-----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, JjBj/m+g9IY6RfKOzbR6/q2dh+QrAdzACe6goisXAPMPA2zv1w2ZK57ECnk7Dnnj 0QDJ0NbwXDrwxRzXr9+Bew== 0000950144-97-012427.txt : 19971117 0000950144-97-012427.hdr.sgml : 19971117 ACCESSION NUMBER: 0000950144-97-012427 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 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: SEC FILE NUMBER: 002-64309 FILM NUMBER: 97721801 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 September 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 (303) 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)
SEPTEMBER 30, DECEMBER 31, 1997 1996 ------------- ------------ (unaudited) CURRENT ASSETS: Cash $ 4,901,703 $ 488,685 Accounts receivable 3,560,600 4,380,108 Notes receivable -- 163,942 Inventories and supplies 4,828,631 5,123,966 Prepaid expenses and other 1,096,481 956,054 Intercompany receivables 586,821 724,312 ----------- ----------- Total current assets 14,974,236 11,837,067 INTANGIBLES 17,207,148 -- PROPERTY AND EQUIPMENT, at cost less accumulated depreciation and amortization 45,125,577 40,038,322 OTHER DEFERRED CHARGES 699,426 238,627 LONG-TERM RECEIVABLES, less amounts currently due -- 1,021,178 ----------- ----------- $78,006,387 $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
SEPTEMBER 30, DECEMBER 31, 1997 1996 ------------- ------------ (unaudited) CURRENT LIABILITIES: Accounts payable $ 3,810,858 $ 2,258,702 Accrued expenses 4,867,739 4,577,981 Deposits and prepaid fees 2,549,645 2,755,297 Notes payable -- 734,429 Maturing long-term obligations -- 2,788,764 ----------- ----------- Total current liabilities 11,228,242 13,115,173 ----------- ----------- LONG-TERM OBLIGATIONS, less current maturities 76,848,748 17,777,544 ----------- ----------- LONG-TERM INTERCOMPANY 3,302,968 4,951,895 ----------- ----------- LONG-TERM CONTINGENCY -- 2,221,938 ----------- ----------- SHAREHOLDERS' INVESTMENT: Common stock, $1 par, 5,000 shares authorized and out- standing 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 (4,398,571) 8,157,197 ----------- ----------- Total shareholders' (Deficit) Equity (13,373,571) 15,068,644 ----------- ----------- $78,006,387 $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)
Quarters Ended September 30 174 Day 99 Day Nine Months ------------------------------ Period Ended Period Ended 1997 1996 June 23, 1997 September 30, 1997 September 30, 1996 ------------ ------------ ------------- ------------------ ------------------ REVENUES: Hotel $ 3,460,723 $ 4,015,763 $ 10,775,626 $ 3,807,006 $15,024,753 Food and beverage 2,331,983 2,978,483 8,106,385 2,607,673 11,615,409 Golf 2,970,131 2,801,712 9,347,282 3,176,358 12,321,416 Other 944,151 1,167,186 3,340,715 1,066,884 4,607,048 Real estate activities - 671,105 180,000 - 656,817 ------------ ------------ ------------ ------------ ----------- 9,706,988 11,634,249 31,750,008 10,657,921 44,225,443 ------------ ------------ ------------ ------------ ----------- COSTS AND OPERATING EXPENSES: Hotel 3,205,526 3,535,003 9,083,194 3,513,778 12,492,239 Food and beverage 2,044,651 2,377,124 5,591,373 2,247,866 8,143,986 Golf 1,469,714 1,330,935 3,247,628 1,582,328 4,636,719 Other 3,893,109 3,721,495 7,672,813 4,240,911 11,346,243 General and administrative 1,051,472 991,252 2,374,385 1,187,366 3,083,734 Real estate activities - 279,750 90,618 - 280,227 ------------ ------------ ------------ ------------ ----------- 11,664,472 12,235,559 28,060,011 12,772,249 39,983,148 ------------ ------------ ------------ ------------ ----------- OPERATING INCOME (LOSS) (1,987,484) (601,310) 3,689,991 2,114,328 4,242,295 INTEREST, NET 2,055,237 494,740 945,481 2,215,236 1,490,460 INCOME (LOSS) BEFORE INCOME TAXES (4,042,721) (1,096,050) 2,744,516 (4,329,564) 2,751,835 PARENT INCOME TAX CHARGE (CREDIT) - (412,400) 967,800 - 1,012,000 INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS (4,042,721) (683,650) 1,776,716 (4,329,564) 1,739,835 LOSS ON EARLY EXTINGUISHMENT OF LONG TERM DEBT (NET OF TAXES OF $155,400) - - (288,600) - - ------------ ------------ ------------ ------------ ----------- INCOME (LOSS) BEFORE DIVIDEND REQUIREMENTS ON PREFERRED STOCK (4,042,721) (683,650) 1,488,116 (4,329,564) 1,739,835 DIVIDEND REQUIREMENTS ON PREFERRED STOCK 64,078 64,078 123,227 69,007 192,234 ------------ ------------ ------------ ------------ ----------- NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (4,106,799) $ (747,728) $ 1,364,889 $ (4,398,571) $ 1,547,601 ============ ============ ============ ============ ============ EARNINGS (LOSS) PER COMMON SHARE $ (821.36) $ (149.55) $ 272.98 $ (879.71) $ 309.52 ============ ============ ============ ============ =============
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 Retained Total Common Stock Preferred Stock Paid-In (Deficit) Shareholders' ---------------- ------------------------ ------------ ----------- ---------------- Shares Amount Shares Amount Capital Earnings (Deficit) Equity ------ ------ --------- ---------- ------------ ----------- ---------------- Balance, December 31, 1995 5,000 $5,000 4,577,000 $4,577,000 $ 2,329,447 $ 7,042,986 $ 13,954,433 ----- ------ --------- ---------- ------------ ----------- ------------ Net income available to common shareholders - - - - - 1,114,211 1,114,211 ----- ------ --------- ---------- ------------ ----------- ------------ Balance, December 31, 1996 5,000 5,000 4,577,000 4,577,000 2,329,447 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 5,000 $5,000 4,577,000 $4,577,000 $ 2,329,447 $ 5,580,420 $ 12,491,867 ===== ====== ========= ========== ============ =========== ============ Balance, June 24, 1997 5,000 $5,000 4,577,000 $4,577,000 $ (4,582,000) - $ - Distribution to shareholder - - - - (8,975,000) - (8,975,000) Net income (loss) available to common shareholder - - - - - (4,398,571) (4,398,571) ----- ------ --------- ---------- ------------ ----------- ------------ Balance, June 30, 1997 5,000 $5,000 4,577,000 $4,577,000 $(13,557,000) $(4,398,571) $(13,373,571) ===== ====== ========= ========== ============ =========== ============
Page 5 6 GOLF HOST RESORTS, INC. (A WHOLLY OWNED SUBSIDIARY OF GOLF HOSTS, INC.) STATEMENTS OF CASH FLOWS
99 day 174 day Nine months period ended period ended ended September 30, 1997 June 23, 1997 September 30, 1996 ------------------ ------------- ------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) before dividend requirements on preferred stock $(4,329,564) $ 1,488,116 $ 1,739,835 Noncash items included in income: Depreciation and amortization 912,718 1,240,111 1,870,300 ----------- ----------- ----------- Cash provided by income (3,416,846) 2,728,227 3,610,135 Changes in operating working capital 2,091,480 417,429 (850,824) ----------- ----------- ----------- Cash provided by operations (1,325,366) 3,145,656 2,759,311 ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Increases in other deferred charges 15,896 62,302 (260,826) Purchases of property and equipment (1,802,373) (1,517,432) (1,642,429) Net recovery of cost of property and equipment sold or retired 52,247 (56,063) 66,771 Additions to notes receivable - (378,788) (7,782) Reduction in notes receivable - 413,278 592,096 ----------- ----------- ----------- Cash (used for) investing (1,734,230) (1,476,703) (1,252,170) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Net change in notes payable - (734,429) (672,582) Increases in long-term obligations - - 480,105 Decreases in long-term obligations 1,073,747 (436,002) (1,411,429) Net proceeds from merger transactions - 5,965,529 - Increases in long-term intercompany (69,007) (123,227) 657,274 Increases in long-term contingency - 127,050 108,157 ----------- ----------- ----------- Cash