##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




---

Form 10-Q

|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended
    December 31, 2003                                        
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from                            to                            

Commission file number: 1-13173



---

Boca Resorts, Inc.

(Exact Name of Registrant as Specified in its
Charter)


|                                             |  |                                     
|-------------------------------------------- |  | ------------------------------------
|Delaware                                     |  | 65-0676005                          
|(State of Incorporation)                     |  | (I.R.S. Employer Identification No.)
|501 East Camino Real                         |  | 33432                               
|Boca Raton, Florida                          |  | (Zip Code)                          
|(Address of Principal Executive
    Offices) |  |                                     

Registrants telephone number, including
area code:

(561) 447-5300


Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report: Not Applicable

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 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.     Yes þ     No o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Exchange
Act).     Yes þ     No o

As of January 30, 2004, there were
39,732,919 shares of Class A Common Stock, $.01 par value
per share, and 255,000 shares of Class B Common Stock, $.01
par value per share, outstanding.









---

TABLE OF CONTENTS



|                                               |  |  |  |  |  |  |  | 
|---------------------------------------------- |  |  |  |  |  |  |  | 
|PART I -- FINANCIAL INFORMATION               
|PART II -- OTHER INFORMATION                  
|SIGNATURES                                    
|EX-31.1 Section 302 Certification of CEO      
|EX-31.2 Section 302 Certification of CFO      
|EX-32.1 Section 906 Certification of CEO & CFO



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##### Table of Contents






PART I  FINANCIAL
INFORMATION



|        |                     
|------- | --------------------
|Item 1. | Financial Statements

BOCA RESORTS, INC.

CONDENSED CONSOLIDATED BALANCE
SHEETS

|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |         |         | 
|-------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ------- | -------- | ------- |  | ------- | ------- | ------- | 
|                                                   |                                                                                                                                                                                                  | December 31,                               |         | June 30,
|                                                   |                                                                                                                                                                                                  | 2003                                       |         | 2003    
|                                                   |                                                                                                                                                                                                  |                                            |         |         
|                                                   |                                                                                                                                                                                                  |                                           
|                                                   |                                                                                                                                                                                                  | (Unaudited)                               
|                                                   |                                                                                                                                                                                                  |                                           
|                                                   |                                                                                                                                                                                                  | (000s Omitted, Except                    
|                                                   |                                                                                                                                                                                                  | Share Data)                               
|ASSETS                                            
|Current assets:                                    |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   | Cash and cash equivalents                                                                                                                                                                        |                                            | $       | 4,317    |         |  | $       | 8,110   |        
|                                                   | Restricted cash                                                                                                                                                                                  |                                            |         | 152      |         |  |         | 641     |        
|                                                   | Accounts receivable, net                                                                                                                                                                         |                                            |         | 19,448   |         |  |         | 20,960  |        
|                                                   | Inventory                                                                                                                                                                                        |                                            |         | 7,663    |         |  |         | 6,616   |        
|                                                   | Current portion of Premier Club notes receivable                                                                                                                                                 |                                            |         | 3,927    |         |  |         | 3,631   |        
|                                                   | Other current assets                                                                                                                                                                             |                                            |         | 4,196    |         |  |         | 3,238   |        
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total current assets                       |         |          | 39,703  |  |         |         | 43,196  | 
|Property and equipment, net                        |                                                                                                                                                                                                  |                                            | 820,486 |          |         |  | 823,681 |        
|Intangible assets                                  |                                                                                                                                                                                                  |                                            | 35,937  |          |         |  | 35,937  |        
|Long-term portion of Premier Club notes receivable |                                                                                                                                                                                                  |                                            | 8,794   |          |         |  | 8,157   |        
|Other assets                                       |                                                                                                                                                                                                  |                                            | 8,454   |          |         |  | 9,179   |        
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total assets                               |         | $        | 913,374 |  |         | $       | 920,150 | 
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|LIABILITIES AND SHAREHOLDERS
    EQUITY          
|Current liabilities:                               |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   | Accounts payable and accrued expenses                                                                                                                                                            |                                            | $       | 26,765   |         |  | $       | 33,515  |        
|                                                   | Current portion of deferred revenue and advance
    deposits                                                                                                                                     |                                            |         | 30,885   |         |  |         | 23,288  |        
|                                                   | Net liabilities of discontinued operations                                                                                                                                                       |                                            |         | 1,045    |         |  |         | 1,074   |        
|                                                   | Current portion of credit line and note payable                                                                                                                                                  |                                            |         |         |         |  |         | 79      |        
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total current liabilities                  |         |          | 58,695  |  |         |         | 57,956  | 
|Credit line and note payable                       |                                                                                                                                                                                                  |                                            | 20,000  |          |         |  | 18,000  |        
|Deferred revenue, net of current portion           |                                                                                                                                                                                                  |                                            | 33,462  |          |         |  | 33,498  |        
|Other liabilities                                  |                                                                                                                                                                                                  |                                            | 9,560   |          |         |  | 9,560   |        
|Deferred income taxes                              |                                                                                                                                                                                                  |                                            | 28,456  |          |         |  | 34,242  |        
|Senior subordinated notes payable                  |                                                                                                                                                                                                  |                                            | 190,145 |          |         |  | 190,145 |        
|Premier Club refundable membership fees            |                                                                                                                                                                                                  |                                            | 55,178  |          |         |  | 56,700  |        
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total liabilities                          |         |          | 395,496 |  |         |         | 400,101 | 
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|Commitments and contingencies                      |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|Shareholders equity:                              |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   | Class A Common Stock, $.01 par value,
    100,000,000 shares authorized and 39,512,459 and 39,035,078
    shares issued and outstanding at December 31, 2003 and
    June 30, 2003, respectively |                                            |         | 396      |         |  |         | 390     |        
|                                                   | Class B Common Stock, $.01 par value,
    10,000,000 shares authorized and 255,000 shares issued and
    outstanding at December 31, 2003 and June 30, 2003.                                     |                                            |         | 3        |         |  |         | 3       |        
|                                                   | Contributed capital                                                                                                                                                                              |                                            |         | 465,352  |         |  |         | 459,548 |        
|                                                   | Retained earnings                                                                                                                                                                                |                                            |         | 52,127   |         |  |         | 60,108  |        
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total shareholders equity                 |         |          | 517,878 |  |         |         | 520,049 | 
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total liabilities and shareholders equity |         | $        | 913,374 |  |         | $       | 920,150 | 
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        

See accompanying notes to consolidated financial
statements.

