-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T0hPlv6AYne070VWg0l4SvovwI6lHvKMhhpFz8s+kE/8Euk0sWzEi7kRqzo4o8ji 8huv3X/xZ6jvPDFwpavV+g== 0000950144-97-009436.txt : 19970821 0000950144-97-009436.hdr.sgml : 19970821 ACCESSION NUMBER: 0000950144-97-009436 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970820 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOLF HOST RESORTS INC CENTRAL INDEX KEY: 0000042429 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 840631130 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-64309 FILM NUMBER: 97667111 BUSINESS ADDRESS: STREET 1: P O DRAWER 3131 CITY: DURANGO STATE: CO ZIP: 81302 BUSINESS PHONE: 3032592000 MAIL ADDRESS: STREET 1: P O BOX 1088 CITY: TARPON SPRINGS STATE: FL ZIP: 34688-1088 FORMER COMPANY: FORMER CONFORMED NAME: TAMARRON INC DATE OF NAME CHANGE: 19870405 FORMER COMPANY: FORMER CONFORMED NAME: GOLF HOST WEST INC /D/B/A/ TAMARRON DATE OF NAME CHANGE: 19840330 10-Q 1 GOLF HOST RESORTS, INC. FORM 10-Q 1 F O R M 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 -------------------- Quarterly Report Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934 -------------------- For Quarter Ended June 30, 1997 Commission File No. 2-64309 GOLF HOST RESORTS, INC. STATE OF COLORADO EMPLOYER IDENTIFICATION NO. 84-0631130 Post Office Drawer 3131, Durango, Colorado 81302 Telephone Number (970) 259-2000 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 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 2 GOLF HOST RESORTS, INC. (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) BALANCE SHEETS ASSETS (Substantially all pledged - Notes 2 and 3)
JUNE 30, DECEMBER 31, 1997 1996 -------------- ----------- (unaudited) CURRENT ASSETS: Cash $ 6,956,559 $ 488,685 Accounts receivable 4,383,882 4,380,108 Notes receivable -- 163,942 Inventories and supplies 4,947,595 5,123,966 Prepaid expenses and other 706,478 956,054 Intercompany receivables 739,665 724,312 ----------- ----------- Total current assets 17,734,179 11,837,067 INTANGIBLES 17,424,977 -- PROPERTY AND EQUIPMENT, at cost, less accumulated depreciation and amortization 44,020,450 40,038,322 OTHER DEFERRED CHARGES 715,322 238,627 LONG-TERM RECEIVABLES, less amounts currently due -- 1,021,178 ----------- ----------- $79,894,928 $53,135,194 =========== ===========
The accompanying notes are an integral part of these financial statements. Page 2 3 GOLF HOST RESORTS, INC. (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
JUNE 30, DECEMBER 31, 1997 1996 ------------ ----------- (unaudited) CURRENT LIABILITIES: Accounts payable $ 2,091,169 2,258,702 Accrued expenses 5,781,085 4,577,981 Deposits and prepaid fees 2,211,479 2,755,297 Notes payable -- 734,429 Maturing long-term obligations -- 2,788,764 ----------- ---------- Total current liabilities 10,083,733 13,115,173 ----------- ---------- LONG-TERM OBLIGATIONS, less current maturities 75,775,000 17,777,544 ----------- ---------- LONG-TERM INTERCOMPANY 3,302,968 4,951,895 ----------- ---------- LONG-TERM CONTINGENCY -- 2,221,938 ----------- ---------- SHAREHOLDERS' (DEFICIT) EQUITY: Common stock, $1 par, 5,000 shares authorized and outstanding 5,000 5,000 5.6% cumulative preferred stock, $1 par, 4,577,000 shares authorized and outstanding 4,577,000 4,577,000 Paid-in capital (13,557,000) 2,329,447 Retained (Deficit) Equity (291,773) 8,157,197 ----------- ----------- Total shareholders' (Deficit) Equity (9,266,773) 15,068,644 ----------- ----------- $79,894,928 $53,135,194 =========== ===========
The accompanying notes are an integral part of these financial statements. Page 3 4 GOLF HOST RESORTS, INC. STATEMENTS OF INCOME (a wholly owned subsidiary of Golf Hosts, Inc.) (unaudited)
