified threshold, target and high earnings levels, consisting of: |
• | annual equity grants with performance metrics and | |
• | multi-year program equity grants with performance metricsand/or time-based vesting. |
• | the Compensation Committee designed annual cash incentives and long-term incentives for Ms. Schaefer and Mr. Calder that created an overall compensation program that can provide for superior compensation when primary company-wide financial goals are met or exceeded, and, conversely, total compensation below competitive levels when such goals are not met. The Compensation Committee believed this was an appropriate structure for these two NEOs due to their broad responsibilities for overseeing our overall performance in financial, development and operating areas. | |
• | for NEOs other than Ms. Schaefer and Mr. Calder, the Compensation Committee felt a total compensation structure that was less likely to provide total compensation significantly above or below competitive levels was appropriate, due to other executive officers having less broad responsibilities for overseeing our overall performance. |
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• | base salary, | |
• | Annual cash incentive and | |
• | long-term incentive compensation. |
2009 Base | Increase From | |||||||
Salary | Prior Base Salary | |||||||
Name | ($) | (%) | ||||||
Ms. Schaefer | 500,000 | 33.3 | ||||||
Mr. Black | 288,711 | 11.0 | ||||||
Mr. Calder | 375,000 | 25.0 | ||||||
Mr. Lombardo | 185,000 | — | ||||||
Mr. Schroeder | 268,000 | — |
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2009 Annual Incentive Opportunity | ||||||||||||||||||||||||
Threshold | Target | Maximum | ||||||||||||||||||||||
Name | (%) | ($) | (%) | ($) | (%) | ($) | ||||||||||||||||||
Ms. Schaefer | 50.0 | 250,000 | 100.0 | 500,000 | 150.0 | 750,000 | ||||||||||||||||||
Mr. Calder | 37.5 | 140,625 | 87.5 | 328,125 | 112.5 | 421,875 |
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• | our company achieving certain levels of Adjusted EBITDA for 2009; | |
• | our company achieving certain levels of Adjusted EPS for 2009; and | |
• | the individual achieving certain individual, business unitand/or departmental performance goals in 2009, as determined by the Compensation Committee. |
Financial Measure | Threshold | Target | Maximum | |||
Performance Objective | ($) | ($) | ($) | |||
Adjusted EBITDA | 63.3 million | 66.6 million | 69.9 million | |||
Adjusted EPS | (0.53) | (0.50) | (0.48) |
Cash Bonus Performance Objectives | ||||||||||||||||||||||||
Individual, | ||||||||||||||||||||||||
Business Unit and/or | ||||||||||||||||||||||||
Departmental | ||||||||||||||||||||||||
Adjusted EBITDA | Adjusted EPS | Performance Goals | ||||||||||||||||||||||
Maximum | Maximum | Maximum | ||||||||||||||||||||||
Bonus | Bonus | Bonus | ||||||||||||||||||||||
Weighting | Amount | Weighting | Amount | Weighting | Amount | |||||||||||||||||||
Name | (%) | ($) | (%) | ($) | (%) | ($) | ||||||||||||||||||
Ms. Schaefer | 60.0 | 450,000 | 20.0 | 150,000 | 20.0 | 150,000 | ||||||||||||||||||
Mr. Calder | 60.0 | 253,125 | 20.0 | 84,375 | 20.0 | 84,375 |
• | we achieved Adjusted EBITDA of $66.0 million, an amount between the threshold and target amounts for that financial measure, resulting in 60.7% and 69.9% of the maximum potential payout for that financial factor being earned for Ms. Schaefer and Mr. Calder, respectively. | |
• | we achieved Adjusted EPS of $(0.43), an amount in excess of the Adjusted EPS maximum amount as established by the Compensation Committee, resulting in 100% of the maximum potential payout for that financial factor being earned. | |
• | the Compensation Committee determined the individual/departmental goal achievements as follows: Mr. Calder — 90% and Ms. Schaefer — 90%. |
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Cash Bonus Performance Objective | Ms. Schaefer | Mr. Calder | ||||||
Adjusted EBITDA: | ||||||||
• Maximum Bonus Amount | $ | 450,000 | $ | 253,125 | ||||
• % earned | 60.7 | % | 69.9 | % | ||||
• Bonus Amount Earned | $ | 273,300 | $ | 176,850 | ||||
Adjusted EPS: | ||||||||
• Maximum Bonus Amount | $ | 150,000 | $ | 84,375 | ||||
• % earned | 100.0 | % | 100.0 | % | ||||
• Bonus Amount Earned | $ | 150,000 | $ | 84,375 | ||||
Individual, Business Unit and/or | ||||||||
Departmental Goals: | ||||||||
• Maximum Bonus Amount | $ | 150,000 | $ | 84,375 | ||||
• % earned | 90.0 | % | 90.0 | % | ||||
• Bonus Amount Earned | $ | 135,000 | $ | 75,938 | ||||
Total Bonus Amount Earned | $ | 558,300 | $ | 337,163 |
• | if an executive’s cash bonus payment would have been $10,000 and they elected thisshares-in-lieu-of-cash option for the entire amount of their bonus, he or she would receive $12,500 of shares. | |
• | the dollar value of shares to be received is divided by a conversion price as determined by the Compensation Committee in order to determine the number of shares the NEO receives. |
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• | first, based on benchmarking data and recommendations contained in FPL’s report, we computed a maximum annual amount of stock-based compensation award (that is, combined AEG and one year of MYPEG) amount as a percentage of each officer’s January 1, 2009 base salary. Applicable percentages and the resulting maximum annual amounts were as follows: |
Maximum Annual | ||||||||||||
Percentage of Base | Amount of | |||||||||||
Salary Used to | Stock-Based | |||||||||||
January 1, 2009 | Compute Maximum | Incentive | ||||||||||
Base Salary | Annual Dollar Value | Compensation | ||||||||||
Name | ($) | (%) | ($) | |||||||||
Ms. Schaefer | 500,000 | 225.0 | 1,125,000 | |||||||||
Mr. Calder | 375,000 | 112.5 | 421,875 |
• | second, for each officer, the total maximum annual dollar value was split between (a) AEG amounts and (b) MYPEG amounts. Based on recommendations from FPL, the applicable splits and resulting dollar amounts for each officer were as follows: |
Multi-Year | ||||||||||||||||
Program Equity | ||||||||||||||||
Annual Equity Grant | Grant | |||||||||||||||
Name | (%) | ($) | (%) | ($) | ||||||||||||
Ms. Schaefer | 60.0 | 675,000 | 40.0 | 450,000 | ||||||||||||
Mr. Calder | 60.0 | 253,125 | 40.0 | 168,750 |
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• | third, for each NEO, the dollar amount for AEGs for 2009 listed above was then converted to a maximum total number of shares to be awarded by dividing (a) that dollar value amount by (b) $1.54, the closing price of our common stock on NASDAQ on December 31, 2008 (the last trading day in the year ended December 31, 2008). Based on this conversion, the maximum number of shares to be awarded to each officer was as follows: Ms. Schaefer — 438,312 shares and Mr. Calder — 164,367 shares. | |
• | fourth, the Committee approved additions to the AEG amounts to account for the effect of each NEO’s base salary increase on January 1, 2009. As outlined in the FPL report and discussed above, the MYPEGs awarded in 2007 covered a three-year performance period(2007-2009) and all shares related to the three-year period were granted in March 2007. The MYPEG shares granted at that time, however, were based on a percentage of each NEO’s January 1, 2007 base salary. Because the three-year(2007-2009) calculation was based on percentages of base salary as of January 1, 2007 and base compensation amounts increased at January 1, 2009, however, the number of shares originally issued for the MYPEGs in March 2007 no longer reflected the correct total long-term incentive potential (based on each executive’s now-higher base salary). As a result, the Committee approved the issuance of the additional shares under the AEGs for 2009 to each officer as follows: Ms. Schaefer — 93,506 shares and Mr. Calder — 26,299 shares. |
• | a portion of the AEG award amount was earned based on our common stock performance in calendar year 2009 relative to the Russell 2000 stock index total return in calendar year 2009. Under this performance criterion, an individual earned: | |
• | a portion of his or her total potential award amount if our stock performance for 2009 was 80% or greater than the performance of the Russell 2000 stock index; | |
• | less than the full portion amount of his or her award amount if our stock performance was less than 120% of the Russell 2000 stock index’s performance; and | |
• | no award under this performance criterion if our stock performance was less than 80% of the Russell 2000 stock index’s performance. | |
• | a portion of the award amount was earned based on the individual achieving certain individual, business unitand/or departmental performance goals in 2009, as determined by the Compensation Committee. |
AEG Award Factor | ||||||||||||||||
Individual, | ||||||||||||||||
Business Unit and/or | ||||||||||||||||
Relative Common | Departmental | |||||||||||||||
Stock Performance | Performance Goals | |||||||||||||||
Maximum | Maximum | |||||||||||||||
Share | Share | |||||||||||||||
Weighting | Award | Weighting | Award | |||||||||||||
Name | (%) | (#) | (%) | (#) | ||||||||||||
Ms. Schaefer | 75.0 | 398,864 | 25.0 | 132,955 | ||||||||||||
Mr. Calder | 75.0 | 142,999 | 25.0 | 47,666 |
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• | our common stock increased 53.9% in 2009 and the Russell 2000 stock index increased 25.2%. Therefore, our common stock’s performance was greater than 120% of the Russell 2000’s performance. As a result, 100% of the maximum potential payout for that award factor was earned. | |
• | the Compensation Committee determined the individual/business unit/department goal achievements as follows: Ms. Schaefer — 90% and Mr. Calder — 90%. |
AEG Award Factor | Ms. Schaefer | Mr. Calder | ||||||
Relative Common Stock Performance: | ||||||||
• Maximum # of Shares | 398,864 | 142,999 | ||||||
• % earned | 100 | % | 100 | % | ||||
• Number of Shares Earned | 398,864 | 142,999 | ||||||
Individual, Business Unit and/or Departmental Goals: | ||||||||
• Maximum # of Shares | 132,955 | 47,666 | ||||||
• % earned | 90.0 | % | 90.0 | % | ||||
• Number of Shares Earned | 119,659 | 42,900 | ||||||
Total Number of Shares Earned | 518,523 | 185,899 |
Amounts Vesting (#) | ||||||||||||||||||||
Vesting Date | Mr. Black | Mr. Calder | Mr. Lombardo | Ms. Schaefer | Mr. Schroeder | |||||||||||||||
3/2/10 | — | 61,966 | — | 172,841 | — | |||||||||||||||
4/1/10 | 5,000 | — | 4,000 | — | 2,000 | |||||||||||||||
12/31/10 | — | 61,967 | — | 172,841 | — | |||||||||||||||
4/1/11 | 5,000 | — | 4,000 | — | 2,000 | |||||||||||||||
12/31/11 | — | 61,966 | — | 172,841 | — | |||||||||||||||
4/1/12 | 5,000 | — | 4,000 | — | 2,000 | |||||||||||||||
4/1/13 | 5,000 | — | 4,000 | — | 2,000 | |||||||||||||||
4/1/14 | 5,000 | — | 4,000 | — | 2,000 |
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• | mandatory annual matching contributions to the plan for each participant equal to the lesser of (a) 4% of the participant’s annual base salary or (b) the participant’s annual deferrals to the plan. Matching contributions are reduced by the maximum amount of matching contributions the executive was eligible to receive in our 401(k) plan for the fiscal year. | |
• | discretionary annual profit-sharing contributions equal to up to 6% of the participant’s annual base salary. |
Employment Contract Item | Mr. Black | Mr. Calder | Ms. Schaefer | Mr. Schroeder | ||||||||||||
Date entered into | 12/16/09 | 12/20/08 | 12/20/08 | 12/20/08 | ||||||||||||
(or most recent date of renewal) | ||||||||||||||||
Contract ending date | 12/16/12 | 12/20/10 | 12/20/10 | 12/20/10 | ||||||||||||
Filing of agreement | Agreement filed as an exhibit to the company’s Form 10-K for the year ended December 31, 2009, filed with the SEC on 3/2/10. | |||||||||||||||
Annual bonus | Eligibility based on criteria determined by Compensation Committee. |
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• | Base salary | Subject to annual review and periodic increases, if any, as determined by the Compensation Committee. | ||
• | Benefit plan eligibility | Eligible to participate in our benefit plans at identical participation costs offered to all of our other employees. | ||
• | Business expense reimbursement | Eligible to have business expenses reimbursed, subject to reimbursement policies for all other employees. | ||
• | Severance payments | Due under various termination scenarios. | ||
• | Covenants not to compete | NEO subject to covenants not to compete with us subsequent to employment with us. |
• | Extension provisions | One-year extension at ending date, unless either we or the NEO provides at least 120 days notice of non-renewal |
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Option | Non-Equity | |||||||||||||||||||||||||||
Stock | Awards | Incentive Plan | All Other | |||||||||||||||||||||||||
Salary | Awards | (3)(4) | Compensation | Compensation | Total | |||||||||||||||||||||||
Name and Principal Position | Year | (1)($) | (2)(4)($) | ($) | (5)($) | (6)($) | ($) | |||||||||||||||||||||
Kimberly K. Schaefer(7) | 2009 | 519,231 | 668,415 | — | 558,300 | 33,669 | 1,779,615 | |||||||||||||||||||||
Chief Executive Officer | 2008 | 375,000 | 507,811 | — | 344,756 | 32,673 | 1,260,240 | |||||||||||||||||||||
2007 | 340,000 | 453,152 | — | 302,175 | 28,215 | 1,123,542 | ||||||||||||||||||||||
James A. Calder | 2009 | 389,423 | 239,639 | — | 337,163 | 25,977 | 992,202 | |||||||||||||||||||||
Chief Financial Officer | 2008 | 300,000 | 391,556 | — | 275,805 | 28,600 | 995,961 | |||||||||||||||||||||
2007 | 285,000 | 361,939 | — | 253,294 | 27,072 | 927,305 | ||||||||||||||||||||||
Timothy D. Black(8) | 2009 | 299,387 | 60,750 | — | 213,750 | 20,058 | 593,945 | |||||||||||||||||||||
Executive Vice President of Operations | ||||||||||||||||||||||||||||
Alissa N. Nolan(9) | 2009 | 298,317 | 12,150 | — | 43,318 | 425,000 | 766,635 | |||||||||||||||||||||
Former Executive Vice President and | 2008 | 425,000 | 29,287 | — | 75,000 | — | 529,287 | |||||||||||||||||||||
Managing Director of Business Development | ||||||||||||||||||||||||||||
Alexander P. Lombardo | 2009 | 192,115 | 48,600 | — | 92,500 | 14,138 | 347,353 | |||||||||||||||||||||
Treasurer | 2008 | 182,308 | 33,550 | — | 75,000 | 17,166 | 308,024 | |||||||||||||||||||||
2007 | 173,654 | 33,450 | — | 45,000 | 16,158 | 268,262 | ||||||||||||||||||||||
J. Michael Schroeder | 2009 | 278,307 | 24,300 | — | 80,000 | 22,612 | 405,519 | |||||||||||||||||||||
General Counsel and | 2008 | 268,000 | 33,550 | — | 52,000 | 25,100 | 378,650 | |||||||||||||||||||||
Corporate Secretary | 2007 | 257,308 | 133,800 | — | 52,000 | 24,622 | 467,730 |
(1) | Salary amounts for 2009 reflect payment of 27 bi-weekly payroll periods during calendar year 2009. | |
(2) | Stock Award amounts reported in the table above for 2009 consist of the following items: |
Stock Award Component | Ms. Schaefer | Mr. Calder | Mr. Black | Mr. Lombardo | Ms. Nolan | Mr. Schroeder | ||||||||||||||||||
Annual Equity Grant — Relative Common Stock Performance: | ||||||||||||||||||||||||
Fair value on grant date ($) | 502,569 | 180,179 | — | — | — | — | ||||||||||||||||||
Shares granted (#) | 398,864 | 142,999 | — | — | — | — | ||||||||||||||||||
Annual Equity Grant — Performance Goals: | ||||||||||||||||||||||||
Fair value on grant date ($) | 184,275 | 66,066 | — | — | — | — | ||||||||||||||||||
Shares granted (#) | 119,659 | 42,900 | — | — | — | — | ||||||||||||||||||
Other: | ||||||||||||||||||||||||
Fair value on grant date ($) | — | — | 60,750 | 48,600 | 12,150 | 24,300 | ||||||||||||||||||
Shares granted (#) | — | — | 25,000 | 20,000 | 5,000 | 10,000 | ||||||||||||||||||
Totals: | ||||||||||||||||||||||||
Fair value on grant date ($) | 668,415 | 239,639 | 60,750 | 48,600 | 12,150 | 24,300 | ||||||||||||||||||
Shares granted (#) | 518,523 | 185,899 | 25,000 | 20,000 | 5,000 | 10,000 |
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(3) | Under generally accepted accounting principles, the fair value amounts of each of our grants of option awards are determined at their grant date. That full value amount as of the grant date is then expensed ratably over the vesting period of the options. The amount we record as expense on our financial statements is based on the value assigned to the options at the grant date; that value is then recorded as expense regardless of whether the options ever have any intrinsic value to the executive (that is, whether or not the price of our common stock ever exceeds the option exercise price). | |
For example, all of the option awards we have recorded as expense for our NEOs relate to stock options we granted to certain of our NEOs in 2004 and 2005. Because those options were subject to a three-year vesting period, we recognized expense related to those options in2004-2008. For all of 2009, 2008 and 2007, however, our common stock traded at values below the exercise prices of all of those options. As a result, at no time in 2009, 2008 or 2007 did the stock options awarded to our NEOs in 2004 and 2005 have any intrinsic value to those NEOs. | ||
(4) | The value reported for Stock Awards and Option Awards for each executive is the aggregate grant date fair value for such awards. The assumptions for making the valuation determinations are set forth in the footnote or footnote sections to our financial statements captioned “Stock Based Compensation” or “Share-Based Compensation” in our consolidated financial statements. For additional information on these awards, see the Grants of Plan-Based Awards table, below. | |
(5) | This column includes amounts earned under our annual cash incentives bonus plan for 2009, 2008 and 2007, as discussed in the Compensation Discussion and Analysis above. For 2009, 2008 and 2007 annual cash incentives bonus amounts, we offered our NEOs the opportunity to take some or their entire bonus in shares of our company’s common stock in lieu of cash. If an executive elected to receive shares, they received shares having a market value equal to 125% of the cash they would have otherwise received. Amounts shown in this column represent the cash bonus that each executive earned, regardless of whether the executive elected to take all or part of their cash bonus in the form of shares of our common stock; any incremental value as a result of an executive taking all or part of their bonus in the form of shares is included in the Stock Awards column (see Note (2) above). | |
(6) | All Other Compensation consists of our contributions to executives’ accounts in our qualified 401(k) plan and our non-tax qualified deferred compensation plan, and separation payments to certain executives. Pursuant to SEC rules, perquisites and personal benefits are not reported for any executive officer for whom such amounts were less than $10,000 in aggregate for the fiscal year. Our contributions to the deferred compensation plan are also reported in the Nonqualified Deferred Compensation table below. |
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Company | ||||||||||||||||||||
Company | Contributions to | |||||||||||||||||||
Contributions to | Deferred | Separation | ||||||||||||||||||
401(k) Plan | Compensation Plan | Payments | Total | |||||||||||||||||
Name | Year | ($) | ($) | ($) | ($) | |||||||||||||||
Ms. Schaefer | 2009 | — | 33,669 | — | 33,669 | |||||||||||||||
2008 | 3,173 | 29,500 | — | 32,673 | ||||||||||||||||
2007 | 4,500 | 23,715 | — | 28,215 | ||||||||||||||||
Mr. Calder | 2009 | — | 25,977 | — | 25,977 | |||||||||||||||
2008 | 4,600 | 24,000 | — | 28,600 | ||||||||||||||||
2007 | 3,365 | 23,707 | — | 27,072 | ||||||||||||||||
Mr. Black | 2009 | — | 20,058 | — | 20,058 | |||||||||||||||
Mr. Lombardo | 2009 | — | 14,138 | — | 14,138 | |||||||||||||||
2008 | 3,639 | 13,527 | — | 17,166 | ||||||||||||||||
2007 | 4,319 | 11,839 | — | 16,158 | ||||||||||||||||
Ms. Nolan | 2009 | — | — | 425,000 | 425,000 | |||||||||||||||
2008 | — | — | — | — | ||||||||||||||||
Mr. Schroeder | 2009 | — | 22,612 | — | 22,612 | |||||||||||||||
2008 | 4,600 | 20,500 | — | 25,100 | ||||||||||||||||
2007 | 4,357 | 20,265 | — | 24,622 |
(7) | Ms. Schaefer was named our Chief Executive Officer effective January 1, 2009. | |
(8) | Mr. Black became an executive officer of the company in 2009. | |
(9) | Ms. Nolan became an executive officer of the company in 2008 and resigned in September 2009. |
Estimated Future Payouts Under | Estimated Future Payouts Under Equity | Grant Date Fair | ||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards(1) | Incentive Plan Awards(2) | Value of Stock and | ||||||||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Option Awards(3) | |||||||||||||||||||||||||
Name | Date | Type of Grant | ($) | ($) | ($) | (#) | (#) | (#) | ($) | |||||||||||||||||||||||
Ms. Schaefer | N/A | Annual Cash Incentive | 250,000 | 500,000 | 750,000 | — | — | — | — | |||||||||||||||||||||||
3/2/2009 | Annual Equity Grant — Relative | — | — | 398,864 | ||||||||||||||||||||||||||||
Common Stock Performance | ||||||||||||||||||||||||||||||||
3/2/2009 | Annual Equity Grant — Performance | — | — | 132,955 | ||||||||||||||||||||||||||||
Goals | ||||||||||||||||||||||||||||||||
Mr. Calder | N/A | Annual Cash Incentive | 328,125 | 421,875 | — | |||||||||||||||||||||||||||
3/2/2009 | Annual Equity Grant — Relative | — | — | 142,999 | ||||||||||||||||||||||||||||
Common Stock Performance | ||||||||||||||||||||||||||||||||
3/2/2009 | Annual Equity Grant — Performance | — | — | 47,666 | ||||||||||||||||||||||||||||
Goals | ||||||||||||||||||||||||||||||||
Mr. Black | N/A | Annual Cash Incentive | 106,875 | 213,750 | — | |||||||||||||||||||||||||||
4/1/2009 | Time-Based | — | — | 25,000 | ||||||||||||||||||||||||||||
Mr. Lombardo | N/A | Annual Cash Incentive | 46,250 | 92,500 | — | |||||||||||||||||||||||||||
4/1/2009 | Time-Based | — | — | 20,000 | ||||||||||||||||||||||||||||
Mr. Schroeder | N/A | Annual Cash Incentive | 67,000 | 134,000 | — | |||||||||||||||||||||||||||
4/1/2009 | Time-Based | — | — | 10,000 |
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(1) | The amounts reported in the columns include potential payouts corresponding to the achievement of the threshold, target, and maximum performance objectives under our annual cash incentive plan, as discussed in the Compensation Discussion and Analysis above. The actual payments for performance under this plan for the fiscal year are reported in the Summary Compensation Table above. | |
(2) | The amounts reported in the columns include potential payouts corresponding to the achievement of the threshold, target, and maximum performance objectives for awards under our long-term incentive plan, as discussed in the Compensation Discussion and Analysis above. The actual award amounts earned for 2009 are also discussed in the Compensation Discussion and Analysis above. | |
(3) | The amount represents the grant date fair value is the value of Stock and Option Awards (that is, those made under an Equity Incentive Plan) granted in 2009, disregarding that we recognize the value of the awards for financial reporting purposes over the service period of the awards. The grant date fair value shown is calculated based in the maximum potential future payout number of shares. |
• | Termination of employment by us: |
• | in the event of death, | |
• | in the event of disability, | |
• | for cause, | |
• | without cause, or | |
• | due to non-renewal of an employment contract. | |
• | termination of employment by the executive: | |
• | as a voluntary termination, | |
• | for good reason or | |
• | due to non-renewal of an employment contract. |
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• | Death or Disability. The NEO would be entitled to receive base salary and annual bonus, if any, which were due and payable on the date the executive’s employment terminated. | |
• | For Cause. The NEO would be entitled to receive base salary and annual bonus, if any, which were due and payable on the date the executive’s employment was terminated for cause. Termination for “cause” is a termination due to: |
• | the executive being convicted of, pleading guilty to, or confessing or otherwise admitting to any felony or any act of fraud, misappropriation or embezzlement; | |
• | an act or omission by the executive involving malfeasance or gross negligence in the performance of the executive’s duties and responsibilities to the material detriment of our company; | |
• | the executive breaching affirmative or negative covenants or undertakings described in the employment agreement, such as the agreement’s non-compete provisions; or | |
• | the executive violating our code of conduct if the consequence of such violation ordinarily would be a termination of their employment by us. |
• | Without cause. The NEO would be entitled to receive, in lump sum payments: |
• | an amount equal to 100% of their then-current annual base salary and most recently paid annual bonus; and | |
• | an amount equal to 36 times our monthly contribution on behalf of the executive under health and welfare plans in which the executive participates. |
• | any person or group acquires 30% or more of our stock; | |
• | the majority of the members of our Board of Directors changes in any two-year period; | |
• | a merger or sale of our company to another company or any sale or disposition of 50% or more of our assets or business; or | |
• | a merger or consolidation where our stockholders hold 60% or less of the voting power to vote for members of the Board of Directors of the new entity. | |
• | Non-renewal of employment agreement by company. The NEO would be entitled to receive the same benefits as for a termination without cause as described above. | |
• | Voluntary. The NEO would be entitled to receive base salary and annual bonus, if any, which were due and payable on the date the executive’s employment terminated. | |
• | Good Reason. Termination by the executive for “good reason” is a termination due to: |
• | A material reduction or, after a change of control, any reduction in the executive’s base salary or a material reduction in the executive’s opportunity to receive any annual bonus and stock option grants; | |
• | a material reduction in the scope, importance or prestige of the executive’s duties, responsibilities or powers at the company or the executive’s reporting relationships within the company; | |
• | transferring the executive’s primary work site from the executive’s primary work site on the date the employment agreement was signed; |
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• | after a change of control, a change in the executive’s job title or employee benefit plans, programs and policies; or | |
• | a material breach or, after a change of control, any breach of the employment agreement. |
• | Non-renewal of employment agreement by the executive. The NEO would be entitled to receive base salary and annual bonus, if any, which were due and payable on the date the executive’s employment terminated. |
• | Death or Disability, For Cause, Non-renewal of employment agreement by the company, Voluntary and Non-renewal of employment agreement by the executive. Mr. Black would be entitled to receive base salary and annual bonus, if any, which were due and payable on the date his employment terminated. | |
• | Without cause. Mr. Black would be entitled to receive base salary and annual bonus, if any, which were due and payable on the date his employment terminated. | |
• | Good Reason. In the event of a termination by Mr. Black for good reason or by the company within 180 days prior to, or 18 months following a change of control, Mr. Black would be entitled to receive, in lump sum payments: |
• | an amount equal to 200% of his then-current annual base salary and most recently paid annual bonus; and | |
• | an amount equal to 36 times our monthly contribution on behalf of the executive under health and welfare plans in which the executive participates. |
• | Death or Disability, For Cause, Non-renewal of employment agreement by the company, Voluntary and Non-renewal of employment agreement by the executive. Mr. Lombardo would be entitled to receive base salary and annual bonus, if any, which were due and payable on the date his employment terminated. | |
• | Without cause. Mr. Lombardo would be entitled to receive base salary and annual bonus, if any, which were due and payable on the date his employment terminated. In the event of a termination by the company within 12 months following a change of control, Mr. Lombardo would be entitled to receive in a lump sum payment an amount equal to 100% of his then-current annual base salary. |
• | competing with us within 50 miles of a location where we conduct or are planning to conduct our business; | |
• | inducing or attempting to induce any customers or potential customers from conducting business with us; or | |
• | hiring or attempting to hire our employees. |