1



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##### Table of Contents



BOCA RESORTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

For the Three Months Ended
December 31


|                                                                                    |                                              |                          |        |        |        |   |        |        |        | 
|----------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------ | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                                                                    |                                              | 2003                     |        | 2002  
|                                                                                    |                                              |                          |        |       
|                                                                                    |                                              |                         
|                                                                                    |                                              | (000s Omitted,         
|                                                                                    |                                              | Except Per              
|                                                                                    |                                              | Share Data)             
|                                                                                    |                                              | (Unaudited)             
|Leisure and recreation revenue                                                      |                                              | $                        | 72,942 |        |        | $ | 67,046 |       
|Operating expenses:                                                                 |                                              |                          |        |        |        |   |        |       
|                                                                                    | Cost of leisure and recreation services      |                          |        | 33,261 |        |   |        | 31,656 |       
|                                                                                    | Selling, general and administrative expenses |                          |        | 21,699 |        |   |        | 21,288 |       
|                                                                                    | Depreciation                                 |                          |        | 10,146 |        |   |        | 9,074  |       
|                                                                                    | Loss on early retirement of debt             |                          |        |       |        |   |        | 149    |       
|                                                                                    |                                              |                          |        |        |        |   |        |       
|                                                                                    |                                              | Total operating expenses |        |        | 65,106 |   |        |        | 62,167 | 
|                                                                                    |                                              |                          |        |        |        |   |        |       
|Operating income                                                                    |                                              |                          | 7,836  |        |        |   | 4,879  |       
|Interest and other income                                                           |                                              |                          | 117    |        |        |   | 9      |       
|Interest expense                                                                    |                                              |                          | (5,430 | )      |        |   | (5,429 | )     
|                                                                                    |                                              |                          |        |        |        |   |        |       
|Income (loss) before
    (provision) benefit for income taxes                       |                                              |                          | 2,523  |        |        |   | (541   | )     
|(Provision) benefit for income taxes                                                |                                              |                          | (972   | )      |        |   | 208    |       
|                                                                                    |                                              |                          |        |        |        |   |        |       
|Net income (loss)                                                                   |                                              | $                        | 1,551  |        |        | $ | (333   | )     
|                                                                                    |                                              |                          |        |        |        |   |        |       
|Net income (loss) per share  basic and
    diluted                                 |                                              | $                        | .04    |        |        | $ | (.01   | )     
|                                                                                    |                                              |                          |        |        |        |   |        |       
|Weighted average shares used in computing net
    income (loss) per share  basic   |                                              |                          | 39,508 |        |        |   | 39,236 |       
|                                                                                    |                                              |                          |        |        |        |   |        |       
|Weighted average shares used in computing net
    income (loss) per share  diluted |                                              |                          | 40,516 |        |        |   | 39,236 |       
|                                                                                    |                                              |                          |        |        |        |   |        |       

See accompanying notes to consolidated financial
statements.

2



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BOCA RESORTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

For the Six Months Ended
December 31


|                                                                                     |                                              |                          |         |        |         |   |         |        |         | 
|------------------------------------------------------------------------------------ | -------------------------------------------- | ------------------------ | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                                                                                     |                                              | 2003                     |         | 2002  
|                                                                                     |                                              |                          |         |       
|                                                                                     |                                              |                         
|                                                                                     |                                              | (Unaudited)             
|                                                                                     |                                              | (000s Omitted, Except  
|                                                                                     |                                              | Per Share Data)         
|Leisure and recreation revenue                                                       |                                              | $                        | 119,931 |        |         | $ | 113,338 |       
|Operating expenses:                                                                  |                                              |                          |         |        |         |   |         |       
|                                                                                     | Cost of leisure and recreation services      |                          |         | 59,875 |         |   |         | 58,057 |        
|                                                                                     | Selling, general and administrative expenses |                          |         | 42,588 |         |   |         | 41,401 |        
|                                                                                     | Depreciation                                 |                          |         | 20,108 |         |   |         | 18,020 |        
|                                                                                     | Loss on early retirement of debt             |                          |         |       |         |   |         | 149    |        
|                                                                                     |                                              |                          |         |        |         |   |         |       
|                                                                                     |                                              | Total operating expenses |         |        | 122,571 |   |         |        | 117,627 | 
|                                                                                     |                                              |                          |         |        |         |   |         |       
|Operating loss                                                                       |                                              |                          | (2,640  | )      |         |   | (4,289  | )     
|Interest and other income                                                            |                                              |                          | 176     |        |         |   | 39      |       
|Interest expense                                                                     |                                              |                          | (10,512 | )      |         |   | (11,040 | )     
|                                                                                     |                                              |                          |         |        |         |   |         |       
|Loss before benefit for income taxes                                                 |                                              |                          | (12,976 | )      |         |   | (15,290 | )     
|Benefit for income taxes                                                             |                                              |                          | 4,995   |        |         |   | 5,887   |       
|                                                                                     |                                              |                          |         |        |         |   |         |       
|Net loss                                                                             |                                              | $                        | (7,981  | )      |         | $ | (9,403  | )     
|                                                                                     |                                              |                          |         |        |         |   |         |       
|Net loss per share  basic and diluted                                               |                                              | $                        | (.20    | )      |         | $ | (.24    | )     
|                                                                                     |                                              |                          |         |        |         |   |         |       
|Weighted average shares used in computing net
    loss per share  basic and diluted |                                              |                          | 39,417  |        |         |   | 39,444  |       
|                                                                                     |                                              |                          |         |        |         |   |         |       

See accompanying notes to consolidated financial
statements.

3



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BOCA RESORTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS

For the Six Months Ended
December 31


|                                                  |                                                                                     |                                            |                                           |         |        |         |        |         |        |         |  
|------------------------------------------------- | ----------------------------------------------------------------------------------- | ------------------------------------------ | ----------------------------------------- | ------- | ------ | ------- | ------ | ------- | ------ | ------- | -
|                                                  |                                                                                     | 2003                                       |                                           | 2002   
|                                                  |                                                                                     |                                            |                                           |        
|                                                  |                                                                                     |                                           
|                                                  |                                                                                     | (Unaudited)                               
|                                                  |                                                                                     | (000s Omitted)                           
|Operating activities:                             |                                                                                     |                                            |                                           |         |        |         |        |        
|                                                  | Net loss                                                                            |                                            | $                                         | (7,981  | )      |         | $      | (9,403  | )     
|                                                  | Adjustments to reconcile net loss to net cash
    provided by operating activities: |                                            |                                           |         |        |         |        |         |       
|                                                  |                                                                                     | Depreciation                               |                                           |         | 20,108 |         |        |         | 18,020 |        
|                                                  |                                                                                     | Non-cash compensation expense              |                                           |         | 453    |         |        |         | 163    |        
|                                                  |                                                                                     | Impairment loss on land parcel             |                                           |         |       |         |        |         | 2,396  |        
|                                                  |                                                                                     | Gain on sale of land parcel                |                                           |         |       |         |        |         | (2,291 | )      
|                                                  |                                                                                     | Loss on early retirement of debt           |                                           |         |       |         |        |         | 149    |        
|                                                  |                                                                                     | Benefit for deferred income taxes          |                                           |         | (4,995 | )       |        |         | (5,887 | )      
|                                                  | Changes in operating assets and liabilities                                         |                                            |                                           |         |        |         |        |         |       
|                                                  |                                                                                     | Accounts receivable                        |                                           |         | 1,512  |         |        |         | 4,334  |        
|                                                  |                                                                                     | Other assets                               |                                           |         | (2,213 | )       |        |         | 2,075  |        
|                                                  |                                                                                     | Accounts payable and accrued expenses      |                                           |         | (3,513 | )       |        |         | (4,942 | )      
|                                                  |                                                                                     | Deferred revenue and other liabilities     |                                           |         | 6,039  |         |        |         | 9,392  |        
|                                                  |                                                                                     | Net liabilities of discontinued operations |                                           |         | (29    | )       |        |         | (467   | )      
|                                                  |                                                                                     |                                            |                                           |         |        |         |        |        
|                                                  |                                                                                     |                                            | Net cash provided by operating activities |         |        | 9,381   |        |         |        | 13,539  |  
|                                                  |                                                                                     |                                            |                                           |         |        |         |        |        
|Investing activities:                             |                                                                                     |                                            |                                           |         |        |         |        |        
|                                                  | Capital expenditures                                                                |                                            |                                           | (20,151 | )      |         |        | (30,719 | )     
|                                                  | Change in restricted cash                                                           |                                            |                                           | 489     |        |         |        | 81      |       
|                                                  | Net proceeds from the sale of land parcels                                          |                                            |                                           |        |        |         |        | 12,786  |       
|                                                  |                                                                                     |                                            |                                           |         |        |         |        |        
|                                                  |                                                                                     |                                            | Net cash used in investing activities     |         |        | (19,662 | )      |         |        | (17,852 | )
|                                                  |                                                                                     |                                            |                                           |         |        |         |        |        
|Financing activities:                             |                                                                                     |                                            |                                           |         |        |         |        |        
|                                                  | Borrowings under credit facilities                                                  |                                            |                                           | 24,000  |        |         |        | 37,000  |       
|                                                  | Payments under long-term debt agreements and
    credit facility                    |                                            |                                           | (22,079 | )      |         |        | (13,611 | )     
|                                                  | Proceeds from exercise of stock options                                             |                                            |                                           | 4,567   |        |         |        |        |       
|                                                  | Repurchases of common stock                                                         |                                            |                                           |        |        |         |        | (6,174  | )     
|                                                  | Repurchases of senior subordinated notes payable                                    |                                            |                                           |        |        |         |        | (2,750  | )     
|                                                  |                                                                                     |                                            |                                           |         |        |         |        |        
|                                                  |                                                                                     |                                            | Net cash provided by financing activities |         |        | 6,488   |        |         |        | 14,465  |  
|                                                  |                                                                                     |                                            |                                           |         |        |         |        |        
|Cash provided by (used in) continuing operations  |                                                                                     |                                            | (3,764                                    | )       |        |         | 10,619 |        
|Cash used in discontinued operations              |                                                                                     |                                            | (29                                       | )       |        |         | (467   | )      
|Cash and cash equivalents, at beginning of period |                                                                                     |                                            | 8,110                                     |         |        |         | 3,691  |        
|                                                  |                                                                                     |                                            |                                           |         |        |         |        |        
|Cash and cash equivalents, at end of period       |                                                                                     | $                                          | 4,317                                     |         |        | $       | 13,843 |        
|                                                  |                                                                                     |                                            |                                           |         |        |         |        |        

