1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Quarterly Report Pursuant to Section 13 or 15 (d)
of The Securities Exchange Act of 1934
---------------
For Quarter Ended September 30, 1998
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) 942-5518
----------------------------------------------------
(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
2
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
BALANCE SHEETS
ASSETS
(Substantially all pledged)
SEPTEMBER 30, | DECEMBER 31,
1998 | 1997
------------- | ------------
(unaudited) |
|
CURRENT ASSETS: |
Cash $ 44,996 | $ 56,090
Restricted cash 1,473,300 | 2,238,767
Accounts receivable, net 4,704,102 | 5,472,228
Inventories and supplies 1,667,588 | 1,899,598
Prepaid expenses and other assets 1,183,426 | 684,497
Intercompany receivables 2,161,297 | 2,857,240
----------- | -----------
11,234,709 | 13,208,420
|
Assets held for sale 10,138,559 | 9,038,309
----------- | -----------
|
Total current assets 21,373,268 | 22,246,729
|
INTANGIBLES, net 31,557,941 | 32,879,352
|
PROPERTY AND EQUIPMENT, at cost, less |
accumulated depreciation and amortization 40,278,778 | 35,725,251
|
OTHER ASSETS 2,165,889 | 1,996,301
----------- | -----------
|
$95,375,876 | $92,847,633
=========== | ===========
The accompanying notes are an integral part of these financial statements.
Page 2
3
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' DEFICIT
SEPTEMBER 30, | DECEMBER 31,
1998 | 1997
------------- | ------------
(unaudited) |
|
CURRENT LIABILITIES: |
Accounts payable $ 9,033,614 | $ 7,854,720
Accrued expenses 5,386,443 | 5,552,488
Deposits and prepaid fees 2,618,200 | 2,907,472
------------ | ------------
|
Total current liabilities 17,038,257 | 16,314,680
------------ | ------------
|
LONG-TERM OBLIGATIONS 82,386,501 | 77,999,163
DEFERRED INCOME TAXES - | 13,134,558
------------ | ------------
|
Total liabilities 99,424,758 | 107,448,401
------------ | ------------
|
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)
Retained (deficit) 4,926,118 | (5,625,768)
------------ | ------------
|
Total shareholder's (deficit) (4,048,882) | (14,600,768)
------------ | ------------
|
Total liabilities and shareholder's |
(deficit) $ 95,375,876 | $ 92,847,633
============ | ============
The accompanying notes are an integral part of these financial statements.
Page 3
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GOLF HOST RESORTS, INC.
STATEMENTS OF INCOME
(a wholly owned subsidiary of Golf Hosts, Inc.)
(unaudited)
Quarter Ended September 30, || Nine Months | 99 Day 174 Day
---------------------------- || Ended | Period Ended Period Ended
|| September 30, | September 30, June 23,
1998 1997 || 1998 | 1997 1997
----------- ----------- || ------------ | ----------- ------------
| || |
REVENUES: | || |
Resort facilities $ 2,402,941 | $ 1,738,987 || $14,809,288 | $ 2,085,270 $10,775,626
Food and beverage 1,944,683 | 1,421,176 || 11,309,350 | 1,696,866 8,106,385
Golf 1,876,610 | 1,877,970 || 12,115,312 | 2,114,198 9,347,282
Other 1,142,866 | 667,050 || 5,105,779 | 789,783 3,340,715
Real estate activities - | - || - | - 180,000
----------- | ----------- || ----------- | ----------- -----------
7,367,100 | 5,705,183 || 43,339,729 | 6,686,117 31,750,008
----------- | ----------- || ----------- | ----------- -----------
| || |
COSTS AND OPERATING EXPENSES: | || |
Resort facilities 2,143,596 | 1,949,972 || 10,962,581 | 2,258,224 9,083,194
Food and beverage 1,469,145 | 1,307,088 || 7,554,440 | 1,510,303 5,591,373
Golf 1,537,987 | 1,221,933 || 5,379,059 | 1,334,547 3,247,628
Other 3,478,545 | 2,866,716 || 10,923,568 | 3,214,518 7,672,813
General and administrative 1,422,971 | 828,991 || 3,792,029 | 922,486 2,374,385
Real estate activities - | - || - | - 90,618
----------- | ----------- || ----------- | ----------- -----------
10,052,244 | 8,174,700 || 38,611,677 | 9,240,078 28,060,011
----------- | ----------- || ----------- | ----------- -----------
| || |
OPERATING (LOSS) INCOME (2,685,144) | (2,469,517) || 4,728,052 | (2,553,961) 3,689,997
| || |
INTEREST, NET 2,309,290 | 2,055,237 || 7,028,357 | 2,215,237 945,481
----------- | ----------- || ----------- | ----------- -----------
| || |
