<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 21, 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 3
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
COMMISSION FILE NUMBER 1-12246
NATIONAL GOLF PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 95-4549193
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
1448 15TH STREET, #200 90404
SANTA MONICA, CA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
(310) 260-5500
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE
COMMON STOCK ON WHICH REGISTERED
$.01 PAR VALUE NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
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 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
---
As of April 25, 1996, the aggregate market value of the voting stock held by
nonaffiliates of the registrant was approximately $239.1 million, based upon
the closing price ($24.625) on the New York Stock Exchange on that date. (For
this computation, the registrant has excluded the market value of all shares
of its common stock reported as owned by executive officers and directors of
the registrant and certain other stockholders; such exclusion shall not be
deemed to constitute an admission that any such person is an "affiliate" of
the registrant).
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date:
10,621,975 SHARES OF COMMON STOCK, $.01 PAR VALUE AS OF APRIL 25, 1996
DOCUMENTS INCORPORATED BY REFERENCE
None
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
(a) 1. FINANCIAL STATEMENTS
Report of Independent Accountants.....................................................
Consolidated Balance Sheets of National Golf Properties, Inc. as of
December 31, 1995 and 1994............................................................
Consolidated Statements of Operations of National Golf Properties, Inc.
for the years ended December 31, 1995 and 1994 and the period August 18, 1993
to December 31, 1993 and Combined Statement of Operations of Golf Properties Group
(Predecessor Affiliates) for the period January 1, 1993 to August 17, 1993............
Consolidated Statements of Stockholders' Equity of National Golf Properties, Inc.
for the years ended December 31, 1995 and 1994 and the period August 18, 1993 to
December 31, 1993 and Combined Statement of Equity of Golf Properties Group
(Predecessor Affiliates) for the period January 1, 1993 to August 17, 1993............
Consolidated Statements of Cash Flows of National Golf Properties, Inc. for the years
ended December 31, 1995 and 1994 and the period August 18, 1993 to December 31, 1993
and Combined Statement of Cash Flows of Golf Properties Group (Predecessor Affiliates)
for the period January 1, 1993 to August 17, 1993.....................................
Notes to Consolidated and Combined Financial Statements...............................
2. FINANCIAL STATEMENT SCHEDULES
Schedule III--Real Estate and Accumulated Depreciation................................ 2
</TABLE>
1
<PAGE>
SCHEDULE III
NATIONAL GOLF PROPERTIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
(IN THOUSANDS)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
INITIAL COST GROSS AMOUNT AT WHICH
TO COMPANY CARRIED AT CLOSE OF PERIOD
-------------------- -----------------------------
COST
CAPITALIZED TOTAL COST
BUILDINGS & SUBSEQUENT BUILDINGS & ACCUMULATED DATE DATE
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTED ACQUIRED
----------- ------------ ------- ------------ -------------- ------- ------------ -------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DAILY FEE
COURSES:
Continental,
Scottsdale, AZ.. $ -- $ 64 $ 881 $ 12 $ 66 $ 891 $ 957 $ 454 1974 1986
Desert Lakes,
Fort Mojave, AZ. -- 163 3,102 39 163 3,141 3,304 323 1990 1993
El Caro,
Phoenix, AZ..... -- 61 553 13 63 564 627 523 1975 1983
Kokopelli,
Gilbert, AZ..... -- 1,177 4,261 135 1,177 4,396 5,573 464 1993 1994
Villa De Paz,
Phoenix, AZ..... -- 186 397 18 188 413 601 325 1974 1981
Camarillo
Springs,
Camarillo, CA... -- 141 2,880 710 143 3,588 3,731 1,511 1972 1984
Carmel Mountain,
San Diego, CA... -- 1,669 5,865 -- 1,669 5,865 7,534 210 1986 1995
Lomas Santa Fe
Exec., Solana
Beach, CA....... -- 175 575 20 177 593 770 506 1974 1982
Mesquite, Palm
Springs, CA..... -- 1,057 5,140 203 1,061 5,339 6,400 509 1985 1993
Rancho San
Joaquin, Irvine,
CA.............. -- 871 8,375 411 873 8,784 9,657 1,900 1962 1992
Summitpointe,
Milpitas, CA.... 4,500 2,315 4,813 358 2,315 5,171 7,486 508 1977 1994
Upland Hills,
Upland, CA...... -- 1,835 6,312 -- 1,835 6,312 8,147 29 1982 1995
Vista Valencia,
Valencia, CA.... -- 652 5,369 40 657 5,404 6,061 2,441 1963 1987
Eagle,
Broomfield, CO.. -- 400 2,425 20 402 2,443 2,845 1,283 1961 1988
Arrowhead,
Davie, FL....... -- 601 2,190 20 604 2,207 2,811 416 1967 1993
Binks Forest,
Wellington, FL.. -- 224 4,591 125 224 4,716 4,940 354 1991 1994
Kendale Lakes,
Miami, FL....... -- 611 5,147 12 614 5,156 5,770 3,544 1972 1985
Sabal Palm,
Tamarac, FL..... -- 441 3,357 20 443 3,375 3,818 1,383 1967 1990
Goshen
Plantation,
Augusta, GA..... -- 195 3,042 206 195 3,248 3,443 195 1971 1994
River's Edge,
Fayetteville,
GA.............. -- 250 4,069 88 143 4,264 4,407 233 1989 1994
Ruffled
Feathers,
Lemont, IL...... -- 293 9,316 -- 293 9,316 9,609 83 1992 1995
Sugar Ridge,
Lawrenceburg,
IN.............. -- 168 2,602 440 168 3,042 3,210 193 1994 1994
Dub's Dread,
Kansas City, KS. -- 135 2,997 284 135 3,281 3,416 309 1963 1994
Links at
Northfork,
Ramsey, MN...... -- 280 3,770 75 280 3,845 4,125 322 1992 1994
Royal Meadows,
Kansas City, MO. -- 176 1,822 40 181 1,857 2,038 969 1933 1984
Rancocas,
Willingboro, NJ. -- 239 1,816 1,206 241 3,020 3,261 785 1963 1989
Fowler's Mill,
Chesterland, OH. -- 346 1,760 20 349 1,777 2,126 904 1972 1986
Hershey South,
Hershey, PA..... -- 150 1,995 32 150 2,027 2,177 197 1927 1994
Hickory Heights,
Bridgeville, PA. -- 87 2,027 203 82 2,235 2,317 120 1990 1994
Bear Creek,
Houston, TX..... -- -- 6,163 757 -- 6,920 6,920 3,390 1966 1985
Lake Houston,
Huffman, TX..... -- 823 1,620 63 829 1,677 2,506 838 1975 1985
Riverchase,
Coppell, TX..... 250 250 1,658 1,080 253 2,735 2,988 771 1987 1988
Riverside, Grand
Prairie, TX..... -- 574 4,445 105 576 4,548 5,124 976 1986 1990
Southwyck,
Pearland, TX.... -- 672 3,492 131 673 3,622 4,295 403 1988 1993
Honey Bee,
Virginia Beach,
VA.............. -- 556 5,009 -- 556 5,009 5,565 216 1987 1995
Reston National,
Reston, VA...... -- 996 4,584 20 999 4,601 5,600 681 1968 1993
Capitol City,
Olympia, WA..... 964 437 2,572 160 437 2,732 3,169 210 1961 1994
Lake Wilderness,
Maple Valley,
WA.............. -- 110 1,665 332 110 1,997 2,107 165 1974 1994
------ ------- -------- ------ ------- -------- -------- -------
$5,714 $19,380 $132,657 $7,398 $19,324 $140,111 $159,435 $28,643
------ ------- -------- ------ ------- -------- -------- -------
</TABLE>
2
<PAGE>
SCHEDULE III (CONTINUED)
NATIONAL GOLF PROPERTIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
(IN THOUSANDS)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
INITIAL COST GROSS AMOUNT AT WHICH
TO COMPANY CARRIED AT CLOSE OF PERIOD
-------------------- -----------------------------
COST
CAPITALIZED TOTAL COST
BUILDINGS & SUBSEQUENT BUILDINGS & ACCUMULATED DATE
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTED
----------- ------------ ------- ------------ -------------- ------- ------------ -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PRIVATE COUNTRY