Seven day 84 day Quarter period ended period ended ended June 30, 1997 June 23, 1997 June 30, 1996 -------------- ------------- --------------- REVENUES: Hotel $ 346,283 $ 4,106,527 $ 4,206,938 Food and beverage 275,690 3,485,895 3,780,692 Golf 236,227 3,745,237 3,665,311 Other 122,733 1,442,607 1,525,156 Real estate activities - - - -------------- ------------- ------------- 980,933 12,780,266 13,178,097 -------------- ------------- ------------- COSTS AND OPERATING EXPENSES: Hotel 308,252 3,805,167 3,731,774 Food and beverage 203,215 2,475,719 2,647,222 Golf 112,614 1,538,916 1,563,782 Other 347,802 3,707,736 3,730,415 General and administrative 135,894 1,221,000 917,721 Real estate activities - 1,989 - -------------- ------------ ------------ 1,107,777 12,750,527 12,590,914 -------------- ------------ ------------ OPERATING INCOME ( LOSS) 126,844 29,739 587,183 INTEREST, NET 160,000 480,143 481,523 -------------- ------------ ------------ INCOME (LOSS) BEFORE INCOME TAXES (286,844) (450,404) 105,660 PARENT INCOME TAX CHARGE (CREDIT) - (234,400) 20,500 -------------- ------------- ------------ INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS (286,844) (216,004) 85,160 LOSS ON EARLY EXTINGUISHMENT OF LONG TERM DEBT (NET OF TAXES OF $155,400) - (288,600) - -------------- ------------ ------------ INCOME (LOSS) BEFORE DIVIDEND REQUIREMENTS ON PREFERRED STOCK (286,844) (504,604) 85,160 DIVIDEND REQUIREMENTS ON PREFERRED STOCK 4,929 59,149 64,078 -------------- ------------ ------------- NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (291,773) $ (563,753) $ 21,082 ============== ============ ============ EARNINGS (LOSS) PER COMMON SHARE $ (58.35) $ (112.75) $ 4.22 ============== ============ ============ Seven day 174 day Six months period ended period ended ended June 30, 1997 June 23, 1997 June 30, 1996 -------------- ------------- --------------- REVENUES: Hotel $ 346,283 $ 10,775,626 $ 11,008,990 Food and beverage 275,690 8,106,385 8,636,926 Golf 236,227 9,347,282 9,519,704 Other 122,733 3,340,715 3,439,862 Real estate activities - 180,000 (14,288) -------------- ------------ ----------- 980,933 31,750,008 32,591,194 -------------- ------------ ----------- COSTS AND OPERATING EXPENSES: Hotel 308,252 9,083,194 8,957,236 Food and beverage 203,215 5,591,373 5,766,862 Golf 112,614 3,247,628 3,305,784 Other 347,802 7,672,813 7,624,748 General and administrative 135,894 2,374,385 2,092,482 Real estate activities - 90,618 477 -------------- ------------ ------------ 1,107,777 28,060,011 27,747,589 -------------- ------------ ------------ OPERATING INCOME ( LOSS) (126,844) 3,689,997 4,843,605 INTEREST, NET 160,000 945,481 995,720 -------------- ------------ ----------- INCOME (LOSS) BEFORE INCOME TAXES (286,844) 2,744,516 3,847,885 PARENT INCOME TAX CHARGE (CREDIT) - 967,800 1,424,400 -------------- ------------ ------------ INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS (286,844) 1,776,716 2,423,485 LOSS ON EARLY EXTINGUISHMENT OF LONG TERM DEBT (NET OF TAXES OF $155,400) - (288,600) - -------------- ------------ ------------ INCOME (LOSS) BEFORE DIVIDEND REQUIREMENTS ON PREFERRED STOCK (286,844) 1,488,116 2,423,485 DIVIDEND REQUIREMENTS ON PREFERRED STOCK 4,929 123,227 128,156 -------------- ---------- ------------ NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (291,773) $ 1,364,889 $ 2,295,329 ============== ============ ============ EARNINGS (LOSS) PER COMMON SHARE $ (58.35) $ 272.98 $ 459.07 ============== ============ ============
The accompanying notes are an integral part of these financial statements. Page 4 5 GOLF HOST RESORTS, INC. STATEMENTS OF SHAREHOLDERS' EQUITY (a wholly owned subsidiary of Golf Hosts, Inc.) (unaudited)
$1 Par Value 5.6% Cumulative Common Stock Preferred Stock Paid-In ---------------------------- --------------------------------- Shares Amount Shares Amount Capital ------------- ------------- --------------- --------------- ---------------- Balance, December 31, 1995 5,000 $5,000 4,577,000 $4,577,000 $2,329,447 ------------ ------------- --------------- --------------- ---------------- Net income available to common shareholders - - - - - ------------ ------------- --------------- --------------- ---------------- Balance, December 31, 1996 5,000 5,000 4,577,000 4,577,000 2,329,447 Notes receivable distribution (Note 1) - - - - - Net income available to common shareholders - - - - - ------------ ------------- --------------- --------------- ---------------- Balance, June 23, 1997 5,000 $ 5,000 4,577,000 $4,577,000 $ 2,329,447 ============ ============= =============== =============== ================ Balance, June 24, 1997 5,000 $ 5,000 4,577,000 $4,577,000 $ (4,582,000) Distribution to shareholder - - - - (8,975,000) Net income (loss) available to common shareholder - - - - - ------------ ------------- --------------- --------------- ---------------- Balance, June 30, 1997 5,000 $ 5,000 4,577,000 $4,577,000 $(13,557,000) ============ ============= =============== =============== ================ Retained Total (Deficit) Shareholders' Earnings (Deficit) Equity ---------------- ----------------- Balance, December 31, 1995 $7,042,986 $13,954,433 ---------------- ----------------- Net income available to common shareholders 1,114,211 1,114,211 ---------------- ----------------- Balance, December 31, 1996 8,157,197 15,068,644 Notes receivable distribution (Note 1) (3,941,666) (3,941,666) Net income available to common shareholders 1,364,889 1,364,889 ---------------- ----------------- Balance, June 23, 1997 $ 5,580,420 $ 12,491,867 ================ ================= Balance, June 24, 1997 - $ - Distribution to shareholder - (8,975,000) Net income (loss) available to common shareholder (291,773) (291,773) ---------------- ------------------ Balance, June 30, 1997 $ (291,773) $ (9,266,773) ================ =================
Page 5 6 GOLF HOST RESORTS, INC. (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) STATEMENTS OF CASH FLOWS
Seven day 174 day Six months period ended period ended ended June 30, 1997 June 23, 1997 June 30, 1996 ------------- ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) before dividend requirements on preferred stock $ (286,844) $ 1,488,116 $ 2,423,485 Noncash items included in income: Depreciation and amortization 49,889 1,240,111 1,240,200 ----------- ------------- ----------- Cash provided by income (236,955) 2,728,227 3,663,685 Changes in operating working capital 241,884 417,429 15,699 ----------- ------------- ----------- Cash provided by operations 4,929 3,145,656 3,679,384 ----------- ------------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Increases in other deferred charges - 62,302 (248,622) Purchases of property and equipment - (1,517,432) (1,142,757) Net recovery of cost of property and equipment sold or retired - (56,063) 12,190 Additions to notes receivable - (378,788) (17,517) Reduction in notes receivable - 413,278 556,053 ----------- ------------- ----------- Cash (used for) investing - (1,476,703) (840,653) ----------- ------------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Net change in notes payable - (734,429) (1,285,673) Increases in long-term obligations - - 467,378 Decreases in long-term obligations - (436,002) (1,023,564) Net proceeds from merger transactions - 5,965,529 - Increases in long-term intercompany (4,929) (123,227) 1,084,155 Increases in long-term contingency - 127,050 70,476 Decreases in long-term contingency - - - ----------- ------------ ----------- Cash provided (used) for financing (4,929) 4,798,921 (687,228) ----------- ------------ ----------- NET INCREASE IN CASH - 6,467,874 2,151,503 CASH, BEGINNING OF PERIOD 6,956,559 488,685 312,603 ----------- ------------ ----------- CASH, END OF PERIOD $ 6,956,559 $ 6,956,559 $ 2,464,106 =========== ============ =========== NONCASH FINANCING AND INVESTING ACTIVITIES: Preferred stock dividend liability to Golf Hosts, Inc. satisfied through the intercompany account $ 4,929 $ 123,227 $ 128,156 The Company transferred undeveloped land to inventory $ - $ 69,628 $ - Distributions to shareholders $(8,975,000) $ (3,941,666) $ -
The accompanying notes are an integral part of these financial statements. Page 6 7 GOLF HOST RESORTS, INC. (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (1) ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES On June 23, 1997, TM Golf Hosts, Inc. ("TMGHI") acquired all of the outstanding stock of Golf Hosts, Inc. ("GHI"), previously an 80% owner of Golf Host Resorts, Inc. (the "Company"), and the 20% of the Company's stock not held by GHI. Concurrently, TMGHI and GHI merged with the legal survivor being GHI, which now owns 100% of the Company. Total consideration for the acquisition of the outstanding stock of GHI and the Company was approximately $63 million, including assumption of certain liabilities. The transaction was financed with new borrowing and all previous indebtedness of the Company was repaid, resulting in an extraordinary loss on early retirement of debt primarily relating to the write-off of unamortized debt discounts and related deferred expenses. Under the terms of the agreement, certain long term receivables were transferred to the selling shareholders immediately prior to the transaction. In addition, certain