##### 









SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549




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FORM 10-Q

(Mark One)

|                                                     |  |                                                                                             
|---------------------------------------------------- |  | --------------------------------------------------------------------------------------------
|x                                                    |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|For the quarterly period ended
    December 31, 2002
|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(State of Incorporation)                                                         |  | 65-0676005(I.R.S. Employer Identification No.)
|                                                                                        
|501 East Camino Real
    Boca Raton, Florida(Address of Principal Executive
    Offices) |  | 33432(Zip Code)                               

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 x     No o

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

As of February 3, 2003, there were
38,947,079 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.



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##### 



PART I  FINANCIAL
INFORMATION

Item 1.     Financial
Statements

BOCA RESORTS, INC.

CONDENSED CONSOLIDATED BALANCE
SHEETS

(In thousands, except share data)


(Unaudited)


|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |         |         | 
|-------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ------- | -------- | ------- |  | ------- | ------- | ------- | 
|                                                   |                                                                                                                                                                                                  | December 31,                               |         | June 30,
|                                                   |                                                                                                                                                                                                  | 2002                                       |         | 2002    
|                                                   |                                                                                                                                                                                                  |                                            |         |         
|ASSETS                                            
|Current assets:                                    |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   | Cash and cash equivalents                                                                                                                                                                        |                                            | $       | 13,843   |         |  | $       | 3,691   |        
|                                                   | Restricted cash                                                                                                                                                                                  |                                            |         | 640      |         |  |         | 721     |        
|                                                   | Accounts receivable, net                                                                                                                                                                         |                                            |         | 17,257   |         |  |         | 21,591  |        
|                                                   | Inventory                                                                                                                                                                                        |                                            |         | 6,995    |         |  |         | 6,433   |        
|                                                   | Current portion of Premier Club notes receivable                                                                                                                                                 |                                            |         | 3,558    |         |  |         | 3,382   |        
|                                                   | Other current assets                                                                                                                                                                             |                                            |         | 3,430    |         |  |         | 3,223   |        
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total current assets                       |         |          | 45,723  |  |         |         | 39,041  | 
|Property and equipment, net                        |                                                                                                                                                                                                  |                                            | 821,067 |          |         |  | 822,630 |        
|Intangible assets, net                             |                                                                                                                                                                                                  |                                            | 34,518  |          |         |  | 34,518  |        
|Long-term portion of Premier Club notes receivable |                                                                                                                                                                                                  |                                            | 7,121   |          |         |  | 7,410   |        
|Other assets                                       |                                                                                                                                                                                                  |                                            | 10,598  |          |         |  | 13,137  |        
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total assets                               |         | $        | 919,027 |  |         | $       | 916,736 | 
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|LIABILITIES AND SHAREHOLDERS
    EQUITY          
|Current liabilities:                               |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   | Accounts payable and accrued expenses                                                                                                                                                            |                                            | $       | 24,250   |         |  | $       | 30,222  |        
|                                                   | Current portion of deferred revenue and advance
    deposits                                                                                                                                     |                                            |         | 32,565   |         |  |         | 22,355  |        
|                                                   | Net liabilities of discontinued operations                                                                                                                                                       |                                            |         | 1,969    |         |  |         | 2,436   |        
|                                                   | Current portion of credit line and note payable                                                                                                                                                  |                                            |         | 42,409   |         |  |         | 227     |        
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total current liabilities                  |         |          | 101,193 |  |         |         | 55,240  | 
|Credit line and note payable                       |                                                                                                                                                                                                  |                                            |        |          |         |  | 18,793  |        
|Deferred revenue, net of current portion           |                                                                                                                                                                                                  |                                            | 38,618  |          |         |  | 38,073  |        
|Other liabilities                                  |                                                                                                                                                                                                  |                                            | 9,561   |          |         |  | 9,695   |        
|Deferred income taxes                              |                                                                                                                                                                                                  |                                            | 24,165  |          |         |  | 30,052  |        
|Senior subordinated notes payable                  |                                                                                                                                                                                                  |                                            | 190,145 |          |         |  | 192,895 |        
|Premier Club refundable membership fees            |                                                                                                                                                                                                  |                                            | 54,487  |          |         |  | 55,716  |        
|Commitments and contingencies                      |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|Shareholders equity:                              |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   | Class A Common Stock, $.01 par value,
    100,000,000 shares authorized and 38,947,079 and 39,538,479
    shares issued and outstanding at December 31, 2002 and
    June 30, 2002, respectively |                                            |         | 389      |         |  |         | 395     |        
|                                                   | Class B Common Stock, $.01 par value,
    10,000,000 shares authorized and 255,000 shares issued and
    outstanding at June 30, 2002 and 2001.                                                  |                                            |         | 3        |         |  |         | 3       |        
|                                                   | Contributed capital                                                                                                                                                                              |                                            |         | 458,560  |         |  |         | 464,565 |        
|                                                   | Retained earnings                                                                                                                                                                                |                                            |         | 41,906   |         |  |         | 51,309  |        
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total shareholders equity                 |         |          | 500,858 |  |         |         | 516,272 | 
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        
|                                                   |                                                                                                                                                                                                  | Total liabilities and shareholders equity |         | $        | 919,027 |  |         | $       | 916,736 | 
|                                                   |                                                                                                                                                                                                  |                                            |         |          |         |  |         |        