CLUBS:
Canyon Oaks,
Chico, CA....... $ 835 $ 309 $ 2,172 $ 2,041 $ 309 $ 4,213 $ 4,522 $ 199 1987
Escondido,
Escondido, CA... -- 114 2,382 587 116 2,967 3,083 1,301 1962
Sunset Hills,
Thousand Oaks,
CA.............. -- 302 1,378 18 304 1,394 1,698 1,099 1966
Wood Ranch, Simi
Valley, CA...... -- 481 9,111 128 481 9,239 9,720 298 1984
Heather Ridge,
Aurora, CO...... -- 992 1,500 715 995 2,212 3,207 936 1970
Brookstone,
Acworth, GA..... -- 557 2,608 410 559 3,016 3,575 461 1987
Mission Hills,
Northbrook, IL.. -- 400 3,600 531 402 4,129 4,531 1,922 1980
Hunt Valley,
Phoenix, MD..... -- 515 1,662 12 517 1,672 2,189 1,244 1972
Skyline Woods,
Elkhorn, NE..... -- 358 3,432 265 361 3,694 4,055 1,078 1986
Tanoan,
Albuquerque, NM. -- 12 3,241 20 15 3,258 3,273 2,357 1978
Brandywine,
Maumee, OH...... -- 814 2,861 82 816 2,941 3,757 730 1967
Oakhurst, Grove
City, OH........ -- 344 1,776 581 346 2,355 2,701 747 1959
Royal Oak,
Cincinnati, OH.. -- 175 822 12 178 831 1,009 476 1963
Creekside,
Salem, OR....... -- 128 3,456 675 128 4,131 4,259 188 1993
Hershey,
Hershey, PA..... -- 1,624 6,400 633 1,624 7,033 8,657 629 1915
Berry Creek,
Georgetown, TX.. -- 204 4,876 115 204 4,991 5,195 191 1986
Bear Creek,
Woodinville, WA. -- 705 4,823 310 711 5,127 5,838 984 1983
Wootton Bassett,
Wiltshire, UK... -- 142 1,716 5 143 1,720 1,863 150 1992
------- ------- -------- ------- ------- -------- -------- -------
$ 835 $ 8,176 $ 57,816 $ 7,140 $ 8,209 $ 64,923 $ 73,132 $14,990
------- ------- -------- ------- ------- -------- -------- -------
RESORT COURSES:
London Bridge,
Lake Havasu
City, AZ........ $ -- $ 301 $ 1,699 $ 24 $ 305 $ 1,719 $ 2,024 $ 668 1968
Superstition
Springs, Mesa,
AZ.............. -- 698 3,771 32 702 3,799 4,501 874 1986
Tatum Ranch,
Cave Creek, AZ.. -- 1,000 3,972 (5) 1,002 3,965 4,967 1,019 1986
Legend at
Arrowhead,
Glendale, AZ.... -- 502 3,408 -- 502 3,408 3,910 738 1986
Aptos Seascape,
Aptos, CA....... -- 901 3,491 20 904 3,508 4,412 737 1926
Monterey, Palm
Desert, CA...... -- 1,294 6,584 32 1,294 6,616 7,910 160 1978
Palm Valley,
Palm Desert, CA. -- 1,750 13,769 191 1,750 13,960 15,710 284 1985
Arrowhead,
Littleton, CO... -- 302 3,245 11 304 3,254 3,558 993 1972
Las Vegas
Hilton, Las
Vegas, NV....... -- 261 3,727 1,586 264 5,310 5,574 2,754 1961
Wildhorse,
Henderson, NV... -- 4,677 6,557 2,099 4,677 8,656 13,333 395 1959
Brigantine,
Brigantine, NJ.. -- 194 1,768 1,299 196 3,065 3,261 909 1926
Carolina Shores,
Calabash, NC.... -- 588 5,903 12 590 5,913 6,503 2,333 1974
Oregon Golf,
West Linn, OR... -- 433 10,230 -- 433 10,230 10,663 -- 1992
Port Royal,
Hilton Head
Island, SC...... 20,000(1) 6,289 15,190 1,830 6,289 17,020 23,309 1,131 1985
Shipyard, Hilton
Head Island, SC. -- (1) 4,773 9,756 310 4,773 10,066 14,839 718 1969
Pecan Valley,
San Antonio, TX. -- 389 3,989 412 391 4,399 4,790 1,363 1962
------- ------- -------- ------- ------- -------- -------- -------
$20,000 $24,352 $ 97,059 $ 7,853 $24,376 $104,888 $129,264 $15,076
------- ------- -------- ------- ------- -------- -------- -------
$26,549 $51,908 $287,532 $22,391 $51,909 $309,922 $361,831 $58,709
======= ======= ======== ======= ======= ======== ======== =======
<CAPTION>
DATE
DESCRIPTION ACQUIRED
----------- --------
<S> <C>
PRIVATE COUNTRY
CLUBS:
Canyon Oaks,
Chico, CA....... 1994
Escondido,
Escondido, CA... 1983
Sunset Hills,
Thousand Oaks,
CA.............. 1975
Wood Ranch, Simi
Valley, CA...... 1995
Heather Ridge,
Aurora, CO...... 1990
Brookstone,
Acworth, GA..... 1993
Mission Hills,
Northbrook, IL.. 1988
Hunt Valley,
Phoenix, MD..... 1983
Skyline Woods,
Elkhorn, NE..... 1990
Tanoan,
Albuquerque, NM. 1982
Brandywine,
Maumee, OH...... 1991
Oakhurst, Grove
City, OH........ 1980
Royal Oak,
Cincinnati, OH.. 1985
Creekside,
Salem, OR....... 1995
Hershey,
Hershey, PA..... 1994
Berry Creek,
Georgetown, TX.. 1995
Bear Creek,
Woodinville, WA. 1993
Wootton Bassett,
Wiltshire, UK... 1993
RESORT COURSES:
London Bridge,
Lake Havasu
City, AZ........ 1986
Superstition
Springs, Mesa,
AZ.............. 1992
Tatum Ranch,
Cave Creek, AZ.. 1992
Legend at
Arrowhead,
Glendale, AZ.... 1992
Aptos Seascape,
Aptos, CA....... 1986
Monterey, Palm
Desert, CA...... 1995
Palm Valley,
Palm Desert, CA. 1995
Arrowhead,
Littleton, CO... 1988
Las Vegas
Hilton, Las
Vegas, NV....... 1982
Wildhorse,
Henderson, NV... 1994
Brigantine,
Brigantine, NJ.. 1989
Carolina Shores,
Calabash, NC.... 1986
Oregon Golf,
West Linn, OR... 1995
Port Royal,
Hilton Head
Island, SC...... 1994
Shipyard, Hilton
Head Island, SC. 1994
Pecan Valley,
San Antonio, TX. 1990
</TABLE>
- ----
(1) Combined encumbrance for Port Royal and Shipyard golf courses.
3
<PAGE>
SCHEDULE III (CONTINUED)
NATIONAL GOLF PROPERTIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
(IN THOUSANDS)
DECEMBER 31, 1995
Depreciation of the Company's investment in Buildings and Improvements
reflected in the statements of operations are calculated over the estimated
useful lives of the assets as follows:
<TABLE>
<S> <C>
Buildings................................................... 30 years
Ground improvements......................................... 20 years
Furniture, fixtures and equipment........................... 3 to 10 years
</TABLE>
The changes in total real estate assets and accumulated depreciation
(excluding corporate assets and related accumulated depreciation) for the
three years ended December 31, are as follows:
<TABLE>
<CAPTION>
TOTAL REAL ESTATE ASSETS
----------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Balance, beginning of year..................... $271,850 $166,284 $130,327
Acquisitions................................... 83,171 101,742 32,548
Improvements................................... 8,770 3,879 4,212
Disposals...................................... (1,960) (55) (803)
-------- -------- --------
Balance, end of year........................... $361,831 $271,850 $166,284
======== ======== ========
<CAPTION>
ACCUMULATED DEPRECIATION
----------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Balance, beginning of year..................... $ 46,862 $ 37,634 $ 30,449
Depreciation for year.......................... 12,598 9,228 7,185
Disposals...................................... (751) -- --
-------- -------- --------
Balance, end of year........................... $ 58,709 $ 46,862 $ 37,634
======== ======== ========
</TABLE>
4
<PAGE>
3. EXHIBITS
<TABLE>
<S> <C>
2.1 Agreement and Plan of Merger dated as of August 31, 1995, by and between National
Golf Properties, Inc., a Delaware corporation, and National Golf Properties of
Maryland, Inc. (renamed "National Golf Properties, Inc." immediately upon
effectiveness of the merger), a Maryland corporation (incorporated by reference to
Exhibit 2 to the Company's Current Report on Form 8-K dated September 26, 1995)
2.2 Asset Purchase Agreement and Agreement and Plan of Merger by and among Golf
Enterprises, Inc., National Golf Properties, Inc. and GEI Acquisition Corporation,
dated February 2, 1996 (incorporated by reference to Exhibit 2 to Golf Enterprises,
Inc. (File No. 0-24264) Current Report on Form 8-K dated February 7, 1996)
2.3 First Amendment to Asset Purchase Agreement and Agreement and Plan of Merger, dated
as of February 16, 1996, by and among National Golf Properties, Inc., GEI
Acquisition Corporation and Golf Enterprises, Inc.