marketable securities and investments with ascribed values aggregating $8,975,000 were distributed from the Company to its parent, GHI, subsequent to the transaction. The interim financial statements are unaudited and were prepared from the books and records of the Company. In the opinion of management, they include all adjustments necessary for a fair presentation of the Company's operations and financial positon. Certain of the Company's operations are seasonal in nature and, therefore, interim results from operations are not necessarily indicitive of a full year. The financial statements as of and for the period from the merger to June 30, 1997 reflect the allocation of the purchase price based upon the fair value of the assets acquired and the liabilities assumed in connection with the merger and are, therefore, not comparable to the financial statements of the Company presented herein as of or for periods prior to the merger, which are based upon its previous historical cost. A portion of the purchase price was allocated to certain intangible assets including those relating to the golf course operations and the operations of the resort pursuant to the rental pool arrangement with the condominium owners. These intangibles will generally be amortized on a straight line basis over a period from 5-10 years based on the related expected period of benefit or contract term of the underlying rental pool arrangement. (2) LONG-TERM OBLIGATIONS As a part of the transaction referred to in Note 1, all previously existing long-term obligations were replaced by a mortgage note with Golf Trust of America, L.P. The participating mortgage is for a term of thirty years and is secured by certain real and personal property of the Company and guaranteed by GHI. The loan allows for certain additional borrowings for capital improvements. The loan has an initial base pay rate increasing annually. The loan also includes participation in certain revenue of the Innisbrook property securing the loan above certain predefined levels. Page 7 8 Long-term obligations consist of the following:
June 30, December 31, 1997 1996 ------------- ------------- Participating mortgage note at varying, increasing pay rates maturing in 2027 $ 70,775,000 $ - Mortgage note at 6.34%, maturing in 2002 5,000,000 - Mortgage notes at varying rates, ranging from 8.3% to 9%, maturing from 1998 to 2007 - 15,487,194 Equipment revolving credit line at prime, maturing serially from 1997 to 2001 - 3,891,728 A $2,000,000 revolving credit line at 9% maturing in 2007 - 1,368,000 Other - 286,386 Unamortized debt discount and expense - (467,000) ------------ ------------- 20,566,308 Less-current maturities - (2,788,764) ------------ ------------- $ 75,775,000 $ 17,777,544 ============ =============
(3) ACCRUED EXPENSES Accrued expenses consist of the following:
June 30, December 31, 1997 1996 -------------- -------------- Rental pool lease operations $ 2,238,783 $ 2,134,459 Salaries 2,042,857 1,456,267 Taxes, other than income taxes 766,724 242,820 Other 732,721 744,435 --------------- ------------- $ 5,781,085 $ 4,577,981 =============== =============
(4) INCOME TAX ALLOCATION AND SHARING POLICY Effective concurrently with the merger, the Company and GHI elected to be subsequently treated as S-Corporations for federal and state tax purposes. As a result, the Company will generally no longer be subject to federal and state income taxes and the tax effects of its activities will accrue to the shareholders of GHI. The Company will be responsible for entity level corporate taxes on certain built-in gains (where the fair market value of the related assets at the effective date the election was made exceeds the carryover tax basis) on property if sold within a ten year period. Estimated deferred tax liabilities relating to these potential entity level taxes, based on management's current plans, have been reflected in these financial statements. Page 8 9 (5) SUPPLEMENTAL CASH FLOW DATA The (increases) decreases in working capital other than cash are as follows:
