EXHIBIT 99.1
RESORTQUEST SAVINGS & RETIREMENT PLAN
FINANCIAL STATEMENTS
YEARS ENDED
DECEMBER 31, 2000 AND 1999
CONTENTS
PAGE
----
FINANCIAL STATEMENTS
Independent Auditor's Reports 3-4
Statements of Net Assets Available for Benefits 5
Statements of Changes in Net Assets Available for Benefits 6
Notes to Financial Statements 7-10
ADDITIONAL INFORMATION
Supplemental Information 11
2
INDEPENDENT AUDITOR'S REPORT
To The Advisory Committee
ResortQuest Savings & Retirement Plan
Memphis, Tennessee
We have audited the accompanying statements of net assets available for benefits
of ResortQuest Savings & Retirement Plan as of December 31, 2000 and the related
statement of changes in net assets available for benefits for year then ended.
These financial statements are the responsibility of Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The statement of net assets available for benefits of ResortQuest
Savings & Retirement Plan as of December 31, 1999 and related statement of
changes in net assets available for benefits for the period from inception
(April 1, 1999) to December 31, 1999 were audited by other auditors whose
report, dated June 9, 2000, expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. 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 amount 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 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, 2000, and the changes in its net
assets available for benefits for the year ended December 31, 2000 in conformity
with accounting principles generally accepted in the United States.
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, 2000 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 it 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/ CANNON & COMPANY, CPA'S
Certified Public Accountants
Memphis, Tennessee
June 25, 2001
3
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. We have not audited the financial
statements of ResortQuest Savings & Retirement Plan for any period subsequent to
December 31, 1999.
/s/ THOMPSON DUNAVANT
June 9, 2000
4
RESORTQUEST SAVINGS & RETIREMENT PLAN
NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
ASSETS
2000 1999
---- ----
INVESTMENTS
Mutual Funds $19,340,366 $18,277,048
ResortQuest International, Inc. Common Stock 519,284 147,052
Guaranteed Interest Annuities 145,493 139,343
Loans to Participants 1,092,614 900,233
----------- -----------
Total Investments 21,097,757 19,463,676
RECEIVABLES
Participant Contributions 165,096 62,865
Employer Contributions 58,155 22,376
Accrued Interest and Dividends 39,722 70,772
----------- -----------
Total Receivables 262,973 156,013
CASH 10,791 7,693
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $21,371,521 $19,627,382
=========== ===========
5
RESORTQUEST SAVINGS & RETIREMENT PLAN
NET CHANAGE IN ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2000 AND FOR THE PERIOD FROM
INCEPTION (APRIL 1, 1999) TO DECEMBER 31, 1999
2000 1999
---- ----
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment Income
Net Appreciation (Depreciation) in
Fair Value of Investments $ (2,964,824) $ 557,205
Interest and Dividends 959,434 725,938
------------ ----------
(2,005,390) 1,283,143
------------ ----------
Contributions
Participants 3,563,983 2,629,752
Employer 1,216,269 899,622
Rollover From Other Plans 218,135 645,019
------------ ----------
4,998,387 4,174,393
------------ ----------
Transfer of Assets From Other Plans 1,448,622 14,548,316
------------ ----------
Total Additions 4,441,619 20,005,852
------------ ----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits Paid to Participants 2,679,705 378,470
Other Plan Expenses 17,775 -
------------ ----------
Total Deductions 2,697,480 378,470
------------ ----------
Net Increase in Net Assets 1,744,139 19,627,382
Net Assets Available for Benefits
Beginning of Period 19,627,382 -
------------ ----------
End of Period $21,371,521 $19,627,382
=========== ===========
6
NOTE 1 - DESCRIPTION OF PLAN
The following description of ResortQuest Savings & Retirement Plan
provides only general information. Readers should refer to the Plan Agreement
for a more complete description of the Plan's provisions.
GENERAL
The ResortQuest Savings & Retirement Plan (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,
2000 and 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 contributions 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 (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 a 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.
7
NOTE 1 - DESCRIPTION OF PLAN - CONTINUED
FORFEITURES
For the year ended December 31, 2000, forfeitures of nonvested accounts
totaled $31,664. This amount is available to reduce future employer
contributions.
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 Institutional, Janus Investments
Fund Worldwide, Janus Enterprise Fund, Vanguard Lifestrategy Income Fund,
Vanguard Lifestrategy Conservative Growth, Vanguard Lifestrategy Moderate
Growth, Vanguard Lifestrategy 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.