3.1 Articles of Incorporation of National Golf Properties, Inc. (incorporated by
reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated
September 26, 1995)
3.2 By-Laws of National Golf Properties, Inc. (incorporated by reference to Exhibit 3.2
to the Company's Current Report on Form 8-K dated September 26, 1995)
3.3 Specimen of certificate representing shares of Common Stock (incorporated by
reference to
Exhibit 3.3 to the Company's Report on Form 8-B dated December 29, 1995)
10.1 Agreement of Limited Partnership of National Golf Operating Partnership, L.P.,
dated as of August 18, 1993, by and among National Golf Properties, Inc. and the
Persons named therein as Limited Partners
10.2 Form of Lease Agreement between the Company and AGC with respect to the Initial
Golf Courses and the Mesquite and Desert Lakes golf courses (incorporated by
reference to Exhibit 10.2 to the Company's Registration Statement on Form S-11 No.
33-63110)
10.3 Form of Lease Agreement between the Company and AGC with respect to the following
golf courses: Southwyck, Dub's Dread, Kokopelli, Summitpointe, Lake Wilderness,
Links at Northfork, Hershey, Hershey South, Canyon Oaks, Capitol City, Binks
Forest, Port Royal, Shipyard, Sugar Ridge, Wildhorse, Goshen Plantation, Hickory
Heights, River's Edge, Berry Creek, Carmel Mountain, Creekside, Honey Bee, Wood
Ranch, Monterey, Palm Valley, Ruffled Feathers, Upland Hills, Oregon Golf and
Golden Oaks; and Form of Lease Agreement between the Company and CGG with respect
to the Carmel Mountain golf course
10.4 Registration Rights Agreement, made and entered into as of August 18, 1993, by and
among National Golf Properties, Inc. and the persons named therein
10.5 Shelf Registration Rights Agreement, made and entered into as of August 18, 1993,
by and among National Golf Properties, Inc. and the persons named therein
*10.6 National Golf Properties, Inc. Stock Incentive Plan Key Employees of National Golf
Properties, Inc., National Golf Operating Partnership, L.P. and American Golf
Corporation, effective August 18, 1993
*10.7 Indemnification Agreement, made as of August 18, 1993, by and between National Golf
Properties, Inc. and its directors and officers
*10.8 Employment Agreements, dated August 18, 1993, between National Golf Properties,
Inc. and each of Richard C. Price and Edward R. Sause
10.9 Director Designation Agreement, dated as of August 18, 1993 by and among David G.
Price, National Golf Properties, Inc. and National Golf Operating Partnership, L.P.
</TABLE>
- --------
* Management contract or compensatory plan or arrangement.
5
<PAGE>
<TABLE>
<C> <S>
10.10 Services Agreement, entered into as of August 18, 1993, by and between National Golf
Properties, Inc. and National Golf Operating Partnership, L.P.
10.11 Senior Secured Promissory Notes and Guarantees related to the Option Golf Courses,
each made and entered into as of August 18, 1993, between National Golf Operating
Partnership, L.P., and The Price Revocable Trust
10.12 First Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing
relating to each of the Senior Secured Participating Promissory Notes, each made as
of August 18, 1993, by and among The Price Revocable Trust and National Golf
Operating Partnership, L.P.
10.13 Partnership Interests Exchange Agreement, dated as of August 18, 1993, by and among
National Golf Operating Partnership, L.P. and Partners of Partnerships Controlling
21 Courses
10.14 Agreement for Transfer of Realty and Assets, dated as of August 18, 1993, by and
among The Price Revocable Trust, Myreshan, Inc. and National Golf Operating
Partnership, L.P.
10.15 Plan and Agreement of Merger, dated as of August 18, 1993, by and among Bear Creek
Enterprises, Inc., National Golf Properties, Inc., The Price Revocable Trust and
David G. Price
10.16 Partnership Interests Acquisition Agreement, dated as of August 18, 1993, by and
among The Price Revocable Trust, American Golf Investment, Inc., Supermarine
Aviation, Limited, David G. Price and National Golf Properties, Inc.
10.17 Contribution Agreement, dated as of August 18, 1993, by and between National Golf
Operating Partnership, L.P. and National Golf Properties, Inc.
10.18 Option Courses Agreement, dated as of August 18,1993, by and among David G. Price,
The Price Revocable Trust, Black Lake/Penasquitos, David G. Price, American Golf
Corporation and National Golf Operating Partnership, L.P.
10.19 Agreement relating to prohibition on acquisitions of golf courses by David G. Price
and his affiliates, made and entered into as of August 18, 1993, by and among
National Golf Properties Inc., National Golf Operating Partnership, L.P., American
Golf Corporation, David G. Price, Dallas P. Price and The Price Revocable Trust
10.20 Amendment to agreement relating to prohibition on acquisitions of golf courses by
David G. Price and his affiliates among National Golf Properties, Inc., National
Golf Operating Partnership, L.P., American Golf Corporation, David G. Price, Dallas
P. Price and The Price Revocable Trust (incorporated by reference to Exhibit 10 to
the Company's Quarterly Report on Form 10-Q/A for the period ended September 30,
1995)
10.21 Note Purchase Agreement ("Note Purchase Agreement"), dated as of December 15, 1994,
with respect to National Golf Operating Partnership, L.P.'s Series A 8.68%
Guarantied Senior Promissory Notes due December 15, 2004 and Series B 8.73%
Guarantied Senior Promissory Notes due June 15, 2005
10.22 Series A 8.68% Guarantied Senior Promissory Notes and Series B 8.73% Guarantied
Senior Promissory Notes
10.23 General Continuing Guaranty of National Golf Properties, Inc. ("General Continuing
Guaranty"), dated as of December 15, 1994, with respect to National Golf Operating
Partnership, L.P.'s Series A 8.68% Guarantied Senior Promissory Notes due December
15, 2004 and Series B 8.73% Guarantied Senior Promissory Notes due June 15, 2005
(incorporated by reference to Exhibit 10.16 to the Company's Report on Form 8-B
dated December 29, 1995)
10.24 First Amendment to Note Purchase Agreements, dated as of August 31, 1995
(incorporated by reference to Exhibit 10.17 to the Company's Report on Form 8-B
dated December 29, 1995)
10.25 First Amendment to General Continuing Guarantee, dated as of August 31, 1995
(incorporated by reference to Exhibit 10.18 to the Company's Report on Form 8-B
dated December 29, 1995)
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
10.26 Agreement of Limited Partnership of Royal Golf, L.P., II, dated as of July 7, 1994
(incorporated by reference to Exhibit 10.19 to the Company's Report on Form 8-B
dated December 29, 1995)
10.27 Amended and Restated Loan Agreement, dated as of July 7, 1994, between Royal Golf,
L.P., II and NationsBank of South Carolina, N.A. (incorporated by reference to
Exhibit 10.20 to the Company's Report on Form 8-B dated December 29, 1995)
10.28 Credit Agreement among Bank of America National Trust and Savings Association,
National Golf Operating Partnership, L.P. and National Golf Properties, Inc. dated
as of September 29, 1993, as amended (incorporated by reference to Exhibit 10.21 to
the Company's Report on Form 8-B dated December 29, 1995)
10.29 Agreement to Enter Into Leases, entered into as of February 1, 1996, by and among
National Golf Properties, Inc., National Golf Operating Partnership and American
Golf Corporation
11.1 Statement regarding computation of per share earnings
21.1 List of Subsidiaries of National Golf Properties, Inc. (incorporated by reference
to Exhibit 22.1 to the Company's Report on Form 8-B dated December 29, 1995)
**23.1 Consent of Independent Accountants
</TABLE>
- --------
**Filed herewith
7
<PAGE>
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
(b) REPORTS ON FORM 8-K FILED DURING THE LAST QUARTER
None
(d) ADDITIONAL INFORMATION REGARDING AMERICAN GOLF CORPORATION AND SUBSIDIARIES
Analysis of American Golf Corporation's Consolidated Financial Information....... 9
American Golf Corporation's Consolidated Financial Statements
Report of Independent Accountants............................................... 11
Consolidated Balance Sheets as of December 31, 1995 and 1994.................... 12
Consolidated Statements of Income for the years ended December 31, 1995 and
1994 and the ten-month period ended December 31, 1993.......................... 13
Consolidated Statements of Stockholders' Equity for the years ended December 31,
1995 and 1994 and the ten-month period ended December 31, 1993................. 14
Consolidated Statements of Cash Flows for the years ended December 31, 1995 and
1994 and the ten-month period ended December 31, 1993.......................... 15
Notes to Consolidated Financial Statements...................................... 16
</TABLE>
8
<PAGE>
National Golf Properties, Inc. ("NGP") currently leases all but one of its
Golf Courses to AGC and, following consummation of NGP's purchase of the 20
golf courses owned by GEI, will also lease such courses to AGC. Although NGP
has no equity ownership interest in AGC, the following financial analysis and
information is provided because AGC is a significant tenant of NGP.
