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<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 March 31, 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 Hwy 19, N, Palm Harbor, FL 34684
- --------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(970)-259-2000
- --------------
(Registrant's telephone number, including area code)
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 17
<PAGE> 2
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
ASSETS
(Substantially all pledged)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------- -------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 57,490 $ 56,090
Restricted cash 1,554,036 2,238,767
Accounts receivable, net 8,658,833 5,472,228
Inventories and supplies 1,624,809 1,899,598
Prepaid expenses and other assets 1,033,672 684,497
Intercompany receivables 2,645,546 2,857,240
------------- -------------
15,574,386 13,208,420
Assets held for sale 9,441,836 9,038,309
------------- -------------
Total current assets 25,016,222 22,246,729
INTANGIBLES, net 32,661,540 32,879,352
PROPERTY AND EQUIPMENT, at cost, less
accumulated depreciation and amortization 36,595,714 35,725,251
OTHER ASSETS 1,749,691 1,996,301
------------- -------------
$ 96,023,167 $ 92,847,633
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements
Page 2
<PAGE> 3
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
LIABILITIES AND SHAREHOLDERS' (DEFICIT)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------ -------------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 6,702,770 $ 7,854,720
Accrued expenses 6,611,276 5,552,488
Deposits and prepaid fees 2,595,712 2,907,472
------------ ------------
Total current liabilities 15,909,758 16,314,680
------------ ------------
LONG-TERM OBLIGATIONS 78,650,309 77,999,163
DEFERRED INCOME TAXES 14,127,687 13,134,558
------------ ------------
Total liabilities 108,687,754 107,448,401
------------ ------------
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) (3,689,587) (5,625,768)
------------- ------------
Total shareholder's (deficit) (12,664,587) (14,600,768)
------------ ------------
Total liabilities and shareholder's
(deficit) $ 96,023,167 $ 92,847,633
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
Page 3
<PAGE> 4
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
STATEMENTS OF INCOME
FOR THE QUARTERS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
Quarters Ended March 31,
---------------------------------------
1998 1997
------------- --------------
<S> <C> <C>
REVENUES:
Resort facilities $ 7,819,476 $ 6,669,099
Food and beverage 5,005,803 4,620,490
Golf 6,148,105 5,602,045
Other 2,004,526 1,898,109
Real estate activities - 180,000
------------ -----------
20,977,910 18,969,743
------------ -----------
COSTS AND OPERATING EXPENSES:
Resort facilities 5,316,594 5,278,027
Food and beverage 3,230,373 3,115,654
Golf 1,978,194 1,708,712
Other 3,895,340 3,965,077
General and administrative 1,116,676 1,153,385
Real estate activities - 88,629
------------ -----------
15,537,177 15,309,484
------------ -----------
OPERATING INCOME 5,440,733 3,660,259
INTEREST, NET 2,240,317 465,338
------------ -----------
INCOME BEFORE INCOME TAX 3,200,416 3,194,921
PARENT INCOME TAX CHARGE 1,200,157 1,202,200
------------ -----------
INCOME BEFORE DIVIDEND
REQUIREMENTS ON PREFERRED STOCK 2,000,259 1,992,721
DIVIDEND REQUIREMENTS ON
PREFERRED STOCK 64,078 64,078
------------ -----------
NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS $ 1,936,181 $ 1,928,643
============ ===========
EARNINGS PER COMMON SHARE
$ 387.24 $ 385.73
============ ===========
</TABLE>
The accompanying notes are an integral part of these statements
Page 4
<PAGE> 5
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S (DEFICIT) EQUITY
FOR THE FIFTEEN MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
$1 Par Value 5.6% Cumulative
Common Stock Preferred Stock Retained Total
----------------- ----------------------- Paid-In (Deficit) Shareholders'
Shares Amount Shares Amount Capital Earnings (Deficit) Equity
------ ------ --------- ---------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
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 equity - - - - - 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 income available to
common shareholder - - - - - 1,936,181 (1,936,181)
----- ------ --------- ---------- ------------ ----------- ------------
Balance, March 31, 1998 5,000 $5,000 4,577,000 $4,577,000 $(13,557,000) $(3,689,587) $(12,664,587)
===== ====== ========= ========== ============ =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 5
<PAGE> 6
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income before dividend
requirements on preferred stock $ 2,000,259 $ 1,992,721
Noncash items included in income:
Depreciation and amortization 837,264 645,000
Increase in deferred tax 993,129 (163,912)
Changes in operating working capital (2,833,567) (504,349)
----------- -----------
Cash provided by operations 997,085 1,969,460
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Decreases) increases in other assets 125,485 -
Purchases of property and equipment (1,350,353) (585,174)
Net recovery of cost of property and
equipment sold or retired (18,435) 13,562
Increase in assets held for sale (403,527) -
Additions to notes receivable - (605)
Reductions in notes receivable - 69,245
----------- -----------
Cash (used in) investing (1,646,830) (502,972)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in notes payable - (734,329)
Increases in long-term obligations - 59,592
Decreases in long-term obligations (355,987) (795,613)
Increase in long-term contingency - 38,505
Additional borrowings 1,007,132 -
----------- -----------
Cash provided by (used for) financing 651,145 (1,431,845)
----------- -----------
NET INCREASE (DECREASE) IN CASH 1,400 34,643
CASH, BEGINNING OF QUARTER 56,090 488,685
----------- -----------
CASH, END OF QUARTER $ 57,490 $ 523,328
=========== ===========
NONCASH FINANCING AND INVESTING
ACTIVITIES:
The Company satisfied it preferred
stock dividend liability to GHI
through the intercompany account $ 64,078 $ 64,078
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 6
<PAGE> 7
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 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 March, 1997 financial
statements to conform to the December 1997 presentation.
