FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
For Quarter Ended June 30, 2000
Commission File no. 2-64309
GOLF HOST RESORTS, INC.
-----------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0631130
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
36750 US 19 N., Palm Harbor, Florida 34684
- --------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(727) 942-2000
- ----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to the filing requirements
for the past 90 days. - Yes [X] No [ ]
Issuer has no common stock subject to this report.
Page 1 of 19
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999
ASSETS
(SUBSTANTIALLY ALL PLEDGED)
JUNE 30, DECEMBER 31,
2000 1999
----------- -----------
(unaudited)
CURRENT ASSETS:
Cash $ 1,556,858 $ 131,440
Restricted cash 814,466 318,860
Accounts receivable, net 5,813,666 4,499,990
Other receivables 659,970 907,568
Inventories and supplies 1,301,854 1,755,452
Prepaid expenses and other assets 825,865 132,116
----------- -----------
10,972,679 7,745,426
Assets held for sale 2,435,000 8,634,596
----------- -----------
Total current assets 19,607,275 16,380,022
INTANGIBLES, net 25,568,452 26,994,645
PROPERTY AND EQUIPMENT, net 42,189,287 43,205,256
OTHER ASSETS 336,338 315,851
----------- -----------
$81,501,756 $86,895,774
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
Page 2
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999
LIABILITIES AND SHAREHOLDER'S DEFICIT
JUNE 30, DECEMBER 31,
2000 1999
------------- -------------
(unaudited)
CURRENT LIABILITIES:
Accounts payable $ 6,547,078 $ 5,039,225
Line of credit 777,988 2,109,316
Accrued payroll costs 1,013,278 899,750
Accrued interest 725,500 691,265
Accrued expenses 3,914,493 3,214,321
Deposits and prepaid fees 1,922,173 2,841,038
Current notes payable 809,566 795,205
Due to related parties 3,127,257 1,994,645
------------- -------------
Total current liabilities 18,837,333 17,584,765
NOTES PAYABLE 82,403,044 83,829,220
OTHER LONG-TERM LIABILITIES 5,486,813 5,168,028
DEFERRED INCOME TAXES 1,770,467 1,770,467
------------- -------------
Total liabilities 108,497,657 108,352,480
------------- -------------
SHAREHOLDER'S DEFICIT
Common stock, $1 par, 5,000 shares
authorized, issued, and outstanding 5,000 5,000
5.6% cumulative preferred stock, $1 par,
4,577,000 shares authorized, issued,
and outstanding 4,577,000 4,577,000
Paid-in capital (13,557,000) (13,557,000)
Accumulated deficit (18,020,901) (12,481,706)
------------- -------------
Total shareholder's deficit (26,995,901) (21,456,706)
------------- -------------
Total liabilities and shareholder's
deficit $ 81,501,756 $ 86,895,774
============= =============
The accompanying notes are an integral part
of these consolidated financial statements.
Page 3
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
STATEMENTS OF INCOME
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
QUARTERS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
2000 1999 2000 1999
------------ ------------ ------------ -----------
(unaudited) (unaudited)
REVENUES:
Resort facilities $ 5,131,088 $ 5,270,491 $ 12,600,061 $14,416,988
Food and beverage 5,767,012 5,221,933 11,111,403 11,410,694
Golf 3,998,690 3,942,125 9,372,278 10,086,757
Other 1,663,257 1,604,366 3,302,004 2,879,508
------------ ------------ ------------ -----------
16,560,047 16,038,915 36,385,746 38,793,947
------------ ------------ ------------ -----------
COST AND OPERATION EXPENSES:
Resort facilities 3,667,801 3,753,362 8,530,104 9,161,757
Food and beverage 2,834,018 2,927,389 5,705,804 6,355,245
Golf 1,987,189 1,915,990 4,040,569 3,997,407
Other 2,976,038 2,781,692 5,827,321 5,801,224
General and administrative 1,593,790 1,681,177 3,425,041 3,729,095
Depreciation and amortization 995,771 2,526,191 1,951,543 3,576,302
------------ ------------ ------------ -----------
14,054,607 15,585,801 29,480,382 32,621,030
------------ ------------ ------------ -----------
INCOME BEFORE INCOME/(LOSS) ON
ASSETS HELD FOR SALE 2,505,440 453,114 6,905,364 6,172,917
INCOME/(LOSS) ON ASSETS HELD FOR SALE
AND LEASED ASSET (458,615) (27,027) (1,257,452) 794,837
------------ ------------ ------------ -----------
OPERATING INCOME 2,046,825 426,087 5,647,912 6,967,754
INTEREST, NET 2,412,075 2,373,556 4,859,357 4,759,494
------------ ------------ ------------ -----------
INCOME/(LOSS) BEFORE DIVIDEND
REQUIREMENTS ON PREFERRED STOCK (365,250) (1,947,469) 788,555 2,208,260
DIVIDEND REQUIREMENTS ON
PREFERRED STOCK 64,077 64,077 128,154 128,154
------------ ------------ ------------ -----------
NET INCOME/(LOSS) AVAILABLE
TO COMMON SHAREHOLDERS $ (429,327) $ (2,011,546) $ 660,401 $ 2,080,106
============ ============ ============ ===========
EARNINGS/(LOSS) PER COMMON SHARE $ (85.86) $ (402.31) $ 132.09 $ 416.02
============ ============ ============ ===========
The accompanying notes are an integral part
of these consolidated financial statements.