ANALYSIS OF AMERICAN GOLF CORPORATION'S FINANCIAL INFORMATION
This financial analysis should be read in conjunction with the consolidated
financial statements of American Golf Corporation and Subsidiaries ("AGC") as
of December 31, 1995.
Results of Operations
Comparison of the year ended December 31, 1995 to the year ended December 31,
1994
Total revenues from golf course operations and management agreements for AGC
increased by $52.5 million, or 17.1%, to $359 million for the year ended
December 31, 1995 as compared to $306.5 million for the year ended December
31, 1994. The increase in revenues was primarily attributable to the addition
of 14 new leased courses and 6 new courses under management agreements. Greens
fees for the year ended December 31, 1995 were $134.1 million, an increase of
$14.9 million, or 12.5%, from $119.2 million for the year ended December 31,
1994. Cart rental revenues for the year ended December 31, 1995 were $51.8
million, an increase of $6.8 million, or 15.1% from $45 million for the year
ended December 31, 1994. Member dues and initiation fees for the year ended
December 31, 1995 were $50.1 million, an increase of $11.2 million, or 28.9%
from $38.9 million for the year ended December 31, 1994. Food and beverage
revenues for the year ended December 31, 1995 were $55 million, an increase of
$8.7 million, or 18.8% from $46.3 million for the year December 31, 1994.
Merchandise sales were $30.9 million, an increase of $7.9 million, or 34.3%
from $23 million for the year ended December 31, 1994. Other revenue, which
includes range income, increased by $3.6 million, or 12.3% to $32.8 million
for the year ended December 31, 1995, from $29.2 million for the year ended
December 31, 1994. Each revenue category rose in reasonable proportion to the
overall increase in revenues due to the addition of the new acquisitions, with
the exception of member dues and initiation fees. Such revenue category
increased as a result of the acquisition of a number of large private clubs.
Total operating expenses increased by $52 million or 17.5%, to $348.5
million for the year ended December 31, 1995 as compared to $296.5 million for
the year ended December 31, 1994. The margin on merchandise sold increased
from 29.7% in 1994 to 34.8% in 1995 due to the greater use of national
contracts which provide the Company with more favorable purchasing terms. The
margin on food and beverage sales remained relatively constant. Rent expense
increased by $9.7 million or 14.2% to $77.8 million for the year ended
December 31, 1995, from $68.1 million for the year ended December 31, 1994.
General and administrative expenses of $35.2 million (which include, among
other things, personal and property taxes, insurance and advertising),
increased by $4.8 million, or 15.8% for the year ended December 31, 1995, from
$30.4 million for the year ended December 31, 1994. These expenses increased
primarily due to additional lease agreements. Depreciation and amortization
increased by approximately $1.9 million due, in part, to the completion of
significant capital improvements as well as AGC entering into capital leases
for the purchase of approximately $4.7 million of machinery and equipment.
Net income decreased by $.6 million to $9.7 million for the year ended
December 31, 1995, from $10.3 million for the year ended December 31, 1994.
This decrease is due to a $2.4 million increase in interest expense offset by
increases in operating income of approximately $.7 million, interest income of
$.6 million and minority interest in loss of $.5 million. The increase in
interest expense is due to increased borrowings of approximately $20.3 million
during 1995. Interest income increased primarily due to a full year of
interest earned on the receivable from officers and directors. The income
attributable to the minority interest in loss is due to the consolidation of
the Company with its majority owned entities American Golf of Atlanta,
American Golf of Detroit, American Golf (UK) Limited and CW Golf Partners.
9
<PAGE>
Comparison of the year ended December 31, 1994 to the ten-month period ended
December 31, 1993
Total revenues from golf course operations and management agreements for AGC
increased by $67.1 million, or 28.0%, to $306.5 million for the year ended
December 31, 1994 as compared to $239.4 million for the ten-month period ended
December 31, 1993. The increase in revenue was primarily attributable to the
addition of 26 new leased courses and 6 new courses under management
agreements, as well as increases in greens fees and cart rentals. Greens fees
for the year ended December 31, 1994 were $119.2 million, an increase of $28.4
million, or 31.3%, as compared to $90.8 million for the ten-month period ended
December 31, 1993. Cart rental revenues for the year ended December 31, 1994
were $45 million, an increase of $10.3 million, or 29.6%, from $34.8 million
for the ten-month period ended December 31, 1993. Member dues and initiation
fees for the year ended December 31, 1994 were $38.9 million, an increase of
$2.8 million, or 7.8%, from $36.1 million for the ten-month period ended
December 31, 1993. Food and beverage revenues for the year ended December 31,
1994 were $46.3 million, an increase of $11.5 million, or 33%, from $34.8
million for the ten-month period ended December 31, 1993. Merchandise sales
for the year ended December 31, 1994 were $23 million, an increase of $6.5
million or 39.4%, from $16.5 million for the ten-month period ended December
31, 1993. Other revenue, which includes range income, increased by $8.6
million, or 41.7%, to $29.2 million for the year ended December 31, 1994, from
$20.6 million for the ten-month period ended December 31, 1993.
Total operating expenses increased by $79.7 million, or 36.7%, to $296.6
million for the year ended December 31, 1994 from $216.9 million for the ten-
month period ended December 31, 1993. Rent expense increased by $23.8 million,
or 53.7%, to $68.1 million from $44.3 million for the ten-month period ended
December 31, 1993. General and administrative expenses (which include, among
other things, personal and property taxes, insurance and advertising) for the
year ended December 31, 1994 were $30.4 million, an increase of $10.3 million,
or 51.2%, from $20.1 million for the ten-month period ended December 31, 1993.
These expenses increased primarily due to additional lease agreements as well
as newly negotiated leases.
Net income decreased by $12.1 million, or 54%, to $10.3 million for the year
ended December 31, 1994, from $22.4 million for the ten-month period ended
December 31, 1993, due in part to increased rent expense associated with the
newly negotiated lease agreements as well as additional lease agreements. The
decrease in 1994 net income is also due in part to the ten-month period ended
December 31, 1993, excluding two winter months of activity where a number of
courses are closed due to adverse weather conditions and the scheduled closure
of golf courses located in harsh winter climates.
