<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
For Quarter Ended September 30, 1999
Commission File no. 2-64309
GOLF HOST RESORTS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0631130
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
36750 US 19 N., Palm Harbor, Florida 34684
- --------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(727) 942-2000
- ----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding twelve months, and (2) has been subject to the filing
requirements for the past 90 days. - Yes [X] No [ ]
Issuer has no common stock subject to this report.
Page 1 of 17
<PAGE> 2
GOLF HOST RESORTS, INC. AND SUBSIDIARY
(A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.)
BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
ASSETS
(Substantially all pledged)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,230,305 $ 1,396,404
Restricted cash 591,428 705,297
Accounts receivable, net 9,039,019 7,545,177
Notes receivable 1,349,823 1,349,823
Inventories and supplies 1,592,999 2,057,450
Prepaid expenses and other assets 362,233 1,061,668
----------- -----------
14,165,807 14,115,819
Assets held for sale 9,444,303 12,684,302
----------- -----------
Total current assets 23,610,110 26,800,121
INTANGIBLES, net 27,225,779 28,547,188
PROPERTY AND EQUIPMENT, at cost, less
accumulated depreciation and amortization 42,413,778 41,585,829
OTHER ASSETS 314,526 1,874,723
----------- -----------
$93,564,193 $98,807,861
=========== ===========
</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
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
LIABILITIES AND SHAREHOLDER'S (DEFICIT)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- -------------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Account receivable line of credit $ 549,051 $ 3,832,443
Accounts payable 5,243,842 3,110,889
Accrued expenses 4,501,392 5,241,267
Deposits and prepaid fees 2,938,725 3,657,913
Intercompany payable 1,274,118 459,520
------------- -------------
Total current liabilities 14,507,128 16,302,032
NOTES PAYABLE 83,475,565 83,416,053
OTHER LONG-TERM LIABILITIES 5,008,634 4,353,543
DEFERRED INCOME TAXES 1,770,467 1,770,467
------------- -------------
Total liabilities 104,761,794 105,842,095
------------- -------------
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 earnings (2,222,601) 1,940,766
------------- -------------
Total shareholder's (deficit) (11,197,601) (7,034,234)
------------- -------------
Total liabilities and shareholder's
(deficit) $ 93,564,193 $ 98,807,861
============= =============
</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 AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
Quarters ended Sept 30, Nine Months ended Sept 30,
----------------------------- -----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Resort facilities $ 2,393,168 $ 2,402,941 $ 16,810,156 $ 14,809,288
Food and beverage 2,457,808 1,944,683 12,746,726 11,309,350
Golf 1,855,983 1,876,610 11,942,740 12,115,312
Other 941,544 1,142,866 4,942,827 5,105,779
------------ ------------ ------------ ------------
7,648,503 7,367,100 46,442,449 43,339,729
------------ ------------ ------------ ------------
COST AND OPERATING EXPENSES:
Resort facilities 2,354,056 2,143,596 11,525,521 10,962,581
Food and beverage 2,273,866 1,469,145 8,398,909 7,554,440
Golf 1,350,653 1,537,987 5,348,060 5,379,059
Other 3,043,321 3,478,545 13,046,178 10,923,568
General and administrative 1,586,581 1,422,971 4,946,193 3,792,029
------------ ------------ ------------ ------------
10,608,477 10,052,244 43,264,861 38,611,677
GAIN (LOSS) ON ASSETS HELD FOR SALE 504,764 327,475 (172,871) 327,475
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) (2,465,317) (2,357,669) 3,004,717 5,055,527
INTEREST, NET 2,216,359 2,309,290 6,975,853 7,028,357
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAX (4,681,676) (4,666,959) (3,971,136) (1,972,830)
PARENT INCOME TAX CHARGE -- -- -- 381,614
GAIN FROM CHANGE IN TAX STATUS -- -- -- 13,426,039
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE DIVIDEND
REQUIREMENTS ON PREFERRED STOCK (4,681,676) (4,666,959) (3,971,136) 11,071,595
DIVIDEND REQUIREMENTS ON
PREFERRED STOCK 64,077 64,078 192,231 192,234
------------ ------------ ------------ ------------
NET INCOME (LOSS) AVAILABLE
TO COMMON SHAREHOLDER $ (4,745,753) $ (4,731,037) $ (4,163,367) $ 10,879,361
============ ============ ============ ============