Page 4
GOLF HOST RESORTS, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S DEFICIT
FOR THE EIGHTEEN MONTHS ENDED JUNE 30, 2000
$1 Par Value 5.6% Cumulative
Common Stock Preferred Stock Total
----------------- ------------------------ Paid-In Retained Shareholder's
Shares Amount Shares Amount Capital Deficit Deficit
------ ------ --------- ---------- ------------ ------------ ------------
Balance, December 31, 1998 5,000 5,000 4,577,000 4,577,000 (13,557,000) 1,940,766 (7,034,234)
Net loss available to
common shareholder -- -- -- -- -- (7,453,219) (7,453,219)
Distribution to shareholder -- -- -- -- -- (6,969,253) (6,969,253)
----- ------ --------- ---------- ------------ ------------ ------------
Balance, December 31, 1999 5,000 5,000 4,577,000 4,577,000 (13,557,000) (12,481,706) (21,456,706)
Net income available to
common shareholder -- -- -- -- -- 660,401 660,401
Distribution to shareholder -- -- -- -- -- (6,199,596) (6,199,596)
----- ------ --------- ---------- ------------ ------------ ------------
Balance, June 30, 2000 5,000 $5,000 4,577,000 $4,577,000 $(13,557,000) $(18,020,901) $(26,995,901)
===== ====== ========= ========== ============ ============ ============
The accompanying notes are an integral part
of these consolidated financial statements.
Page 5
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
2000 1999
----------- -----------
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income before dividend requirements
on preferred stock $ 788,555 $ 2,183,014
Noncash items included in income:
Depreciation and amortization 1,951,543 1,898,720
Write-off of startup costs -- 1,606,538
Changes in operating working capital 1,294,196 (3,345,281)
----------- -----------
Cash provided by operations 4,034,294 2,342,991
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) in other assets (20,487) --
Purchases of property and equipment (164,031) (1,894,207)
Net recovery of cost of property and
equipment sold or retired -- 7,229
Decrease in assets held for sale -- 2,605,738
----------- -----------
Cash provided by (used in) investing activities (184,518) 718,760
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase/(decrease) in notes payable 14,361 (195,762)
Additional borrowings on existing debt -- 303,416
Repayment of existing debt (1,426,176) --
Repayment of line of credit (1,331,328) (3,513,173)
Increases in other long-term liabilities 318,785 (41,579)
----------- -----------
Cash provided by (used in) financing activities (2,424,358) (3,447,098)
----------- -----------
NET INCREASE (DECREASE) IN CASH 1,425,418 (385,347)
CASH, BEGINNING OF PERIOD 131,440 1,396,404
----------- -----------
CASH, END OF PERIOD $ 1,556,858 $ 1,011,057
=========== ===========
NONCASH FINANCING AND INVESTING ACTIVITIES:
The Company satisfied its preferred
stock dividend liability to GHI
through the intercompany account $ 128,154 $ 128,154
=========== ===========
Settlement with previous owners $ 1,249,843 $ --
=========== ===========
Dividend of Tamarron to Golf Hosts II, Inc. $ 6,199,596 $ --
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
Page 6
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(1) ORGANIZATION, BUSINESS, LIQUIDITY AND ACCOUNTING POLICIES
During the quarter, there was no significant change from the 10-K filing
on December 31, 1999.