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Health and | Excise Tax | |||||||||||||||||||
Welfare | Gross-Up | |||||||||||||||||||
Salary Due | Bonus Due | Payment | Payment | Total Due | ||||||||||||||||
Name/Termination Event | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Ms. Schaefer | ||||||||||||||||||||
- Death, disability, termination for cause, voluntary termination, non-renewal by executive | — | — | — | — | — | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming no change of control) | 500,000 | 344,756 | 29,883 | — | 874,639 | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming a change of control) | 1,000,000 | 689,512 | 29,883 | 1,370,008 | 3,089,403 | |||||||||||||||
Mr. Calder | ||||||||||||||||||||
- Death, disability, termination for cause, voluntary termination, non-renewal by executive | — | — | — | — | — | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming no change of control) | 375,000 | 275,805 | 19,147 | — | 669,952 | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming a change of control) | 750,000 | 551,610 | 19,147 | 746,358 | 2,067,115 | |||||||||||||||
Mr. Black | ||||||||||||||||||||
- Death, disability, termination for cause, voluntary termination, non-renewal by executive | — | — | — | — | — | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming no change of control) | — | — | — | — | — | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming a change of control) | 570,000 | 180,000 | 29,883 | 301,307 | 1,081,190 | |||||||||||||||
Mr. Lombardo | ||||||||||||||||||||
- Death, disability, termination for cause, voluntary termination, non-renewal by executive | — | — | — | — | — | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming no change of control) | — | — | — | — | — | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming a change of control) | 185,000 | — | — | — | 185,000 | |||||||||||||||
Mr. Schroeder | ||||||||||||||||||||
- Death, disability, termination for cause, voluntary termination, non-renewal by executive | — | — | — | — | — | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming no change of control) | 268,000 | 52,000 | 28,083 | — | 348,083 | |||||||||||||||
- Termination without cause, for good reason or non-renewal by company (all assuming a change of control) | 536,000 | 104,000 | 28,083 | — | 668,083 |
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• | termination of the executive’s employment by the company without cause and | |
• | termination of the executive’s employment by the executive for good reason. |
• | a termination by us without cause or | |
• | an executive’s resignation for good reason. |
Shares With | Value | |||||||
Vesting | Realized on | |||||||
Accelerated | Vesting | |||||||
Name | (#) | (1) ($) | ||||||
Ms. Schaefer | 4,339 | 10,283 | ||||||
Mr. Calder | 1,688 | 4,001 | ||||||
Mr. Black | 38,000 | 90,060 | ||||||
Mr. Lombardo | 27,500 | 65,175 | ||||||
Mr. Schroeder | 20,000 | 47,400 |
(1) | The value realized is based on the closing price of our common stock on NASDAQ on December 31, 2009, which was $2.37. |
• | For shares granted under the 2009 AEG program, vesting of the shares will accelerate upon a termination of the officer by the company without cause, a termination by the officer for good reason, death or disability, or a change in control of the company. Officers will forfeit all unvested AEG awards upon termination by the company with cause or a voluntary termination by the officer without good reason. | |
• | For shares granted under the2007-2009 MYPEG program, vesting of the shares will accelerate upon a termination of the officer by the company without cause, a termination by the officer for good reason, death or disability, or a change in control of the company. Awards with respect to time-based shares would at all times be deemed fully vested upon a change in control of the company. Officers will forfeit all unvested MYPEG program awards upon termination by the company with cause or a voluntary termination by the officer without good reason. |
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Shares With | Value | |||||||
Vesting | Realized on | |||||||
Accelerated | Vesting | |||||||
Name | (#) | (1) ($) | ||||||
Ms. Schaefer | 522,633 | 1,238,640 | ||||||
Mr. Calder | 189,344 | 448,745 |
(1) | The value realized is based on the closing price of our common stock on NASDAQ on December 31, 2009, which was $2.37. |
• | a change of control of the company or | |
• | the NEO’s death or disability. |
Stock Awards | ||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||
Equity | Plan Awards: | |||||||||||||||||||||||||||||||
Incentive | Market or | |||||||||||||||||||||||||||||||
Plan Awards; | Payout | |||||||||||||||||||||||||||||||
Market | Number of | Value of | ||||||||||||||||||||||||||||||
Option Awards | Number of | Value of | Unearned | Unearned | ||||||||||||||||||||||||||||
Number of | Number of | Shares or | Shares or | Shares, | Shares, | |||||||||||||||||||||||||||
Securities | Securities | Units of | Units of | Units or | Units or | |||||||||||||||||||||||||||
Underlying | Underlying | Option | Stock | Stock | Other Rights | Other Rights | ||||||||||||||||||||||||||
Unexercised | Unexercised | Exercise | Option | That Have | That Have | That Have | That Have | |||||||||||||||||||||||||
Options | Options(1) | Price | Expiration | Not Vested(1) | Not Vested(2) | Not Vested(1) | Not Vested(2) | |||||||||||||||||||||||||
Name | (# Exer) | (# Unexer) | ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||
Ms. Schaefer | 100,000 | — | �� | 17.00 | 12/20/2014 | 8,449 | 20,024 | 518,523 | 1,228,900 | |||||||||||||||||||||||
Mr. Calder | 100,000 | — | 17.00 | 12/20/2014 | 5,134 | 12,168 | 185,899 | 440,581 | ||||||||||||||||||||||||
Mr. Black | 1,000 | — | 17.00 | 12/20/2014 | 38,000 | 90,060 | — | — | ||||||||||||||||||||||||
Mr. Lombardo | 40,000 | — | 17.00 | 12/20/2014 | 27,500 | 65,175 | — | — | ||||||||||||||||||||||||
Mr. Schroeder | 75,000 | — | 17.00 | 12/20/2014 | 20,000 | 47,400 | — | — |
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(1) | The following table shows the vesting dates of the outstanding Option Awards and Stock Awards that were unvested as of December 31, 2009: |
Vesting | Amounts Vesting (#) | |||||||||||||||||||||
Award Type | Date | Ms. Schaefer | Mr. Calder | Mr. Black | Mr. Lombardo | Mr. Schroeder | ||||||||||||||||
Stock | 1/1/10 | — | — | 2,000 | — | — | ||||||||||||||||
Stock | 3/2/10 | 172,841 | 61,966 | — | — | — | ||||||||||||||||
Stock | 4/1/10 | — | — | 7,500 | 5,500 | 5,000 | ||||||||||||||||
Stock | 8/8/10 | — | — | — | 1,000 | — | ||||||||||||||||
Stock | 12/31/10 | 179,120 | 66,256 | — | — | — | ||||||||||||||||
Stock | 1/1/11 | — | — | 2,000 | — | — | ||||||||||||||||
Stock | 4/1/11 | — | — | 7,500 | 5,500 | 5,000 | ||||||||||||||||
Stock | 8/8/11 | — | — | — | 1,000 | — | ||||||||||||||||
Stock | 12/31/11 | 175,011 | 62,811 | — | — | — | ||||||||||||||||
Stock | 4/1/12 | — | — | 7,500 | 5,500 | 5,000 | ||||||||||||||||
Stock | 4/1/13 | — | — | 6,500 | 5,000 | 3,000 | ||||||||||||||||
Stock | 4/1/14 | — | — | 5,000 | 4,000 | 2,000 |
(2) | The Market Value is based on the closing price of our common stock on NASDAQ on December 31, 2009, which was $2.37. |
Option Awards | Stock Awards | |||||||||||||||
Number of Shares | Number of Shares | |||||||||||||||
Acquired on | Value Realized | Acquired on | Value Realized | |||||||||||||
Exercise | on Exercise | Vesting | on Vesting | |||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
Ms. Schaefer | — | — | 15,392 | 34,049 | ||||||||||||
Mr. Calder | — | — | 7,913 | 17,809 | ||||||||||||
Mr. Black | — | — | 4,500 | 9,415 | ||||||||||||
Mr. Lombardo | — | — | 2,500 | 6,875 | ||||||||||||
Mr. Schroeder | — | — | 3,000 | 7,290 |
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Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||||
Contributions in | Contributions | Earnings in | Withdrawals/ | Balance at | ||||||||||||||||
Last FY | in Last FY | Last FY(1) | Distributions | Last FYE(2) | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Ms. Schaefer | 19,808 | 33,669 | 48,229 | — | 183,034 | |||||||||||||||
Mr. Calder | 14,885 | 25,977 | 26,816 | — | 199,694 | |||||||||||||||
Mr. Black | 17,181 | 20,058 | 13,765 | — | 58,508 | |||||||||||||||
Mr. Lombardo | 7,385 | 14,138 | 11,524 | — | 81,456 | |||||||||||||||
Mr. Schroeder | 10,720 | 22,612 | 8,923 | — | 101,918 |
(1) | The values in this column include aggregate notional earnings during 2009 of each NEO’s account in the deferred compensation plan. Aggregate notional earnings in this table are not reported in the Summary Compensation Table because they are based on market rates that are determined by reference to available benchmark investment alternatives offered under the Plan. | |
(2) | This column includes amounts of each NEO’s total deferred compensation plan account as of December 31, 2009. The following table reports the portion of the Aggregate Balance that was reported as base salary and bonus compensation in the Summary Compensation Tables in our prior year proxies. |
Amounts that were | ||||
Reported as | ||||
Compensation in | ||||
Name | Prior Year Proxies ($) | |||
Ms. Schaefer | 67,330 | |||
Mr. Calder | 256,016 | |||
Mr. Black | — | |||
Mr. Lombardo | — | |||
Mr. Schroeder | 39,540 |
2009 Annual | ||||
Benchmark Investment (Ticker Symbol) | Rate of Return (%) | |||
Artisan International (ARTIX) | 39.8 | |||
Baron Growth (BGRFX) | 34.2 | |||
Columbia Small Cap Value I Z (CSCZX) | 24.7 | |||
Dodge & Cox Stock Fund (DODGX) | 31.3 | |||
Growth Fund of America (GFAFX) | 34.6 | |||
PIMCO All Asset (PASAX) | 22.2 | |||
PIMCO Total Return Fund (PTTRX) | 13.8 | |||
Vanguard Mid-Cap Index (VIMSX) | 40.2 | |||
Vanguard S&P 500 Index (VFINX) | 26.5 | |||
Great Wolf Resorts, Inc. common stock (WOLF) | 53.9 |
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Fees | ||||||||||||||||
Earned or | Stock | Option | ||||||||||||||
Paid in | Awards | Awards | Total | |||||||||||||
Name | Cash ($) | (1)(2)(3)($) | (1)(2)(3)($) | ($) | ||||||||||||
Joseph Vittoria | 90,375 | 52,999 | — | 143,374 | ||||||||||||
Elan Blutinger | 54,750 | 52,999 | — | 107,749 | ||||||||||||
Randy Churchey | 15,875 | 102,373 | — | 118,248 | ||||||||||||
Steven Hovde(4) | — | 52,110 | — | 52,110 | ||||||||||||
Michael Knetter(4) | 19,125 | 7,968 | — | 27,093 | ||||||||||||
Richard Murray(4) | — | 25,500 | — | 25,500 | ||||||||||||
Edward Rensi | 56,625 | 52,999 | — | 109,624 | ||||||||||||
Howard Silver | 59,938 | 63,702 | — | 123,640 |
(1) | The value reported for Stock Awards and Option Awards for each individual is the fair value of the full grant received as of the grant date. The assumptions for making the valuation determinations are set forth in the footnote or footnote sections to our financial statements captioned “Stock Based Compensation” or “Share-Based Compensation” in our consolidated financial statements. | |
(2) | The following table shows the number of outstanding Stock Awards and Option Awards held by each non-employee director as of December 31, 2009: |
Stock Awards | Option Awards | |||||||||||||||
Vested | Unvested | Vested | Unvested | |||||||||||||
Name | (#) | (#) | (#) | (#) | ||||||||||||
Mr. Vittoria | 26,288 | 23,111 | 7,500 | — | ||||||||||||
Mr. Blutinger | 19,746 | 23,111 | 12,500 | — | ||||||||||||
Mr. Churchey | 38,917 | 19,632 | 12,500 | — | ||||||||||||
Mr. Rensi | 19,574 | 23,111 | 7,500 | — | ||||||||||||
Mr. Silver | 24,381 | 23,111 | 12,500 | — |
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Vesting | ||||||||||||||||||||||||
Award Type | Date | Mr. Vittoria | Mr. Blutinger | Mr. Churchey | Mr. Rensi | Mr. Silver | ||||||||||||||||||
Stock | 5/26/10 | 5,573 | 5,573 | 5,573 | 5,573 | 5,573 | ||||||||||||||||||
Stock | 5/28/10 | 2,609 | 2,609 | 870 | 2,609 | 2,609 | ||||||||||||||||||
Stock | 5/30/10 | 1,173 | 1,173 | 1,173 | 1,173 | 1,173 | ||||||||||||||||||
Stock | 5/26/11 | 5,573 | 5,573 | 5,573 | 5,573 | 5,573 | ||||||||||||||||||
Stock | 5/28/11 | 2,610 | 2,610 | 870 | 2,610 | 2,610 | ||||||||||||||||||
Stock | 5/26/12 | 5,573 | 5,573 | 5,573 | 5,573 | 5,573 |
(3) | The following table details the grants of Stock Awards and Option Awards to directors during 2009: |
Grant Date | ||||||||||||||||||||
Fair Value of | ||||||||||||||||||||
Grant | Grant | Stock | Option | Stock and | ||||||||||||||||
Name | Type | Date | Awards (#) | Awards (#) | Option Awards ($) | |||||||||||||||
Mr. Vittoria | (B | ) | 5/26/09 | 16,719 | — | 52,999 | ||||||||||||||
Mr. Blutinger | (B | ) | 5/26/09 | 16,719 | — | 52,999 | ||||||||||||||
Mr. Churchey | (A | ) | 1/1/09 | 9,588 | — | 14,766 | ||||||||||||||
(A | ) | 4/1/09 | 6,076 | — | 14,765 | |||||||||||||||
(B | ) | 5/26/09 | 16,719 | — | 52,999 | |||||||||||||||
(A | ) | 7/1/09 | 9,061 | — | 19,844 | |||||||||||||||
Mr. Hovde | (A | ) | 1/1/09 | 21,713 | — | 33,438 | ||||||||||||||
(A | ) | 4/1/09 | 7,684 | — | 18,672 | |||||||||||||||
Mr. Knetter | (A | ) | 4/1/09 | 3,279 | — | 7,968 | ||||||||||||||
Mr. Murray | (A | ) | 1/1/09 | 8,279 | — | 12,750 | ||||||||||||||
(A | ) | 4/1/09 | 5,247 | — | 12,750 | |||||||||||||||
Mr. Rensi | (B | ) | 5/26/09 | 16,719 | — | 52,999 | ||||||||||||||
Mr. Silver | (A | ) | 1/1/09 | 6,950 | — | 10,703 | ||||||||||||||
(B | ) | 5/26/09 | 16,719 | — | 52,999 |
Items marked (A) in the table above represent shares of our common stock that a director elected to receive in lieu of cash payment for director compensation in 2009. Items marked (B) in the table above represent the annual equity grant amount received as director compensation for 2009. For additional information on these components of director compensation, see the Narrative to the Director Compensation Table below. | ||
The grant date fair value is the value of Stock and Option Awards granted in 2009, disregarding that we recognize the value of the awards for financial reporting purposes over the service period of the awards. | ||
(4) | Messrs. Hovde and Murray served as members of our Board of Directors through April 2009. Mr. Knetter served as a member of our Board of Directors through May 2009. |
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Bluegreen Corporation | Red Lion Hotels Corporation | |
Cedar Fair | Silverleaf Resorts, Inc. | |
Gaylord Entertainment Company | Six Flags, Inc. | |
ILX Resorts Incorporated | Steiner Leisure Limited | |
Isle of Capri Casinos, Inc. | Vail Resorts, Inc. | |
Nevada Gold & Casinos, Inc. |
• | each of our non-employee directors received an annual retainer fee of $47,250 for services as a director. Also, our chairman received an additional annual fee of $25,000. | |
• | the chair of the audit committee received an additional annual fee of $17,500, and the chair of each other committee received an additional annual fee of $7,500. | |
• | each member of the audit committee other than the chair received an additional annual fee of $12,500, and each member of each other committee other than the chairs received an additional annual fee of $3,750. | |
• | directors who are employees of our company or our subsidiaries did not receive compensation for their services as directors. | |
• | each independent director who is initially elected to our Board of Directors received 2,500 nonvested shares of our common stock. The shares granted to new independent directors vest in thirds over a three-year period, beginning on the first anniversary of the date of the grant of the shares, subject to accelerated vesting only upon a change of control or if the director is removed from or is not nominated to stand for reelection to the Board of Directors. | |
• | independent directors received an equity amount of $53,000 in shares of our restricted common stock on May 26, 2009, the date of our 2009 annual meeting of our stockholders. These shares granted to independent directors vest in thirds over a three-year period, beginning on the first anniversary of the date of the grant of the shares, subject to accelerated vesting only upon a change of control or if the director is removed from or is not nominated to stand for reelection to the Board of Directors. |
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Shares Beneficially | ||||||||
Name of Beneficial Owner | Owned | |||||||
Officers and Directors | Number | Percentage | ||||||
Joseph V. Vittoria | 77,567 | (1) | * | |||||
Kimberly K. Schaefer | 1,235,329 | (2) | 3.8 | % | ||||
Elan Blutinger | 91,904 | (3) | * | |||||
Randy L. Churchey | 144,675 | (4) | * | |||||
Edward H. Rensi | 70,853 | (1) | * | |||||
Howard A. Silver | 84,660 | (3) | * | |||||
Timothy D. Black | 84,628 | (5) | ||||||
James A. Calder | 400,680 | (6) | 1.2 | % | ||||
Alexander P. Lombardo | 72,997 | (7) | * | |||||
J. Michael Schroeder | 94,848 | (8) | * | |||||
All directors and executive officers as a group (10 persons) | 2,358,141 | 7.2 | % |
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Shares Beneficially | ||||||||
Name of Beneficial Owner | Owned | |||||||
Officers and Directors | Number | Percentage | ||||||
Beneficial Holders in Excess of 5% | ||||||||
Wells Fargo & Company 420 Montgomery Street San Francisco, CA 94163 | 4,763,104 | (9) | 14.5 | % | ||||
AXA Financial, Inc 1290 Avenue of the Americas New York, NY 10104 | 3,144,894 | (10) | 9.6 | % | ||||
Baron Capital Group, Inc. 767 Fifth Avenue, 49th Floor New York, NY 10153 | 3,060,000 | (11) | 9.3 | % | ||||
Dimensional Fund Advisors, LP, 6300 Bee Cave Road, Austin, TX 78746 | 2,630,979 | (12) | 8.0 | % | ||||
Prescott Group Capital Management, LLC, 1924 South Utica, Suite 1120, Tulsa, OK74104-6529 | 2,036,634 | (13) | 6.2 | % |
* | Less than one percent of the outstanding shares of common stock. | |
(1) | Includes (a) 7,500 shares issuable upon the exercise of vested options granted under Great Wolf Resorts’ 2004 Incentive Stock Plan and (b) 38,824 unvested shares of restricted stock granted under Great Wolf Resorts’ 2004 Incentive Stock Plan. | |
(2) | Includes (a) 33,009 shares held jointly with Ms. Schaefer’s spouse, (b) 100,000 shares issuable upon the exercise of vested options granted under Great Wolf Resorts’ 2004 Incentive Stock Plan and (c) 510,777 unvested shares of restricted stock granted under Great Wolf Resorts’ 2004 Incentive Stock Plan. | |
(3) | Includes (a) 12,500 shares issuable upon the exercise of vested options granted under Great Wolf Resorts’ 2004 Incentive Stock Plan and (b) 38,824 unvested shares of restricted stock granted under Great Wolf Resorts’ 2004 Incentive Stock Plan. | |
(4) | Includes (a) 12,500 shares issuable upon the exercise of vested options granted under Great Wolf Resorts’ 2004 Incentive Stock Plan and (b) 37,084 unvested shares of restricted stock granted under Great Wolf Resorts’ 2004 Incentive Stock Plan. | |
(5) | Includes (a) 1,000 shares issuable upon exercise of vested options granted under Great Wolf Resorts’ 2004 Incentive Stock Plan and (b) 73,144 unvested shares of restricted stock granted under Great Wolf Resorts’ 2004 Incentive Stock Plan. | |
(6) | Includes (a) 100,000 shares issuable upon the exercise of vested options granted under Great Wolf Resorts’ 2004 Incentive Stock Plan and (b) 202,168 unvested shares of restricted stock granted under Great Wolf Resorts’ 2004 Incentive Stock Plan. In addition, Great Wolf Resorts’ deferred compensation plan holds 11,765 shares to pay obligations owed to Mr. Calder pursuant to that plan. | |
(7) | Includes (a) 40,000 shares issuable upon the exercise of vested options granted under Great Wolf Resorts’ 2004 Incentive Stock Plan and (b) 21,000 unvested shares of restricted stock granted under Great Wolf Resorts’ 2004 Incentive Stock Plan. | |
(8) | Includes (a) 75,000 shares issuable upon the exercise of vested options granted under Great Wolf Resorts’ 2004 Incentive Stock Plan and (b) 15,000 unvested shares of restricted stock granted under Great Wolf Resorts’ 2004 Incentive Stock Plan. | |
(9) | Based solely upon information provided in aSchedule 13-G filed with the SEC on January 22, 2010. Wells Fargo & Company owns beneficially in the aggregate 4,763,104 shares of common stock, of which it has sole voting and dispositive power with respect to 3,240,310 and 4,763,104, respectively. | |
(10) | Based solely upon information provided in aSchedule 13-G filed with the SEC on February 12, 2010. AXA Financial, Inc owns beneficially in the aggregate 3,144,894 shares of common stock, of which it has sole voting and dispositive power with respect to 2,850,844 and 3,144,894, respectively. | |
(11) | Based solely upon information provided in aSchedule 13-G filed with the SEC on February 3, 2010. Baron Capital Group, Inc. (“BCG”) owns beneficially in the aggregate 3,060,000 shares of common stock, of which it has sole voting and dispositive power with respect to none of such shares and shared voting and dispositive power over 3,060,000 shares. BCG is a parent holding company of BAMCO, Inc. (“BAMCO”), a registered investment advisor. Ronald Baron (“Baron”) owns a controlling interest in |
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BCG. BAMCO and Baron beneficially own 3,060,000 and 3,060,000, respectively, shares of common stock, of which they have sole voting and dispositive power with respect to none of such shares and shared voting power and dispositive power of 3,060,000 shares. | ||
(12) | Based solely upon information provided in aSchedule 13-G filed with the SEC on February 8, 2010. Dimensional Fund Advisors LP owns beneficially in the aggregate 2,630,979 shares of common stock, of which it has sole voting and dispositive power with respect to 2,588,199 and 2,630,979, respectively. | |
(13) | Based solely upon information provided in aSchedule 13-G filed with the SEC on February 12, 2010. Prescott Group Capital Management, LLC owns beneficially in the aggregate 2,036,634 shares of common stock, of which it has sole voting and dispositive power with respect to 2,036,634. |
• | We rent office space for our headquarters location in Madison, Wisconsin from a company that is an affiliate of Steven Hovde, who was a member of our Board of Directors through April 23, 2009 and a principal of Hovde Capital Advisors, LLC, a holder of more than 5% of our common stock through May 27, 2009. For 2009, our total payments for rent and related expenses for this office space were approximately $353,000. |
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Corporate Trust Services
40 Pearly Street, NW, Suite 838
Grand Rapids, MI 49503
Attn: Specialized Finance
Corporate Trust Services
40 Pearly Street, NW, Suite 838
Grand Rapids, MI 49503
Attn: Specialized Finance
Confirm by Telephone: (800)934-6802
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• | are general obligations of the Issuers; | |
• | rankpari passuin right of payment to all existing and future senior Indebtedness of the Issuers; | |
• | are senior in right of payment to any existing and future subordinated Indebtedness of the Issuers; | |
• | are unconditionally guaranteed by the Parent Guarantors and the Subsidiary Guarantors and the guarantees by certain Subsidiary Guarantors are secured by assets of such Subsidiary Guarantors; | |
• | are structurally subordinated to all existing and future liabilities of those Subsidiaries of the Issuers that do not guarantee the Notes; and | |
• | are not secured by any assets of the Issuers. |
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• | rankspari passuin right of payment with all existing and future senior Indebtedness of that Subsidiary Guarantor; | |
• | is effectively senior to all existing and future senior unsecured Indebtedness of that Subsidiary Guarantor, to the extent of the value of the Collateral securing such Note Guarantee; and | |
• | is senior in right of payment to any existing and future subordinated Indebtedness of that Subsidiary Guarantor. |
• | rankspari passuin right of payment with all existing and future senior Indebtedness of that Guarantor; | |
• | is senior in right of payment to any existing and future subordinated Indebtedness of that Guarantor; and | |
• | is effectively junior in right of payment with all existing and future secured Indebtedness of that Guarantor to the extent of the value of the assets securing such Indebtedness. |
• | consolidated total revenues of $264.0 million, and the non-guarantor subsidiaries had total revenues of $115.5 million; | |
• | consolidated total operating loss of $(24.5) million, and the non-guarantor subsidiaries had total operating loss of $(31.0) million; | |
• | consolidated net loss attributable to Great Wolf Resorts, Inc. of $(58.5) million, and the non-guarantor subsidiaries had total net loss of $(46.1) million; and | |
• | consolidated Adjusted EBITDA of $66.0 million, and the non-guarantor subsidiaries had Adjusted EBITDA of $25.7 million. |
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• | consolidated total revenues of $139.1 million, and the non-guarantor subsidiaries had total revenues of $64.7 million; | |
• | consolidated total operating income of $0.2 million, and the non-guarantor subsidiaries had total operating income of $2.2 million; | |
• | consolidated net loss attributable to Great Wolf Resorts, Inc. of $(20.8) million, and the non-guarantor subsidiaries had total net loss of $(6.0) million; and | |
• | consolidated Adjusted EBITDA of $32.0 million, and the non-guarantor subsidiaries had Adjusted EBITDA of $14.9 million. |
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Year | Percentage | |||
2014 | 105.438 | % | ||
2015 | 102.719 | % | ||
2016 and thereafter | 100.000 | % |
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• | financial institutions, | |
• | regulated investment companies, | |
• | real estate investment trusts, | |
• | partnership or other pass-through entities (or investors in such entities), | |
• | tax-exempt entities, |
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• | insurance companies, | |
• | persons holding the Notes as part of a hedging, integrated, or conversion transaction, constructive sale or “straddle,” | |
• | U.S. expatriates, | |
• | persons subject to the alternative minimum tax, and | |
• | dealers or traders in securities or currencies. |
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• | the product of the “adjusted issue price” of the exchange note at the beginning of the accrual period and its “yield to maturity,” over | |
• | the aggregate amount of any QSI payments allocable to the accrual period. |
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• | the issue price of your exchange note will equal your initial basis in the exchange note, | |
• | the issue date of your exchange note will be the date you acquired the initial note, and | |
• | no payments on your exchange note will be treated as payments of QSI. |
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• | fail to provide a correct taxpayer identification number (which, if you are an individual, would ordinarily be your Social Security Number), | |
• | have been notified by the IRS that you are subject to backup withholding, | |
• | fail to certify that you are exempt from withholding, or | |
• | otherwise fail to comply with applicable requirements of the backup withholding rules. |
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• | you do not own, actually or constructively, for U.S. federal income tax purposes, 10% or more of the total combined voting power of all classes of the stock of Great Wolf Resorts, Inc. entitled to vote, | |
• | you are not, for U.S. federal income tax purposes, a controlled foreign corporation related, directly or indirectly, to Great Wolf Resorts, Inc. through equity ownership, | |
• | you are not considered a bank for purposes of these rules, and | |
• | you provide a properly completed IRSForm W-8BEN certifying yournon-U.S. status. |
• | you are an individual present in the United States for 183 days or more in the taxable year of disposition, and certain other conditions are met, in which case you will be subject to a flat 30% tax (or a lower applicable treaty rate) with respect to such gain (offset by certain U.S. source capital losses), or | |
• | such gain is effectively connected with your conduct of a trade or business in the United States, in which case you will be subject to tax as described below under “Income Effectively Connected with a U.S. Trade or Business.” |
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Page | ||||
No. | ||||
Consolidated Financial Statements of Great Wolf Resorts, Inc. and Subsidiaries: | ||||
F-2 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
F-44 | ||||
F-45 | ||||
F-46 | ||||
F-47 |
Page | ||||
No | ||||
Consolidated Financial Statements | ||||
F-76 | ||||
F-77 | ||||
F-78 | ||||
F-79 | ||||
F-80 | ||||
F-82 |
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March 2, 2010, except for Notes 14 and 15, as to which the date is September 13, 2010.
