FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

For Quarter Ended September 30, 2001

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 incorporation or organization)		(I.R.S. Employer 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 21

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)

CONSOLIDATED BALANCE SHEETS

ASSETS
(Substantially all pledged)


			September 30,		December 31,
			2001		2000

			(unaudited)
CURRENT ASSETS:
	Cash		$	152,065	$	565,400
	Restricted cash			1,652,860		1,219,289
	Accounts receivable, net			2,234,894		4,865,607
	Other receivables			261,863		543,651
	Inventories and supplies			1,302,049		1,606,935
	Prepaid expenses and other assets			275,998		197,399

				5,879,729		8,998,281
	Assets held for sale			—		2,435,000

		Total current assets		5,879,729		11,433,281
INTANGIBLES, net				13,586,856		17,376,706
PROPERTY AND EQUIPMENT, net				40,099,298		41,768,369
OTHER ASSETS				509,042		483,788

			$	60,074,925	$	71,062,144

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.)

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND SHAREHOLDER’S DEFICIT


			September 30,			December 31,
			2001			2000

			(unaudited)
CURRENT LIABILITIES:
	Accounts payable		$	8,791,478		$	8,614,179
	Line of credit			—			667,141
	Accrued payroll costs			1,112,158			830,072
	Accrued interest			866,197			817,047
	Other payables and accrued expenses			2,758,159			3,076,854
	Deposits and prepaid fees			2,047,666			3,461,783
	Current notes payable			3,039,210			862,058
	Due to related parties			4,867,519			3,572,690

		Total current liabilities		23,482,387			21,901,824
NOTES PAYABLE				79,318,481			82,239,239
OTHER LONG-TERM LIABILITIES				9,440,914			7,869,858
DEFERRED INCOME TAXES				1,770,467			1,770,467

		Total liabilities		114,012,249			113,781,388

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			(44,962,324	)		(33,744,244	)

	Total shareholder’s deficit			(53,937,324	)		(42,719,244	)

	Total liabilities and shareholder’s deficit		$	60,074,925		$	71,062,144

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.)

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)


		Quarters ended September 30,						Nine months ended September 30,

		2001			2000			2001			2000

REVENUES:
	Resort facilities	$	1,835,812		$	2,266,074		$	13,960,991		$	14,866,135
	Food and beverage		1,480,863			2,338,827			10,544,809			13,450,230
	Golf		1,754,794			1,992,873			10,794,265			11,365,151
	Other		966,787			876,949			4,282,329			4,178,953

			6,038,256			7,474,723			39,582,394			43,860,469

COST AND OPERATION EXPENSES:
	Resort facilities		1,932,180			2,017,739			9,879,706			10,547,843
	Food and beverage		1,587,577			1,785,619			7,285,816			7,491,423
	Golf		1,463,194			1,505,047			5,121,083			5,545,616
	Other		5,096,125			2,603,317			10,319,031			8,429,391
	General and administrative		880,923			1,066,966			3,795,585			4,489,754
	Depreciation and amortization		968,284			1,075,772			2,904,851			3,027,315

			11,928,283			10,054,460			39,306,072			39,531,342

INCOME/(LOSS) BEFORE INCOME/(LOSS) ON ASSET HELD FOR SALE AND LEASED ASSET			(5,890,027	)		(2,579,737	)		276,322			4,329,127
INCOME/(LOSS) ON ASSET HELD FOR SALE AND LEASED ASSET			162,371			253,432			(108,540	)		(1,004,020	)

OPERATING (LOSS)/INCOME			(5,727,656	)		(2,326,305	)		167,782			3,325,107
INTEREST, NET			2,353,139			2,476,561			7,265,296			7,335,918

LOSS BEFORE DIVIDEND REQUIREMENTS ON PREFERRED STOCK			(8,080,795	)		(4,802,866	)		(7,097,514	)		(4,010,811	)
DIVIDEND REQUIREMENTS ON PREFERRED STOCK			64,077			64,077			192,231			192,231

NET LOSS AVAILABLE TO COMMON SHAREHOLDER		$	(8,144,872	)	$	(4,866,943	)	$	(7,289,745	)	$	(4,203,042	)