See accompanying notes to consolidated financial
statements.

4



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##### Table of Contents



BOCA RESORTS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

1.     Basis of
Presentation

The accompanying Unaudited Condensed Consolidated
Financial Statements of Boca Resorts, Inc. and subsidiaries (the
Company) have been prepared in accordance with
generally accepted accounting principles for interim financial
statements and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements.

In the opinion of management, the financial
information furnished in this report reflects all material
adjustments (including normal recurring accruals) necessary for
a fair presentation of the results for the interim periods
presented. The results of operations for the three and six
months ended December 31, 2003 are not necessarily
indicative of the results to be expected for the entire year
primarily due to seasonal variations. All significant
intercompany accounts have been eliminated.

2.     Nature of
Operations

The Company is an owner and operator of five
luxury resorts located in Florida, with hotels, conference
facilities, golf courses, spas, marinas and private clubs. The
Companys resorts include the Boca Raton Resort &
Club (Boca Raton), the Registry Resort at Pelican Bay (Naples),
the Edgewater Beach Hotel (Naples), the Hyatt Regency Pier 66
Resort and Marina (Fort Lauderdale), and the Radisson Bahia Mar
Resort and Yachting Center (Fort Lauderdale). The Company also
owns and operates two golf clubs located in Florida, Grande Oaks
Golf Club in Davie and Naples Grande Golf Club in Naples, and
owns and operates two golf courses in Boca Raton that are part
of the Boca Raton Resort & Club.

3.     Earnings Per
Common Share

Basic earnings (loss) per share equals net income
(loss) divided by the number of weighted average common shares
outstanding. Diluted earnings (loss) per share includes the
effects of common stock equivalents to the extent they are
dilutive.

|                                            |  |                    |        |                  |  |      |        |      |  |  |        |  |  |  |        | 
|------------------------------------------- |  | ------------------ | ------ | ---------------- |  | ---- | ------ | ---- |  |  | ------ |  |  |  | ------ | 
|                                            |  |                    |        |                 
|                                            |  | Three Months Ended |        | Six Months Ended
|                                            |  | December 31,       |        | December 31,    
|                                            |  |                    |        |                 
|                                            |  | 2003               |        | 2002             |  | 2003 |        | 2002
|                                            |  |                    |        |                  |  |      |        |     
|                                            |  |                   
|                                            |  | (In thousands)    
|Basic weighted average shares outstanding   |  |                    | 39,508 |                  |  |      | 39,236 |      |  |  | 39,417 |  |  |  | 39,444 | 
|Stock options                               |  |                    | 1,008  |                  |  |      |       |      |  |  |       |  |  |  |       | 
|                                            |  |                    |        |                  |  |      |        |      |  |  |        |  |  |  |        | 
|Diluted weighted average shares outstanding |  |                    | 40,516 |                  |  |      | 39,236 |      |  |  | 39,417 |  |  |  | 39,444 | 
|                                            |  |                    |        |                  |  |      |        |      |  |  |        |  |  |  |        | 

Options to purchase shares of common stock
totaling 7.0 million and 7.2 million were outstanding
at December 31, 2003 and 2002, respectively, but were not
included in the computation of loss per share for the associated
periods because the effect would be antidilutive.

4.     Stock Option
Plan

The Company grants stock options for a fixed
number of shares to employees with an exercise price equal to
the fair value of the shares at the date of grant. The Company
accounts for the options granted under the intrinsic value
method, which follows the recognition and measurement principles
of Accounting Principals Board Opinion No. 25,
Accounting for Stock Issued to Employees. No
stock-based employee compensation cost is reflected in net loss,
except for certain non-cash compensation expense associated with
the modification in terms of stock option awards which totaled
$453,000 (or $279,000 net of benefit for income taxes) during
the six months ended December 31, 2003 and $163,000 (or
$100,000 net of benefit for income taxes) during the six months
ended December 31, 2002. The following table summarizes the
effect of accounting for stock

5



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##### Table of Contents



BOCA RESORTS, INC.


NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

option awards as if the fair value recognition
provisions of Statement of Financial Accounting Standard
(SFAS) No. 123, as amended by SFAS
No. 148, had been applied for the three and six months
ended December 31, 2003 and 2002 (000s omitted):

|                                                                                                                             |  |                    |       |                  |  |      |      |      |  |   |        |   |  |   |         |  
|---------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----- | ---------------- |  | ---- | ---- | ---- |  | - | ------ | - |  | - | ------- | -
|                                                                                                                             |  |                    |       |                 
|                                                                                                                             |  | Three Months Ended |       | Six Months Ended
|                                                                                                                             |  | December 31,       |       | December 31,    
|                                                                                                                             |  |                    |       |                 
|                                                                                                                             |  | 2003               |       | 2002             |  | 2003 |      | 2002
|                                                                                                                             |  |                    |       |                  |  |      |      |     
|Net income (loss) as reported                                                                                                |  | $                  | 1,551 |                  |  | $    | (333 | )    |  | $ | (7,981 | ) |  | $ | (9,403  | )
|Less: total stock based compensation determined
    under fair value based method for awards, net of related tax
    effects |  |                    | (354  | )                |  |      | (440 | )    |  |   | (731   | ) |  |   | (848    | )
|                                                                                                                             |  |                    |       |                  |  |      |      |      |  |   |        |   |  |   |         |  
|Pro forma net income (loss)                                                                                                  |  | $                  | 1,197 |                  |  | $    | (773 | )    |  | $ | (8,712 | ) |  | $ | (10,251 | )
|                                                                                                                             |  |                    |       |                  |  |      |      |      |  |   |        |   |  |   |         |  
|Net income (loss) per share  basic and
    diluted, as reported                                                             |  | $                  | .04   |                  |  | $    | (.01 | )    |  | $ | (.20   | ) |  | $ | (.24    | )
|                                                                                                                             |  |                    |       |                  |  |      |      |      |  |   |        |   |  |   |         |  
|Net income (loss) per share  basic and
    diluted, Pro forma                                                               |  | $                  | .03   |                  |  | $    | (.02 | )    |  | $ | (.22   | ) |  | $ | (.26    | )
|                                                                                                                             |  |                    |       |                  |  |      |      |      |  |   |        |   |  |   |         |  