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December 31, | ||||||||
2009 | 2008 | |||||||
(Dollars in thousands, | ||||||||
except per share amounts) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 20,913 | $ | 14,231 | ||||
Escrows | 5,938 | 2,555 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $101 and $114 | 2,192 | 2,167 | ||||||
Accounts receivable — affiliates, net of allowance for doubtful accounts of $1,201 in 2008 | 2,614 | 925 | ||||||
Inventory | 4,791 | 4,265 | ||||||
Other current assets | 4,252 | 3,055 | ||||||
Total current assets | 40,700 | 27,198 | ||||||
Property and equipment, net | 676,405 | 716,173 | ||||||
Investment in and advances to affiliates | 27,484 | 43,855 | ||||||
Notes receivable | 8,268 | 3,248 | ||||||
Other assets | 29,058 | 25,758 | ||||||
Intangible assets | 23,829 | 23,829 | ||||||
Total assets | $ | 805,744 | $ | 840,061 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 16,126 | $ | 81,464 | ||||
Accounts payable | 5,078 | 23,217 | ||||||
Accrued expenses | 21,970 | 22,565 | ||||||
Accrued expenses — affiliates | — | 1,806 | ||||||
Advance deposits | 7,114 | 7,498 | ||||||
Gift certificates payable | 5,946 | 5,416 | ||||||
Total current liabilities | 56,234 | 141,966 | ||||||
Mortgage debt | 441,724 | 333,259 | ||||||
Other long-term debt | 92,221 | 92,328 | ||||||
Deferred compensation liability | 809 | 568 | ||||||
Total liabilities | 590,988 | 568,121 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ Equity: | ||||||||
Common stock, $0.01 par value, 250,000,000 shares authorized, 31,278,889 and 30,982,646 shares issued and outstanding at December 31, 2009 and 2008 | 313 | 310 | ||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding at December 31, 2009 and 2008 | — | — | ||||||
Additional paid-in capital | 400,930 | 399,641 | ||||||
Accumulated deficit | (186,287 | ) | (127,811 | ) | ||||
Deferred compensation | (200 | ) | (200 | ) | ||||
Total stockholders’ equity | 214,756 | 271,940 | ||||||
Total liabilities and stockholders’ equity | $ | 805,744 | $ | 840,061 | ||||
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Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
(Dollars in thousands, except per share data) | ||||||||||||
Revenues: | ||||||||||||
Rooms | $ | 154,751 | $ | 143,395 | $ | 112,261 | ||||||
Food and beverage | 42,643 | 38,808 | 29,588 | |||||||||
Other hotel operations | 38,377 | 35,365 | 27,085 | |||||||||
Management and other fees | 1,990 | 2,798 | 2,855 | |||||||||
Management and other fees — affiliates | 4,973 | 5,346 | 4,314 | |||||||||
242,734 | 225,712 | 176,103 | ||||||||||
Other revenue from managed properties-affiliates | 17,132 | 19,826 | 11,477 | |||||||||
Other revenue from managed properties | 4,166 | — | — | |||||||||
Total revenues | 264,032 | 245,538 | 187,580 | |||||||||
Operating expenses by department: | ||||||||||||
Rooms | 22,449 | �� | 20,134 | 15,716 | ||||||||
Food and beverage | 33,217 | 30,990 | 25,196 | |||||||||
Other | 32,124 | 28,959 | 23,104 | |||||||||
Other operating expenses: | ||||||||||||
Selling, general and administrative | 60,986 | 51,902 | 47,915 | |||||||||
Property operating costs | 37,788 | 37,086 | 30,555 | |||||||||
Depreciation and amortization | 56,378 | 46,081 | 36,372 | |||||||||
Impairment loss on investment in affiliates | — | 18,777 | — | |||||||||
Goodwill impairment | — | 17,430 | — | |||||||||
Asset impairment loss | 24,000 | — | — | |||||||||
Loss on disposition of property | 255 | 19 | 128 | |||||||||
267,197 | 251,378 | 178,986 | ||||||||||
Other expenses from managed properties-affiliates | 17,132 | 19,826 | 11,477 | |||||||||
Other expenses from managed properties | 4,166 | — | — | |||||||||
Total operating expenses | 288,495 | 271,204 | 190,463 | |||||||||
Net operating loss | (24,463 | ) | (25,666 | ) | (2,883 | ) | ||||||
Gain on sale of unconsolidated affiliate | (962 | ) | — | — | ||||||||
Investment income — affiliates | (1,330 | ) | (2,187 | ) | (667 | ) | ||||||
Interest income | (642 | ) | (1,424 | ) | (2,758 | ) | ||||||
Interest expense | 34,072 | 27,277 | 14,887 | |||||||||
Loss before income taxes and equity in unconsolidated affiliates | (55,601 | ) | (49,332 | ) | (14,345 | ) | ||||||
Income tax expense (benefit) | 440 | (11,956 | ) | (5,859 | ) | |||||||
Equity in unconsolidated affiliates, net of tax | 2,435 | 3,349 | 1,547 | |||||||||
Net loss. | (58,476 | ) | (40,725 | ) | (10,033 | ) | ||||||
Net loss attributable to noncontrolling interest, net of tax. | — | — | (452 | ) | ||||||||
Net loss attributable to Great Wolf Resorts, Inc. | $ | (58,476 | ) | $ | (40,725 | ) | $ | (9,581 | ) | |||
Basic loss per common share | $ | (1.90 | ) | $ | (1.32 | ) | $ | (0.31 | ) | |||
Diluted loss per common share | $ | (1.90 | ) | $ | (1.32 | ) | $ | (0.31 | ) | |||
Weighted average common shares outstanding: | ||||||||||||
Basic | 30,749,318 | 30,827,860 | 30,533,249 | |||||||||
Diluted | 30,749,318 | 30,827,860 | 30,533,249 | |||||||||
Other comprehensive loss, net of tax: | ||||||||||||
Net loss. | $ | (58,476 | ) | $ | (40,725 | ) | $ | (10,033 | ) | |||
Unrealized (gain) loss on interest rate swap | — | (387 | ) | 387 | ||||||||
Comprehensive loss | (58,476 | ) | (40,338 | ) | (10,420 | ) | ||||||
Comprehensive loss attributable to noncontrolling interest | — | — | (452 | ) | ||||||||
Comprehensive loss attributable to Great Wolf Resorts, Inc. | $ | (58,476 | ) | $ | (40,338 | ) | $ | (9,968 | ) | |||
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Additional | ||||||||||||||||||||||||||||||||
Common | Common | Paid-in | Accumulated | Deferred | Accumulated Other | Noncontrolling | Total | |||||||||||||||||||||||||
Shares | Stock | Capital | Deficit | Compensation | Comprehensive Loss | Interest | Equity | |||||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||
Balance, January 1, 2007 | 30,509,320 | $ | 305 | $ | 396,909 | $ | (77,505 | ) | $ | (2,200 | ) | $ | — | $ | 5,757 | $ | 323,266 | |||||||||||||||
Issuance of non-vested equity shares | 189,363 | 2 | — | — | — | — | — | 2 | ||||||||||||||||||||||||
Stock-based compensation | — | — | 2,850 | — | — | — | — | 2,850 | ||||||||||||||||||||||||
Unrealized loss on interest rate swap, net of tax | — | — | — | — | — | (387 | ) | — | (387 | ) | ||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | (452 | ) | (452 | ) | ||||||||||||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | — | — | — | (9,581 | ) | — | — | — | (9,581 | ) | ||||||||||||||||||||||
Purchase of noncontrolling interest | — | — | — | — | — | — | (5,305 | ) | (5,305 | ) | ||||||||||||||||||||||
Balance, December 31, 2007 | 30,698,683 | 307 | 399,759 | (87,086 | ) | (2,200 | ) | (387 | ) | — | 310,393 | |||||||||||||||||||||
Issuance of non-vested equity shares | 283,963 | 3 | — | — | — | — | — | 3 | ||||||||||||||||||||||||
Sale of common stock — deferred compensation plan | — | — | (2,000 | ) | — | 2,000 | — | — | — | |||||||||||||||||||||||
Stock-based compensation | — | — | 1,882 | — | — | — | — | 1,882 | ||||||||||||||||||||||||
Unrealized gain on interest rate swap, net of tax | — | — | — | — | — | 387 | — | 387 | ||||||||||||||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | — | — | — | (40,725 | ) | — | — | — | (40,725 | ) | ||||||||||||||||||||||
Balance, December 31, 2008 | 30,982,646 | 310 | 399,641 | (127,811 | ) | (200 | ) | — | — | 271,940 | ||||||||||||||||||||||
Issuance of non-vested equity shares | 296,243 | 3 | — | — | — | — | — | 3 | ||||||||||||||||||||||||
Stock-based compensation | — | — | 1,289 | — | — | — | — | 1,289 | ||||||||||||||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | — | — | — | (58,476 | ) | — | — | — | (58,476 | ) | ||||||||||||||||||||||
Balance, December 31, 2009 | 31,278,889 | $ | 313 | $ | 400,930 | $ | (186,287 | ) | $ | (200 | ) | $ | — | $ | — | $ | 214,756 | |||||||||||||||
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Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
(Dollars in thousands) | ||||||||||||
Operating activities: | ||||||||||||
Net loss. | $ | (58,476 | ) | $ | (40,725 | ) | $ | (10,033 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 56,378 | 46,081 | 36,372 | |||||||||
Bad debt expense | 680 | 1,305 | 154 | |||||||||
Impairment loss on investment in affiliates | — | 18,777 | — | |||||||||
Goodwill impairment | — | 17,430 | — | |||||||||
Non-cash employee and director compensation | 1,138 | 250 | 5,080 | |||||||||
Loss on disposition of property | 255 | 19 | 128 | |||||||||
Asset impairment loss | 24,000 | — | — | |||||||||
Gain on sale of unconsolidated affiliate | (962 | ) | — | — | ||||||||
Equity in losses of unconsolidated affiliates | 2,416 | 4,421 | 2,616 | |||||||||
Deferred tax expense (benefit) | 131 | (14,072 | ) | (7,417 | ) | |||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable and other assets | (8,865 | ) | (1,916 | ) | (4,399 | ) | ||||||
Accounts payable, accrued expenses and other liabilities | (4,480 | ) | 1,964 | 7,250 | ||||||||
Net cash provided by operating activities | 12,215 | 33,534 | 29,751 | |||||||||
Investing activities: | ||||||||||||
Capital expenditures for property and equipment | (49,258 | ) | (134,967 | ) | (171,884 | ) | ||||||
Loan repayment from unconsolidated affiliate | 9,225 | 3,168 | — | |||||||||
Investment in unconsolidated affiliates | (303 | ) | (10,430 | ) | (24,058 | ) | ||||||
Proceeds from sale of interest in unconsolidated affiliate | 6,000 | — | — | |||||||||
Investment in development | 834 | (2,255 | ) | (10,276 | ) | |||||||
Issuance of notes receivable | — | — | (3,263 | ) | ||||||||
Proceeds from sale of assets | 66 | — | — | |||||||||
Decrease in restricted cash | 160 | 55 | 2,289 | |||||||||
(Increase) decrease in escrows | (3,383 | ) | (183 | ) | 225 | |||||||
Net cash used in investing activities | (36,659 | ) | (144,612 | ) | (206,967 | ) | ||||||
Financing activities: | ||||||||||||
Principal payments on long-term debt | (8,031 | ) | (57,294 | ) | (1,350 | ) | ||||||
Proceeds from issuance of long-term debt | 51,051 | 168,042 | 108,263 | |||||||||
Payment of loan costs | (11,894 | ) | (4,036 | ) | (978 | ) | ||||||
Purchase of noncontrolling interests | — | — | (6,900 | ) | ||||||||
Net cash provided by financing activities | 31,126 | 106,712 | 99,035 | |||||||||
Net increase (decrease) in cash and cash equivalents | 6,682 | (4,366 | ) | (78,181 | ) | |||||||
Cash and cash equivalents, beginning of year | 14,231 | 18,597 | 96,778 | |||||||||
Cash and cash equivalents, end of year | $ | 20,913 | $ | 14,231 | $ | 18,597 | ||||||
Supplemental cash flow information: | ||||||||||||
Cash paid for interest, net of capitalized interest | $ | 33,458 | $ | 26,749 | $ | 13,404 | ||||||
Cash paid for income taxes, net of refunds | $ | 411 | $ | 597 | $ | (312 | ) | |||||
Non-cash items: | ||||||||||||
Construction in process accruals | $ | 20 | $ | 6,969 | $ | 9,728 | ||||||
Guarantee on loan for unconsolidated affiliate | $ | — | $ | — | $ | 1,180 |
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1. | ORGANIZATION |
Number of | Indoor | |||||||||||||||||||
Ownership | Number of | Condo | Entertainment | |||||||||||||||||
Percentage | Opened | Guest Suites | Units(1) | Area(2) | ||||||||||||||||
(Approx. sq. ft.) | ||||||||||||||||||||
Wisconsin Dells, WI(3) | — | 1997 | 308 | 77 | 102,000 | |||||||||||||||
Sandusky, OH(3) | — | 2001 | 271 | — | 41,000 | |||||||||||||||
Traverse City, MI | 100 | % | 2003 | 280 | — | 57,000 | ||||||||||||||
Kansas City, KS | 100 | % | 2003 | 281 | — | 57,000 | ||||||||||||||
Sheboygan, WI | 100 | % | 2004 | 182 | 64 | 54,000 | ||||||||||||||
Williamsburg, VA(4) | 100 | % | 2005 | 405 | — | 87,000 | ||||||||||||||
Pocono Mountains, PA(4) | 100 | % | 2005 | 401 | — | 101,000 | ||||||||||||||
Niagara Falls, ONT(5) | — | 2006 | 406 | — | 104,000 | |||||||||||||||
Mason, OH(4) | 100 | % | 2006 | 401 | — | 105,000 | ||||||||||||||
Grapevine, TX(4) | 100 | % | 2007 | 605 | — | 110,000 | ||||||||||||||
Grand Mound, WA(6) | 49 | % | 2008 | 398 | — | 74,000 | ||||||||||||||
Concord, NC | 100 | % | 2009 | 402 | — | 97,000 |
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(1) | Condominium units are individually owned by third parties and are managed by us. | |
(2) | Our indoor entertainment areas generally include our indoor waterpark, game arcade, children’s activity room, family tech center, MagiQuest® (an interactive game attraction) and fitness room, as well as our spa in the resorts that have such amenities. | |
(3) | These properties are owned by CNL Lifestyle Properties, Inc. (CNL), a real estate investment trust focused on leisure and lifestyle properties. Prior to August 2009, these properties were owned by a joint venture between CNL and us. In August 2009 we sold our 30.26% joint venture interest to CNL for $6,000. We currently manage both properties and license the Great Wolf Lodge brand to these resorts. | |
(4) | Five of our properties (Great Wolf Lodge resorts in Williamsburg, VA; Pocono Mountains, PA; Mason, OH; Grapevine, TX and Concord, NC) each had a book value of fixed assets equal to ten percent or more of our total assets as of December 31, 2009. Four of our properties (Great Wolf Lodge resorts in Williamsburg, VA; Pocono Mountains, PA; Mason, OH and Grapevine, TX) each had total revenues equal to ten percent or more of our total revenues for the year ended December 31, 2009. | |
(5) | An affiliate of Ripley Entertainment, Inc. (Ripley), our licensee, owns this resort. We have granted Ripley a license to use the Great Wolf Lodge name for this resort through April 2016. We managed the resort on behalf of Ripley through April 2009. | |
(6) | This property is owned by a joint venture. The Confederated Tribes of the Chehalis Reservation (Chehalis) owns a 51% interest in the joint venture, and we own a 49% interest. We operate the property and license the Great Wolf Lodge brand to the joint venture under long-term agreements through April 2057, subject to earlier termination in certain situations. The joint venture leases the land for the resort from the United States Department of the Interior, which is trustee for Chehalis. |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Buildings and improvements | 20-40 years | |||
Fixtures and equipment, including waterpark equipment | 5-15 years |
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2009 | 2008 | |||||||
Balance as of January 1 | ||||||||
Goodwill | $ | 130,496 | $ | 130,496 | ||||
Accumulated impairment losses | (68,405 | ) | (50,975 | ) | ||||
Goodwill related to sale of affiliate | (62,091 | ) | (62,091 | ) | ||||
— | 17,430 | |||||||
Impairment losses | — | (17,430 | ) | |||||
Balance as of December 31 | ||||||||
Goodwill | 130,496 | 130,496 | ||||||
Accumulated impairment losses | (68,405 | ) | (68,405 | ) | ||||
Goodwill related to sale of affiliate | (62,091 | ) | (62,091 | ) | ||||
$ | — | $ | — | |||||
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• | Resort ownership/operation — revenues derived from our consolidated owned resorts; and | |
• | Resort third-party management/licensing — revenues derived from management, license and other related fees from unconsolidated managed resorts; and | |
• | Condominium sales — revenues derived from sales of condominium units to third-party owners. This segment had no activity in 2008 or 2009. |
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Resort Third- | ||||||||||||||||||||
Resort | Party | Totals per | ||||||||||||||||||
Ownership/ | Management/ | Condominium | Financial | |||||||||||||||||
Operation | Licensing | Sales | Other | Statements | ||||||||||||||||
Year Ended December 31, 2009 | ||||||||||||||||||||
Revenues | $ | 235,771 | $ | 28,261 | $ | — | $ | — | $ | 264,032 | ||||||||||
Depreciation and amortization | (55,596 | ) | — | — | (782 | ) | $ | (56,378 | ) | |||||||||||
Asset impairment loss | (24,000 | ) | — | — | — | $ | (24,000 | ) | ||||||||||||
Net operating income (loss) | (52,246 | ) | 6,963 | — | 20,820 | $ | (24,463 | ) | ||||||||||||
Gain on sale of unconsolidated affiliate | — | — | — | (962 | ) | (962 | ) | |||||||||||||
Investment income — affiliates | — | — | — | — | (1,330 | ) | ||||||||||||||
Interest income | — | — | — | — | (642 | ) | ||||||||||||||
Interest expense | — | — | — | — | 34,072 | |||||||||||||||
Loss before income taxes and equity in unconsolidated affiliates | — | — | — | — | $ | (55,601 | ) | |||||||||||||
Additions to long-lived assets | 48,768 | — | — | 490 | $ | 49,258 | ||||||||||||||
Total assets | 707,472 | 2,942 | — | 95,330 | $ | 805,744 | ||||||||||||||
Resort Third- | ||||||||||||||||||||
Resort | Party | Totals per | ||||||||||||||||||
Ownership/ | Management/ | Condominium | Financial | |||||||||||||||||
Operation | Licensing | Sales | Other | Statements | ||||||||||||||||
Year Ended December 31, 2008 | ||||||||||||||||||||
Revenues | $ | 217,568 | $ | 27,970 | $ | — | $ | — | $ | 245,538 | ||||||||||
Depreciation and amortization | (45,042 | ) | — | — | (1,039 | ) | $ | (46,081 | ) | |||||||||||
Impairment loss on investment in affiliates | — | — | — | (18,777 | ) | $ | (18,777 | ) | ||||||||||||
Goodwill impairment | (16,021 | ) | — | — | (1,409 | ) | $ | (17,430 | ) | |||||||||||
Net operating income (loss) | (11,286 | ) | 8,144 | — | (22,524 | ) | $ | (25,666 | ) | |||||||||||
Investment income — affiliates | — | — | — | — | (2,187 | ) | ||||||||||||||
Interest income | — | — | — | — | (1,424 | ) | ||||||||||||||
Interest expense | — | — | — | — | 27,277 | |||||||||||||||
Loss before income taxes and equity in unconsolidated affiliates | — | — | — | — | $ | (49,332 | ) | |||||||||||||
Additions to long-lived assets | 134,167 | — | — | 800 | $ | 134,967 | ||||||||||||||
Total assets | 738,119 | 2,314 | — | 99,628 | $ | 840,061 | ||||||||||||||
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Resort Third- | ||||||||||||||||||||
Resort | Party | Totals per | ||||||||||||||||||
Ownership/ | Management/ | Condominium | Financial | |||||||||||||||||
Operation | Licensing | Sales | Other | Statements | ||||||||||||||||
Year Ended December 31, 2007 | ||||||||||||||||||||
Revenues | $ | 168,934 | $ | 18,646 | $ | — | $ | — | $ | 187,580 | ||||||||||
Depreciation and amortization | (35,767 | ) | — | — | (605 | ) | $ | (36,372 | ) | |||||||||||
Net operating income (loss) | (3,588 | ) | 7,169 | (682 | ) | (5,782 | ) | $ | (2,883 | ) | ||||||||||
Investment income — affiliates | — | — | — | — | (667 | ) | ||||||||||||||
Interest income | — | — | — | — | (2,758 | ) | ||||||||||||||
Interest expense | — | — | — | — | 14,887 | |||||||||||||||
Loss before income taxes, noncontrolling interest, and equity in unconsolidated affiliates | — | — | — | — | $ | (14,345 | ) | |||||||||||||
Additions to long-lived assets | 171,197 | — | — | 687 | $ | 171,884 | ||||||||||||||
Total assets | 653,367 | 4,384 | — | 113,054 | $ | 770,805 | ||||||||||||||
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3. | INVESTMENT IN AFFILIATES |
Period January 1 | ||||||||
through | Year Ended | |||||||
August 5, | December 31, | |||||||
Operating data: | 2009 | 2008 | ||||||
Revenue | $ | 19,750 | $ | 31,531 | ||||
Operating expenses | $ | (24,213 | ) | $ | (39,491 | ) | ||
Net loss | $ | (4,463 | ) | $ | (7,960 | ) |
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2009 | 2008 | |||||||
Balance sheet data: | ||||||||
Total assets | $ | 145,247 | $ | 152,215 | ||||
Total liabilities | $ | 114,129 | $ | 118,636 | ||||
Operating data: | ||||||||
Revenue | $ | 39,645 | $ | 33,194 | ||||
Operating expenses | $ | 36,353 | $ | 31,739 | ||||
Net loss | $ | (2,461 | ) | $ | (5,553 | ) |
4. | PROPERTY AND EQUIPMENT |
December 31, | ||||||||
2009 | 2008 | |||||||
Land and improvements | $ | 60,718 | $ | 51,684 | ||||
Building and improvements | 427,602 | 353,537 | ||||||
Furniture, fixtures and equipment | 341,529 | 315,577 | ||||||
Construction in process | 327 | 117,063 | ||||||
830,176 | 837,861 | |||||||
Less accumulated depreciation | (153,771 | ) | (121,688 | ) | ||||
Property and equipment, net | $ | 676,405 | $ | 716,173 | ||||
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5. | LONG-TERM DEBT |
December 31, | ||||||||
2009 | 2008 | |||||||
Long-Term Debt: | ||||||||
Traverse City/Kansas City mortgage loan | $ | 68,773 | $ | 70,211 | ||||
Mason mortgage loan | 73,800 | 76,800 | ||||||
Pocono Mountains mortgage loan | 95,458 | 96,571 | ||||||
Williamsburg mortgage loan | 63,125 | 64,625 | ||||||
Grapevine mortgage loan | 77,909 | 78,709 | ||||||
Concord construction loan | 78,549 | 27,594 | ||||||
Junior subordinated debentures | 80,545 | 80,545 | ||||||
Other Debt: | ||||||||
City of Sheboygan bonds | 8,544 | 8,493 | ||||||
City of Sheboygan loan | 3,290 | 3,503 | ||||||
Other | 78 | — | ||||||
550,071 | 507,051 | |||||||
Less current portion of long-term debt | (16,126 | ) | (81,464 | ) | ||||
Total long-term debt | $ | 533,945 | $ | 425,587 | ||||
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2010 | $ | 16,126 | ||
2011 | 206,645 | |||
2012 | 80,189 | |||
2013 | 3,675 | |||
2014 | 3,966 | |||
Thereafter | 239,470 | |||
Total | $ | 550,071 | ||
6. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Level 1 | Level 2 | Level 3 | Total | |||||
Interest rate caps | $— | $133 | $— | $133 |
Level 1 | Level 2 | Level 3 | Total | |||||
Property and Equipment | $ — | $ — | $5,771 | $5,771 | ||||
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7. | INCOME TAXES |
Current | Deferred | Total | ||||||||||
Year ended December 31, 2009 | ||||||||||||
Federal | $ | — | $ | 86 | $ | 86 | ||||||
State and local | 248 | 45 | 293 | |||||||||
Foreign | 80 | — | 80 | |||||||||
$ | 328 | $ | 131 | $ | 459 | |||||||
Year ended December 31, 2008 | ||||||||||||
Federal | $ | — | $ | (12,499 | ) | $ | (12,499 | ) | ||||
State and local | 955 | (1,573 | ) | (618 | ) | |||||||
Foreign | 89 | — | 89 | |||||||||
$ | 1,044 | $ | (14,072 | ) | $ | (13,028 | ) | |||||
Year ended December 31, 2007 | ||||||||||||
Federal | $ | — | $ | (5,723 | ) | $ | (5,723 | ) | ||||
State and local | 398 | (1,382 | ) | (984 | ) | |||||||
Foreign | 92 | — | 92 | |||||||||
$ | 490 | $ | (7,105 | ) | $ | (6,615 | ) | |||||
Income Tax Expense (Benefit) | ||||||||||||
for the Year Ending December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Income tax expense (benefit) | $ | 440 | $ | (11,956 | ) | $ | (5,859 | ) | ||||
Net loss attributable to noncontrolling interest | — | — | 312 | |||||||||
Equity in unconsolidated affiliates, net of tax | 19 | (1,072 | ) | (1,068 | ) | |||||||
Total income tax expense (benefit) | $ | 459 | $ | (13,028 | ) | $ | (6,615 | ) | ||||
2009 | 2008 | 2007 | ||||||||||
Federal statutory income tax benefit | (35.0 | )% | (35.0 | )% | (35.0 | )% | ||||||
State income taxes, net of federal income taxes | (3.5 | )% | (0.6 | )% | (6.1 | )% | ||||||
Nondeductible goodwill | — | 11.5 | % | — | ||||||||
Change in valuation allowance | 39.7 | % | — | — | ||||||||
Other | (0.4 | )% | (0.1 | )% | 0.3 | % | ||||||
0.8 | % | (24.2 | )% | (40.8 | )% | |||||||
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2009 | 2008 | |||||||
Deferred tax assets: | �� | |||||||
Net operating loss carryforwards | $ | 31,032 | $ | 17,504 | ||||
Intangibles | 14,222 | 11,564 | ||||||
Investment in affiliates | 2,200 | 7,161 | ||||||
