<PAGE> 1
F O R M 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 June 30, 1996
Commission File No. 2-64309
GOLF HOST RESORTS, INC.
STATE OF COLORADO EMPLOYER IDENTIFICATION NO. 84-0631130
Post Office Drawer 3131, Durango, Colorado 81302
Telephone Number (970) 259-2000
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 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 20
<PAGE> 2
GOLF HOST RESORTS, INC.
BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
ASSETS
(Substantially all pledged - Notes 2 and 3)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,464,106 $ 312,603
Accounts receivable 4,245,665 4,471,677
Notes receivable 122,461 627,817
Inventories and supplies 4,562,144 4,392,498
Prepaid expenses and other 1,269,703 1,207,186
Intercompany receivables 357,251 567,455
----------- -----------
Total current assets 13,021,330 11,579,236
----------- -----------
LONG-TERM RECEIVABLES, less
amounts currently due 983,941 1,011,871
----------- -----------
PROPERTY AND EQUIPMENT, at cost,
less accumulated depreciation 40,121,384 40,231,020
----------- -----------
$54,126,655 $52,822,127
=========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets. These
statements were prepared from the books and records of the Company without
audit and, in the opinion of management, include all adjustments which are
necessary for a fair presentation.
Page 2
<PAGE> 3
GOLF HOST RESORTS, INC.
BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable $ 100 $ 1,285,773
Maturing long-term obligations 2,533,046 1,854,401
Accounts payable 2,096,313 1,911,052
Accrued expenses 4,350,141 4,274,085
Deposits and prepaid fees 2,201,141 2,681,066
----------- -----------
Total current liabilities 11,180,741 12,006,377
----------- -----------
LONG-TERM OBLIGATIONS,
less current maturities 19,424,515 20,659,348
----------- -----------
LONG-TERM INTERCOMPANY 5,123,400 4,124,210
----------- -----------
LONG-TERM CONTINGENCY 2,148,235 2,077,759
----------- -----------
SHAREHOLDERS' INVESTMENT:
Common stock, $1 par, 5,000
shares authorized and out-
standing 5,000 5,000
5.6% cumulative preferred
stock, $1 par, 4,577,000
shares authorized and
outstanding 4,577,000 4,577,000
Paid-in capital 2,329,447 2,329,447
Retained Earnings 9,338,317 7,042,986
----------- -----------
Total shareholders' investment 16,249,764 13,954,433
----------- -----------
$54,126,655 $52,822,127
=========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets. These
statements were prepared from the books and records of the Company without
audit and, in the opinion of management, include all adjustments which are
necessary for a fair presentation.
Page 3
<PAGE> 4
GOLF HOST RESORTS, INC.
STATEMENTS OF INCOME
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
Quarters Ended June 30, Six Months Ended June 30,
-------------------------- ----------------------------
1996 1995 1996 1995
------------ ----------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Hotel $ 4,174,702 $ 4,404,021 $10,875,123 $11,241,647
Food and beverage 3,746,335 3,833,994 8,573,951 8,879,084
Golf 3,665,311 4,042,573 9,519,704 9,689,099
Other 1,861,398 1,847,945 4,186,024 4,384,800
Real estate activities - - (14,288) -
----------- ----------- ----------- -----------
13,447,746 14,128,533 33,140,514 34,194,630
----------- ----------- ----------- -----------
COSTS AND OPERATING EXPENSES:
Hotel 3,698,205 3,868,447 8,913,047 9,184,632
Food and beverage 2,524,660 2,622,784 5,523,773 5,581,684
Golf 1,554,343 1,588,550 3,286,239 3,377,072
Other 4,250,767 4,300,621 8,646,370 8,662,624
General and administrative 832,586 898,394 1,927,001 1,954,458
Real estate activities - 2,534 477 2,775
----------- ----------- ----------- -----------
12,860,561 13,281,330 28,296,907 28,763,245
----------- ----------- ----------- -----------
OPERATING INCOME 587,185 847,203 4,843,607 5,431,385
INTEREST, NET 481,523 472,624 995,720 1,026,560
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 105,662 374,579 3,847,887 4,404,825
PARENT INCOME TAX CHARGE 20,500 130,700 1,424,400 1,646,100
----------- ----------- ----------- -----------
INCOME BEFORE DIVIDEND
REQUIREMENTS ON PREFERRED STOCK 85,162 243,879 2,423,487 2,758,725
DIVIDEND REQUIREMENTS ON
PREFERRED STOCK 64,078 63,900 128,156 128,512
----------- ----------- ----------- -----------
NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS $ 21,084 $ 179,979 $ 2,295,331 $ 2,630,213
=========== =========== =========== ===========
EARNINGS PER COMMON SHARE $ 4.22 $ 36.00 $ 459.07 $ 526.04
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements. These
statements were prepared from the books and records of the Company without audit
and, in the opinion of management, include all adjustments which are necessary
for a fair presentation.