LIQUIDITY AND CAPITAL RESOURCES
AGC has one $20 million and two $15 million credit facilities with a
commercial bank. The $20 million facility, which bears interest at prime or a
Libor based rate and expires on January 6, 1997, is used to finance working
capital requirements as well as provide for standby letters of credit. At
December 31, 1995 there was $8.5 million advanced against this line of credit,
with standby letters of credit outstanding of approximately $7.1 million. The
first $15 million facility, which expires August 15, 1997, supports the
letters of credit issued (approximately $13.6 million at December 31, 1995) in
favor of NGP pursuant to terms of the leases. Letters of credit issued under
these facilities are charged a 1 to 1.25% annual letter of credit fee. The
second $15 million facility is used for capital improvements and matures on
July 1, 2001. As of December 31, 1995, there was $15 million outstanding on
the second credit facility.
AGC had working capital of approximately $10.9 million as of December 31,
1995. AGC believes it will also be able to satisfy its liquidity requirements,
including capital expenditures and rental payments under the leases, with cash
flow available from operations and available borrowings. AGC has certain
capital expenditure commitments related to acquiring and renewing leases.
These commitments are typically satisfied over several years. The material
capital commitments are clubhouse renovations, building and course
improvements and irrigation systems. At December 31, 1995, AGC's capital
expenditure commitment was approximately $3.3 million. The improvements will
be funded from AGC's operating cash flow and from available borrowings under
the bank credit facilities.
10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
American Golf Corporation
We have audited the accompanying consolidated balance sheets of American
Golf Corporation and Subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of income, stockholders' equity and cash flows
for the years ended December 31, 1995 and 1994, and the ten-month period ended
December 31, 1993. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of American Golf Corporation and Subsidiaries as of December 31, 1995 and
1994, and the consolidated results of their operations and their cash flows
for the years ended December 31, 1995 and 1994, and the ten-month period ended
December 31, 1993, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Los Angeles, California
February 28, 1996
11
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1994
-------- --------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents................................ $ 2,345 $ 5,717
Accounts receivable--members (less allowance for doubtful
accounts of $892 and $516, respectively)................ 10,674 5,497
Other receivables........................................ 11,410 7,966
Receivable from affiliates, net.......................... 9,290 4,599
Inventories.............................................. 10,224 8,355
Prepaid expenses......................................... 3,441 3,713
-------- --------
Total current assets.................................... 47,384 35,847
Property, equipment and capital leases, net............... 75,567 56,948
Licenses.................................................. 696 565
Leasehold rights.......................................... 11,034 11,675
Prepaid rents............................................. 6 125
Deposits and other assets................................. 9,468 8,931
-------- --------
Total assets............................................ $144,155 $114,091
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable......................................... $ 6,802 $ 5,602
Notes payable--current portion:
Stockholders............................................ 26 343
Capital leases.......................................... 738 --
Other................................................... 1,375 74
Accrued expenses......................................... 21,033 18,577
Other liabilities........................................ 6,504 6,850
-------- --------
Total current liabilities:.............................. 36,478 31,446
Notes payable--long-term portion:
Stockholders............................................. 482 508
Capital leases........................................... 3,701 --
Other.................................................... 32,094 17,536
Accrued expenses.......................................... 6,117 5,809
-------- --------
Total liabilities..................................... 78,872 55,299
-------- --------
Minority interest......................................... 681 --
-------- --------
Commitments and contingencies (Note 9)
Common stock--no par value; 10,000,000 shares authorized;
6,414,497 and 6,398,677 shares issued at December 31,
1995 and 1994, respectively; 6,354,497 and 6,338,677
shares outstanding at December 31, 1995 and 1994,
respectively............................................. 8,682 8,289
Retained earnings......................................... 60,765 55,442
Notes receivable from officers/directors.................. (4,901) (4,939)
Foreign currency translation adjustment................... 56 --
-------- --------
Total stockholders' equity............................ 64,602 58,792
-------- --------
Total liabilities and stockholders' equity............ $144,155 $114,091
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
12
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE
FOR THE FOR THE TEN-MONTH
YEAR ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Revenues:
Green fees............................ $134,100 $119,228 $ 90,837
Cart rentals.......................... 51,801 45,044 34,788
Member dues and initiation fees....... 50,134 38,891 36,109
Food and beverage sales............... 54,956 46,280 34,763
Merchandise sales..................... 30,888 22,993 16,450
Other revenue......................... 32,755 29,209 20,560
Management fees....................... 4,432 4,884 5,886
-------- -------- --------
Total revenues...................... 359,066 306,529 239,393
Costs & expenses:
Payroll and related expenses.......... 118,440 99,788 74,908
Cost of food and beverage sold........ 17,514 14,697 10,727
Cost of merchandise sold.............. 20,142 16,161 11,129
General and administrative............ 35,204 30,399 20,124
Repairs and maintenance............... 11,435 11,322 10,289
Other operating expenses.............. 60,983 51,020 41,779
Rents................................. 77,767 68,065 44,349
Depreciation and amortization......... 6,970 5,105 3,611
-------- -------- --------
Total costs & expenses.............. 348,455 296,557 216,916
-------- -------- --------
Operating income........................ 10,611 9,972 22,477
Other income (expense):
Interest income....................... 1,583 961 1,340
Interest expense...................... (2,830) (405) (796)
-------- -------- --------
Income before provision for state
income taxes and minority interest
in earnings........................ 9,364 10,528 23,021
Provision for state income taxes........ (201) (237) (518)
-------- -------- --------
Income before minority interest in
loss (earnings).................... 9,163 10,291 22,503
Minority interest in loss (earnings).... 519 -- (63)
-------- -------- --------
Net income.......................... $ 9,682 $ 10,291 $ 22,440
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
13
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOREIGN
COMMON STOCK NOTES RECEIVABLE CURRENCY TOTAL
------------- RETAINED FROM TRANSLATION STOCKHOLDERS'
SHARES AMOUNT EARNINGS OFFICERS/DIRECTORS ADJUSTMENT EQUITY
------ ------ -------- ------------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, February 28,
1993................... 6,140 $3,350 $37,337 $ -- $-- $40,687
Net income............ -- -- 22,440 -- -- 22,440
Dividends............. -- -- (8,800) -- -- (8,800)
----- ------ ------- ------- ---- -------
Balance, December 31,
1993................... 6,140 3,350 50,977 -- -- 54,327
Net income............ -- -- 10,291 -- -- 10,291
Dividends............. -- -- (5,826) -- -- (5,826)
Issuance of stock for
notes receivable..... 199 4,939 -- (4,939) -- --
----- ------ ------- ------- ---- -------
Balance, December 31,
1994................... 6,339 8,289 55,442 (4,939) -- 58,792
Net income............ -- -- 9,682 -- -- 9,682
Dividends............. -- -- (4,359) -- -- (4,359)
Foreign currency
translation
adjustment........... -- -- -- -- 56 56
Issuance of stock for
notes receivable..... 15 393 -- (368) -- 25
Payments on notes
receivable........... -- -- -- 406 -- 406
----- ------ ------- ------- ---- -------
Balance, December 31,
1995................... 6,354 $8,682 $60,765 $(4,901) $ 56 $64,602
===== ====== ======= ======= ==== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
14
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR FOR THE YEAR TEN-MONTH
ENDED ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating
activities:
Net income........................ $ 9,682 $ 10,291 $ 22,440
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization... 6,970 5,105 3,611
Minority interest in earnings
(loss)......................... (519) -- 63
Proceeds from insurance claims.. -- -- 1,890
Increase (decrease) from changes
in:
Accounts receivable........... (5,177) (935) (1,626)
Other receivables............. (3,444) (4,290) (232)
Receivable from affiliates,
net.......................... (4,691) 5,096 (596)
Inventories................... (1,869) (1,335) (1,200)
Prepaid expenses.............. 391 2,534 (4,087)
Licenses, deposits and other
assets....................... (668) (800) (3,200)
Accounts payable.............. 1,200 1,291 (1,175)
Accrued expenses.............. 2,764 (405) 8,000
Other liabilities............. (346) 443 1,978
-------- -------- --------
Net cash provided by
operating activities....... 4,293 16,995 25,866
-------- -------- --------
Cash flows from investing activi-
ties:
Acquisition of property and
equipment and leasehold rights. (20,241) (22,604) (14,681)
Proceeds from insurance claims.. -- -- 1,644
-------- -------- --------
Net cash used in investing
activities................. (20,241) (22,604) (13,037)
-------- -------- --------
Cash flows from financing activi-
ties:
Proceeds from notes payable--
other............................ 28,478 38,254 30,951
Payments on notes payable--
stockholders..................... (343) (23) (177)
Payments on notes payable--other.. (12,619) (30,848) (26,806)
Payments on notes payable--capital
leases........................... (268) -- --
Proceeds on notes receivable from
officers/directors............... 431 -- --
Capital contribution by minority
interest......................... 1,200 -- --
Dividends paid.................... (4,359) (5,826) (8,800)
-------- -------- --------
Net cash provided by (used
in) financing activities... 12,520 1,557 (4,832)
Effect of exchange rate
changes on cash and cash
equivalents................ 56 -- --
-------- -------- --------
Net increase (decrease) in
cash and cash equivalents.. (3,372) (4,052) 7,997
Cash and cash equivalents, beginning
of period.......................... 5,717 9,769 1,772
-------- -------- --------
Cash and cash equivalents, end of
period............................. $ 2,345 $ 5,717 $ 9,769
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
15
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
The consolidated financial statements include the accounts of American Golf
Corporation ("AGC"), a California subchapter S Corporation, and its
subsidiaries, American Golf of Atlanta ("Atlanta"), a Georgia general
partnership, American Golf of Detroit ("Detroit"), a Michigan general
partnership, American Golf (UK) Limited ("AG(UK)"), a United Kingdom limited
liability company, and CW Golf Partners ("CWP"), a California limited
partnership (collectively, the "Company"). AGC was formed in 1973 for the
purpose of operating public and private golf and tennis facilities on leased
premises. The Company is 87% owned by David G. Price. The following table
lists AGC's subsidiaries and selected information:
<TABLE>
<CAPTION>
AGC
ENTITY FORMATION DATE OWNERSHIP PURPOSE
------ -------------- --------- --------------------------------------
<C> <C> <C> <S>
Atlanta June 1986 65% Acquire and operate four courses in
Atlanta, Georgia.