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


	$1 Par Value				5.6% Cumulative
	Common Stock				Preferred Stock										Total
									Paid-In			Accumulated			Shareholder's
	Shares		Amount		Shares		Amount		Capital			Deficit			Deficit

Balance, December 31, 1999		5,000	$	5,000		4,577,000	$	4,577,000	$	(13,557,000	)	$	(12,481,706	)	$	(21,456,706	)
Net loss available to common shareholder		—		—		—		—		—			(15,062,942	)		(15,062,942	)
Distribution to shareholder		—		—		—		—		—			(6,199,596	)		(6,199,596	)

Balance, December 31, 2000		5,000		5,000		4,577,000		4,577,000		(13,557,000	)		(33,744,244	)		(42,719,244	)
Net loss available to common shareholder		—		—		—		—		—			(7,289,745	)		(7,289,745	)
Distribution to shareholder		—		—		—		—		—			(3,928,335	)		(3,928,335	)

Balance, September 30, 2001 (unaudited)		5,000	$	5,000		4,577,000	$	4,577,000	$	(13,557,000	)	$	(44,962,324	)	$	(53,937,324	)

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 NINE MONTHS ENDED SEPTEMBER 30,
(unaudited)


			2001			2000

CASH FLOWS FROM OPERATING ACTIVITIES:
	Net loss before dividend requirements on preferred stock		$	(7,097,514	)	$	(4,010,811	)
	Adjustments to reconcile net loss to net cash provided by operations:
		Provision for bad debt		166,662			62,121
		Depreciation and amortization		2,904,851			3,027,315
		Provision for intangible impairment		3,000,000			—
		Gain on sale of asset held for sale		(1,164,911	)		—
		Changes in operating working capital		2,416,968			3,806,725

		Cash provided by operating activities		226,056			2,885,350

CASH FLOWS FROM INVESTING ACTIVITIES:
	Increase in other assets			(25,254	)		(191,385	)
	Purchases of property and equipment			(727,032	)		(504,166	)
	Proceeds from sale of assets held for sale			3,928,635			—
	Increase in assets held for sale			(47,624	)		—

		Cash provided by (used in) investing activities		3,128,725			(695,551	)

CASH FLOWS FROM FINANCING ACTIVITIES:
	Distribution to shareholder			(3,928,335	)		—
	Repayment of debt			(743,606	)		(1,464,238	)
	Repayment of line of credit			(667,141	)		(1,098,540	)
	Increases in other long-term liabilities			1,571,056			478,178

		Cash used in financing activities		(3,768,026	)		(2,084,600	)

NET (DECREASE) INCREASE IN CASH				(413,245	)		105,199
CASH, BEGINNING OF PERIOD				565,400			131,440

CASH, END OF PERIOD			$	152,155		$	236,639

NONCASH FINANCING AND INVESTING ACTIVITIES:
The Company satisfied its preferred stock dividend liability to GHI through the intercompany account			$	192,231		$	192,231

Transfer from fixed assets to assets held for sale			$	281,100		$	—

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 CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of preparation

The financial statements for December 31, 2000 were prepared assuming the Company will continue as a going concern. As discussed in the notes to consolidated financial statements on Form 10-K dated December 31, 2000, the Company has suffered recurring losses from operations, has negative working capital and has a shareholder’s deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in the footnotes. Additionally, as described in Note 12 of the notes to consolidated financial statements on Form 10-K, subsequent to December 31, 2000 the Company has defaulted under the terms of its debt agreement and is a defendant to a class action lawsuit. These financial statements do not include any adjustments that might result from the outcome of the uncertainties.

These financial statements and related notes are presented for interim periods on a going concern basis in accordance with the requirements of Form 10-Q and, consequently, do not include all disclosures normally provided in the Company’s Annual Report on Form 10-K. Accordingly, these financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2000.

The accompanying balance sheet for September 30, 2001, and statements of operations and cash flows for the periods ended September 30, 2001 and 2000, are unaudited but reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented on a going concern basis. All such adjustments are of a normal recurring nature.

The Company’s business is seasonal. Therefore, the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal years.

