<PAGE> 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 March 31, 1997
Commission File No. 2-64309
GOLF HOST RESORTS, INC.
STATE OF COLORADO EMPLOYER IDENTIFICATION NO. 84-0631130
Post Office Box 3131, Durango, Colorado 81302-3131
Telephone Number (303) 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 19
<PAGE> 2
GOLF HOST RESORTS, INC.
BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
ASSETS
(Substantially all pledged - Notes 2 and 3)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 523,328 $ 488,685
Accounts receivable 6,367,680 4,380,108
Notes receivable 164,054 163,942
Inventories and supplies 4,982,301 5,123,966
Prepaid expenses and other 1,275,160 956,054
Intercompany receivables -- 724,312
----------- -----------
Total current assets 13,312,523 11,837,067
----------- -----------
OTHER DEFERRED CHARGES 238,627 238,627
LONG-TERM RECEIVABLES, less
amounts currently due 952,426 1,021,178
PROPERTY AND EQUIPMENT, at cost,
less accumulated depreciation
and amortization 39,964,940 40,038,322
----------- -----------
$54,468,516 $53,135,194
=========== ===========
</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
MARCH 31, 1997 AND DECEMBER 31, 1996
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
----------- -------------
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable $ 100 $ 734,429
Maturing long-term obligations 2,743,120 2,788,764
Accounts payable 2,509,925 2,258,702
Accrued expenses 5,463,429 4,577,981
Deposits and prepaid fees 2,229,155 2,755,297
Intercompany payable 389,905 --
----------- -----------
Total current liabilities 13,335,634 13,115,173
----------- -----------
LONG-TERM OBLIGATIONS,
less current maturities 17,087,169 17,777,544
----------- -----------
LONG-TERM INTERCOMPANY 4,787,983 4,951,895
----------- -----------
LONG-TERM CONTINGENCY 2,260,443 2,221,938
----------- -----------
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 10,085,840 8,157,197
----------- -----------
Total shareholders' investment 16,997,287 15,068,644
----------- -----------
$54,468,516 $53,135,194
=========== ===========
</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 ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
Quarters Ended March 31,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
REVENUES:
Hotel $ 6,669,099 $ 6,802,052
Food and beverage 4,620,490 4,856,234
Golf 5,602,045 5,854,393
Other 1,898,109 1,914,706
Real estate activities 180,000 (14,288)
------------ ------------
18,969,743 19,413,097
------------ ------------
COSTS AND OPERATING EXPENSES:
Hotel 5,278,027 5,225,462
Food and beverage 3,115,654 3,119,640
Golf 1,708,712 1,742,002
Other 3,965,077 3,894,333
General and administrative 1,153,385 1,174,761
Real estate activities 88,629 477
------------ ------------
15,309,484 15,156,675
------------ ------------
OPERATING INCOME 3,660,259 4,256,422
INTEREST, NET 465,338 514,197
------------ ------------
INCOME BEFORE INCOME TAX 3,194,921 3,742,225
PARENT INCOME TAX CHARGE 1,202,200 1,403,900
------------ ------------
INCOME BEFORE DIVIDEND
REQUIREMENTS ON PREFERRED STOCK 1,992,721 2,338,325
DIVIDEND REQUIREMENTS ON
PREFERRED STOCK 64,078 64,078
------------ ------------
NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS $ 1,928,643 $ 2,274,247
============ ============
EARNINGS PER COMMON SHARE $ 385.73 $ 454.85
============ ============
</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 FIFTEEN MONTHS ENDED MARCH 31, 1997
<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, 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 -- -- -- -- -- 1,114,211 1,114,211
----- ------ --------- ---------- ---------- ----------- -----------
Balance, December 31, 1996 5,000 5,000 4,577,000 4,577,000 2,329,447 8,157,197 15,068,644
Net income available to
common shareholders -- -- -- -- -- 1,928,643 1,928,643
----- ------ --------- ---------- ---------- ----------- -----------
Balance, March 31, 1997 .. 5,000 $5,000 4,577,000 $4,577,000 $2,329,447 $10,085,840 $16,997,287
===== ====== ========= ========== ========== =========== ===========
</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 5
<PAGE> 6
GOLF HOST RESORTS, INC.
STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income before dividend
requirements on preferred stock $ 1,992,721 $ 2,338,325
Adjustments to reconcile net
income to net cash flows
from operating activities:
Depreciation and amortization 645,000 620,100
Changes in operating working capital
other than cash (Note 7) (440,267) (2,654,206)
----------- -----------
Net cash flows provided by
operating activities 2,197,454 304,219
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (585,179) (585,560)
Recovery of cost of property and
equipment sold 13,561 4,440
Additions to notes receivable (605) (17,256)
Reductions in notes receivable 69,245 519,736
----------- -----------
Net cash flows used in investing
activities (502,978) (78,640)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in notes payable (734,329) (343,929)
Increases in long-term obligations 59,592 3,978
Decreases in long-term obligations (795,611) (758,132)
(Decrease) increase in long-term intercompany (227,990) 797,957
Increase in long-term contingency 38,505 642
----------- -----------
Net cash flows provided by
financing activities (1,659,833) (299,484)
----------- -----------
NET INCREASE (DECREASE) IN CASH 34,643 (73,905)
----------- -----------
CASH, BEGINNING OF QUARTER 488,685 312,603
----------- -----------
CASH, END OF QUARTER $ 523,328 $ 238,698
=========== ===========
</TABLE>
Supplemental information on noncash 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
MARCH 31, 1997 AND 1996
(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, 1996 except as follows:
Financial Statement Presentation
Certain reclassifications have been made to the December 31, 1995, March
31, 1996 and December 31, 1996 financial statements to conform to the
March 31, 1997 presentation.
(2) LINES OF CREDIT
During the quarter, there was no significant change from the 10-K filing
of December 31, 1996 except as follows:
Under provisions of the related loan agreements, approximately
$5,664,000 was available for immediate use.
(3) LONG-TERM OBLIGATIONS AND CAPITAL LEASE OBLIGATIONS
Long-term obligations consist of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
Mortgage notes at varying rates, ranging
from 8.3% to 9%, maturing from
1998 to 2007. $ 15,179,210 $ 15,487,194
Equipment revolving credit line at
prime, maturing serially from 1997
to 2001. 3,398,164 3,891,728
A $2,000,000 revolving credit line at 9%,
maturing in 2007. 1,368,000 1,368,000
Other 334,665 286,386
Unamortized debt discount and expense (449,750) (467,000)
------------ ------------
19,830,289 20,566,308
Less-current maturities (2,743,120) (2,788,764)
------------ ------------
$ 17,087,169 $ 17,777,544
============ ============
</TABLE>
Page 7
<PAGE> 8
The remainder of Note 3 has not changed significantly from the 10-K filing
of December 31, 1996.
(4) LEASES
During the quarter, there was no significant change from the 10-K filing
of December 31, 1996.
(5) ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
---------- ------------
<S> <C> <C>
Rental pool lease operations $3,382,086 $2,134,459
Salaries 988,753 1,456,267
Taxes, other than income taxes 417,164 242,820
Other 675,426 744,435
---------- ----------
$5,463,429 $4,577,981
========== ==========
</TABLE>
(6) INCOME TAX ALLOCATION AND SHARING POLICY
During the quarter, there was no significant change from the 10-K filing
of December 31, 1996.
(7) SUPPLEMENTAL CASH FLOW DATA
The (increases) decreases in working capital other than cash are as
follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
----------- -------------
<S> <C> <C>
Accounts receivable $(1,987,572) (3,745,113)
Inventories and supplies 141,665 18,707
Prepaid expenses and other (319,106) 116,094
Intercompany 1,114,217 235,664
Accounts payable 251,223 639,607
Accrued expenses 885,448 747,269
Deposits and prepaid fees (526,142) (666,434)
----------- -----------
$ (440,267) $(2,654,206)
=========== ===========
Noncash Financing Activities:
The Company satisfied its preferred
stock dividend liability to
Golf Hosts, Inc. through the
long-term intercompany account. $ 64,078 $ 64,078
</TABLE>
Page 8
<PAGE> 9
GOLF HOST RESORTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Occupancy for the quarter, measured in room nights, declined 2.4% from
the prior year level. On a divisional basis, Innisbrook's occupancy fell 7.9%,
while Tamarron experienced a gain of 31.0%. The fluctuations were primarily in
the conference segment.