(2) LONG-TERM OBLIGATIONS
Long-term obligations consist of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Participating mortgage note at varying pay
rates maturing in 2027 $ 69,725,000 $ 69,975,000
$9,000,000 participating mortgage
note credit facility 4,031,295 3,024,163
Mortgage note at 6.34%,
maturing in 2002. 4,894,014 5,000,000
------------ ------------
$ 78,650,309 $ 77,999,163
============ ============
</TABLE>
Page 7
<PAGE> 8
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(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 at March 31, 1998, are included.
Guest occupancy for the quarter, measured in room nights, increased 7.4% from
the level of the prior year. On a divisional basis, Innisbrook's occupancy
rose 17.3% while Tamarron experienced a decline in occupancy of 34.9%. The
sharp decline in Tamarron's occupancy is primarily due to the record snowfalls
in New Mexico, which is normally a significant contributor to Tamarron's
ski-related winter occupancy.
Revenues from resort operations on a per occupied room basis increased 8.8%,
from $376.62 to $409.68. The improved guest spending is primarily attributable
to a nearly 20% increase in Innisbrook's average room rate while Tamarron's
lower average rate winter occupancy levels declined. Food and beverage and
golf revenues also reflected improved spending per occupied room. On a
divisional basis, Innisbrook's and Tamarron's revenue per occupied room for the
first quarter of 1998 and 1997 were $437.72 and $197.99 as compared to $419.19
and $177.77, respectively. As a result of the improved occupancy and guest
spending, total resort operations revenues rose nearly $3.4 million, or 18%.
Real estate activities revenue increased to $400,000 in 1998 as compared with
$180,000 in 1997. The 1997 amount results from the sale of the last Estates at
Tamarron-Highpoint homesite while the 1998 revenue results from the sale of one
Estates at Tamarron - Pine Ridge homesite. Six Pine Ridge homesites remain
unsold.
Relative to total resort operations revenues, costs and operating expenses
declined slightly to 80.6% as compared to 1997's 81.0%. At Innisbrook,
increased management fees resulting from the change in the management were
offset by the economies of scale attributable to higher occupancy and the
reduction in the costs associated with resort facilities revenue. The cost
reduction resulted from the new master lease agreement, which yielded an
increase in rental pool distribution expense of 3.5% while related resort
facilities revenue rose 31.4%. These improvements at Innisbrook were somewhat
offset by the decline in operating levels at Tamarron. While Tamarron's resort
operations revenues declined 27%, costs and operating expenses as a percentage
of revenues rose from 130% to 177%. In addition to lost economies of scale
resulting from lower occupancy levels, additional costs were incurred relative
to the installation of Troon Golf as manager of the golf course and increased
permanent staff in food and beverage and golf.
FINANCIAL CONDITION AND LIQUIDITY
The Company's working capital position (exclusive of Assets Held for Sale) was
a deficit of $335,000, 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.
However, due to the seasonal nature of the Company's business, the Company
expects cash flow deficits from operations during the third and fourth quarters
of 1998. The Company has evaluated the cash needs with respect to these
deficits and planned capital expenditures and has reason to believe that cash
flow generated from operations during the first half of the year will not be
sufficient to meet the expected cash needs of the second half of 1998.
Management recognizes that the Company must generate additional cash resources
to ensure the continuation of operations and anticipates funding any cash flow
deficits by obtaining additional financing from lending institutions, deferring
certain capital expenditures, sales of investments under appropriate market
conditions, sales of certain significant operating and non-operating assets,
additional cash advances by the Company's parent and Westin, and the infusion
of additional capital by the shareholders of the Company's parent. Management
expects these efforts to generate enough cash to cover any cash deficiency
experienced during the year. In this vein, 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 is negotiating an accounts receivable
line of credit with major financial institutions.