Certain prior year balances have been reclassified to conform with the current year presentation.

(2) Asset held for sale

On May 4, 2001, the Company sold the remaining land parcel at Innisbrook included in asset held for sale as of December 31, 2000 for $4,578,000. Net proceeds of $3,929,000 were distributed by the Company to its shareholder.

(3) Intangible Assets

The Company recorded at closing in 1997, a resort intangible of approximately $30,400,000. This intangible related to the purchase of the Innisbrook Resort, which contained an existing rental pool agreement and a recently executed management agreement with Westin Hotels. The intangible is being amortized over twenty years on as straight-line basis. Amortization expense for all intangible assets was approximately $1,157,000 and $1,158,000 for the nine months ended September 30, 2001 and September 30, 2000, respectively.

As noted in the Company’s 10-K for December 31, 2000, management had determined that due to declining demand in the resort business and reduced rental pool participation which led to declines in operating results, impairment had occurred. At December 31, 2000, an impairment charge of $7,441,000 was recorded.

As a result of the continuing decline in destination golf resort business during 2001 and the events of September 11, 2001, the Company has determined that further impairment has occurred and consequently has recognized an additional $3,000,000 impairment charge during the quarter ended September 30, 2001.

(4) Long-term obligations

Long-term obligations consist of the following:


	September 30,			December 31,
	2001			2000

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		2,668,000			3,167,921
Capital leases		714,691			958,376

		82,357,691			83,101,297
Less current maturities		(3,039,210	)		(862,058	)

	$	79,318,481		$	82,239,239

Page 7

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4) Long-term obligations cont.

On May 22, 2001, Golf Trust of America, Inc. (“GTA”), the lender on the $78,975,000 participating mortgage, announced that its shareholders approved a plan for its liquidation. The impact of GTA’s plan of its liquidation on the Company, if any, is uncertain.

(5) Contingencies

The Company has been named as a defendant in consolidated class action lawsuit whereby the plaintiffs allege breaches of contract, including breaches in connection with the Rental Pool Master Lease Agreement. The plaintiffs are seeking unspecified damages and declaratory judgement declaring that the plaintiffs are entitled to participate in the rental pool if one exits and a limitation of golf course access to persons who are either condominium owners, members, their accompanied guests, or guests of the resort. Deposition of class members and others, including depositions of prior executives of Golf Host Resorts, have been taken and additional discovery remains. A court date of February 3, 2003 has been set. As this litigation is still in its early stages, the Company is not yet able to determine whether the resolution of this matter will have a material adverse effect on the Company’s financial condition or results of operations although the Company believes it has successful defenses and intends to vigorously defend this action.

(6) Tamarron’s results of operations

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. entered into during 2000. The net income (loss) is as follows and is included in loss on assets held for sale and leased asset in the statements of income.


		Nine months ended			For the 111 days ended
		September 30,			September 30,
		2001			2000

Revenue:
	Hotel	$	2,605,035		$	1,841,337
	Food and beverage		1,679,854			1,005,602
	Golf		1,582,319			986,329
	Other		1,591,104			645,577

			7,458,312			4,478,845

Costs & operating expense:
	Hotel		932,994			578,751
	Food and beverage		1,204,816			763,279
	Golf		692,247			384,262
	Other		2,473,893			1,316,383
	General and administrative		3,344,082			1,291,287
	Interest expense		83,731			15,817

			8,731,763			4,349,779

Net loss		$	(1,273,451	)	$	129,066

Page 8

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) Subsequent events

The Company was informed by GTA on November 29, 2001 that the Company is in default on the $78,975,000 participating mortgage with GTA arising from the Company’s failure to pay the October 2001 interest payment. GTA has asserted its right to accelerate payment of the total outstanding principal amounts.

As a result of the default, Wells Fargo Business Credit, Inc. has elected to terminate their credit line with the Company effective May 23, 2002. The Company expects to develop a replacement facility upon reaching a resolution with GTA.