On a per occupied room night basis, revenues, excluding those
attributable to real estate activities, declined .9%, from $375.94 to $372.62.
The decline primarily was in food and beverage and can be attributed to the
spending patterns unique to the conference business associated with each
period. Golf also declined, due in part to the occupancy gain at Tamarron for
which, due to seasonality, there were no attendant golf revenues. On a
divisional basis, revenue per occupied room was $418.97 and $174.47, compared
with $407.82 and $182.09 a year earlier, for Innisbrook and Tamarron,
respectively. The occupancy decline coupled with changes in guest spending, as
measured by revenue per occupied room, resulted in a decline in total revenues,
excluding those attributable to real estate activities, of approximately
$638,000 or 3.3%. Revenues from real estate activities increased almost
$200,000, attributable to the closing of the last residential homesite at
Estates at Tamarron - Highpoint.
Costs and operating expenses, in relation to total revenues, increased
from 78.1% to 80.7%. To some extent, the increase can be attributed to the
minimum wage hike that went into effect last fall. Additionally, lost economies
of scale typically accompany lower levels of occupancy, contributing to an
erosion of the operating income margin. Finally, the impact of lower guest
spending, coupled with general price level changes in the underlying cost
structure, adversely impacted the operating expense percentage, further
eroding the operating income margin.
Interest, net, decreased approximately $50,000 from the year-ago level,
reflecting lower borrowings under the accounts receivable line of credit, and a
reduction in both the interest rate and the level of debt outstanding under the
Company's mortgages.
FINANCIAL CONDITION
At March 31, 1997, the Company's net working capital deficit was
$23,111, compared with $1,278,106 at December 31, 1996. The Company typically
experiences seasonal fluctuations in its net working capital position without
impairing its ability to pay trade creditors in a timely manner and satisfy its
financial obligations in an orderly fashion.
The Company maintains satisfactory relations with its financial
institutions. Liquidity is provided by an accounts receivable and inventory
credit line of $6,000,000, of which $5,664,000 was available for immediate use
at March 31, 1997, and a revolving mortgage credit facility of $2,000,000, of
which approximately $586,000 was available for immediate use at March 31, 1997.
Specific financing is in place for most equipment purchases.
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 as satisfactory.
Page 9
<PAGE> 10
PART II - OTHER INFORMATION
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 quarters ended March 31, 1997 and 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
Page 10
<PAGE> 11
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: May 15, 1997 By: /s/ R. S. Ferreira
-------------------------------- ------------------------------
Richard S. Ferreira
Executive Vice President
Chief Financial Officer
Date: May 15, 1997 By: /s/ A. S. Herzog
-------------------------------- ------------------------------
A. Stephen Herzog
Vice President and Controller
Chief Accounting Officer
Date: May 15, 1997 By: /s/ R. L. Akin
-------------------------------- ------------------------------
Richard L. Akin
Vice President
and Treasurer
Page 11
<PAGE> 12
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 ended March 31, 1997 and 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, 1996 (File No. 2-64309).