The fair value for these options was estimated at
the date of grant using a Black-Scholes option-pricing model
with the following assumptions for the three and six months
ended December 31, 2003 and 2002:

|                        |  |      |         |      |  |  |         |  
|----------------------- |  | ---- | ------- | ---- |  |  | ------- | -
|                        |  | 2003 |         | 2002
|                        |  |      |         |     
|Risk free interest rate |  |      | 1.00    | %    |  |  | 1.50    | %
|Expected lives          |  |      | 6 years |      |  |  | 6 years |  
|Expected volatility     |  |      | 30      | %    |  |  | 30      | %

5.     Shareholders
Equity

The accompanying table sets forth the components
of the change in shareholders equity for the six months
ended December 31, 2003 (000s omitted):

|                           |                             |              |        |              |  |        |     |        |  |             |     |          |  |               |   |   |  |   |         |       |  |   |        |        |   |   |         |        |  
|-------------------------- | --------------------------- | ------------ | ------ | ------------ |  | ------ | --- | ------ |  | ----------- | --- | -------- |  | ------------- | - | - |  | - | ------- | ----- |  | - | ------ | ------ | - | - | ------- | ------ | -
|                           |                             |              |        |              |  |        |     |        |  |            
|                           |                             | Class A      |        | Class B      |  |        |     |        |  |            
|                           |                             | Common Stock |        | Common Stock |  |        |     |        |  |            
|                           |                             |              |        |              |  |        |     |        |  |            
|                           |                             | Number       |        |              |  | Number |     |        |  |             |     |          |  | Total        
|                           |                             | of           |        |              |  | of     |     |        |  | Contributed |     | Retained |  | Shareholders
|                           |                             | Shares       |        | Amount       |  | Shares |     | Amount |  | Capital     |     | Earnings |  | Equity       
|                           |                             |              |        |              |  |        |     |        |  |             |     |          |  |              
|Balance, June 30, 2003     |                             |              | 39,035 |              |  | $      | 390 |        |  |             | 255 |          |  | $             | 3 |   |  | $ | 459,548 |       |  | $ | 60,108 |        |   | $ | 520,049 |       
|                           | Net loss                    |              |        |             |  |        |     |       |  |             |     |         |  |               |   |  |  |   |         |      |  |   |        | (7,981 | ) |   |         | (7,981 | )
|                           | Exercise of stock options   |              |        | 477          |  |        |     | 5      |  |             |     |         |  |               |   |  |  |   |         | 4,562 |  |   |        |       |   |   |         | 4,567  |  
|                           | Other stock option activity |              |        |             |  |        |     |       |  |             |     |         |  |               |   |  |  |   |         | 1,243 |  |   |        |       |   |   |         | 1,243  |  
|                           |                             |              |        |              |  |        |     |        |  |             |     |          |  |               |   |   |  |   |         |       |  |   |        |        |   |   |         |       
|Balance, December 31, 2003 |                             |              | 39,512 |              |  | $      | 395 |        |  |             | 255 |          |  | $             | 3 |   |  | $ | 465,353 |       |  | $ | 52,127 |        |   | $ | 517,878 |       
|                           |                             |              |        |              |  |        |     |        |  |             |     |          |  |               |   |   |  |   |         |       |  |   |        |        |   |   |         |       

6



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##### Table of Contents





|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

This report may not contain all the information
that is important to you and should be read together with the
Annual Report on Form 10-K for the fiscal year ended
June 30, 2003, including the disclosure relating to
critical accounting policies in Managements Discussion and
Analysis. The Securities and Exchange Commission has requested
that all registrants list their most critical accounting
policies in MD&A. The SEC indicated that a
critical accounting policy is one which is both
important to the portrayal of the Companys financial
position and results of operations and requires
managements most difficult, subjective or complex
judgments, often as a result of the need to make estimates about
the effect of matters that are inherently uncertain.

Business Philosophy

The Companys business strategy is to focus
on internal expansion and development opportunities at its
existing resort properties. However, management continuously
evaluates ownership, acquisition and divestiture alternatives
with the intention of maximizing shareholder value.

Seasonality

The resort operations are generally seasonal. The
resorts historically experience greater revenue, costs and
income in the second and third quarters of the fiscal year ended
June 30 due to increased occupancy and room rates during
the winter months. Historically, 16%, 25%, 35% and 24% of annual
revenue has been derived during the first, second, third and
fourth fiscal quarters, respectively.

Events of September 11, 2001

During the three-month period following the
September 11, 2001 terrorist attacks on New Yorks
World Trade Center towers and on the Pentagon, the
Companys results of operations were adversely affected by
travel disruption and short-term cancellation of group bookings
at its properties. The Companys operating results continue
to track slightly below pre-September 11, 2001 levels.

Non-GAAP Financial Measures

This quarterly report on Form 10-Q contains
a non-GAAP financial measure, within the meaning of applicable
Securities and Exchange Commission rules, which we believe is
useful to investors. This financial measure is earnings before
extraordinary and non-recurring items, interest expense,
interest income, income taxes, depreciation and amortization
(EBITDA). EBITDA is used by management, the lodging
industry and certain investors as an indicator of the
Companys historical ability to service debt, to sustain
potential future increases in debt and to satisfy capital
requirements. However, EBITDA is not intended to represent cash
flows for the period. In addition, it has not been presented as
an alternative to either (a) operating income or loss (as
determined by GAAP) as an indicator of operating performance or
(b) cash flows from operating, investing and financing
activities (as determined by GAAP) and is thus susceptible to
varying calculations. EBITDA as presented may not be comparable
to other similarly titled measures of other companies.