(LOSS) INCOME BEFORE INCOME TAXES (4,994,434) | (4,524,754) || (2,300,305) | (4,769,198) 2,744,516
| || |
PARENT INCOME TAX CHARGE (BENEFIT) - | (1,743,614) || 381,614 | (1,835,281) 967,800
----------- | ----------- || ----------- | ----------- ------------
| || |
(LOSS) INCOME BEFORE EXTRAORDINARY | || |
ITEMS (4,994,434) | (2,781,140) || (2,681,919) | (2,933,917) 1,776,716
| || |
GAIN FROM CHANGE IN TAX STATUS - | - || 13,426,039 | - -
| || |
LOSS ON EARLY EXTINGUISHMENT OF | || |
LONG TERM DEBT (NET OF TAXES | || |
OF $155,400) - | - || - | - (288,600)
----------- | ----------- || ----------- | ----------- ------------
| || |
NET (LOSS) INCOME (4,994,434) | (2,781,140) || 10,744,120 | (2,933,917) 1,488,116
| || |
DIVIDEND REQUIREMENTS ON | || |
PREFERRED STOCK 64,078 | 64,078 || 192,234 | 69,007 123,227
----------- | ----------- || ----------- | ----------- ------------
| || |
NET CHANGE IN EARNINGS (DEFICIT) $(5,058,512) | $(2,845,218) || $10,551,886 | $(3,002,924) $ 1,364,889
=========== =========== || =========== | =========== ============
| || |
(LOSS) EARNINGS PER COMMON SHARE $ (1,011.70) | $ (569.04) || $ 2,110.38 | $ (600.58) $ 272.98
=========== | =========== || =========== | =========== ============
The accompanying notes are an integral part of these financial statements.
Page 4
5
GOLF HOST RESORTS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
(UNAUDITED)
$1 Par Value 5.6% Cumulative
Common Stock Preferred Stock Retained Total
---------------- ----------------------- Paid-In (Deficit) Shareholder's
Shares Amount Shares Amount Capital Earnings (Deficit) Equity
------ ------ -------- -------- ------- --------- ----------------
Balance, December 31, 1996 5,000 $5,000 4,577,000 $ 4,577,000 $ 2,329,447 $ 8,157,197 $ 15,068,644
Notes receivable
distribution - - - - - (3,941,666) (3,941,666)
Net change in earnings - - - - - 1,364,889 1,364,889
----- ------ --------- ----------- ------------ ----------- ------------
Balance, June 23, 1997 5,000 $5,000 4,577,000 $ 4,577,000 $ 2,329,447 $ 5,580,420 $ 12,491,867
===== ====== ========= =========== ============ =========== ============
- -----------------------------------------------------------------------------------------------------------------------------
Balance, June 24, 1997 5,000 $5,000 4,577,000 $ 4,577,000 $ (4,582,000) $ - $ -
Distribution to shareholder - - - - (8,975,000) - (8,975,000)
Net change in deficit - - - - - (5,625,768) (5,625,768)
----- ------ --------- ----------- ------------ ----------- ------------
Balance, December 31, 1997 5,000 5,000 4,577,000 4,577,000 (13,557,000) $(5,625,768) $(14,600,768)
Net change in earnings - - - - - 10,551,886 10,551,886
----- ------ --------- ----------- ------------ ----------- ------------
Balance, September 30, 1998 5,000 $5,000 4,577,000 $ 4,577,000 $(13,557,000) $ 4,926,118 $ (4,048,882)
===== ====== ========= =========== ============ =========== ============
Page 5
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GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
STATEMENTS OF CASH FLOWS
Nine months 99 day | 174 day
ended period ended | period ended
September 30, 1998 September 30, 1997 | June 23, 1997
------------------ ------------------ |------------------
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
Net (loss) income $ 10,744,118 $(2,933,917) | $ 1,488,116
Noncash items included in income: |
Provision for bad debts - - | 89,609
Depreciation and amortization 3,003,035 852,993 | 1,282,510
Decrease in deferred tax (13,134,558) (1,660,807) | -
Changes in operating working capital 2,493,962 2,039,253 | (2,059,667)
------------ ----------- | -----------
Cash provided by operations 3,106,557 (1,702,478) | 800,568
------------ ----------- | -----------
CASH FLOWS FROM INVESTING ACTIVITIES: |
Decreases (increases) in other assets (356,231) 6,932 | 62,302
Purchases of property and equipment (6,037,586) (1,732,812) | (1,517,431)
Decrease (increase) in assets held for sale (1,100,250) 299,754 | -
Net recovery of cost of property and |
equipment sold or retired (10,921) - | -
Additions to notes receivable - - | -
Reductions in notes receivable - - | 1,185,120
------------ ----------- | -----------
Cash provided by (used for) investing (7,504,988) (1,426,126) | (270,009)