Page 12
<PAGE> 13
INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS
MARCH 31, 1997 AND 1996
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1997 1996
---------- ----------
ASSETS
<S> <C> <C>
RECEIVABLE FROM GOLF HOST RESORTS, INC
FOR DISTRIBUTION - FULLY SECURED $3,093,103 $3,249,762
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 22,062 24,347
---------- ----------
$3,115,165 $3,274,109
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $2,561,534 $2,863,753
DUE TO MAINTENANCE ESCROW FUND 371,665 404,621
RESERVE FOR ESTIMATED LIFE-SAFETY
REIMBURSEMENT 181,966 5,735
PARTICIPANTS' FUND BALANCES -- --
---------- ----------
$3,115,165 $3,274,109
========== ==========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $2,017,075 $1,147,241
INVENTORIES -- 251
RECEIVABLE FROM DISTRIBUTION FUND 371,665 404,621
INTEREST RECEIVABLE 25,196 32,148
---------- ----------
$2,413,936 $1,584,261
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 20,641 $ 14,933
INTEREST PAYABLE TO DISTRIBUTION FUND 22,062 24,347
CARPET CARE RESERVE 41,812 48,086
PARTICIPANTS' FUND BALANCES 2,329,421 1,496,895
---------- ----------
$2,413,936 $1,584,261
========== ==========
</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 13
<PAGE> 14
INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 1997 AND 1996
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
GROSS REVENUES $5,881,655 $6,166,059
---------- ----------
DEDUCTIONS:
Agents' commissions 102,617 118,547
Audit fees 3,100 3,100
---------- ----------
105,717 121,647
---------- ----------
ADJUSTED GROSS REVENUES 5,775,938 6,044,412
MANAGEMENT FEE (2,714,690) (2,840,874)
---------- ----------
GROSS INCOME DISTRIBUTION 3,061,248 3,203,538
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary occupancy fees 3,920 3,005
Occupancy fees (495,550) (539,491)
Advisory Committee expenses (28,712) (22,239)
Life-safety reimbursement (181,966) (5,735)
---------- ----------
NET INCOME DISTRIBUTION 2,358,940 2,639,078
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
Occupancy fees 495,550 539,491
Hospitality suite fees 3,022 4,328
Greens fees 35,790 37,508
Additional participation credit 17,835 18,290
---------- ----------
AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS $2,911,137 $3,238,695
========== ==========
Average daily distribution $ 39.33 $ 42.79
Average room rate $ 143.92 $ 138.94
Occupied room nights 40,867 44,378
Available room nights 74,022 75,692
Occupancy percentage 55.2% 58.6%
Average number of available units 822 832
</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 CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS ENDED MARCH 31, 1997 AND 1996
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1997 1996
----------- ------------
<S> <C> <C>
BALANCE, beginning of period $ -- $ --
ADDITIONS:
Amounts available for distribution
before life-safety reimbursement 3,093,103 3,244,430
Interest received or receivable from
Maintenance Escrow Fund 22,062 24,347
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (371,665) (404,621)
Amounts held in reserve for estimated
life-safety reimbursement (181,966) (5,735)
Amounts accrued or paid to participants (2,561,534) (2,858,421)
----------- -----------
BALANCE, end of period $ -- $ --
=========== ===========
MAINTENANCE ESCROW FUND
1997 1996
----------- -----------
BALANCE, beginning of period $ 1,734,415 $ 1,141,259
ADDITIONS:
Amounts withheld from occupancy fees 371,665 404,621
Interest earned 22,062 24,347
Charges to participants to establish
or restore escrow balances 453,323 239,474
REDUCTIONS:
Maintenance charges (211,600) (266,489)
Carpet care reserve deposit (14,497) (10,792)
Interest accrued or paid to Distribution Fund (22,062) (24,347)
Refunds to participants as prescribed by
the Master Lease Agreement (3,885) (11,178)
----------- -----------
BALANCE, end of period $ 2,329,421 $ 1,496,895
=========== ===========
</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
TAMARRON RENTAL POOL LEASE OPERATION
BALANCE SHEETS
MARCH 31, 1997 AND 1996
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
ASSETS
CASH $ 1,000 $ 1,000
RECEIVABLE FROM GOLF HOST RESORTS, INC