Page 4
<PAGE> 5
GOLF HOST RESORTS, INC.
STATEMENTS OF SHAREHOLDERS' INVESTMENT
FOR THE EIGHTEEN MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Other Shareholders'
$1 Par Value 5.6% Cumulative Investment
Common Stock Preferred Stock ---------------------- Total
-------------- ----------------------- Paid-In Retained Shareholders'
Shares Amount Shares Amount Capital Earnings Investment
------ ------ ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 5,000 $5,000 4,577,000 $4,577,000 $2,329,447 $5,923,381 $12,834,828
------ ------ ---------- ---------- ---------- ---------- -----------
Net income available to
common shareholders - - - - - 1,119,605 1,119,605
------ ------ ---------- ---------- ---------- ---------- -----------
Balance, December 31, 1995 5,000 5,000 4,577,000 4,577,000 2,329,447 7,042,986 13,954,433
Net income available to
common shareholders - - - - - 2,295,331 2,295,331
------ ------ ---------- ---------- ---------- ---------- -----------
Balance, December 31, 1996 5,000 $5,000 4,577,000 $4,577,000 $2,329,447 $9,338,317 $16,249,764
====== ====== ========== ========== ========== ========== ===========
</TABLE>
The accompanying notes are an intergeral part of these statements. These
statements were prepared from the books and records of the Company without
necessary for a fair presentation.
Page 5
<PAGE> 6
GOLF HOST RESORTS, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------
1996 1995
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income before dividend requirements
on preferred stock $2,423,487 $2,758,725
Adjustments to reconcile net
income to net cash flows from
operating activities:
Depreciation 1,240,200 1,270,200
Changes in working capital
other than cash (Note 7) (107,551) (1,777,582)
---------- ----------
Net cash flows provided by
operating activities 3,556,136 2,251,343
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,142,757) (1,734,335)
Recovery of cost of property and
equipment sold 12,190 3,540
Reductions in notes receivable 550,800 73,451
Additions to notes receivable (17,517) (749)
---------- ----------
Net cash flows used in investing
activities (597,284) (1,658,093)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in notes payable (1,285,673) -
Increases in long-term obligations 454,012 8,047
Decreases in long-term obligations (917,198) (1,021,470)
Increases in long-term intercompany 871,034 1,444,822
Increases in long-term contingency 70,476 214,983
---------- ----------
Net cash flows (used in) provided by
financing activities (807,349) 646,382
---------- ----------
NET INCREASE IN CASH 2,151,503 1,239,632
CASH, BEGINNING OF PERIOD 312,603 824,875
---------- ----------
CASH, END OF PERIOD $2,464,106 $2,064,507
========== ==========
</TABLE>
Supplemental information on noncash financing and investing activities is
included in Note 7.
The accompanying notes are an integral part of these statements. These
statements were prepared from the books and records of the Company without
audit and, in the opinion of management, include all adjustments which are
necessary for a fair presentation.
Page 6
<PAGE> 7
GOLF HOST RESORTS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
(1) ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
During the quarter, there was no significant change from the 10-K filing of
December 31, 1995.
Financial Statement Presentation
Certain reclassifications have been made to the December 31, 1994, June 30,
1995 and December 31, 1995 financial statements to conform to the June 30,
1996 presentation. All adjustments to the interim financial statements are
of a normal recurring nature.
(2) LINES OF CREDIT
During the quarter, there was no significant change from the 10-K filing of
December 31, 1995 except as follows:
Under provisions of the related loan agreements, approximately $3,857,000
was available for immediate use.