7



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##### Table of Contents



The accompanying table sets forth the operating
results for the three and six months ended December 31,
2003 and 2002 (000s omitted):

|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |        |        |         |  
|------------------------------------------------------- | --------------------------------------------- | ---------------------- | ----------------------------- | ---------------- | ------ | ------ | ------- | ------ | ------ | ------ | ------- | ------ | ------ | ------- | ------- | ------ | ------ | ------- | -
|                                                        |                                               |                        |                               |                 
|                                                        |                                               | Three Months Ended     |                               | Six Months Ended
|                                                        |                                               | December 31,           |                               | December 31,    
|                                                        |                                               |                        |                               |                 
|                                                        |                                               | 2003                   |                               | 2002             |        | 2003   |         | 2002  
|                                                        |                                               |                        |                               |                  |        |        |         |       
|Leisure and recreation revenue                          |                                               | $                      | 72,942                        |                  |        | $      | 67,046  |        |        | $      | 119,931 |        |        | $       | 113,338 |       
|Operating expenses:                                     |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|                                                        | Cost of leisure and recreation services       |                        |                               | 33,261           |        |        |         | 31,656 |        |        |         | 59,875 |        |         |         | 58,057 |       
|                                                        | Selling, general and administrative expenses: |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |        |       
|                                                        |                                               | Leisure and recreation |                               |                  | 19,386 |        |         |        | 18,898 |        |         |        | 38,251 |         |         |        | 37,686 |        
|                                                        |                                               | Corporate              |                               |                  | 2,313  |        |         |        | 2,390  |        |         |        | 4,337  |         |         |        | 3,715  |        
|                                                        | Amortization and depreciation:                |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |        |       
|                                                        |                                               | Leisure and recreation |                               |                  | 10,093 |        |         |        | 9,021  |        |         |        | 20,002 |         |         |        | 17,914 |        
|                                                        |                                               | Corporate              |                               |                  | 53     |        |         |        | 53     |        |         |        | 106    |         |         |        | 106    |        
|                                                        | Loss on early retirement of debt              |                        |                               |                 |        |        |         | 149    |        |        |         |       |        |         |         | 149    |       
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|                                                        |                                               |                        | Total operating expenses      |                  |        | 65,106 |         |        |        | 62,167 |         |        |        | 122,571 |         |        |        | 117,627 |  
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|                                                        | Operating income (loss):                      |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |        |       
|                                                        |                                               | Leisure and recreation |                               |                  | 10,202 |        |         |        | 7,471  |        |         |        | 1,803  |         |         |        | (319   | )      
|                                                        |                                               | Corporate              |                               |                  | (2,366 | )      |         |        | (2,592 | )      |         |        | (4,443 | )       |         |        | (3,970 | )      
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|                                                        |                                               |                        | Total operating income (loss) |                  |        | 7,836  |         |        |        | 4,879  |         |        |        | (2,640  | )       |        |        | (4,289  | )
|Interest and other income                               |                                               |                        | 117                           |                  |        |        | 9       |        |        |        | 176     |        |        |         | 39      |       
|Interest expense                                        |                                               |                        | (5,430                        | )                |        |        | (5,429  | )      |        |        | (10,512 | )      |        |         | (11,040 | )     
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|Income (loss) before benefit for income taxes           |                                               |                        | 2,523                         |                  |        |        | (541    | )      |        |        | (12,976 | )      |        |         | (15,290 | )     
|(Provision) benefit for income taxes                    |                                               |                        | (972                          | )                |        |        | 208     |        |        |        | 4,995   |        |        |         | 5,887   |       
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|Net income (loss)                                       |                                               | $                      | 1,551                         |                  |        | $      | (333    | )      |        | $      | (7,981  | )      |        | $       | (9,403  | )     
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|Net cash provided by (used in) operating
    activities |                                               | $                      | (3,627                        | )                |        | $      | 2,324   |        |        | $      | 9,381   |        |        | $       | 13,539  |       
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|Net cash used in investing activities                   |                                               | $                      | (8,215                        | )                |        | $      | (12,315 | )      |        | $      | (19,662 | )      |        | $       | (17,852 | )     
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|Net cash provided by financing activities               |                                               | $                      | 8,961                         |                  |        | $      | 14,167  |        |        | $      | 6,488   |        |        | $       | 14,465  |       
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       
|EBITDA                                                  |                                               | $                      | 17,982                        |                  |        | $      | 14,265  |        |        | $      | 17,921  |        |        | $       | 14,043  |       
|                                                        |                                               |                        |                               |                  |        |        |         |        |        |        |         |        |        |         |         |       

The accompanying table reconciles EBITDA to net
income (loss) for the three and six months ended
December 31, 2003 and 2002 (000s omitted):

|                                                   |  |                    |         |                  |  |      |        |      |  |   |         |   |  |   |         |  
|-------------------------------------------------- |  | ------------------ | ------- | ---------------- |  | ---- | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                   |  |                    |         |                 
|                                                   |  | Three Months Ended |         | Six Months Ended
|                                                   |  | December 31,       |         | December 31,    
|                                                   |  |                    |         |                 
|                                                   |  | 2003               |         | 2002             |  | 2003 |        | 2002
|                                                   |  |                    |         |                  |  |      |        |     
|EBITDA                                             |  | $                  | 17,982  |                  |  | $    | 14,265 |      |  | $ | 17,921  |   |  | $ | 14,043  |  
|Less: Depreciation                                 |  |                    | (10,146 | )                |  |      | (9,074 | )    |  |   | (20,108 | ) |  |   | (18,020 | )
|Less: Interest expense                             |  |                    | (5,430  | )                |  |      | (5,429 | )    |  |   | (10,512 | ) |  |   | (11,040 | )
|Less: Non-recurring, non-cash compensation expense |  |                    |        |                  |  |      | (163   | )    |  |   | (453    | ) |  |   | (163    | )
|Less: Loss on early retirement of debt             |  |                    |        |                  |  |      | (149   | )    |  |   |        |   |  |   | (149    | )
|Plus: Interest income                              |  |                    | 117     |                  |  |      | 9      |      |  |   | 176     |   |  |   | 39      |  
|Plus (less): (Provision) benefit for income taxes  |  |                    | (972    | )                |  |      | 208    |      |  |   | 4,995   |   |  |   | 5,887   |  
|                                                   |  |                    |         |                  |  |      |        |      |  |   |         |   |  |   |         |  
|Net income (loss)                                  |  | $                  | 1,551   |                  |  | $    | (333   | )    |  | $ | (7,981  | ) |  | $ | (9,403  | )
|                                                   |  |                    |         |                  |  |      |        |      |  |   |         |   |  |   |         |  

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##### Table of Contents



See Condensed Consolidated Statements of Cash
Flow for a reconciliation of net income to net cash flow from
operating activities for the six months ended December 31,
2003 and 2002.

The accompanying table sets forth additional
operating data for the three and six months ended
December 31, 2003 and 2002 (000s omitted, except
operating statistics):

|                                                            |                          |                                      |         |                  |        |        |         |        |        |      |    |        |   |   |         |        |         |   |         |        |         |  |    |    |   |  
|----------------------------------------------------------- | ------------------------ | ------------------------------------ | ------- | ---------------- | ------ | ------ | ------- | ------ | ------ | ---- | -- | ------ | - | - | ------- | ------ | ------- | - | ------- | ------ | ------- |  | -- | -- | - | -
|                                                            |                          |                                      |         |                 
|                                                            |                          | Three Months Ended                   |         | Six Months Ended
|                                                            |                          | December 31,                         |         | December 31,    
|                                                            |                          |                                      |         |                 
|                                                            |                          |                                      |         | %                |        |        |         | %     
|                                                            |                          | 2003                                 |         | 2002             |        | Change |         | 2003   |        | 2002 |    | Change
|                                                            |                          |                                      |         |                  |        |        |         |        |        |      |    |       
|Revenue:                                                    |                          |                                      |         |                  |        |        |         |        |        |      |    |        |   |   |         |        |         |   |         |        |         |  |    |   
|                                                            | Room revenue             |                                      | $       | 27,115           |        |        | $       | 25,032 |        |      |    | 8      | % |   | $       | 43,413 |         |   | $       | 41,239 |         |  |    | 5  | %
|                                                            | Non-room related revenue |                                      |         | 45,827           |        |        |         | 42,014 |        |      |    | 9      | % |   |         | 76,518 |         |   |         | 72,099 |         |  |    | 6  | %
|                                                            |                          |                                      |         |                  |        |        |         |        |        |      |    |        |   |   |         |        |         |   |         |        |         |  |    |   
|                                                            |                          | Total leisure and recreation revenue |         | $                | 72,942 |        |         | $      | 67,046 |      |    |        | 9 | % |         | $      | 119,931 |   |         | $      | 113,338 |  |    |    | 6 | %
|Operating Statistics:                                       |                          |                                      |         |                  |        |        |         |        |        |      |    |        |   |   |         |        |         |   |         |        |         |  |    |   
|Available room nights                                       |                          |                                      | 213,103 |                  |        |        | 213,164 |        |        |      |   |        |   |   | 426,267 |        |         |   | 426,328 |        |         |  |   |   
|Average daily rate                                          |                          | $                                    | 206.97  |                  |        | $      | 215.16  |        |        |      | (4 | )%     |   | $ | 170.98  |        |         | $ | 176.68  |        |         |  | (3 | )%
|Occupancy                                                   |                          |                                      | 61.5    | %                |        |        | 54.6    | %      |        |      | 13 | %      |   |   | 59.6    | %      |         |   | 54.7    | %      |         |  | 9  | % 
|Room revenue per available room                             |                          | $                                    | 127.24  |                  |        | $      | 117.43  |        |        |      | 8  | %      |   | $ | 101.84  |        |         | $ | 96.73   |        |         |  | 5  | % 
|Total leisure and recreation revenue per
    available room |                          | $                                    | 342.27  |                  |        | $      | 314.53  |        |        |      | 9  | %      |   | $ | 281.34  |        |         | $ | 265.85  |        |         |  | 6  | % 