EARNINGS (LOSS) PER COMMON SHARE $ (949.15) $ (946.21) $ (832.67) $ 2,175.87
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial 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 TWENTY-ONE MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
$1 Par Value 5.6% Cumulative
Common Stock Preferred Stock Retained Total
----------------- ------------------------- Paid-In (Deficit) Shareholder's
Shares Amount Shares Amount Capital Earnings (Deficit) Equity
------ ------- --------- ----------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
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 - - - - - 7,566,534 7,566,534
----- ------- --------- ----------- ------------ ------------ -------------
Balance, December 31, 1998 5,000 5,000 4,577,000 4,577,00 (13,557,000) 1,940,766 (7,034,234)
Net income available to
common shareholder - - - - - (4,163,367) (4,163,367)
----- ------- --------- ----------- ------------ ------------ -------------
Balance, September 30, 1999 5,000 $ 5,000 4,577,000 $ 4,577,000 $(13,557,000) $ (2,222,601) $ (11,197,601)
===== ======= ========= =========== ============ ============ =============
</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 NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) before dividend
requirements on preferred stock $ (3,971,136) $ 11,071,595
Noncash items included in income:
Depreciation and amortization 2,984,409 3,003,035
Write-off of startup costs 1,623,446 --
Gain from change in tax status -- --
Increase in deferred tax -- (13,134,558)
Changes in operating working capital 1,080,186 2,493,962
------------ ------------
Cash provided by operations 1,716,905 3,434,034
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in other assets (63,249) (356,231)
Purchases of property and equipment (2,498,195) (6,037,586)
Net recovery of cost of property and
equipment sold or retired 7,229 (10,921)
(Increase) decrease in assets held for sale 3,240,000 (1,427,727)
------------ ------------
Cash provided by (used in) investing activities 685,785 (7,832,465)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decreases in notes payable (284,157) (355,987)
Additional borrowings 303,416 4,743,324
Repayment of line of credit (3,283,392) --
Increases in other long-term liabilities 695,344 --
------------ ------------
Cash provided by (used for) financing activities (2,568,789) 4,387,337
------------ ------------
NET INCREASE (DECREASE) IN CASH (166,099) (11,094)
CASH, BEGINNING OF PERIOD 1,396,404 56,090
------------ ------------
CASH, END OF PERIOD $ 1,230,305 $ 44,996
============ ============
NONCASH FINANCING AND INVESTING
ACTIVITIES:
The Company satisfied its preferred
stock dividend liability to GHI
through the intercompany account $ 192,231 $ 192,234
</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
SEPTEMBER 30, 1999 and 1998
(1) ORGANIZATION, BUSINESS, LIQUIDITY AND ACCOUNTING
POLICIES
During the quarter, there was no significant change from the 10-K filing
on December 31, 1998.
Financial Statement Presentation
Certain reclassifications have been made to the September 1998 financial
statements to conform to the December 1998 presentation.
(2) LONG-TERM OBLIGATIONS
Long-term obligations consist of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
<S> <C> <C>
Participating mortgage note at varying pay
rates maturing in 2027 $ 69,975,000 $ 69,975,000
$9,000,000 participation mortgage
note credit facility 9,000,000 8,696,584
Mortgage note at 6.34%,
maturing in 2002 4,417,764 4,645,264
Capital lease at 9.51% 104,248 119,181
------------ ------------
83,497,012 83,436,029
Less current maturities 21,447 19,976
------------ ------------
$ 83,475,565 $ 83,416,053
============ ============
</TABLE>
Page 7
<PAGE> 8
GOLF HOST RESORTS, 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 1999 and 1998,
the results of operations of Tamarron, which are included in gain (loss) on
assets held for sale in 1999, are also utilized.
Guest occupancy for the quarter, measured in room nights, declined .8% from the
level of the prior year. On a divisional basis, Innisbrook's occupancy rose .6%
while Tamarron experienced a reduction in occupancy of 3.3%. The modest
increase in Innisbrook's room nights occurred primarily in the transient
segment. The decline in Tamarron's occupancy occurred in the transient segment,
while the group segment occupancy declined slightly.
