<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------
For Quarter Ended June 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)
(970) 259-2000
- --------------------------------------------------------------------------------
(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
JUNE 30, 1999 AND DECEMBER 31, 1998
ASSETS
(Substantially all pledged)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- -----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,011,057 $ 1,396,404
Restricted cash 1,413,856 705,297
Accounts receivable, net 10,958,579 7,545,177
Notes receivable 1,349,823 1,349,823
Inventories and supplies 1,600,906 2,057,450
Prepaid expenses and other assets 857,353 1,061,668
----------- -----------
17,191,574 14,115,819
Assets held for sale 10,078,564 12,684,302
----------- -----------
Total current assets 27,270,138 26,800,121
INTANGIBLES, net 27,740,468 28,547,188
PROPERTY AND EQUIPMENT, at cost, less
accumulated depreciation and amortization 42,380,792 41,585,829
OTHER ASSETS 268,185 1,874,723
----------- -----------
$97,659,583 $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
JUNE 30, 1999 AND DECEMBER 31, 1998
LIABILITIES AND SHAREHOLDER'S (DEFICIT)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
------------- -------------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Account receivable line of credit $ 319,270 $ 3,832,443
Accounts payable 3,692,634 3,110,889
Accrued expenses 6,235,910 5,241,267
Deposits and prepaid fees 2,344,432 3,657,913
Intercompany payable 440,573 459,520
------------- -------------
Total current liabilities 13,032,819 16,302,032
NOTES PAYABLE 83,523,707 83,416,053
OTHER LONG-TERM LIABILITIES 4,311,964 4,353,543
DEFERRED INCOME TAXES 1,770,467 1,770,467
------------- -------------
Total liabilities 102,638,957 105,842,095
------------- -------------
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 3,995,626 1,940,766
------------- -------------
Total shareholder's (deficit) (4,979,374) (7,034,234)
------------- -------------
Total liabilities and shareholder's
(deficit) $ 97,659,583 $ 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 SIX MONTHS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
Quarters ended June 30, Six Months ended June 30,
--------------------------------- ------------------------------
1999 1998 1999 1998
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Resort facilities $ 5,270,491 $ 4,586,871 $14,416,988 $12,406,347
Food and beverage 4,781,104 4,358,864 9,923,457 9,364,667
Golf 3,942,125 4,090,597 10,086,757 10,238,702
Other 2,122,650 1,958,387 4,376,854 3,962,913
------------ ------------ ----------- -----------
16,116,370 14,994,719 38,804,056 35,972,629
------------ ------------ ----------- -----------
COST AND OPERATION EXPENSES:
Resort facilities 3,738,206 3,502,391 9,171,465 8,818,985
Food and beverage 3,168,090 2,854,922 6,125,043 6,085,295
Golf 1,913,019 1,862,878 3,997,407 3,841,072
Other 5,189,768 3,549,683 10,002,858 7,445,023
General and administrative 18,115 1,252,384 3,359,612 2,369,060
------------ ------------ ----------- -----------
14,027,198 13,022,258 32,656,385 28,559,435
GAIN (LOSS) ON ASSETS HELD FOR SALE (27,027) -- 794,837 --
------------ ------------ ----------- -----------
OPERATING INCOME 2,062,145 1,972,461 6,942,508 7,413,194
INTEREST, NET 2,373,556 2,478,750 4,759,494 4,719,067
------------ ------------ ----------- -----------
INCOME (LOSS) BEFORE INCOME TAX (311,411) (506,289) 2,183,014 2,694,127
PARENT INCOME TAX CHARGE (CREDIT) -- (818,543) -- 381,614
GAIN FROM CHANGE IN TAX STATUS -- 13,426,039 -- 13,426,039
------------ ------------ ----------- -----------
INCOME (LOSS) BEFORE DIVIDEND
REQUIREMENTS ON PREFERRED STOCK (311,411) 13,738,293 2,183,014 15,738,552
DIVIDEND REQUIREMENTS ON
PREFERRED STOCK 64,077 64,078 128,154 128,156
------------ ------------ ----------- -----------
NET INCOME (LOSS) AVAILABLE
TO COMMON SHAREHOLDERS $ (375,488) $ 13,674,215 $ 2,054,860 $15,610,396
============ ============ =========== ===========
EARNINGS (LOSS) PER COMMON SHARE $ (75.10) $ 2,734.84 $ 410.97 $ 3,122.08
============ ============ =========== ===========
</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 EIGHTEEN MONTHS ENDED JUNE 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 4,577,000 (13,557,000) 1,940,766 (7,034,234)
Net income available to
common shareholder -- -- -- -- -- 2,054,860 2,054,860
----- ------ --------- ---------- ------------ ----------- ------------