8
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, 2000 and 1999 are as
follows:
2000 1999
---------- ----------
Federated Capital Preservation Fund $5,889,029 $5,366,504
Fidelity Advisor Series II Growth Opportunities Fund Institutional 2,982,899 4,138,354
Vanguard Index Trust 500 Portfolio 2,281,459 1,895,726
Janus Enterprise Fund 2,223,390 2,009,513
Janus Investments Fund Worldwide 1,753,728 1,279,055
Vanguard Lifestrategy Moderate Growth 1,394,565 1,604,948
Loans to Participants 1,092,614
During 2000 and 1999, the Plan's investments (including investments
bought, sold and held during the year) appreciated (depreciated) in value as
follows:
2000 1999
---------- ----------
ResortQuest International, Inc. Common Stock $ 93,920 (70,044)
Dreyfus Appreciation Fund, Inc. #141 (70,326) 22,256
Fidelity Advisor Series II Growth Opportunities Fund Institutional (806,590) (297,816)
Janus Investments Fund Worldwide (626,175) 283,647
Janus Enterprise Fund (1,166,976) 406,327
Vanguard Lifestrategy Income Fund 838 (511)
Vanguard Lifestrategy Conservative Growth (4,592) 3,027
Vanguard Lifestrategy Moderate Growth (94,865) 70,546
Vanguard Lifestrategy Growth Fund (70,620) 20,209
Vanguard Index Trust 500 Portfolio (258,496) 131,832
Federated Capital Preservation Fund 144 (361)
Vanguard Fixed Income Securities Long-Term Corporate Portfolio 20,686 (7,043)
Vanguard Fixed Income Securities Fund Intermediate Term U.S. Treasury 12,079 (4,864)
Travelers Insurance Company Group Flexible Annuity Contract 6,149
----------- ----------
$(2,964,824) 557,205
=========== ==========
NOTE 4 - LOANS TO PARTICIPANTS
Loans to participants consist of loans transferred with the net
statement assets from other plans and new loans issued since plan inception. The
loans are secured by the balance in the participant's account and retain the
existing repayment period interest rate. As of December 31, 2000 and 1999,
interest rates on loans to participants ranged from 6.37% to 11.5%. Principal
and interest is repaid ratably through payroll deductions. Loan administration
fees are charged for all new loans. The amount of the fee is deducted from the
participant's account that receives the loan. For the year ending December 31,
2000 loan administration fees totaled $17,775.
9
NOTE 5 - RELATED PARTY TRANSACTIONS
The Plan purchased $278,312 and $217,096 of the Plan Sponsor's common
stock during the year ended December 31, 2000 and 1999, respectively. The stock
held by the Plan at December 31, 2000 and 1999 had a market value of $519,284
and $147,052, respectively.
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 qualified 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 ResortQuest
International, Inc.'s subsidiaries participated in separate qualified retirement
plans. Upon formation of the Plan, each of the subsidiaries' plans were merged
into the Plan. The Company acquired additional subsidiaries in 2000 and 1999.
The qualified retirement plans maintained by these subsidiaries were likewise
merged into the Plan. During the period ended December 31, 2000 and 1999
$1,448,622 and $14,548,316 was transferred to the Plan as a result of these
transactions.
10
RESORTQUEST SAVINGS & RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR
EIN: 62-1750352 / PLAN NUMBER: 001
FOR THE YEAR ENDED DECEMBER 31, 2000
CURRENT
(a) (b)(c) IDENTITY OF ISSUE/DESCRIPTION (e) VALUE
- --- ------------------------------------ ---------
* ResortQuest International, Inc. Common Stock $ 519,284
Dreyfus Appreciation Fund, Inc. #141 1,016,696
Fidelity Advisor Series II Growth Opportunities Fund Institutional 2,982,899
Janus Investments Fund Worldwide 1,753,728
Janus Enterprise Fund 2,223,391
Vanguard Lifestrategy Income Fund 141,184
Vanguard Lifestrategy Conservation Growth 165,940
Vanguard Lifestrategy Moderate Growth 1,394,565
Vanguard Lifestrategy Growth Fund 794,710
Vanguard Index Trust 500 Portfolio 2,281,459
Federated Capital Preservation Fund 5,889,029
Vanguard Fixed Income Securities Long-Term Corporate Portfolio 456,585
Vanguard Fixed Income Securities Fund Intermediate Term U.S. Treasury 240,180
Guaranteed Interest Annuities 145,493
Loans to Participants, Interest Rates Ranging From 6.36% to 11.5% 1,092,614
-----------
Total Assets Held for Investment Purposes at End of Year $21,097,757
===========
* Represents a party-in-interest
11