See accompanying notes to consolidated financial
statements.

1



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##### 



BOCA RESORTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

For the Three Months Ended
December 31


(In thousands, except per share
data)


(Unaudited)


|                                                                                     |                                              |                          |        |        |        |   |        |        |        | 
|------------------------------------------------------------------------------------ | -------------------------------------------- | ------------------------ | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                                                                     |                                              | 2002                     |        | 2001  
|                                                                                     |                                              |                          |        |       
|Leisure and recreation revenue                                                       |                                              | $                        | 67,046 |        |        | $ | 57,782 |       
|Operating expenses:                                                                  |                                              |                          |        |        |        |   |        |       
|                                                                                     | Cost of leisure and recreation services      |                          |        | 31,656 |        |   |        | 27,892 |       
|                                                                                     | Selling, general and administrative expenses |                          |        | 21,288 |        |   |        | 20,848 |       
|                                                                                     | Depreciation                                 |                          |        | 9,074  |        |   |        | 8,518  |       
|                                                                                     | Loss on early retirement of debt             |                          |        | 149    |        |   |        | 198    |       
|                                                                                     |                                              |                          |        |        |        |   |        |       
|                                                                                     |                                              | Total operating expenses |        |        | 62,167 |   |        |        | 57,456 | 
|                                                                                     |                                              |                          |        |        |        |   |        |       
|Operating income                                                                     |                                              |                          | 4,879  |        |        |   | 326    |       
|Interest and other income                                                            |                                              |                          | 9      |        |        |   | 267    |       
|Interest expense                                                                     |                                              |                          | (5,429 | )      |        |   | (5,158 | )     
|                                                                                     |                                              |                          |        |        |        |   |        |       
|Loss before income taxes                                                             |                                              |                          | (541   | )      |        |   | (4,565 | )     
|Benefit for income taxes                                                             |                                              |                          | 208    |        |        |   | 1,826  |       
|                                                                                     |                                              |                          |        |        |        |   |        |       
|Net loss                                                                             |                                              | $                        | (333   | )      |        | $ | (2,739 | )     
|                                                                                     |                                              |                          |        |        |        |   |        |       
|Net loss per share  basic and diluted                                               |                                              | $                        | (0.01  | )      |        | $ | (0.07  | )     
|                                                                                     |                                              |                          |        |        |        |   |        |       
|Weighted average shares used in computing net
    loss per share  basic and diluted |                                              |                          | 39,236 |        |        |   | 39,702 |       
|                                                                                     |                                              |                          |        |        |        |   |        |       

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


(In thousands, except per share
data)


(Unaudited)