Balance, June 30, 1999 5,000 $5,000 4,577,000 $4,577,000 $(13,557,000) $ 3,995,626 $ (4,979,374)
===== ====== ========= ========== ============ =========== ============
</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 SIX MONTHS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income before dividend
requirements on preferred stock $ 2,183,014 $ 15,738,552
Noncash items included in income:
Depreciation and amortization 1,898,720 1,431,639
Write-off of startup costs 1,606,538 --
Gain from change in tax status -- (13,426,039)
Increase in deferred tax -- 291,481
Changes in operating working capital (3,345,281) (1,441,673)
----------- ------------
Cash provided by operations 2,342,991 2,593,960
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Decreases) increases in other assets -- (177,683)
Purchases of property and equipment (1,894,207) (3,416,166)
Net recovery of cost of property and
equipment sold or retired 7,229 (12,219)
(Increase) decrease in assets held for sale 2,605,738 (1,702,538)
----------- ------------
Cash provided by (used in) investing activities 718,760 (5,308,606)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decreases in notes payable (195,762) (355,987)
Additional borrowings 303,416 3,068,990
Repayment of line of credit (3,513,173) --
Decreases in other long-term liabilities (41,579) --
----------- ------------
Cash provided by (used for) financing activities (3,447,098) 2,713,003
----------- ------------
NET INCREASE (DECREASE) IN CASH (385,347) (1,643)
CASH, BEGINNING OF PERIOD 1,396,404 56,090
----------- ------------
CASH, END OF PERIOD $ 1,011,057 $ 54,447
=========== ============
NONCASH FINANCING AND INVESTING
ACTIVITIES:
The Company satisfied its preferred
stock dividend liability to GHI
through the intercompany account $ 128,154 $ 128,156
</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
JUNE 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 June 1998 financial
statements to conform to the December 1998 presentation.
(2) LONG-TERM OBLIGATIONS
Long-term obligations consist of the following:
<TABLE>
<CAPTION>
June 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 4,460,312 4,645,264
Capital lease at 9.51% 109,340 119,181
----------- -----------
83,544,652 83,436,029
Less current maturities 20,945 19,976
----------- -----------
$83,523,707 $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 and in assets held for sale in 1998, are also
utilized.
Guest occupancy for the quarter, measured in room nights, increased 5.4% from
the level of the prior year. On a divisional basis, Innisbrook's occupancy rose
4.9% while Tamarron experienced an increase in occupancy of 8.5%. The modest
increase in Innisbrook's room nights occurred primarily in the group segment.
The increase in Tamarron's occupancy occurred in the group segment, while the
social segment occupancy declined slightly.
Revenues from resort operations on a per occupied room basis increased 2.9%,
from $387.05 to $398.12. The improved guest spending is primarily attributable
to Tamarron, which enjoyed a 16.4% increase in gross operating revenue. While
Innisbrook's gross operating revenue rose 7.5%, its revenue per room night rose
2.4%. Innisbrook's average daily room rate rose 9.5% while Tamarron's increased
12.3% While meals served at Innisbrook declined .8%, revenue per meal served
improved 10.6%. Tamarron's meals served rose 9.5% while its revenue per meal
served increased 1.7%. The improved revenues per meal served at both resorts
reflects the benefits of rethemed restaurants which were more attractive to
guests. Innisbrook golf revenues were down 3.6% from the prior year, as revenue
per player declined 5.0%. Rounds played increased 1.4%. Tamarron's golf revenues
were down 8.4% while rounds played decreased by 6.3%. On a divisional basis,
Innisbrook and Tamarron's revenue per occupied room for the second quarter of
1999 and 1998 were $412.28 and $316.78 as compared to $402.46 and $295.49,
respectively. As a result of the improved occupancy and guest spending, total
resort operations revenues rose $1.4 million, or 8.4%. Real estate activities at
Tamarron generated two lot sales during the second quarter of 1999 and none
during 1998. 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 increased to 87.0% of total resort operations
revenues as compared to 86.8% in 1998. At Innisbrook, gross operating income
increased 16.8% as relative departmental operating expense levels rose
moderately by 3.4% over the prior year while revenues increased at a 7.4% rate.