provided (used) for financing 1,004,740 4,798,921 (838,475) ----------- ----------- ----------- NET INCREASE IN CASH (2,054,856) 6,467,874 668,666 CASH, BEGINNING OF PERIOD 6,956,559 488,685 312,603 ----------- ----------- ----------- CASH, END OF PERIOD $ 4,901,703 $ 6,956,559 $ 981,269 =========== =========== =========== NONCASH FINANCING AND INVESTING ACTIVITIES: Preferred stock dividend liability to Golf Hosts, Inc. satisfied through the intercompany account $ 69,007 $ 123,227 $ 192,236 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 SEPTEMBER 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 indicative of a full year. The financial statements as of and for the period from the merger to September 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 are being amortized on a straight line basis over a 20 year period based on the contract term of the Innisbrook management agreement. (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 above certain predefined levels in certain revenue of the Innisbrook property securing the loans. Page 7 8 Long-term obligations consist of the following:
September 30, December 31, 1997 1996 ------------- ------------ Participating mortgage note at varying, increasing pay rates maturing in 2027 $71,848,748 - Mortgage note at 6.34%, maturing in 2002 5,000,000 - Mortgage notes at varying rates, ranging from 8.3% to 9%, maturing from 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) ----------- ----------- 76,848,748 20,566,308 Less-current maturities - (2,788,764) ----------- ----------- $76,848,748 $17,777,544 =========== ===========
(3) ACCRUED EXPENSES Accrued expenses consist of the following:
September 30, December 31, 1997 1996 ------------- ------------ Rental pool lease operations $ 1,911,567 $ 2,134,459 Salaries 933,385 1,456,267 Taxes, other than income taxes 637,757 242,820 Other 1,385,030 744,435 ----------- ----------- $ 4,867,739 $ 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:
99 day 174 day Nine months period ended period ended ended September 30, 1997 September 23, 1997 September 30, 1997 ------------------ ------------------ ------------------ Accounts receivable $ 822,663 $ (3,155) $ (284,382) Inventories and supplies 168,715 253,620 (452,934) Prepaid expenses and other (349,074) 208,647 194,330 Intercompany 90,262 (319,029) (151,413) Accounts payable 1,692,214 (140,060) 279,978 Accrued expenses (582,283) 872,041 (124,508) Deposits and prepaid fees 248,983 (454,635) (311,895) ----------- ----------- ----------- $ 2,091,480 $ 417,429 $ (850,824) =========== =========== ===========
(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 the 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, room nights occupied fell 21.1% from the same prior year quarter. Occupied room nights on a divisional basis declined 24.6% at Innisbrook while Tamarron experienced a 15.4% decline. The decline in occupancy occurred mostly in the conference segment at both resorts. Revenues from resort operations decreased 12.3% for the quarter. Revenue per occupied room night of $289.55 reflected an 11.1% increase over the prior year amount of $260.53. Revenue per occupied room night at Innisbrook increased 12.4% to $283.62 while Tamarron's spending rose 8.9% to $298.15. The prior year amounts were $252.35 and $273.83, respectively. The guest spending improvement was unable to offset the lower occupancy impact, yielding a $1,381,000 decrease in resort operations revenue. There was no real estate revenue generated during the quarter, while $671,000 was produced in the prior year quarter. Resort operations costs and operating expenses increased to 120.2% of revenues from the prior year 109.1%, resulting in an operating income decline of $965,000 from the prior year loss of $992,000. Other costs and expenses rose 4.6%, or approximately $172,000, including intangible