Seven day 174 day Six months period ended period ended ended June 30, 1997 June 23, 1997 June 30, 1996 ------------- ------------- ------------- Accounts receivable $ (619) $ (3,155) $ 261,026 Inventories and supplies 49,751 253,620 (379,746) Prepaid expenses and other 40,929 208,647 458,621 Intercompany (62,582) (319,029) 23,237 Accounts payable (27,475) (140,060) 220,972 Accrued expenses 331,063 872,041 (88,486) Deposits and prepaid fees (89,183) (454,635) (479,925) ------------- ------------- ------------- $241,884 $ 417,429 $ 15,699 ============= ============= =============
(6) CHANGE IN INNISBROOK PROPERTY MANAGER Concurrently with the merger, the Company entered into an agreement to terminate the existing Innisbrook hotel operation management agreement effective July 15, 1997 for a $600,000 termination fee. A new hotel property manager was engaged effective on that date. Such termination fee was included in determining the cost of the acquisition. Page 9 10 GOLF HOST RESORTS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS For purposes of discussing comparative results from operations for 1996 and 1997, the results for periods prior to and subsequent to the June 23, 1997 merger transaction, described in Note 1 to the financial statements, are combined. For the current quarter, occupied room nights fell 2.1% from the prior year. On a divisional basis, occupied room nights at Innisbrook rose 2.3%, while Tamarron's room nights declined 20.1%. The increase in Innisbrook's occupancy resulted primarily from the social segment. The decline in Tamarron's room nights occurred mostly in the conference segment. Revenues from resort operations increased 4.4% for the quarter. The revenue per occupied room night totaled $332.50, a 6.6% increase over the prior year's $311.80. Innisbrook's revenue per occupied room night increased 5.6% to $348.47, while Tamarron's rose 4.9% to $248.64. The comparable prior year amounts were $330.05 and $236.97, respectively. The improvement in guest spending at both resorts offset the impact of the lower occupancy at Tamarron, yielding a $583,000 increase in resort operations revenue. Consistent with the prior year, there was no real estate revenue generated during the quarter. Costs and operating expenses increased to 100.7% of revenues from 95.5%. As a result, operating income declined $684,000 from the prior year to a loss of $97,000. Hotel expense increased disproportionately to the occupancy change as a result of an approximately $190,000 adjustment to related inventories. Other costs and operating expenses rose 8.7%, or approximately $325,000. Included in this increase was approximately $134,000 related to the ensuing property management transition at Innisbrook. General and administrative expense increased $439,000 over the prior year. Included in this increase are an additional $l80,000 in costs relative to the change in control of the Company discussed in the notes to financial statements and the above-mentioned management transition, and an increase of $135,000 in bad debt expense. Interest expense increased $159,000 to $640,000, primarily as a result of additional interest from the new borrowings as a result of the merger transactions described in Note 1 to the financial statements. In addition, repayment of previous indebtedness of the Company resulted in an extraordinary loss on early retirement of debt of approximately $444,000, presented net of a related tax benefit of $155,000 primarily relating to the write-off of unamortized debt discounts and related deferred expenses. For the six months ended June 30, 1997, occupied room nights declined 2.3% from the prior year level. Improved levels of spending per occupied room, up 2.2%, served to somewhat mitigate the decline in occupancy, yielding a slight decline in revenues of .2%. As a percentage of revenues, cost and operating expenses rose from 85.1% to 89.3%. The reduction in income before income taxes of $1,674,000 reflects the impact of the above items coupled with the first quarter reduction in occupancy, related lost economies of scale relative to operating income margin and the impact of the minimum wage hike. FINANCIAL CONDITION AND LIQUIDITY As more fully discussed in Note 1 to the financial statements, on June 23, 1997 all the stock of the Company and its parent GHI was acquired by previously unrelated parties in a transaction financed by new debt obligations of the Company. These transactions have generally resulted in improved financial liquidity as a result of additional cash and borrowing facilities. The Company's working capital position