SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10K/A (No. 3)
AMENDMENT NO. 3 TO ANNUAL REPORT FILED PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission File Number: 1-8096
FAIRFIELD COMMUNITIES, INC.
(Exact name of registrant as specified in its Charter)
Delaware 71-0390438
(State of incorporation) (I.R.S. Employer Identification No.)
11001 Executive Center Drive, Little Rock, Arkansas 72211
(Formerly 2800 Cantrell Road, Little Rock, Arkansas 72202)
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (501) 228-2700
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, $.01 par value New York
Preferred Stock Purchase Rights New York
with respect to Common Stock,
$.01 par value
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2)
has been subject to such filing requirements for the
past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best
of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [ ]
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed
all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes X No
--- ---
The number of shares of the registrant's Common Stock
outstanding as of January 31, 1997 totaled 11,052,903
and the aggregate market value of the registrant's
Common Stock held by non-affiliates totaled
approximately $299.3 million at January 31, 1997.
Documents Incorporated by Reference: Parts I, II and
III of this Form 10-K incorporate certain information by
reference from the registrant's Annual Report to
Stockholders for the year ended December 31, 1996 and
the Proxy Statement to be issued in connection with its
1997 Annual Meeting of Stockholders.
FAIRFIELD COMMUNITIES, INC.
Securities and Exchange Commission
Form 10-K, Part I
Items 1. and 2. BUSINESS AND PROPERTIES
- --------------- -----------------------
Items 1 and 2 are hereby amended in their entirety as follows.
GENERAL
Fairfield Communities, Inc. ("Fairfield" and
together with its subsidiaries, the "Company") is the
largest vacation ownership company in the United States
in terms of property owners and vacation units
constructed. The Company's 15 resorts are located in 11
states; five resorts are in destination areas with
popular vacation attractions ("Destination Resorts") and
10 regional resorts are in scenic locations ("Regional
Resorts").
The Company's primary business is selling vacation
ownership interests ("VOIs"), commonly known as
timeshares, primarily through its innovative points-
based vacation system, Fairshare Plus. The Company also
offers financing for VOI purchasers through its wholly
owned subsidiary, Fairfield Acceptance Corporation
("FAC"), which results in the creation of high quality,
medium-term contracts receivable with attractive yields.
FAC holds these contracts in its portfolio and, in the
recent past, has begun to securitize its contracts
receivable in an effort to lower the costs of borrowed
funds and maintain borrowing availability under its
credit facilities.
Since 1980, the Company has sold more than $1.1
billion of VOIs. The Company's net revenue from sales
of VOIs has increased from $33.5 million in 1993 to
$114.6 million in 1996. Interest income from the
Company's financing activities totaled $20.0 million in
1996 and at December 31, 1996, the Company had a
portfolio of approximately 45,700 contracts receivable
amounting to $154.9 million with outstanding borrowings
of $54.3 million secured by the contracts receivable.
At December 31, 1996, these contracts receivable had a
weighted average maturity of approximately five years.
For the year ended December 31, 1996, the contracts
receivable had a weighted average interest rate of
13.6%, as compared to a weighted average cost of
associated debt of 8.6%.
In 1992, the Company successfully reorganized under
Chapter 11 of the Bankruptcy Code. Before the Company's
reorganization, it focused its VOI business on the
development of Regional Resorts, which required
construction and development of large-scale amenities
such as golf courses and other recreational facilities
to attract vacationers to those resorts. Since the
reorganization, the Company has focused on its core
business of marketing and financing vacation ownership
products and has sold over $121 million of non-core
assets, the proceeds of which have been used to reduce
indebtedness and reinvest in VOI operations. Fairfield
has also changed the focus of its vacation ownership
business from developing Regional Resorts to
constructing units in Destination Resorts, thereby
eliminating the need for developing large-scale
amenities to attract vacationers, lowering development
expense, reducing development risk and increasing its
access to a steady source of potential customers.
FAIRFIELD'S PROPERTY PORTFOLIO
Fairfield's objective is to be the leading provider
of innovative, high-quality vacation experiences in the
timeshare industry to the broadest spectrum of
households throughout the United States. To capitalize
on its innovative FairShare Plus vacation system and to
achieve its objective, Fairfield has placed an emphasis
on acquiring and developing resort properties in
destination locations. These resorts are in areas with
well-known attractions and large tourist populations.
The advantage of focusing on sites in destination
locations is the reduced need for developing large-scale
amenities to attract vacationers, yielding lower
developmental risks and expenses for Fairfield.
Furthermore, large populations of prospective customers
continually pass through these areas, marking them as
prime areas for Fairfield to operate on-site sales
offices which showcase the Company's property portfolio
and contribute significantly to increased sales.