During 2000, the Company transferred the assets and liabilities of
Tamarron of approximately $6,200,000, net, to its parent, Golf Host, Inc.
("GHI"), who contributed them to Golf Host II, Inc., a wholly owned
subsidiary of GHI. Concurrently with the transfer of Tamarron, the Company
entered into a lease agreement whereby Golf Host II, Inc. leased Tamarron
to the Company. Rent is payable annually in the amount of $1. In addition,
the Company assumes responsibility for Tamarron's Net Income (Loss), as
defined by the lease agreement. The lease term is 10 years.
Financial Statement Presentation
Certain reclassifications have been made to the June 2000 financial
statements to conform to the December 1999 presentation.
(2) LONG-TERM OBLIGATIONS
Long-term obligations consist of the following:
JUNE 30, DECEMBER 31,
2000 1999
------------ ------------
Participating mortgage note at varying pay
rates maturing in 2027 $ 69,975,000 $ 69,975,000
$9,000,000 participation mortgage
note credit facility 9,000,000 9,000,000
Mortgage note at 6.34%, maturing in 2002 3,168,000 4,417,764
Capital leases 1,069,610 1,231,661
------------ ------------
83,212,610 84,624,425
Less current maturities (809,566) (795,205)
------------ ------------
$ 82,403,044 $ 83,829,220
============ ============
Page 7
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(3) TAMARRON'S RESULT OF OPERATIONS:
As defined in Note 1, the Company assumes responsibility for the Net
Income (Loss) of Tamarron under the terms of the lease agreement between
the Company and Golf Host II, Inc. for the period of lease inception (June
12, 2000) through December 31, 2000, the Net Income (Loss) is as follows
and is included in loss on assets held for sale and leased asset in the
Statement of Operations:
19 DAYS ENDED
JUNE 30, 2000
REVENUE:
HOTEL 123,355
FOOD & BEVERAGE 120,212
GOLF 69,539
OTHER 83,568
REAL ESTATE --
--------
--
396,674
--------
COSTS & OPERATING EXP:
HOTEL 67,127
FOOD & BEVERAGE 87,936
GOLF 42,580
OTHER 122,196
GENERAL & ADMIN 201,199
--------
521,038
--------
INTEREST EXPENSE --
--------
--
NET INCOME/(LOSS) (124,363)
========
Page 8
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
Management's Discussion and Analysis
of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
For purposes of discussing comparative results of operations for 2000
and 1999, the results of operations of Tamarron, which are included in
income/(loss) on assets held for sale, in 2000 and 1999, are also
utilized.
Guest occupancy for the quarter, measured in room nights, decreased
4.8% from the level of the prior year. On a divisional basis,
Innisbrook's occupancy decreased 5.6% while Tamarron experienced a
decrease in occupancy of .5%. The decrease in Innisbrook's room nights
occurred primarily in the group segment. The decrease in Tamarron's
occupancy also occurred in the group segment, while the social segment
occupancy remained flat.
Revenues from resort operations on a per occupied room basis increased
10.5% from $398.14 to $439.81. The improved guest spending is primarily
attributable to Innisbrook, which enjoyed an 11.1% increase in gross
operating revenue. While Tamarron's gross operating revenue rose 7.4%,
its revenue per room night rose 8.0%. Innisbrook's average daily room
rate rose 5.3% while Tamarron's decreased .4%. While meals served at
Innisbrook increased 8.1%, revenue per meal served improved 11.6%.
Tamarron's meals served rose 1.5% while its revenue per meal served
decreased 7.3%. Innisbrook golf revenues were up 1.4% from the prior
year, as revenue per player increased .9%. Rounds played increased .5%.
Tamarron's golf revenues were down 18.1% while rounds played increased
by 18.2%. On a divisional basis, Innisbrook and Tamarron's revenue per
occupied room for the second quarter of 2000 and 1999 were $458.09 and
$342.21 as compared to $412.29 and $316.85, respectively. As a result
of the reduced occupancy and improved guest spending, total resort
operations revenues rose $604 thousand or 3.3%. Real estate activities
at Tamarron generated two lot sales during the second quarter of 1999
and none during 2000. All of the real estate sales activity for 2000
and 1999 is included in income/(loss) on assets held for sale in the
statements of income.
