10-Q 1 g73643e10-q.txt GOLF HOST RESORTS, INC. FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------- For Quarter Ended June 30, 2000 Commission File no. 2-64309 GOLF HOST RESORTS, INC. ----------------------- (Exact name of registrant as specified in its charter) Colorado 84-0631130 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 36750 US 19 N., Palm Harbor, Florida 34684 -------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (727) 942-2000 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding twelve months, and (2) has been subject to the filing requirements for the past 90 days. - Yes [X] No [ ] Issuer has no common stock subject to this report. Page 1 of 19 GOLF HOST RESORTS, INC. AND SUBSIDIARY (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) BALANCE SHEETS JUNE 30, 2000 AND DECEMBER 31, 1999 ASSETS (SUBSTANTIALLY ALL PLEDGED)
JUNE 30, DECEMBER 31, 2000 1999 ----------- ----------- (unaudited) CURRENT ASSETS: Cash $ 1,556,858 $ 131,440 Restricted cash 814,466 318,860 Accounts receivable, net 5,813,666 4,499,990 Other receivables 659,970 907,568 Inventories and supplies 1,301,854 1,755,452 Prepaid expenses and other assets 825,865 132,116 ----------- ----------- 10,972,679 7,745,426 Assets held for sale 2,435,000 8,634,596 ----------- ----------- Total current assets 19,607,275 16,380,022 INTANGIBLES, net 25,568,452 26,994,645 PROPERTY AND EQUIPMENT, net 42,189,287 43,205,256 OTHER ASSETS 336,338 315,851 ----------- ----------- $81,501,756 $86,895,774 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. Page 2 GOLF HOST RESORTS, INC. AND SUBSIDIARY (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) BALANCE SHEETS JUNE 30, 2000 AND DECEMBER 31, 1999 LIABILITIES AND SHAREHOLDER'S DEFICIT
JUNE 30, DECEMBER 31, 2000 1999 ------------- ------------- (unaudited) CURRENT LIABILITIES: Accounts payable $ 6,547,078 $ 5,039,225 Line of credit 777,988 2,109,316 Accrued payroll costs 1,013,278 899,750 Accrued interest 725,500 691,265 Accrued expenses 3,914,493 3,214,321 Deposits and prepaid fees 1,922,173 2,841,038 Current notes payable 809,566 795,205 Due to related parties 3,127,257 1,994,645 ------------- ------------- Total current liabilities 18,837,333 17,584,765 NOTES PAYABLE 82,403,044 83,829,220 OTHER LONG-TERM LIABILITIES 5,486,813 5,168,028 DEFERRED INCOME TAXES 1,770,467 1,770,467 ------------- ------------- Total liabilities 108,497,657 108,352,480 ------------- ------------- SHAREHOLDER'S DEFICIT Common stock, $1 par, 5,000 shares authorized, issued, and outstanding 5,000 5,000 5.6% cumulative preferred stock, $1 par, 4,577,000 shares authorized, issued, and outstanding 4,577,000 4,577,000 Paid-in capital (13,557,000) (13,557,000) Accumulated deficit (18,020,901) (12,481,706) ------------- ------------- Total shareholder's deficit (26,995,901) (21,456,706) ------------- ------------- Total liabilities and shareholder's deficit $ 81,501,756 $ 86,895,774 ============= =============
The accompanying notes are an integral part of these consolidated financial statements. Page 3 GOLF HOST RESORTS, INC. AND SUBSIDIARY (a wholly owned subsidiary of Golf Hosts, Inc.) STATEMENTS OF INCOME FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
