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, 1998
Commission File Number 33-89818, 33-96568, 333-08041 and 333-57107
CLUBCORP STOCK INVESTMENT PLAN
(Full title of the plan)
CLUBCORP, INC.
(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, 1998 and
1997
Statements of Changes in Net Assets Available for Benefits for the Years
Ended December 31, 1998 and 1997
Notes to Financial Statements
Item 27(a) - Schedule of Assets Held for Investment Purposes as of
December 31, 1998
Item 27(d) - Schedule of Reportable Transactions for the year ended
December 31, 1998
(b) Signatures
(c) Exhibit 23.1 - Consent of KPMG 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, 1998 and 1997, 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, 1998 and 1997, 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, 1998 and the schedule of reportable
transactions for the year ended December 31, 1998, are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are 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. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
KPMG LLP
June 21, 1999
<PAGE>
CLUBCORP STOCK INVESTMENT PLAN
Statements of Net Assets Available for Benefits
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
------------- ----------
<S> <C> <C>
Assets:
ClubCorp, Inc. common stock, at fair value (note 2) $ 65,278,819 53,652,313
Short-term investments, at fair value (note 2) 1,350,945 404,874
Cash 284,927 319,291
Receivables (note 3):
Employer contributions 1,876,109 1,774,078
Employee contributions 113,121 127,501
------------- ----------
1,989,230 1,901,579
------------- ----------
Total assets 68,903,921 56,278,057
------------- ----------
Liabilities - miscellaneous payables - 8,625
------------- ----------
Net assets available for benefits $ 68,903,921 56,269,432
============= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CLUBCORP STOCK INVESTMENT PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
------------- ----------
<S> <C> <C>
Additions to net assets attributed to:
Employer contributions $ 2,687,437 2,466,900
Employee contributions 5,894,318 5,321,242
Net appreciation in fair value of investments -
ClubCorp, Inc. common stock (note 2) 9,326,526 8,194,188
Investment income 79,776 85,758
------------- ----------
17,988,057 16,068,088
Deductions from net assets attributed to:
Benefits paid and withdrawals 5,198,229 6,102,748
Administrative expenses 155,339 150,443
------------- ----------
5,353,568 6,253,191
------------- ----------
Net increase in net assets available for benefits 12,634,489 9,814,897
Net assets available for benefits:
Beginning of year 56,269,432 46,454,535
------------- ----------
End of year $ 68,903,921 56,269,432
============= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CLUBCORP STOCK INVESTMENT PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(1) GENERAL
The ClubCorp Stock Investment Plan (Plan) is a defined contribution plan
covering all employees of ClubCorp, Inc.'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, 1998 and 1997,
ClubCorp made discretionary contributions of approximately $1,558,000 and
$1,430,000, 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 $155,339 and $150,443 in 1998 and 1997, respectively. Indirect
expenses and any direct expenses not covered by forfeitures are paid by
ClubCorp. Indirect administrative expenses of $313,775 and $301,755 were paid
by ClubCorp on behalf of the Plan in 1998 and 1997, 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, 1998 and 1997 are less than the corresponding amounts reported in
the accompanying financial statements by $1,153,951 and $906,617, 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, 1998
and 1997.
<TABLE>
<CAPTION>
1998 1997
---------------------- ----------------------
UNITS/ FAIR UNITS/ FAIR
SHARES VALUE SHARES VALUE
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Investment at estimated fair
value - ClubCorp, Inc.
common stock 3,932,459 $65,278,819 3,775,673 $53,652,313
Investments at quoted market
value - Dreyfus Institutional
Government Money
Market Fund 1,350,945 1,350,945 404,874 404,874
----------- -----------
$66,629,764 $54,057,187
</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, 1998 and 1997, purchases
of common stock made by the Plan were from two individual shareholders and
ClubCorp.
(3) EMPLOYER 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, 1998 and 1997. At December 31, 1998 and 1997, Employer
contributions receivable includes the Employer discretionary contribution of
approximately $1,558,000 and $1,430,000, respectively (see note 1(b)).
(4) FEDERAL INCOME TAXES
The Plan obtained its latest tax determination letter on July 15, 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. ClubCorp, Inc. common stock and short-term
investments are carried at fair value.
(6) SUBSEQUENT EVENT
The Plan was amended and restated into an employee stock ownership plan
effective as of January 1, 1999, known as the ClubCorp Employee Stock Ownership
Plan (the "Amended Plan"). Eligible employees continue to have the opportunity
to invest 1% to 6% of their pretax compensation, subject to certain limitations.
The participating subsidiaries' matching contributions and vesting schedule
remained the same.
Funds that were in the Plan before January 1, 1999, remain in the Amended Plan.
Generally, contributions to the Amended Plan will be invested in ClubCorp stock.
Participants may elect to diversify a portion of their account assets upon
meeting certain age and participation requirements. In addition, upon
termination, retirement or permanent disability, a participant or beneficiary
may demand distribution of ClubCorp common stock in lieu of cash.
<PAGE>
SCHEDULE 1
CLUBCORP STOCK INVESTMENT PLAN
Item 27(a) - Schedule of Assets Held for Investment Purposes
as of December 31, 1998
<TABLE>
<CAPTION>
DESCRIPTION OF CURRENT
IDENTITY OF ISSUE INVESTMENT COST VALUE
- --------------------------------- ---------------- ----------- -----------
<S> <C> <C> <C>
Common stock - ClubCorp, Inc.* 3,932,459 shares $26,724,373 $65,278,819
Short-term investments - Dreyfus
Institutional Government Money
Market Fund 1,350,945 units $ 1,350,945 $ 1,350,945
*Party-in-interest
</TABLE>
See accompanying independent auditors' report.
<PAGE>
SCHEDULE 2
CLUBCORP STOCK INVESTMENT PLAN
Item 27(d) - Schedule of Reportable Transactions
for the year ended December 31, 1998
<TABLE>
<CAPTION>
EXPENSE CURRENT VALUE
AGGREGATE INCURRED ASSET ON
DESCRIPTION OF NUMBER OF PURCHASE SELLING LEASE WITH COST OF TRANSACTION
ASSET TRANSACTIONS PRICE PRICE RENTAL TRANSACTION ASSET DATE
----------------- ------------ ---------- ---------- ------ ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases:
Dreyfus Institutional
Government Money
Market Fund Money market fund 8 $3,188,677 - - - $3,188,677 $ 3,188,677
Sales:
Dreyfus Institutional
Government Money
Market Fund Money market fund 2 $ - $2,300,000 - - $2,300,000 $ 2,300,000
NET
GAIN
(LOSS)
------
<S> <C>
Purchases:
Dreyfus Institutional
Government Money
Market Fund -
Sales:
Dreyfus Institutional
Government Money
Market Fund -
</TABLE>
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
CLUBCORP, INC.
Plan Administrator
Date: June 28, 1999 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
ClubCorp, Inc.:
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 ClubCorp, Inc. of
our report dated June 21, 1999, relating to the statements of net assets
available for benefits of ClubCorp Stock Investment Plan as of December 31, 1998
and 1997, and the related statements of changes in net assets available for
benefits for the years then ended, and the related supplemental schedules, which
report appears in the December 31, 1998 annual report on Form 11-K of ClubCorp
Stock Investment Plan.
KPMG LLP
Dallas, Texas
June 28, 1999