While the Company has a substantial retained deficit, based on existing cash
levels and the additional cash sources discussed above, the Company assesses
its liquidity as satisfactory.
Page 8
<PAGE> 9
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
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,
1998 and 1997.
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
<PAGE> 10
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: 7/1/98 By: /s/ Merrick Kleeman
----------------------------- ------------------------------
Merrick Kleeman
President
Date: 7/1/98 By: /s/ Richard L. Akin
----------------------------- ------------------------------
Richard L. Akin
Vice President and Treasurer
Page 10
<PAGE> 11
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, 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
<PAGE> 12
INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS
MARCH 31, 1998 AND 1997
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1998 1997
------------ ----------
<S> <C> <C>
ASSETS
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION - FULLY SECURED $ 3,081,390 $ 3,093,103
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 20,976 22,062
------------ -----------
$ 3,102,366 $ 3,115,165
============ ===========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION 2,583,088 2,561,534
DUE TO MAINTENANCE ESCROW FUND 519,278 371,665
RESERVE FOR ESTIMATED LIFE-SAFETY
REIMBURSEMENT - 181,966
PARTICIPANTS' FUND - -
------------ -----------
$ 3,102,366 $ 3,115,165
============ ===========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $ 1,786,060 $ 2,017,075
RECEIVABLE FROM DISTRIBUTION FUND 519,278 371,665
INTEREST RECEIVABLE 36,785 25,196
------------ -----------
$ 2,342,123 $ 2,413,936
============ ===========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 60,674 $ 20,641
INTEREST PAYABLE TO DISTRIBUTION FUND 20,976 22,062
CARPET CARE RESERVE 29,007 41,812
PARTICIPANTS' FUND BALANCES 2,231,466 2,329,421
------------ -----------
$ 2,342,123 $ 2,413,936
============ ===========
</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 12
<PAGE> 13
INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 1998 AND 1997
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
GROSS REVENUES $ 7,744,819 $ 5,881,665
----------- -----------
DEDUCTIONS:
Agents' commissions 250,789 102,617
Credit Card Fees 82,301 -
Audit fees 3,249 3,100
----------- -----------
336,339 105,717
----------- -----------
ADJUSTED GROSS REVENUES 7,408,480 5,775,938
MANAGEMENT FEE (3,689,868) (2,714,690)
----------- -----------
GROSS INCOME DISTRIBUTION 3,718,612 3,061,248
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Management Fee (398,722) -
Marketing Fee (217,484) -
Miscellaneous pooled expense (25,343) -
Corporate complimentary occupancy fees 7,009 3,920
Occupancy fees (583,307) (495,550)
Advisory Committee expenses (9,525) (28,712)
Life-safety reimbursement - (181,966)
----------- -----------
NET INCOME DISTRIBUTION 2,491,240 2,358,940
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
Occupancy fees 583,307 495,550
Hospitality suite fees - 3,022
Greens fees 5,523 35,790
Additional participation credit 1,320 17,835
----------- -----------
AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS $ 3,081,390 $ 2,911,137
=========== ===========
Average daily distribution $ 42.76 $ 39.33
Average room rate $ 161.52 $ 143.92
Occupied room nights 47,951 40,867
Available room nights 72,061 74,022
Occupancy percentage 66.5% 55.2%
Average number of available units 801 822
</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 CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS ENDED MARCH 31, 1998 AND 1997
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
BALANCE, beginning of period $ - $ -
ADDITIONS:
Amounts available for distribution
before life-safety reimbursement 3,081,390 3,093,103
Interest received or receivable from
Maintenance Escrow Fund 20,976 22,062
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (519,278) (371,665)
Amounts held in reserve for estimated
life-safety reimbursement - (181,966)
Amounts accrued or paid to participants (2,583,088) (2,561,534)
------------ ------------
BALANCE, end of period $ - $ -
============ ============
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 1,901,616 $ 1,734,415
ADDITIONS:
Amounts withheld from occupancy fees 519,278 371,665
Interest earned 20,976 22,062
Charges to participants to establish
or restore escrow balances 83,803 453,323
REDUCTIONS:
Maintenance charges (194,214) (211,600)
Carpet care reserve deposit (11,666) (14,497)
Interest accrued or paid to Distribution Fund (20,976) (22,062)