QUARTERS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, 2000 1999 2000 1999 ------------ ------------ ------------ ----------- (unaudited) (unaudited) REVENUES: Resort facilities $ 5,131,088 $ 5,270,491 $ 12,600,061 $14,416,988 Food and beverage 5,767,012 5,221,933 11,111,403 11,410,694 Golf 3,998,690 3,942,125 9,372,278 10,086,757 Other 1,663,257 1,604,366 3,302,004 2,879,508 ------------ ------------ ------------ ----------- 16,560,047 16,038,915 36,385,746 38,793,947 ------------ ------------ ------------ ----------- COST AND OPERATION EXPENSES: Resort facilities 3,667,801 3,753,362 8,530,104 9,161,757 Food and beverage 2,834,018 2,927,389 5,705,804 6,355,245 Golf 1,987,189 1,915,990 4,040,569 3,997,407 Other 2,976,038 2,781,692 5,827,321 5,801,224 General and administrative 1,593,790 1,681,177 3,425,041 3,729,095 Depreciation and amortization 995,771 2,526,191 1,951,543 3,576,302 ------------ ------------ ------------ ----------- 14,054,607 15,585,801 29,480,382 32,621,030 ------------ ------------ ------------ ----------- INCOME BEFORE INCOME/(LOSS) ON ASSETS HELD FOR SALE 2,505,440 453,114 6,905,364 6,172,917 INCOME/(LOSS) ON ASSETS HELD FOR SALE AND LEASED ASSET (458,615) (27,027) (1,257,452) 794,837 ------------ ------------ ------------ ----------- OPERATING INCOME 2,046,825 426,087 5,647,912 6,967,754 INTEREST, NET 2,412,075 2,373,556 4,859,357 4,759,494 ------------ ------------ ------------ ----------- INCOME/(LOSS) BEFORE DIVIDEND REQUIREMENTS ON PREFERRED STOCK (365,250) (1,947,469) 788,555 2,208,260 DIVIDEND REQUIREMENTS ON PREFERRED STOCK 64,077 64,077 128,154 128,154 ------------ ------------ ------------ ----------- NET INCOME/(LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (429,327) $ (2,011,546) $ 660,401 $ 2,080,106 ============ ============ ============ =========== EARNINGS/(LOSS) PER COMMON SHARE $ (85.86) $ (402.31) $ 132.09 $ 416.02 ============ ============ ============ ===========
The accompanying notes are an integral part of these consolidated financial statements. Page 4 GOLF HOST RESORTS, INC AND SUBSIDIARY CONSOLIDATED STATEMENTS OF SHAREHOLDER'S DEFICIT FOR THE EIGHTEEN MONTHS ENDED JUNE 30, 2000
$1 Par Value 5.6% Cumulative Common Stock Preferred Stock Total ----------------- ------------------------ Paid-In Retained Shareholder's Shares Amount Shares Amount Capital Deficit Deficit ------ ------ --------- ---------- ------------ ------------ ------------ Balance, December 31, 1998 5,000 5,000 4,577,000 4,577,000 (13,557,000) 1,940,766 (7,034,234) Net loss available to common shareholder -- -- -- -- -- (7,453,219) (7,453,219) Distribution to shareholder -- -- -- -- -- (6,969,253) (6,969,253) ----- ------ --------- ---------- ------------ ------------ ------------ Balance, December 31, 1999 5,000 5,000 4,577,000 4,577,000 (13,557,000) (12,481,706) (21,456,706) Net income available to common shareholder -- -- -- -- -- 660,401 660,401 Distribution to shareholder -- -- -- -- -- (6,199,596) (6,199,596) ----- ------ --------- ---------- ------------ ------------ ------------ Balance, June 30, 2000 5,000 $5,000 4,577,000 $4,577,000 $(13,557,000) $(18,020,901) $(26,995,901) ===== ====== ========= ========== ============ ============ ============
The accompanying notes are an integral part of these consolidated financial statements. Page 5 GOLF HOST RESORTS, INC. AND SUBSIDIARY (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
2000 1999 ----------- ----------- (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income before dividend requirements on preferred stock $ 788,555 $ 2,183,014 Noncash items included in income: Depreciation and amortization 1,951,543 1,898,720 Write-off of startup costs -- 1,606,538 Changes in operating working capital 1,294,196 (3,345,281) ----------- ----------- Cash provided by operations 4,034,294 2,342,991 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: (Increase) in other assets (20,487) -- Purchases of property and equipment (164,031) (1,894,207) Net recovery of cost of property and equipment sold or retired -- 7,229 Decrease in assets held for sale -- 2,605,738 ----------- ----------- Cash provided by (used in) investing activities (184,518) 718,760 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase/(decrease) in notes payable 14,361 (195,762) Additional borrowings