FOR DISTRIBUTION 288,983 223,848
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 253 $ 1,180
---------- ----------
$ 290,236 $ 226,208
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $ 220,765 $ 183,300
DUE TO MAINTENANCE ESCROW FUND 69,471 42,728
PARTICIPANTS' FUND BALANCES -- --
---------- ----------
$ 290,236 $ 226,028
========== ==========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $ 17,588 $ 126,695
DUE FROM DISTRIBUTION FUND 69,471 42,728
INTEREST RECEIVABLE -- 374
INVENTORY:
Linen 124,704 84,408
Materials and supplies 9,642 7,806
DEPOSITS -- 4,371
---------- ----------
$ 221.405 $ 266,382
========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 10,781 $ 11,132
INTEREST PAYABLE TO DISTRIBUTION FUND 253 1,180
PARTICIPANTS' FUND BALANCES 210,371 254,070
---------- ----------
$ 221,405 $ 266,382
========== ==========
</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
STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 1997 AND 1996
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
GROSS REVENUES $ 701,690 $ 534,362
--------- ---------
DEDUCTIONS:
Agents' commissions 58,047 36,579
Sales and marketing expenses 56,135 45,421
Audit fees 2,600 2,601
--------- ---------
116,782 84,601
--------- ---------
ADJUSTED GROSS REVENUES 584,908 449,761
MANAGEMENT FEE (292,454) (224,881)
--------- ---------
GROSS INCOME DISTRIBUTION 292,454 224,880
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary occupancy fees 622 695
Occupancy fees (95,117) (56,683)
Designated items (20,911) (13,386)
Advisory Committee expenses (4,093) (1,780)
--------- ---------
POOLED INCOME 172,955 153,726
ADJUSTMENTS TO POOLED INCOME:
Hospitality suite fees -- 53
Occupancy fees 95,117 56,683
--------- ---------
NET INCOME DISTRIBUTION $ 268,072 $ 210,462
========= =========
Average daily distribution $ 10.44 $ 8.26
Average room rate $ 73.40 $ 73.21
Room nights 9,559 7,299
Occupancy percentage 37.2% 28.7%
Average number of available units 285 280
Number of units in Rental Pool at end of period 297 290
</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 l7
<PAGE> 18
TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS ENDED MARCH 31, 1997 AND 1996
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
BALANCE, beginning of period $ -- $ --
ADDITIONS:
Amounts available for distribution 268,072 210,462
Interest received or receivable from
Maintenance Escrow Fund 253 1,180
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (47,560) (28,342)
Amounts accrued or paid to participants (220,765) (183,300)
--------- ---------
BALANCE, end of period $ -- $ --
========= =========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 197,548 $ 328,336
ADDITIONS:
Amounts withheld from occupancy fees 47,560 28,342
Interest earned 253 1,180
Reimbursement of designated items 20,911 13,386
Charges to participants to establish
or restore escrow balances 12,086 16,684
REDUCTIONS:
Maintenance and inventory charges (19,472) (36,717)
Refurbishing charges (22,431) (75,745)
Interest accrued or paid to
Distribution Fund (253) (1,180)
Designated items (20,911) (13,387)
Refunds to participants as prescribed
by Master Lease Agreement (4,920) (6,829)
--------- ---------
BALANCE, end of period $ 210,371 $ 254,070
========= =========
</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
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-31-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 523,328
<SECURITIES> 0
<RECEIVABLES> 6,582,789
<ALLOWANCES> 51,055
<INVENTORY> 4,982,301
<CURRENT-ASSETS> 13,312,523
<PP&E> 66,860,913
<DEPRECIATION> 26,895,973
<TOTAL-ASSETS> 54,468,516
<CURRENT-LIABILITIES> 13,335,634
<BONDS> 19,830,289
0
4,577,000
<COMMON> 5,000
<OTHER-SE> 12,415,287
<TOTAL-LIABILITY-AND-EQUITY> 54,468,516
<SALES> 5,959,782
<TOTAL-REVENUES> 18,969,743
<CGS> 1,735,884
<TOTAL-COSTS> 15,309,484
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 15,331
<INTEREST-EXPENSE> 465,338
<INCOME-PRETAX> 3,194,921
<INCOME-TAX> 1,202,200
<INCOME-CONTINUING> 1,992,721
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,992,721
<EPS-PRIMARY> 398.54
<EPS-DILUTED> 398.54
</TABLE>