at June 30, 1997 was $3,845,000, compared with $1,841,000 at June 30, 1996 and a deficit of $1,278,000 at December 31, l996. The Company typically experiences seasonal fluctuations in its net working capital position without impairing its ability to pay trade creditors in a timely manner and satisfy its financial obligations in an orderly fashion. As a result of the change in control previously discussed, the Company's former lenders were replaced with a single lender on June 23, 1997. Reference is made in the notes to financial statements regarding the new lender. While the Company has a substantial retained deficit, based on existing cash levels, expected operating levels for the balance of the year and the existence of credit facilities with its parent, the Company assesses its liquidity as satisfactory. Page 10 11 PART II - OTHER INFORMATION Item 1. Legal Proceedings Registrant is not currently involved in lawsuits 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, 1997 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 Form 8-K, reporting changes in control of registrant and change in registrant's certifying accountant, was filed with the SEC on July 8, 1997. Page 11 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GOLF HOST RESORTS, INC. Date: August 20, 1997 By:/s/ Merrick Kleeman --------------------- -------------------------- Merrick Kleeman President Date: August 20, 1997 By:/s/ R. L. Akin --------------------- -------------------------- Richard L. Akin Vice President and Treasurer Page 12 13 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 quarter and six months ended June 30, 1997. 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, 1996 (File No. 2-64309). As discussed in Note 1 to the Golf Host Resorts, Inc. financial statement, on June 23, 1997, TM Golf Hosts, Inc. ("TMGHI") acquired all of the outstanding stock of Golf Hosts, Inc. ("GHI") and the 20% of the Company's stock not held by GHI. Concurrently, TMGHI and GHI merged with the legal survivor being GHI. Concurrently with the merger, the Company entered into an agreement to terminate the existing management agreement, effective July 15, 1997, with the current hotel operations manager for Innisbrook for a $600,000 termination fee. A new hotel property manager was engaged effective on that date. Neither the change in ownership nor the change in hotel managers at Innisbrook is expected to have an adverse affect on the participants in the Rental Pools. Page 13 14 INNISBROOK RENTAL POOL LEASE OPERATION BALANCE SHEETS JUNE 30, 1997 AND 1996 DISTRIBUTION FUND
1997 1996 ------------- ------------ ASSETS RECEIVABLE FROM GOLF HOST RESORTS, INC. FOR DISTRIBUTION - FULLY SECURED $1,982,583 $1,808,415 INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND 29,522 16,784 ---------- ---------- $2,012,105 $1,825,199 LIABILITIES AND PARTICIPANTS' FUND BALANCES DUE TO PARTICIPANTS FOR DISTRIBUTION $1,464,014 $1,469,054 DUE TO MAINTENANCE ESCROW FUND 318,529 310,851 RESERVE FOR ESTIMATED LIFE-SAFETY REIMBURSEMENT 229,562 45,294 PARTICIPANTS' FUND BALANCES - - ---------- ---------- $2,012,105 $1,825,199 MAINTENANCE ESCROW FUND ASSETS CASH AND CASH EQUIVALENTS $2,134,454 $1,345,193 INVENTORIES - 251 RECEIVABLE FROM DISTRIBUTION FUND 318,529 310,851 INTEREST RECEIVABLE 29,135 13,260 ---------- ---------- $2,482,118 $1,669,555 ========== ========== LIABILITIES AND PARTICIPANTS' FUND BALANCES ACCOUNTS PAYABLE $ 378 $ 268 INTEREST PAYABLE TO DISTRIBUTION FUND 29,522 16,784 CARPET CARE RESERVE 34,293 45,420 PARTICIPANTS' FUND BALANCES 2,417,925 1,607,083 ---------- ---------- $2,482,118 $1,669,555
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 15 INNISBROOK RENTAL POOL LEASE OPERATION STATEMENTS OF OPERATIONS FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996 DISTRIBUTION FUND