(3) LONG-TERM AND CAPITAL LEASE OBLIGATIONS
Long-term obligations consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------- -------------
<S> <C> <C>
Mortgage notes at varying
rates, maturing primarily
from 2006 to 2007 $18,127,306 $18,810,140
Equipment revolving credit line
at prime, maturing serially
from 1997 to 2000 4,051,945 3,862,987
Other 262,310 346,622
Unamortized debt discount expense (484,000) (506,000)
----------- -----------
21,957,561 22,513,749
Less-current maturities (2,533,046) (1,854,401)
----------- -----------
$19,424,515 $20,659,348
=========== ===========
</TABLE>
Page 7
<PAGE> 8
The remainder of Note 3 has not changed significantly from the 10-K filing
of December 31, 1995.
(4) LEASES
During the quarter, there was no significant change from the 10-K filing of
December 31, 1995.
(5) ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------- ------------
<S> <C> <C>
Rental pool lease operations $2,341,380 $1,760,259
Salaries 1,122,936 1,400,364
Taxes, other than income taxes 572,720 742,033
Other 181,039 371,429
---------- ----------
$4,350,141 $4,274,085
========== ==========
</TABLE>
(6) INCOME TAX ALLOCATION AND SHARING POLICY
During the quarter, there was no significant change from the 10-K filing of
December 31, 1995.
(7) SUPPLEMENTAL CASH FLOW DATA
The (increases) decreases in working capital other than cash are as
follows:
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1996 1995
------------- -------------
<S> <C> <C>
Accounts receivable $ 226,012 $ (473,893)
Inventories and supplies (169,646) (53,344)
Prepaid expenses and other (62,517) (11,234)
Intercompany 210,208 (436,600)
Accounts payable 185,261 495,564
Accrued expenses 76,056 (260,435)
Deposits and prepaid fees (572,925) $(1,037,640)
--------- -----------
$(107,551) $(1,777,582)
========= ===========
</TABLE>
Page 8
<PAGE> 9
Noncash Financing Activities:
<TABLE>
<S> <C> <C>
The Company satisfied its preferred
stock dividend liability to
Golf Hosts, Inc. through the
intercompany account. $128,156 $128,512
</TABLE>
Page 9
<PAGE> 10
GOLF HOST RESORTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
RESULTS OF OPERATIONS
Occupancy for the quarter, measured in room nights, declined 10.2% from
the year-ago level. On a divisional basis, the decreases were 9.8% and 11.7%
for Innisbrook and Tamarron, respectively. Approximately 85% of the decline
was in the conference segment, with a proportionately larger share of the total
decline occurring at Tamarron. The reduction in conference business at
Tamarron can be attributed to a shortage of scheduled airline seats into
Durango, while the reduction at Innisbrook was not attributable to any one
significant cause.
Revenues for the quarter were 4.8% behind last year. On a per occupied
room night basis, revenues increased 6.0%, with Innisbrook experiencing a gain
of 7.2% while Tamarron experienced a modest decline of 1%. The gains in
spending partially mitigated the effects of the occupancy decline on total
revenues.
Operating income for the quarter was 4.4% of total revenues, compared with
6.0% a year earlier. The decline generally can be attributed to the lack of
economies of scale that typically accompany higher levels of business.
Interest expense, net, for the quarter was virtually the same as the year-ago
level.
In summary, the $268,917 decline in income before income taxes, when
compared with the same quarter a year earlier, reflects a drop in revenues of
$680,789 and a decrease in marginal operating income.
For the six months ended June 30, 1996, occupied rooms declined 9.0% from
the level of a year earlier. An improvement of 6.5% in the level of spending
per occupied room, with both divisions reporting gains, limited the decline in
total revenues to 3.1%. Costs and operating expenses were 85.4% of revenues
compared with 84.1% for the same period a year earlier. The $588,778 decline
in income before income taxes reflects the drop in revenue and the impact of
lower business volumes on the operating income percentage.
FINANCIAL CONDITION
At June 30, 1996, the Company's net working capital position was
$1,840,589, compared with $2,649,959 at June 30, 1995, and a deficit $427,141
at December 31, 1995. The Company typically experiences seasonal fluctuations
in its net working capital position without impairing its ability to pay its
trade creditors in a timely manner and satisfy its financial obligations in an
orderly fashion.