Salaries and wages | 2,901 | 2,534 | ||||||
Other | 1,329 | 1,329 | ||||||
Total deferred tax assets | 51,684 | 40,092 | ||||||
Deferred tax liabilities: | ||||||||
Property and equipment | (22,522 | ) | (32,922 | ) | ||||
Prepaid expenses | (856 | ) | (932 | ) | ||||
Interest rate swap | — | (273 | ) | |||||
Total deferred tax liabilities | (23,378 | ) | (34,127 | ) | ||||
Valuation allowance | (23,008 | ) | (366 | ) | ||||
Net deferred tax asset | $ | 5,298 | $ | 5,599 | ||||
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Unrecognized tax benefit — December 31, 2008 | $ | 1,298 | ||
Gross increases — tax positions in current period | — | |||
Unrecognized tax benefit — December 31, 2009 | $ | 1,298 | ||
8. | RELATED-PARTY TRANSACTIONS |
2009 | 2008 | 2007 | ||||||||||
Management and other fees | $ | 4,973 | $ | 5,346 | $ | 4,314 | ||||||
Other revenue from managed properties | 17,132 | 19,826 | 11,477 | |||||||||
Other expenses from managed properties | 17,132 | 19,826 | 11,477 | |||||||||
Investment income | 1,330 | 2,187 | 667 | |||||||||
Accounts receivable | 2,614 | 925 | 3,973 | |||||||||
Accrued expenses | — | 1,806 | 124 |
9. | COMMITMENTS AND CONTINGENCIES |
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2010 | $ | 377 | ||
2011 | 195 | |||
2012 | 174 | |||
2013 | 34 | |||
2014 | 34 | |||
Thereafter | — | |||
Total | $ | 814 | ||
10. | RETIREMENT PLAN |
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11. | EQUITY |
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Net loss attributable to common shares | $ | (58,476 | ) | $ | (40,725 | ) | $ | (9,581 | ) | |||
Weighted average common shares outstanding — basic and diluted | 30,749,318 | 30,827,860 | 30,533,249 | |||||||||
Net loss per share — basic and diluted | $ | (1.90 | ) | $ | (1.32 | ) | $ | (0.31 | ) |
12. | SHARE-BASED COMPENSATION |
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Weighted | ||||||||||||
Weighted | Average | |||||||||||
Average | Remaining | |||||||||||
Exercise | Contractual | |||||||||||
Shares | Price | Life | ||||||||||
Number of shares under option: | ||||||||||||
Outstanding at January 1, 2007 | 1,064,500 | $ | 17.55 | 8.05 years | ||||||||
Granted | — | |||||||||||
Exercised | (167 | ) | $ | 12.40 | ||||||||
Forfeited | (77,333 | ) | $ | 20.87 | ||||||||
Outstanding at December 31, 2007 | 987,000 | $ | 17.29 | 7.03 years | ||||||||
Granted | — | |||||||||||
Exercised | — | |||||||||||
Forfeited | (512,000 | ) | $ | 17.01 | ||||||||
Outstanding at December 31, 2008 | 475,000 | $ | 17.59 | 6.09 years | ||||||||
Granted | — | |||||||||||
Exercised | — | |||||||||||
Forfeited | (34,000 | ) | $ | 18.41 | ||||||||
Outstanding at December 31, 2009 | 441,000 | $ | 17.53 | 5.09 years | ||||||||
Exercisable at December 31, 2009 | 441,000 | $ | 17.53 | 5.09 years |
• | 541,863 were based on our common stock’s performance in 2009 relative to a stock index, as designated by the Compensation Committee of the Board of Directors. These shares vest ratably over a three-year period,2009-2011. The per share fair value of these market condition shares was $1.26 as of the grant date. |
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Dividend yield | — | |||
Weighted average, risk free interest rate | 0.62 | % | ||
Expected stock price volatility | 96.51 | % | ||
Expected stock price volatility (small-cap stock index) | 37.89 | % |
• | 84,748 are based on our common stock’s performance in 2008 relative to a stock index, as designated by the Compensation Committee of the Board of directors. These shares vest ratably over a three-year period,2008-2010. The per share fair value of these market condition shares was $1.63. |
Dividend yield | — | |||
Weighted average, risk free interest rate | 2.05 | % | ||
Expected stock price volatility | 34.98 | % | ||
Expected stock price volatility (small-cap stock index) | 20.08 | % |
• | 53,006 are based on our common stock’s performance in 2007 relative to a stock index, as designated by the Compensation Committee of the Board of directors. These shares vest ratably over a three-year period,2007-2009. The per share fair value of these market condition shares was $7.25. |
Dividend yield | — | |||
Weighted average, risk free interest rate | 5.05 | % | ||
Expected stock price volatility | 42.13 | % | ||
Expected stock price volatility (small-cap stock index) | 16.64 | % |
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• | 81,293 are based on our common stock’s absolute performance during the three-year period2007-2009. Half of these shares vested on December 31, 2009, and the other half vest on December 31, 2010. The per share fair value of these market condition shares was $6.65. |
Dividend yield | — | |||
Weighted average, risk free interest rate | 4.73 | % | ||
Expected stock price volatility | 42.13 | % |
• | 81,293 are based on our common stock’s performance in2007-2009 relative to a stock index, as designated by the Compensation Committee of the Board of directors. Half of these shares vested December 31, 2009, and the other half vest on December 31, 2010. The per share fair value of these market condition shares was $8.24. |
Dividend yield | — | |||
Weighted average, risk free interest rate | 4.73 | % | ||
Expected stock price volatility | 42.13 | % | ||
Expected stock price volatility (small-cap stock index) | 16.64 | % |
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• | Employees earned and were issued 18,084 performance shares in February 2009 related to the 2008 grants, and | |
• | Employees earned and were issued 20,843 performance shares in February 2008 related to the 2007 grants. |
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Weighted | ||||||||
Average | ||||||||
Grant Date | ||||||||
Shares | Fair Value | |||||||
Non-vested shares balance at January 1, 2007 | 245,000 | $ | 11.08 | |||||
Granted | 143,711 | $ | 13.47 | |||||
Forfeited | (5,000 | ) | $ | 10.79 | ||||
Vested | (50,600 | ) | $ | 11.53 | ||||
Non-vested shares balance at December 31, 2007 | 333,111 | $ | 12.37 | |||||
Granted | 210,799 | $ | 6.78 | |||||
Forfeited | (162,008 | ) | $ | 10.91 | ||||
Vested | (81,653 | ) | $ | 12.14 | ||||
Non-vested shares balance at December 31, 2008 | 300,249 | $ | 9.29 | |||||
Granted | 331,179 | $ | 2.75 | |||||
Forfeited | (61,809 | ) | $ | 4.73 | ||||
Vested | (86,151 | ) | $ | 10.79 | ||||
Non-vested shares balance at December 31, 2009 | 483,468 | $ | 5.13 | |||||
• | In connection with the elections related to 2008 bonus amounts, we issued 17,532 shares in February 2009. We valued these shares at $32 based on the closing market value of our common stock on the date of the grant. | |
• | In connection with the elections related to 2007 bonus amounts, we issued 265,908 shares in February 2008. We valued these shares at $2,055 based on the closing market value of our common stock on the date of the grant. |
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13. | QUARTERLY FINANCIAL DATA (UNAUDITED) |
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
2009: | ||||||||||||||||
Total Revenues | $ | 62,307 | $ | 68,625 | $ | 76,827 | $ | 56,273 | ||||||||
Net operating loss | (2,450 | ) | (581 | ) | (15,491 | ) | (5,941 | ) | ||||||||
Net loss attributable to Great Wolf Resorts, Inc. | (5,645 | ) | (5,706 | ) | (36,923 | ) | (10,202 | ) | ||||||||
Basic loss per common share | $ | (0.18 | ) | $ | (0.18 | ) | $ | (1.18 | ) | $ | (0.33 | ) | ||||
Diluted loss per common share | $ | (0.18 | ) | $ | (0.18 | ) | $ | (1.18 | ) | $ | (0.33 | ) |
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
2008: | ||||||||||||||||
Total Revenues | $ | 64,208 | $ | 63,018 | $ | 69,413 | $ | 48,899 | ||||||||
Net operating income (loss) | 4,062 | 51 | 9,763 | (39,542 | ) | |||||||||||
Net (loss) income attributable to Great Wolf Resorts, Inc. | (2,327 | ) | (4,090 | ) | 2,171 | (36,479 | ) | |||||||||
Basic (loss) earnings per share | $ | (0.08 | ) | $ | (0.13 | ) | $ | 0.07 | $ | (1.18 | ) | |||||
Diluted (loss) earnings per share | $ | (0.08 | ) | $ | (0.13 | ) | $ | 0.07 | $ | (1.18 | ) |
Impairment loss on investment in affiliates | $ | 18,777 | ||
Goodwill impairment | 17,430 | |||
$ | 36,207 | |||
14. | SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS |
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December 31, 2009
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 5,023 | $ | 14,538 | $ | (1,590 | ) | $ | 2,942 | $ | — | $ | 20,913 | |||||||||||
Escrows | — | — | 4,430 | 1,508 | — | 5,938 | ||||||||||||||||||
Accounts receivable | 33 | — | 1,177 | 982 | — | 2,192 | ||||||||||||||||||
Accounts receivable — affiliates | — | — | 1,079 | 1,535 | — | 2,614 | ||||||||||||||||||
Accounts receivable — consolidating entities | 23,800 | 459,146 | 183,648 | 151,521 | (818,115 | ) | — | |||||||||||||||||
Inventory | — | — | 2,230 | 2,561 | — | 4,791 | ||||||||||||||||||
Other current assets | 792 | — | 1,991 | 1,469 | — | 4,252 | ||||||||||||||||||
Total current assets | 29,648 | 473,684 | 192,965 | 162,518 | (818,115 | ) | 40,700 | |||||||||||||||||
Property and equipment, net | — | — | 373,879 | 302,526 | — | 676,405 | ||||||||||||||||||
Investment in consolidated entities | 251,217 | 277,475 | — | — | (528,692 | ) | — | |||||||||||||||||
Investment in and advances to affiliates | — | — | — | 27,484 | — | 27,484 | ||||||||||||||||||
Notes receivable | 8,268 | — | — | — | — | 8,268 | ||||||||||||||||||
Other assets | 10,965 | — | 9,333 | 8,760 | — | 29,058 | ||||||||||||||||||
Intangible assets | — | — | 4,668 | 19,161 | — | 23,829 | ||||||||||||||||||
Total assets | $ | 300,098 | $ | 751,159 | $ | 580,845 | $ | 520,449 | $ | (1,346,807 | ) | $ | 805,744 | |||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Current portion of long-term debt | $ | — | $ | — | $ | 12,731 | $ | 3,395 | $ | — | $ | 16,126 | ||||||||||||
Accounts payable | — | — | 3,132 | 1,946 | — | 5,078 | ||||||||||||||||||
Accounts payable — consolidating entities | — | 499,931 | 205,954 | 112,230 | (818,115 | ) | — | |||||||||||||||||
Accrued expenses | 1,498 | 11 | 13,351 | 7,110 | — | 21,970 | ||||||||||||||||||
Advance deposits | — | — | 2,457 | 4,657 | — | 7,114 | ||||||||||||||||||
Gift certificates payable | 3,299 | — | 830 | 1,817 | — | 5,946 | ||||||||||||||||||
Total current liabilities | 4,797 | 499,942 | 238,455 | 131,155 | (818,115 | ) | 56,234 | |||||||||||||||||
Mortgage debt | — | — | 202,103 | 239,621 | — | 441,724 | ||||||||||||||||||
Other long-term debt | 80,545 | — | 78 | 11,598 | — | 92,221 | ||||||||||||||||||
Deferred compensation liability | — | — | 809 | — | — | 809 | ||||||||||||||||||
Total liabilities | 85,342 | 499,942 | 441,445 | 382,374 | (818,115 | ) | 590,988 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||||||
Common stock | 313 | — | — | — | — | 313 | ||||||||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||||||||||||||
Additional paid in capital | 400,930 | 448,562 | 163,514 | 285,048 | (897,124 | ) | 400,930 | |||||||||||||||||
Accumulated deficit | (186,287 | ) | (197,345 | ) | (24,114 | ) | (146,973 | ) | 368,432 | (186,287 | ) | |||||||||||||
Deferred compensation | (200 | ) | — | — | — | (200 | ) | |||||||||||||||||
Total stockholders’ equity | 214,756 | 251,217 | 139,400 | 138,075 | (528,692 | ) | 214,756 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 300,098 | $ | 751,159 | $ | 580,845 | $ | 520,449 | $ | (1,346,807 | ) | $ | 805,744 | |||||||||||
F-35
Table of Contents
December 31, 2008
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 4,762 | $ | 6,279 | $ | 727 | $ | 2,463 | $ | — | $ | 14,231 | ||||||||||||
Escrows | — | — | 923 | 1,632 | — | 2,555 | ||||||||||||||||||
Accounts receivable | 150 | — | 1,262 | 755 | — | 2,167 | ||||||||||||||||||
Accounts receivable — affiliates | — | — | 290 | 635 | — | 925 | ||||||||||||||||||
Accounts receivable — consolidating entities | 28,627 | 459,146 | 148,241 | 132,141 | (768,155 | ) | — | |||||||||||||||||
Inventory | — | — | 2,194 | 2,071 | — | 4,265 | ||||||||||||||||||
Other current assets | 7,126 | — | 1,526 | 1,291 | (6,888 | ) | 3,055 | |||||||||||||||||
Total current assets | 40,665 | 465,425 | 155,163 | 140,988 | (775,043 | ) | 27,198 | |||||||||||||||||
Property and equipment, net | — | — | 395,433 | 320,740 | — | 716,173 | ||||||||||||||||||
Investment in consolidating entities | 301,617 | 327,751 | — | — | (629,368 | ) | — | |||||||||||||||||
Investment in and advances to affiliates | — | — | — | 43,855 | — | 43,855 | ||||||||||||||||||
Other assets | 14,168 | — | 8,734 | 6,104 | — | 29,006 | ||||||||||||||||||
Intangible assets | — | — | 4,668 | 19,161 | — | 23,829 | ||||||||||||||||||
Total assets | $ | 356,450 | $ | 793,176 | $ | 563,998 | $ | 530,848 | $ | (1,404,411 | ) | $ | 840,061 | |||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Current portion of long-term debt | $ | — | $ | — | $ | 78,700 | $ | 2,764 | $ | — | $ | 81,464 | ||||||||||||
Accounts payable | — | — | 10,292 | 12,925 | — | 23,217 | ||||||||||||||||||
Accounts payable — affiliates | — | — | 1,227 | 579 | — | 1,806 | ||||||||||||||||||
Accounts payable — consolidating entities | — | 491,546 | 171,822 | 104,787 | (768,155 | ) | — | |||||||||||||||||
Accrued expenses | 1,167 | 13 | 12,775 | 8,610 | — | 22,565 | ||||||||||||||||||
Advance deposits | — | — | 2,802 | 4,696 | — | 7,498 | ||||||||||||||||||
Gift certificates payable | 2,798 | — | 806 | 1,812 | — | 5,416 | ||||||||||||||||||
Total current liabilities | 3,965 | 491,559 | 278,424 | 136,173 | (768,155 | ) | 141,966 | |||||||||||||||||
Mortgage debt | — | — | 141,434 | 198,713 | (6,888 | ) | 333,259 | |||||||||||||||||
Other long-term debt | 80,545 | — | — | 11,783 | — | 92,328 | ||||||||||||||||||
Deferred compensation liability | — | — | 568 | — | — | 568 | ||||||||||||||||||
Total liabilities | 84,510 | 491,559 | 420,426 | 346,669 | (775,043 | ) | 568,121 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||||||
Common stock | 310 | — | — | — | — | 310 | ||||||||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||||||||||||||
Additional paid in capital | 399,641 | 448,562 | 163,514 | 285,048 | (897,124 | ) | 399,641 | |||||||||||||||||
Accumulated deficit | (127,811 | ) | (146,945 | ) | (19,942 | ) | (100,869 | ) | 267,756 | (127,811 | ) | |||||||||||||
Deferred compensation | (200 | ) | — | — | — | — | (200 | ) | ||||||||||||||||
Total stockholders’ equity | 271,940 | 301,617 | 143,572 | 184,179 | (629,368 | ) | 271,940 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 356,450 | $ | 793,176 | $ | 563,998 | $ | 530,848 | $ | (1,404,411 | ) | $ | 840,061 | |||||||||||
F-36
Table of Contents
Year ended December 31, 2009
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rooms | $ | — | $ | — | $ | 78,347 | $ | 76,404 | $ | — | $ | 154,751 | ||||||||||||
Food and beverage | — | — | 22,633 | 20,010 | — | 42,643 | ||||||||||||||||||
Other hotel operations | — | — | 19,350 | 19,027 | — | 38,377 | ||||||||||||||||||
Management and other fees | 697 | — | 18,343 | 77 | (17,127 | ) | 1,990 | |||||||||||||||||
Management and other fees — affiliates | — | — | 4,973 | — | — | 4,973 | ||||||||||||||||||
697 | — | 143,646 | 115,518 | (17,127 | ) | 242,734 | ||||||||||||||||||
Other revenue from managed properties — affiliates | — | — | 17,132 | — | — | 17,132 | ||||||||||||||||||
Other revenue from managed properties | — | — | 4,166 | — | — | 4,166 | ||||||||||||||||||
Total revenues | 697 | — | 164,944 | 115,518 | (17,127 | ) | 264,032 | |||||||||||||||||
Operating expenses by department: | ||||||||||||||||||||||||
Rooms | — | — | 12,720 | 12,751 | (3,022 | ) | 22,449 | |||||||||||||||||
Food and beverage | — | — | 17,340 | 15,877 | — | 33,217 | ||||||||||||||||||
Other | — | — | 15,740 | 16,384 | — | 32,124 | ||||||||||||||||||
Other operating expenses: | ||||||||||||||||||||||||
Selling, general and administrative | 2,908 | 141 | 42,065 | 29,977 | (14,105 | ) | 60,986 | |||||||||||||||||
Property operating costs | — | — | 16,651 | 21,137 | — | 37,788 | ||||||||||||||||||
Depreciation and amortization | 155 | — | 29,871 | 26,352 | — | 56,378 | ||||||||||||||||||
Asset impairment loss | — | — | — | 24,000 | — | 24,000 | ||||||||||||||||||
Loss on disposition of property | — | — | 191 | 64 | — | 255 | ||||||||||||||||||
3,063 | 141 | 134,578 | 146,542 | (17,127 | ) | 267,197 | ||||||||||||||||||
Other expenses from managed properties — affiliates | — | — | 17,132 | — | — | 17,132 | ||||||||||||||||||
Other expenses from managed properties | — | — | 4,166 | — | — | 4,166 | ||||||||||||||||||
Total operating expenses | 3,063 | 141 | 155,876 | 146,542 | (17,127 | ) | 288,495 | |||||||||||||||||
Net operating (loss) income | (2,366 | ) | (141 | ) | 9,068 | (31,024 | ) | — | (24,463 | ) | ||||||||||||||
Gain on sale of unconsolidated affiliate | — | — | — | (962 | ) | — | (962 | ) | ||||||||||||||||
Investment income — affiliates | — | — | — | (1,330 | ) | — | (1,330 | ) | ||||||||||||||||
Interest income | (605 | ) | (17 | ) | (13 | ) | (7 | ) | — | (642 | ) | |||||||||||||
Interest expense | 6,123 | — | 12,923 | 15,026 | — | 34,072 | ||||||||||||||||||
Loss before income taxes and equity in affiliates | (7,884 | ) | (124 | ) | (3,842 | ) | (43,751 | ) | — | (55,601 | ) | |||||||||||||
Income tax expense (benefit) | 192 | — | 330 | (82 | ) | — | 440 | |||||||||||||||||
Equity in affiliates, net of tax | 50,400 | 50,276 | — | 2,435 | (100,676 | ) | 2,435 | |||||||||||||||||
Net loss | $ | (58,476 | ) | $ | (50,400 | ) | $ | (4,172 | ) | $ | (46,104 | ) | $ | 100,676 | $ | (58,476 | ) | |||||||
F-37
Table of Contents
Year ended December 31, 2008
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rooms | $ | — | $ | — | $ | 74,725 | $ | 68,670 | $ | — | $ | 143,395 | ||||||||||||
Food and beverage | — | — | 21,192 | 17,616 | — | 38,808 | ||||||||||||||||||
Other hotel operations | — | — | 18,594 | 16,771 | — | 35,365 | ||||||||||||||||||
Management and other fees | 1,604 | — | 16,893 | 83 | (15,782 | ) | 2,798 | |||||||||||||||||
Management and other fees — affiliates | — | — | 4,982 | 364 | — | 5,346 | ||||||||||||||||||
1,604 | — | 136,386 | 103,504 | (15,782 | ) | 225,712 | ||||||||||||||||||
Other revenue from managed properties — affiliates | — | — | 19,826 | — | — | 19,826 | ||||||||||||||||||
�� | ||||||||||||||||||||||||
Total revenues | 1,604 | — | 156,212 | 103,504 | (15,782 | ) | 245,538 | |||||||||||||||||
Operating expenses by department: | ||||||||||||||||||||||||
Rooms | — | — | 12,043 | 10,854 | (2,763 | ) | 20,134 | |||||||||||||||||
Food and beverage | — | — | 17,001 | 13,989 | — | 30,990 | ||||||||||||||||||
Other | — | — | 15,087 | 13,872 | — | 28,959 | ||||||||||||||||||
Other operating expenses: | ||||||||||||||||||||||||
Selling, general and administrative | 3,174 | 142 | 37,091 | 24,514 | (13,019 | ) | 51,902 | |||||||||||||||||
Property operating costs | — | — | 20,214 | 16,872 | — | 37,086 | ||||||||||||||||||
Depreciation and amortization | 154 | — | 25,136 | 20,791 | — | 46,081 | ||||||||||||||||||
Impairment loss on investment in affiliates | — | — | 630 | 18,147 | — | 18,777 | ||||||||||||||||||
Goodwill impairment | — | 1,410 | — | 16,020 | — | 17,430 | ||||||||||||||||||
Loss on disposition of property | — | — | — | 19 | — | 19 | ||||||||||||||||||
3,328 | 1,552 | 127,202 | 135,078 | (15,782 | ) | 251,378 | ||||||||||||||||||
Other expenses from managed properties — affiliates | — | — | 19,826 | — | — | 19,826 | ||||||||||||||||||
Total operating expenses | 3,328 | 1,552 | 147,028 | 135,078 | (15,782 | ) | 271,204 | |||||||||||||||||
Net operating (loss) income | (1,724 | ) | (1,552 | ) | 9,184 | (31,574 | ) | — | (25,666 | ) | ||||||||||||||
Investment income — affiliates | — | — | — | (2,187 | ) | — | (2,187 | ) | ||||||||||||||||
Interest income | (786 | ) | (605 | ) | (9 | ) | (24 | ) | — | (1,424 | ) | |||||||||||||
Interest expense | 5,554 | — | 11,521 | 10,202 | — | 27,277 | ||||||||||||||||||
Loss before income taxes and equity in affiliates | (6,492 | ) | (947 | ) | (2,328 | ) | (39,565 | ) | — | (49,332 | ) | |||||||||||||
Income tax (benefit) expense | (12,911 | ) | — | 331 | 624 | — | (11,956 | ) | ||||||||||||||||
Equity in affiliates, net of tax | 47,144 | 46,197 | — | 3,349 | (93,341 | ) | 3,349 | |||||||||||||||||
Net loss | $ | (40,725 | ) | $ | (47,144 | ) | $ | (2,659 | ) | $ | (43,538 | ) | $ | 93,341 | $ | (40,725 | ) | |||||||
�� | ||||||||||||||||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||||||
Net loss | $ | (40,725 | ) | $ | (47,144 | ) | $ | (2,659 | ) | $ | (43,538 | ) | $ | 93,341 | $ | (40,725 | ) | |||||||
Unrealized gain on interest rate swap | — | (387 | ) | — | — | (387 | ) | |||||||||||||||||
Comprehensive loss | $ | (40,725 | ) | $ | (47,144 | ) | $ | (2,272 | ) | $ | (43,538 | ) | $ | 93,341 | $ | (40,338 | ) | |||||||
F-38
Table of Contents
Year ended December 31, 2007
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rooms | $ | — | $ | — | $ | 43,467 | $ | 68,794 | $ | — | $ | 112,261 | ||||||||||||
Food and beverage | — | — | 12,299 | 17,289 | — | 29,588 | ||||||||||||||||||
Other hotel operations | — | — | 9,975 | 17,110 | — | 27,085 | ||||||||||||||||||
Management and other fees | 1,650 | 47 | 13,260 | 169 | (12,271 | ) | 2,855 | |||||||||||||||||
Management and other fees — affiliates | — | — | 2,505 | 1,809 | — | 4,314 | ||||||||||||||||||
1,650 | 47 | 81,506 | 105,171 | (12,271 | ) | 176,103 | ||||||||||||||||||
Other revenue from managed properties — affiliates | — | — | 11,477 | — | — | 11,477 | ||||||||||||||||||
Total revenues | 1,650 | 47 | 92,983 | 105,171 | (12,271 | ) | 187,580 | |||||||||||||||||
Operating expenses by department: | ||||||||||||||||||||||||
Rooms | — | — | 7,072 | 10,819 | (2,175 | ) | 15,716 | |||||||||||||||||
Food and beverage | — | — | 10,897 | 14,299 | — | 25,196 | ||||||||||||||||||
Other | — | — | 9,033 | 14,071 | — | 23,104 | ||||||||||||||||||
Other operating expenses: | ||||||||||||||||||||||||
Selling, general and administrative | 2,527 | 121 | 29,385 | 25,978 | (10,096 | ) | 47,915 | |||||||||||||||||
Property operating costs | — | — | 16,453 | 14,102 | — | 30,555 | ||||||||||||||||||
Depreciation and amortization | 103 | — | 15,511 | 20,758 | — | 36,372 | ||||||||||||||||||
Loss on disposition of property | — | — | — | 128 | — | 128 | ||||||||||||||||||
2,630 | 121 | 88,351 | 100,155 | (12,271 | ) | 178,986 | ||||||||||||||||||
Other expenses from managed properties — affiliates | — | — | 11,477 | — | — | 11,477 | ||||||||||||||||||
Total operating expenses | 2,630 | 121 | 99,828 | 100,155 | (12,271 | ) | 190,463 | |||||||||||||||||
Net operating (loss) income | (980 | ) | (74 | ) | (6,845 | ) | 5,016 | — | (2,883 | ) | ||||||||||||||
Investment income — affiliates | — | — | — | (667 | ) | — | (667 | ) | ||||||||||||||||
Interest income | (972 | ) | (1,665 | ) | (49 | ) | (72 | ) | — | (2,758 | ) | |||||||||||||
Interest expense | 1,396 | — | 5,585 | 7,906 | — | 14,887 | ||||||||||||||||||
(Loss) income before income taxes and equity in affiliates | (1,404 | ) | 1,591 | (12,381 | ) | (2,151 | ) | — | (14,345 | ) | ||||||||||||||
Income tax (expense) benefit | (6,283 | ) | — | 93 | 331 | — | (5,859 | ) | ||||||||||||||||
Equity in affiliates, net of tax | 14,460 | 16,051 | — | 1,547 | (30,511 | ) | 1,547 | |||||||||||||||||
Net loss | (9,581 | ) | (14,460 | ) | (12,474 | ) | (4,029 | ) | 30,511 | (10,033 | ) | |||||||||||||