At the same time, Innisbrook's fixed charges and other expenses increased 21.3%
over the prior year, primarily due to increased rental pool distribution expense
and amortization of intangible assets. While Tamarron's gross operating revenue
increased as noted above, its cost and operating expenses experienced a 1.2%
decrease. Tamarron's fixed charges and other expenses increased 6.9%.
Interest expense declined 4.2%, primarily as a result of payments under a
participating mortgage in 1998 which did not reoccur in 1999. The gain from
change in tax status of $13.4 million resulted from the conversion to a
subchapter S subsidiary effective February 3, 1998.
Financial Condition and Liquidity
The Company's working capital position (exclusive of Assets Held for Sale) was
$4,159,000 at June 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.
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 six months
ended June 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: August 20, 1999 By: /s/ Merrick Kleeman
------------------ -----------------------------------
Merrick Kleeman
President
Date: August 20, 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 six months ended June 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
JUNE 30, 1999 AND 1998
DISTRIBUTION FUND
<TABLE>
<CAPTION>
1999 1998
----------- ----------
ASSETS
<S> <C> <C>
RECEIVABLE FROM GOLF HOST RESORTS, INC
FOR DISTRIBUTION $ 1,984,193 $1,843,159
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND 27,480 22,127
----------- ----------
$ 2,011,673 $1,865,286
=========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION 1,577,250 1,447,419
DUE TO MAINTENANCE ESCROW FUND 434,423 417,867
PARTICIPANTS' FUND BALANCES -- --
----------- ----------
$ 2,011,673 $1,865,286
=========== ==========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $ 2,613,918 $1,862,745
RECEIVABLE FROM DISTRIBUTION FUND 434,423 417,867
INVENTORY 80,382 --
INTEREST RECEIVABLE 42,486 31,295
----------- ----------
$ 3,171,209 $2,311,907
=========== ==========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 1,990 $ 17,716
INTEREST PAYABLE TO DISTRIBUTION FUND 27,480 22,127
CARPET CARE RESERVE (2,968) 19,509
PARTICIPANTS' FUND BALANCES 3,144,707 2,262,555
----------- ----------
$ 3,171,209 $2,311,907
=========== ==========
</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 SIX MONTHS ENDED JUNE 30, 1999 AND 1998
DISTRIBUTION FUND
<TABLE>
<CAPTION>
Current Quarter Year-to-Date
------------------------------ --------------------------------
1999 1998 1999 1998
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
GROSS REVENUES $ 5,194,758 $ 4,648,684 $ 13,904,392 $ 12,393,503
----------- ----------- ------------ ------------
DEDUCTIONS:
Agents' commissions 358,596 209,030 797,036 459,819
Credit Card fees 42,323 37,556 105,494 119,857
Audit fees 3,250 3,250 6,500 6,499
----------- ----------- ------------ ------------
404,169 249,836 909,030 586,175
----------- ----------- ------------ ------------
DJUSTED GROSS REVENUES 4,790,589 4,398,848 12,995,362 11,807,328
MANAGEMENT FEE (2,386,715) (2,190,295) (6,476,117) (5,880,163)
----------- ----------- ------------ ------------
GROSS INCOME DISTRIBUTION 2,403,874 2,208,553 6,519,245 5,927,165
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Management fee (268,808) (238,143) (722,754) (636,865)
Marketing fee (146,623) (129,896) (394,230) (347,380)
Miscellaneous pooled expense (22,323) (12,666) (68,060) (38,009)
Corporate complimentary occupancy fees 8,328 9,544 16,645 16,553
Westin Associate room fees 13,196 7,960 26,027 7,960
Occupancy fees (487,723) (469,464) (1,040,382) (1,052,771)
Advisory Committee expenses (7,166) (6,883) (13,582) (16,408)
----------- ----------- ------------ ------------