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
Net change in notes payable - - | -
Increases in long-term obligations - - | -
Decreases in long-term obligations (355,987) - | -
Increases in long-term intercompany - - | -
Increases in long-term contingency - - | -
Additional borrowings 4,743,324 1,073,748 | 1,514,587
Proceeds from sale of company - - | 63,524,946
Repayment of existing debt - - | (25,037,262)
Proceeds to selling shareholders - - | (38,046,827)
------------ ----------- | -----------
Cash provided (used) for financing 4,387,337 1,073,748 | 1,955,444
------------ ----------- | -----------
NET (DECREASE) INCREASE IN CASH (11,094) (2,054,856) | 2,486,003
CASH, BEGINNING OF PERIOD 56,090 2,974,688 | 488,685
------------ ----------- | -----------
CASH, END OF PERIOD $ 44,996 $ 919,832 | $ 2,974,688
============ =========== | ===========
|
NONCASH FINANCING AND INVESTING ACTIVITIES: |
|
Preferred stock dividend liability of Golf Hosts, Inc. |
satisfied through the intercompany account $ 192,234 $ 69,007 | $ 123,227
|
The Company transferred its investment in |
GTA to GHI $ - $ 8,975,000 | $ -
|
OTHER INFORMATION |
|
Interest paid in cash $ 2,048,798 $ 1,118,595 | $ 965,117
|
Income taxes paid in cash $ - $ - | $ 118,090
The accompanying notes are an integral part of these financial statements.
Page 6
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GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(1) ORGANIZATION, BUSINESS, LIQUIDITY AND ACCOUNTING POLICIES
During the quarter, there was no significant change from the 10-K filing
on December 31, 1997.
Financial Statement Presentation
Certain reclassifications have been made to the September 1997 financial
statements to conform to the December 1997 presentation.
(2) LONG-TERM OBLIGATIONS
Long-term obligations consist of the following:
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
Participating mortgage note at varying pay
rates maturing in 2027 $69,725,000 $69,975,000
$9,000,000 participating mortgage note
credit facility 7,767,487 3,024,163
Mortgage note at 6.34%, maturing in 2002 4,894,014 5,000,000
----------- -----------
$82,386,501 $77,999,163
=========== ===========
(3) INCOME TAXES
On April 17, 1998, the Company filed an election with the Internal Revenue
Service to change its tax status to a qualified subchapter S subsidiary
effective February 3, 1998. As a result of this election all deferred tax
liability has been removed from the balance sheet and reflected as an
extraordinary item in the statements of income.
Page 7
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GOLF HOST RESORTS, INC.
(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 1998 and 1997,
the results of operations of Tamarron, which are included in Assets Held for
Sale, are also utilized.
Guest occupancy for the quarter, measured in room nights, increased 8.7% from
the level of the prior year. On a divisional basis, Innisbrook's occupancy rose
15.9% while Tamarron experienced a decline in occupancy of 1.8%. The largest
increase in Innisbrook's occupancy occurred in conference room nights, although
golf groups and social room nights posted significant improvements as well.
Revenues from resort operations on a per occupied room basis increased 7.3%,
from $289.05 to $310.21. The improved guest spending is primarily attributable
to Innisbrook, which enjoyed a 29.1% increase in gross operating revenue while
Tamarron's gross operating revenue declined .6%. In addition to higher
occupancy levels, Innisbrook's average room rate improved 19.2%, while food and
beverage revenue posted a 36.8% improvement despite a 6.1% decline in meals
served as the revenue per meal increased 47.9%, primarily due to two
restaurants being re-themed. Innisbrook golf revenues approximated the prior
year as revenue per player rose 4.5% while rounds played declined 4.4%. On a
divisional basis, Innisbrook and Tamarron's revenue per occupied room for the
third quarter of 1998 and 1997 were $315.15 and $301.76 as compared to $282.86
and $298.08, respectively. As a result of the improved occupancy and guest
spending, total resort operations revenues rose $1.6 million, or 16.6%. Real
estate activities did not generate revenue in the third quarter of either year.