Net loss attributable to noncontrolling interest, net of tax | — | — | (452 | ) | — | — | (452 | ) | ||||||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | $ | (9,581 | ) | $ | (14,460 | ) | $ | (12,022 | ) | $ | (4,029 | ) | $ | 30,511 | $ | (9,581 | ) | |||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||||||
Net loss | $ | (9,581 | ) | $ | (14,460 | ) | $ | (12,474 | ) | $ | (4,029 | ) | $ | 30,511 | $ | (10,033 | ) | |||||||
Unrealized loss on interest rate swap | — | — | 387 | — | — | 387 | ||||||||||||||||||
Comprehensive loss | (9,581 | ) | (14,460 | ) | (12,861 | ) | (4,029 | ) | 30,511 | (10,420 | ) | |||||||||||||
Comprehensive loss attributable to noncontrolling interest | — | — | (452 | ) | — | — | (452 | ) | ||||||||||||||||
Comprehensive loss attributable to Great Wolf Resorts, Inc. | $ | (9,581 | ) | $ | (14,460 | ) | $ | (12,409 | ) | $ | (4,029 | ) | $ | 30,511 | $ | (9,968 | ) | |||||||
F-39
Table of Contents
Year ended December 31, 2009
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||
Net loss | $ | (58,476 | ) | $ | (50,400 | ) | $ | (4,172 | ) | $ | (46,104 | ) | $ | 100,676 | $ | (58,476 | ) | |||||||
Adjustment to reconcile net loss to net cash (used) provided by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 155 | — | 29,871 | 26,352 | — | 56,378 | ||||||||||||||||||
Bad debt expense | — | — | 617 | 63 | — | 680 | ||||||||||||||||||
Non-cash employee compensation and professional fees expense | — | — | 1,138 | — | — | 1,138 | ||||||||||||||||||
Loss on disposition of property | — | — | 191 | 64 | — | 255 | ||||||||||||||||||
Asset impairment loss | — | — | — | 24,000 | — | 24,000 | ||||||||||||||||||
Gain on sale of unconsolidated affiliates | — | — | — | (962 | ) | — | (962 | ) | ||||||||||||||||
Equity in losses of affiliates | 50,400 | 50,276 | — | 2,416 | (100,676 | ) | 2,416 | |||||||||||||||||
Deferred tax expense | 131 | — | — | — | — | 131 | ||||||||||||||||||
Changes in operating assets and liabilities | 3,283 | (2 | ) | (7,070 | ) | (2,668 | ) | (6,888 | ) | (13,345 | ) | |||||||||||||
Net cash (used) provided by operating activities | (4,507 | ) | (126 | ) | 20,575 | 3,161 | (6,888 | ) | 12,215 | |||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Capital expenditures for property and equipment | — | — | (8,573 | ) | (40,685 | ) | — | (49,258 | ) | |||||||||||||||
Loan repayment from unconsolidated affiliate | — | — | — | 9,225 | — | 9,225 | ||||||||||||||||||
Investment in unconsolidated affiliates | — | — | — | (303 | ) | — | (303 | ) | ||||||||||||||||
Proceeds from sale of interest in unconsolidated affiliate | — | — | — | 6,000 | — | 6,000 | ||||||||||||||||||
Investment in development | — | — | 834 | — | — | 834 | ||||||||||||||||||
Proceeds from sale of assets | — | — | — | 66 | — | 66 | ||||||||||||||||||
Decrease in restricted cash | 159 | — | — | 1 | — | 160 | ||||||||||||||||||
(Increase) decrease in escrows | — | — | (3,507 | ) | 124 | — | (3,383 | ) | ||||||||||||||||
Net cash provided (used) in investing activities | 159 | — | (11,246 | ) | (25,572 | ) | — | (36,659 | ) | |||||||||||||||
Financing activities: | ||||||||||||||||||||||||
Principal payments on long-term debt | — | — | (5,317 | ) | (2,714 | ) | — | (8,031 | ) | |||||||||||||||
Proceeds from issuance of long-term debt | — | — | 95 | 44,068 | 6,888 | 51,051 | ||||||||||||||||||
Payment of loan costs | (218 | ) | — | (5,149 | ) | (6,527 | ) | — | (11,894 | ) | ||||||||||||||
Advances from consolidating entities, net | 4,827 | 8,385 | (1,275 | ) | (11,937 | ) | — | — | ||||||||||||||||
Net cash provided (used) by financing activities | 4,609 | 8,385 | (11,646 | ) | 22,890 | 6,888 | 31,126 | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 261 | 8,259 | (2,317 | ) | 479 | — | 6,682 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 4,762 | 6,279 | 727 | 2,463 | — | 14,231 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 5,023 | $ | 14,538 | $ | (1,590 | ) | $ | 2,942 | $ | — | $ | 20,913 | |||||||||||
F-40
Table of Contents
Year ended December 31, 2008
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||
Net loss | $ | (40,725 | ) | $ | (47,144 | ) | $ | (2,659 | ) | $ | (43,538 | ) | $ | 93,341 | $ | (40,725 | ) | |||||||
Adjustment to reconcile net loss to net cash (used) provided by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 154 | — | 25,136 | 20,791 | — | 46,081 | ||||||||||||||||||
Bad debt expense | — | — | 1,240 | 65 | — | 1,305 | ||||||||||||||||||
Impairment loss on investment in affiliates | — | — | 630 | 18,147 | — | 18,777 | ||||||||||||||||||
Goodwill impairment | — | 1,410 | — | 16,020 | — | 17,430 | ||||||||||||||||||
Non-cash employee compensation expense | — | — | 250 | — | — | 250 | ||||||||||||||||||
Loss on disposition of property | — | — | — | 19 | — | 19 | ||||||||||||||||||
Equity in losses of affiliates | 47,144 | 46,197 | — | 4,421 | (93,341 | ) | 4,421 | |||||||||||||||||
Deferred tax benefit | (14,072 | ) | — | — | — | — | (14,072 | ) | ||||||||||||||||
Changes in operating assets and liabilities | (2,715 | ) | (40 | ) | 491 | (4,576 | ) | 6,888 | 48 | |||||||||||||||
Net cash (used) provided by operating activities | (10,214 | ) | 423 | 25,088 | 11,349 | 6,888 | 33,534 | |||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Capital expenditures for property and equipment | — | — | (55,303 | ) | (79,664 | ) | — | (134,967 | ) | |||||||||||||||
Loan repayment from unconsolidated affiliate | — | — | — | 3,168 | — | 3,168 | ||||||||||||||||||
Investment in affiliates | (1,180 | ) | (53,430 | ) | — | (9,250 | ) | 53,430 | (10,430 | ) | ||||||||||||||
Investment in development | — | — | (2,255 | ) | — | — | (2,255 | ) | ||||||||||||||||
Decrease (increase) in restricted cash | 1 | — | 55 | (1 | ) | — | 55 | |||||||||||||||||
(Increase) decrease in escrows | — | — | (724 | ) | 541 | — | (183 | ) | ||||||||||||||||
Net cash (used) provided in investing activities | (1,179 | ) | (53,430 | ) | (58,227 | ) | (85,206 | ) | 53,430 | (144,612 | ) | |||||||||||||
Financing activities: | ||||||||||||||||||||||||
Principal payments on long-term debt | — | — | (55,375 | ) | (1,919 | ) | — | (57,294 | ) | |||||||||||||||
Proceeds from issuance of long-term debt | — | — | 140,449 | 34,481 | (6,888 | ) | 168,042 | |||||||||||||||||
Loan fees | (12 | ) | — | (2,686 | ) | (1,338 | ) | — | (4,036 | ) | ||||||||||||||
Advances from consolidating entities, net | 10,050 | 50,614 | (49,387 | ) | (11,277 | ) | — | — | ||||||||||||||||
Equity contributions | — | — | — | 53,430 | (53,430 | ) | — | |||||||||||||||||
Net cash provided (used) by financing activities | 10,038 | 50,614 | 33,001 | 73,377 | (60,318 | ) | 106,712 | |||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (1,355 | ) | (2,393 | ) | (138 | ) | (480 | ) | — | (4,366 | ) | |||||||||||||
Cash and cash equivalents, beginning of period | 6,117 | 8,672 | 865 | 2,943 | — | 18,597 | ||||||||||||||||||
�� | ||||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 4,762 | $ | 6,279 | $ | 727 | $ | 2,463 | $ | — | $ | 14,231 | ||||||||||||
F-41
Table of Contents
Year ended December 31, 2007
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||
Net loss | $ | (9,581 | ) | $ | (14,460 | ) | $ | (12,474 | ) | $ | (4,029 | ) | $ | 30,511 | $ | (10,033 | ) | |||||||
Adjustment to reconcile net loss to net cash (used) provided by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 103 | — | 15,511 | 20,758 | — | 36,372 | ||||||||||||||||||
Bad debt expense | — | — | 83 | 71 | — | 154 | ||||||||||||||||||
Non-cash employee compensation expense | — | — | 5,080 | — | — | 5,080 | ||||||||||||||||||
Loss on disposition of property | — | — | — | 128 | — | 128 | ||||||||||||||||||
Equity in losses of affiliates | 14,460 | 16,051 | — | 2,616 | (30,511 | ) | 2,616 | |||||||||||||||||
Deferred tax benefit | (7,105 | ) | — | — | — | (312 | ) | (7,417 | ) | |||||||||||||||
Changes in operating assets and liabilities | 934 | (1,614 | ) | 5,442 | (2,223 | ) | 312 | 2,851 | ||||||||||||||||
Net cash (used) provided by operating activities | (1,189 | ) | (23 | ) | 13,642 | 17,321 | — | 29,751 | ||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Capital expenditures for property and equipment | — | — | (147,308 | ) | (24,576 | ) | — | (171,884 | ) | |||||||||||||||
Investment in unconsolidated affiliates | (78,687 | ) | (104,721 | ) | — | (25,238 | ) | 184,588 | (24,058 | ) | ||||||||||||||
Investment in development | — | — | (10,276 | ) | — | — | (10,276 | ) | ||||||||||||||||
Issuance of notes receivable | (3,263 | ) | — | — | — | — | (3,263 | ) | ||||||||||||||||
Decrease (increase) in restricted cash | 1,167 | 405 | 720 | (3 | ) | — | 2,289 | |||||||||||||||||
(Increase) decrease in escrows | — | — | (198 | ) | 423 | — | 225 | |||||||||||||||||
Net cash (used) provided in investing activities | (80,783 | ) | (104,316 | ) | (157,062 | ) | (49,394 | ) | 184,588 | (206,967 | ) | |||||||||||||
Financing activities: | ||||||||||||||||||||||||
Principal payments on long-term debt | — | — | — | (1,350 | ) | — | (1,350 | ) | ||||||||||||||||
Proceeds from issuance of long-term debt | 28,995 | — | 79,268 | — | — | 108,263 | ||||||||||||||||||
Payment of loan costs | (921 | ) | — | (50 | ) | (7 | ) | — | (978 | ) | ||||||||||||||
Purchase of noncontrolling interests | — | — | (6,900 | ) | — | — | (6,900 | ) | ||||||||||||||||
Advances from consolidating entities, net | — | 79,867 | 20,891 | 33,074 | (133,832 | ) | — | |||||||||||||||||
Equity contribution | — | — | 50,756 | — | (50,756 | ) | — | |||||||||||||||||
Net cash provided by financing activities | 28,074 | 79,867 | 143,965 | 31,717 | (184,588 | ) | 99,035 | |||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (53,898 | ) | (24,472 | ) | 545 | (356 | ) | — | (78,181 | ) | ||||||||||||||
Cash and cash equivalents, beginning of period | 60,015 | 33,144 | 320 | 3,299 | — | 96,778 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 6,117 | $ | 8,672 | $ | 865 | $ | 2,943 | $ | — | $ | 18,597 | ||||||||||||
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Table of Contents
15. | SUBSEQUENT EVENT |
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Table of Contents
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
(Dollars in thousands, except share and per share amounts) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 30,410 | $ | 20,913 | ||||
Escrows | 2,774 | 5,938 | ||||||
Accounts receivable, net of allowance | ||||||||
for doubtful accounts of $122 and $101 | 4,173 | 2,192 | ||||||
Accounts receivable — affiliates | 2,833 | 2,614 | ||||||
Inventory | 6,453 | 4,791 | ||||||
Other current assets | 5,565 | 4,252 | ||||||
Total current assets | 52,208 | 40,700 | ||||||
Property and equipment, net | 665,170 | 676,405 | ||||||
Investments in and advances to affiliates | 27,134 | 27,484 | ||||||
Notes receivable | — | 8,268 | ||||||
Other assets | 33,645 | 29,058 | ||||||
Intangible assets | 27,715 | 23,829 | ||||||
Total assets | $ | 805,872 | $ | 805,744 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 4,186 | $ | 16,126 | ||||
Accounts payable | 7,806 | 5,078 | ||||||
Accounts payable — affiliates | 10 | — | ||||||
Accrued expenses | 29,754 | 21,970 | ||||||
Advance deposits | 12,642 | 7,114 | ||||||
Other current liabilities | 5,419 | 5,946 | ||||||
Total current liabilities | 59,817 | 56,234 | ||||||
Mortgage debt | 457,185 | 441,724 | ||||||
Other long-term debt | 92,096 | 92,221 | ||||||
Deferred compensation liability | 1,050 | 809 | ||||||
Other long-term liabilities | 1,131 | — | ||||||
Total liabilities | 611,279 | 590,988 | ||||||
Commitments and contingencies | ||||||||
Great Wolf Resorts stockholders’ equity: | ||||||||
Common stock, $0.01 par value; 250,000,000 shares authorized; 32,445,206 and 31,278,889 shares issued and outstanding | 324 | 313 | ||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding | — | — | ||||||
Additionalpaid-in-capital | 401,542 | 400,930 | ||||||
Accumulated deficit | (207,112 | ) | (186,287 | ) | ||||
Deferred compensation | (200 | ) | (200 | ) | ||||
Total Great Wolf Resorts stockholders’ equity | 194,554 | 214,756 | ||||||
Noncontrolling interest | 39 | — | ||||||
Total equity | 194,593 | 214,756 | ||||||
Total liabilities and equity | $ | 805,872 | $ | 805,744 | ||||
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Table of Contents
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(Unaudited; dollars in thousands, | ||||||||||||||||
except share and per share data) | ||||||||||||||||
Revenues: | ||||||||||||||||
Rooms | $ | 39,460 | $ | 40,310 | $ | 81,248 | $ | 76,655 | ||||||||
Food and beverage | 11,456 | 11,305 | 23,073 | 21,207 | ||||||||||||
Other | 10,379 | 10,160 | 20,587 | 19,125 | ||||||||||||
Management and other fees | 560 | 402 | 1,195 | 991 | ||||||||||||
Management and other fees — affiliates | 960 | 1,210 | 1,980 | 2,434 | ||||||||||||
62,815 | 63,387 | 128,083 | 120,412 | |||||||||||||
Other revenue from managed properties — affiliates | 2,759 | 5,238 | 5,453 | 10,520 | ||||||||||||
Other revenue from managed properties | 2,854 | — | 5,571 | — | ||||||||||||
Total revenues | 68,428 | 68,625 | 139,107 | 130,932 | ||||||||||||
Operating expenses by department: | ||||||||||||||||
Rooms | 6,044 | 5,948 | 12,073 | 10,977 | ||||||||||||
Food and beverage | 8,739 | 8,865 | 17,266 | 16,280 | ||||||||||||
Other | 8,575 | 8,424 | 16,942 | 15,692 | ||||||||||||
Other operating expenses: | ||||||||||||||||
Selling, general and administrative | 14,486 | 16,987 | 33,228 | 31,631 | ||||||||||||
Property operating costs | 8,170 | 9,114 | 17,204 | 21,456 | ||||||||||||
Depreciation and amortization | 17,110 | 14,630 | 31,130 | 27,216 | ||||||||||||
Loss on disposition of property | 9 | — | 19 | 191 | ||||||||||||
63,133 | 63,968 | 127,862 | 123,443 | |||||||||||||
Other expenses from managed properties — affiliates | 2,759 | 5,238 | 5,453 | 10,520 | ||||||||||||
Other expenses from managed properties | 2,854 | — | 5,571 | — | ||||||||||||
Total operating expenses | 68,746 | 69,206 | 138,886 | 133,963 | ||||||||||||
Net operating (loss) income | (318 | ) | (581 | ) | 221 | (3,031 | ) | |||||||||
Investment income — affiliates | (276 | ) | (336 | ) | (565 | ) | (720 | ) | ||||||||
Interest income | (180 | ) | (148 | ) | (433 | ) | (336 | ) | ||||||||
Interest expense | 12,459 | 8,777 | 21,658 | 15,044 | ||||||||||||
Loss before income taxes and equity in unconsolidated affiliates | (12,321 | ) | (8,874 | ) | (20,439 | ) | (17,019 | ) | ||||||||
Income tax expense (benefit) | 189 | (3,635 | ) | 369 | (6,783 | ) | ||||||||||
Equity in loss (income) of unconsolidated affiliates, net of tax | 210 | 467 | (23 | ) | 1,115 | |||||||||||
Net loss | (12,720 | ) | (5,706 | ) | (20,785 | ) | (11,351 | ) | ||||||||
Net loss attributable to noncontrolling interest, net of tax | 40 | — | 40 | — | ||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | $ | (12,760 | ) | $ | (5,706 | ) | $ | (20,825 | ) | $ | (11,351 | ) | ||||
Basic loss per common share | $ | (0.41 | ) | $ | (0.18 | ) | $ | (0.67 | ) | $ | (0.36 | ) | ||||
Diluted loss per common share | $ | (0.41 | ) | $ | (0.18 | ) | $ | (0.67 | ) | $ | (0.36 | ) | ||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 31,000,179 | 31,263,487 | 30,919,023 | 31,123,072 | ||||||||||||
Diluted | 31,000,179 | 31,263,487 | 30,919,023 | 31,123,072 | ||||||||||||
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Table of Contents
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
(Unaudited; dollars | ||||||||
in thousands) | ||||||||
Operating activities: | ||||||||
Net loss | $ | (20,785 | ) | $ | (11,351 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 31,130 | 27,216 | ||||||
Bad debt expense | 193 | 457 | ||||||
Non-cash employee compensation and professional fees expense | 1,061 | 469 | ||||||
Loss on disposition of property | 19 | 191 | ||||||
Equity in (income) losses of | ||||||||
unconsolidated affiliates | (22 | ) | 1,854 | |||||
Deferred tax benefit | (224 | ) | (7,582 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable and other assets | (3,482 | ) | (5,025 | ) | ||||
Accounts payable, accrued expenses and other liabilities | 10,380 | 2,106 | ||||||
Net cash provided by operating activities | 18,270 | 8,335 | ||||||
Investing activities: | ||||||||
Capital expenditures for property and equipment | (6,229 | ) | (45,846 | ) | ||||
Loan repayment from unconsolidated affiliates | 490 | 8,098 | ||||||
Investment in affiliate | (10 | ) | — | |||||
Investment in unconsolidated affiliates | — | (303 | ) | |||||
Investment in development | (358 | ) | 1,086 | |||||
Proceeds from sale of assets | 15 | 66 | ||||||
Cash acquired in acquisition of Creative Kingdoms, LLC | 324 | — | ||||||
(Increase) decrease in restricted cash | (3 | ) | 163 | |||||
Decrease (increase) in escrows | 3,164 | (1,379 | ) | |||||
Net cash used in investing activities | (2,607 | ) | (38,115 | ) | ||||
Financing activities: | ||||||||
Principal payments on long-term debt | (215,941 | ) | (3,112 | ) | ||||
Proceeds from issuance of long-term debt | 219,337 | 50,073 | ||||||
Payment of loan costs | (9,562 | ) | (8,377 | ) | ||||
Net cash (used in) provided by financing activities | (6,166 | ) | 38,584 | |||||
Net increase in cash and cash equivalents | 9,497 | 8,804 | ||||||
Cash and cash equivalents, beginning of period | 20,913 | 14,231 | ||||||
Cash and cash equivalents, end of period | $ | 30,410 | $ | 23,035 | ||||
Supplemental Cash Flow Information: | ||||||||
Cash paid for interest, net of capitalized interest | $ | 16,543 | $ | 14,599 | ||||
Cash paid for income taxes, net of refunds | $ | 404 | $ | 36 | ||||
Non-cash items: | ||||||||
Construction in process accruals | $ | — | $ | 319 | ||||
Loan cost accruals | $ | 1,076 | $ | — | ||||
Conversion of note receivable and accrued interest to equity investment | $ | 9,963 | $ | — |
F-46
Table of Contents
1. | ORGANIZATION |
F-47
Table of Contents
Indoor | ||||||||||||||||||||
Ownership | Number of | Number of | Entertainment | |||||||||||||||||
Percentage | Opened | Guest Suites | Condo Units(1) | Area(2) | ||||||||||||||||
(Approx. sq. ft.) | ||||||||||||||||||||
Wisconsin Dells, WI(3) | — | 1997 | 308 | 77 | 102,000 | |||||||||||||||
Sandusky, OH(3) | — | 2001 | 271 | — | 41,000 | |||||||||||||||
Traverse City, MI | 100 | % | 2003 | 280 | — | 57,000 | ||||||||||||||
Kansas City, KS | 100 | % | 2003 | 281 | — | 57,000 | ||||||||||||||
Sheboygan, WI | 100 | % | 2004 | 182 | 64 | 54,000 | ||||||||||||||
Williamsburg, VA(4) | 100 | % | 2005 | 405 | — | 87,000 | ||||||||||||||
Pocono Mountains, PA(4) | 100 | % | 2005 | 401 | — | 101,000 | ||||||||||||||
Niagara Falls, ONT(5) | — | 2006 | 406 | — | 104,000 | |||||||||||||||
Mason, OH(4) | 100 | % | 2006 | 401 | — | 105,000 | ||||||||||||||
Grapevine, TX(4) | 100 | % | 2007 | 605 | — | 110,000 | ||||||||||||||
Grand Mound, WA(6) | 49 | % | 2008 | 398 | — | 74,000 | ||||||||||||||
Concord, NC(4) | 100 | % | 2009 | 402 | — | 97,000 |
(1) | Condominium units are individually owned by third parties and are managed by us. | |
(2) | Our indoor entertainment areas generally include our indoor waterpark, game arcade, children’s activity room, family tech center, MagiQuest and fitness room, as well as our spa in the resorts that have such amenities. | |
(3) | These properties are owned by CNL Lifestyle Properties, Inc. (CNL), a real estate investment trust focused on leisure and lifestyle properties. Prior to August 2009, these properties were owned by a joint venture between CNL and us. In August 2009, we sold our 30.26% joint venture interest to CNL for $6,000. We currently manage both properties and license the Great Wolf Lodge brand to these resorts. | |
(4) | Five of our properties (Great Wolf Lodge resorts in Williamsburg, VA; Pocono Mountains, PA; Mason, OH; Grapevine, TX and Concord, NC) each had a book value of fixed assets equal to ten percent or more of our total assets as of June 30, 2010 and each of those five properties had total revenues equal to ten percent or more of our total revenues for the three and six months ended June 30, 2010. | |
(5) | An affiliate of Ripley Entertainment, Inc. (Ripley), our licensee, owns this resort. We have granted Ripley a license to use the Great Wolf Lodge name for this resort through April 2016. We managed the resort on behalf of Ripley through April 2009. | |
(6) | This property is owned by a joint venture. The Confederated Tribes of the Chehalis Reservation (Chehalis) owns a 51% interest in the joint venture, and we own a 49% interest. We operate the property and license the Great Wolf Lodge brand to the property under long-term agreements through April 2057, subject to earlier termination in certain situations. The joint venture leases the land for the resort from the United States Department of Interior, which is trustee for Chehalis. |
F-48
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Goodwill | $ | 2,276 | 130,496 | |||||
Accumulated impairment losses | — | (68,405 | ) | |||||
Goodwill related to sale of affiliate | — | (62,091 | ) | |||||
$ | 2,276 | $ | — | |||||
F-49
Table of Contents
• | Resort ownership/operation-revenues derived from our consolidated owned resorts; and | |
• | Resort third-party management/licensing-revenues derived from management, license and other related fees from unconsolidated managed resorts. |
Resort Third- | ||||||||||||||||
Resort | Party | Totals per | ||||||||||||||
Ownership/ | Management/ | Financial | ||||||||||||||
Operation | License | Other | Statements | |||||||||||||
Three months ended June 30, 2010 | ||||||||||||||||
Revenues | $ | 60,428 | $ | 7,133 | $ | 867 | $ | 68,428 | ||||||||
Depreciation and amortization | (16,416 | ) | — | (694 | ) | (17,110 | ) | |||||||||
Net operating (loss) income | (1,664 | ) | 1,520 | (174 | ) | (318 | ) | |||||||||
Investment income — affiliates | — | — | — | (276 | ) | |||||||||||
Interest income | — | — | — | (180 | ) | |||||||||||
Interest expense | — | — | — | 12,459 | ||||||||||||
Loss before income taxes and equity in income of unconsolidated affiliates | — | — | — | $ | (12,321 | ) | ||||||||||
Additions to long-lived assets | 1,961 | — | 487 | $ | 2,448 | |||||||||||
Resort Third- | ||||||||||||||||
Resort | Party | Totals per | ||||||||||||||
Ownership/ | Management/ | Financial | ||||||||||||||
Operation | License | Other | Statements | |||||||||||||
Six months ended June 30, 2010 | ||||||||||||||||
Revenues | $ | 124,041 | $ | 14,199 | $ | 867 | $ | 139,107 | ||||||||
Depreciation and amortization | (30,271 | ) | — | (859 | ) | (31,130 | ) | |||||||||
Net operating (loss) income | (709 | ) | 3,175 | (2,245 | ) | 221 | ||||||||||
Investment income — affiliates | — | — | — | (565 | ) | |||||||||||
Interest income | — | — | — | (433 | ) | |||||||||||
Interest expense | — | — | — | 21,658 | ||||||||||||
Loss before income taxes and equity in income of unconsolidated affiliates | — | — | — | $ | (20,439 | ) | ||||||||||
Additions to long-lived assets | 5,790 | — | 439 | $ | 6,229 | |||||||||||
Total assets | 685,381 | 3,565 | 116,926 | $ | 805,872 | |||||||||||
F-50
Table of Contents
Resort Third- | ||||||||||||||||
Resort | Party | Totals per | ||||||||||||||
Ownership/ | Management/ | Financial | ||||||||||||||