asset amortization of $218,000, while related revenue declined $223,000. General and administrative expense increased $60,000 over the prior year. Interest expense increased $1,560,000 to $2,055,000 as a result of additional interest from the new borrowings related to the merger transactions described in Note 1 to the financial statements. For the nine months ended September 30, 1997, occupied room nights declined 8.2% from the prior year. The 5.3% improvement in guest spending per occupied room somewhat mitigated the decline in occupancy, yielding a decline in revenues of 3.3%. As a percentage of revenues, costs and operating expenses rose from 91.1% to 96.5%. Income before income taxes declined $3,975,000, reflecting the impact of the above items, 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 Golf Hosts, Inc. 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 September 30, 1997 was $4,372,000 as compared with $445,000 at September 30, 1996 and a deficit of $1,278,000 at December 31, 1996. 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 nine months ended September 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: November 14, 1997 By: /s/ Merrick Kleeman ------------------------------ ------------------------- Merrick Kleeman President Date: November 14, 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 nine months ended September 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 SEPTEMBER 30, 1997 AND 1996 DISTRIBUTION FUND
1997 1996 ----------- ----------- ASSETS RECEIVABLE FROM GOLF HOST RESORTS, INC FOR DISTRIBUTION - FULLY SECURED $ 1,140,133 $ 1,160,240 INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND 30,326 19,021 ----------- ----------- $ 1,170,459 $ 1,179,261 =========== =========== LIABILITIES AND PARTICIPANTS' FUND BALANCES DUE TO PARTICIPANTS FOR DISTRIBUTION $ 778,608 $ 808,871 DUE TO MAINTENANCE ESCROW FUND 191,096 245,640 RESERVE FOR ESTIMATED LIFE-SAFETY REIMBURSEMENT 200,755 124,750 PARTICIPANTS' FUND BALANCES - - ----------- ----------- $ 1,170,459 $ 1,179,261 =========== =========== MAINTENANCE ESCROW FUND ASSETS CASH AND CASH EQUIVALENTS $ 1,888,704 $ 1,467,308 INVENTORIES - 251 RECEIVABLE FROM DISTRIBUTION FUND 191,096 245,640 INTEREST RECEIVABLE 33,383 20,216 ----------- ----------- $ 2,113,183 $ 1,733,415 =========== =========== LIABILITIES AND PARTICIPANTS' FUND BALANCES ACCOUNTS PAYABLE $ 40,453 $ 34,792 INTEREST PAYABLE TO DISTRIBUTION FUND 30,326 19,021 CARPET CARE RESERVE 31,651 38,720 PARTICIPANTS' FUND BALANCES 2,010,753 1,640,882 ----------- ----------- $ 2,113,183 $ 1,733,415 =========== ===========
These balance sheets 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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 DISTRIBUTION FUND
Current Quarter Year-to-Date ----------------------------- ------------------------------- 1997 1996 1997 1996 ----------- ----------- ------------ ------------ GROSS REVENUES $ 1,734,022 $ 2,090,975 $ 11,377,240 $ 11,710,587 ----------- ----------- ------------ ------------ REDUCTIONS: Agents' commissions 31,266 4,685 188,342 207,955 Audit fees 3,000 3,000 9,100 9,100 ----------- ----------- ------------ ------------ 34,266 7,685 197,442 217,055 ----------- ----------- ------------ ------------ ADJUSTED GROSS REVENUES 1,699,756 2,083,290 11,179,798 11,493,532 MANAGEMENT FEE (798,885) (979,146) (5,254,504) (5,401,960) ----------- ----------- ------------ ------------ GROSS INCOME DISTRIBUTION 900,871 1,104,144 5,925,294 6,091,572 ADJUSTMENTS TO GROSS INCOME DISTRIBUTION: Corporate complimentary occupany fees 5,202 1,451 13,696 6,592 Occupancy fees (254,792) (327,518) (1,175,044) (1,281,474) Advisory Committee expenses (25,230) (20,447) (79,543) (66,525) Life-safety reimbursement 28,807 (79,456) (200,755) (124,750) ----------- ----------- ------------ ------------ NET INCOME DISTRIBUTION 654,858 