Four of the nine Pine Ridge homesites remain unsold; two Pine Ridge homesites
were closed in October 1998.
Relative to total resort operations revenues, costs and operating expenses
approximated the prior year on a percentage basis. At Innisbrook, gross
operating income grew 45.1% as relative departmental operating expense levels
rose 21.0% over the prior year while revenues increased at a 29.1% rate. At the
same time, Innisbrook's fixed charges and other expenses increased 13.3% over
the prior year, primarily due to marketing costs increasing 66.1% and
management fees increasing 29.5% while insurance costs declined 56.3%. While
Tamarron's gross operating revenue remained flat, its cost and operating
expenses grew slightly to 48.6% of revenues as compared to 46.4% the prior
year. Tamarron's fixed charges and other expenses declined 2.7% from the prior
year's level, with a 157.7% increase in management fees being offset by a
118.4% decrease in maintenance expense.
Effective September 1, 1998, the Tamarron management agreement with Hilton
Hotels Corporation was terminated. Sheraton Operating Corporation now manages
Tamarron, which is doing business as The Sheraton Tamarron Resort.
FINANCIAL CONDITION AND LIQUIDITY
The Company's working capital position (exclusive of Assets Held for Sale) was
a deficit of $5,804,000 as compared to a deficit of $3,106,000 at December 31,
1997. 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. Relative to these seasonal fluctuations, the Company has
entered into an unsecured capital expenditure sharing agreement with Westin
whereby Westin will fund 50% of capital expenditures incurred subsequent to the
June 23, 1997 merger transaction in excess of $6,000,000, plus capital reserve
requirements as defined. In addition, the Company has obtained a $5,000,000
accounts receivable line of credit from a major financial institution, with
initial draws on the line occurring in October 1998.
Based on existing cash levels and the additional cash sources discussed above,
the Company assesses its liquidity as satisfactory.
Page 8
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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 the 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, 1998.
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 9
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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: November 13, 1998 By: /s/ Merrick Kleeman
------------------------------ ----------------------------------
Merrick Kleeman
President
Date: November 13, 1998 By: /s/ Richard L. Akin
------------------------------ ----------------------------------
Richard L. Akin
Vice President and Treasurer
Page 10
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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 nine months ended September 30, 1998 and 1997.
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, 1997 (file No. 2-64309).
Page 11
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INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS
SEPTEMBER 30, 1998 AND 1997
DISTRIBUTION FUND
1998 1997
-------- ----------
ASSETS
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION - FULLY SECURED $ 903,483 $1,140,133
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 24,030 30,326
---------- ----------
$ 927,513 $1,170,459
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $ 670,103 $ 778,608
DUE TO MAINTENANCE ESCROW FUND 257,410 191,096
RESERVE FOR ESTIMATED LIFE-SAFETY
REIMBURSEMENT - 200,755
PARTICIPANTS' FUND BALANCES - -
---------- ----------
$ 927,513 $1,170,459
========== ==========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $2,042,626 $1,888,704
INVENTORIES - -
RECEIVABLE FROM DISTRIBUTION FUND 257,410 191,096
INTEREST RECEIVABLE 19,285 33,383
---------- ----------
$2,319,321 $2,113,183
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 5,844 $ 40,453
INTEREST PAYABLE TO DISTRIBUTION FUND 24,030 30,326
CARPET CARE RESERVE 9,994 31,651
PARTICIPANTS' FUND BALANCES 2,279,453 2,010,753
---------- ----------
$2,319,321 $2,113,183
========== ==========
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 12
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INNISBROOK RENTAL POOL OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