The Company maintains satisfactory relations with several financial
institutions. Liquidity is provided by an accounts receivable and inventory
credit line of $6,000,000, of which approximately $3,900,000 was available for
immediate use at June 30, 1996, and a revolving mortgage credit facility of
$2,000,000. Specific financing is in place for equipment additions.
Based on expected operating levels for the balance of the year and the
existence of credit facilities with its lenders, the Company assesses its
liquidity situation as satisfactory.
Page 10
<PAGE> 11
PART II - OTHER INFORMATION
<TABLE>
<S> <C>
Item 1. Legal Proceedings
Registrant is not currently involved in lawsuits 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, 1996.
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
</TABLE>
Page 11
<PAGE> 12
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: August 12, 1996 By: /s/ R. S. Ferreira
--------------- ---------------------------
Richard S. Ferreira
Executive Vice President
Chief Financial Officer
Date: August 12, 1996 By: /s/ A. S. Herzog
--------------- ---------------------------
A. Stephen Herzog
Vice President and Controller
Chief Accounting Officer
Date: August 12, 1996 By: /s/ R. L. Akin
--------------- -----------------------
Richard L. Akin
Vice President
and Treasurer
Page 12
<PAGE> 13
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, 1996.
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, 1995 (File No. 2-64309).
Page 13
<PAGE> 14
INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS
JUNE 30, 1996 AND 1995
DISTRIBUTION FUND
ASSETS
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION - FULLY SECURED $1,808,415 $1,956,199
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 16,784 14,308
---------- ----------
$1,825,199 $1,970,507
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $1,469,054 $1,621,920
DUE TO MAINTENANCE ESCROW FUND 310,851 182,587
RESERVE FOR ESTIMATED LIFE-SAFETY
REIMBURSEMENT 45,294 166,000
PARTICIPANTS' FUND BALANCES 0 0
---------- ----------
$1,825,199 $1,970,507
========== ==========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $1,345,193 $1,350,282
INVENTORIES 251 251
RECEIVABLE FROM DISTRIBUTION FUND 310,851 182,587
INTEREST RECEIVABLE 13,260 13,549
---------- ----------
$1,669,555 $1,546,669
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 268 $ 115,136
INTEREST PAYABLE TO DISTRIBUTION FUND 16,784 14,308
CARPET CARE RESERVE 45,420 55,603
PARTICIPANTS' FUND BALANCES 1,607,083 1,361,622
---------- ----------
$1,669,555 $1,546,669
========== ==========
</TABLE>
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
<PAGE> 15
INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
DISTRIBUTION FUND
<TABLE>
<CAPTION>
Current Quarter Year-to-Date
------------------------ -------------------------
1996 1995 1996 1995
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
GROSS REVENUES $3,453,553 $3,544,678 $9,619,612 $ 9,767,386
---------- ---------- ---------- -----------
REDUCTIONS:
Agents' commissions 84,723 140,450 203,270 241,478
Audit fees 3,000 3,000 6,100 5,850
---------- ---------- ---------- -----------
87,723 143,450 209,370 247,328
---------- ---------- ---------- -----------
ADJUSTED GROSS REVENUES 3,365,830 3,401,228 9,410,242 9,520,058
MANAGEMENT FEE (1,581,940) (1,598,577) (4,422,814) (4,474,427)
---------- ---------- ---------- -----------
GROSS INCOME DISTRIBUTION 1,783,890 1,802,651 4,987,428 5,045,631
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary
occupany fees 2,135 1,766 5,141 3,210
Occupancy fees (414,465) (365,165) (953,956) (813,416)
Advisory Committee expenses (23,838) (21,325) (46,078) (41,737)
Life-safety reimbursement (39,559) (36,000) (45,294) (166,000)
---------- ---------- ---------- -----------
NET INCOME DISTRIBUTION 1,308,163 1,381,927 3,947,241 4,027,688
ADJUSTMENTS TO NET INCOME
DISTRIBUTION:
Occupancy fees 414,465 365,165 953,956 813,416