As of July 2002, the Company is seeking to negotiate a Settlement Agreement with GTA. In connection with the proposed Settlement Agreement, The Company would transfer to GTA the resort property, three condo- minium properties located at the Innisbrook Resort, the Company’s GTA stock interests, and all rights, title, and interests of the Company under existing contracts and agreements. In addition, the Company would provide a limited indemnity to defend and hold harmless GTA (and its affiliates) from and against any and all costs, liabilities, claims, losses, judgements or damages arising out of or in connection with the Class Action Lawsuit, as well as liabilities accruing on or before the closing date relating to employee benefits and liabilities for contracts or agreements not disclosed by the Company to GTA. In return, it is anticipated that GTA would deliver to the Company a duly executed release. No Settlement Agreement has yet been signed and no terms are definite. Neither GTA nor any of its affiliates is under any obligation to continue to negotiate with the Company or to execute the Settlement Agreement and could initiate foreclosure proceedings and pursue its other remedies at any time.

On November 19, 2001, GH II, an affiliated company and lessor of Tamarron, sold Tamarron for $9,500,000. A portion of the proceeds were contributed to the Company as a capital contribution and were used to settle the remaining balance due under the mortgage note from the previous owners.

A revised Master Lease Agreement (“Revised MLA”) has been presented to the rental pool participants, effective January 1, 2002, resulting from the expiration of the existing Master Lease Agreement (“MLA”) between the Company and rental pool participants under the existing Master Lease Agreement on December 31, 2001. On an annual basis, beginning in 2002 each condominium owner will elect to participate in either the Revised MLA or the Guaranteed Master Lease Agreement (“GMLA”). As of December 26, 2001, 605 rental units had elected participation in the Revised MLA and 13 in the GMLA. The Revised MLA provides for Adjusted Gross Revenues, as defined, to be divided 40% to the Innisbrook rental pool participants and 60% to the Company. In addition, the Company has agreed as part of the Revised MLA, to reimburse participants in the Revised MLA for up to 50% of actual unit refurbishment costs. If the Company proves unsuccessful in its defenses in the class-action lawsuit (Note 4), any rental pool participant who elects, subject to the Revised MLA, will forego reimbursement by the Company for renovations or offset against future quarterly distributions equal to their pro-rata amount of the class-action settlement proceeds.

On October 3, 2001, the FASB issued FASB Statement No. 144 (“FAS 144”), Accounting for the Impairment or Disposal of Long-Lived Assets. FAS 144 excludes goodwill from its scope and, therefore, eliminates the requirement to allocate goodwill to long-lived assets to be tested for impairment. The provisions of FAS 144 will be effective for fiscal years beginning after December 15, 2001. The Company has not completed the process of evaluating the impact that will result from adopting FAS 144.

Page 9

GOLF HOST RESORTS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Quarter Ended September 30, 2001

During the third quarter of 2001, the Company has continued to experience reduced occupancy and overall resort revenue. This downturn was in large part the result of the decline in travel in the United States prior to and following the September 11, 2001 attacks in New York and Washington, DC, as several large groups cancelled plans to utilize the Innisbrook facilities during late September.

Total room nights for the quarter were down 2,985 as compared to the prior year third quarter of 22,123, or 13.5%. Total revenue per room night increased for the quarter from $337.87 to $339.13, or less than a percent. The reduction in room nights, offset by the improvement in spending levels, resulted in a net decrease in gross revenue of $984,452, or 13.2%, as compared to 2000. In response to and in anticipation of this further decline in operating revenue, management continues its focus on establishing the most effective utilization of its resources. Operating expenses, were also reduced from $10,054,460 in 2000 to $8,928,283, or a 11.2% savings (before intangible impairment). The operating loss for the quarter of $5,890,027 was greater than the same period last year.

Interest expense was $123,422 less in the current quarter as compared to last year. This decrease is attributed to reductions in the utilization of the Accounts Receivable credit line and interest expense on the note due to the prior shareholders partially offset by an increase in the Golf Trust mortgage contractual interest of approximately $108,000.

Year to Date September 30, 2001

During the nine months ended September 30, 2001, the Company continued to experience a reduction in overall occupancy and resort revenue and reflects the general downturn in the hotel golf resort industry prior to and following the September 11, 2001 terrorist attacks. Gross revenues declined from the comparable 2000 numbers by $4,278,075, or 9.8%. Room nights were down by 8.5%, or 8,310. Room night sales for 2001 and 2000, respectively, were 89,604 and 97,914.

