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EXHIBIT 1
INNISBROOK RENTAL POOL LEASE OPERATION
Memorandum of Procedure
under
Letter Agreement Life-Safety Equipment - March 23, 1993
for
Deductions from Rental Pool Distributions
The primary purpose of this memorandum is to set forth the methodology
by which reimbursements to Golf Host Resorts (GHR) for amounts expended for
life-safety improvements (fire sprinklers and electronic door locks) are to be
estimated and deducted from amounts otherwise available for distribution to
rental pool participants.
Not later than April 15 of any year in which there remains any
unreimbursed amount, GHR in cooperation with the Lessors' Advisory Committee
(LAC) shall estimate the total rental pool distribution for such year. This
estimate shall be updated on ninety-day intervals.
For the first quarter, if such estimate exceeds the threshold of
$7,375,000, then 50% of such excess is the Preliminary Reimbursement
Requirement (PRR) (This would be limited to the actual balance due). The PRR
shall be allocated to the first quarter based upon such quarter's ratio to the
total estimate, then allocated, based upon room revenues, to the respective
months.
For the balance of the year, the PRR allocation to the then current
quarter shall be likewise determined and, in addition, such quarter shall be
adjusted to include a prorata portion of the impact, if any, of the updated
estimate on prior quarters. Based upon annual audited results, any PRR
quarterly deduction variances for a given year shall be combined with the
respective quarterly PRR allocations in the immediately subsequent year.
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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 quarter and six months ended June 30, 1995.
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, 1994 (File No. 2-64309).
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INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS
JUNE 30, 1995 AND 1994
DISTRIBUTION FUND
1995 1994
---------- ----------
ASSETS
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION - FULLY SECURED $1,790,199 $1,651,755
INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND 14,308 6,728
---------- ----------
$1,804,507 $1,658,483
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $1,585,920 $1,492,001
DUE TO MAINTENANCE ESCROW FUND 182,587 166,482
DUE TO GOLF HOST RESORTS, INC. FOR
LIFE-SAFETY EQUIPMENT (1) 36,000 -
PARTICIPANTS' FUND BALANCES - -
---------- ----------
$1,804,507 $1,658,483
========== ==========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $1,350,282 $ 735,423
INVENTORIES 251 5,184
RECEIVABLE FROM DISTRIBUTION FUND 182,587 166,482
INTEREST RECEIVABLE 13,549 3,837
---------- ----------
$1,546,669 $ 910,926
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 115,136 $ 23,515
INTEREST PAYABLE TO DISTRIBUTION FUND 14,308 6,728
CARPET CARE RESERVE 55,603 80,608
PARTICIPANTS' FUND BALANCES 1,361,622 800,075
---------- ----------
$1,546,669 $ 910,926
========== ==========
(1) As discussed in Note 3 to the Financial Statements of the Innisbrook
Rental Pool Lease Operation for the year ended December 31, 1994 (contained in
Golf Host Resorts, Inc. Form 10-K filing for 1994), reimbursement of
life-safety equipment costs becomes due as certain distribution levels are
achieved. Such reimbursements amounted to $36,000 and $130,000 for the
quarters ended June 30, 1995 and March 31, 1995, respectively. As of June 30,
1995, $1,656,119 of principal (after application of the current quarter
reimbursement of $36,000) remained unpaid.
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.
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INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
DISTRIBUTION FUND
Current Quarter Year-to-Date
--------------------------- ---------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
GROSS REVENUES $ 3,544,678 $ 3,169,184 $ 9,767,386 $ 8,189,236
----------- ----------- ----------- -----------
REDUCTIONS:
Agents' commissions 140,450 102,140 241,478 270,428
Audit fees 3,000 2,850 5,850 5,700
----------- ----------- ----------- -----------
143,450 104,990 247,328 276,128
----------- ----------- ----------- -----------
ADJUSTED GROSS REVENUES 3,401,228 3,064,194 9,520,058 7,913,108
MANAGEMENT FEE (1,598,577) (1,440,171) (4,474,427) (3,719,161)
----------- ----------- ----------- -----------
GROSS INCOME DISTRIBUTION 1,802,651 1,624,023 5,045,631 4,193,947
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary
occupancy fees 1,766 1,589 3,210 3,542
Occupancy fees (365,165) (332,957) (813,416) (711,064)
Advisory Committee expenses (21,325) (19,754) (41,737) (42,887)
Life-safety reimbursement (36,000) - (166,000) -
----------- ----------- ----------- -----------
NET INCOME DISTRIBUTION 1,381,927 1,272,901 4,027,688 3,443,538
ADJUSTMENTS TO NET INCOME
DISTRIBUTION:
Occupancy fees 365,165 332,957 813,416 711,064
Hospitality suite fees 770 4,344 2,727 9,096
Greens fees 23,407 21,818 61,076 57,480
Additional participation credit 18,930 19,735 38,265 39,710
----------- ----------- ----------- -----------
AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS $ 1,790,199 $ 1,651,755 $ 4,943,172 $ 4,260,888
=========== =========== =========== ===========
Average daily distribution $ 21.63 $ 19.34 $ 31.19 $ 26.33
Average room rate $ 94.08 $ 90.77 $ 115.38 $ 109.92
Room nights 37,679 34,915 84,652 74,505
Occupancy percentage 45.5% 40.9% 53.4% 46.0%
Average number of available units 909 938 876 894
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.