Costs and operating expenses decreased to 89.2% of total resort
operations revenues as compared to 91.2% in 1999. At Innisbrook, gross
operating income increased 19.9% as relative departmental operating
expense levels rose moderately by .2% over the prior years while
revenues increased at a 2.8% rate. At the same time, Innisbrook's
fixed charges and other expenses increased 1.8% over the prior year,
primarily due to the rental pool distribution expense and amortization
of intangible assets. While Tamarron's gross operating revenue
increased as noted above, its cost and operating expenses experienced
a 5.6% increase.
Interest expense rose 1.6% primarily as a result of payments under a
participating mortgage in 1999 offset against reduced revolving credit
line costs.
Page 9
FINANCIAL CONDITION AND LIQUIDITY
The company's working capital position (exclusive of Assets Held for
Sale) was a deficit of $7,864,654 at June 30, 2000, as compared to a
deficit of $15,085,098 at December 31, 1999. The Company typically
experiences seasonal fluctuations in its net working capital position
without normally impairing its ability to pay trade creditors in a
timely manner and satisfy its financial obligations in an orderly
fashion.
Based on existing cash levels and the additional cash sources noted
above, the Company assesses its liquidity as satisfactory.
Page 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Registrant is not currently involved in material legal proceedings
other than ordinary routine litigation incidental to its business.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Pursuant to an agreement with the SEC staff, included in this 10-Q
filing are unaudited financial statements of the Innisbrook Rental
Pool Lease Operation and the Tamarron Rental Pool Lease Operation
for the quarter and six months ended June 30, 2000 and 1999
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
Page 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GOLF HOST RESORTS, INC.
Date: 12/24/01 By: /s/ Merrick Kleeman
--------------------------- ---------------------------------
Merrick Kleeman
President
Date: 12/24/01 By: /s/ R. Keith Wilt
--------------------------- ---------------------------------
R. Keith Wilt
Vice President and Treasurer
Page 12
RENTAL POOL LEASE OPERATIONS
The following unaudited financial statements of the Innisbrook Rental Pool Lease
Operation and the Tamarron Rental Pool Lease Operation (the Rental Pools) are
for the quarters and six months ended June 30, 2000 and 1999.
The operations of the Rental Pools are tied closely to that of Golf Host
Resorts, Inc. (the Company), and provide for distribution of a percentage of the
Company's room revenues, as defined in the Rental Pool Master Lease Agreements,
to participating condominium owners (Participants).
The operations of the Rental Pools are more fully discussed in Form 10-K, for
the fiscal year ended December 31, 1999 (file No. 2-64309).
Page 13
INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS
JUNE 30, 2000 AND 1999
DISTRIBUTION FUND
2000 1999
---------- -----------
ASSETS
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION $1,972,547 $ 1,984,193
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 56,707 27,480
---------- -----------
$2,029,254 $ 2,011,673
========== ===========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION 1,619,223 1,577,250
DUE TO MAINTENANCE ESCROW FUND 410,031 434,423
PARTICIPANTS' FUND BALANCES -- --
---------- -----------
$2,029,254 $ 2,011,673
========== ===========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $3,752,755 $ 2,613,918
RECEIVABLE FROM DISTRIBUTION FUND 410,031 434,423
INVENTORY 3,210,484 80,382
INTEREST RECEIVABLE 36,600 42,486
---------- -----------
$7,409,870 $ 3,171,209
========== ===========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 96,993 $ 1,990
INTEREST PAYABLE TO DISTRIBUTION FUND 56,707 27,480
CARPET CARE RESERVE 6,408 (2,968)
PARTICIPANTS' FUND BALANCES 7,249,762 3,144,707
---------- -----------
$7,409,870 $ 3,171,209
========== ===========
These statements were prepared from the books and records of the Rental Pool
without audit and, in the opinion of management, include all adjustments which
are necessary for a fair presentation.