on existing debt -- 303,416 Repayment of existing debt (1,426,176) -- Repayment of line of credit (1,331,328) (3,513,173) Increases in other long-term liabilities 318,785 (41,579) ----------- ----------- Cash provided by (used in) financing activities (2,424,358) (3,447,098) ----------- ----------- NET INCREASE (DECREASE) IN CASH 1,425,418 (385,347) CASH, BEGINNING OF PERIOD 131,440 1,396,404 ----------- ----------- CASH, END OF PERIOD $ 1,556,858 $ 1,011,057 =========== =========== NONCASH FINANCING AND INVESTING ACTIVITIES: The Company satisfied its preferred stock dividend liability to GHI through the intercompany account $ 128,154 $ 128,154 =========== =========== Settlement with previous owners $ 1,249,843 $ -- =========== =========== Dividend of Tamarron to Golf Hosts II, Inc. $ 6,199,596 $ -- =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. Page 6 GOLF HOST RESORTS, INC. AND SUBSIDIARY (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 AND 1999 (1) ORGANIZATION, BUSINESS, LIQUIDITY AND ACCOUNTING POLICIES During the quarter, there was no significant change from the 10-K filing on December 31, 1999. During 2000, the Company transferred the assets and liabilities of Tamarron of approximately $6,200,000, net, to its parent, Golf Host, Inc. ("GHI"), who contributed them to Golf Host II, Inc., a wholly owned subsidiary of GHI. Concurrently with the transfer of Tamarron, the Company entered into a lease agreement whereby Golf Host II, Inc. leased Tamarron to the Company. Rent is payable annually in the amount of $1. In addition, the Company assumes responsibility for Tamarron's Net Income (Loss), as defined by the lease agreement. The lease term is 10 years. Financial Statement Presentation Certain reclassifications have been made to the June 2000 financial statements to conform to the December 1999 presentation. (2) LONG-TERM OBLIGATIONS Long-term obligations consist of the following:
JUNE 30, DECEMBER 31, 2000 1999 ------------ ------------ Participating mortgage note at varying pay rates maturing in 2027 $ 69,975,000 $ 69,975,000 $9,000,000 participation mortgage note credit facility 9,000,000 9,000,000 Mortgage note at 6.34%, maturing in 2002 3,168,000 4,417,764 Capital leases 1,069,610 1,231,661 ------------ ------------ 83,212,610 84,624,425 Less current maturities (809,566) (795,205) ------------ ------------ $ 82,403,044 $ 83,829,220 ============ ============
Page 7 GOLF HOST RESORTS, INC. AND SUBSIDIARY (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 AND 1999 (3) TAMARRON'S RESULT OF OPERATIONS: As defined in Note 1, the Company assumes responsibility for the Net Income (Loss) of Tamarron under the terms of the lease agreement between the Company and Golf Host II, Inc. for the period of lease inception (June 12, 2000) through December 31, 2000, the Net Income (Loss) is as follows and is included in loss on assets held for sale and leased asset in the Statement of Operations:
19 DAYS ENDED JUNE 30, 2000 REVENUE: HOTEL 123,355 FOOD & BEVERAGE 120,212 GOLF 69,539 OTHER 83,568 REAL ESTATE -- -------- -- 396,674 -------- COSTS & OPERATING EXP: HOTEL 67,127 FOOD & BEVERAGE 87,936 GOLF 42,580 OTHER 122,196 GENERAL & ADMIN 201,199 -------- 521,038 -------- INTEREST EXPENSE -- -------- -- NET INCOME/(LOSS) (124,363) ========