Detroit December 1990 80% Acquire and operate four courses in
Detroit, Michigan.
AG(UK) August 1993 75% Operate courses in the United Kingdom.
CWP September 1993 75% Operate one course in Los Angeles,
California.
</TABLE>
The remaining 25% interest in AG(UK) is owned by European Golf Corporation,
an affiliate of AGC.
The term "affiliate," as used in these financial statements, refers to any
entity in which David G. Price has a controlling interest.
At December 31, 1995, the Company leases 80 golf courses from National Golf
Properties, Inc. ("NGP"). David G. Price is the Chairman of the Board of
Directors of NGP and owns 6.3% of NGP's outstanding stock.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
All material intercompany transactions and balances have been eliminated in
consolidation.
RISKS AND UNCERTAINTIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVENTORIES
Inventories are stated at the lower of cost (using the first-in, first-out
method) or market. Inventories consist primarily of food, beverage, golf and
tennis equipment, and clothing and accessories.
16
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
(CONTINUED):
REVENUE RECOGNITION
Revenue from green fees, cart rentals, food and beverage sales, merchandise
sales and range income are generally recognized at the time of sale.
Revenue from membership dues are generally billed monthly and recognized in
the month earned. The monthly dues are structured to cover the club operating
costs and membership services. Initiation fees are generally refundable in 30
years. Accordingly, the difference between the amount of the fees and the net
present value of the future obligation is recognized as revenue at the time of
sale, unless uncertainty surrounding collectability exists.
PROPERTY, EQUIPMENT, CAPITAL LEASES AND LEASEHOLD RIGHTS
Property, equipment and leasehold rights are recorded at the lower of cost
or net realizable value. Property and equipment under capital leases are
stated at the lower of the present value of the future minimum lease payments
at the beginning of the lease term or the fair value at the inception of the
lease.
Depreciation of property and equipment is computed using the straight-line
method over the lesser of the estimated useful life of the asset (3 to 30
years) or the remaining term of the lease. Property and equipment held under
capital leases and leasehold rights are amortized using the straight-line
method over the lesser of the lease term or the estimated useful life of the
asset.
When property and equipment are sold or otherwise disposed of, the asset
account and related accumulated depreciation and amortization account are
relieved, and any gain or loss is included in operations. Expenditures for
maintenance and repairs are charged to operations. Significant expenditures
which extend the useful life of existing assets are capitalized.
The Company periodically reevaluates the propriety of the carrying amounts
of its assets at each golf course as well as the amortization period to
determine whether current events and circumstances warrant adjustments to the
carrying amounts or a revised estimate of the useful life. The Company
compares the undiscounted future net cash flows expected to result from the
use of each of its properties to the carrying amount of the assets at that
property to determine whether the Company shall recognize an impairment loss.
The Company believes that no impairment has occurred and that no reduction of
the estimated useful lives is warranted.
NEWLY ISSUED ACCOUNTING STANDARDS
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation"
("Statement No. 123"), which establishes a fair value based method of
accounting for stock-based compensation plans. Entities are encouraged to
adopt all provisions of Statement No. 123 and are required to comply with the
disclosure requirements of Statement No. 123. Statement No. 123 is effective
for financial statements for fiscal years beginning after December 15, 1995.
The provisions of Statement No. 123, if adopted, would not have a material
effect on the consolidated financial condition or operating results of AGC, as
AGC does not intend to adopt the value-based measurement concept.
The Financial Accounting Standards Board has also issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("Statement No.
121"). Statement No. 121 requires that long-lived assets and certain
intangibles be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. AGC periodically reevaluates the carrying amounts of its long-
lived assets and the related
17
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
(CONTINUED):
depreciation and amortization periods as discussed above, and AGC believes
that the adoption of Statement No. 121 will not have a material effect on its
consolidated financial statements.
CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to concentration
of credit risk consist primarily of trade receivables.
Concentration of credit risk with respect to trade receivables, which
consists primarily of membership dues and charges, is limited due to the large
number of club members comprising the Company's customer base, and their
dispersion across many different geographic areas. The trade receivables are
billed and due monthly, and all probable bad debt losses have been
appropriately considered in establishing an allowance for doubtful accounts.
As of December 31, 1995 the Company had no significant concentration of credit
risk.
The Company has cash in financial institutions which is insured by the
Federal Deposit Insurance Corporation ("FDIC") up to $100,000 per account. At
various times throughout the year and as of December 31, 1995, the Company had
cash in financial institutions which was in excess of the FDIC insurance
limit.
FAIR VALUE OF FINANCIAL INSTRUMENTS
To meet the reporting requirements of Statement of Financial Accounting
Standards No. 107, "Disclosures about Fair Value of Financial Instruments",
the Company calculates the fair value of financial instruments and includes
this additional information in the notes to the consolidated financial
statements when the fair value is different than the carrying value of those
financial instruments. When the fair value reasonably approximates the
carrying value, no additional disclosure is made. The Company uses quoted
market prices to calculate these fair values.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
ADVERTISING
The Company expenses advertising costs as incurred. Advertising costs for
the years ended December 31, 1995 and 1994, and the ten-month period ended
December 31, 1993 were approximately $4,521,000, $3,562,000 and $1,869,000,
respectively.
FOREIGN CURRENCY TRANSLATION
The Company translates foreign currency financial statements by translating
balance sheet accounts at the year-end exchange rate and income statement
accounts at the average exchange rate for the year. Translation gains and
losses are recorded in stockholders' equity, and realized gains and losses are
included in operations. The effect of realized gains and losses is not
material to the consolidated financial statements.
18
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(2) NET RECEIVABLE FROM AFFILIATES:
The net receivable from affiliates is uncollateralized and due within one
year.
(3) PROPERTY, EQUIPMENT AND CAPITAL LEASES:
Property, equipment and capital leases consist of the following:
<TABLE>
<CAPTION>
ESTIMATED
USEFUL DECEMBER 31,
LIVES ----------------
(YEARS) 1995 1994
--------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Golf course improvements............................ 10-20 $40,041 $28,641
Buildings........................................... 15-30 30,535 26,040
Furniture, fixtures, machinery and equipment........ 3-7 19,787 16,240
Equipment under capital leases...................... 3-7 4,707 --
------- -------
95,070 70,921
Less: accumulated depreciation...................... (30,497) (25,057)
------- -------
64,573 45,864
Construction-in-progress............................ 10,994 11,084
------- -------
$75,567 $56,948
======= =======
</TABLE>
Equipment under capital leases includes golf carts, turf and maintenance
equipment, computers, and other office equipment.