DISTRIBUTION FUND
Current Quarter Year-to-Date
------------------------- --------------------------
1998 1997 1998 1997
---- ---- ---- ----
GROSS REVENUES $ 2,230,251 $1,734,022 $14,623,754 $11,377,240
----------- ---------- ----------- -----------
REDUCTIONS:
Agents' commissions 37,919 31,266 497,738 188,342
Credit card fees 21,328 - 141,185 -
Audit fees 3,250 3,000 9,749 9,100
----------- ---------- ----------- -----------
62,497 34,266 648,672 197,442
ADJUSTED GROSS REVENUES 2,167,754 1,699,756 13,975,082 11,179,798
MANAGEMENT FEE (1,079,003) (798,885) (6,959,166) (5,254,504)
----------- ---------- ----------- -----------
GROSS INCOME DISTRIBUTION 1,088,751 900,871 7,015,916 5,925,294
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Management fees (113,559) - (750,424) -
Marketing fee (61,942) - (409,322) -
Miscellaneous pooled expense (20,274) - (58,283) -
Corporate complimentary
occupancy fees 9,601 5,202 26,154 13,696
Westin Associate room fees 4,370 - 12,330 -
Occupancy fees (289,988) (254,792) (1,342,759) (1,175,044)
Advisory Committee expenses (6,115) (25,230) (22,523) (79,543)
Life-safety reimbursement - 28,807 - (200,755)
----------- ---------- ----------- -----------
NET INCOME DISTRIBUTION 610,844 654,858 4,471,089 4,483,648
ADJUSTMENTS TO NET INCOME
DISTRIBUTION:
Occupancy fees 289,988 254,792 1,342,759 1,175,044
Hospitality suite fees - 2,217 134 7,298
Greens fees 1,331 10,276 10,090 66,956
Additional participation credits 1,320 17,235 3,960 52,555
--------- ---------- ----------- -----------
AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS $ 903,483 $ 939,378 $ 5,828,032 $ 5,785,501
========= ========== =========== ===========
Average daily distribution $ 10.95 $ 10.94 $ 24.92 $ 23.91
Average room rate $ 95.35 $ 85.91 $ 133.56 $ 118.74
Occupied room nights 23,389 20,185 109,496 95,818
Available room nights 82,492 85,904 233,900 241,952
Occupancy percentage 28.4% 23.5% 46.8% 39.6%
Average number of available units 897 934 857 886
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
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INNISBROOK RENTAL POOL OPERATION
STATEMENT OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
DISTRIBUTION FUND
Current Quarter Year-to-Date
--------------------------- ----------------------------
1998 1997 1998 1997
---- ---- ---- ----
BALANCE, beginning of period $ - $ - $ - $ -
ADDITIONS:
Amounts available for distribution
before life-safety reimbursement 903,483 910,571 5,828,032 5,986,256
Interest received or receivable from
Maintenance Escrow Fund 24,030 30,326 67,133 81,910
REDUCTIONS:
Amount withheld for Maintenance Escrow Fund (257,410) (191,096) 1,194,555) (881,290)
Amounts held in reserve for estimated
life-safety reimbursement - 28,807 - (200,755)
Amounts accrued or paid to participants (670,103) (778,608) (4,700,610) (4,986,121)
---------- ----------- ----------- -----------
BALANCE, end of period $ - $ - $ - $ -
========== =========== =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $2,252,555 $ 2,417,925 $ 1,901,616 $ 1,734,415
ADDITIONS:
Amounts withheld from occupancy fees 257,410 191,096 1,194,555 881,290
Interest earned 24,030 30,326 67,133 81,910
Charges to participants to establish
or restore escrow balances 34,104 164,492 161,883 994,837
REDUCTIONS:
Maintenance charges (184,490) (722,489) (761,552) (1,498,557)
Carpet care reserve deposit (5,800) (5,098) (26,855) (28,092)
Interest accrued or paid to
Distribution Fund (24,030) (30,326) (67,133) (81,910)
Refunds to participants as prescribed
by Master Lease Agreement (74,326) (35,173) (190,194) (73,140)
---------- ----------- ----------- -----------
BALANCE, end of period $2,279,453 $ 2,010,753 $ 2,279,453 $ 2,010,753
========== =========== =========== ===========
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
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TAMARRON RENTAL POOL LEASE OPERATION
BALANCE SHEETS
SEPTEMBER 30, 1998 AND 1997
DISTRIBUTION FUND
1998 1997
---- ----
ASSETS
CASH $ 1,000 $ 1,000
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION 754,275 771,434
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 212 203
-------- --------
$755,487 $772,637
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $666,442 $666,146
