UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
Commission File Number 33-89818, 33-96568, 333-08041 and 333-57107
CLUBCORP STOCK INVESTMENT PLAN
(Full title of the plan)
CLUB CORPORATION INTERNATIONAL
(Exact name of issuer of the securities held pursuant to the plan)
3030 LBJ FREEWAY, DALLAS, TEXAS 75234
(Address of principal executive office)
(972) 243-6191
(Issuer's telephone number; including area code)
<PAGE>
CLUBCORP STOCK INVESTMENT PLAN
INDEX TO ANNUAL REPORT ON FORM 11-K
(a) Financial Statements
Description
-----------
Independent Auditors' Report
Statements of Net Assets Available for Benefits as of
December 31, 1997 and 1996
Statements of Changes in Net Assets Available for Benefits for the Years
Ended December 31, 1997 and 1996
Notes to Financial Statements
Item 27(a )- Schedule of Assets Held for Investment Purposes as of December
31, 1997
(b) Signatures
(c) Exhibit 23.1 - Consent of KPMG Peat Marwick LLP
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Trustees
ClubCorp Stock Investment Plan:
We have audited the accompanying statements of net assets available for benefits
of ClubCorp Stock Investment Plan as of December 31, 1997 and 1996, and the
related statements of changes in net assets available for benefits for the years
then ended. These financial statements are the responsibility of the Plan'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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of ClubCorp Stock
Investment Plan as of December 31, 1997 and 1996, and the changes in net assets
available for benefits for the years then ended in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes as of December 31, 1997, is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
KPMG Peat Marwick LLP
Dallas, Texas
May 29, 1998
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<TABLE>
<CAPTION>
CLUBCORP STOCK INVESTMENT PLAN
Statements of Net Assets Available for Benefits
December 31, 1997 and 1996
1997 1996
----------- ----------
<S> <C> <C>
Assets:
Club Corporation International common stock, at fair value
(note 2) $53,652,313 43,233,147
Short-term investments, at fair value (note 2) 404,874 1,297,887
Cash 319,291 230,012
Receivables (note 3):
Employer contributions 1,774,078 1,719,446
Employee contributions 127,501 16,624
----------- ----------
1,901,579 1,736,070
----------- ----------
Total assets 56,278,057 46,497,116
----------- ----------
Liabilities - miscellaneous payables 8,625 42,581
----------- ----------
Net assets available for benefits $56,269,432 46,454,535
=========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CLUBCORP STOCK INVESTMENT PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1997 and 1996
1997 1996
----------- ----------
<S> <C> <C>
Additions to net assets attributed to:
Employer contributions $ 2,466,900 2,386,159
Employee contributions 5,321,242 5,092,569
Net appreciation in fair value of investments -
Club Corporation International common stock (note 2) 8,194,188 7,265,487
Investment income 85,758 81,408
----------- ----------
16,068,088 14,825,623
Deductions from net assets attributed to:
Benefits paid and withdrawals 6,102,748 5,772,875
Administrative expenses 150,443 123,013
----------- ----------
6,253,191 5,895,888
----------- ----------
Net increase in net assets
available for benefits 9,814,897 8,929,735
Net assets available for benefits:
Beginning of year 46,454,535 37,524,800
----------- ----------
End of year $56,269,432 46,454,535
=========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CLUBCORP STOCK INVESTMENT PLAN
Notes to Financial Statements
December 31. 1997 and 1996
(1) General
-------
The ClubCorp Stock Investment Plan (Plan) is a defined contribution plan
covering all employees of Club Corporation International's participating
subsidiaries (ClubCorp) who have completed one year of service and worked at
least l,000 hours during their eligibility year of service. The sponsoring
Employer of the Plan is ClubCorp. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). Participants should
refer to the Plan document for more complete information.
(a) Basis of Presentation
-----------------------
The accompanying financial statements have been prepared on an accrual
basis.
(b) Contributions
-------------
Participating employees may elect to contribute up to 6% of their eligible
compensation to the Plan. The Employer matches 20% of the employee
contributions and may, at its discretion, match up to an additional 30% of
employee contributions. For the years ended December 31, 1997 and 1996,
ClubCorp made discretionary contributions of approximately $1,430,000 and
$1,374,000, respectively.
The maximum amount which may be added to any participant's account in any
year is the lesser of $30,000 or 25% of their compensation for that year for all
ClubCorp defined contribution plans. This maximum amount includes the
participant's share of ClubCorp's contributions.
(c) Participant Accounts
---------------------
Each participant's account is credited with the allocation of ClubCorp's
contributions based on the participant's contributions to the Plan. Earnings
and losses from investments are allocated to the participants' accounts based on
their individual quarter-end balances. Forfeitures of terminated participants'
nonvested accounts are used to cover direct administrative expenses of the Plan
(see note l(f)).
(d) Vesting
-------
Participants are gradually vested in ClubCorp's contributions as determined
by years of continuous service based on one hour of service for each Plan year.
Full vesting is attained after seven years of credited service. Participants
are always 100% vested in the account value of their voluntary contributions and
earnings thereon.