678,174 4,483,648 4,625,415 ADJUSTMENTS TO NET INCOME DISTRIBUTION: Occupancy fees 254,792 327,518 1,175,044 1,281,474 Hospitality suite fees 2,217 2,672 7,298 9,853 Greens fees 10,276 9,186 66,956 66,239 Additional participation credits 17,235 17,940 52,555 54,325 ----------- ----------- ------------ ------------ AMOUNT AVAILABLE FOR DISTRIBUTION TO PARTICIPANTS $ 939,378 $ 1,035,490 $ 5,785,501 $ 6,037,306 =========== =========== ============ ============ Average daily distribution $ 10.94 $ 11.83 $ 23.91 $ 24.47 Average room rate $ 85.91 $ 78.14 $ 118.74 $ 111.40 Occupied room nights 20,185 26,761 95,818 105,119 Available room nights 85,904 87,543 241,952 246,679 Occupancy percentage 23.5% 30.6% 39.6% 42.6% Average number of available units 934 952 886 900
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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 DISTRIBUTION FUND
Current Quarter Year-to-Date ---------------------------- ---------------------------- 1997 1996 1996 1995 ----------- ----------- ----------- ----------- BALANCE, beginning of period $ - $ - $ - $ - ADDITIONS: Amounts available for distribution before life-safety reimbursement 910,571 1,114,946 5,986,256 6,162,056 Interest received or receivable from Maintenance Escrow Fund 30,326 19,021 81,910 60,152 REDUCTIONS: Amount withheld for Maintenance Escrow Fund (191,096) (245,640) (881,290) (961,112) Amounts held in reserve for estimated life-safety reimbursement 28,807 (79,456) (200,755) (124,750) Amounts accrued or paid to participants (778,608) (808,871) (4,986,121) (5,136,346) ----------- ----------- ----------- ----------- BALANCE, end of period $ - $ - $ - $ - =========== =========== =========== =========== MAINTENANCE ESCROW FUND BALANCE, beginning of period $ 2,417,925 $ 1,607,083 $ 1,734,415 $ 1,141,259 ADDITIONS: Amounts withheld from occupancy fees 191,096 245,640 881,290 961,112 Interest earned 30,326 19,021 81,910 60,152 Charges to participants to establish or restore escrow balances 164,492 319,098 994,837 838,563 REDUCTIONS: Maintenance charges (722,489) (493,740) (1,498,557) (1,210,085) Carpet care reserve deposit (5,098) (6,553) (28,092) (25,638) Interest accrued or paid to Distribution Fund (30,326) (19,021) (81,910) (60,152) Refunds to participants as prescribed by Master Lease Agreement (35,173) (30,646) (73,140) (64,329) ----------- ----------- ----------- ----------- BALANCE, end of period $ 2,010,753 $ 1,640,882 $ 2,010,753 $ 1,640,882 =========== =========== =========== ===========
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 SEPTEMBER 30, 1997 AND 1996 DISTRIBUTION FUND
1997 1996 ----------- ----------- ASSETS CASH $ 1,000 $ 1,000 RECEIVABLE FROM GOLF HOST RESORTS, INC FOR DISTRIBUTION 771,434 837,169 INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND 203 481 ----------- ----------- $ 772,637 $ 838,650 =========== =========== LIABILITIES AND PARTICIPANTS' FUND BALANCES DUE TO PARTICIPANTS FOR DISTRIBUTION $ 666,146 $ 751,101 DUE TO MAINTENANCE ESCROW FUND 106,491 87,549 PARTICIPANTS' FUND BALANCES - - ----------- ----------- $ 772,637 $ 838,650 =========== =========== MAINTENANCE ESCROW FUND ASSETS CASH AND CASH EQUIVALENTS 21,598 75,509 DUE FROM DISTRIBUTION FUND 106,491 87,549 INTEREST RECEIVABLE - - INVENTORY: Linen 89,480 99,871 Materials and supplies 13,643 7,229 DEPOSITS - 86,077 ----------- ----------- $ 231,212 $ 355,235 =========== =========== LIABILITIES AND PARTICIPANTS' FUND BALANCES ACCOUNTS PAYABLE $ 4,150 $ 5,033 INTEREST PAYABLE TO DISTRIBUTION FUND 203 481 PARTICIPANTS' FUND BALANCES 226,859 349,721 ----------- ----------- $ 231,212 $ 355,235 =========== ===========
These balance sheets 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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 DISTRIBUTION FUND