|                                                                                              |                                              |                          |         |        |         |   |         |        |         | 
|--------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------ | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                                                                                              |                                              | 2002                     |         | 2001  
|                                                                                              |                                              |                          |         |       
|Leisure and recreation revenue                                                                |                                              | $                        | 113,338 |        |         | $ | 97,302  |       
|Operating expenses:                                                                           |                                              |                          |         |        |         |   |         |       
|                                                                                              | Cost of leisure and recreation services      |                          |         | 58,057 |         |   |         | 51,938 |        
|                                                                                              | Selling, general and administrative expenses |                          |         | 41,401 |         |   |         | 40,148 |        
|                                                                                              | Depreciation                                 |                          |         | 18,020 |         |   |         | 16,228 |        
|                                                                                              | Loss on early retirement of debt             |                          |         | 149    |         |   |         | 1,613  |        
|                                                                                              |                                              |                          |         |        |         |   |         |       
|                                                                                              |                                              | Total operating expenses |         |        | 117,627 |   |         |        | 109,927 | 
|                                                                                              |                                              |                          |         |        |         |   |         |       
|Operating loss                                                                                |                                              |                          | (4,289  | )      |         |   | (12,625 | )     
|Interest and other income                                                                     |                                              |                          | 39      |        |         |   | 984     |       
|Interest expense                                                                              |                                              |                          | (11,040 | )      |         |   | (12,112 | )     
|                                                                                              |                                              |                          |         |        |         |   |         |       
|Loss from continuing operations before income
    taxes                                       |                                              |                          | (15,290 | )      |         |   | (23,753 | )     
|Benefit for income taxes                                                                      |                                              |                          | 5,887   |        |         |   | 9,501   |       
|                                                                                              |                                              |                          |         |        |         |   |         |       
|Loss from continuing operations                                                               |                                              |                          | (9,403  | )      |         |   | (14,252 | )     
|Gain on disposition of discontinued operations,
    net of income taxes                       |                                              |                          |        |        |         |   | 23,728  |       
|                                                                                              |                                              |                          |         |        |         |   |         |       
|Net income (loss)                                                                             |                                              | $                        | (9,403  | )      |         | $ | 9,476   |       
|                                                                                              |                                              |                          |         |        |         |   |         |       
|Loss per share from continuing operations                                                     |                                              | $                        | (0.24   | )      |         | $ | (0.36   | )     
|Income per share from discontinued operations                                                 |                                              |                          |        |        |         |   | 0.60    |       
|                                                                                              |                                              |                          |         |        |         |   |         |       
|Net income (loss) per share  basic and
    diluted                                           |                                              | $                        | (0.24   | )      |         | $ | 0.24    |       
|                                                                                              |                                              |                          |         |        |         |   |         |       
|Weighted average shares used in computing net
    income (loss) per share  basic and diluted |                                              |                          | 39,444  |        |         |   | 39,821  |       
|                                                                                              |                                              |                          |         |        |         |   |         |       

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


(In thousands)


(Unaudited)