Hospitality suite fees 2,852 770 7,181 2,727
Greens fees 19,546 23,407 57,053 61,076
Additional participation credit 18,095 18,930 36,385 38,265
---------- ---------- ---------- -----------
AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS $1,763,121 $1,790,199 $5,001,816 $ 4,943,172
========== ========== ========== ===========
Average daily distribution $ 21.13 $ 21.10 $ 31.43 $ 30.57
Average room rate $ 101.63 $ 94.08 $ 122.76 $ 115.38
Room nights 33,980 37,679 78,358 84,652
Available room nights 83,444 84,847 159,136 161,712
Occupancy percentage 40.7% 44.4% 49.2% 52.3%
Average number of available units 917 932 874 893
</TABLE>
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
<PAGE> 16
INNISBROOK RENTAL POOL OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
DISTRIBUTION FUND
<TABLE>
<CAPTION>
Current Quarter Year-to-Date
--------------------------- ---------------------------
1996 1995 1996 1995
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, beginning of period $ - $ - $ - $ -
ADDITIONS:
Amounts available for distribution
before life-safety reimbursement 1,802,680 1,826,199 5,047,110 5,109,172
Interest received or receivable from
Maintenance Escrow Fund 16,784 14,308 41,131 24,771
REDUCTIONS:
Amount withheld for Maintenance Escrow Fund (310,851) (182,587) (715,472) (406,717)
Amounts held in reserve for estimated
life-safety reimbursement (39,559) (36,000) (45,294) (166,000)
Amounts accrued or paid to participants (1,469,054) (1,621,920) (4,327,475) (4,561,226)
----------- ----------- ----------- -----------
BALANCE, end of period $ - $ - $ - $ -
=========== =========== =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 1,496,895 $ 1,128,267 $ 1,141,259 851,207
ADDITIONS:
Amounts withheld from occupancy fees 310,851 182,587 715,472 406,717
Interest earned 16,784 14,308 41,131 24,771
Charges to participants to establish
or restore escrow balances 279,991 497,298 519,465 716,841
REDUCTIONS:
Maintenance charges (449,856) (433,696) (716,345) (588,992)
Carpet care reserve deposit (8,293) (3,655) (19,085) (8,141)
Interest accrued or paid to
Distribution Fund (16,784) (14,308) (41,131) (24,771)
Refunds to participants as prescribed
by Master Lease Agreement (22,505) (9,179) (33,683) (16,010)
----------- ----------- ----------- ----------
BALANCE, end of period $ 1,607,083 $ 1,361,622 $ 1,607,083 $1,361,622
=========== =========== =========== ==========
</TABLE>
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
<PAGE> 17
TAMARRON RENTAL POOL LEASE OPERATION
BALANCE SHEETS
JUNE 30, 1996 AND 1995
DISTRIBUTION FUND
ASSETS
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
CASH $ l,000 $ 1,000
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION 317,655 374,840
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 1,147 521
-------- --------
$319,802 $376,361
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $264,791 $307,941
DUE TO MAINTENANCE ESCROW FUND 55,011 68,420
PARTICIPANTS' FUND BALANCES - -
-------- --------
$319,802 $376,361
======== ========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $149,252 $ 99,949
DUE FROM DISTRIBUTION FUND 55,011 68,421
INTEREST RECEIVABLE 934 -
INVENTORY:
Linen 114,237 109,303
Materials and supplies 8,285 13,538
DEPOSITS 16,000 62,837
-------- --------
$343,719 $354,048
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 6,493 $ 2,014
INTEREST PAYABLE TO DISTRIBUTION FUND 1,147 521
PARTICIPANTS' FUND BALANCES 336,079 351,513
-------- --------
$343,719 $354,048
======== ========
</TABLE>
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
<PAGE> 18
TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
DISTRIBUTION FUND
<TABLE>
<CAPTION>
Current Quarter Year-to-Date
--------------------------- ---------------------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
GROSS REVENUES $ 721,149 $ 859,343 $1,255,511 $1,474,261
---------- ---------- ----------- -----------
REDUCTIONS:
