FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
For Quarter Ended September 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 18
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
BALANCE SHEETS
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
ASSETS
(SUBSTANTIALLY ALL PLEDGED)
SEPTEMBER 30, DECEMBER 31,
2000 1999
----------- -----------
(unaudited)
CURRENT ASSETS:
Cash $ 236,639 $ 131,440
Restricted cash 1,018,202 318,860
Accounts receivable, net 4,930,775 4,499,990
Other receivables 744,075 907,568
Inventories and supplies 1,472,171 1,755,452
Prepaid expenses and other assets 695,252 132,116
----------- -----------
9,097,114 7,745,426
Assets held for sale 2,435,000 8,634,596
----------- -----------
Total current assets 17,731,710 16,380,022
INTANGIBLES, net 25,182,681 26,994,645
PROPERTY AND EQUIPMENT, net 41,839,422 43,205,256
OTHER ASSETS 507,236 315,851
----------- -----------
$79,061,453 $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
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
LIABILITIES AND SHAREHOLDER'S DEFICIT
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- -------------
(unaudited)
CURRENT LIABILITIES:
Accounts payable $ 9,283,648 $ 5,039,225
Line of credit 1,010,776 2,109,316
Accrued payroll costs 1,359,698 899,750
Accrued interest 723,500 691,265
Accrued expenses 2,622,211 3,214,321
Deposits and prepaid fees 2,533,348 2,841,038
Current notes payable 901,379 795,205
Due to related parties 2,810,756 1,994,645
------------- -------------
Total current liabilities 21,245,316 17,584,765
NOTES PAYABLE 82,258,808 83,829,220
OTHER LONG-TERM LIABILITIES 5,646,206 5,168,028
DEFERRED INCOME TAXES 1,770,467 1,770,467
------------- -------------
Total liabilities 110,920,797 108,352,480
------------- -------------
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 (22,884,344) (12,481,706)
------------- -------------
Total shareholder's deficit (31,859,344) (21,456,706)
------------- -------------
Total liabilities and shareholder's deficit $ 79,061,453 $ 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 NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
QUARTERS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
(unaudited) (unaudited)
REVENUES:
Resort facilities $ 2,266,074 $ 2,393,168 $ 14,866,135 $ 16,810,156
Food and beverage 2,338,827 2,692,332 13,450,230 14,103,026
Golf 1,992,873 1,855,983 11,365,151 11,942,740
Other 876,949 791,033 4,178,953 3,670,541
------------ ------------ ------------ ------------
7,474,723 7,732,516 43,860,469 46,526,463
------------ ------------ ------------ ------------
COST AND OPERATION EXPENSES:
Resort facilities 2,017,739 2,363,764 10,547,843 11,525,521
Food and beverage 1,785,619 2,127,679 7,491,423 8,482,924
Golf 1,505,047 1,350,653 5,545,616 5,348,060
Other 2,603,317 2,582,965 8,429,391 8,384,189
General and administrative 1,066,966 1,217,098 4,489,754 4,946,193
Depreciation and amortization 1,075,772 788,812 3,027,315 4,365,114
------------ ------------ ------------ ------------
10,054,460 10,430,971 39,531,342 43,052,001
------------ ------------ ------------ ------------
INCOME BEFORE INCOME/(LOSS) ON
ASSETS HELD FOR SALE (2,579,737) (2,698,455) 4,329,127 3,474,462
INCOME/(LOSS) ON ASSETS HELD FOR SALE
AND LEASED ASSET 253,432 504,765 (1,004,020) (172,870)
------------ ------------ ------------ ------------
OPERATING INCOME (2,326,305) (2,193,690) 3,325,107 3,301,592
INTEREST, NET 2,476,561 2,216,359 7,335,918 6,975,853
------------ ------------ ------------ ------------
LOSS BEFORE DIVIDEND
REQUIREMENTS ON PREFERRED STOCK (4,802,866) (4,410,049) (4,010,811) (3,674,261)
DIVIDEND REQUIREMENTS ON
PREFERRED STOCK 64,077 64,077 192,231 192,231
------------ ------------ ------------ ------------
NET LOSS AVAILABLE
TO COMMON SHAREHOLDERS $ (4,866,943) $ (4,474,126) $ (4,203,042) $ (3,866,492)
============ ============ ============ ============
EARNINGS PER COMMON SHARE $ (973.38) $ (894.83) $ (840.60) $ (773.30)