Operation | License | Other | Statements | |||||||||||||
Three months ended June 30, 2009 | ||||||||||||||||
Revenues | $ | 61,775 | $ | 6,850 | $ | — | $ | 68,625 | ||||||||
Depreciation and amortization | (14,474 | ) | — | (156 | ) | (14,630 | ) | |||||||||
Net operating (loss) income | (777 | ) | 1,612 | (1,416 | ) | (581 | ) | |||||||||
Investment income — affiliates | — | — | — | (336 | ) | |||||||||||
Interest income | (148 | ) | ||||||||||||||
Interest expense | — | — | — | 8,777 | ||||||||||||
Loss before income taxes and equity in losses of unconsolidated affiliates | — | — | — | $ | (8,874 | ) | ||||||||||
Additions to long-lived assets | 16,064 | — | 104 | $ | 16,168 | |||||||||||
Resort Third- | ||||||||||||||||
Resort | Party | Totals per | ||||||||||||||
Ownership/ | Management/ | Financial | ||||||||||||||
Operation | License | Other | Statements | |||||||||||||
Six months ended June 30, 2009 | ||||||||||||||||
Revenues | $ | 116,987 | $ | 13,945 | $ | — | $ | 130,932 | ||||||||
Depreciation and amortization | (26,845 | ) | — | (371 | ) | (27,216 | ) | |||||||||
Net operating (loss) income | (3,659 | ) | 3,425 | (2,797 | ) | (3,031 | ) | |||||||||
Investment income — affiliates | (720 | ) | ||||||||||||||
Interest income | — | — | — | (336 | ) | |||||||||||
Interest expense | — | — | — | 15,044 | ||||||||||||
Loss before income taxes and equity in losses of unconsolidated affiliates | — | — | — | $ | (17,019 | ) | ||||||||||
Additions to long-lived assets | 45,619 | — | 227 | $ | 45,846 | |||||||||||
Total assets (as of December 31, 2009) | 707,472 | 2,942 | 95,330 | $ | 805,744 | |||||||||||
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3. | INVESTMENT IN AFFILIATES |
Three Months | Six Months | |||||||
Ended June 30, | Ended June 30, | |||||||
2009 | 2009 | |||||||
Operating data: | ||||||||
Revenue | $ | 7,041 | $ | 14,650 | ||||
Operating expenses | $ | (9,592 | ) | $ | (19,830 | ) | ||
Net loss | $ | (2,551 | ) | $ | (5,180 | ) |
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June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Balance sheet data: | ||||||||
Total assets | $ | 144,624 | $ | 145,247 | ||||
Total liabilities | $ | 113,358 | $ | 114,129 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating data: | ||||||||||||||||
Revenue | $ | 10,563 | $ | 10,156 | $ | 21,776 | $ | 20,133 | ||||||||
Operating expenses | $ | (10,957 | ) | $ | (8,718 | ) | $ | (20,381 | ) | $ | (17,302 | ) | ||||
Net income (loss) | $ | (457 | ) | $ | (22 | ) | $ | 60 | $ | (186 | ) |
4. | VARIABLE INTEREST ENTITIES |
• | We have equity investments in and a loan to the joint venture that owns the Great Wolf Lodge resort Grand Mound, Washington. We manage that resort and we have concluded that the joint venture is a variable interest entity because the management fees we receive represent a variable interest. The management contract, however, does not provide us with power over the activities that most significantly impact the economic performance of the joint venture. As we lack the ability to direct the activities that most significantly affect the resorts’ performance, we are not the primary beneficiary of the joint venture and, therefore, we do not consolidate this entity at June 30, 2010. During the three and six months ended June 30, 2010 and 2009, we did not provide any support to this entity that we were not contractually obligated to do so. Our maximum exposure to loss related to our involvement with this entity as of June 30, 2010 is limited to the carrying value of our equity investments in and loans to the joint venture as of that date. The total carrying values of those items on our balance sheet as of June 30, 2010 is $27,017. | |
• | We have equity investments in two subsidiaries which are Delaware statutory trusts, both of which were used to issue trust preferred securities through private offerings. We have concluded that both of these trusts are variable interest entities. As we lack the ability to direct the activities that most significantly impact the trusts’ performance, however, we are not the primary beneficiary and therefore, we do not consolidate these entities at June 30, 2010. During the three and six months ended June 30, 2010 and |
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2009, we did not provide any support to these entities that we were not contractually obligated to do so. Our maximum exposure to loss related to our involvement with these entities as of June 30, 2010 is limited to the carrying value of our equity investments in the entities as of that date. The total carrying values of those items on our balance sheet as of June 30, 2010 is $2,420. |
5. | ACQUISITION OF CREATIVE KINGDOMS |
6. | SHARE-BASED COMPENSATION |
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Weighted | ||||||||||||
Weighted | Average | |||||||||||
Average | Remaining | |||||||||||
Exercise | Contractual | |||||||||||
Shares | Price | Life | ||||||||||
Number of shares under option: | ||||||||||||
Outstanding at beginning of period | 441,000 | $ | 17.53 | 4.59 years | ||||||||
Exercised | — | |||||||||||
Forfeited | — | |||||||||||
Outstanding at end of period | 441,000 | $ | 17.53 | 4.59 years | ||||||||
Exercisable at end of period | 441,000 | $ | 17.53 | 4.59 years |
• | 333,060 were based on our common stock’s performance in 2010 relative to a stock index, as designated by the Compensation Committee of the Board of Directors. These shares vest ratably over a three-year period,2010-2012. The per share fair value of these market condition shares was $2.43 as of the grant date. |
Dividend yield | — | |||
Weighted average, risk free interest rate | 0.26 | % | ||
Expected stock price volatility | 108.06 | % | ||
Expected stock price volatility (small-cap stock index) | 40.92 | % |
• | 91,463 were based on our common stock’s absolute performance during the three year period2010-2012. For shares that are earned, half of the shares vest on December 31, 2012, and the other half vest on December 31, 2013. The per share fair value of these market condition shares was $2.53 as of the grant date. |
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Dividend yield | — | |||
Weighted average, risk free interest rate | 1.27 | % | ||
Expected stock price volatility | 95.21 | % |
• | 91,463 were based on our common stock’s performance in2010-2012 relative to a stock index, as designated by the Compensation Committee of the Board of Directors. For shares that are earned, half of the shares vest on December 31, 2012, and the other half vest on December 31, 2013. The per share fair value of these market condition shares was $2.61 as of the grant date. |
Dividend yield | — | |||
Weighted average, risk free interest rate | 1.27 | % | ||
Expected stock price volatility | 95.21 | % | ||
Expected stock price volatility (small-cap stock index) | 37.51 | % |
• | 541,863 were based on our common stock’s performance in 2009 relative to a stock index, as designated by the Compensation Committee of the Board of Directors. These shares vest ratably over a three-year period,2009-2011. The per share fair value of these market condition shares was $1.26 as of the grant date. |
Dividend yield | — | |||
Weighted average, risk free interest rate | 0.62 | % | ||
Expected stock price volatility | 96.51 | % | ||
Expected stock price volatility (small-cap stock index) | 37.89 | % |
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• | 81,293 are based on our common stock’s absolute performance during the three-year period2007-2009. Half of these shares vested on December 31, 2009, and the other half vest on December 31, 2010. The per share fair value of these market condition shares was $6.65. |
Dividend yield | — | |||
Weighted average, risk free interest rate | 4.73 | % | ||
Expected stock price volatility | 42.13 | % |
• | 81,293 were based on our common stock’s performance in2007-2009 relative to a stock index, as designated by the Compensation Committee of the Board of directors. Half of these shares vested December 31, 2009, and the other half vest on December 31, 2010. The per share fair value of these market condition shares was $8.24. |
Dividend yield | — | |||
Weighted average, risk free interest rate | 4.73 | % | ||
Expected stock price volatility | 42.13 | % | ||
Expected stock price volatility (small-cap stock index) | 16.64 | % |
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• | Employees earned and were issued 162,559 performance shares in March 2010 related to 2009 grants and | |
• | Employees earned and were issued 18,084 performance shares in February 2009 related to the 2008 grants. |
Weighted | ||||||||
Average | ||||||||
Grant Date | ||||||||
Shares | Fair Value | |||||||
Non-vested shares balance at beginning of period | 483,468 | $ | 5.13 | |||||
Granted | 1,306,653 | $ | 2.10 | |||||
Forfeited | (6,400 | ) | $ | 5.42 | ||||
Vested | (365,352 | ) | $ | 2.95 | ||||
Non-vested shares balance at end of period | 1,418,369 | $ | 2.72 | |||||
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• | In connection with the elections related to 2008 bonus amounts, we issued 17,532 shares in February 2009. We valued these shares at $32 based on the closing market value of our common stock on the date of the grant. | |
• | There were no shares issued in the six months ended June 30, 2010 related to 2009 bonus amounts. |
7. | PROPERTY AND EQUIPMENT |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Land and improvements | $ | 60,718 | $ | 60,718 | ||||
Building and improvements | 430,580 | 427,602 | ||||||
Furniture, fixtures and equipment | 357,937 | 341,529 | ||||||
Construction in process | 847 | 327 | ||||||
850,082 | 830,176 | |||||||
Less accumulated depreciation | (184,912 | ) | (153,771 | ) | ||||
Property and equipment, net | $ | 665,170 | $ | 676,405 | ||||
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8. | LONG-TERM DEBT |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Long-Term Debt: | ||||||||
Traverse City/Kansas City mortgage loan | $ | 68,011 | $ | 68,773 | ||||
Mason mortgage loan | — | 73,800 | ||||||
Pocono Mountains mortgage loan | 94,867 | 95,458 | ||||||
Williamsburg mortgage loan | — | 63,125 | ||||||
Grapevine mortgage loan | — | 77,909 | ||||||
Concord mortgage loan | 78,588 | 78,549 | ||||||
First mortgage notes (net of discount of $10,343) | 219,657 | — | ||||||
Junior subordinated debentures | 80,545 | 80,545 | ||||||
Other Debt: | ||||||||
City of Sheboygan bonds | 8,564 | 8,544 | ||||||
City of Sheboygan loan | 3,172 | 3,290 | ||||||
Other | 63 | 78 | ||||||
553,467 | 550,071 | |||||||
Less current portion of long-term debt | (4,186 | ) | (16,126 | ) | ||||
Total long-term debt | $ | 549,281 | $ | 533,945 | ||||
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Through June 30, | ||||
2011 | $ | 4,186 | ||
2012 | 80,780 | |||
2013 | 3,538 | |||
2014 | 3,818 | |||
2015 | 63,003 | |||
Thereafter | 408,485 | |||
Total | $ | 563,810 | ||
9. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
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June 30, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Interest rate caps | $ | — | $ | 7 | $ | — | $ | 7 |
December 31, 2009 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Interest rate caps | $ | — | $ | 133 | $ | — | $ | 133 |
10. | EARNINGS PER SHARE |
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Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | $ | (12,760 | ) | $ | (5,706 | ) | $ | (20,825 | ) | $ | (11,351 | ) | ||||
Weighted average common shares outstanding — basic | 31,000,179 | 31,263,487 | 30,919,023 | 31,123,072 | ||||||||||||
Weighted average common shares outstanding — diluted | 31,000,179 | 31,263,487 | 30,919,023 | 31,123,072 | ||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. per share — basic | $ | (0.41 | ) | $ | (0.18 | ) | $ | (0.67 | ) | $ | (0.36 | ) | ||||
Net loss attributable to Great Wolf Resorts, Inc. per share — diluted | $ | (0.41 | ) | $ | (0.18 | ) | $ | (0.67 | ) | $ | (0.36 | ) |
11. | SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS |
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June 30, 2010
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 10,030 | $ | 15,492 | $ | 1,787 | $ | 3,101 | $ | — | $ | 30,410 | ||||||||||||
Escrows | — | — | — | 2,774 | — | 2,774 | ||||||||||||||||||
Accounts receivable | 76 | — | 2,321 | 1,776 | — | 4,173 | ||||||||||||||||||
Accounts receivable — affiliates | — | — | 881 | 1,952 | — | 2,833 | ||||||||||||||||||
Accounts receivable — consolidating entities | 13,586 | 466,835 | 274,806 | 156,507 | (911,734 | ) | — | |||||||||||||||||
Inventory | — | — | 2,638 | 3,815 | — | 6,453 | ||||||||||||||||||
Other current assets | 268 | 50 | 2,556 | 2,691 | — | 5,565 | ||||||||||||||||||
Total current assets | 23,960 | 482,377 | 284,989 | 172,616 | (911,734 | ) | 52,208 | |||||||||||||||||
Property and equipment, net | — | — | 363,508 | 301,662 | — | 665,170 | ||||||||||||||||||
Investment in consolidating entities | 242,183 | 275,008 | — | — | (517,191 | ) | — | |||||||||||||||||
Investment in and advances to affiliates | — | — | — | 27,134 | — | 27,134 | ||||||||||||||||||
Other assets | 10,512 | 8,547 | 6,883 | 7,703 | — | 33,645 | ||||||||||||||||||
Intangible assets | 2,276 | — | 4,668 | 20,771 | — | 27,715 | ||||||||||||||||||
Total assets | $ | 278,931 | $ | 765,932 | $ | 660,048 | $ | 529,886 | $ | (1,428,925 | ) | $ | 805,872 | |||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Current portion of long-term debt | $ | — | $ | — | $ | — | $ | 4,186 | $ | — | $ | 4,186 | ||||||||||||
Accounts payable | — | — | 3,748 | 4,058 | — | 7,806 | ||||||||||||||||||
Accounts payable — affiliates | — | — | — | 10 | — | 10 | ||||||||||||||||||
Accounts payable — consolidating entities | — | 298,242 | 499,864 | 113,628 | (911,734 | ) | — | |||||||||||||||||
Accrued expenses | 1,397 | 5,851 | 12,795 | 9,711 | — | 29,754 | ||||||||||||||||||
Advance deposits | — | — | 6,564 | 6,078 | — | 12,642 | ||||||||||||||||||
Other current liabilities | 2,435 | — | 717 | 2,267 | — | 5,419 | ||||||||||||||||||
Total current liabilities | 3,832 | 304,093 | 523,688 | 139,938 | (911,734 | ) | 59,817 | |||||||||||||||||
Mortgage debt | — | 219,656 | — | 237,529 | — | 457,185 | ||||||||||||||||||
Other long-term debt | 80,545 | — | 63 | 11,488 | — | 92,096 | ||||||||||||||||||
Deferred compensation liability | — | — | 1,050 | — | — | 1,050 | ||||||||||||||||||
Other long-term liabilities | — | — | — | 1,131 | — | 1,131 | ||||||||||||||||||
Total liabilities | 84,377 | 523,749 | 524,801 | 390,086 | (911,734 | ) | 611,279 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Great Wolf Resorts stockholders’ equity: | ||||||||||||||||||||||||
Common stock | 324 | — | — | — | — | 324 | ||||||||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||||||||||||||
Additional paid in capital | 401,542 | 456,251 | 163,514 | 292,737 | (912,502 | ) | 401,542 | |||||||||||||||||
Accumulated deficit | (207,112 | ) | (214,068 | ) | (28,267 | ) | (152,976 | ) | 395,311 | (207,112 | ) | |||||||||||||
Deferred compensation | (200 | ) | — | — | — | — | (200 | ) | ||||||||||||||||
Total Great Wolf Resorts stockholders’ equity | 194,554 | 242,183 | 135,247 | 139,761 | (517,191 | ) | 194,554 | |||||||||||||||||
Noncontrolling interest | — | — | — | 39 | — | 39 | ||||||||||||||||||
Total equity | 194,554 | 242,183 | 135,247 | 139,800 | (517,191 | ) | 194,593 | |||||||||||||||||
Total liabilities and equity | $ | 278,931 | $ | 765,932 | $ | 660,048 | $ | 529,886 | $ | (1,428,925 | ) | $ | 805,872 | |||||||||||
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December 31, 2009
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 5,023 | $ | 14,538 | $ | (1,590 | ) | $ | 2,942 | $ | — | $ | 20,913 | |||||||||||
Escrows | — | — | 4,430 | 1,508 | — | 5,938 | ||||||||||||||||||
Accounts receivable | 33 | — | 1,177 | 982 | — | 2,192 | ||||||||||||||||||
Accounts receivable — affiliates | — | — | 1,079 | 1,535 | — | 2,614 | ||||||||||||||||||
Accounts receivable — consolidating entities | 23,800 | 459,146 | 183,648 | 151,521 | (818,115 | ) | — | |||||||||||||||||
Inventory | — | — | 2,230 | 2,561 | — | 4,791 | ||||||||||||||||||
Other current assets | 792 | — | 1,991 | 1,469 | — | 4,252 | ||||||||||||||||||
Total current assets | 29,648 | 473,684 | 192,965 | 162,518 | (818,115 | ) | 40,700 | |||||||||||||||||
Property and equipment, net | — | — | 373,879 | 302,526 | — | 676,405 | ||||||||||||||||||
Investment in consolidated entities | 251,217 | 277,475 | — | — | (528,692 | ) | — | |||||||||||||||||
Investment in and advances to affiliates | — | — | — | 27,484 | — | 27,484 | ||||||||||||||||||
Notes receivable | 8,268 | — | — | — | — | 8,268 | ||||||||||||||||||
Other assets | 10,965 | — | 9,333 | 8,760 | — | 29,058 | ||||||||||||||||||
Intangible assets | — | — | 4,668 | 19,161 | — | 23,829 | ||||||||||||||||||
Total assets | $ | 300,098 | $ | 751,159 | $ | 580,845 | $ | 520,449 | $ | (1,346,807 | ) | $ | 805,744 | |||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Current portion of long-term debt | $ | — | $ | — | $ | 12,731 | $ | 3,395 | $ | — | $ | 16,126 | ||||||||||||
Accounts payable | — | — | 3,132 | 1,946 | — | 5,078 | ||||||||||||||||||
Accounts payable — consolidating entities | — | 499,931 | 205,954 | 112,230 | (818,115 | ) | — | |||||||||||||||||
Accrued expenses | 1,498 | 11 | 13,351 | 7,110 | — | 21,970 | ||||||||||||||||||
Advance deposits | — | — | 2,457 | 4,657 | — | 7,114 | ||||||||||||||||||
Gift certificates payable | 3,299 | — | 830 | 1,817 | — | 5,946 | ||||||||||||||||||
Total current liabilities | 4,797 | 499,942 | 238,455 | 131,155 | (818,115 | ) | 56,234 | |||||||||||||||||
Mortgage debt | — | — | 202,103 | 239,621 | — | 441,724 | ||||||||||||||||||
Other long-term debt | 80,545 | — | 78 | 11,598 | — | 92,221 | ||||||||||||||||||
Deferred compensation liability | — | — | 809 | — | — | 809 | ||||||||||||||||||
Total liabilities | 85,342 | 499,942 | 441,445 | 382,374 | (818,115 | ) | 590,988 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||||||
Common stock | 313 | — | — | — | — | 313 | ||||||||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||||||||||||||
Additional paid in capital | 400,930 | 448,562 | 163,514 | 285,048 | (897,124 | ) | 400,930 | |||||||||||||||||
Accumulated deficit | (186,287 | ) | (197,345 | ) | (24,114 | ) | (146,973 | ) | 368,432 | (186,287 | ) | |||||||||||||
Deferred compensation | (200 | ) | — | — | — | — | (200 | ) | ||||||||||||||||
Total stockholders’ equity | 214,756 | 251,217 | 139,400 | 138,075 | (528,692 | ) | 214,756 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 300,098 | $ | 751,159 | $ | 580,845 | $ | 520,449 | $ | (1,346,807 | ) | $ | 805,744 | |||||||||||
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Three month ended June 30, 2010
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rooms | $ | — | $ | — | $ | 19,948 | $ | 19,512 | $ | — | $ | 39,460 | ||||||||||||
Food and beverage | — | — | 6,026 | 5,430 | — | 11,456 | ||||||||||||||||||
Other | — | — | 4,673 | 5,706 | — | 10,379 | ||||||||||||||||||
Management and other fees | 108 | — | 5,226 | — | (4,774 | ) | 560 | |||||||||||||||||
Management and other fees — affiliates | — | — | 960 | — | — | 960 | ||||||||||||||||||
108 | — | 36,833 | 30,648 | (4,774 | ) | 62,815 | ||||||||||||||||||
Other revenue from managed properties — affiliates | — | — | 2,759 | — | — | 2,759 | ||||||||||||||||||
Other revenue from managed properties | — | — | 2,854 | — | — | 2,854 | ||||||||||||||||||
Total revenues | 108 | — | 42,446 | 30,648 | (4,774 | ) | 68,428 | |||||||||||||||||
Operating expenses by department: | ||||||||||||||||||||||||
Rooms | — | — | 3,391 | 3,425 | (772 | ) | 6,044 | |||||||||||||||||
Food and beverage | — | — | 4,583 | 4,156 | — | 8,739 | ||||||||||||||||||
Other | — | — | 4,013 | 4,562 | — | 8,575 | ||||||||||||||||||
Other operating expenses: | ||||||||||||||||||||||||
Selling, general and administrative | 996 | 42 | 10,608 | 6,842 | (4,002 | ) | 14,486 | |||||||||||||||||
Property operating costs | — | — | 3,867 | 4,303 | — | 8,170 | ||||||||||||||||||
Depreciation and amortization | 38 | 295 | 10,035 | 6,742 | — | 17,110 | ||||||||||||||||||
Loss on disposition of property | — | — | — | 9 | — | 9 | ||||||||||||||||||
1,034 | 337 | 36,497 | 30,039 | (4,774 | ) | 63,133 | ||||||||||||||||||
Other expenses from managed properties — affiliates | — | — | 2,759 | — | — | 2,759 | ||||||||||||||||||
Other expenses from managed properties | — | — | 2,854 | — | — | 2,854 | ||||||||||||||||||
Total operating expenses | 1,034 | 337 | 42,110 | 30,039 | (4,774 | ) | 68,746 | |||||||||||||||||
Net operating (loss) income | (926 | ) | (337 | ) | 336 | 609 | — | (318 | ) | |||||||||||||||
Investment income — affiliates | — | — | — | (276 | ) | — | (276 | ) | ||||||||||||||||
Interest income | (181 | ) | (2 | ) | — | 3 | — | (180 | ) | |||||||||||||||
Interest expense | 1,584 | 6,194 | 250 | 4,431 | — | 12,459 | ||||||||||||||||||
Loss before income taxes and equity in affiliates | (2,329 | ) | (6,529 | ) | 86 | (3,549 | ) | — | (12,321 | ) | ||||||||||||||
Income tax expense | 3 | — | 171 | 15 | — | 189 | ||||||||||||||||||
Equity in loss of affiliates, net of tax | 10,428 | 3,899 | — | 210 | (14,327 | ) | 210 | |||||||||||||||||
Net loss | (12,760 | ) | (10,428 | ) | (85 | ) | (3,774 | ) | 14,327 | (12,720 | ) | |||||||||||||
Net loss attributable to noncontrolling interest, net of tax | — | — | — | 40 | — | 40 | ||||||||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | $ | (12,760 | ) | $ | (10,428 | ) | $ | (85 | ) | $ | (3,814 | ) | $ | 14,327 | $ | (12,760 | ) | |||||||
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Three months ended June 30, 2009
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rooms | $ | — | $ | — | $ | 20,666 | $ | 19,644 | $ | — | $ | 40,310 | ||||||||||||
Food and beverage | — | — | 6,051 | 5,254 | — | 11,305 | ||||||||||||||||||
Other | — | — | 5,012 | 5,148 | — | 10,160 | ||||||||||||||||||
Management and other fees | 176 | — | 4,699 | 15 | (4,488 | ) | 402 | |||||||||||||||||
Management and other fees — affiliates | — | — | 1,210 | — | — | 1,210 | ||||||||||||||||||
176 | — | 37,638 | 30,061 | (4,488 | ) | 63,387 | ||||||||||||||||||
Other revenue from managed properties — affiliates | — | — | 5,238 | — | — | 5,238 | ||||||||||||||||||
Total revenues | 176 | — | 42,876 | 30,061 | (4,488 | ) | 68,625 | |||||||||||||||||
Operating expenses by department: | ||||||||||||||||||||||||
Rooms | — | — | 3,272 | 3,467 | (791 | ) | 5,948 | |||||||||||||||||
Food and beverage | — | — | 4,602 | 4,263 | — | 8,865 | ||||||||||||||||||
Other | — | — | 3,972 | 4,452 | — | 8,424 | ||||||||||||||||||
Other operating expenses: | ||||||||||||||||||||||||
Selling, general and administrative | 835 | 35 | 11,893 | 7,921 | (3,697 | ) | 16,987 | |||||||||||||||||
Property operating costs | — | — | 3,844 | 5,270 | — | 9,114 | ||||||||||||||||||
Depreciation and amortization | 38 | — | 7,380 | 7,212 | — | 14,630 | ||||||||||||||||||
873 | 35 | 34,963 | 32,585 | (4,488 | ) | 63,968 | ||||||||||||||||||
Other expenses from managed properties — affiliates | — | — | 5,238 | — | — | 5,238 | ||||||||||||||||||
Total operating expenses | 873 | 35 | 40,201 | 32,585 | (4,488 | ) | 69,206 | |||||||||||||||||