Current Quarter Year-to-Date ------------------------------- ------------------------------- 1997 1996 1997 1996 ------------ ------------ ------------- ------------ GROSS REVENUES $ 3,761,563 $ 3,453,553 $ 9,643,218 $ 9,619,612 ------------ ------------ ------------ ------------ REDUCTIONS: Agents' commissions 54,459 84,723 157,076 203,270 Audit fees 3,000 3,000 6,100 6,100 ------------ ------------ ------------ ------------ 57,459 87,723 163,176 209,370 ------------ ------------ ------------ ------------ ADJUSTED GROSS REVENUES 3,704,104 3,365,830 9,480,042 9,410,242 MANAGEMENT FEE (1,740,929) (1,581,940) (4,455,619) (4,422,814) ------------ ------------ ------------ ------------ GROSS INCOME DISTRIBUTION 1,963,175 1,783,890 5,024,423 4,987,428 ADJUSTMENTS TO GROSS INCOME DISTRIBUTION: Corporate complimentary occupany fees 4,574 2,135 8,494 5,141 Occupancy fees (424,702) (414,465) (920,252) (953,956) Advisory Committee expenses (25,601) (23,838) (54,313) (46,078) Life-safety reimbursement (47,596) (39,559) (229,562) (45,294) ------------ ------------- ------------ ------------ NET INCOME DISTRIBUTION 1,469,850 1,308,163 3,828,790 3,947,241 ADJUSTMENTS TO NET INCOME DISTRIBUTION: Occupancy fees 424,702 414,465 920,252 953,956 Hospitality suite fees 2,059 2,852 5,081 7,181 Greens fees 20,890 19,546 56,680 57,053 Additional participation credit 17,485 18,095 35,320 36,385 ------------ -------------- ------------ ------------ AMOUNT AVAILABLE FOR DISTRIBUTION TO PARTICIPANTS $ 1,934,986 $ 1,763,121 $ 4,846,123 $ 5,001,816 ============ ============== ============ ============ Average daily distribution $ 23.59 $ 21.13 $ 31.06 $ 31.43 Average room rate $ 108.20 $ 101.63 $ 127.50 $ 122.76 Occupied room nights 34,766 33,980 75,633 78,358 Available room nights 80,026 83,444 156,048 159,136 Occupancy percentage 42.4% 40.7% 48.5% 49.2% Average number of available units 901 917 862 874
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 16 INNISBROOK RENTAL POOL OPERATION STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
DISTRIBUTION FUND Current Quarter Year-to-Date -------------------------- ---------------------- 1997 1996 1997 1996 --------- ---------- --------- ---------- BALANCE, beginning of period $ -- $ -- $ -- $ -- ADDITIONS: Amounts available for distribution before life-safety reimbursement 1,800,617 1,802,680 4,893,720 5,047,110 Interest received or receivable from Maintenance Escrow Fund 29,522 16,784 51,584 41,131 REDUCTIONS: Amount withheld for Maintenance Escrow Fund (318,529) (310,851) (690,194) (715,472) Amounts held in reserve for estimated life-safety reimbursement (47,596) (39,559) (229,562) (45,294) Amounts accrued or paid to participants (1,464,014) (1,469,054) (4,025,548) (4,327,475) ----------- ----------- ----------- ----------- BALANCE, end of period $ -- $ -- $ -- $ -- =========== =========== =========== =========== MAINTENANCE ESCROW FUND BALANCE, beginning of period $ 2,329,421 $ 1,496,895 $ 1,734,415 1,141,259 ADDITIONS: Amounts withheld from occupancy fees 318,529 310,851 690,194 715,472 Interest earned 29,522 16,784 51,584 41,131 Charges to participants to establish or restore escrow balances 377,022 279,991 830,345 519,465 REDUCTIONS: Maintenance charges (564,468) (449,856) (776,068) (716,345) Carpet care reserve deposit (8,497) (8,293) (22,994) (19,085) Interest accrued or paid to Distribution Fund (29,522) (16,784) (51,584) (41,131) Refunds to participants as prescribed by Master Lease Agreement (34,082) (22,505) (37,967) (33,683) ----------- ----------- ----------- ----------- BALANCE, end of period $ 2,417,925 $ 1,607,083 2,417,925 $ 1,607,083 =========== =========== =========== ===========
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 17 TAMARRON RENTAL POOL LEASE OPERATION BALANCE SHEETS JUNE 30, 1997 AND 1996
DISTRIBUTION FUND 1997 1996 ------------- ------------- ASSETS CASH $ 1,000 $ 1,000 RECEIVABLE FROM GOLF HOST RESORTS, INC. FOR DISTRIBUTION 256,200 317,655 INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND 132 1,147 ------------- ------------- $ 257,332 $ 319,802 ============= ============= LIABILITIES AND PARTICIPANTS' FUND BALANCES DUE TO PARTICIPANTS FOR DISTRIBUTION $ 190,016 $ 264,791 DUE TO MAINTENANCE ESCROW FUND 67,316 55,011 PARTICIPANTS' FUND BALANCES - - ------------- ------------ $ 257,332 $ 319,802 ============= ============ MAINTENANCE ESCROW FUND ASSETS CASH AND CASH EQUIVALENTS $ 13,301 149,252 DUE FROM DISTRIBUTION FUND 67,316 55,011 INTEREST RECEIVABLE - 934 INVENTORY: Linen 114,241 114,237 Materials and supplies 17,224 8,285 DEPOSITS - 16,000 ------------- ---------- $ 212,082 $ 343,719 ============= ========== LIABILITIES AND PARTICIPANTS' FUND BALANCES ACCOUNTS PAYABLE $ 5,113 $ 6,493 INTEREST PAYABLE TO DISTRIBUTION FUND 132 1,147 PARTICIPANTS' FUND BALANCES 206,837 336,079 ------------- ---------- $ 212,082 $ 343,719 ============= ==========
