EXHIBIT 99.1
RESORTQUEST SAVINGS & RETIREMENT PLAN
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Financial Statements
and Supplemental Schedule
For the Period from Inception (April 1, 1999)
to December 31, 1999
RESORTQUEST SAVINGS & RETIREMENT PLAN
CONTENTS
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Page
Independent Auditor's Report 2
Statement of Net Assets Available for Benefits 3
Statement of Changes in Net Assets Available for Benefits 4
Notes to Financial Statements 5-8
Supplemental Schedule
Schedule of Assets Held for Investment Purposes at End of Year 9
[ON THOMPSON DUNAVANT PLC LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To The Advisory Committee
ResortQuest Savings & Retirement Plan
Memphis, Tennessee
We have audited the accompanying statement of net assets available for benefits
of ResortQuest Savings & Retirement Plan (the "Plan") as of December 31, 1999,
and the related statement of changes in net assets available for benefits for
the period from inception (April 1, 1999) to December 31, 1999. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of ResortQuest
Savings & Retirement Plan as of December 31, 1999, and the changes in its net
assets available for benefits for the nine months then ended in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes as of December 31, 1999 is presented for the
purpose of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and is not a required part of the basic financial statements. The
supplemental schedule has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Thompson Dunavant, PLC
June 9, 2000
RESORTQUEST SAVINGS & RETIREMENT PLAN
Statement of Net Assets Available for Benefits
December 31, 1999
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Assets
Investments
Mutual funds $ 18,277,048
ResortQuest International, Inc. common stock 147,052
Guaranteed interest annuities 139,343
Loans to participants 900,233
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Total investments 19,463,676
Receivables
Participant contributions 62,865
Employer contributions 22,376
Accrued interest and dividends 70,772
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Total receivables 156,013
Cash 7,693
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Net assets available for benefits $ 19,627,382
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The accompanying notes are an integral
part of these financial statements.
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RESORTQUEST SAVINGS & RETIREMENT PLAN
Statement of Changes in Net Assets Available for Benefits
For the Period from Inception (April 1,1999) to December 31,1999
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Additions to net assets attributed to:
Investment income
Net appreciation in fair value of investment $ 557,205
Interest and dividends 725,938
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1,283,143
Contributions
Participants 2,629,752
Employer 899,622
Rollovers from other plans 645,019
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4,174,393
Transfer of assets from other plans 14,548,316
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Total additions 20,005,852
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Deductions from net assets attributed to:
Benefits paid to participants 378,470
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Net increase in net assets 19,627,382
Net assets available for benefits
Beginning of period --
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End of period $19,627,382
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The accompanying notes are an integral
part of these financial statements.
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RESORTQUEST SAVINGS & RETIREMENT PLAN
Notes to Financial Statements
December 31, 1999
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Note 1 - Description of Plan
The following description of ResortQuest Savings & Retirement Plan (the "Plan")
provides only general information. Readers should refer to the Plan Agreement
for a more complete description of the Plan's provisions.
General
The Plan is a contributory defined contribution plan covering all full-time
salaried and hourly employees of ResortQuest International, Inc. and its
wholly-owned subsidiaries (the "Company"). Employees become eligible on January
1 and July 1 following the first anniversary of their employment provided they
are at least 21 and completed 1,000 hours of service during their first year of
employment or during any plan year (January 1 to December 31). The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
Upon formation of the Plan on April 1,1999, all full-time employees of the
Company on this date became eligible to participate in the Plan.
Contributions
Participants may elect to contribute up to twenty (20%) percent of his/her
annual compensation subject to Internal Revenue Service limitations. For each
plan year, the Company will contribute to the Plan an amount of matching
contributions determined by the Company at its discretion. As of December 31,
1999, the Company matching contributions totaled 50% of each participant's
contributions up to a maximum of 6% of compensation.
Participant accounts
Each participant's account is credited with the participant's contribution, and
an allocation of the employer's contribution made on their behalf plus a
proportionate interest in the investment earnings of the funds in which the
contributions are invested. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's account.
Vesting
Participants are immediately vested in their voluntary contributions plus
earnings thereon. Participants vest in the Company's matching contributions and
related earnings based upon years of service with 100% vesting occurring after
three years of credited service. In the event of death, disability, or normal
retirement (age 59 1/2) participants become 100% vested in all account balances.
Payment of benefits
Participants may choose to receive account distributions either in the form of a
lump sum payment or installments over a period of time as defined in the Plan
Agreement. However, if the participant's vested balance does not exceed $5,000,
the Plan may distribute funds in the form of a lump sum payment without the
consent of the participant.
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RESORTQUEST SAVINGS & RETIREMENT PLAN
Notes to Financial Statements (Continued)
December 31, 1999
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Note 1 - Description of Plan (continued)
Plan termination
Although it has not expressed any intent to do so, the Company has the right to
modify or terminate the Plan at any time subject to the provisions of ERISA and
the Plan Agreement.
Note 2 - Summary of significant accounting policies
Investments
Investments are stated at fair value and represent the Plan's share of the
market value of fund holdings or are based upon quoted market prices. Purchases
and sales of securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis and dividends are recorded on the ex-dividend
date.