============ ============ ============ ============
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) EQUITY
FOR THE TWENTY ONE MONTHS ENDED SEPTEMBER 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 loss available to
common shareholder -- -- -- -- -- (4,203,042) (4,203,042)
Distribution to shareholder -- -- -- -- -- (6,199,596) (6,199,596)
----- ------ --------- ---------- ------------ ------------ ------------
Balance, September 30, 2000 5,000 $5,000 4,577,000 $4,577,000 $(13,557,000) $(22,884,344) $(31,859,344)
===== ====== ========= ========== ============ ============ ============
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 NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
2000 1999
----------- -----------
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income before dividend requirements
on preferred stock $(4,010,811) $(3,971,136)
Noncash items included in income:
Depreciation and amortization 3,027,315 2,984,409
Write-off of startup costs -- 1,623,446
Changes in operating working capital 3,868,846 1,080,186
----------- -----------
Cash provided by operations 2,885,350 1,716,905
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Decreases) in other assets (191,385) (63,249)
Purchases of property and equipment (504,166) (2,498,195)
Net recovery of cost of property and
equipment sold or retired -- 7,229
Decrease in assets held for sale -- 3,240,000
----------- -----------
Cash provided by (used in) investing activities (695,551) 685,785
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase/(decrease) in notes payable 106,174 (284,157)
Additional borrowings on existing debt -- 303,416
Repayment of existing debt (1,570,412) --
Repayment of line of credit (1,098,540) (3,283,392)
Increases in other long-term liabilities 478,178 695,344
----------- -----------
Cash provided by (used in) financing activities (2,084,600) (2,568,789)
----------- -----------
NET INCREASE (DECREASE) IN CASH 105,199 (166,099)
CASH, BEGINNING OF PERIOD 131,440 1,396,404
----------- -----------
CASH, END OF PERIOD $ 236,639 $ 1,230,305
=========== ===========
NONCASH FINANCING AND INVESTING ACTIVITIES:
The Company satisfied its preferred
stock dividend liability to GHI
through the intercompany account $ 192,231 $ 192,231
=========== ===========
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
SEPTEMBER 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 1999 financial
statements to conform to the December 1999 presentation.
(2) LONG-TERM OBLIGATIONS
Long-term obligations consist of the following:
SEPTEMBER 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 1,017,187 1,231,661
------------ ------------
83,160,187 84,624,425
Less current maturities (901,379) (795,205)
------------ ------------
$ 82,258,808 $ 83,829,220
============ ============
Page 7
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 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
through December 31, 2000, the Net Income (Loss) is as follows:
FOR THE 111 DAYS
ENDED
SEPTEMBER 30, 2000
REVENUE:
HOTEL 1,841,337
FOOD & BEVERAGE 1,005,602
GOLF 986,329
OTHER 645,577
REAL ESTATE --
---------
4,478,845
---------
COSTS & OPERATING EXP:
HOTEL 578,751
FOOD & BEVERAGE 763,279
GOLF 384,262
OTHER 1,316,383
GENERAL & ADMINISTRATIVE 1,291,287
---------
4,333,962
---------
INTEREST EXPENSE 15,817
---------
NET INCOME/(LOSS) 129,067
=========
Page 8
GOLF HOST RESORTS, INC.
Management's Discussion and analysis
of Financial condition and Results of Operations
RESULTS OF OPERATIONS
For purposes of discussing comparative results for 2000 and 1999, the results
of operations for Tamarron, which are included in income (loss) on assets held
for sale, and also utilized.
Guest occupancy for the quarter declined by 719 room nights or 2% from the
prior year. On a divisional basis, Innisbrook was down 609 room nights or 2.7%,
while Tamarron also experienced a decline of 110 room nights or .9%. Both
properties experienced modest decreases in their conference business during the
period.