DUE TO MAINTENANCE ESCROW FUND 89,045 106,491
PARTICIPANTS' FUND BALANCES - -
-------- --------
$755,487 $772,637
======== ========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $ 26,176 $ 21,598
DUE FROM DISTRIBUTION FUND 89,045 106,491
INTEREST RECEIVABLE - -
INVENTORY:
Linen 56,313 89,480
Materials and supplies 12,281 13,643
DEPOSITS - -
-------- --------
$183,815 $231,212
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 5,139 $ 4,150
INTEREST PAYABLE TO DISTRIBUTION FUND 212 203
PARTICIPANTS' FUND BALANCES 178,464 226,859
-------- --------
$183,815 $231,212
======== ========
These balance sheets 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
16
TAMARRON RENTAL POOL LEASE OPERATION
STATEMENT OF OPERATIONS
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
DISTRIBUTION FUND
Current Quarter Year-to-Date
------------------------ --------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
GROSS REVENUES $1,671,867 $1,711,566 $ 2,791,077 $ 2,992,542
---------- ---------- ----------- -----------
REDUCTIONS:
Sales and marketing expenses 125,390 136,925 209,331 239,405
Agents' commissions 33,540 27,916 92,845 98,381
Audit fees 3,714 2,595 9,287 7,795
---------- ---------- ----------- -----------
162,644 167,436 311,463 345,581
---------- ---------- ----------- -----------
ADJUSTED GROSS REVENUES 1,509,223 1,544,130 2,479,614 2,646,961
MANAGEMENT FEE (754,611) (772,065) (1,239,807) (1,323,480)
---------- ---------- ----------- -----------
GROSS INCOME DISTRIBUTION 754,612 772,065 1,239,807 1,323,481
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary
occupancy fees 1,191 1,466 1,926 2,952
Occupancy fees (137,427) (140,935) (267,075) (302,638)
Designated items (19,329) (35,022) (51,207) (88,954)
Advisory Committee expenses (1,527) (2,097) (7,468) (9,816)
---------- ---------- ----------- -----------
POOLED INCOME 597,520 595,477 915,983 925,025
ADJUSTMENTS TO POOLED INCOME:
Hospitality suite fees - - - -
Occupancy fees 137,427 140,935 267,075 302,638
---------- ---------- ----------- -----------
NET INCOME DISTRIBUTION $ 734,947 $ 736,412 $ 1,183,058 $ 1,227,663
========== ========== =========== ===========
Average daily distribution $ 29.97 $ 29.36 $ 15.44 $ 15.84
Average room rate $ 122.53 $ 123.03 $ 105.57 $ 99.45
Occupied room nights 13,644 13,912 26,439 30,092
Available room nights 24,525 25,070 76,635 77,505
Occupancy percentage 55.6% 55.5% 34.5% 38.8%
Average number of available units 267 273 283 284
Number of units in Rental Pool
at end of period 288 293 - -
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
17
TAMARRON RENTAL POOL LEASE OPERATION
STATEMENT OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
DISTRIBUTION FUND
Current Quarter Year-to-Date
------------------------ ----------------------------
1998 1997 1998 1997
--------- --------- ----------- -----------
BALANCE, beginning of period $ - $ - $ - $ -
ADDITIONS:
Amounts available for distribution 734,947 736,412 1,183,059 1,227,663
Interest received or receivable from
Maintenance Escrow Fund 212 204 990 589
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (68,716) (70,470) (133,544) (151,325)
Amounts accrued or paid to participants (666,443) (666,146) (1,050,505) (1,076,927)
--------- --------- ----------- -----------
BALANCE, end of period $ - $ - $ - $ -
========= ========= =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 123,214 $ 206,837 $ 165,522 $ 197,548
ADDITIONS:
Amounts withheld from occupancy fees 68,716 70,470 133,544 151,325
Interest earned 212 204 990 589
Reimbursement of designated items 19,329 35,022 51,207 88,954
Charges to participants to establish
or restore escrow balances 147,266 7,564 348,960 23,859
REDUCTIONS:
Maintenance and inventory charges (97,891) (40,840) (278,375) (93,068)
Refurbishing charges (57,664) (14,206) (178,252) (38,875)
Interest accrued or paid to Distribution Fund (212) (204) (990) (589)
Designated items (19,329) (35,022) (51,207) (88,953)
Refunds to participants as prescribed by
Master Lease Agreement (5,177) (2,966) (12,935) (13,931)
--------- --------- ----------- -----------
BALANCE, end of period $ 178,464 $ 226,859 $ 178,464 $ 226,859
========= ========= =========== ===========
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