Leisure and Recreation Revenue

Leisure and recreation revenue totaled
$72.9 million and $67.0 million for the three months
ended December 31, 2003 and 2002, respectively, and
$119.9 million and $113.3 million for the six months
ended December 31, 2003 and 2002, respectively. The
increase in revenue for the three and six months ended
December 31, 2003, compared to the three and six months
ended December 31, 2002, resulted from increases in revenue
at each of the Companys properties. Increases in revenue
generally were derived through increased occupancy at the
Companys resorts, partially offset by a decrease in
average daily room rates. The decrease in average daily room
rates was partially in response to the Companys automated
yield management system, which seeks to maximize hotel revenue
by recommending the optimal mix between occupancy and room rates.

Revenue increases at the Companys Naples
properties during the three and six months ended
December 31, 2003, versus the three and six months ended
December 31, 2002, were primarily a result of room
renovations being performed during the prior year period at both
the Registry Resort and Edgewater Beach Hotel. Revenue increases
at the Companys Fort Lauderdale properties during the
three and six months ended December 31, 2003, compared to
the three and six months ended December 31, 2002, were
primarily the result of more group and leisure business. The
Fort Lauderdale properties had over 3,850 more occupied room
nights during the three months ended December 31, 2003,
than during the three months ended December 31, 2002, and
over 7,300 more occupied room nights during the six months ended
December 31, 2003, than during the six months ended
December 31, 2002. The increase in occupied room nights at
the Companys Fort Lauderdale properties during the three
and six months ended December 31, 2003, versus the three
and six months ended December 31, 2002, was partially
because the Bahia Mar Resort & Yachting Center was
undergoing a marina renovation during the prior year period and
because the Company continues to experience strong call center
volume and web booking trends. The Companys Boca Raton
Resort & Club continues to benefit from increases in
non-room revenue as a result of property renovations and added
amenities. In addition to a comprehensive guestroom renovation,
capital enhancements over the past six years have included a new
112 water-view room marina hotel and marina slips (the
Yacht Club), a 50,000 square foot spa complex, a
golf clubhouse, additional retail and restaurant space, a
140,000 square foot conference center, a redesigned golf course
and a tennis and fitness center.

9



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##### Table of Contents



Leisure and Recreation Operating
Expenses

Cost of leisure and recreation services totaled
$33.3 million, or 46% of revenue, for the three months
ended December 31, 2003, compared to cost of leisure and
recreation services of $31.7 million, or 47% of revenue,
for the three months ended December 31, 2002. Cost of
leisure and recreation services totaled $59.9 million, or
50% of revenue, for the six months ended December 31, 2003,
compared to cost of leisure and recreation services of
$58.1 million, or 51% of revenue, for the six months ended
December 31, 2002. Cost of leisure and recreation services
primarily consisted of direct costs to service rooms, marinas,
food and beverage operations, retail establishments, spas and
other amenities at the resorts.

Leisure and recreation selling, general and
administrative expenses (S,G&A) totaled
$19.4 million, or 27% of revenue, for the three months
ended December 31, 2003, compared to S,G&A of
$18.9 million, or 28% of revenue, for the three months
ended December 31, 2002. Leisure and recreation S,G&A
totaled $38.3 million, or 32% of revenue, for the three
months ended December 31, 2003, compared to S,G&A of
$37.7 million, or 33% of revenue, for the three months
ended December 31, 2002. Leisure and recreation S,G&A
includes, among other items, administrative payroll costs,
selling and marketing expenses, energy and property costs,
insurance, real estate taxes, franchise agreement fees and other
administrative expenses. Although leisure and recreation
S,G&A as a percent of revenue decreased slightly for the
three and six months ended December 31, 2003, compared to
the three and six months ended December 31, 2002, the
Company continues to be adversely affected by an increase in
energy and insurance costs, which were partially offset by a
decrease in costs associated with golf course leases with third
parties which recently expired.

Leisure and recreation depreciation expense
totaled $10.1 million and $9.0 million for the three
months ended December 31, 2003 and 2002, respectively, and
$20.0 million and $17.9 million for the six months
ended December 31, 2003 and 2002, respectively. The
increase in depreciation expense for the three and six months
ended December 31, 2003, compared to the three and six
months ended December 31, 2002, was primarily the result of
an increase in depreciation expense following the completion of
room renovations at the Registry Resort (resulting in a
$1.1 million increase in depreciation expense for the
six-month period) and Edgewater Beach Hotel (resulting in a
$91,000 increase in depreciation expense for the six-month
period) and the marina renovation at the Bahia Mar Resort &
Yachting Center (resulting in a $305,000 increase in
depreciation expense for the six-month period).

Leisure and Recreation Operating Income
(Loss)

Leisure and recreation operations reported
operating income of $10.2 million and $7.5 million for
the three months ended December 31, 2003 and 2002,
respectively. Leisure and recreation operations reported
operating income of $1.8 million for the six months ended
December 31, 2003, compared to an operating loss of
$319,000 for the six months ended December 31, 2002. The
increase in operating results for the three and six months ended
December 31, 2003, versus the three and six months ended
December 31, 2002, was primarily due to an increase in
revenue partially offset by higher depreciation expense.

Corporate General and Administrative
Expenses

Corporate general and administrative expenses
totaled $2.3 million and $2.4 million for the three
months ended December 31, 2003 and 2002, respectively, and
$4.3 million and $3.7 million for the six months ended
December 31, 2003 and 2002, respectively. The increase in
corporate general and administrative expenses during the six
months ended December 31, 2003, compared to the six months
ended December 31, 2002, was primarily because the 2003
period included an increase in compensation expense associated
with the modification in terms of certain stock option awards
and an increase in costs associated with corporate governance
issues pursuant to the Sarbanes-Oxley Act of 2002.