Gross revenues from resort operations on a per room night basis declined 1.1%,
or from $338.13 to $334.26 for the period. This drop reflects the 4.1% decrease
in guest spending levels at Tamarron offset by the modest .6% increase in
spending per room night at Innisbrook. On a divisional basis, Innisbrook had a
net decrease in revenue of 2.1%, or approximately $163,000. Tamarron also
declined in revenue by 5.0%, or approximately $213,000. The combined average
daily room rate also dropped by $4.80 per room night, or 4%. This was driven
primarily by Tamarron's 6% reduction, coupled with Innisbrook's reduced
spending of 2.7%. The number of meals served decreased 1.9%, or by 3,324. This
reduced number equated to a combined revenue reduction of approximately
$741,000 in Food & Beverage revenue. Innisbrook and Tamarron contributed
$484,000 and $257,000 to this reduction, respectively. Golf revenues increased
a combined 3.2%, or $90,500. On a divisional basis, Innisbrook's revenues were
up by 7.4%. This increase is attributable to increased rounds played, or 11.7%
offset by decreased spending per round of 3.9%. Tamarron's rounds of golf
played increased by .9%, but had an offsetting decrease in revenue per round of
5.7%. Total golf rounds played in 2000 were 28,713 and 10,075 for Innisbrook
and Tamarron, respectively. During the year 2000, no real estate sales were
closed. Real estate sales for 1999 and 2000, respectively, are reflected in
gain/loss on assets held for sale in the statements of income.
During June of 2000, The Sheraton Tamarron Resort was transferred to an
affiliated company. Golf Host Resorts and the buyer entered into a lease
agreement wherein the resort is leased back and utilized as an operating asset
consistent with historical practices. For financial statement reporting
purposes, The Tamarron Resort's operational results continue to be presented in
the statements of income as part of gain/(loss) on assets held for sale.
Costs and operating expenses as a percentage of revenue decreased .4%. At
Innisbrook, operating expenses before General & Administrative, depreciation
and amortization expense, decreased 3.9% to 106% of gross revenue. This net
increase recognizes a reduction in gross revenues as compared to reactively
static fixed expenses.
FINANCIAL CONDITION AND LIQUIDITY
The Company's working capital position (exclusive of Assets Held for Sale) was
deficit of $12,148,000 at September 30, 2000, as compared to a deficit of
$9,839,000 at December 31, 1999. The Company typically experiences seasonal
fluctuations in its net working capital position. These fluctuations are
managed through the utilization of revolving credit line, advances from Westin
Hotel Corporation under the annual guarantee agreement and cash infusion by
ownership, when necessary. Management believes that its current liquidity
situation, coupled with the cash resources noted, is manageable and
satisfactory.
Page 9
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 nine months ended September 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 10
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 11
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 nine months ended September 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 12
INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS
SEPTEMBER 30, 2000 AND 1999
DISTRIBUTION FUND
2000 1999
---------- -----------
ASSETS
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION $ 877,829 $ 921,741
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 49,269 54,339
---------- -----------
$ 927,098 $ 976,080
========== ===========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION 670,139 716,279
DUE TO MAINTENANCE ESCROW FUND 256,959 259,801
PARTICIPANTS' FUND BALANCES -- --
---------- -----------
$ 927,098 $ 976,080
========== ===========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $3,393,295 $ 5,925,231
RECEIVABLE FROM DISTRIBUTION FUND 256,959 259,801
INVENTORY 3,726,753 821,586
INTEREST RECEIVABLE 27,916 76,582
---------- -----------
$7,404,923 $ 7,083,200