Page 8 GOLF HOST RESORTS, INC. AND SUBSIDIARY (a wholly owned subsidiary of Golf Hosts, Inc.) Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS For purposes of discussing comparative results of operations for 2000 and 1999, the results of operations of Tamarron, which are included in income/(loss) on assets held for sale, in 2000 and 1999, are also utilized. Guest occupancy for the quarter, measured in room nights, decreased 4.8% from the level of the prior year. On a divisional basis, Innisbrook's occupancy decreased 5.6% while Tamarron experienced a decrease in occupancy of .5%. The decrease in Innisbrook's room nights occurred primarily in the group segment. The decrease in Tamarron's occupancy also occurred in the group segment, while the social segment occupancy remained flat. Revenues from resort operations on a per occupied room basis increased 10.5% from $398.14 to $439.81. The improved guest spending is primarily attributable to Innisbrook, which enjoyed an 11.1% increase in gross operating revenue. While Tamarron's gross operating revenue rose 7.4%, its revenue per room night rose 8.0%. Innisbrook's average daily room rate rose 5.3% while Tamarron's decreased .4%. While meals served at Innisbrook increased 8.1%, revenue per meal served improved 11.6%. Tamarron's meals served rose 1.5% while its revenue per meal served decreased 7.3%. Innisbrook golf revenues were up 1.4% from the prior year, as revenue per player increased .9%. Rounds played increased .5%. Tamarron's golf revenues were down 18.1% while rounds played increased by 18.2%. On a divisional basis, Innisbrook and Tamarron's revenue per occupied room for the second quarter of 2000 and 1999 were $458.09 and $342.21 as compared to $412.29 and $316.85, respectively. As a result of the reduced occupancy and improved guest spending, total resort operations revenues rose $604 thousand or 3.3%. Real estate activities at Tamarron generated two lot sales during the second quarter of 1999 and none during 2000. All of the real estate sales activity for 2000 and 1999 is included in income/(loss) on assets held for sale in the statements of income. Costs and operating expenses decreased to 89.2% of total resort operations revenues as compared to 91.2% in 1999. At Innisbrook, gross operating income increased 19.9% as relative departmental operating expense levels rose moderately by .2% over the prior years while revenues increased at a 2.8% rate. At the same time, Innisbrook's fixed charges and other expenses increased 1.8% over the prior year, primarily due to the rental pool distribution expense and amortization of intangible assets. While Tamarron's gross operating revenue increased as noted above, its cost and operating expenses experienced a 5.6% increase. Interest expense rose 1.6% primarily as a result of payments under a participating mortgage in 1999 offset against reduced revolving credit line costs. Page 9 FINANCIAL CONDITION AND LIQUIDITY The company's working capital position (exclusive of Assets Held for Sale) was a deficit of $7,864,654 at June 30, 2000, as compared to a deficit of $15,085,098 at December 31, 1999. The Company typically experiences seasonal fluctuations in its net working capital position without normally impairing its ability to pay trade creditors in a timely manner and satisfy its financial obligations in an orderly fashion. Based on existing cash levels and the additional cash sources noted above, the Company assesses its liquidity as satisfactory. Page 10 PART II - OTHER INFORMATION Item 1. Legal Proceedings Registrant is not currently involved in material legal proceedings other than ordinary routine litigation incidental to its business. Item 2. Changes in Securities Not applicable. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Submission of matters to a Vote of Security Holders Not applicable. Item 5. Other Information Pursuant to an agreement with the SEC staff, included in this 10-Q filing are unaudited financial statements of the Innisbrook Rental Pool Lease Operation and the Tamarron Rental Pool Lease Operation for the quarter and six months ended June 30, 2000 and 1999 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 Financial Data Schedule (for SEC use only) (b) Reports on Form 8-K None Page 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GOLF HOST RESORTS, INC. Date: 12/24/01 By: /s/ Merrick Kleeman --------------------------- --------------------------------- Merrick Kleeman President Date: 12/24/01 By: /s/ R. Keith Wilt --------------------------- --------------------------------- R. Keith Wilt Vice President and Treasurer Page 12 RENTAL POOL LEASE OPERATIONS The following unaudited financial statements of the Innisbrook Rental Pool Lease Operation and the Tamarron Rental Pool Lease Operation (the Rental Pools) are for the quarters and six months ended June 30, 2000 and 1999. The operations of the Rental Pools are tied closely to that of Golf Host Resorts, Inc. (the Company), and provide for distribution of a percentage of the Company's room revenues, as defined in the Rental Pool Master Lease Agreements, to participating condominium owners (Participants). The operations of the Rental Pools are more fully discussed in Form 10-K, for the fiscal year ended December 31, 1999 (file No. 2-64309). Page 13 INNISBROOK RENTAL POOL LEASE OPERATION BALANCE SHEETS JUNE 30, 2000 AND 1999 DISTRIBUTION FUND
2000 1999 ---------- ----------- ASSETS RECEIVABLE FROM GOLF HOST RESORTS, INC. FOR DISTRIBUTION $1,972,547 $ 1,984,193 INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND 56,707 27,480 ---------- ----------- $2,029,254 $ 2,011,673 ========== =========== LIABILITIES AND PARTICIPANTS' FUND BALANCES DUE TO PARTICIPANTS FOR DISTRIBUTION 1,619,223 1,577,250 DUE TO MAINTENANCE ESCROW FUND 410,031 434,423 PARTICIPANTS' FUND BALANCES -- -- ---------- ----------- $2,029,254 $ 2,011,673 ========== =========== MAINTENANCE ESCROW FUND ASSETS CASH AND CASH EQUIVALENTS $3,752,755 $ 2,613,918 RECEIVABLE FROM DISTRIBUTION FUND 410,031 434,423 INVENTORY 3,210,484 80,382 INTEREST RECEIVABLE 36,600 42,486 ---------- ----------- $7,409,870 $ 3,171,209 ========== =========== LIABILITIES AND PARTICIPANTS' FUND BALANCES ACCOUNTS PAYABLE $ 96,993 $ 1,990 INTEREST PAYABLE TO DISTRIBUTION FUND 56,707 27,480 CARPET CARE RESERVE 6,408 (2,968) PARTICIPANTS' FUND BALANCES 7,249,762 3,144,707 ---------- ----------- $7,409,870 $ 3,171,209 ========== ===========
These statements were prepared from the books and records of the Rental Pool without audit and, in the opinion of management, include all adjustments which are necessary for a fair presentation. Page 14 INNISBROOK RENTAL POOL LEASE OPERATION STATEMENTS OF OPERATIONS FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE ---------------------------- ------------------------------ 2000 1999 2000 1999 ----------- ----------- ------------ ------------ GROSS REVENUES $ 5,012,349 $ 5,194,758 $ 12,387,505 $ 13,904,392 ----------- ----------- ------------ ------------ DEDUCTIONS: Agents' commissions 255,530 358,596 620,918 797,036 Credit Card fees 40,071 42,323 88,434 105,494 Audit fees 3,251 3,250 6,501 6,500 ----------- ----------- ------------ ------------ 298,852 404,169 715,853 909,030 ----------- ----------- ------------ ------------ ADJUSTED GROSS REVENUES 4,713,497 4,790,589 11,671,652 12,995,362 AMOUNT RETAINED BY LESSEE (2,348,432) (2,386,715) (5,816,593) (6,476,117) ----------- ----------- ------------ ------------ GROSS INCOME DISTRIBUTION 2,365,065 2,403,874 5,855,059 6,519,245 ADJUSTMENTS TO GROSS INCOME DISTRIBUTION: Management fee (259,799) (268,808) (644,365) (722,754) Marketing fee (141,709) (146,623) (351,472) (394,230) Miscellaneous pooled expense (20,786) (22,323) (43,580) (68,060) Corporate complimentary occupancy fees 13,444 8,328 23,855 16,645 Westin Associate room fees 21,301 13,196 39,675 26,027 Occupancy fees (460,399) (487,723) (958,410) (1,040,382) Advisory Committee expenses (8,146) (7,166) (16,186) (13,582) ----------- ----------- ------------ ------------ NET INCOME DISTRIBUTION 1,508,971 1,492,755 3,904,576 4,322,909 ADJUSTMENTS TO NET INCOME DISTRIBUTION: Occupancy fees 460,399 487,723 958,410 1,040,382 Hospitality suite fees 135 135 135 324 Greens fees 2,322 2,620 5,700 6,666 Additional participation credit 720 960 1,470 1,920 ----------- ----------- ------------ ------------ AMOUNT AVAILABLE FOR DISTRIBUTION TO PARTICIPANTS $ 1,972,547 $ 1,984,193 $ 4,870,291 $ 5,372,201 =========== =========== ============ ============ Average daily distribution $ 32.50 $ 27.84 $ 40.95 $ 38.10 Average room rate $ 138.65 $ 132.89 $ 163.44 $ 165.24 Occupied room nights 36,150 39,090 75,791 84,148 Available room nights 60,701 71,262 118,929 141,018 Occupancy percentage 59.6% 54.9% 63.7% 59.7% Average number of available units 667 783 653 779
These statements were prepared from the books and records of the Rental Pool without audit and, in the opinion of management, include all adjustments which are necessary for a fair presentation. Page 15 INNISBROOK RENTAL POOL LEASE OPERATION STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE 2000 1999 2000 1999 ----------- ----------- ----------- ----------- BALANCE, beginning of period $ -- $ -- $ -- $ -- ADDITIONS: Amount available for distribution 1,972,547 1,984,193 4,870,291 5,372,201 Interest received or receivable from Maintenance Escrow Fund 56,707 27,480 112,692 52,799 REDUCTIONS: Amounts withheld for Maintenance Escrow Fund (410,031) (434,423) (854,302) (949,077) Amounts accrued or paid to participants (1,619,223) (1,577,250) (4,128,681) (4,475,923) ----------- ----------- ----------- ----------- BALANCE, end of period $ -- $ -- $ -- $ -- =========== =========== =========== =========== MAINTENANCE ESCROW FUND BALANCE, beginning of period $ 7,018,143 $ 2,742,143 $ 7,021,346 $ 2,505,110 ADDITIONS: Amounts withheld from occupancy fees 410,031 434,423 854,302 927,423 Interest earned 56,707 27,480 112,692 52,799 Charges to participants to establish or restore escrow balances 117,043 269,855 165,221 335,380 REDUCTIONS: Maintenance charges (125,068) (224,352) (226,786) (342,696) Carpet care reserve deposit (21,577) (19,509) (41,480) (30,563) Interest accrued or paid to Distribution Fund (56,707) (27,480) (112,692) (52,799) Refunds to participants as prescribed by the master lease agreements (148,810) (57,853) (522,841) (249,947) ----------- ----------- ----------- ----------- BALANCE, end of period $ 7,249,762 $ 3,144,707 $ 7,249,762 $ 3,144,707 =========== =========== =========== ===========
These statements were prepared from the books and records of the Rental Pool without audit and, in the opinion of management, include all adjustments which are necessary for a fair presentation. Page 16 TAMARRON RENTAL POOL LEASE OPERATION BALANCE SHEETS JUNE 30, 2000 AND 1999 DISTRIBUTION FUND
2000 1999 -------- -------- ASSETS CASH $ 1,000 $ 1,000 RECEIVABLE FROM GOLF HOST RESORTS, INC. FOR DISTRIBUTION 282,737 332,009 INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND 1,231 -- -------- -------- $284,968 $333,009 ======== ======== LIABILITIES AND PARTICIPANTS' FUND BALANCES DUE TO PARTICIPANTS FOR DISTRIBUTION $228,310 $274,347 DUE TO MAINTENANCE ESCROW FUND 56,658 58,662 -------- -------- $284,968 $333,009 ======== ======== MAINTENANCE ESCROW FUND ASSETS CASH AND CASH EQUIVALENTS $121,822 $ 22,351 DUE FROM DISTRIBUTION FUND 56,659 58,662 INVENTORY: Linen 22,390 45,818 Materials and supplies 5,614 14,672 DEPOSITS 17,941 -- -------- -------- $224,426 $141,503 ======== ======== LIABILITIES AND PARTICIPANTS' FUND BALANCES ACCOUNTS PAYABLE $ 7,579 $ 12,537 INTEREST PAYABLE TO DISTRIBUTION FUND 1,231 -- PARTICIPANTS' FUND BALANCES 215,616 128,966 -------- -------- $224,426 $141,503 ======== ========