|                                                   |                                                                                              |                                                                         |                                                            |         |        |         |         |         |         |         |  
|-------------------------------------------------- | -------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ---------------------------------------------------------- | ------- | ------ | ------- | ------- | ------- | ------- | ------- | -
|                                                   |                                                                                              | 2002                                                                    |                                                            | 2001   
|                                                   |                                                                                              |                                                                         |                                                            |        
|Operating activities:                              |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|                                                   | Net income (loss)                                                                            |                                                                         | $                                                          | (9,403  | )      |         | $       | 9,476   |        
|                                                   | Adjustments to reconcile net income (loss) to net
    cash provided by operating activities: |                                                                         |                                                            |         |        |         |         |         |        
|                                                   |                                                                                              | Amortization and depreciation                                           |                                                            |         | 18,020 |         |         |         | 16,228  |        
|                                                   |                                                                                              | Benefit for deferred income taxes                                       |                                                            |         | (5,887 | )       |         |         | (9,501  | )      
|                                                   |                                                                                              | Impairment loss on land parcel                                          |                                                            |         | 2,396  |         |         |         |        |        
|                                                   |                                                                                              | Gain on sale of land parcel                                             |                                                            |         | (2,291 | )       |         |         |        |        
|                                                   |                                                                                              | Loss on early retirement of debt                                        |                                                            |         | 149    |         |         |         | 1,613   |        
|                                                   |                                                                                              | Non-cash compensation expense                                           |                                                            |         | 163    |         |         |         |        |        
|                                                   |                                                                                              | Gain on disposition of discontinued operations,
    net of income taxes |                                                            |         |       |         |         |         | (23,728 | )      
|                                                   | Changes in operating assets and liabilities                                                  |                                                                         |                                                            |         |        |         |         |         |        
|                                                   |                                                                                              | Accounts receivable                                                     |                                                            |         | 4,334  |         |         |         | 3,933   |        
|                                                   |                                                                                              | Other assets                                                            |                                                            |         | 2,075  |         |         |         | 890     |        
|                                                   |                                                                                              | Accounts payable and accrued expenses                                   |                                                            |         | (4,942 | )       |         |         | (4,231  | )      
|                                                   |                                                                                              | Deferred revenue and other liabilities                                  |                                                            |         | 9,392  |         |         |         | 14,018  |        
|                                                   |                                                                                              | Net liabilities of discontinued operations                              |                                                            |         | (467   | )       |         |         |        |        
|                                                   |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|                                                   |                                                                                              |                                                                         | Net cash provided by operating activities                  |         |        | 13,539  |         |         |         | 8,698   |  
|                                                   |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|Investing activities:                              |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|                                                   | Net proceeds from the sale of land parcels                                                   |                                                                         |                                                            | 12,786  |        |         |         |        |        
|                                                   | Net proceeds from the disposition of discontinued
    operations                             |                                                                         |                                                            |        |        |         |         | 72,380  |        
|                                                   | Capital expenditures                                                                         |                                                                         |                                                            | (30,719 | )      |         |         | (50,809 | )      
|                                                   | Change in restricted cash                                                                    |                                                                         |                                                            | 81      |        |         |         | (125    | )      
|                                                   |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|                                                   |                                                                                              |                                                                         | Net cash provided by (used in) investing
    activities    |         |        | (17,852 | )       |         |         | 21,446  |  
|                                                   |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|Financing activities:                              |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|                                                   | Borrowings under credit facility                                                             |                                                                         |                                                            | 37,000  |        |         |         | 24,500  |        
|                                                   | Payments under long-term debt agreements and
    credit facility                             |                                                                         |                                                            | (13,611 | )      |         |         | (119    | )      
|                                                   | Repurchases of senior subordinated notes payable                                             |                                                                         |                                                            | (2,750  | )      |         |         | (57,000 | )      
|                                                   | Repurchases of common stock                                                                  |                                                                         |                                                            | (6,174  | )      |         |         | (2,305  | )      
|                                                   | Proceeds from exercise of stock options                                                      |                                                                         |                                                            |        |        |         |         | 530     |        
|                                                   |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|                                                   |                                                                                              |                                                                         | Net cash provided by (used in) in financing
    activities |         |        | 14,465  |         |         |         | (34,394 | )
|                                                   |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|Cash provided by (used in) continuing operations   |                                                                                              |                                                                         | 10,619                                                     |         |        |         | (76,630 | )      
|Cash provided by (used in) discontinued operations |                                                                                              |                                                                         | (467                                                       | )       |        |         | 72,380  |        
|Cash and cash equivalents, at beginning of period  |                                                                                              |                                                                         | 3,691                                                      |         |        |         | 9,909   |        
|                                                   |                                                                                              |                                                                         |                                                            |         |        |         |         |        
|Cash and cash equivalents, at end of period        |                                                                                              | $                                                                       | 13,843                                                     |         |        | $       | 5,659   |        
|                                                   |                                                                                              |                                                                         |                                                            |         |        |         |         |        

See accompanying notes to consolidated financial
statements.

4



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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, 2002 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 Hotel
and Marina (Fort Lauderdale), and the Radisson Bahia Mar Resort
and Yachting Center (Fort Lauderdale). The Company also owns and
operates two championship golf courses located in Florida -
Grande Oaks Golf Club in Davie and Naples Grande Golf Club in
Naples.

The Company sold its entertainment and sports
business, which primarily consisted of the operations of the
Florida Panthers Hockey Club and related arena management
operations, on July 25, 2001. Accordingly, the
Companys entertainment and sports business has been
accounted for as discontinued operations and the accompanying
Unaudited Condensed Consolidated Financial Statements presented
herein report separately the net liabilities and operating
results of this discontinued operation.

3.     Earnings Per
Common Share

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

The following options to purchase shares of
common stock were outstanding at the end of the periods
presented, but were not included in the computation of earnings
per share because the Company reported a loss from continuing
operations during the periods and, therefore, the effect would
be antidilutive.

|                                    |  |                  |       |      |  |  |       | 
|----------------------------------- |  | ---------------- | ----- | ---- |  |  | ----- | 
|                                    |  |                 
|                                    |  | Six Months Ended
|                                    |  | December 31,    
|                                    |  |                 
|                                    |  | 2002             |       | 2001
|                                    |  |                  |       |     
|                                    |  |                 
|                                    |  | (In Thousands)  
|Number of shares covered by options |  |                  | 7,218 |      |  |  | 6,631 | 
|                                    |  |                  |       |      |  |  |       | 

4.     Recently
Implemented Accounting Standards

In August 2001, the Financial Accounting
Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets. The new rules apply to the classification and
impairment analysis conducted on long-lived assets other than
intangible assets and was adopted by the Company on July 1,
2002. The new rules provide a single accounting treatment for
the impairment of long-lived assets and implementation guidance
regarding impairment calculations. This statement also modifies
accounting and disclosure requirements for discontin-

5



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##### 



BOCA RESORTS, INC.


NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

ued operations. The adoption of SFAS No. 144
did not have a material impact on the Companys results of
operations or financial position.

In April 2002, the FASB issued SFAS No. 145,
which rescinds SFAS No. 4, Reporting Gains and Losses
from Extinguishment of Debt. Previously, SFAS No. 4
required all gains and losses from extinguishment of debt to be
aggregated and, if material, classified as an extraordinary
item, net of related income tax effect. Under SFAS No. 145,
gains and losses from extinguishment of debt are classified as
extraordinary items only if they meet the criteria in Accounting
Principles Board (APB) Opinion 30, Reporting
the Results of Operations  Discontinued Events and
Extraordinary Items. Applying the provisions of APB
Opinion 30 distinguishes transactions that are part of an
entitys recurring operations from those that are unusual
or infrequent, or that meet the criteria for classification as
an extraordinary item. The Company adopted SFAS No. 145 on
July 1, 2002. Accordingly, losses on the extinguishment of
debt that were classified as an extraordinary item in the prior
periods presented, have been reclassified to recurring
operations.

In June 2002, the FASB issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities. This Statement addresses financial accounting
and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force Issue
No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity.
The provisions of this Statement shall be effective for exit or
disposal activities initiated after December 31, 2002. This
Statement requires that a liability for a cost associated with
an exit or disposal activity be recognized when the liability is
incurred. Under Issue 94-3, a liability for an exit cost was
recognized at the date of an entitys commitment to an exit
plan. The adoption of SFAS No. 146 is not anticipated to
have a material impact on the Companys results of
operations or financial position.

5.     Comprehensive
Income (Loss)

Comprehensive income (loss) was the same as
net income (loss) for the three and six months ended
December 31, 2002 and 2001.

6.     Long-Lived
Assets and Assets to be Disposed of

In August 2002, the Company sold a land parcel
located in Naples, Florida for $5.7 million. The
transaction yielded net proceeds of $5.6 million and a
pre-tax gain of $2.3 million, which is included in interest
and other income in the accompanying Unaudited Condensed
Consolidated Statements of Operations.

In December 2002, the Company sold a land parcel
located in Plantation, Florida for $7.2 million, which
yielded net proceeds of $7.1 million. The Company recorded
an impairment loss of $2.4 million to reflect the
difference between the carrying value of this land parcel and
the net proceeds. The impairment loss is included in interest
and other income in the accompanying Unaudited Condensed
Consolidated Statements of Operations.

6



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##### 



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, 2002, including the disclosure relating to
critical accounting policies in Managements Discussion and
Analysis.

Business Strategy

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

Management Outlook

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 resorts have experienced
an increase in demand since the beginning of the 2002 calendar
year, however, the Company continues to experience an overall
slower recovery than expected because of the difficult economic
conditions.

The weakness in the economy has made it more
difficult for management to predict future operating results
than in the past. Even though the Company has a solid base of
large group business already on the books, reservation patterns
have become increasingly short-term as they relate to the
Companys leisure customer and small group market. The
weaker economy has also made it more difficult to achieve
originally anticipated levels of ancillary spending. To remain
competitive and to combat the short-term uncertainty, the
Company has introduced various value-added programs targeting
both its leisure and group customers. Because of these factors,
management expects that its operating results for the remainder
of fiscal 2003 will be lower than originally anticipated, but
higher than the comparable prior year periods.