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 18 TAMARRON RENTAL POOL LEASE OPERATION STATEMENTS OF OPERATIONS FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996 DISTRIBUTION FUND
Current Quarter Year-to-Date ---------------------------------- --------------------------------- 1997 1996 1997 1996 -------------- -------------- -------------- ------------- GROSS REVENUES $ 579,286 $ 721,149 $ 1,280,976 $ 1,255,511 -------------- -------------- -------------- ------------- DEDUCTIONS: Agents' commissions 12,418 15,781 70,465 52,360 Sales and marketing expenses 46,345 61,297 102,480 106,718 Audit fees 2,600 2,601 5,200 5,202 -------------- -------------- -------------- ------------- 61,363 79,679 178,145 164,280 -------------- -------------- -------------- ------------- ADJUSTED GROSS REVENUES 517,923 641,470 1,102,831 1,091,231 MANAGEMENT FEE (258,961) (320,735) (551,415) (545,616) -------------- -------------- -------------- ------------- GROSS INCOME DISTRIBUTION 258,962 320,735 551,416 545,615 ADJUSTMENTS TO GROSS INCOME DISTRIBUTION: Corporate complimentary occupancy fees 864 903 1,486 1,598 Occupancy fees (66,586) (67,475) (161,703) (124,158) Designated items (33,021) (20,273) (53,932) (33,659) Advisory Committee expenses (3,626) (3,983) (7,719) (5,763) -------------- -------------- -------------- ------------- POOLED INCOME 156,593 229,907 329,548 383,633 ADJUSTMENTS TO POOLED INCOME: Hospitality suite fees - - - 53 Occupancy fees 66,586 67,475 161,703 124,158 -------------- -------------- -------------- ------------- NET INCOME DISTRIBUTION $ 223,179 $ 297,382 $ 491,251 $ 507,844 ============== ============== ============== ============= Average daily distribution $ 8.34 $ 11.38 $ 9.37 $ 9.83 Average room rate $ 87.49 $ 86.98 $ 79.17 $ 80.53 Room nights 6,621 8,288 16,180 15,587 Occupancy percentage 24.7% 31.7% 30.9% 30.l% Average number of available units 294 288 290 284 Number of units in Rental Pool at end of period 298 298 - -
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 19 TAMARRON RENTAL POOL LEASE OPERATION STATEMENTS OF CHANGES IN PARTICIPANTS' FUND BALANCES FOR THE QUARTERS AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
DISTRIBUTION FUND Current Quarter Year-to-Date --------------------------------- --------------------------------- 1997 1996 1997 1996 ------------- ------------- ------------- -------------- BALANCE, beginning of period $ - $ - $ - $ - ADDITIONS: Amounts available for distribution 223,179 297,382 491,251 507,844 Interest received or receivable from Maintenance Escrow Fund 132 1,147 385 2,327 REDUCTIONS: Amounts withheld for Maintenance Escrow Fund (33,295) (33,738) (80,855) (62,080) Amounts accrued or paid to participants (190,016) (264,791) (410,781) (448,091) ------------- ------------- ------------ ------------ BALANCE, end of period $ - $ - $ - $ - ============= ============= ============ ============ MAINTENANCE ESCROW FUND BALANCE, beginning of period $ 210,371 $ 254,070 $ 197,548 $ 328,336 ADDITIONS: Amounts withheld from occupancy fees 33,295 33,738 80,855 62,080 Interest earned 132 1,147 385 2,327 Reimbursement of designated items 33,021 20,273 53,932 33,659 Charges to participants to establish or restore escrow balances 4,209 125,948 16,295 142,632 REDUCTIONS: Maintenance and inventory charges (32,756) (51,905) (52,228) (88,622) Refurbishing charges (2,237) (17,804) (24,668) (93,549) Interest accrued or paid to Distribution Fund (132) (1,147) (385) (2,327) Designated items (33,021) (20,273) (53,932) (33,660) Refunds to participants as prescribed by Master Lease Agreement (6,045) (7,968) (10,965) (14,797) -------------- ------------- ------------ ------------ BALANCE, end of period $ 206,837 $ 336,079 $ 206,837 $ 336,079 ============= ============= ============ ============
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 EX-27 2 FINANCIAL DATA SCHEDULE
5 1 U.S. DOLLARS 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 1 6,956,559 0 4,383,882 100,940 4,947,595 17,734,179 71,331,156 27,310,706 79,894,928 10,083,733 75,775,000 0 4,577,000 5,000 (13,848,773) 79,894,928 10,667,977 32,730,941 3,219,982 29,167,788 0 77,891 1,105,481 2,457,672 967,800 1,489,872 0 288,600 0 1,073,116 214.62 214.62
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