Interest capitalized for the years ended December 31, 1995 and 1994, and the
ten-month period ended December 31, 1993 was approximately $416,000, $418,000
and $391,000, respectively.
(4) STATE INCOME TAXES:
The Company has elected to be taxed as an S corporation under the Internal
Revenue Code of 1986, as amended. Accordingly, corporate income is taxed
directly to the stockholders for federal income tax reporting purposes. The
Company therefore has no provision in its consolidated financial statements
for federal income taxes. The following is the provision for state franchise
and income taxes for the years ended December 31, 1995 and 1994, and the ten-
month period ended December 31, 1993:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1995 1994 1993
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Current.................................................... $ -- $128 $420
Deferred................................................... 201 109 98
---- ---- ----
Total provision for state income taxes................... $201 $237 $518
==== ==== ====
</TABLE>
19
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(5) NOTES PAYABLE -- STOCKHOLDERS:
Notes payable to stockholders consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1995 1994
--------------- ---------------
(IN THOUSANDS)
LONG- LONG-
INTEREST INTEREST CURRENT TERM CURRENT TERM
RATE PAYMENTS PORTION PORTION PORTION PORTION MATURITY
-------- -------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
8.0% Monthly $25 $474 $ 23 $499 12/2007
8.0% Monthly 1 8 1 9 12/2007
3.1% Annually -- -- 319 -- 12/1995
--- ---- ---- ----
$26 $482 $343 $508
=== ==== ==== ====
</TABLE>
Interest expense to the stockholders for the years ended December 31, 1995
and 1994, and the ten-month period ended December 31, 1993 was approximately
$75,000, $44,000 and $545,000, respectively.
Annual maturities on notes payable to stockholders are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, AMOUNT
----------------------- --------------
(IN THOUSANDS)
<S> <C>
1996.................................................... $26
1997.................................................... 29
1998.................................................... 31
1999.................................................... 33
2000.................................................... 36
Thereafter.............................................. 353
----
$508
====
</TABLE>
(6) NOTES PAYABLE -- OTHER:
Notes payable to others consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1995 1994
--------------- ---------------
(IN THOUSANDS)
LONG- LONG-
INTEREST INTEREST CURRENT TERM CURRENT TERM
TYPE OF COLLATERAL RATE PAYMENTS PORTION PORTION PORTION PORTION MATURITY
---------------------- --------- --------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Collateralized note 9.0% Monthly $ 3 $ -- $17 $ 2 1/1996
Collateralized line of
credit Reference Monthly -- 8,500 -- 12,400 1/1997
Uncollateralized note 9.0% Monthly 18 26 16 43 4/1998
Uncollateralized note 8.3% Quarterly 36 260 33 296 6/2002
Collateralized note 8.0% Monthly 68 4,607 -- 4,674 9/2009
Collateralized note 9.5% Monthly -- 4,951 -- -- 1/2010
Collateralized note Reference Monthly 1,250 13,750 -- -- 7/2001
Collateralized note -- Annually -- -- 8 121 12/2001
------ ------- --- -------
$1,375 $32,094 $74 $17,536
====== ======= === =======
</TABLE>
20
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(6) NOTES PAYABLE -- OTHER -- (CONTINUED):
At December 31, 1995 and 1994, the bank prime and reference rate was 8.5%.
Annual maturities on notes payable to others are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, AMOUNT
----------------------- --------------
(IN THOUSANDS)
<S> <C>
1996.................................. $1,375
1997.................................. 3,480
1998.................................. 3,509
1999.................................. 3,548
2000.................................. 3,598
Thereafter............................ 17,959
-------
$33,469
=======
</TABLE>
The Company is a guarantor of various credit facilities provided to David G.
Price in the amount of $14,071,000. At December 31, 1995, the outstanding
balance drawn on these credit facilities was $10,793,000.
On December 30, 1994, the Company entered into one $20 million and two $15
million credit facilities with a commercial bank that bear interest at prime
or a Libor based rate. Letters of credit issued under these credit facilities
are charged a 1 to 1.25% annual letter of credit fee. The $20 million facility
is used to finance working capital requirements and expires on January 6,
1997. At December 31, 1995, there was $8,500,000 advanced against this line of
credit and the standby letters of credit outstanding totalled $7,127,000. At
December 31, 1994, the outstanding cash balance advanced against this line of
credit was $12,400,000 and the standby letters of credit outstanding totalled
$7,572,000. The first $15 million credit facility, which expires on August 15,
1997, supports $13,555,000 of letters of credit issued in favor of NGP,
pursuant to the terms of the leases between NGP and AGC. The second $15
million credit facility matures July 1, 2001 and is used for capital
improvements. As of December 31, 1995, there was $15,000,000 outstanding on
the second credit facility.
The line of credit agreement contains, among other covenants, working
capital maintenance, fixed charge and debt to net worth ratios, minimum
tangible net worth amounts, and certain restrictions regarding indebtedness to
others.
Loans are collateralized by equipment, accounts receivable and inventory.
The net book value at December 31, 1995 of the assets collateralizing the
notes payable is $61.4 million.
21
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(7) NOTES PAYABLE -- CAPITAL LEASES:
Future minimum payments, by year and in the aggregate, under noncancelable
capital leases with initial remaining terms of one year or more consist of the
following at December 31, 1995:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, AMOUNT
----------------------- --------------
(IN THOUSANDS)
<S> <C>
1996.................................. $1,076
1997.................................. 1,076
1998.................................. 1,076
1999.................................. 1,617
2000.................................. 555
Thereafter............................ --
------
Total minimum lease payments........... 5,400
Amount representing interest........... 961
------
Present value of net minimum payments.. 4,439
Current portion........................ 738
------
Long-term portion...................... $3,701
======
</TABLE>
(8) EMPLOYEE BENEFITS:
In 1994, the Company established the 1994 Employee Equity Participation Plan
(the "1994 Plan"). Under the 1994 Plan, 900,000 shares may be awarded to key
employees as either nonqualified stock options, Performance Awards, as
defined, or the right to purchase common stock. During 1994, the Company
issued 198,677 shares of common stock at $24.86 per share and received notes
receivable totalling $4,939,000. During 1995, the Company issued 15,820 shares
of common stock at $24.86 per share and received notes receivable totalling
$368,000. The stock options vest over a three to five year period and are
subject to continued employment and the Company achieving certain financial
performance targets. There were no shares exercisable at December 31, 1995 and
1994. The following table summarizes the option activity since inception of
the 1994 Plan:
<TABLE>
<CAPTION>
SHARES OPTION
OUTSTANDING PRICE
----------- ------
<S> <C> <C>
January 1, 1994........................................ --
Granted.............................................. 318,954 $24.86
-------
December 31, 1994...................................... 318,954
Granted.............................................. 31,641 $24.86
-------
December 31, 1995...................................... 350,595
=======
</TABLE>
In 1995, Performance Shares were granted to key members of management who
were not awarded the right to purchase common stock or nonqualified stock
options. The 1994 Plan provides that holders of Performance Shares have the
right to receive an amount equal to the appreciation in share value (as
measured by a predetermined formula based on the Company's earnings). All
Performance Shares mature on December 31, 1998 with the appreciation in share
value payable in three equal annual installments, beginning in January, 1999.
Performance Shares vest based on achieving certain earnings targets of the
Company and are subject to continued employment. As of December 31, 1995,
159,886 Performance Shares were outstanding. There were 175,022 and 382,369
shares available under the 1994 Plan as of December 31, 1995 and 1994,
respectively. There was no
22
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(8) EMPLOYEE BENEFITS -- (CONTINUED):
compensation expense with respect to the 1994 Plan for the years ended
December 31, 1995 and 1994 and the ten-month period ended December 31, 1993.
The Company has a long-term share appreciation plan (phantom stock plan) for
key members of management. The plan is administered by the Board of Directors
of AGC and provides that the participants have the right to receive an amount
equal to the appreciation in share value (as measured by a predetermined
formula based on cash flow) at a date five years following the date of grant.
The appreciation in share value is payable 50% after the exercise period, and
the remainder, with interest in three equal installments, on the last day of
the succeeding three years. There were 157,000 and 251,500 outstanding share
appreciation rights as of December 31, 1995 and 1994, respectively. The share
appreciation expense for the year ended December 31, 1994 was approximately
$620,000. There was no share appreciation expense for the year ended December
31, 1995 and the ten-month period ended December 31, 1993. The Company does
not intend to grant any additional share appreciation rights.