Operating expense (before intangible impairment) for the nine months were reduced by 8.2%, or $3,225,270 from the prior year. In total, operating expenses (before intangible impairment) in 2000 were $39,531,342, as compared to $36,306,072 in 2001. With the reduction in gross revenues of $4,278,075, partially offset by the reduction in operating expenses of $3,225,270, the Company has a reduction of $1,052,805 in operating income (before intangible impairment), or 24.3% for the nine month comparative period.

Interest expense for 2001 was less than the 2000 amount by $70,622. This net decrease is due to the reductions in the utilization of the Accounts Receivable revolving credit line and reduced interest expense on the note payable to the prior shareholders partially offset by the contractual increase in the Golf Trust of America's mortgage in the aggregate of $324.000.

During the nine months ended September 30, 2001, the Company set aside capital reserves in the amount of approximately $1,733,000. Actual capital expenditures during the period amounted to approximately $926,000. These funds were utilized to finalize the Highlands Clubhouse renovation, repair the Island Clubhouse roof and water heater, replace the Innisbrook property water softener, fund the property’s golf cart and golf course equipment leases, replace trees lost to the Southern Pine Beetle and upgrade the computer systems and software.

Page 10

Financial Condition and Liquidity

The Company’s working capital position (exclusive of Asset Held for Sale) has decreased to a deficit of approximately $17,603,000. This $4,699,000 reduction in working capital from the December 31, 2000 deficit of approximately $12,904,000 is primarily the result of net losses after interest of $1,192,663 (excluding depreciation and amortization) in addition to the reclassification of the prior shareholders note of $2,668,000 as a current liability. This obligation was subsequently relieved through the utilization of the proceeds on the sale of the Tamarron property on November 18, 2001.

The Company continues to experience seasonal fluctuations with net working capital position. These fluctuations have been managed through the utilization of an Accounts Receivable revolving credit line in the amount of $3,000,000 with Wells Fargo Business Credit, Inc. As described below, the Company has defaulted on its mortgage obligation to Golf Trust of America. As a result of that default, Wells Fargo Business Credit, Inc. has elected to terminate their credit line with Golf Host Resorts effective May 23, 2002. While the Company has utilized this credit line to facilitate short term cash needs in past years, its utilization during 2001 has been limited. The Company expects to develop a replacement facility upon completion of the loan settlement agreement. Management believes that the Company will have to restructure the GTA loan for the economic viability of the Resort.

The Company was informed by GTA on November 29, 2001 that the company is in default on the $78,975,000 participating mortgage with GTA arising from the Company’s failure to pay the October 2001 interest payment. GTA has asserted its right to accelerate payment of the total outstanding principal amounts.

As of July 2002, the Company is seeking to negotiate a Settlement Agreement with GTA. In connection with the proposed Settlement Agreement, the Company would transfer to GTA the resort property, three condominium properties located at the Innisbrook Resort, the Company’s GTA stock interests, and all rights, title and interests of the Company under existing contracts and agreements. In addition, the Company would provide a limited indemnity to defend and hold harmless GTA (and its affiliates) from and against any and all costs, liabilities, claims, losses, judgments or damages arising out of or in connection with the Class Action Lawsuit, as well as liabilities accruing on or before the closing date relating to employee benefits and liabilities for contracts or agreements not disclosed by the Company to GTA. In return, it is anticipated that GTA would deliver to the Company a duly executed release. No Settlement Agreement has yet been signed and no terms are definite. Neither GTA nor any of its affiliates is under any obligation to continue negotiating with the Company or to execute the Settlement Agreement and could initiate foreclosure proceedings and pursue its other remedies at any time.

Page 11

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

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 ended September 30, 2001 and 2000.

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 nine months ended September 30, 2001 and 2000.

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 Innisbrook Rental Pool Operation is party to lease agreements with an affiliated entity, whose ability to continue as a going concern is in substantial doubt.