Revenues from resort operations on a per occupied room basis increased 3.0%,
from $328.48 to $338.44. The resorts shared the improved guest spending, with
Innisbrook's guest spending per occupied room rising 3.2% while Tamarron
enjoyed a 2.8% increase. This resulted from a 3.8% increase in Innisbrook's
revenue, with Tamarron posting a .6% decline. The average daily room rate rose
4.5% during the period. Innisbrook's average daily room rate declined 1.0% and
Tamarron's increased 13.1%. Innisbrook's meals served rose 29% and its revenue
per meal served declined 2.4%. The increase in meals served resulted from the
opening of an on property pizzeria and a lounge. These facilities generate a
lower average check than the restaurants. Tamarron's meals served approximated
the prior year, while its revenue per meal declined 4.2% due to a change in the
mix of banquet/restaurant meals served. Innisbrook golf revenues were down 1.1%
from the prior year, as revenue per player declined 14.8%. This resulted from a
16.1% increase in rounds played; the increase being attributable to a
discounted rate promotional program. Tamarron's golf revenues were down 7.6%,
reflecting the 8.4% decrease in rounds played, which was partially due to
inclement weather. On a divisional basis, Innisbrook and Tamarron's revenue per
occupied room for the third quarter of 1999 and 1998 were $336.49 and $341.98
as compared to $326.12 and $332.59, respectively. As a result of the improved
guest spending, total resort operations revenues rose $257,000, or 2.2%. There
was no Pine Ridge lot sale activity in the third quarter of either year, and
there are no remaining Pine Ridge homesites to be sold. All of the real estate
sales activity for 1999 and 1998 is included in gain (loss) on assets held for
sale in the statements of income.
Costs and operating expenses as a percentage of revenues approximated the prior
year. At Innisbrook, the gross operating loss for the quarter improved 20.2%,
or $108,000, as relative departmental operating expense increased by a modest
2.2% over the prior year. At the same time, Innisbrook's fixed charges and
other expenses declined .6% from the prior year. While Tamarron's gross
operating revenue increased as noted above, its cost and operating expenses
decreased 7.7% while its fixed charges and other expenses approximated those of
the prior year.
FINANCIAL CONDITION AND LIQUIDITY
The Company's working capital position (exclusive of Assets Held for Sale) was
a deficit of $341,000 at September 30, 1999 as compared to a deficit of
$2,186,000 at December 31, 1998. 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.
Based on existing cash levels and the additional cash sources discussed above,
the Company assesses its liquidity as satisfactory.
YEAR 2000 ISSUE
The Company has carefully reviewed the impact of the year 2000 issues on its
information technology and other electronic systems as well as its vendors and
suppliers. It has determined the consequences of its year 2000 issues will not
have a material impact on either the future operating results or financial
condition of the Company.
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 quarter and nine months
ended September 30, 1999 and 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
Page 9
<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: November 22, 1999 By: /s/ Merrick Kleeman
------------------------ ----------------------------
Merrick Kleeman
President
Date: November 22, 1999 By: /s/ R. Keith Wilt
------------------------ ----------------------------
R. Keith Wilt
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 and nine months ended September 30, 1999 and 1998.
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, 1998 (file No. 2-64309).
Page 11
<PAGE> 12
INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS
SEPTEMBER 30, 1999 AND 1998
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION $ 921,741 $ 903,483
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 54,339 24,030
----------- -----------
$ 976,080 $ 927,513
=========== ===========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION 716,279 670,103
DUE TO MAINTENANCE ESCROW FUND 259,801 257,410
PARTICIPANTS' FUND BALANCES -- --
----------- -----------
$ 976,080 $ 927,513
=========== ===========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $ 5,925,231 $ 2,042,626
RECEIVABLE FROM DISTRIBUTION FUND 259,801 257,410
INVENTORY 821,586 --
INTEREST RECEIVABLE 76,582 19,285
----------- -----------
$ 7,083,200 $ 2,319,321
=========== ===========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 128,881 $ 5,844