The Company has a 401(k) Employee Savings Plan available to all employees
who have earned one year of vesting service and are at least 21 years of age.
Participants may contribute from 1% to 10% of their earnings, in whole
percentages, on a before-tax basis. The Company contributes to participants'
accounts based on the amount the participant elects to defer and a matching
contribution equal to $.50 on each dollar contributed by a participant up to
3% of the participant's gross pay. The Company's expense for the plan for the
years ended December 31, 1995 and 1994, and the ten-month period ended
December 31, 1993 was approximately $523,000, $524,000 and $347,000,
respectively.
(9) COMMITMENTS AND CONTINGENCIES:
The Company is the lessee under long-term operating leases for golf courses
and equipment. At December 31, 1995, future minimum rental payments required
pursuant to the terms of all lease obligations are as follows:
<TABLE>
<CAPTION>
RELATED UNRELATED
YEAR ENDED DECEMBER 31, PARTIES PARTIES TOTAL
----------------------- -------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
1996....................................... $ 52,332 $ 24,064 $ 76,396
1997....................................... 52,332 21,623 73,955
1998....................................... 52,332 18,940 71,272
1999....................................... 52,332 13,981 66,313
2000....................................... 52,332 12,390 64,722
Thereafter................................. 533,671 154,252 687,923
-------- -------- ----------
$795,331 $245,250 $1,040,581
======== ======== ==========
</TABLE>
In addition to minimum rental payments, certain leases require payment of
the excess of various percentages of gross revenue over the minimum rental
payments. During the years ended December 31, 1995 and 1994, and the ten-month
period ended December 31, 1993, percentage rentals paid to unrelated parties
were approximately $7,789,000, $7,604,000 and $8,196,000, respectively.
Under the terms of certain leases, the Company is committed to make
improvements at golf courses. At December 31, 1995, approximately $3,254,000
of such improvements remain to be made.
At December 31, 1995, the Company was contingently liable for outstanding
letters of credit in the amount of approximately $20,682,000.
23
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(9) COMMITMENTS AND CONTINGENCIES -- (CONTINUED):
The Company has continuing litigation matters and other contingencies
incurred in the ordinary course of business and has recorded allowances for
the payment of these contingencies when such amounts can be estimated and are
considered material to the results of operations. Where no allowance has been
recorded, the Company does not consider the contingencies material to either
its consolidated financial position or results of operations.
The Company has guaranteed the obligations of David G. Price and a related
entity in the amount of $25,241,000 related to the repayment of participating
mortgage loans owed to NGP on four golf courses operated by AGC. Such loans
are collateralized by first mortgage liens on the courses and bear interest at
8.92% per annum.
(10) RELATED PARTY TRANSACTIONS:
The Company leases golf and tennis facilities from David G. Price and
related entities, including NGP. Rent expense paid to David G. Price and
related entities was approximately $47,600,000, $42,492,000 and $23,861,000
for the years ended December 31, 1995 and 1994 and the ten-month period ended
December 31, 1993, respectively.
The Company recorded net management fees from related entities in the amount
of approximately $554,000, $1,240,000 and $4,091,000 for the years ended
December 31, 1995 and 1994, and the ten-month period ended December 31, 1993,
respectively.
The Company has accumulated costs in other receivables relating to
construction in progress at certain golf and tennis facilities owned by NGP.
Periodically, substantially all of these costs are reimbursed by NGP and
related entities. At December 31, 1995 and 1994, these accumulated costs
amounted to approximately $3,106,000 and $1,246,000, respectively.
The Company earns interest on receivables from affiliates at a prime based
rate. Interest income from affiliates was approximately $873,000, $753,000 and
$1,001,000 for the years ended December 31, 1995 and 1994 and the ten-month
period ended December 31, 1993, respectively.
(11) STATEMENT OF CASH FLOWS-SUPPLEMENTAL DISCLOSURES:
Interest paid for the years ended December 31, 1995 and 1994, and the ten-
month period ended December 31, 1993 was approximately $2,213,000, $511,000
and $543,000, respectively.
State income taxes paid for the years ended December 31, 1995 and 1994, and
the ten-month period ended December 31, 1993 was approximately $149,000,
$269,000 and $406,000, respectively.
The Company entered into four long-term leases with assignable purchase
options in 1993. During the year ended December 31, 1994, one of the purchase
options in the amount of approximately $600,000 was exercised. This option was
subsequently assigned to an affiliate at cost plus related expenses totalling
approximately $300,000.
Capital lease obligations of approximately $4,707,000 were incurred when the
Company entered into leases for new equipment in 1995.
24
<PAGE>
AMERICAN GOLF CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)
(12) STOCKHOLDERS' EQUITY:
As discussed in Note 8 to the consolidated financial statements, the Company
has issued 214,497 shares of common stock to key employees for notes
receivable with a balance at December 31, 1995 of $4,901,000. The notes
receivable bear interest ranging from six to seven percent and the principal
is due in 2004. The notes are collateralized by the common stock issued. The
amount of the receivable is shown on the balance sheets as a reduction in
stockholders' equity. During the year ended December 31, 1995, the Company
received proceeds from the notes receivable of approximately $406,000.
Interest income accrued on the notes receivable was approximately $300,000 for
the year ended December 31, 1995.
Interest is paid with proceeds from stockholder distributions and, in part,
their annual bonus. To the extent these amounts are insufficient to cover the
current year interest, the unpaid interest may be added to the principal of
the note. No amounts were added to principal for the year ended December 31,
1995.
(13) SUBSEQUENT EVENTS:
On January 19, 1996, NGP sold Wootton Bassett Golf Club in Wiltshire, United
Kindom. As a result of this sale, the Company's lease to operate Wootton
Bassett Golf Club was terminated. The Company realized a loss of approximately
$500,000 on the early termination of this lease. This amount is included in
the results of operations for the year ended December 31, 1995.
On February 2, 1996, NGP executed a definitive agreement to purchase 20 golf
courses from Golf Enterprises, Inc. ("GEI") for a purchase price of $58
million. All of the courses acquired will be leased to the Company on a triple
net basis. NGP will receive minimum base rent equal to 10% of its investment.
The minimum base rent will be adjusted in specific years based on increases in
CPI. Additionally, a percentage rent feature will allow NGP to participate in
any growth in revenues.
The following unaudited pro forma results of operations of the Company
assume NGP's acquisition of the 20 golf courses from GEI had been consummated
as of January 1, 1995. The pro forma financial information includes the
following adjustments: (i) an increase in operating revenues; (ii) an increase
in operating expenses; (iii) an increase in rent expense; (iv) an increase in
interest income; and (v) an increase in interest expense.
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------ --------------------
COMBINED
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 20 GOLF DECEMBER 31,
1995 COURSES 1995
------------ ------- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues................................ $359,066 $40,678 $399,744
Net income.............................. $ 9,682 $ 1,525 $ 11,207
</TABLE>
The unaudited pro forma results of operations do not purport to be
indicative of the results that would actually have been obtained had the
acquisition taken place at January 1, 1995, nor does it purport to represent
the results of operations for future periods.
On February 28, 1996, NGP's Board of Directors approved NGP's exercise of
options to acquire 4 golf courses from affiliates of the Company. The 4 golf
courses will be leased to the Company on a triple net basis.
25
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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.
National Golf Properties, Inc.
Date: June 21, 1996 By: /s/ EDWARD R. SAUSE
_________________________________
Edward R. Sause
Executive Vice President,
Chief Financial Officer
and Director
26
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of National Golf Properties, Inc. on Form S-8 (and the related prospectus)
(File No. 33-67350), of our report dated February 28, 1996, on our audits of
the consolidated and combined financial statements and financial statement
schedule of National Golf Properties, Inc. and Golf Properties Group
(Predecessor Affiliates) as of December 31, 1995 and 1994, and for the years
then ended and the period August 18, 1993 through December 31, 1993 and the
period January 1, 1993 through August 17, 1993, respectively, which report is
included in this Annual Report on Form 10-K/A Amendment No. 3.
Coopers & Lybrand, L.L.P.
Los Angeles, California
June 21, 1996
