NEW ACCOUNTING PRONOUNCEMENTS

May 2014,

the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) on recognition of revenue arising from contracts with customers, as well as recognition of gains and losses from the transfer of nonfinancial assets in contracts with noncustomers, and subsequently, it issued additional guidance that further clarified the ASU. The revenue recognition ASU has implications for all revenues, excluding those that are under the specific scope of other accounting standards, such as revenue associated with leases (described below).

The Company’s revenues for the

three

months ended

March 31, 2018,

that were subject to the revenue recognition ASU were as follows (in thousands):

Real estate	$	36
Utilities		704
Resort amenities and other		307
Total	$	1,047

The core principle underlying the revenue recognition ASU is that an entity will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in such exchange. This will require entities to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are recognized at a point in time except for the resort amenities revenue where the annual membership dues are recognized over a period of

twelve

months.

A customer is distinguished from a noncustomer by the nature of the goods or services that are transferred. Customers are provided with goods or services that are generated by a company’s ordinary output activities, whereas noncustomers are provided with nonfinancial assets that are outside of a company’s ordinary output activities. This distinction

may

not

significantly change the pattern of income recognition, but determines whether that income is classified as revenue (contracts with customers) or other gains/losses (contracts with noncustomers) in the Company’s financial statements. The Company’s revenue streams for the period were generated as ordinary output activities to customers as defined by the guidance and were properly classified as revenues.

The ASU requires the use of a new

five

-step model to recognize revenue from customer contracts. The

five

-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will

not

occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the

five

-step model to the revenue streams compared to the prior guidance did

not

result in significant changes in the way the Company records its real estate revenue, utilities revenue and resort amenities and other revenues.

An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does

not

control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange. Upon adoption of the new lease ASU in

2019,

the Company

may

be required to classify its tenant recoveries into lease and nonlease components, whereby the nonlease components would be subject to the revenue recognition ASU, pending the resolution of the proposed amendment issued by the FASB in

January 2018.

Property services categorized as nonlease components that are reimbursed by the Company’s tenants

may

need to be presented on a net basis if it is determined that the Company held an agent arrangement.

Upon adoption, entities can use either a full retrospective or modified retrospective method to adopt this ASU. Under the full retrospective method, all periods presented will be restated upon adoption to conform to the new standard and a cumulative adjustment for effects on periods prior to

2016

will be recorded to retained earnings as of

January 1, 2016.

Under the modified retrospective approach, prior periods are

not

restated to conform to the new standard. Instead, a cumulative adjustment for effects of applying the new standard to periods prior to

2018

is recorded to retained earnings as of

January 1, 2018.

Additionally, incremental footnote disclosures are required to present the

2018

revenues under the prior standard. Under the modified retrospective method, an entity

may

also elect to apply the standard to either (i) all contracts as of

January 1, 2018,

or (ii) only to contracts that are

not

completed as of

January 1, 2018.

The Company elected to adopt this guidance using the modified retrospective method at

January 1, 2018

which did

not

result in an adjustment to the retained earnings. Additionally, upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the

five

-step model under the new guidance and confirmed that there were

differences in the pattern of revenue recognition.

February 2016,

FASB issued an ASU that sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). The ASU is effective for the Company

later than

January 1, 2019,

with early adoption permitted. The ASU requires the Company to identify lease and nonlease components of a lease agreement. This ASU will govern the recognition of revenue for lease components. Revenue related to nonlease components under our lease agreements will be subject to the new revenue recognition standard effective upon adoption of the new lease accounting standard. The Company expects to adopt the new lease accounting standard on

January 1, 2019.

August 2016,

FASB issued ASU

No.

2016

15,

Statement of Cash Flows. This ASU aims to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for public business entities for annual reporting periods beginning after

December 15, 2017.

The adoption of this guidance did

not

have a material impact on the Company’s financial statements.

October 2016,

FASB issued ASU

No.

2016

16,

Income Taxes. This ASU simplifies the recognition of intra-entity income tax consequences when an asset other than inventory is transferred. This ASU is effective for annual reporting periods beginning after

December 15, 2017

for public business entities. The adoption of this guidance did

not

have a material impact on the Company’s financial statements.

November 2016,

FASB issued ASU

No.

2016

18,

Statement of Cash Flows-Restricted Cash. This ASU addresses the diversity in the classification and presentation of changes in restricted cash in the statement of cash flows. This ASU is effective for annual reporting periods beginning after

December 15, 2017

for public business entities. The adoption of this guidance did

not

have a material impact on the Company’s financial statements.

December 2016,

FASB issued ASU

No.

2016

20,

Technical Corrections and Improvements to Topic

606,

Revenue from Contracts with Customers. This ASU summarizes the various amendments that serve to clarify the codification or to correct unintended application of guidance. This ASU is effective for annual reporting periods beginning after

December 15, 2017.

The adoption of this guidance did

not

have a material impact on the Company’s financial statements.

March 2017,

FASB issued ASU

No.

2017

07,

Compensation-Retirement Benefits. This ASU aims to improve the presentation of the net periodic pension cost and net periodic postretirement benefit cost by requiring the reporting of the service cost component in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This ASU is effective for public business entities for annual periods beginning after

December 15, 2017.

The adoption of this guidance is reflected on the Company’s financial statements.

May 2017,

the FASB issued ASU

No.

2017

09,

Compensation-Stock Compensation (Topic

718

) Scope of Modification Accounting. This ASU clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic

718.

The standard is effective for interim and annual reporting periods beginning after

December 15, 2017,

with early adoption permitted. The adoption of this guidance did

not

have a material impact on the Company’s financial statements.