Page 14
INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
---------------------------- ------------------------------
2000 1999 2000 1999
----------- ----------- ------------ ------------
GROSS REVENUES $ 5,012,349 $ 5,194,758 $ 12,387,505 $ 13,904,392
----------- ----------- ------------ ------------
DEDUCTIONS:
Agents' commissions 255,530 358,596 620,918 797,036
Credit Card fees 40,071 42,323 88,434 105,494
Audit fees 3,251 3,250 6,501 6,500
----------- ----------- ------------ ------------
298,852 404,169 715,853 909,030
----------- ----------- ------------ ------------
ADJUSTED GROSS REVENUES 4,713,497 4,790,589 11,671,652 12,995,362
AMOUNT RETAINED BY LESSEE (2,348,432) (2,386,715) (5,816,593) (6,476,117)
----------- ----------- ------------ ------------
GROSS INCOME DISTRIBUTION 2,365,065 2,403,874 5,855,059 6,519,245
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Management fee (259,799) (268,808) (644,365) (722,754)
Marketing fee (141,709) (146,623) (351,472) (394,230)
Miscellaneous pooled expense (20,786) (22,323) (43,580) (68,060)
Corporate complimentary occupancy fees 13,444 8,328 23,855 16,645
Westin Associate room fees 21,301 13,196 39,675 26,027
Occupancy fees (460,399) (487,723) (958,410) (1,040,382)
Advisory Committee expenses (8,146) (7,166) (16,186) (13,582)
----------- ----------- ------------ ------------
NET INCOME DISTRIBUTION 1,508,971 1,492,755 3,904,576 4,322,909
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
Occupancy fees 460,399 487,723 958,410 1,040,382
Hospitality suite fees 135 135 135 324
Greens fees 2,322 2,620 5,700 6,666
Additional participation credit 720 960 1,470 1,920
----------- ----------- ------------ ------------
AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS $ 1,972,547 $ 1,984,193 $ 4,870,291 $ 5,372,201
=========== =========== ============ ============
Average daily distribution $ 32.50 $ 27.84 $ 40.95 $ 38.10
Average room rate $ 138.65 $ 132.89 $ 163.44 $ 165.24
Occupied room nights 36,150 39,090 75,791 84,148
Available room nights 60,701 71,262 118,929 141,018
Occupancy percentage 59.6% 54.9% 63.7% 59.7%
Average number of available units 667 783 653 779
These statements were prepared from the books and records of the Rental Pool
without audit and, in the opinion of management, include all adjustments which
are necessary for a fair presentation.
Page 15
INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
2000 1999 2000 1999
----------- ----------- ----------- -----------
BALANCE, beginning of period $ -- $ -- $ -- $ --
ADDITIONS:
Amount available for distribution 1,972,547 1,984,193 4,870,291 5,372,201
Interest received or receivable from
Maintenance Escrow Fund 56,707 27,480 112,692 52,799
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (410,031) (434,423) (854,302) (949,077)
Amounts accrued or paid to participants (1,619,223) (1,577,250) (4,128,681) (4,475,923)
----------- ----------- ----------- -----------
BALANCE, end of period $ -- $ -- $ -- $ --
=========== =========== =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 7,018,143 $ 2,742,143 $ 7,021,346 $ 2,505,110
ADDITIONS:
Amounts withheld from occupancy fees 410,031 434,423 854,302 927,423
Interest earned 56,707 27,480 112,692 52,799
Charges to participants to establish
or restore escrow balances 117,043 269,855 165,221 335,380
REDUCTIONS:
Maintenance charges (125,068) (224,352) (226,786) (342,696)
Carpet care reserve deposit (21,577) (19,509) (41,480) (30,563)
Interest accrued or paid to Distribution Fund (56,707) (27,480) (112,692) (52,799)
Refunds to participants as prescribed by
the master lease agreements (148,810) (57,853) (522,841) (249,947)
----------- ----------- ----------- -----------
BALANCE, end of period $ 7,249,762 $ 3,144,707 $ 7,249,762 $ 3,144,707
=========== =========== =========== ===========
These statements were prepared from the books and records of the Rental Pool
without audit and, in the opinion of management, include all adjustments which
are necessary for a fair presentation.