Interest Expense

Interest expense totaled $5.4 for both the three
months ended December 31, 2003 and 2002 and
$10.5 million and $11.0 million for the six months
ended December 31, 2003 and 2002, respectively. The
decrease in interest expense during the six months ended
December 31, 2003, versus the six months ended

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##### Table of Contents



December 31, 2002, was the result of a
$207,000 increase in the amount of interest capitalized on
projects under construction together with a $254,000 decrease in
interest expense resulting from lower average outstanding
indebtedness during the 2003 period.


Provision/Benefit for Income Taxes

The Company recorded provisions and benefits for
income taxes equal to 38.5% of pretax income (loss) during
the three and six months ended December 31, 2003 and 2002.

Net Income (Loss)

Net income totaled $1.6 million for the
three months ended December 31, 2003, compared to a net
loss of $333,000 during the three months ended December 31,
2002. Net loss totaled $8.0 million and $9.4 million
for the six months ended December 31, 2003 and 2002,
respectively. The improvement in operating results for the three
and six months ended December 31, 2003, versus the three
and six months ended December 31, 2002, was primarily due
to an increase in revenue partially offset by higher
depreciation expense. See also explanations for such financial
statement captions set forth above.

Liquidity and Capital Resources

Unrestricted cash and cash equivalents decreased
to $4.3 million at December 31, 2003, from
$8.1 million at June 30, 2003. The major components of
the change are discussed below.

Net Cash
Provided by Operating Activities

Net cash provided by operating activities totaled
$9.4 million and $13.5 million for the six months
ended December 31, 2003 and 2002, respectively. The
decrease in net cash provided by operating activities for the
six months ended December 31, 2003, compared to the six
months ended December 31, 2002, is primarily due to the
timing in collection of advance deposits. Because the lead-time
in booking leisure and group business has become shorter-term in
nature, advance deposits are collected closer to the
customers stay at the Companys resorts.

Net Cash Used
In Investing Activities

Net cash used in investing activities totaled
$19.7 million and $17.9 million for the six months
ended December 31, 2003 and 2002, respectively. Although
the Company received $12.8 million in proceeds from the
sale of land parcels located in Naples and Fort Lauderdale,
Florida during the prior year six-month period, it incurred
$10.5 million more in capital expenditures during the same
period as more fully discussed below.

During the six months ended December 31,
2003 capital expenditures included the final stages of a marina
renovation at the Bahia Mar Resort and Yachting Center. This
extensive marina renovation, which was funded substantially from
operations, results in a state-of-the art yachting center with
245 reconfigured boat slips, sized to accommodate larger yachts
ranging from 80 feet to over 200 feet, without reducing the
rentable linear feet. The Company also completed a number of
smaller initiatives during the six-month period including the
renovation of the pool area at the Boca Raton Resort & Club
and new themed restaurants at Pier 66 Resort and Marina and
at Registry Resort.

During the six months ended December 31,
2002, capital expenditures included a comprehensive room
renovation at the Registry Resort covering 395 guestrooms, which
included all new furnishings and new five fixture bathrooms. The
Company also renovated approximately 60 guest suites at the
Edgewater Beach Hotel.

The change in restricted cash was not material
from June 30, 2003 to December 31, 2003 or from
June 30, 2002 to December 31, 2002.

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Net Cash
Provided by Financing Activities

Net cash provided by financing activities totaled
$6.5 million and $14.5 million during the six months
ended December 31, 2003 and 2002, respectively. Financing
activities for the periods primarily includes borrowings, net of
repayments, under the Companys revolving credit facility,
proceeds from the exercise of stock options, as well as,
repurchases of the Companys common stock and senior
subordinated notes payable. The decrease in net borrowings
during the six months ended December 31, 2003, compared to
the six months ended December 31, 2002, was the result of a
decrease in capital expenditures over the same period.

Capital
Resources

The Companys capital resources are provided
from both internal and external sources. The primary capital
resources from internal sources include (1) room rentals,
food and beverage sales, retail sales, spa revenue, golf
revenue, tennis revenue, marina and conference service revenue
at the resorts and (2) Premier Club membership revenue net
of related costs. The primary external sources of liquidity have
been the issuance of debt securities, borrowing under term loans
and credit lines, the issuance of Company stock for property
acquisitions and the exercise of non-qualified stock options by
employees pursuant to the Companys stock option plan.

As of December 31, 2003, the Company had
$20.0 million outstanding under its revolving credit line
(which matures on June 30, 2005) and had $85.3 million
in immediate availability. As a result of the current
availability under this credit line, combined with cash on hand,
management believes the Company has sufficient funds to continue
its capital enhancement plans during the remainder of fiscal
2004 (which are estimated to cost an additional
$5.0 million to $7.0 million) and support on-going
operations, including meeting debt service obligations as they
come due.

As of December 31, 2003, the Company had
$190.1 million principal amount of 9.875% senior
subordinated notes due April 15, 2009 outstanding. The
notes are redeemable at the option of the Company, in whole or
in part, in cash, on or after April 15, 2004, together with
accrued and unpaid interest, if any, to the date of redemption.
The optional redemption prices for the twelve month periods
beginning April 15 are: 2004  104.9375%;
2005  103.2910%; 2006  101.6450% and 2007
and thereafter  100.00%.

Financial Condition

Significant changes in balance sheet data from
June 30, 2003 to December 31, 2003 are discussed below.

Inventory

Inventory increased to $7.7 million at
December 31, 2003, from $6.6 million at June 30, 2003.
Changes in inventory levels result, in large part, due to the
seasonality of the Companys business. The most significant
increases in inventory were in retail clothing apparel at the
Companys resort retail shops to stock for the ensuing peak
operating season.

Other Current
Assets

Other current assets increased to
$4.2 million at December 31, 2003, from
$3.2 million at June 30, 2003. The increase was due to
the payment of the annual premium for the Companys
directors and officers liability insurance partially offset by
two months amortization of such premium.

Accounts
Payable and Accrued Expenses

Accounts payable and accrued expenses decreased
to $26.8 million at December 31, 2003, from
$33.5 million at June 30, 2003. The decrease in
accounts payable and accrued expenses was primarily due to the
payment of income taxes in July 2003 and real estate taxes in
November 2003.

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Current
Portion of Deferred Revenue and Advance Deposits

Current portion of deferred revenue and advance
deposits increased to $30.9 million at December 31,
2003, from $23.3 million at June 30, 2003. The
increase substantially related to the receipt of annual Premier
Club dues at the Boca Raton Resort & Club. The Company bills
annual Premier Club dues in August of each year. The annual dues
are being recognized as revenue ratably over the membership
year, which commenced on October 1.

Deferred
Income Taxes

Deferred income taxes decreased to
$28.5 million at December 31, 2003, from
$34.2 million at June 30, 2003. The decrease was the
result of recording a $5.0 million benefit for income taxes
following the pretax loss for the December six-month period
together with recording the tax deduction in the amount of
$790,000 associated with the exercise of employee stock options.



| |                
| | ---------------
| | Working Capital

Current liabilities exceeded current assets by
$19.0 million and $14.8 million at December 31,
2003 and June 30, 2003, respectively. Current liabilities
exceeded current assets at both December 31, 2003 and
June 30, 2003 primarily because the Company repurchased
$149.9 million principal amount of senior subordinated
notes over the past three years and such notes would have
otherwise matured in April 2009. The repurchase of the notes
resulted in, among other things, a decrease in the Company
average cost of borrowing. However, the ratio of current
liabilities to current assets is not indicative of a lack of
liquidity as the Company maintains a revolving credit line that
represents an additional and immediate potential source of
liquidity. See Capital Resources.