Sales and marketing expenses 61,297 77,341 106,718 132,684
Agents' commissions 15,781 31,463 52,360 48,721
Audit fees 2,601 2,529 5,202 4,980
---------- ---------- ---------- ----------
79,679 111,333 164,280 186,385
---------- ---------- ---------- ----------
ADJUSTED GROSS REVENUES 641,470 748,010 1,091,231 1,287,876
MANAGEMENT FEE (320,735) (374,005) (545,616) (643,938)
---------- ---------- ---------- ----------
GROSS INCOME DISTRIBUTION 320,735 374,005 545,615 643,938
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary
occupancy fees 903 730 1,598 1,464
Occupancy fees (67,475) (75,742) (124,158) (149,853)
Designated items (20,273) (25,381) (33,659) (34,978)
Advisory Committee expenses (3,983) (4,168) (5,763) (5,692)
---------- ---------- ---------- ----------
POOLED INCOME 229,907 269,444 383,633 454,879
ADJUSTMENTS TO POOLED INCOME:
Hospitality suite fees - 105 53 105
Occupancy fees 67,475 75,742 124,158 149,853
---------- ---------- ---------- ----------
NET INCOME DISTRIBUTION $ 297,382 $ 345,291 $ 507,844 $ 604,837
========== ========== ========== ==========
Average daily distribution $ 11.38 $ 13.42 $ 9.83 $ 12.02
Average room rate $ 86.98 $ 91.54 $ 80.53 $ 79.29
Room nights 8,288 9,388 15,587 18,594
Occupancy percentage 31.7% 36.5% 30.1% 37.0%
Average number of available units 288 283 284 278
Number of units in Rental Pool at
end of period 298 291 - -
</TABLE>
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
<PAGE> 19
TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
DISTRIBUTION FUND
<TABLE>
<CAPTION>
Current Quarter Year-to-Date
--------------------------- -------------------------
1996 1995 1996 1995
------------ ------------- ------------ ----------
<S> <C> <C> <C> <C>
BALANCE, beginning of period $ - $ - $ - $ -
ADDITIONS:
Amounts available for distribution 297,382 345,291 507,844 604,836
Interest received or receivable from
Maintenance Escrow Fund 1,147 521 2,327 2,830
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (33,738) (37,871) (62,080) (74,927)
Amounts accrued or paid to participants (264,791) (307,941) (448,091) (532,739)
--------- --------- --------- ---------
BALANCE, end of period $ - $ - $ - $ -
========= ========== ========= =========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 254,070 $ 428,979 $ 328,336 $ 397,655
ADDITIONS:
Amounts withheld from occupancy fees 33,738 37,871 62,080 74,927
Interest earned 1,147 521 2,327 2,830
Reimbursement of designated items 20,273 25,381 33,659 34,978
Charges to participants to establish
or restore escrow balances 125,948 30,085 142,632 77,066
REDUCTIONS:
Maintenance and inventory charges (51,905) (70,620) (88,622) (100,657)
Refurbishing charges (17,804) (73,902) (93,549) (82,778)
Interest accrued or paid to
Distribution Fund (1,147) (521) (2,327) (2,830)
Designated items (20,273) (25,381) (33,660) (34,978)
Refunds to participants as prescribed
by Master Lease Agreement (7,968) (900) (14,797) (14,700)
--------- ------------ --------- --------
BALANCE, end of period $ 336,079 $ 351,513 $ 336,079 $351,513
========= ============ ========= ========
</TABLE>
These statements were repared 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
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,464,106
<SECURITIES> 0
<RECEIVABLES> 4,324,077
<ALLOWANCES> 78,412
<INVENTORY> 4,562,144
<CURRENT-ASSETS> 13,021,330
<PP&E> 65,711,966
<DEPRECIATION> 25,590,582
<TOTAL-ASSETS> 54,126,655
<CURRENT-LIABILITIES> 11,180,741
<BONDS> 21,957,561
0
4,577,000
<COMMON> 5,000
<OTHER-SE> 11,667,764
<TOTAL-LIABILITY-AND-EQUITY> 54,126,655
<SALES> 10,910,270
<TOTAL-REVENUES> 33,140,514
<CGS> 3,305,874
<TOTAL-COSTS> 28,296,907
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 50,976
<INTEREST-EXPENSE> 995,720
<INCOME-PRETAX> 3,847,887
<INCOME-TAX> 1,424,400
<INCOME-CONTINUING> 2,423,487
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,295,331
<EPS-PRIMARY> 459.07
<EPS-DILUTED> 459.07
</TABLE>