INTEREST PAYABLE TO DISTRIBUTION FUND 54,339 24,030
CARPET CARE RESERVE (10,817) 9,994
PARTICIPANTS' FUND BALANCES 6,910,797 2,279,453
----------- -----------
$ 7,083,200 $ 2,319,321
=========== ===========
</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 AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
DISTRIBUTION FUND
<TABLE>
<CAPTION>
CURRENT QUARTER YEAR-TO-DATE
------------------------------ ------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
GROSS REVENUES $ 2,358,631 $ 2,230,251 $ 16,263,023 $ 14,623,754
------------ ------------ ------------ ------------
DEDUCTIONS:
Agents' commissions 132,772 37,919 929,808 497,738
Credit Card fees 21,321 21,328 126,815 141,185
Audit fees 3,250 3,250 9,750 9,749
------------ ------------ ------------ ------------
157,343 62,497 1,066,373 648,672
------------ ------------ ------------ ------------
ADJUSTED GROSS REVENUES 2,201,288 2,167,754 15,196,650 13,975,082
MANAGEMENT FEE (1,096,349) (1,079,003) (7,572,466) (6,959,166)
------------ ------------ ------------ ------------
GROSS INCOME DISTRIBUTION 1,104,939 1,088,751 7,624,184 7,015,916
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Management fee (121,368) (113,559) (844,122) (750,424)
Marketing fee (66,200) (61,942) (460,430) (409,322)
Miscellaneous pooled expense (14,164) (20,274) (82,224) (58,283)
Corporate complimentary occupancy fees 8,320 9,601 24,965 26,154
Westin Associate room fees 16,089 4,370 42,116 12,330
Occupancy fees (292,187) (289,988) (1,332,569) (1,342,759)
Advisory Committee expenses (7,861) (6,115) (21,443) (22,523)
------------ ------------ ------------ ------------
NET INCOME DISTRIBUTION 627,568 610,844 4,950,477 4,471,089
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
Occupancy fees 292,187 289,988 1,332,569 1,342,759
Hospitality suite fees -- -- 324 134
Greens fees 1,086 1,331 7,752 10,090
Additional participation credit 900 1,320 2,820 3,960
------------ ------------ ------------ ------------
AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS $ 921,741 $ 903,483 $ 6,293,942 $ 5,828,032
============ ============ ============ ============
Average daily distribution $ 12.88 $ 10.95 $ 29.61 $ 24.92
Average room rate $ 103.76 $ 98.73 $ 152.16 $ 134.12
Occupied room nights 22,732 22,590 106,880 109,036
Available room nights 71,557 82,492 212,575 233,900
Occupancy percentage 31.8% 27.4% 50.3% 46.6%
Average number of available units 778 897 779 857
</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 AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
CURRENT QUARTER YEAR-TO-DATE
----------------------------- -----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
DISTRIBUTION FUND
BALANCE, beginning of period $ -- $ -- $ -- $ --
ADDITIONS:
Amount available for distribution 921,741 903,483 6,293,942 5,828,032
Interest received or receivable from
Maintenance Escrow Fund 54,339 24,030 107,138 67,133
REDUCTIONS:
Amounts withheld for Maintenance
Escrow Fund (259,801) (257,410) (1,208,878) (1,194,555)
Amounts accrued or paid to participants (716,279) (670,103) (5,192,202) (4,700,610)
----------- ----------- ----------- -----------
BALANCE, end of period $ -- $ -- $ -- $ --
=========== =========== =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 3,144,707 $ 2,252,555 $ 2,505,110 $ 1,901,616
ADDITIONS:
Amounts withheld from occupancy fees 259,801 257,410 1,187,224 1,194,555
Interest earned 54,339 24,030 107,138 67,133
Charges to participants to establish
or restore escrow balances 4,362,515 34,104 4,697,895 161,883
REDUCTIONS:
Maintenance charges (842,121) (184,490) (1,184,817) (761,552)
Carpet care reserve deposit (11,687) (5,800) (42,250) (26,855)
Interest accrued or paid to
Distribution Fund (54,339) (24,030) (107,138) (67,133)
Refunds to participants as prescribed by
the master lease agreements (2,418) (74,326) (252,365) (190,194)
----------- ----------- ----------- -----------
BALANCE, end of period $ 6,910,797 $ 2,279,453 $ 6,910,797 $ 2,279,453
=========== =========== =========== ===========
</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
SEPTEMBER 30, 1999 AND 1998
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
ASSETS
CASH $ 1,000 $ 1,000
RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION 788,850 754,275
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND -- 212
-------- --------
$789,850 $755,487
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $706,425 $666,442
DUE TO MAINTENANCE ESCROW FUND 83,425 89,045
-------- --------
$789,850 $755,487
======== ========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $ 80,530 $ 26,176