These statements were prepared from the books and records of the Rental Pool without audit and, in the opinion of management, include all adjustments which are necessary for a fair presentation. Page 17 TAMARRON RENTAL POOL LEASE OPERATION STATEMENTS OF OPERATIONS FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE ------------------------ ---------------------------- 2000 1999 2000 1999 --------- --------- ----------- ----------- GROSS REVENUES $ 709,134 $ 734,637 $ 1,139,021 $ 1,327,534 --------- --------- ----------- ----------- DEDUCTIONS: Agents' commissions 12,279 8,832 40,498 45,157 Sales and marketing expenses 53,185 55,098 85,427 99,565 Audit fees 3,255 3,255 6,510 6,510 --------- --------- ----------- ----------- 68,719 67,185 132,435 151,232 --------- --------- ----------- ----------- ADJUSTED GROSS REVENUES 640,415 667,452 1,006,586 1,176,302 MANAGEMENT FEE (355,791) (333,726) (538,876) (588,151) --------- --------- ----------- ----------- GROSS INCOME DISTRIBUTION 284,624 333,726 467,710 588,151 ADJUSTMENTS TO GROSS INCOME DISTRIBUTION: Corporate complimentary occupancy fees 590 939 1,123 1,592 Occupancy fees (70,835) (69,784) (132,992) (143,228) Designated items (20,239) (22,768) (30,540) (66,877) Advisory Committee expenses (2,477) (2,656) (2,640) (5,938) --------- --------- ----------- ----------- POOLED INCOME 191,663 239,457 302,661 373,700 ADJUSTMENTS TO POOLED INCOME: Occupancy fees 70,835 69,784 132,992 143,228 --------- --------- ----------- ----------- NET INCOME DISTRIBUTION $ 262,498 $ 309,241 $ 435,653 $ 516,928 ========= ========= =========== =========== Average daily distribution $ 10.94 $ 12.18 $ 9.14 $ 10.33 Average room rate $ 99.12 $ 103.22 $ 84.32 $ 90.96 Room nights 7,154 7,117 13,508 14,594 Occupancy percentage 29.8% 28.0% 28.4% 29.2% Average number of available units 267 276 262 276
These statements were prepared from the books and records of the Rental Pool without audit and, in the opinion of management, include all adjustments which are necessary for a fair presentation. Page 18 TAMARRON RENTAL POOL LEASE OPERATION STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 DISTRIBUTION FUND
CURRENT QUARTER YEAR-TO-DATE 2000 1999 2000 1999 --------- --------- --------- --------- BALANCE, beginning of period $ -- $ -- $ -- $ -- ADDITIONS: Amounts available for distribution 262,498 309,241 435,653 516,928 Interest received or receivable from Maintenance Escrow Fund 1,231 -- 1,374 -- REDUCTIONS: Amounts withheld for Maintenance Escrow (35,419) (34,894) (66,499) (71,619) Amounts accrued or paid to participants (228,310) (274,347) (370,528) (445,309) --------- --------- --------- --------- BALANCE, end of period $ -- $ -- $ -- $ -- ========= ========= ========= ========= MAINTENANCE ESCROW FUND BALANCE, beginning of period $ 189,482 $ 193,614 $ 188,338 $ 174,111 ADDITIONS: Amounts withheld from occupancy fees 35,419 34,894 66,499 71,619 Interest earned 1,231 -- 1,374 -- Reimbursement of designated items 20,239 22,768 30,540 66,877 Charges to participants to establish or restore escrow balances 94,378 3,906 101,858 16,734 REDUCTIONS: Maintenance and inventory charges (94,867) (91,903) (124,049) (110,311) Refurbishing charges -- (6,766) -- (9,740) Interest accrued or paid to Distribution Fund (1,231) -- (1,374) -- Designated items (20,239) (22,768) (30,540) (66,877) Refunds to participants as prescribed by Master Lease Agreement (8,796) (4,779) (17,030) (13,447) --------- --------- --------- --------- BALANCE, end of period $ 215,616 $ 128,966 $ 215,616 $ 128,966 ========= ========= ========= =========
These statements were prepared from the books and records of the Rental Pool without audit and, in the opinion of management, include all adjustments which are necessary for a fair presentation. Page 19