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INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
--------------------------- ----------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
BALANCE, beginning of period $ - $ - $ - $ -
ADDITIONS:
Amounts available for distribution
before life-safety reimbursement 1,790,199 1,651,755 4,943,172 4,260,888
Interest received or receivable from
Maintenance Escrow Fund 14,308 6,728 24,771 11,863
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (182,587) (166,482) (406,717) (355,539)
Amounts due Golf Host Resorts, Inc. for
life-safety reimbursement (36,000) - (166,000) -
Amounts accrued or paid to participants (1,585,920) (1,492,001) (4,395,226) (3,917,212)
----------- ----------- ----------- -----------
BALANCE, end of period $ - $ - $ - $ -
=========== =========== =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 1,128,267 $ 905,831 $ 851,207 $ 733,465
ADDITIONS:
Amounts withheld from occupancy fees 182,587 166,482 406,717 355,539
Interest earned 14,308 6,728 24,771 11,863
Charges to participants to establish
or restore escrow balances 497,298 142,276 716,841 332,791
REDUCTIONS:
Maintenance charges (433,696) (382,959) (588,992) (565,257)
Carpet care reserve deposit (3,655) (13,318) (8,141) (28,442)
Interest accrued or paid to
Distribution Fund (14,308) (6,728) (24,771) (11,863)
Refunds to participants as prescribed
by Master Lease Agreement (9,179) (18,237) (16,010) (28,021)
----------- ----------- ----------- -----------
BALANCE, end of period $ 1,361,622 $ 800,075 $ 1,361,622 $ 800,075
=========== =========== =========== ===========
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.
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TAMARRON RENTAL POOL LEASE OPERATION
BALANCE SHEETS
JUNE 30, 1995 AND 1994
DISTRIBUTION FUND
1995 1994
========= ==========
ASSETS
CASH $ 1,000 $ 1,000
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION 374,840 413,130
INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND 521 1,468
---------- ----------
$ 376,361 $ 415,598
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $ 307,941 $ 355,411
DUE TO MAINTENANCE ESCROW FUND 68,420 60,187
PARTICIPANTS' FUND BALANCES - -
---------- ----------
$ 376,361 $ 415,598
========== ==========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $ 99,949 $ 138,600
DUE FROM DISTRIBUTION FUND 68,421 60,187
INVENTORY:
Linen 109,303 63,454
Materials and supplies 13,538 12,406
DEPOSITS 62,837
---------- ----------
$ 354,048 $ 274,647
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 2,014 $ 1,631
INTEREST PAYABLE TO DISTRIBUTION FUND 521 1,468
PARTICIPANTS' FUND BALANCES 351,513 271,548
---------- ----------
$ 354,048 $ 274,647
========== ==========
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.
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TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
--------------------------- --------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
GROSS REVENUES $ 859,343 $ 958,430 $ 1,474,261 $ 1,470,575
REDUCTIONS:
Advertising and promotional expenses 31,463 33,876 48,721 77,403
Agents' commissions 77,341 98,541 132,684 115,442
Audit fees 2,529 2,451 4,980 4,901
----------- ----------- ----------- -----------
111,333 134,868 186,385 197,746
----------- ----------- ----------- -----------
ADJUSTED GROSS REVENUES 748,010 823,562 1,287,876 1,272,829
MANAGEMENT FEE (374,005) (411,781) (643,938) (636,415)
----------- ----------- ----------- -----------
GROSS INCOME DISTRIBUTION 374,005 411,781 642,938 636,414
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary
occupancy fees 730 676 1,464 1,615
Occupancy fees (75,742) (92,552) (149,853) (153,509)
Designated items (25,381) (11,382) (34,978) (25,750)
Advisory Committee expenses (4,168) (1,529) (5,692) (2,599)
----------- ----------- ----------- -----------
POOLED INCOME 269,444 306,994 454,879 456,171
ADJUSTMENTS TO POOLED INCOME:
Hospitality suite fees 105 673 105 673
Occupancy fees 75,742 92,552 149,853 153,509
----------- ----------- ----------- -----------
NET INCOME DISTRIBUTION $ 345,291 $ 400,219 $ 604,837 $ 610,353
=========== =========== =========== ===========
Average daily distribution $ 13.42 $ 15.06 $ 12.02 $ 11.63
Average room rate $ 91.54 $ 83.66 $ 79.29 $ 76.25
Room nights 9,388 11,456 18,594 19,285
Occupancy percentage 36.5% 43.1% 37.0% 36.7%
Average number of available units 283 292 278 290
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.
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TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE
--------------------------- --------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
BALANCE, beginning of period $ - $ - $ - $ -
ADDITIONS:
Amounts available for distribution 345,291 400,219 604,836 610,353
Interest received or receivable from
Maintenance Escrow Fund 521 1,468 2,830 2,626
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (37,871) (46,277) (74,927) (76,756)
Amounts accrued or paid to participants (307,941) (355,410) (532,739) (536,223)
----------- ----------- ----------- -----------
BALANCE, end of period $ - $ - $ - $ -
=========== =========== =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 428,979 $ 267,265 $ 397,655 $ 258,562
ADDITIONS:
Amounts withheld from occupancy fees 37,871 46,277 74,927 76,756
Interest earned 521 1,468 2,830 2,626
Reimbursement of designated items 25,381 11,382 34,978 25,750
Charges to participants to establish
or restore escrow balances 30,085 9,377 77,066 15,517
REDUCTIONS:
Maintenance and inventory charges (70,620) (46,395) (100,657) (69,090)
Refurbishing charges (73,902) (261) (82,778) (261)
Interest accrued or paid to
Distribution Fund (521) (1,468) (2,830) (2,626)
Designated items (25,381) (11,382) (34,978) (25,750)
Refunds to participants as prescribed
by Master Lease Agreement (900) (4,715) (14,700) (9,936)
----------- ----------- ----------- -----------
BALANCE, end of period $ 351,513 $ 271,548 $ 351,513 $ 271,548
=========== =========== =========== ===========
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.
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