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


	September 30,			December 31,
	2001			2000

	(unaudited)

DISTRIBUTION FUND

ASSETS

RECEIVABLE FROM GOLF HOST RESORTS, INC. FOR DISTRIBUTION	$	772,363		$	1,579,097
INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND		20,911			45,643

	$	793,274		$	1,624,740


LIABILITIES AND PARTICIPANTS’ FUND BALANCES

DUE TO PARTICIPANTS FOR DISTRIBUTION	$	565,481		$	1,285,558
DUE TO MAINTENANCE ESCROW FUND		227,793			339,182

	$	793,274		$	1,624,740


MAINTENANCE ESCROW FUND

ASSETS
CASH AND CASH EQUIVALENTS	$	2,404,549		$	2,517,396
RECEIVABLE FROM DISTRIBUTION FUND		227,793			339,182
CONSTRUCTION WORK IN PROGRESS		—			11,484
INTEREST RECEIVABLE		9,879			27,301

	$	2,642,221		$	2,895,363


LIABILITIES AND PARTICIPANTS’ FUND BALANCES

ACCOUNTS PAYABLE	$	(3,502	)	$	760,544
CONSTRUCTION RETAINAGE		—			154,419
INTEREST PAYABLE TO DISTRIBUTION FUND		20,911			45,643
CARPET CARE RESERVE		(26,884	)		4,856
PARTICIPANTS’ FUND BALANCES		2,651,696			1,929,901

	$	2,642,221		$	2,895,363

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 NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(unaudited)

DISTRIBUTION FUND


			Current Quarter						Year-to-Date

			2001			2000			2001			2000

GROSS REVENUES			$	2,045,547		$	2,215,469		$	13,272,026		$	14,602,974

DEDUCTIONS:
		Agents’ commissions		100,056			130,790			554,439			751,708
		Credit Card fees		45,440			17,382			127,233			105,816
		Audit fees		3,625			3,250			10,875			9,751

				149,121			151,422			692,547			867,275

ADJUSTED GROSS REVENUES				1,896,426			2,064,047			12,579,479			13,735,699
MANAGEMENT FEE				(945,022	)		(1,028,043	)		(6,269,449	)		(6,844,636	)

GROSS INCOME DISTRIBUTION				951,404			1,036,004			6,310,030			6,891,063
ADJUSTMENTS TO GROSS INCOME
	DISTRIBUTION:
		Management fee		(106,342	)		(114,082	)		(691,108	)		(758,447	)
		Marketing fee		(58,005	)		(62,226	)		(376,969	)		(413,698	)
		Miscellaneous pooled expense		(11,081	)		(12,721	)		(51,881	)		(56,301	)
		Corporate complimentary occupancy fees		12,361			13,820			33,607			37,675
		Westin Associate room fees		25,039			23,891			76,979			63,566
		Occupancy fees		(255,493	)		(289,366	)		(1,155,586	)		(1,247,776	)
		Advisory Committee expenses		(42,524	)		(8,759	)		(130,773	)		(24,945	)

NET INCOME DISTRIBUTION				515,359			586,561			4,014,299			4,491,137
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
		Occupancy fees		255,493			289,366			1,155,586			1,247,776
		Hospitality suite fees		—			—			—			135
		Greens fees		851			1,182			6,702			6,881
		Additional participation credit		660			720			2,070			2,190

AMOUNT AVAILABLE FOR DISTRIBUTION TO PARTICIPANTS			$	772,363		$	877,829		$	5,178,657		$	5,748,119

Average daily distribution			$	12.48		$	14.11		$	28.84		$	31.73
Average room rate			$	106.88		$	100.14		$	148.12		$	149.14
Occupied room nights				19,136			22,123			89,604			97,914
Available room nights				61,867			62,234			179,587			181,163
Occupancy percentage				30.9	%		35.5	%		49.9	%		54.0	%
Average number of available units				672			676			658			664

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 NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(unaudited)