Refunds to participants as prescribed by
the Master Lease Agreement (67,351) (3,885)
------------ ------------
BALANCE, end of period $ 2,231,466 $ 2,329,421
============ ============
</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
TAMARRON RENTAL POOL LEASE OPERATION
BALANCE SHEETS
MARCH 31, 1998 AND 1997
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CASH $ 1,000 $ 1,000
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION 196,299 288,983
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 402 253
------------ ------------
$ 197,701 $ 290,236
============ ============
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $ 148,299 $ 220,765
DUE TO MAINTENANCE ESCROW FUND 49,402 69,471
PARTICIPANTS' FUND BALANCES - -
------------ ------------
$ 197,701 $ 290,236
============ ============
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $ 62,030 $ 17,588
DUE FROM DISTRIBUTION FUND 49,402 69,471
INTEREST RECEIVABLE - -
INVENTORY:
Linen 51,905 124,704
Materials and supplies 16,483 9,642
DEPOSITS - -
------------ ------------
$ 179,820 $ 221,405
============ =============
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 7,000 $ 10,781
INTEREST PAYABLE TO DISTRIBUTION FUND 402 253
PARTICIPANTS' FUND BALANCES 172,418 210,371
------------ ------------
$ 179,820 $ 221,405
============ ============
</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
STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 1998 AND 1997
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
GROSS REVENUES $ 486,608 $ 701,690
----------- -----------
DEDUCTIONS:
Agents' commissions 49,672 58,047
Sales and marketing expenses 36,496 56,135
Audit fees 2,601 2,600
----------- -----------
88,769 116,782
----------- -----------
ADJUSTED GROSS REVENUES 397,839 584,908
MANAGEMENT FEE (198,919) (292,454)
----------- -----------
GROSS INCOME DISTRIBUTION 198,920 292,454
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary occupancy fees 307 622
Occupancy fees (63,563) (95,117)
Designated items (16,619) (20,911)
Advisory Committee expenses (2,927) (4,093)
----------- -----------
POOLED INCOME 116,118 172 955
ADJUSTMENTS TO POOLED INCOME:
Hospitality suite fees - -
Occupancy fees 63,563 95,117
----------- -----------
NET INCOME DISTRIBUTION $ 179,681 $ 268,072
=========== ===========
Average daily distribution $ 7.00 $ 10.44
Average room rate $ 78.24 $ 73.40
Room nights 6,219 9,559
Occupancy percentage 24.2% 37.2%
Average number of available units 285 285
Number of units in Rental Pool at end of period 295 297
</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 l6
<PAGE> 17
TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS ENDED MARCH 31, 1998 AND 1997
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
BALANCE, beginning of period $ - $ -
ADDITIONS:
Amounts available for distribution 179,681 268,072
Interest received or receivable from
Maintenance Escrow Fund 402 253
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (31,784) (47,560)
Amounts accrued or paid to participants (148,299) (220,765)
------------ ------------
BALANCE, end of period $ - $ -
============ ============
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 165,522 $ 197,548
ADDITIONS:
Amounts withheld from occupancy fees 31,784 47,560
Interest earned 402 253
Reimbursement of designated items 16,619 20,911
Charges to participants to establish
or restore escrow balances 105,272 12,086
REDUCTIONS:
Maintenance and inventory charges (33,076) (19,472)
Refurbishing charges (91,254) (22,431)
Interest accrued or paid to
Distribution Fund (402) (253)
Designated items (16,619) (20,911)
Refunds to participants as prescribed
by Master Lease Agreement (5,830) (4,920)
------------- ----------
BALANCE, end of period $ 172,418 $ 210,371
============= ==========
</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
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 54,490
<SECURITIES> 1,554,036
<RECEIVABLES> 8,717,483
<ALLOWANCES> 58,650
<INVENTORY> 1,624,809
<CURRENT-ASSETS> 25,016,222
<PP&E> 55,334,464
<DEPRECIATION> 17,538,750
<TOTAL-ASSETS> 96,023,167
<CURRENT-LIABILITIES> 15,909,758
<BONDS> 78,650,309
0
4,577,000
<COMMON> 5,000
<OTHER-SE> (17,246,587)
<TOTAL-LIABILITY-AND-EQUITY> 96,023,167
<SALES> 6,348,200
<TOTAL-REVENUES> 20,977,910
<CGS> 1,921,982
<TOTAL-COSTS> 15,537,177
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 38,500
<INTEREST-EXPENSE> 2,240,317
<INCOME-PRETAX> 3,200,416
<INCOME-TAX> 1,200,157
<INCOME-CONTINUING> 2,000,259
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,936,181
<EPS-PRIMARY> 387.24
<EPS-DILUTED> 387.24
</TABLE>
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