Fairfield has opened five resorts in the
destination cities of Branson, Missouri; Myrtle Beach,
South Carolina; Nashville, Tennessee; Orlando, Florida;
and Williamsburg, Virginia. Eleven of Fairfield's
properties, including all five destination location
resorts, have been awarded the Gold Crown Resort
designation, the highest level of distinction from
Resort Condominiums International (RCI), the leading
industry exchange company. Furthermore, at year end,
Fairfield owned undeveloped property at its destination
resorts on which the present master plans for those
resorts provide for approximately 778 additional units,
which if sold at current prices would represent
approximately $523 million in future sales.
NEWER DEVELOPMENTS
FAIRFIELD MYRTLE BEACH
Fairfield's second Myrtle Beach resort, SeaWatch
Plantation, is a 10-acre oceanfront property with 640
units consisting of a mixture of condominiums and hotel
units. The initial phase includes 97 units as well as a
pool, lagoon and beachwalk. The first building of the
resort was completed in August 1996 and the entire first
phase should be completed in 1999. The Myrtle Beach area
was rated the second most popular drive destination in
the United States by the Automobile Association of
America Travel Service and averages more than 14 million
visitors per year. Fairfield Westwinds, Fairfield's
original Myrtle Beach area development, was built in
1989.
FAIRFIELD NASHVILLE
Fairfield Nashville is located on 19 acres in the
music center of Nashville, Tennessee, adjacent to
Opryland. When completed, the resort will offer
approximately 254 units. At year end, Fairfield
Nashville had 15 units completed and 31 units under
construction. Amenities at Fairfield Nashville include
indoor and outdoor swimming pools, a health club,
clubhouse, fully equipped picnic areas and playgrounds.
As an estimated 10 million people visit Nashville
annually, the location of this resort is consistent with
Fairfield's strategy to expand its vacation ownership
network in popular destination locations.
FAIRFIELD ORLANDO AT CYPRESS PALMS
Fairfield Orlando at Cypress Palms is located in
close proximity to this city's world-famous attractions
such as Walt Disney World (TRADEMARK) Resort, Epcot
Center, MGM Studios, Universal Studios and Sea World.
When completed, the resort will include 244 units and a
pool and whirlpool spa. Currently, Cypress Palms has 58
units completed and 12 units under construction. Orlando
and the surrounding areas also offer other major amusement
parks, exhibits and attractions drawing visitors
throughout the year, many of whom are repeat visitors.
OTHER RESORTS
Fairfield's array of other resorts offers a variety
of vacation experiences which are intended to meet the
different lifestyles and vacation needs of its customer
base. Fairfield's resort sites vary in size from
several acres to over 18,000 acres. The locations offer
many on-site amenities ranging from swimming pools and
tennis courts at most sites and, as indicated below,
golf courses, equestrian facilities and ski slopes at
some of the resorts. Many of Fairfield's units offer
full-size, fully equipped kitchens, fireplaces, private
whirlpool spas, VCRs, washers and dryers, and more.
Fairfield Branson at the Falls, Fairfield's original
Branson development has 54 units. The second Branson
development, Fairfield Branson at the Meadows, is
partially completed with a planned 232-unit capacity
when fully developed. Both developments provide
convenient access to the 10-mile stretch of Highway 76
where over 30 indoor theaters provide entertainment.
The Branson/Lakes area also offers boating, fishing,
swimming, waterskiing, sailing, scuba diving and
parasailing on three lakes, Table Rock, Lake Taneycomo
and Bull Shoals. Theme parks such as Silver Dollar City
and White Water are among other attractions in the area.
Fairfield Williamsburg is located just 10 miles from
Jamestown, the first English speaking settlement in
North America, and 15 miles from Yorktown, where the
last battle of the American Revolution was fought.
Three miles from the resort is Busch Gardens amusement
park.
Fairfield Bay offers 217 units in the Ozark foothills
and a lighted 10-court tennis center. Mountain Ranch
Golf Course is in the heart of the resort. The Ozark
National Forest is available for hiking and camping, and
the Ozark Folk Center features performances and craft
shows and demonstrations year-round. Blanchard Springs
Caverns is nearby, as are the trout fishing waters of
the White and Little Red Rivers. Fairfield Bay is
located on the 40,000-acre Greers Ferry Lake, which has
over 300 miles of shoreline.
Located in Flagstaff, Arizona, Fairfield Flagstaff
provides 125 units in four seasons of resort
vacationing. Fairfield Flagstaff is approximately 75
miles from the Grand Canyon and 25 miles from Sedona.
Nearby Arizona Snowbowl offers a sky-ride in the summer,
as well as downhill and cross-country skiing in the
winter. The resort offers swimming, golf, tennis,
horseback riding and shopping.
Fairfield Glade in Tennessee offers one 27-hole and
three 18-hole golf courses. The resort has 358 units and
is surrounded by 11 lakes. Hobby and social clubs, arts
and crafts fairs, local shops and outlet malls are
nearby, along with the Cumberland County Playhouse.