The accompanying table sets forth the operating
results for the three and six months ended December 31
(expressed in 000s):

|                               |                                               |                        |                          |                  |        |        |        |        |        |        |         |        |        |         |        |        |        |         | 
|------------------------------ | --------------------------------------------- | ---------------------- | ------------------------ | ---------------- | ------ | ------ | ------ | ------ | ------ | ------ | ------- | ------ | ------ | ------- | ------ | ------ | ------ | ------- | 
|                               |                                               |                        |                          |                 
|                               |                                               | Three Months Ended     |                          | Six Months Ended
|                               |                                               | December 31,           |                          | December 31,    
|                               |                                               |                        |                          |                 
|                               |                                               | 2002                   |                          | 2001             |        | 2002   |        | 2001  
|                               |                                               |                        |                          |                  |        |        |        |       
|Leisure and recreation revenue |                                               | $                      | 67,046                   |                  |        | $      | 57,782 |        |        | $      | 113,338 |        |        | $       | 97,302 |       
|Operating expenses:            |                                               |                        |                          |                  |        |        |        |        |        |        |         |        |        |         |        |       
|                               | Cost of leisure and recreation services       |                        |                          | 31,656           |        |        |        | 27,892 |        |        |         | 58,057 |        |         |        | 51,938 |       
|                               | Selling, general and administrative expenses: |                        |                          |                  |        |        |        |        |        |        |         |        |        |         |        |        |       
|                               |                                               | Leisure and recreation |                          |                  | 18,898 |        |        |        | 18,552 |        |         |        | 37,686 |         |        |        | 36,313 |        
|                               |                                               | Corporate              |                          |                  | 2,390  |        |        |        | 2,296  |        |         |        | 3,715  |         |        |        | 3,835  |        
|                               | Depreciation:                                 |                        |                          |                  |        |        |        |        |        |        |         |        |        |         |        |        |       
|                               |                                               | Leisure and recreation |                          |                  | 9,021  |        |        |        | 8,457  |        |         |        | 17,914 |         |        |        | 16,100 |        
|                               |                                               | Corporate              |                          |                  | 53     |        |        |        | 61     |        |         |        | 106    |         |        |        | 128    |        
|                               | Loss on early retirement of debt              |                        |                          | 149              |        |        |        | 198    |        |        |         | 149    |        |         |        | 1,613  |       
|                               |                                               |                        |                          |                  |        |        |        |        |        |        |         |        |        |         |        |       
|                               |                                               |                        | Total operating expenses |                  |        | 62,167 |        |        |        | 57,456 |         |        |        | 117,627 |        |        |        | 109,927 | 
|                               |                                               |                        |                          |                  |        |        |        |        |        |        |         |        |        |         |        |       