Forward-Looking Statements

Some of the information in this report may
contain forward-looking statements. These statements discuss
future expectations, contain projections of results of
operations or of financial position, or state other
forward-looking information. When considering such
forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in this report. The risk
factors include certain known and unknown risks and
uncertainties, and could cause the Companys actual results
to differ materially from those contained in any forward looking
statement.

These risk factors include, among others, risks
relating to travel; risks associated with construction and
development at the Companys properties; competition in the
Companys principal business; the availability of financing
on terms suitable to the Company and the Companys
dependence on key personnel, as well as other risk factors
discussed from time to time in the Companys Securities and
Exchange Commission filings. Risks relating to travel include a
change in travel patterns resulting from slowing economic
conditions and geopolitical conditions, as well as changes in
corporate policies relating to group meetings and air or other
travel disruption.

Item 3.     Quantitative
and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4.     Controls
and Procedures

As of December 31, 2003, the Company carried
out an evaluation, under the supervision and with the
participation of the Companys management, including the
Companys chairman of the board (the Companys
principal executive officer) and chief financial officer, of the
effectiveness of the design and operation of the Companys
disclosure controls and procedures pursuant to Exchange Act
Rule 13a-14. The Companys disclosure controls and
procedures are designed to ensure that information required to
be disclosed by the Company in its periodic filings with the
Securities and Exchange Commission (SEC) is
effectively recorded, processed and reported within the time
periods specified in the SECs rules and forms. In designing

13



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##### Table of Contents



and evaluating the disclosure controls and
procedures, the Companys management recognized that any
controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the
desired objectives and management necessarily was required to
apply its judgment in evaluating the cost-benefit relationship
of possible controls and procedures. It should be noted that the
design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can
be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions, regardless
of how remote. Based on the foregoing, the Companys
chairman of the board and chief financial officer concluded as
of December 31, 2003 that the Companys disclosure
controls and procedures were effective in timely alerting them
to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the
Companys periodic SEC filings. Additionally, there have
been no significant changes in the Companys internal
controls or in other factors that could significantly affect the
internal controls subsequent to the date the Company completed
its evaluation.


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##### Table of Contents






PART II  OTHER
INFORMATION



|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings

The Company is not currently involved in any
material legal proceedings.



|        |                                              
|------- | ---------------------------------------------
|Item 2. | Changes in Securities and Use of
    Proceeds

None.



|        |                                    
|------- | -----------------------------------
|Item 3. | Defaults Upon Senior
    Securities

None.



|        |                                                        
|------- | -------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders

At the Annual Meeting of Stockholders held on
November 7, 2003, the shareholders voted to elect the
directors named in the proxy materials dated September 30,
2003 and voted to ratify the selection of Ernst & Young LLP
as the Companys independent public accountants for the
year ending June 30, 2004. The results of the voting were
as follows:

|                                          |                        |     |               |               |  |          |       |         |  |        |   |               |  |  |       |   |  |  |   |   |  |  |               |               | 
|----------------------------------------- | ---------------------- | --- | ------------- | ------------- |  | -------- | ----- | ------- |  | ------ | - | ------------- |  |  | ----- | - |  |  | - | - |  |  | ------------- | ------------- | 
|                                          |                        |     |               |               |  |          |       |         |  | Broker |   |              
|                                          |                        |     |               |               |  |          |       |         |  | Non-   |   |              
|                                          |                        | For |               | Against       |  | Withheld |       | Abstain |  | Votes  |   | Total(1)     
|                                          |                        |     |               |               |  |          |       |         |  |        |   |              
|Election of Directors:                    |                        |     |               |               |  |          |       |         |  |        |   |               |  |  |       |   |  |  |   |   |  |  |               |              
|                                          | Steven R. Berrard      |     |               | 2,585,075,526 |  |          |       |        |  |        |   | 30,642        |  |  |       |  |  |  |   |  |  |  |               | 2,585,106,168 | 
|                                          | Dennis J. Callaghan    |     |               | 2,585,007,044 |  |          |       |        |  |        |   | 99,124        |  |  |       |  |  |  |   |  |  |  |               | 2,585,106,168 | 
|                                          | Michael S. Egan        |     |               | 2,585,078,313 |  |          |       |        |  |        |   | 27,855        |  |  |       |  |  |  |   |  |  |  |               | 2,585,106,168 | 
|                                          | Harris W. Hudson       |     |               | 2,585,074,619 |  |          |       |        |  |        |   | 31,549        |  |  |       |  |  |  |   |  |  |  |               | 2,585,106,168 | 
|                                          | H. Wayne Huizenga      |     |               | 2,584,997,748 |  |          |       |        |  |        |   | 108,420       |  |  |       |  |  |  |   |  |  |  |               | 2,585,106,168 | 
|                                          | George D. Johnson, Jr. |     |               | 2,585,078,323 |  |          |       |        |  |        |   | 27,845        |  |  |       |  |  |  |   |  |  |  |               | 2,585,106,168 | 
|                                          | Henry Latimer          |     |               | 2,583,151,382 |  |          |       |        |  |        |   | 1,954,786     |  |  |       |  |  |  |   |  |  |  |               | 2,585,106,168 | 
|                                          | Peter H. Roberts       |     |               | 2,585,078,744 |  |          |       |        |  |        |   | 27,424        |  |  |       |  |  |  |   |  |  |  |               | 2,585,106,168 | 
|                                          | Richard C. Rochon      |     |               | 22,061,150    |  |          |       |        |  |        |   | 2,563,045,018 |  |  |       |  |  |  |   |  |  |  |               | 2,585,106,168 | 
|Ratify Selection of Ernst & Young
    LLP |                        |     | 2,585,099,004 |               |  |          | 3,856 |         |  |        |  |               |  |  | 3,308 |   |  |  |  |   |  |  | 2,585,106,168 |              



---



|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(1) | Each share of Class A Common Stock is
    entitled to one vote and each share of Class B Common Stock
    is entitled to 10,000 votes.



|        |                  
|------- | -----------------
|Item 5. | Other Information

None.



|        |                                      
|------- | -------------------------------------
|Item 6. | Exhibits and Reports on
    Form 8-K.

(a)Exhibits

|         |      |  |  |                        |  |                                                                                         
|-------- | ---- |  |  | ---------------------- |  | ----------------------------------------------------------------------------------------
|Exhibits |      |  |  | Description Of Exhibit
|         |      |  |  |                       
|         | 31.1 |  |  |                       |  | Certification Pursuant to Section 302 of the
    Sarbanes-Oxley Act  H. Wayne Huizenga.
|         | 31.2 |  |  |                       |  | Certification Pursuant to Section 302 of the
    Sarbanes-Oxley Act  Wayne Moor.       
|         | 32.1 |  |  |                       |  | Certification Pursuant to Section 906 of the
    Sarbanes-Oxley Act.                    

(b)Reports on Form 8-K

None.

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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.



| |                   
| | ------------------
| | BOCA RESORTS, INC.



| |     |               
| | --- | --------------
| | By: | /s/ WAYNE MOOR

| |                                                                                                   
| | --------------------------------------------------------------------------------------------------
| |                                                                                                   
| | Wayne Moor                                                                                        
| | Senior Vice President, Treasurer and Chief
    Financial Officer
    (Principal Financial Officer)



| |     |                       
| | --- | ----------------------
| | By: | /s/ MARYJO FINOCCHIARO

| |                                                                           
| | --------------------------------------------------------------------------
| |                                                                           
| | MaryJo Finocchiaro                                                        
| | Vice President and Corporate Controller
    (Principal Accounting Officer)

Date: February 3, 2004

16