Current Quarter Year-to-Date ----------------------------- ----------------------------- 1997 1996 1997 1996 ----------- ----------- ----------- ----------- GROSS REVENUES $ 1,711,566 $ 1,887,216 $ 2,992,542 $ 3,142,727 ----------- ----------- ----------- ----------- REDUCTIONS: Sales and marketing expenses 136,925 160,413 239,405 267,131 Agents' commissions 27,916 50,520 98,381 102,880 Audit fees 2,595 2,601 7,795 7,803 ----------- ----------- ----------- ----------- 167,436 213,534 345,581 377,814 ----------- ----------- ----------- ----------- ADJUSTED GROSS REVENUES 1,544,130 1,673,682 2,646,961 2,764,913 MANAGEMENT FEE (772,065) (836,841) (1,323,480) (1,382,457) ----------- ----------- ----------- ----------- GROSS INCOME DISTRIBUTION 772,065 836,841 1,323,481 1,382,456 ADJUSTMENTS TO GROSS INCOME DISTRIBUTION: Corporate complimentary occupancy fees 1,466 1,989 2,952 3,587 Occupancy fees (140,935) (131,790) (302,638) (255,948) Designated items (35,022) (20,653) (88,954) (54,312) Advisory Committee expenses (2,097) (1,661) (9,816) (7,424) ----------- ----------- ----------- ----------- POOLED INCOME 595,477 684,726 925,025 1,068,359 ADJUSTMENTS TO POOLED INCOME: Hospitality suite fees - - - 53 Occupancy fees 140,935 131,790 302,638 255,948 ----------- ----------- ----------- ----------- NET INCOME DISTRIBUTION $ 736,412 $ 816,516 $ 1,227,663 $ 1,324,360 =========== =========== =========== =========== Average daily distribution $ 29.36 $ 32.01 $ 15.84 $ 17.17 Average room rate $ 123.03 $ 114.85 $ 99.45 $ 98.15 Room nights 13,912 16,432 30,092 32,019 Occupancy percentage 55.5% 64.4% 38.8% 41.5% Average number of available units 273 277 284 282 Number of units in Rental Pool at end of period 293 302 - -
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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 DISTRIBUTION FUND
Current Quarter Year-to-Date ------------------------------- ------------------------------- 1997 1996 1997 1996 ----------- ----------- ----------- ----------- BALANCE, beginning of period $ - $ - $ - $ - ADDITIONS: Amounts available for distribution 736,412 816,516 1,227,663 1,324,360 Interest received or receivable from Maintenance Escrow Fund 204 480 589 2,807 REDUCTIONS: Amounts withheld for Maintenance Escrow Fund (70,470) (65,895) (151,325) (127,975) Amounts accrued or paid to participants (666,146) (751,101) (1,076,927) (1,199,192) ----------- ----------- ----------- ----------- BALANCE, end of period $ - $ - $ - $ - =========== =========== =========== =========== MAINTENANCE ESCROW FUND BALANCE, beginning of period $ 206,837 $ 336,079 $ 197,548 $ 328,336 ADDITIONS: Amounts withheld from occupancy fees 70,470 65,895 151,325 127,975 Interest earned 204 480 589 2,807 Reimbursement of designated items 35,022 20,653 88,954 54,312 Charges to participants to establish or restore escrow balances 7,564 85,132 23,859 227,764 REDUCTIONS: Maintenance and inventory charges (40,840) (30,995) (93,068) (119,617) Refurbishing charges (14,206) (98,167) (38,875) (191,716) Interest accrued or paid to Distribution Fund (204) (480) (589) (2,807) Designated items (35,022) (20,653) (88,953) (54,313) Refunds to participants as prescribed by Master Lease Agreement (2,966) (8,223) (13,931) (23,020) ----------- ----------- ----------- ----------- BALANCE, end of period $ 226,859 $ 349,721 $ 226,859 $ 349,721 =========== =========== =========== ===========
These statements were repared 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 l9 EX-27 2 FINANCIAL DATA SCHEDULE
5 1 US DOLLARS 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 1 4,901,703 3,595,210 0 34,610 4,828,631 14,974,236 73,012,818 27,887,241 78,006,387 11,228,242 76,848,748 0 4,577,000 5,000 (17,955,571) 78,006,387 14,015,995 42,407,929 4,383,683 40,832,260 0 115,723 3,160,717 (1,585,048) 967,800 (2,552,848) 0 0 0 (3,033,682) (606.73) (606.73)
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