DUE FROM DISTRIBUTION FUND 83,425 89,045
INVENTORY:
Linen 34,116 56,313
Materials and supplies 15,860 12,281
-------- --------
$213,931 $183,815
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 4,666 $ 5,139
INTEREST PAYABLE TO DISTRIBUTION FUND -- 212
PARTICIPANTS' FUND BALANCES 209,265 178,464
-------- --------
$213,931 $183,815
======== ========
</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 AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
DISTRIBUTION FUND
<TABLE>
<CAPTION>
CURRENT QUARTER YEAR-TO-DATE
------------------------------ ------------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
GROSS REVENUES $ 1,728,323 $ 1,671,867 $ 3,055,857 $ 2,791,077
=========== =========== =========== ===========
DEDUCTIONS:
Agents' commissions 18,248 125,390 63,405 92,845
Sales and marketing expenses 129,624 33,540 229,189 209,331
Audit fees 3,255 3,714 9,765 9,287
----------- ----------- ----------- -----------
151,127 162,644 302,359 311,463
----------- ----------- ----------- -----------
ADJUSTED GROSS REVENUES 1,577,196 1,509,223 2,753,498 2,479,614
MANAGEMENT FEE (788,598) (754,611) (1,376,749) (1,239,807)
----------- ----------- ----------- -----------
GROSS INCOME DISTRIBUTION 788,598 754,612 1,376,749 1,239,807
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary occupancy fees 252 1,191 1,844 1,926
Occupancy fees (129,582) (137,427) (272,810) (267,075)
Designated items (17,632) (19,329) (84,509) (51,207)
Advisory Committee expenses -- (1,527) (5,938) (7,468)
----------- ----------- ----------- -----------
POOLED INCOME 641,636 597,520 1,015,336 915,983
ADJUSTMENTS TO POOLED INCOME:
Occupancy fees 129,582 137,427 272,810 267,075
----------- ----------- ----------- -----------
NET INCOME DISTRIBUTION $ 771,218 $ 734,947 $ 1,288,146 $ 1,183,058
=========== =========== =========== ===========
Average daily distribution $ 32.45 $ 29.97 $ 17.46 $ 15.44
Average room rate $ 132.90 $ 122.53 $ 110.73 $ 105.57
Room nights 13,005 13,644 27,599 26,439
Occupancy percentage 54.7% 55.6% 37.4% 34.5%
Average number of available units 258 267 270 283
</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 CHANGES IN PARTICIPANTS' FUND BALANCES
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
CURRENT QUARTER YEAR-TO-DATE
----------------------------- -----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
DISTRIBUTION FUND
BALANCE, beginning of period $ -- $ -- $ -- $ --
ADDITIONS:
Amounts available for distribution 771,218 734,947 1,288,146 1,183,059
Interest received or receivable from
Maintenance Escrow Fund -- 212 -- 990
REDUCTIONS:
Amounts withheld for Maintenance
Escrow Fund (64,793) (68,716) (136,412) (133,544)
Amounts accrued or paid to participants (706,425) (666,443) (1,151,734) (1,050,505)
----------- ----------- ----------- -----------
BALANCE, end of period $ -- $ -- $ -- $ --
=========== =========== =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 128,966 $ 123,214 $ 174,111 $ 165,522
ADDITIONS:
Amounts withheld from occupancy fees 64,793 68,716 136,412 133,544
Interest earned -- 212 -- 990
Reimbursement of designated items 17,632 19,329 84,510 51,207
Charges to participants to establish
or restore escrow balances 36,758 147,266 53,492 348,960
REDUCTIONS:
Maintenance and inventory charges (19,065) (97,891) (129,376) (278,375)
Refurbishing charges 779 (57,664) (8,961) (178,252)
Interest accrued or paid to
Distribution Fund -- (212) -- (990)
Designated items (17,632) (19,329) (84,510) (51,207)
Refunds to participants as prescribed
by Master Lease Agreement (2,966) (5,177) (16,413) (12,935)
----------- ----------- ----------- -----------
BALANCE, end of period $ 209,265 $ 178,464 $ 209,265 $ 178,464
=========== =========== =========== ===========
</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
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,230,305
<SECURITIES> 591,428
<RECEIVABLES> 10,475,907
<ALLOWANCES> (87,065)
<INVENTORY> 1,395,219
<CURRENT-ASSETS> 23,610,110
<PP&E> 67,437,307
<DEPRECIATION> (24,923,528)
<TOTAL-ASSETS> 93,564,193
<CURRENT-LIABILITIES> 14,507,128
<BONDS> 88,484,199
0
4,577,000
<COMMON> 5,000
<OTHER-SE> (15,779,601)
<TOTAL-LIABILITY-AND-EQUITY> 93,564,193
<SALES> 16,547,294
<TOTAL-REVENUES> 46,442,449
<CGS> 3,885,880
<TOTAL-COSTS> 43,264,861
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 76,000
<INTEREST-EXPENSE> 6,975,853
<INCOME-PRETAX> (3,971,136)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,971,136)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,163,367)
<EPS-BASIC> (832.67)
<EPS-DILUTED> (832.67)
</TABLE>