Net operating (loss) income | (697 | ) | (35 | ) | 2,675 | (2,524 | ) | — | (581 | ) | ||||||||||||||
Investment income — affiliates | — | — | — | (336 | ) | — | (336 | ) | ||||||||||||||||
Interest income | (130 | ) | (6 | ) | (10 | ) | (2 | ) | — | (148 | ) | |||||||||||||
Interest expense | 1,577 | — | 2,893 | 4,307 | — | 8,777 | ||||||||||||||||||
(Loss) income before income taxes and equity in affiliates | (2,144 | ) | (29 | ) | (208 | ) | (6,493 | ) | — | (8,874 | ) | |||||||||||||
Income tax (benefit) expense | (3,657 | ) | — | 88 | (66 | ) | — | (3,635 | ) | |||||||||||||||
Equity in affiliates, net of tax | 7,219 | 7,190 | — | 467 | (14,409 | ) | 467 | |||||||||||||||||
Net loss | $ | (5,706 | ) | $ | (7,219 | ) | $ | (296 | ) | $ | (6,894 | ) | $ | 14,409 | $ | (5,706 | ) | |||||||
F-69
Table of Contents
Six months ended June 30, 2010
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rooms | $ | — | $ | — | $ | 39,062 | $ | 42,186 | $ | — | $ | 81,248 | ||||||||||||
Food and beverage | — | — | 11,688 | 11,385 | — | 23,073 | ||||||||||||||||||
Other | — | — | 9,469 | 11,118 | — | 20,587 | ||||||||||||||||||
Management and other fees | 225 | — | 10,767 | 12 | (9,809 | ) | 1,195 | |||||||||||||||||
Management and other fees — affiliates | — | — | 1,980 | — | — | 1,980 | ||||||||||||||||||
225 | — | 72,966 | 64,701 | (9,809 | ) | 128,083 | ||||||||||||||||||
Other revenue from managed properties — affiliates | — | — | 5,453 | — | — | 5,453 | ||||||||||||||||||
Other revenue from managed properties | — | — | 5,571 | — | — | 5,571 | ||||||||||||||||||
Total revenues | 225 | — | 83,990 | 64,701 | (9,809 | ) | 139,107 | |||||||||||||||||
Operating expenses by department: | ||||||||||||||||||||||||
Rooms | — | — | 6,659 | 7,003 | (1,589 | ) | 12,073 | |||||||||||||||||
Food and beverage | — | — | 8,815 | 8,451 | — | 17,266 | ||||||||||||||||||
Other | — | — | 7,958 | 8,984 | — | 16,942 | ||||||||||||||||||
Other operating expenses: | ||||||||||||||||||||||||
Selling, general and administrative | 1,709 | 80 | 23,935 | 15,724 | (8,220 | ) | 33,228 | |||||||||||||||||
Property operating costs | — | — | 7,971 | 9,233 | — | 17,204 | ||||||||||||||||||
Depreciation and amortization | 77 | 295 | 17,636 | 13,122 | — | 31,130 | ||||||||||||||||||
Loss on disposition of property | — | — | 10 | 9 | — | 19 | ||||||||||||||||||
1,786 | 375 | 72,984 | 62,526 | (9,809 | ) | 127,862 | ||||||||||||||||||
Other expenses from managed properties — affiliates | — | — | 5,453 | — | — | 5,453 | ||||||||||||||||||
Other expenses from managed properties | — | — | 5,571 | — | — | 5,571 | ||||||||||||||||||
Total operating expenses | 1,786 | 375 | 84,008 | 62,526 | (9,809 | ) | 138,886 | |||||||||||||||||
Net operating (loss) income | (1,561 | ) | (375 | ) | (18 | ) | 2,175 | — | 221 | |||||||||||||||
Investment income — affiliates | — | — | — | (565 | ) | — | (565 | ) | ||||||||||||||||
Interest income | (431 | ) | (2 | ) | (1 | ) | 1 | — | (433 | ) | ||||||||||||||
Interest expense | 3,162 | 6,194 | 3,850 | 8,452 | — | 21,658 | ||||||||||||||||||
Loss before income taxes and equity in affiliates | (4,292 | ) | (6,567 | ) | (3,867 | ) | (5,713 | ) | — | (20,439 | ) | |||||||||||||
Income tax (benefit) expense | (190 | ) | — | 286 | 273 | — | 369 | |||||||||||||||||
Equity in loss (income) of affiliates, net of tax | 16,723 | 10,156 | — | (23 | ) | (26,879 | ) | (23 | ) | |||||||||||||||
Net loss | (20,825 | ) | (16,723 | ) | (4,153 | ) | (5,963 | ) | 26,879 | (20,785 | ) | |||||||||||||
Net loss attributable to noncontrolling interest, net of tax | — | — | — | 40 | — | 40 | ||||||||||||||||||
Net loss attributable to Great Wolf Resorts, Inc. | $ | (20,825 | ) | $ | (16,723 | ) | $ | (4,153 | ) | $ | (6,003 | ) | $ | 26,879 | $ | (20,825 | ) | |||||||
F-70
Table of Contents
Six months ended June 30, 2009
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rooms | $ | — | $ | — | $ | 39,348 | $ | 37,307 | $ | — | $ | 76,655 | ||||||||||||
Food and beverage | — | — | 11,486 | 9,721 | — | 21,207 | ||||||||||||||||||
Other hotel operations | — | — | 9,802 | 9,323 | — | 19,125 | ||||||||||||||||||
Management and other fees | 512 | — | 8,949 | 35 | (8,505 | ) | 991 | |||||||||||||||||
Management and other fees — affiliates | — | — | 2,434 | — | — | 2,434 | ||||||||||||||||||
512 | — | 72,019 | 56,386 | (8,505 | ) | 120,412 | ||||||||||||||||||
Other revenue from managed properties — affiliates | — | — | 10,520 | — | — | 10,520 | ||||||||||||||||||
Total revenues | 512 | — | 82,539 | 56,386 | (8,505 | ) | 130,932 | |||||||||||||||||
Operating expenses by department: | ||||||||||||||||||||||||
Rooms | — | — | 6,310 | 6,168 | (1,501 | ) | 10,977 | |||||||||||||||||
Food and beverage | — | — | 8,747 | 7,533 | — | 16,280 | ||||||||||||||||||
Other | — | — | 7,859 | 7,833 | — | 15,692 | ||||||||||||||||||
Other operating expenses: | ||||||||||||||||||||||||
Selling, general and administrative | 1,628 | 69 | 22,690 | 14,248 | (7,004 | ) | 31,631 | |||||||||||||||||
Property operating costs | — | — | 8,699 | 12,757 | — | 21,456 | ||||||||||||||||||
Depreciation and amortization | 79 | — | 14,722 | 12,415 | — | 27,216 | ||||||||||||||||||
Loss on disposition of property | — | — | 191 | — | — | 191 | ||||||||||||||||||
1,707 | 69 | 69,218 | 60,954 | (8,505 | ) | 123,443 | ||||||||||||||||||
Other expenses from managed properties — affiliates | — | — | 10,520 | — | — | 10,520 | ||||||||||||||||||
Total operating expenses | 1,707 | 69 | 79,738 | 60,954 | (8,505 | ) | 133,963 | |||||||||||||||||
Net operating (loss) income | (1,195 | ) | (69 | ) | 2,801 | (4,568 | ) | — | (3,031 | ) | ||||||||||||||
Investment income — affiliates | — | — | — | (720 | ) | — | (720 | ) | ||||||||||||||||
Interest income | (307 | ) | (13 | ) | (12 | ) | (4 | ) | — | (336 | ) | |||||||||||||
Interest expense | 2,950 | — | 5,358 | 6,736 | — | 15,044 | ||||||||||||||||||
Loss before income taxes and equity in affiliates | (3,838 | ) | (56 | ) | (2,545 | ) | (10,580 | ) | — | (17,019 | ) | |||||||||||||
Income tax (benefit) expense | (6,950 | ) | — | 176 | (9 | ) | — | (6,783 | ) | |||||||||||||||
Equity in affiliates, net of tax | 14,463 | 14,407 | — | 1,115 | (28,870 | ) | 1,115 | |||||||||||||||||
Net loss | $ | (11,351 | ) | $ | (14,463 | ) | $ | (2,721 | ) | $ | (11,686 | ) | $ | 28,870 | $ | (11,351 | ) | |||||||
F-71
Table of Contents
Six months ended June 30, 2010
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||
Net loss | $ | (20,825 | ) | $ | (16,723 | ) | $ | (4,153 | ) | $ | (5,963 | ) | $ | 26,879 | $ | (20,785 | ) | |||||||
Adjustment to reconcile net loss to net cash provided (used) by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 77 | 295 | 17,636 | 13,122 | — | 31,130 | ||||||||||||||||||
Bad debt expense | — | — | 162 | 31 | — | 193 | ||||||||||||||||||
Non-cash employee compensation and professional fees expense | — | — | 1,061 | — | — | 1,061 | ||||||||||||||||||
Loss on disposition of property | — | — | 10 | 9 | — | 19 | ||||||||||||||||||
Equity in losses (income) of affiliates | 16,723 | 10,156 | — | (22 | ) | (26,879 | ) | (22 | ) | |||||||||||||||
Deferred tax benefit | (224 | ) | — | — | — | — | (224 | ) | ||||||||||||||||
Changes in operating assets and liabilities | (1,015 | ) | 4,719 | 828 | 2,366 | — | 6,898 | |||||||||||||||||
Net cash provided (used) by operating activities | (5,264 | ) | (1,553 | ) | 15,544 | 9,543 | — | 18,270 | ||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Capital expenditures for property and equipment | — | — | (2,306 | ) | (3,923 | ) | — | (6,229 | ) | |||||||||||||||
Loan repayment from unconsolidated affiliates | — | — | — | 490 | — | 490 | ||||||||||||||||||
Investment in affiliates | — | — | — | (10 | ) | — | (10 | ) | ||||||||||||||||
Investment in development | — | — | (358 | ) | — | — | (358 | ) | ||||||||||||||||
Proceeds from sale of assets | — | — | — | 15 | — | 15 | ||||||||||||||||||
Cash acquired in acquisition of Creative Kingdoms, LLC | — | — | — | 324 | — | 324 | ||||||||||||||||||
Increase in restricted cash | — | — | — | (3 | ) | — | (3 | ) | ||||||||||||||||
Decrease (increase) in escrows | — | — | 4,430 | (1,266 | ) | — | 3,164 | |||||||||||||||||
Net cash (used) provided in investing activities | — | — | 1,766 | (4,373 | ) | — | (2,607 | ) | ||||||||||||||||
Financing activities: | ||||||||||||||||||||||||
Principal payments on long-term debt | — | 358 | (214,849 | ) | (1,450 | ) | — | (215,941 | ) | |||||||||||||||
Proceeds from issuance of long-term debt | — | 219,298 | — | 39 | — | 219,337 | ||||||||||||||||||
Payment of loan costs | 57 | (7,771 | ) | (1,836 | ) | (12 | ) | — | (9,562 | ) | ||||||||||||||
Advances from consolidating entities, net | 10,214 | (209,378 | ) | 202,752 | (3,588 | ) | — | — | ||||||||||||||||
Net cash provided (used) by financing activities | 10,271 | 2,507 | (13,933 | ) | (5,011 | ) | — | (6,166 | ) | |||||||||||||||
Net increase in cash and cash equivalents | 5,007 | 954 | 3,377 | 159 | — | 9,497 | ||||||||||||||||||
Cash and cash equivalents, beginning of period | 5,023 | 14,538 | (1,590 | ) | 2,942 | — | 20,913 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 10,030 | $ | 15,492 | $ | 1,787 | $ | 3,101 | $ | — | $ | 30,410 | ||||||||||||
F-72
Table of Contents
Six months ended June 30, 2009
(Dollars in thousands)
Subsidiary | Non Guarantor | Consolidating | ||||||||||||||||||||||
Parent | Issuers | Guarantors | Subsidiaries | Adjustments | Consolidated | |||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||
Net loss | $ | (11,351 | ) | $ | (14,463 | ) | $ | (2,721 | ) | $ | (11,686 | ) | $ | 28,870 | $ | (11,351 | ) | |||||||
Adjustment to reconcile net loss to net cash provided (used) by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 79 | — | 14,722 | 12,415 | — | 27,216 | ||||||||||||||||||
Bad debt expense | — | — | 458 | (1 | ) | — | 457 | |||||||||||||||||
Non-cash employee compensation expense | — | — | 469 | — | — | 469 | ||||||||||||||||||
Loss on sale of assets | — | — | 191 | — | — | 191 | ||||||||||||||||||
Equity in losses of affiliates | 14,463 | 14,407 | — | 1,854 | (28,870 | ) | 1,854 | |||||||||||||||||
Deferred tax benefit | (7,582 | ) | — | — | — | — | (7,582 | ) | ||||||||||||||||
Changes in operating assets and liabilities | 6,527 | (1 | ) | (3,775 | ) | 1,218 | (6,888 | ) | (2,919 | ) | ||||||||||||||
Net cash provided (used) by operating activities | 2,136 | (57 | ) | 9,344 | 3,800 | (6,888 | ) | 8,335 | ||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Capital expenditures for property and equipment | — | — | (7,569 | ) | (38,277 | ) | — | (45,846 | ) | |||||||||||||||
Loan repayment from unconsolidated affiliate | — | — | — | 8,098 | — | 8,098 | ||||||||||||||||||
Investment in affiliates | — | — | — | (303 | ) | — | (303 | ) | ||||||||||||||||
Investment in development | — | — | 1,086 | — | — | 1,086 | ||||||||||||||||||
Proceeds from sale of assets | — | — | — | 66 | — | 66 | ||||||||||||||||||
Decrease in restricted cash | 159 | — | — | 4 | — | 163 | ||||||||||||||||||
(Increase) decrease in escrows | — | — | (1,493 | ) | 114 | — | (1,379 | ) | ||||||||||||||||
Net cash provided (used) in investing activities | 159 | — | (7,976 | ) | (30,298 | ) | — | (38,115 | ) | |||||||||||||||
Financing activities: | ||||||||||||||||||||||||
Principal payments on long-term debt | — | — | (1,752 | ) | (1,360 | ) | — | (3,112 | ) | |||||||||||||||
Proceeds from issuance of long-term debt | — | — | 95 | 43,090 | 6,888 | 50,073 | ||||||||||||||||||
Payment of loan costs | (20 | ) | — | (2,234 | ) | (6,123 | ) | — | (8,377 | ) | ||||||||||||||
Advances from consolidating entities, net | 2,469 | 4,721 | 1,491 | (8,681 | ) | — | — | |||||||||||||||||
Net cash provided (used) by financing activities | 2,449 | 4,721 | (2,400 | ) | 26,926 | 6,888 | 38,584 | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 4,744 | 4,664 | (1,032 | ) | 428 | — | 8,804 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 4,762 | 6,279 | 727 | 2,463 | — | 14,231 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 9,506 | $ | 10,943 | $ | (305 | ) | $ | 2,891 | $ | — | $ | 23,035 | |||||||||||
F-73
Table of Contents
12. | SUBSEQUENT EVENT |
F-74
Table of Contents
F-75
Table of Contents
F-76
Table of Contents
August 5, | December 31, | |||||||
2009 | 2008 | |||||||
(Not covered by | ||||||||
auditor’s report) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,751,796 | $ | 968,390 | ||||
Restricted cash | 1,613,350 | 1,390,733 | ||||||
Accounts receivable | 997,016 | 930,242 | ||||||
Due from affiliates | 2,106,415 | 973,431 | ||||||
Prepaid expenses and other current assets | 1,527,345 | 1,169,189 | ||||||
9,995,922 | 5,431,985 | |||||||
Loan costs, net | 376,242 | 438,405 | ||||||
Property and equipment, net | 96,331,718 | 98,628,211 | ||||||
Other intangible assets, net | 120,651 | 213,171 | ||||||
Total assets | $ | 106,824,533 | $ | 104,711,772 | ||||
LIABILITIES AND PARTNERS’ CAPITAL | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 6,773,803 | $ | 5,595,957 | ||||
Mortgage loan payable, current portion | 740,441 | 513,043 | ||||||
Due to affiliates | 3,315,043 | — | ||||||
Advanced deposits | 1,295,567 | 1,015,643 | ||||||
12,124,854 | 7,124,643 | |||||||
Mortgage loan payable | 62,032,099 | 62,486,957 | ||||||
Total liabilities | 74,156,953 | 69,611,600 | ||||||
Partners’ capital | 32,667,580 | 35,100,172 | ||||||
Total liabilities and partners’ capital | $ | 106,824,533 | $ | 104,711,772 | ||||
F-77
Table of Contents
Period January 1 | ||||||||||||
through August 5, | Year Ended December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
(Not covered by | (Not covered by | |||||||||||
auditor’s report) | auditor’s report) | |||||||||||
Revenues | ||||||||||||
Rooms | $ | 13,971,105 | $ | 22,111,582 | $ | 24,016,962 | ||||||
Food and beverage | 3,180,677 | 5,165,671 | 5,726,252 | |||||||||
Other operating departments | 2,598,191 | 4,232,432 | 4,854,177 | |||||||||
19,749,973 | 31,509,685 | 34,597,391 | ||||||||||
Cost of sales and other expenses | ||||||||||||
Rooms | 2,498,457 | 3,920,976 | 3,936,089 | |||||||||
Food and beverage | 2,763,088 | 4,725,934 | 5,042,643 | |||||||||
Other operating departments | 3,283,537 | 5,293,681 | 5,505,790 | |||||||||
Property operations and maintenance | 3,883,937 | 6,201,572 | 6,462,936 | |||||||||
Management fees | 203,394 | 315,097 | 1,037,922 | |||||||||
Franchise and licensing fees (see footnote 5) | (1,201,354 | ) | 945,291 | 1,037,922 | ||||||||
General and administrative | 2,178,798 | 3,459,059 | 3,921,479 | |||||||||
Sales and marketing | 2,344,185 | 3,296,099 | 3,254,141 | |||||||||
Depreciation and amortization | 4,412,492 | 7,334,696 | 7,111,968 | |||||||||
20,366,534 | 35,492,405 | 37,310,890 | ||||||||||
Operating loss | (616,561 | ) | (3,982,720 | ) | (2,713,499 | ) | ||||||
Interest and other income (loss) | (3,899 | ) | 21,436 | 101,683 | ||||||||
Interest expense and loan cost amortization | (2,357,473 | ) | (3,998,359 | ) | (3,954,843 | ) | ||||||
Net loss | $ | (2,977,933 | ) | $ | (7,959,643 | ) | $ | (6,566,659 | ) | |||
F-78
Table of Contents
Partner | CNL LP | GW | Total | |||||||||||||
Balance, December 31, 2006 (not covered by auditor’s report) | $ | 4,737 | $ | 33,158,795 | $ | 14,212,942 | $ | 47,376,474 | ||||||||
Capital contributions | — | — | 250,000 | 250,000 | ||||||||||||
Net loss | (653 | ) | (4,552,399 | ) | (2,013,607 | ) | (6,566,659 | ) | ||||||||
Balance, December 31, 2007 (not covered by auditor’s report) | 4,084 | 28,606,396 | 12,449,335 | 41,059,815 | ||||||||||||
Capital contributions | 200 | 1,393,400 | 606,400 | 2,000,000 | ||||||||||||
Net loss | (796 | ) | (5,545,483 | ) | (2,413,364 | ) | (7,959,643 | ) | ||||||||
Balance, December 31, 2008 | 3,488 | 24,454,313 | 10,642,371 | 35,100,172 | ||||||||||||
Capital contributions | 110 | 796,690 | 303,200 | 1,100,000 | ||||||||||||
Distribution of operating cash flows | — | — | (554,659 | ) | (554,659 | ) | ||||||||||
Net loss | (298 | ) | (2,523,480 | ) | (454,155 | ) | (2,977,933 | ) | ||||||||
Balance, August 5, 2009 (not covered by auditor’s report) | $ | 3,300 | $ | 22,727,523 | $ | 9,936,757 | $ | 32,667,580 | ||||||||
F-79
Table of Contents
Period January 1, | ||||||||||||
2009 through | ||||||||||||
August 5, | Year Ended December 31, | |||||||||||
2009 | 2008 | 2007 | ||||||||||
(Not covered by | (Not covered by | |||||||||||
auditor’s report) | auditor’s report) | |||||||||||
Cash Flows from operating activities | ||||||||||||
Net loss | $ | (2,977,933 | ) | $ | (7,959,643 | ) | $ | (6,566,659 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||||||||||
Depreciation and amortization | 4,412,492 | 7,334,696 | 7,111,968 | |||||||||
Loan cost amortization | 62,163 | 104,118 | 71,243 | |||||||||
Loss from retirement of assets | 3,899 | — | — | |||||||||
Changes in assets and liabilities | ||||||||||||
Accounts receivable | (66,774 | ) | 273,182 | 304,603 | ||||||||
Due from affiliates | (1,132,984 | ) | (973,431 | ) | — | |||||||
Prepaid expenses and other current assets | (358,156 | ) | 160,942 | (131,708 | ) | |||||||
Accounts payable and accrued expenses | 1,177,846 | (1,231,138 | ) | 637,934 | ||||||||
Due to affiliates | 3,315,043 | (63,807 | ) | (544,529 | ) | |||||||
Advanced deposits | 279,924 | (52,406 | ) | 61,626 | ||||||||
Net cash provided by (used in) operating activities | 4,715,520 | (2,407,487 | ) | 944,478 | ||||||||
Cash Flows from investing activities | ||||||||||||
Acquisition of property and equipment | (2,027,378 | ) | (886,577 | ) | (1,311,707 | ) | ||||||
(Increase) decrease in restricted cash | (222,617 | ) | 575,024 | (457,378 | ) | |||||||
Net cash used in investing activities | (2,249,995 | ) | (311,553 | ) | (1,769,085 | ) | ||||||
Cash Flows from financing activities | ||||||||||||
Capital contributions from partners | 1,100,000 | 2,000,000 | — | |||||||||
Distribution to partners | (554,659 | ) | — | — | ||||||||
Refunds from partners | — | — | 1,225,508 | |||||||||
Principal payments on mortgage loan | (227,460 | ) | — | — | ||||||||
Net cash provided by financing activities | 317,881 | 2,000,000 | 1,225,508 | |||||||||
Net increase (decrease) in cash and cash equivalents | 2,783,406 | (719,040 | ) | 400,901 | ||||||||
Cash and cash equivalents | ||||||||||||
Beginning of period | 968,390 | 1,687,430 | 1,286,529 | |||||||||
End of period | $ | 3,751,796 | $ | 968,390 | $ | 1,687,430 | ||||||
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2009 | 2008 | 2007 | ||||||||||
(Not covered by | (Not covered by | |||||||||||
auditor’s report) | auditor’s report) | |||||||||||
Supplemental disclosure of noncash financing activities | ||||||||||||
Capital contributions (equipment) from partners | $ | — | $ | — | $ | 250,000 | ||||||
Supplemental disclosure of cash flow information | ||||||||||||
Cash paid during the period for interest | $ | 2,582,642 | $ | 3,894,241 | $ | 3,884,227 | ||||||
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1. | Business |
Partner | Percentage Interest | |||
General Partner | 0.01 | % | ||
CNL LP | 69.73 | % | ||
GW | 30.26 | % |
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2. | Summary of Significant Accounting Policies |
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3. | Property and Equipment |
August 5, | December 31, | |||||||
2009 | 2008 | |||||||
Land and land improvements | $ | 7,620,110 | $ | 7,611,511 | ||||
Building and improvements | 84,376,402 | 82,825,136 | ||||||
Furniture, fixtures and equipment | 30,042,595 | 29,585,681 | ||||||
122,039,107 | 120,022,328 | |||||||
Less: accumulated depreciation | (25,707,389 | ) | (21,394,117 | ) | ||||
$ | 96,331,718 | $ | 98,628,211 | |||||
4. | Other Intangible Assets |
August 5, | December 31, | |||||||
2009 | 2008 | |||||||
Condo rental pool | $ | 710,570 | $ | 710,570 | ||||
Less: accumulated amortization | (589,919 | ) | (497,399 | ) | ||||
$ | 120,651 | $ | 213,171 | |||||
5. | Related Party Transactions |
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6. | Income Taxes |
August 5, | December 31, | |||||||
2009 | 2008 | |||||||
Deferred tax asset: | ||||||||
Net operating loss | $ | 12,157,488 | $ | 7,829,779 | ||||
Other book/tax differences | 252,199 | 341,589 | ||||||
Total deferred tax asset | 12,409,687 | 8,171,368 | ||||||
Deferred tax liability: | ||||||||
Book/tax differences in acquired assets | 1,151,776 | 1,472,517 | ||||||
Total deferred tax liability | 1,151,776 | 1,472,517 | ||||||
Net deferred tax asset | 11,257,911 | 6,698,851 | ||||||
Valuation allowance | (11,257,911 | ) | (6,698,851 | ) | ||||
$ | — | $ | — | |||||
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7. | Leases |
2010 | $ | 63,504 | ||
2011 | 41,729 | |||
2012 | 5,904 | |||
2013 | 163 | |||
$ | 111,300 | |||
8. | Mortgage Loan Payable |
2010 | $ | 740,441 | ||
2011 | 787,397 | |||
2012 | 826,569 | |||
2013 | 60,418,133 | |||
$ | 62,772,540 | |||
9. | Commitments and Contingencies |
10. | Subsequent Events |
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ITEM 20. | INDEMNIFICATION OF DIRECTORS AND OFFICERS. |
II-1
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ITEM 21. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. |
Exhibit | ||||
Number | Description | |||
1 | .1 | Purchase Agreement (in relation to $230,000,000 aggregate principal amount of the initial notes), dated as of March 30, 2010, by and among GWR Operating Partnership, L.L.L.P. (the “Company”), Great Wolf Finance Corp. (“Great Wolf Finance”), the guarantors named therein and the initial purchasers named therein (incorporated by reference to Exhibit 10.27 to the Parent’s Quarterly Report onForm 10-Q filed May 5, 2010). | ||
2 | .1 | Form of Merger Agreement (Delaware) (incorporated herein by reference to Exhibit 2.1 to Great Wolf Resorts, Inc.’s (the “Parent”) Registration Statement onForm S-1 filed August 12, 2004). | ||
2 | .2 | Form of Merger Agreement (Wisconsin) (incorporated herein by reference to Exhibit 2.2 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004). | ||
4 | .1 | Indenture governing the 10.875% First Mortgage Notes due 2017, dated as of April 7, 2010, by and among the Company and Great Wolf Finance as co-obligors, the guarantors named therein, and U.S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 10.28 to the Parent’s Quarterly Report onForm 10-Q filed May 5, 2010). | ||
4 | .2 | Form of Exchange Note (incorporated herein by reference to Exhibit A1 of Exhibit 10.28 to the Parent’s Quarterly Report onForm 10-Q filed May 5, 2010). | ||
4 | .3* | Registration Rights Agreement, dated as of April 7, 2010, by and among the Company and Great Wolf Finance as issuers, the guarantors named therein, and the initial purchasers named therein. | ||
4 | .4* | Security Agreement, dated as of April 7, 2010, by and among the loan parties from time to time party thereto and U.S. Bank National Association, as collateral agent. | ||
4 | .5* | Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of April 7, 2010, from Mason Family Resorts, LLC, as mortgagor, to U.S. Bank National Association, as trustee. | ||
4 | .6* | Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of April 7, 2010, from Great Wolf Lodge of Grapevine, LLC, as trustor, to Peter S. Graf, as mortgaged property trustee, for the benefit of U.S. Bank National Association, as collateral agent, as beneficiary. | ||