(e) Payment of Benefits
---------------------
Benefits are paid to participants upon retirement, permanent disability,
termination, or to beneficiaries upon death of the participant. The participant
or beneficiary may elect, subject to the terms of the Plan, to receive his or
her benefits in a lump sum cash distribution, in installments over a fixed
period, or through transfer to another retirement plan in an amount equal to the
value of the participant's account.
(f) Administrative Expenses
------------------------
Forfeitures are used by the Plan to pay direct administrative expenses
which amounted to $150,443 and $123,013 in 1997 and 1996, respectively.
Indirect expenses and any direct expenses not covered by forfeitures are paid by
the sponsoring Employer. Indirect administrative expenses of $301,755 and
$327,511 were paid by ClubCorp on behalf of the Plan in 1997 and 1996,
respectively.
(g) Plan Termination
-----------------
Although it has not expressed any intent to do so, ClubCorp has the right
to terminate the Plan at any time subject to the provisions of ERISA. If the
Plan were to terminate, participants would automatically become fully vested
regardless of years of service and the net Plan assets would be distributed to
Plan participants based on each participant's account balance.
(h) Form 5500 Reconciliation
--------------------------
The net assets available for benefits recorded in the Plan's Form 5500 as
of December 31, 1997 and 1996 are less than the corresponding amounts reported
in the accompanying financial statements by $906,617 and $577,306, respectively.
These differences relate to benefits payable at year-end for terminations.
(i) Use of Estimates
------------------
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 additions and deductions during the
reporting period. Actual results could differ from those estimates.
(2) Investments
-----------
The following table presents the fair value of investments at December 31,
1997 and 1996.
<TABLE>
<CAPTION>
1997 1996
---------------------- ----------------------
Units/ Fair Units/ Fair
shares value shares value
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Investment at estimated fair
value - Club Corporation
International common stock 3,775,673 $53,652,313 3,590,793 $43,233,147
Investments at quoted market
value - Dreyfus Institutional
Government Money
Market Fund 404,874 404,874 1,297,887 1,297,887
----------- -----------
Total investments $54,057,187 $44,531,034
=========== ===========
</TABLE>
If available, quoted market prices are used to value investments of the
Plan. Because there is no public market for the common stock of ClubCorp, its
fair value is based upon a Formula Price which is determined quarterly by
ClubCorp using a formula based on certain financial measures. The Trustees of
the Plan have retained a Financial Advisor to perform an independent appraisal
of ClubCorp four times each year following delivery of the ClubCorp's quarterly
financial statements. Based upon such appraisals, the Financial Advisor
confirms that the Formula Price falls within the range of fair market value of
the common stock. During the years ended December 31, 1997 and 1996, purchases
of common stock made by the Plan were from two individual shareholders and
ClubCorp.
(3) Employer and Employee Contributions Receivable
--------------------------------------------------
Matching contributions are allocated to employees' accounts at the end of
each quarter; therefore, the accompanying financial statements reflect a
receivable for the fourth quarter's Employer match credited to employees'
accounts but not received at December 31, 1997 and 1996. At December 31, 1997
and 1996, Employer contributions receivable includes the Employer discretionary
contribution of approximately $1,430,000 and $1,374,000, respectively (see note
1(b)).
(4) Federal Income Taxes
----------------------
The Plan obtained its latest tax determination letter on May 29, 1998, in
which the Internal Revenue Service stated that the Plan was in compliance with
the applicable requirements of the Internal Revenue Code (IRC). The Plan
administrator believes that the Plan is currently being operated in compliance
with the applicable requirements of the IRC.
(5) Financial Instruments
----------------------
The carrying values of financial instruments such as cash, receivables and
liabilities approximate their fair values because of the nature and short
maturity of these instruments. Club Corporation International common stock and
short-term investments are carried at fair value.
<PAGE>
Schedule 1
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<TABLE>
<CAPTION>
CLUBCORP STOCK INVESTMENT PLAN
Item 27(a) - Schedule of Assets Held for Investment Purposes
as of December 31, 1997
Current
Identity of issue Description of investment Cost value
- -------------------------------- ------------------------- ----------- ----------
<S> <C> <C> <C>
Common stock - Club 3,775,673 shares $24,424,393 53,652,313
Corporation International*
Short-term investments - Dreyfus
Institutional Government Money
Market Fund 404,874 units 404,874 404,874
</TABLE>
*Party-in-interest
See accompanying independent auditors' report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
CLUBCORP STOCK INVESTMENT PLAN
CLUB CORPORATION INTERNATIONAL
Plan Administrator
Date: June 24, 1998 By: /s/ James P. McCoy, Jr.
- -------------------- -------------------------------
James P. McCoy, Jr.
Chief Financial Officer
and Executive Vice President
(chief accounting officer)
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Club Corporation International:
We consent to incorporation by reference in the registration statements (Nos.
33-89818, 33-96568, 333-08041 and 333-57107) on Form S-8 of Club Corporation
International of our report dated May 29, 1998, relating to the statements of
net assets available for benefits of ClubCorp Stock Investment Plan as of
December 31, 1997 and 1996, and the related statements of changes in net assets
available for benefits for the years then ended, and the related supplemental
schedule, which report appears in the December 31, 1997, annual report on Form
11-K of ClubCorp Stock Investment Plan.
KPMG Peat Marwick LLP
Dallas, Texas
June 24, 1998