Benefit payments
Benefit payments to participants are recorded upon distribution.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions which affect certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
Note 3 - Investments
The Plan allows participants to invest varying portions of their account
balances in thirteen different investment options which include the common stock
of ResortQuest International, Inc. and twelve different mutual funds offered by
the custodian Union Planters Bank. The twelve mutual funds offered by the
custodian include Dreyfus Appreciation Fund, Inc., Fidelity Advisor Series II
Growth Opportunities Fund International, Janus Investments Fund Worldwide, Janus
Enterprise Fund, Vanguard Life Strategy Income Fund, Vanguard Life Strategy
Conservative Growth, Vanguard Life Strategy Moderate Growth, Vanguard
Life Strategy Growth Fund, Vanguard Index Trust 500 Portfolio, Federated Capital
Preservation Fund, Vanguard Fixed Income Securities Long-Term Corporate
Portfolio, and Vanguard Fixed Income Securities Fund Intermediate Term U.S.
Treasury. All Plan assets are held by Union Planters Bank.
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RESORTQUEST SAVINGS & RETIREMENT PLAN
Notes to Financial Statements (Continued)
December, 31, 1999
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Note 3 - Investments (continued)
The fair value of individual investments which represent five percent or more of
the Plan's net assets as of December 31, 1999 is as follows:
Federated Capital Preservation Fund $5,366,504
Fidelity Advisor Series II Growth Opportunities Fund Institutional 4,138,354
Janus Enterprise Fund 2,009,513
Vanguard Index Trust 500 Portfolio 1,895,726
Vanguard Life Strategy Moderate Growth 1,604,948
Janus Investments Fund Worldwide 1,279,055
During 1999, the Plan's investments (including investments bought, sold and held
during the year) appreciated (depreciated) in value as follows:
ResortQuest International, Inc. common stock $ (70,044)
Dreyfus Appreciation Fund, Inc. #141 22,256
Fidelity Advisor Series II Growth Opportunities Fund Institutional (297,816)
Janus Investments Fund Worldwide 283,647
Janus Enterprise Fund 406,327
Vanguard Life Strategy Income Fund (511)
Vanguard Life Strategy Conservative Growth 3,027
Vanguard Life Strategy Moderate Growth 70,546
Vanguard Life Strategy Growth Fund 20,209
Vanguard Index Trust 500 Portfolio 131,832
Federated Capital Preservation Fund (361)
Vanguard Fixed Income Securities Long-Term Corporate Portfolio (7,043)
Vanguard Fixed Income Securities Fund Intermediate Term
U.S. Treasury (4.864)
$ 557,205
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Note 4 - Loans to participants
The loans to participants were transferred with the net assets from other Plans.
New loans are also provided for in the Plan Agreement. The loans are secured by
the balance in the participant's account and retain the existing repayment
period and interest rate. As of December 31, 1999, interest rates on loans to
participants ranged from 6.37% to 11.3%. Principal and interest is repaid
ratably through payroll deductions over a period not in excess of five years.
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RESORTQUEST SAVINGS & RETIREMENT PLAN
Notes to Financial Statements (Continued)
December 31, 1999
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Note 5 - Related party transactions
The Plan purchased $217,096 of the Plan Sponsor's common stock during the year
ended December 31, 1999. The stock held by the Plan at December 31, 1999 had a
market value of $147,052.
The Company provides the Plan with certain management and administrative
services for which no fees are charged.
Note 6 - Tax status
The Plan has received a determination letter from the Internal Revenue Service
stating that the Plan qualifies under the appropriate sections of the Internal
Revenue Code ("IRC"), and is, therefore, not subject to tax under present income
tax law. Once qualified, the Plan is required to operate in conformity with the
IRC to maintain its qualification. The Plan's management is not aware of any
course of action or series of events that have occurred that might adversely
affect the Plan's qualified status.
Note 7 - Transfer of assets from other plans
Prior to the Plan's establishment on April 1, 1999, each of the subsidiaries of
ResortQuest International, Inc. maintained separate qualified retirement plans.
Upon formation of the Plan, each of the subsidiaries' plans were merged into the
ResortQuest Savings & Retirement Plan. The Company acquired additional
subsidiaries subsequent to April 1, 1999 and the qualified retirement plans
maintained by these subsidiaries were likewise merged into the Plan. During the
period ended December 31, 1999, assets totaling $14,548,316 were transferred to
the Plan as a result of these transactions.
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SUPPLEMENTAL SCHEDULE
RESORTQUEST SAVINGS & RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
EIN: 62-1750352/PLAN NUMBER: 001
DECEMBER 31, 1999
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Current
(a) (b)(c) Identity of Issue/Description (e) Value
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* ResortQuest International, Inc. common stock $ 147,052
Dreyfus Appreciation Fund, Inc. #141 716,649
Fidelity Advisor Series II Growth Opportunities
Fund Institutional 4,138,354
Janus Investments Fund Worldwide 1,279,055
Janus Enterprise Fund 2,009,513
Vanguard Life Strategy Income Fund 48,917
Vanguard Life Strategy Conservative Growth 116,302
Vanguard Life Strategy Moderate Growth 1,604,948
Vanguard Life Strategy Growth Fund 633,930
Vanguard Index Trust 500 Portfolio 1,895,726
Federated Capital Preservation Fund 5,366,504
Vanguard Fixed Income Securities Long-Term
Corporate Portfolio 316,413
Vanguard Fixed Income Securities Fund Intermediate
Term U.S. Treasury 150,737
Guaranteed interest annuities 139,343
Loans to participants, interest rates ranging
from 6.37% to 11.3% 900,233
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Total assets held for investment purposes
at end of year $ 19,463,676
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* Represents a party-in-interest