		Current Quarter						Year-to-date

		2001			2000			2001			2000


DISTRIBUTION FUND

BALANCE, beginning of period		$	—		$	—		$	—		$	—
ADDITIONS:
	Amount available for distribution		772,363			877,829			5,178,657			5,748,119
	Interest received or receivable from Maintenance Escrow Fund		20,911			49,269			70,227			161,962
REDUCTIONS:
	Amounts withheld for Maintenance Escrow Fund		(227,793	)		(256,959	)		(1,030,691	)		(1,111,261	)
	Amounts accrued or paid to participants		(565,481	)		(670,139	)		(4,218,193	)		(4,798,820	)

BALANCE, end of period		$	—		$	—		$	—		$	—


MAINTENANCE ESCROW FUND

BALANCE, beginning of period		$	2,625,147		$	7,249,762		$	2,002,330		$	7,021,346
ADDITIONS:
	Amounts withheld from occupancy fees		227,793			256,959			1,030,691			1,111,261
	Interest earned		20,911			49,269			70,227			161,961
	Receivable from Innisbrook		—			—			397,412			—
	Charges to participants to establish or restore escrow balances		8,511			159,191			254,128			324,412
REDUCTIONS:
	Maintenance charges		(109,782	)		(188,038	)		(380,674	)		(414,824	)
	Carpet care reserve deposit		(25,550	)		(13,312	)		(70,556	)		(54,792	)
	Interest accrued or paid to Distribution Fund		(20,911	)		(49,269	)		(70,227	)		(161,961	)
	Refunds to participants as prescribed by the master lease agreements		(74,423	)		(158,034	)		(581,635	)		(680,875	)

BALANCE, end of period		$	2,651,696		$	7,306,528		$	2,651,696		$	7,306,528

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


		September 30,		December 31,
		2001		2000

		(unaudited)

DISTRIBUTION FUND

ASSETS

CASH		$	1,000	$	1,000
RECEIVABLE FROM GOLF HOST RESORTS, INC. FOR DISTRIBUTION			552,251		181,539
INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND			812		1,549

		$	554,063	$	184,088


LIABILITIES AND PARTICIPANTS’ FUND BALANCES

DUE TO PARTICIPANTS FOR DISTRIBUTION		$	459,019	$	152,957
DUE TO MAINTENANCE ESCROW FUND			95,044		31,131

		$	554,063	$	184,088


MAINTENANCE ESCROW FUND

ASSETS

CASH AND CASH EQUIVALENTS		$	61,942	$	129,635
DUE FROM DISTRIBUTION FUND			95,044		31,131
INVENTORY:
	Linen		69,981		16,496
	Materials and supplies		13,451		7,306
DEPOSITS			4,467		6,292

		$	244,885	$	190,860


LIABILITIES AND PARTICIPANTS’ FUND BALANCES

ACCOUNTS PAYABLE		$	2,326	$	14,597
INTEREST PAYABLE TO DISTRIBUTION FUND			811		1,549
PARTICIPANTS’ FUND BALANCES			241,748		174,714

		$	244,885	$	190,860

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 NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(unaudited)

DISTRIBUTION FUND


				Current Quarter						Year-to-date

				2001			2000			2001			2000

GROSS REVENUES				$	1,288,614		$	1,556,860		$	2,413,899		$	2,695,881

DEDUCTIONS:
	Agents’ commissions				14,635			33,665			61,441			74,163
	Sales and marketing expenses				96,646			116,764			181,042			202,191
	Audit fees				3,255			3,255			9,765			9,765

					114,536			153,684			252,248			286,119

ADJUSTED GROSS REVENUES					1,174,078			1,403,176			2,161,651			2,409,762
MANAGEMENT FEE					(622,747	)		(737,172	)		(1,146,533	)		(1,276,048	)

GROSS INCOME DISTRIBUTION					551,331			666,004			1,015,118			1,133,714
ADJUSTMENTS TO GROSS INCOME
		DISTRIBUTION:
			Corporate complimentary occupancy fees		1,565			1,673			3,209			2,795
			Occupancy fees		(138,101	)		(128,717	)		(308,216	)		(261,708	)
			Designated items		(24,993	)		(9,232	)		(56,727	)		(39,772	)
			Advisory Committee expenses		(645	)		(1,374	)		(8,664	)		(4,014	)

POOLED INCOME					389,157			528,354			644,720			831,015
ADJUSTMENTS TO POOLED INCOME:
			Occupancy fees		138,101			128,717			308,216			261,708