========== ===========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 46,872 $ 128,881
INTEREST PAYABLE TO DISTRIBUTION FUND 49,269 54,339
CARPET CARE RESERVE 2,254 (10,817)
PARTICIPANTS' FUND BALANCES 7,306,528 6,910,797
---------- -----------
$7,404,923 $ 7,083,200
========== ===========
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 13
INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
----------------------------- -------------------------------
2000 1999 2000 1999
----------- ----------- ------------ ------------
GROSS REVENUES $ 2,215,469 $ 2,358,631 $ 14,602,974 $ 16,263,023
----------- ----------- ------------ ------------
DEDUCTIONS:
Agents' commissions 130,790 132,772 751,708 929,808
Credit Card fees 17,382 21,321 105,816 126,815
Audit fees 3,250 3,250 9,751 9,750
----------- ----------- ------------ ------------
151,422 157,343 867,275 1,066,373
----------- ----------- ------------ ------------
ADJUSTED GROSS REVENUES 2,064,047 2,201,288 13,735,699 15,196,650
AMOUNT RETAINED BY LESSEE (1,028,043) (1,096,349) (6,844,636) (7,572,466)
----------- ----------- ------------ ------------
GROSS INCOME DISTRIBUTION 1,036,004 1,104,939 6,891,063 7,624,184
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Management fee (114,082) (121,368) (758,447) (844,122)
Marketing fee (62,226) (66,200) (413,698) (460,430)
Miscellaneous pooled expense (12,721) (14,164) (56,301) (82,224)
Corporate complimentary occupancy fees 13,820 8,320 37,675 24,965
Westin Associate room fees 23,891 16,089 63,566 42,116
Occupancy fees (289,366) (292,187) (1,247,776) (1,332,569)
Advisory Committee expenses (8,759) (7,861) (24,945) (21,443)
----------- ----------- ------------ ------------
NET INCOME DISTRIBUTION 586,561 627,568 4,491,137 4,950,477
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
Occupancy fees 289,366 292,187 1,247,776 1,332,569
Hospitality suite fees -- -- 135 324
Greens fees 1,181 1,086 6,881 7,752
Additional participation credit 720 900 2,190 2,820
----------- ----------- ------------ ------------
AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS $ 877,828 $ 921,741 $ 5,748,119 $ 6,293,942
=========== =========== ============ ============
Average daily distribution $ 14.11 $ 12.88 $ 31.73 $ 26.61
Average room rate $ 100.14 $ 103.76 $ 149.14 $ 152.16
Occupied room nights 22,123 22,732 97,914 106,880
Available room nights 62,234 71,557 181,163 212,575
Occupancy percentage 35.5% 31.8% 54.0% 50.3%
Average number of available units 676 778 664 779
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 14
INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
2000 1999 2000 1999
----------- ----------- ----------- -----------
BALANCE, beginning of period $ -- $ -- $ -- $ --
ADDITIONS:
Amount available for distribution 877,829 921,741 5,748,120 6,293,942
Interest received or receivable from
Maintenance Escrow Fund 49,269 54,339 161,961 107,138
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (256,959) (259,801) (1,111,261) (1,208,878)
Amounts accrued or paid to participants (670,139) (716,279) (4,798,820) (5,192,202)
----------- ----------- ----------- -----------
BALANCE, end of period $ -- $ -- $ -- $ --
=========== =========== =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 7,249,762 $ 3,144,707 $ 7,021,346 $ 2,505,110
ADDITIONS:
Amounts withheld from occupancy fees 256,959 259,801 1,111,261 1,187,224
Interest earned 49,269 54,339 161,961 107,138
Charges to participants to establish
or restore escrow balances 159,191 4,362,515 324,412 4,697,895
REDUCTIONS:
Maintenance charges (188,038) (842,121) (414,824) (1,184,817)
Carpet care reserve deposit (13,312) (11,687) (54,792) (42,250)
Interest accrued or paid to Distribution Fund (49,269) (54,339) (161,961) (107,138)
Refunds to participants as prescribed by
the master lease agreements (158,034) (2,418) (680,875) (252,365)
----------- ----------- ----------- -----------
BALANCE, end of period $ 7,306,528 $ 6,910,797 $ 7,306,528 $ 6,910,797
=========== =========== =========== ===========
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
TAMARRON RENTAL POOL LEASE OPERATION
BALANCE SHEETS