NET INCOME DISTRIBUTION 1,492,755 1,369,005 4,322,909 3,860,245
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
Occupancy fees 487,723 469,464 1,040,382 1,052,771
Hospitality suite fees 135 134 324 134
Greens fees 2,620 3,236 6,666 8,759
Additional participation credit 960 1,320 1,920 2,640
----------- ----------- ------------ ------------
AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS $ 1,984,193 $ 1,843,159 $ 5,372,201 $ 4,924,549
=========== =========== ============ ============
Average daily distribution $ 27.84 $ 23.23 $ 38.10 $ 32.53
Average room rate $ 132.89 $ 121.83 $ 165.24 $ 143.93
Occupied room nights 39,090 38,156 84,148 86,107
Available room nights 71,262 79,347 141,018 151,408
Occupancy percentage 54.9% 48.1% 59.7% 56.9%
Average number of available units 783 872 779 837
</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 SIX MONTHS ENDED JUNE 30, 1999 AND 1998
DISTRIBUTION FUND
<TABLE>
<CAPTION>
CURRENT QUARTER YEAR-TO-DATE
--------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, beginning of period $ -- $ -- $ -- $ --
ADDITIONS:
Amount available for distribution 1,984,193 1,843,159 5,372,201 4,924,549
Interest received or receivable from
Maintenance Escrow Fund 27,480 22,127 52,799 43,103
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (434,423) (417,867) (949,077) (937,145)
Amounts accrued or paid to participants (1,577,250) (1,447,419) (4,475,923) (4,030,507)
----------- ----------- ----------- -----------
BALANCE, end of period $ -- $ -- $ -- $ --
=========== =========== =========== ===========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 2,742,143 $ 2,231,466 $ 2,505,110 $ 1,901,616
ADDITIONS:
Amounts withheld from occupancy fees 434,423 417,867 927,423 937,145
Interest earned 27,480 22,127 52,799 43,103
Charges to participants to establish
or restore escrow balances 269,855 43,976 335,380 127,779
REDUCTIONS:
Maintenance charges (224,352) (382,848) (342,696) (577,062)
Carpet care reserve deposit (19,509) (9,389) (30,563) (21,055)
Interest accrued or paid to Distribution Fund (27,480) (22,127) (52,799) (43,103)
Refunds to participants as prescribed by
the master lease agreements (57,853) (48,517) (249,947) (115,868)
----------- ----------- ----------- -----------
BALANCE, end of period $ 3,144,707 $ 2,252,555 $ 3,144,707 $ 2,252,555
=========== =========== =========== ===========
</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
JUNE 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 332,009 283,690
INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND -- 376
-------- --------
$333,009 $285,066
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION $274,347 $235,763
DUE TO MAINTENANCE ESCROW FUND 58,662 49,303
-------- --------
$333,009 $285,066
======== ========
MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS $ 22,351 $ 33,553
DUE FROM DISTRIBUTION FUND 58,662 49,303
INVENTORY:
Linen 45,818 44,147
Materials and supplies 14,672 15,274
-------- --------
$141,503 $142,277
======== ========
LIABILITIES AND PARTICIPANTS' FUND BALANCES
ACCOUNTS PAYABLE $ 12,537 $ 18,687
INTEREST PAYABLE TO DISTRIBUTION FUND -- 376
PARTICIPANTS' FUND BALANCES 128,966 123,214
-------- --------
$141,503 $142,277
======== ========
</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 SIX MONTHS ENDED JUNE 30, 1999 AND 1998
DISTRIBUTION FUND
<TABLE>
<CAPTION>
CURRENT QUARTER YEAR-TO-DATE
-------------------------- ------------------------------
1999 1998 1999 1998
--------- --------- ----------- -----------
<S> <C> <C> <C> <C>
GROSS REVENUES $ 734,637 $ 632,602 $ 1,327,534 $ 1,119,210
--------- --------- ----------- -----------
DEDUCTIONS:
Agents' commissions 8,832 9,633 45,157 59,305
Sales and marketing expenses 55,098 47,445 99,565 83,941
Audit fees 3,255 2,972 6,510 5,573