Horseback riding and indoor and outdoor swimming pools
and tennis courts are available to vacationers. Nearby
attractions include the Fall Creek Falls and Cumberland
Mountain State Parks, Great Smokey Mountains National
Park, as well as Dolly Parton's Dollywood and the
American Museums of Atomic Energy and Fine Arts.
Harbortown Point is located in Ventura Harbor,
California, between Santa Barbara and Los Angeles and
has 57 units. In addition to the public beaches and
water activities surrounding the resort, on-site
facilities include a heated swimming pool and two glass-
enclosed whirlpools. Channel Island National Park, the
only aquatic national park in the continental United
States, is just beyond the resorts docks. Harbortown
Point's boat rentals include sailboats, fishing boats,
paddle boats and boardsails.
Fairfield Harbour, located in New Bern, North Carolina
is surrounded by historical towns and attractions, such
as Bath, incorporated in 1705 as the state's first town.
Beaufort, founded in 1709, features restorations of 18th
and 19th century homes and businesses. Nearby Tryon
Palace is a classical Georgian mansion that once served
as the North Carolina capitol. The recreation center at
Fairfield Harbour includes an indoor and outdoor pool,
whirlpool spa, exercise room with sauna, miniature golf,
playground, video game room and community center. The
city of New Bern offers shopping centers, marina
facilities, restaurants and nightclubs.
Fairfield Mountains, in Lake Lure, North Carolina offers
215 units amid the Blue Ridge Mountains, just 45 miles
east of Asheville, North Carolina. Lake Lure and Bald
Mountain Lake both offer bass fishing, as well as
boating and private beaches. The Bald Mountain and
Apple Valley golf courses are open year-round. Guided
trips are available to Chimney Rock Park for hiking and
exploring caves and waterfalls, as well as white water
rafting and boat cruises. Nearby attractions include
Oconaluftee Indian Village, a replica of a Cherokee
Indian Village, and the Biltmore House and Gardens,
built in the 19th century.
Fairfield Ocean Ridge, in Edisto Island, South Carolina
is located 45 miles from Charleston, South Carolina.
Fairfield Ocean Ridge offers four tennis courts, an
outdoor swimming pool, bicycle rental, miniature golf,
and an 18-hole golf course. Shelling, swimming and
sailing in the ocean are also attractions at Fairfield
Ocean Ridge.
Fairfield Pagosa, in Pagosa Springs, Colorado has five
lakes on the property and is bordered by two-and-a-half
million acres of national forest and wilderness. Nearby
is Wolf Creek Ski area. On-site, Fairfield Pagosa has
27 holes of golf, seven tennis courts, mini-golf and
other family activities. The resort's recreation center
features an indoor pool, spa and racquetball courts, as
well as fitness equipment and aerobics classes.
Fairfield Plantation is an entire resort community just
45 miles west of Atlanta, Georgia. The resort features
80 units. There are three lakes which provide fishing
and water sports. The tennis center's courts are
lighted for evening play, and there is an 18-holes golf
course, a miniature golf course and a playground. For
swimming, the resort has its own private beach and three
outdoor pools.
Fairfield Sapphire Valley includes 194 units. The
resort lies in the foothills of the Blue Ridge
Mountains, 60 miles south of Asheville, North Carolina.
The Pisgah National Forest and Great Smokey Mountains
National Park offer backpacking and other outdoor
activities. The Horsepasture and the Tuckasegee Rivers
are nearby and offer trout fishing and the Nantahala and
Chattooga Rivers of western North Carolina offer white
water rafting. Sapphire Stables provides horseback
riders with excursions through the countryside. There
is also skiing in the winter months and golfing is
available.
Fairfield was incorporated in Delaware in 1969.
The Company's principal executive office is located at
11001 Executive Center Drive, Little Rock, Arkansas
72211, and its telephone number is (501) 228-2700. At
December 31, 1996, the Company had approximately 1,200
full-time employees.
DEVELOPMENT/REGULATION
In certain of its developments, the Company engages in
master planning of land, home and commercial construction
and management of resort and conference facilities. Many
state and local authorities have imposed restrictions and
additional regulations on developers of VOIs and lots.
Although these restrictions have generally increased the
cost of selling VOIs and lots, the Company has not
experienced material difficulties in complying with such
regulations or operating within such restrictions. The
Company provides certain purchasers with
a "property report" designed to comply with the disclosure
requirements of federal and state laws which contains, among
other things, detailed information about the particular
community, the development and the purchaser's rights and
obligations as a VOI or lot owner.
SIGNATURE
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 duly authorized.
FAIRFIELD COMMUNITIES, INC.
Date: November 5, 1997 /s/William G.Sell
------------------- ----------------------------------------
William G. Sell, Vice President/
Controller (Chief Accounting Officer)