NET INCOME DISTRIBUTION				$	527,258		$	657,071		$	952,936		$	1,092,723

	Average daily distribution			$	25.59		$	30.94		$	15.01		$	15.86
	Average room rate			$	126.00		$	120.38		$	104.80		$	101.58
	Room nights				10,227			12,933			23,032			26,441
	Available Rooms				20,491			21,320			63,247			68,937
	Occupancy percentage				49.6	%		60.9	%		36.3	%		38.4	%
	Average number of available units				224			230			232			251

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 NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(unaudited)


		Current Quarter						Year-to-date

		2001			2000			2001			2000


DISTRIBUTION FUND

BALANCE, beginning of period		$	—		$	—		$	—		$	—
ADDITIONS:
	Amounts available for distribution		527,258			657,071			952,935			1,092,724
	Interest received or receivable from Maintenance Escrow Fund		811			1,442			2,856			2,816
REDUCTIONS:
	Amounts withheld for Maintenance Escrow Fund		(69,050	)		(64,360	)		(154,608	)		(130,859	)
	Amounts accrued or paid to participants		(459,019	)		(594,153	)		(801,183	)		(964,681	)

BALANCE, end of period		$	—		$	—		$	—		$	—


MAINTENANCE ESCROW FUND

BALANCE, beginning of period		$	210,260		$	215,616		$	174,714		$	188,338
ADDITIONS:
	Amounts withheld from occupancy fees		69,050			64,360			154,608			130,859
	Interest earned		811			1,442			2,856			2,816
	Reimbursement of designated items		24,993			9,232			56,728			39,772
	Charges to participants to establish or restore escrow balances		57,741			99,699			99,350			201,557
REDUCTIONS:
	Maintenance and inventory charges		(72,616	)		(127,923	)		(159,125	)		(251,972	)
	Refurbishing charges		—			—			—			—
	Interest accrued or paid to Distribution Fund		(811	)		(1,442	)		(2,856	)		(2,816	)
	Designated items		(24,993	)		(9,232	)		(56,727	)		(39,772	)
	Refunds to participants as prescribed by Master Lease Agreement		(22,687	)		(3,845	)		(27,800	)		(20,875	)

BALANCE, end of period		$	241,748		$	247,907		$	241,748		$	247,907

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

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits


99.1	President Certification required under Section 906 of Sarbanes-Oxley Act of 2002.

99.2	Principal Financial Officer Certification required under Section 906 of Sarbanes-Oxley Act 2002.

(b) Reports on Form 8-K


	None

Page 20

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.
For the quarter ended September 30, 2001


Date: September 20, 2002	By:	/s/ Merrick Kleeman Merrick Kleeman President



Date: September 20, 2002	By:	/s/ R. Keith Wilt R. Keith Wilt Vice President and Treasurer (Principal Financial Officer)

Page 21

TABLE OF CONTENTS


SIGNATURES
SECTION 302 CERTIFICATION
SECTION 302 CERTIFICATION
CEO Certification
CFO Certification

SECTION 302 CERTIFICATION

CERTIFICATION

I, Merrick Kleeman, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Golf Host Resorts, Inc;

2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the quarterly report;

4.		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure control procedures (as defined in Exchange Act Rules 13a – 14 and 15d – 14) for the registrant and have:

	a.		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b.		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c.		presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of’ the Evaluation Date;

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

	a.		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b.		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our more recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


Date: October 30, 2002	/s/ Merrick Kleeman
	Name: Title:	Merrick Kleeman President

SECTION 302 CERTIFICATION

CERTIFICATION

I, R. Keith Wilt, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Golf Host Resorts, Inc;

2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the quarterly report;

4.		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure control procedures (as defined in Exchange Act Rules 13a – 14 and 15d – 14) for the registrant and have:

	a.		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b.		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c.		presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of’ the Evaluation Date;

	a.		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b.		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


Date: October 29, 2002	/s/ R. Keith Wilt
	Name: Title:	R. Keith Wilt Vice President & Treasurer (Principal Financial Officer)

GOLF HOST RESORTS INC 10-Q