--------- --------- ----------- -----------
67,185 60,050 151,232 148,819
--------- --------- ----------- -----------
ADJUSTED GROSS REVENUES 667,452 572,552 1,176,302 970,391
MANAGEMENT FEE (333,726) (286,276) (588,151) (485,195)
--------- --------- ----------- -----------
GROSS INCOME DISTRIBUTION 333,726 286,276 588,151 485,196
ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:
Corporate complimentary occupancy fees 939 428 1,592 735
Occupancy fees (69,784) (66,085) (143,228) (129,648)
Designated items (22,768) (15,259) (66,877) (31,878)
Advisory Committee expenses (2,656) (3,014) (5,938) (5,941)
--------- --------- ----------- -----------
POOLED INCOME 239,457 202,346 373,700 318,464
ADJUSTMENTS TO POOLED INCOME:
Occupancy fees 69,784 66,085 143,228 129,648
--------- --------- ----------- -----------
NET INCOME DISTRIBUTION $ 309,241 $ 268,431 $ 516,928 $ 448,112
========= ========= =========== ===========
Average daily distribution $ 12.18 $ 10.14 $ 10.33 $ 8.60
Average room rate $ 103.22 $ 96.20 $ 90.96 $ 87.47
Room nights 7,117 6,576 14,594 12,795
Occupancy percentage 28.0% 24.8% 29.2% 24.6%
Average number of available units 276 291 276 288
Number of units in Rental Pool at end of period 284 296 284 296
</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 SIX MONTHS ENDED JUNE 30, 1999 AND 1998
DISTRIBUTION FUND
<TABLE>
<CAPTION>
CURRENT QUARTER YEAR-TO-DATE
------------------------- -------------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
BALANCE, beginning of period $ -- $ -- $ -- $ --
ADDITIONS:
Amounts available for distribution 309,241 268,431 516,928 448,112
Interest received or receivable from
Maintenance Escrow Fund -- 376 -- 778
REDUCTIONS:
Amounts withheld for Maintenance Escrow Fund (34,894) (33,044) (71,619) (64,828)
Amounts accrued or paid to participants (274,347) (235,763) (445,309) (384,062)
--------- --------- --------- ---------
BALANCE, end of period $ -- $ -- $ -- $ --
========= ========= ========= =========
MAINTENANCE ESCROW FUND
BALANCE, beginning of period $ 193,614 $ 172,418 $ 174,111 $ 165,522
ADDITIONS:
Amounts withheld from occupancy fees 34,894 33,044 71,619 64,828
Interest earned -- 376 -- 778
Reimbursement of designated items 22,768 15,259 66,877 31,878
Charges to participants to establish
or restore escrow balances 3,906 96,422 16,734 201,694
REDUCTIONS:
Maintenance and inventory charges (91,903) (147,408) (110,311) (180,484)
Refurbishing charges (6,766) (29,334) (9,740) (120,588)
Interest accrued or paid to
Distribution Fund -- (376) -- (778)
Designated items (22,768) (15,259) (66,877) (31,878)
Refunds to participants as prescribed
by Master Lease Agreement (4,779) (1,928) (13,447) (7,758)
--------- --------- --------- ---------
BALANCE, end of period $ 128,966 $ 123,214 $ 128,966 $ 123,214
========= ========= ========= =========
</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
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GOLF HOSTS RESORTS, INC. FOR THE SIX MONTHS ENDED JUNE
30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,011,057
<SECURITIES> 12,444,443
<RECEIVABLES> 6,159,671
<ALLOWANCES> (136,041)
<INVENTORY> 1,600,906
<CURRENT-ASSETS> 27,270,138
<PP&E> 66,733,320
<DEPRECIATION> (24,352,528)
<TOTAL-ASSETS> 97,659,583
<CURRENT-LIABILITIES> 13,032,819
<BONDS> 83,523,707
0
4,577,000
<COMMON> 5,000
<OTHER-SE> (9,561,374)
<TOTAL-LIABILITY-AND-EQUITY> 97,659,583
<SALES> 11,459,159
<TOTAL-REVENUES> 38,804,056
<CGS> 3,121,665
<TOTAL-COSTS> 32,656,385
<OTHER-EXPENSES> (794,837)
<LOSS-PROVISION> 65,000
<INTEREST-EXPENSE> 4,759,494
<INCOME-PRETAX> 2,183,014
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,183,014
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,054,860
<EPS-BASIC> 410.97
<EPS-DILUTED> 410.97
</TABLE>