4 | .7* | Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of April 7, 2010, from Great Wolf Williamsburg SPE, LLC, as trustor, to Craig A. Johnson, as mortgaged property trustee, for the benefit of U.S. Bank National Association, in its capacity as collateral agent, as beneficiary. | ||
4 | .8* | First Supplemental Indenture, dated as of May 28, 2010, by and among Scooops Tenant, LLC, the Company and Great Wolf Finance as issuers, the guarantors named therein and U.S. Bank National Association, as trustee. | ||
5 | .1* | Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to validity of the exchange notes. | ||
5 | .2* | Opinion of Michael Best & Friedrich LLC as to certain legal matters of Wisconsin law relating to the validity of the securities being registered and the guarantees. | ||
5 | .3* | Opinion of McDermott Will & Emery LLP as to certain legal matters of Texas law relating to the validity of the securities being registered and the guarantees. | ||
8 | .1* | Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to certain tax matters. | ||
10 | .1 | License Agreement, dated January 30, 2004, by and between The Great Lakes Companies, Inc. and Jim Pattison Entertainment, Ltd. (incorporated by reference to Exhibit 10.1 to the Parent’s Registration Statement onform S-1 filed September 23, 2004) | ||
10 | .2 | Development Agreement, dated as of July 30, 2003, among the City of Sheboygan, Wisconsin, the Redevelopment Authority of the City of Sheboygan, Wisconsin, The Great Lakes Companies, Inc., Blue Harbor Resort Sheboygan, LLC, and Blue Harbor Resort Condominium, LLC (incorporated herein by reference to Exhibit 10.2 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004) | ||
10 | .3 | First Amendment to the Development Agreement, dated June 25, 2004, by and among the City of Sheboygan, Wisconsin, the Redevelopment Authority of the City of Sheboygan, Wisconsin, The Great Lakes Companies, Inc., Blue Harbor Resort Sheboygan, LLC, and Blue Harbor Resort Condominium, LLC (incorporated herein by reference to Exhibit 10.3 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004) |
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Exhibit | ||||
Number | Description | |||
10 | .4 | Tall Pines Exclusive License and Royalty Agreement, dated July 25, 2004, between Tall Pines Development Corporation and The Great Lakes Companies, Inc. (incorporated herein by reference to Exhibit 10.4 to the Parent’s Registration Statement onForm S-1 filed December 7, 2004) | ||
10 | .5 | Employment Agreement between Great Wolf Resorts, Inc., and Kimberly Schaefer, dated December 13, 2004 (incorporated herein by reference to Exhibit 10.5 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .6 | Employment Agreement between Great Wolf Resorts, Inc. and James Calder, dated December 13, 2004 (incorporated herein by reference to Exhibit 10.6 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .7 | Employment Agreement between Great Wolf Resorts, Inc. and J. Michael Schroeder, dated December 13, 2004 (incorporated herein by reference to Exhibit 10.7 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .8 | First Amendment to Employment Agreement between Great Wolf Resorts, Inc. and J. Michael Schroeder, dated May 28, 2008 (incorporated herein by reference to Exhibit 10.8 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .9 | Second Amendment to Employment Agreement between Great Wolf Resorts, Inc. and J. Michael Schroeder, dated July 2, 2008 (incorporated herein by reference to Exhibit 10.9 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .10 | Employment Agreement between Great Wolf Resorts, Inc. and Timothy Black, dated March 20, 2009 (incorporated herein by reference to Exhibit 10.10 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .11 | First Amendment to Employment Agreement between Great Wolf Resorts, Inc. and Timothy Black, dated December 16, 2009 (incorporated herein by reference to Exhibit 10.11 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .12 | Form of Noncompete Agreement, Trade Secret and Confidentiality Agreement (incorporated herein by reference to Exhibit 10.6 to the Parent’s Registration Statement onForm S-1 filed January 21, 2005) | ||
10 | .13 | Form of Officers and Directors Indemnification Agreement (incorporated herein by reference to Exhibit 10.7 to the Company’s Registration Statement onForm S-1 filed August 12, 2004) | ||
10 | .14 | Form of Indemnity Agreement (incorporated herein by reference to Exhibit 10.8 to the Parent’s Registration Statement onForm S-1 filed September 23, 2004) | ||
10 | .15 | Form of Great Wolf Resorts, Inc. Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.9 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004) | ||
10 | .16 | Form of Great Wolf Resorts, Inc. 2004 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.10 to the Parent’s Registration Statement onForm S-1 filed November 26, 2004) | ||
10 | .17 | Form of Great Wolf Resorts, Inc. Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.11 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004) | ||
10 | .18 | Loan Agreement by and among Great Wolf Resorts, Inc., Citigroup Global Markets Realty Corp. and The Travelers Insurance Company (incorporated herein by reference to Exhibit 10.16 to Parent’s Registration Statement onForm S-1 filed January 21, 2005) | ||
10 | .19 | Purchase Agreement, dated as of March 15, 2005, among Great Wolf Resorts, Inc., Great Wolf Capital Trust I, Taberna Preferred Funding I, Ltd and Merrill Lynch International (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed March 18, 2005) | ||
10 | .20 | Loan Agreement dated July 28, 2007, among Great Wolf Lodge of Grapevine, LLC, as borrower, and Merrill Lynch Capital and HSH Nordbank, as lenders (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed July 31, 2007) | ||
10 | .21 | Third Amendment to Loan Agreement dated July 31, 2009, among Great Wolf Lodge of Grapevine, LLC, as borrower, and GE Business Financial Services Inc. (f/k/a Merrill Lynch Business Financial Services, Inc. through its division Merrill Lynch Capital), as administrative agent on behalf of the lenders (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed July 31, 2009) |
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Table of Contents
Exhibit | ||||
Number | Description | |||
10 | .22 | Loan Agreement dated December 6, 2007, between Great Wolf Lodge of the Poconos, LLC, as borrower, and Citigroup Global Markets Realty Corp., as lender (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed December 13, 2007) | ||
10 | .23 | Loan Agreement dated August 4, 2008, between Great Wolf Lodge Williamsburg SPE, LLC, as borrower, and Calyon New York Branch and Capmark Bank, as lenders (incorporated herein by reference to the Parent’s Current Report onForm 10-Q filed August 5, 2008) | ||
10 | .24 | Amendment to Loan Agreement dated January 15, 2010, among Great Wolf Lodge Williamsburg SPE, LLC, as borrower, and Calyon New York Branch, as agent, and Calyon New York Branch and Capmark Bank, as lenders (incorporated herein by reference to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .25 | Loan Agreement dated April 30, 2008, among Great Wolf Lodge of the Carolinas, LLC, as borrower, Marshall Financial Group, as administrative agent, and the several banks and other financial institutions from time to time party thereto, as lenders (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed May 6, 2008) | ||
10 | .26 | Fifth Amendment to Lease, dated January 22, 2009, between the registrant and Hovde Building, LLC, (incorporated herein by reference to the Company’s Current Report onForm 8-K filed January 28, 2009) | ||
12 | .1* | Statement of Computation of Ratios of Earnings of Fixed Charges. | ||
21 | .1* | Subsidiaries of the Parent. | ||
23 | .1** | Consent of Grant Thornton LLP. | ||
23 | .2** | Consent of Deloitte & Touche LLP. | ||
23 | .3** | Consent of PricewaterhouseCoopers LLP. | ||
23 | .4* | Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP (included in Exhibits 5.1 and 8.1 to this Registration Statement). | ||
23 | .5* | Consent of Michael Best & Friedrich LLP (included in Exhibit 5.2 to this Registration Statement). | ||
23 | .6* | Consent of McDermott Will & Emery LLP (included in Exhibit 5.3 to this Registration Statement). | ||
24 | .1* | Powers of Attorney (included on signature pages of this Part II). | ||
25 | .1* | Form T-1 Statement of Eligibility of U.S. Bank National Association to act as trustee under the Indenture. | ||
99 | .1* | Form of Letter of Transmittal. | ||
99 | .2* | Form of Notice of Guaranteed Delivery. |
* | Previously filed | |
** | Filed herewith |
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ITEM 22. | UNDERTAKINGS. |
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By: | GWR OP General Partner, LLC |
By: | Great Wolf Resorts, Inc. |
By: | /s/ J. Michael Schroeder |
Signature | Title | Date | ||||
* Kimberly K. Schaefer | Chief Executive Officer (Principal Executive Officer) and Director | October 8, 2010 | ||||
* James A. Calder | Chief Financial Officer (Principal Financial and Accounting Officer) | October 8, 2010 | ||||
* Joseph V. Vittoria | Director and Chairman of the Board | October 8, 2010 | ||||
* Elan Blutinger | Director | October 8, 2010 | ||||
* Randy L. Churchey | Director | October 8, 2010 | ||||
* Edward H. Rensi | Director | October 8, 2010 | ||||
* Howard A. Silver | Director | October 8, 2010 | ||||
*By: | /s/ J. Michael Schroeder J. Michael Schroeder Attorney-in-Fact |
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By: | /s/ J. Michael Schroeder |
Signature | Title | Date | ||||
* Kimberly K. Schaefer | Director | October 8, 2010 | ||||
* James A. Calder | Director | October 8, 2010 | ||||
*By: | /s/ J. Michael Schroeder J. Michael Schroeder Attorney-in-Fact |
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By: | /s/ J. Michael Schroeder |
Title: | Corporate Secretary |
Signature | Title | Date | ||||
* Kimberly K. Schaefer | Chief Executive Officer (Principal Executive Officer) and Director | October 8, 2010 | ||||
* James A. Calder | Chief Financial Officer (Principal Financial and Accounting Officer) | October 8, 2010 | ||||
* Joseph V. Vittoria | Director and Chairman of the Board | October 8, 2010 | ||||
* Elan Blutinger | Director | October 8, 2010 | ||||
* Randy L. Churchey | Director | October 8, 2010 | ||||
* Edward H. Rensi | Director | October 8, 2010 | ||||
* Howard A. Silver | Director | October 8, 2010 | ||||
*By: | /s/ J. Michael Schroeder J. Michael Schroeder Attorney-in-Fact |
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Table of Contents
By: | /s/ J. Michael Schroeder |
Title: | Secretary |
Signature | Title | Date | ||||
* Randy L. Churchey | President (Chief Executive Officer) and Director | October 8, 2010 | ||||
* James A. Calder | Treasurer (Principal Financial and Accounting Officer) and Director | October 8, 2010 | ||||
/s/ J. Michael Schroeder J. Michael Schroeder | Director | October 8, 2010 | ||||
*By: | /s/ J. Michael Schroeder J. Michael Schroeder Attorney-in-Fact |
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By: | /s/ J. Michael Schroeder |
Title: | Authorized Representative |
Signature | Title | Date | ||||
* Jack D. Bateman | Sole director and sole officer (Principal Executive, Financial and Accounting Officer) | October 8, 2010 | ||||
*By: | /s/ J. Michael Schroeder J. Michael Schroeder Attorney-in-Fact |
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Table of Contents
By: | Great Wolf Resorts, Inc. |
By: | /s/ J. Michael Schroeder |
Title: | Secretary |
By: | GWR Operating Partnership, L.L.L.P. |
By: | GWR OP General Partner, LLC |
By: | Great Wolf Resorts, Inc. |
By: | /s/ J. Michael Schroeder |
Title: | Secretary |
By: | Great Wolf Lodge of PKI, LLC |
By: | GWR Operating Partnership, L.L.L.P. |
By: | GWR OP General Partner, LLC |
By: | Great Wolf Resorts, Inc. |
By: | /s/ J. Michael Schroeder |
Title: | Secretary |
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By: | GWR Operating Partnership, L.L.L.P. |
By: | GWR OP General Partner, LLC |
By: | Great Wolf Resorts, Inc. |
By: | /s/ J. Michael Schroeder |
Title: | Secretary |
By: | GWR Operating Partnership, L.L.L.P. |
By: | GWR OP General Partner, LLC |
By: | Great Wolf Resorts, Inc. |
By: | /s/ J. Michael Schroeder |
Title: | Secretary |
II-12
Table of Contents
Exhibit | ||||
Number | Description | |||
1 | .1 | Purchase Agreement (in relation to $230,000,000 aggregate principal amount of the initial notes), dated as of March 30, 2010, by and among GWR Operating Partnership, L.L.L.P. (the “Company”), Great Wolf Finance Corp. (“Great Wolf Finance”), the guarantors named therein and the initial purchasers named therein (incorporated by reference to Exhibit 10.27 to the Parent’s Quarterly Report onForm 10-Q filed May 5, 2010). | ||
2 | .1 | Form of Merger Agreement (Delaware) (incorporated herein by reference to Exhibit 2.1 to Great Wolf Resorts, Inc.’s (the “Parent”) Registration Statement onForm S-1 filed August 12, 2004). | ||
2 | .2 | Form of Merger Agreement (Wisconsin) (incorporated herein by reference to Exhibit 2.2 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004). | ||
4 | .1 | Indenture governing the 10.875% First Mortgage Notes due 2017, dated as of April 7, 2010, by and among the Company and Great Wolf Finance as co-obligors, the guarantors named therein, and U.S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 10.28 to the Parent’s Quarterly Report on Form 10-Q filed May 5, 2010). | ||
4 | .2 | Form of Exchange Note (incorporated herein by reference to Exhibit A1 of Exhibit 10.28 to the Parent’s Quarterly Report on Form 10-Q filed May 5, 2010). | ||
4 | .3* | Registration Rights Agreement, dated as of April 7, 2010, by and among the Company and Great Wolf Finance as issuers, the guarantors named therein, and the initial purchasers named therein. | ||
4 | .4* | Security Agreement, dated as of April 7, 2010, by and among the loan parties from time to time party thereto and U.S. Bank National Association, as collateral agent. | ||
4 | .5* | Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of April 7, 2010, from Mason Family Resorts, LLC, as mortgagor, to U.S. Bank National Association, as trustee. | ||
4 | .6* | Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of April 7, 2010, from Great Wolf Lodge of Grapevine, LLC, as trustor, to Peter S. Graf, as mortgaged property trustee, for the benefit of U.S. Bank National Association, as collateral agent, as beneficiary. | ||
4 | .7* | Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of April 7, 2010, from Great Wolf Williamsburg SPE, LLC, as trustor, to Craig A. Johnson, as mortgaged property trustee, for the benefit of U.S. Bank National Association, in its capacity as collateral agent, as beneficiary. | ||
4 | .8* | First Supplemental Indenture, dated as of May 28, 2010, by and among Scooops Tenant, LLC, the Company and Great Wolf Finance as issuers, the guarantors named therein and U.S. Bank National Association, as trustee. | ||
5 | .1* | Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to validity of the exchange notes. | ||
5 | .2* | Opinion of Michael Best & Friedrich LLC as to certain legal matters of Wisconsin law relating to the validity of the securities being registered and the guarantees. | ||
5 | .3* | Opinion of McDermott Will & Emery LLP as to certain legal matters of Texas law relating to the validity of the securities being registered and the guarantees. | ||
8 | .1* | Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP as to certain tax matters. | ||
10 | .1 | License Agreement, dated January 30, 2004, by and between The Great Lakes Companies, Inc. and Jim Pattison Entertainment, Ltd. (incorporated by reference to Exhibit 10.1 to the Parent’s Registration Statement onform S-1 filed September 23, 2004) | ||
10 | .2 | Development Agreement, dated as of July 30, 2003, among the City of Sheboygan, Wisconsin, the Redevelopment Authority of the City of Sheboygan, Wisconsin, The Great Lakes Companies, Inc., Blue Harbor Resort Sheboygan, LLC, and Blue Harbor Resort Condominium, LLC (incorporated herein by reference to Exhibit 10.2 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004) | ||
10 | .3 | First Amendment to the Development Agreement, dated June 25, 2004, by and among the City of Sheboygan, Wisconsin, the Redevelopment Authority of the City of Sheboygan, Wisconsin, The Great Lakes Companies, Inc., Blue Harbor Resort Sheboygan, LLC, and Blue Harbor Resort Condominium, LLC (incorporated herein by reference to Exhibit 10.3 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004) |
Table of Contents
Exhibit | ||||
Number | Description | |||
10 | .4 | Tall Pines Exclusive License and Royalty Agreement, dated July 25, 2004, between Tall Pines Development Corporation and The Great Lakes Companies, Inc. (incorporated herein by reference to Exhibit 10.4 to the Parent’s Registration Statement onForm S-1 filed December 7, 2004) | ||
10 | .5 | Employment Agreement between Great Wolf Resorts, Inc., and Kimberly Schaefer, dated December 13, 2004 (incorporated herein by reference to Exhibit 10.5 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .6 | Employment Agreement between Great Wolf Resorts, Inc. and James Calder, dated December 13, 2004 (incorporated herein by reference to Exhibit 10.6 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .7 | Employment Agreement between Great Wolf Resorts, Inc. and J. Michael Schroeder, dated December 13, 2004 (incorporated herein by reference to Exhibit 10.7 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .8 | First Amendment to Employment Agreement between Great Wolf Resorts, Inc. and J. Michael Schroeder, dated May 28, 2008 (incorporated herein by reference to Exhibit 10.8 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .9 | Second Amendment to Employment Agreement between Great Wolf Resorts, Inc. and J. Michael Schroeder, dated July 2, 2008 (incorporated herein by reference to Exhibit 10.9 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .10 | Employment Agreement between Great Wolf Resorts, Inc. and Timothy Black, dated March 20, 2009 (incorporated herein by reference to Exhibit 10.10 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .11 | First Amendment to Employment Agreement between Great Wolf Resorts, Inc. and Timothy Black, dated December 16, 2009 (incorporated herein by reference to Exhibit 10.11 to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .12 | Form of Noncompete Agreement, Trade Secret and Confidentiality Agreement (incorporated herein by reference to Exhibit 10.6 to the Parent’s Registration Statement onForm S-1 filed January 21, 2005) | ||
10 | .13 | Form of Officers and Directors Indemnification Agreement (incorporated herein by reference to Exhibit 10.7 to the Company’s Registration Statement onForm S-1 filed August 12, 2004) | ||
10 | .14 | Form of Indemnity Agreement (incorporated herein by reference to Exhibit 10.8 to the Parent’s Registration Statement onForm S-1 filed September 23, 2004) | ||
10 | .15 | Form of Great Wolf Resorts, Inc. Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.9 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004) | ||
10 | .16 | Form of Great Wolf Resorts, Inc. 2004 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.10 to the Parent’s Registration Statement onForm S-1 filed November 26, 2004) | ||
10 | .17 | Form of Great Wolf Resorts, Inc. Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.11 to the Parent’s Registration Statement onForm S-1 filed August 12, 2004) | ||
10 | .18 | Loan Agreement by and among Great Wolf Resorts, Inc., Citigroup Global Markets Realty Corp. and The Travelers Insurance Company (incorporated herein by reference to Exhibit 10.16 to Parent’s Registration Statement onForm S-1 filed January 21, 2005) | ||
10 | .19 | Purchase Agreement, dated as of March 15, 2005, among Great Wolf Resorts, Inc., Great Wolf Capital Trust I, Taberna Preferred Funding I, Ltd and Merrill Lynch International (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed March 18, 2005) | ||
10 | .20 | Loan Agreement dated July 28, 2007, among Great Wolf Lodge of Grapevine, LLC, as borrower, and Merrill Lynch Capital and HSH Nordbank, as lenders (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed July 31, 2007) | ||
10 | .21 | Third Amendment to Loan Agreement dated July 31, 2009, among Great Wolf Lodge of Grapevine, LLC, as borrower, and GE Business Financial Services Inc. (f/k/a Merrill Lynch Business Financial Services, Inc. through its division Merrill Lynch Capital), as administrative agent on behalf of the lenders (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed July 31, 2009) |
Table of Contents
Exhibit | ||||
Number | Description | |||
10 | .22 | Loan Agreement dated December 6, 2007, between Great Wolf Lodge of the Poconos, LLC, as borrower, and Citigroup Global Markets Realty Corp., as lender (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed December 13, 2007) | ||
10 | .23 | Loan Agreement dated August 4, 2008, between Great Wolf Lodge Williamsburg SPE, LLC, as borrower, and Calyon New York Branch and Capmark Bank, as lenders (incorporated herein by reference to the Parent’s Current Report onForm 10-Q filed August 5, 2008) | ||
10 | .24 | Amendment to Loan Agreement dated January 15, 2010, among Great Wolf Lodge Williamsburg SPE, LLC, as borrower, and Calyon New York Branch, as agent, and Calyon New York Branch and Capmark Bank, as lenders (incorporated herein by reference to the Parent’s Annual Report onForm 10-K filed March 2, 2010) | ||
10 | .25 | Loan Agreement dated April 30, 2008, among Great Wolf Lodge of the Carolinas, LLC, as borrower, Marshall Financial Group, as administrative agent, and the several banks and other financial institutions from time to time party thereto, as lenders (incorporated herein by reference to Exhibit 1.1 to the Parent’s Current Report onForm 8-K filed May 6, 2008) | ||
10 | .26 | Fifth Amendment to Lease, dated January 22, 2009, between the registrant and Hovde Building, LLC, (incorporated herein by reference to the Company’s Current Report onForm 8-K filed January 28, 2009) | ||
12 | .1* | Statement of Computation of Ratios of Earnings of Fixed Charges. | ||
21 | .1* | Subsidiaries of the Parent. | ||
23 | .1** | Consent of Grant Thornton LLP. | ||
23 | .2** | Consent of Deloitte & Touche LLP. | ||
23 | .3** | Consent of PricewaterhouseCoopers LLP. | ||
23 | .4* | Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP (included in Exhibits 5.1 and 8.1 to this Registration Statement). | ||
23 | .5* | Consent of Michael Best & Friedrich LLP (included in Exhibit 5.2 to this Registration Statement). | ||
23 | .6* | Consent of McDermott Will & Emery LLP (included in Exhibit 5.3 to this Registration Statement). | ||
24 | .1* | Powers of Attorney (included on signature pages of this Part II). | ||
25 | .1* | Form T-1 Statement of Eligibility of U.S. Bank National Association to act as trustee under the Indenture. | ||
99 | .1* | Form of Letter of Transmittal. | ||
99 | .2* | Form of Notice of Guaranteed Delivery. |
* | Previously filed | |
** | Filed herewith |