Page 16
TAMARRON RENTAL POOL LEASE OPERATION
BALANCE SHEETS
JUNE 30, 2000 AND 1999
DISTRIBUTION FUND
2000 1999
-------- --------
ASSETS
CASH $ 1,000 $ 1,000
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION 282,737 332,009
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 1,231 --
-------- --------
$284,968 $333,009
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $228,310 $274,347
DUE TO MAINTENANCE ESCROW FUND 56,658 58,662
-------- --------
$284,968 $333,009
======== ========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $121,822 $ 22,351
DUE FROM DISTRIBUTION FUND 56,659 58,662
INVENTORY:
Linen 22,390 45,818
Materials and supplies 5,614 14,672
DEPOSITS 17,941 --
-------- --------
$224,426 $141,503
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 7,579 $ 12,537
INTEREST PAYABLE TO DISTRIBUTION FUND 1,231 --
PARTICIPANTS' FUND BALANCES 215,616 128,966
-------- --------
$224,426 $141,503
======== ========
These statements were prepared from the books and records of the Rental Pool
without audit and, in the opinion of management, include all adjustments which
are necessary for a fair presentation.
Page 17
TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
------------------------ ----------------------------
2000 1999 2000 1999
--------- --------- ----------- -----------
GROSS REVENUES $ 709,134 $ 734,637 $ 1,139,021 $ 1,327,534
--------- --------- ----------- -----------
DEDUCTIONS:
Agents' commissions 12,279 8,832 40,498 45,157
Sales and marketing expenses 53,185 55,098 85,427 99,565
Audit fees 3,255 3,255 6,510 6,510
--------- --------- ----------- -----------
68,719 67,185 132,435 151,232
--------- --------- ----------- -----------
ADJUSTED GROSS REVENUES 640,415 667,452 1,006,586 1,176,302
MANAGEMENT FEE (355,791) (333,726) (538,876) (588,151)
--------- --------- ----------- -----------
GROSS INCOME DISTRIBUTION 284,624 333,726 467,710 588,151
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary occupancy fees 590 939 1,123 1,592
Occupancy fees (70,835) (69,784) (132,992) (143,228)
Designated items (20,239) (22,768) (30,540) (66,877)
Advisory Committee expenses (2,477) (2,656) (2,640) (5,938)
--------- --------- ----------- -----------
POOLED INCOME 191,663 239,457 302,661 373,700
ADJUSTMENTS TO POOLED INCOME:
Occupancy fees 70,835 69,784 132,992 143,228
--------- --------- ----------- -----------
NET INCOME DISTRIBUTION $ 262,498 $ 309,241 $ 435,653 $ 516,928
========= ========= =========== ===========
Average daily distribution $ 10.94 $ 12.18 $ 9.14 $ 10.33
Average room rate $ 99.12 $ 103.22 $ 84.32 $ 90.96
Room nights 7,154 7,117 13,508 14,594
Occupancy percentage 29.8% 28.0% 28.4% 29.2%
Average number of available units 267 276 262 276
These statements were prepared from the books and records of the Rental Pool
without audit and, in the opinion of management, include all adjustments which
are necessary for a fair presentation.
Page 18
TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
2000 1999 2000 1999
--------- --------- --------- ---------
BALANCE, beginning of period $ -- $ -- $ -- $ --
ADDITIONS:
Amounts available for distribution 262,498 309,241 435,653 516,928
Interest received or receivable from
Maintenance Escrow Fund 1,231 -- 1,374 --
REDUCTIONS:
Amounts withheld for Maintenance Escrow (35,419) (34,894) (66,499) (71,619)
Amounts accrued or paid to participants (228,310) (274,347) (370,528) (445,309)
--------- --------- --------- ---------
BALANCE, end of period $ -- $ -- $ -- $ --
========= ========= ========= =========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 189,482 $ 193,614 $ 188,338 $ 174,111
ADDITIONS:
Amounts withheld from occupancy fees 35,419 34,894 66,499 71,619
Interest earned 1,231 -- 1,374 --
Reimbursement of designated items 20,239 22,768 30,540 66,877
Charges to participants to establish
or restore escrow balances 94,378 3,906 101,858 16,734
REDUCTIONS:
Maintenance and inventory charges (94,867) (91,903) (124,049) (110,311)
Refurbishing charges -- (6,766) -- (9,740)
Interest accrued or paid to
Distribution Fund (1,231) -- (1,374) --
Designated items (20,239) (22,768) (30,540) (66,877)
Refunds to participants as prescribed
by Master Lease Agreement (8,796) (4,779) (17,030) (13,447)
--------- --------- --------- ---------
BALANCE, end of period $ 215,616 $ 128,966 $ 215,616 $ 128,966
========= ========= ========= =========
These statements were prepared from the books and records of the Rental Pool
without audit and, in the opinion of management, include all adjustments which
are necessary for a fair presentation.
Page 19