SEPTEMBER 30, 2000 AND 1999
DISTRIBUTION FUND
2000 1999
-------- --------
ASSETS
CASH $ 1,000 $ 1,000
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION 686,303 788,850
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 1,442 --
-------- --------
$688,745 $789,850
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $594,153 $706,425
DUE TO MAINTENANCE ESCROW FUND 74,592 83,425
-------- --------
$668,745 $789,850
======== ========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $144,264 $ 80,530
DUE FROM DISTRIBUTION FUND 74,592 83,425
INVENTORY:
Linen 19,693 34,116
Materials and supplies 6,532 15,860
DEPOSITS 7,187 --
-------- --------
$252,268 $213,931
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 2,919 $ 4,666
INTEREST PAYABLE TO DISTRIBUTION FUND 1,442 --
PARTICIPANTS' FUND BALANCES 247,907 209,265
-------- --------
$252,268 $213,931
======== ========
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
STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
----------------------------- -----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
GROSS REVENUES $ 1,556,860 $ 1,728,323 $ 2,695,881 $ 3,055,857
----------- ----------- ----------- -----------
DEDUCTIONS:
Agents' commissions 33,665 18,248 74,163 63,405
Sales and marketing expenses 116,764 129,624 202,191 229,189
Audit fees 3,255 3,255 9,765 9,765
----------- ----------- ----------- -----------
153,684 151,127 286,119 302,359
----------- ----------- ----------- -----------
ADJUSTED GROSS REVENUES 1,403,176 1,577,196 2,409,762 2,753,498
MANAGEMENT FEE (737,172) (788,598) (1,276,048) (1,376,749)
----------- ----------- ----------- -----------
GROSS INCOME DISTRIBUTION 666,004 788,598 1,133,714 1,376,749
ADJUSTMENTS TO GROSS INCOME DISTRIBUTION:
Corporate complimentary occupancy fees 1,673 252 2,795 1,844
Occupancy fees (128,717) (129,582) (261,708) (272,810)
Designated items (9,232) (17,632) (39,772) (84,509)
Advisory Committee expenses (1,374) -- (4,014) (5,938)
----------- ----------- ----------- -----------
POOLED INCOME 528,354 641,636 831,015 1,015,336
ADJUSTMENTS TO POOLED INCOME:
Occupancy fees 128,717 129,582 261,708 272,810
----------- ----------- ----------- -----------
NET INCOME DISTRIBUTION $ 657,071 $ 771,218 $ 1,092,723 $ 1,288,146
=========== =========== =========== ===========
Average daily distribution $ 30.94 $ 32.45 $ 15.86 $ 17.46
Average room rate $ 120.38 $ 132.90 $ 101.58 $ 110.73
Room nights 12,933 13,005 26,441 27,599
Occupancy percentage 60.9% 54.7% 38.4% 37.4%
Average number of available units 230 258 251 270
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 CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
2000 1999 2000 1999
--------- --------- ----------- -----------
BALANCE, beginning of period $ -- $ -- $ -- $ --
ADDITIONS:
Amounts available for distribution 657,071 771,218 1,092,724 1,288,146
Interest received or receivable from
Maintenance Escrow Fund 1,442 -- 2,816 --
REDUCTIONS:
Amounts withheld for Maintenance Escrow (64,360) (64,793) (130,859) (136,412)
Amounts accrued or paid to participants (594,153) (706,425) (964,681) (1,151,734)
--------- --------- ----------- -----------
BALANCE, end of period $ -- $ -- $ -- $ --
========= ========= =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 215,616 $ 128,966 $ 188,338 $ 174,111
ADDITIONS:
Amounts withheld from occupancy fees 64,360 64,793 130,859 136,412
Interest earned 1,442 -- 2,816 --
Reimbursement of designated items 9,232 17,632 39,772 84,510
Charges to participants to establish
or restore escrow balances 99,699 36,758 201,557 53,492
REDUCTIONS:
Maintenance and inventory charges (127,923) (19,065) (251,972) (129,376)
Refurbishing charges -- 779 -- (8,961)
Interest accrued or paid to
Distribution Fund (1,442) -- (2,816) --
Designated items (9,232) (17,632) (39,772) (84,510)
Refunds to participants as prescribed
by Master Lease Agreement (3,845) (2,966) (20,875) (16,413)
--------- --------- ----------- -----------
BALANCE, end of period $ 247,907 $ 209,265 $ 247,907 $ 209,265
========= ========= =========== ===========
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