7



---



##### 



|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |   |        |         |       | 
|----------------------------------------------------------------------- | ------------------------ | ---------------------- | ----------------------------- | ---------------- | ------ | ----- | ------- | ---- | ------ | --- | ------- | - | ------ | ------ | ------- | - | ------ | ------- | ----- | 
|                                                                        |                          |                        |                               |                 
|                                                                        |                          | Three Months Ended     |                               | Six Months Ended
|                                                                        |                          | December 31,           |                               | December 31,    
|                                                                        |                          |                        |                               |                 
|                                                                        |                          | 2002                   |                               | 2001             |        | 2002  |         | 2001
|                                                                        |                          |                        |                               |                  |        |       |         |     
|                                                                        | Operating income (loss): |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |   |       
|                                                                        |                          | Leisure and recreation |                               |                  | 7,471  |       |         |      | 2,881  |     |         |   | (319   | )      |         |   | (7,049 | )      
|                                                                        |                          | Corporate              |                               |                  | (2,592 | )     |         |      | (2,555 | )   |         |   | (3,970 | )      |         |   | (5,576 | )      
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|                                                                        |                          |                        | Total operating income (loss) |                  |        | 4,879 |         |      |        | 326 |         |   |        | (4,289 | )       |   |        | (12,625 | )    
|Interest and other income                                               |                          |                        | 9                             |                  |        |       | 267     |      |        |     | 39      |   |        |        | 984     |  
|Interest expense                                                        |                          |                        | (5,429                        | )                |        |       | (5,158  | )    |        |     | (11,040 | ) |        |        | (12,112 | )
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|Loss from continuing operations before income
    taxes                 |                          |                        | (541                          | )                |        |       | (4,565  | )    |        |     | (15,290 | ) |        |        | (23,753 | )
|Benefit for income taxes                                                |                          |                        | 208                           |                  |        |       | 1,826   |      |        |     | 5,887   |   |        |        | 9,501   |  
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|Loss from continuing operations                                         |                          |                        | (333                          | )                |        |       | (2,739  | )    |        |     | (9,403  | ) |        |        | (14,252 | )
|Gain on disposition of discontinued operations,
    net of income taxes |                          |                        |                              |                  |        |       |        |      |        |     |        |   |        |        | 23,728  |  
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|Net income (loss)                                                       |                          | $                      | (333                          | )                |        | $     | (2,739  | )    |        | $   | (9,403  | ) |        | $      | 9,476   |  
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|Net cash provided by operating activities                               |                          | $                      | 2,324                         |                  |        | $     | 2,044   |      |        | $   | 13,539  |   |        | $      | 8,698   |  
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|Net cash provided by (used in) investing
    activities                 |                          | $                      | (12,315                       | )                |        | $     | (34,369 | )    |        | $   | (17,852 | ) |        | $      | 21,446  |  
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|Net cash provided by (used in) financing
    activities                 |                          | $                      | 14,167                        |                  |        | $     | 15,681  |      |        | $   | 14,465  |   |        | $      | (34,394 | )
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|EBITDA (EBITDA loss):                                                   |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|                                                                        |                          | Leisure and recreation |                               | $                | 16,492 |       |         | $    | 11,338 |     |         | $ | 17,596 |        |         | $ | 9,051  |        
|                                                                        |                          | Corporate              |                               |                  | (2,390 | )     |         |      | (2,296 | )   |         |   | (3,715 | )      |         |   | (3,835 | )      
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|                                                                        |                          |                        |                               | Total            |        | $     | 14,102  |      |        | $   | 9,042   |   |        | $      | 13,881  |   |        | $       | 5,216 | 
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|Adjusted EBITDA (Adjusted EBITDA loss):                                 |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|                                                                        |                          | Leisure and recreation |                               | $                | 16,678 |       |         | $    | 13,353 |     |         | $ | 17,636 |        |         | $ | 11,649 |        
|                                                                        |                          | Corporate              |                               |                  | (2,390 | )     |         |      | (2,296 | )   |         |   | (3,715 | )      |         |   | (3,835 | )      
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  
|                                                                        |                          |                        |                               | Total            |        | $     | 14,288  |      |        | $   | 11,057  |   |        | $      | 13,921  |   |        | $       | 7,814 | 
|                                                                        |                          |                        |                               |                  |        |       |         |      |        |     |         |   |        |        |         |  

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

|                                                            |                          |                                      |         |        |        |                  |         |        |        |      |    |        |    |   |         |        |         |   |         |        |        |  |    |    |    |  
|----------------------------------------------------------- | ------------------------ | ------------------------------------ | ------- | ------ | ------ | ---------------- | ------- | ------ | ------ | ---- | -- | ------ | -- | - | ------- | ------ | ------- | - | ------- | ------ | ------ |  | -- | -- | -- | -
|                                                            |                          |                                      |         |        |        |                  |         |       
|                                                            |                          | Three Months Ended                   |         |        |        | Six Months Ended |         |       
|                                                            |                          | December 31,                         |         |        |        | December 31,     |         |       
|                                                            |                          |                                      |         |        |        |                  |         |       
|                                                            |                          | 2002                                 |         | 2001   |        | % Chg.           |         | 2002   |        | 2001 |    | % Chg.
|                                                            |                          |                                      |         |        |        |                  |         |        |        |      |    |       
|Revenue:                                                    |                          |                                      |         |        |        |                  |         |        |        |      |    |        |    |   |         |        |         |   |         |        |        |  |    |   
|                                                            | Room revenue             |                                      | $       | 25,032 |        |                  | $       | 21,168 |        |      |    | 18     | %  |   | $       | 41,239 |         |   | $       | 35,041 |        |  |    | 18 | % 
|                                                            | Non-room related revenue |                                      |         | 42,014 |        |                  |         | 36,614 |        |      |    | 15     | %  |   |         | 72,099 |         |   |         | 62,261 |        |  |    | 16 | % 
|                                                            |                          |                                      |         |        |        |                  |         |        |        |      |    |        |    |   |         |        |         |   |         |        |        |  |    |   
|                                                            |                          | Total leisure and recreation revenue |         | $      | 67,046 |                  |         | $      | 57,782 |      |    |        | 16 | % |         | $      | 113,338 |   |         | $      | 97,302 |  |    |    | 17 | %
|Operating Statistics:                                       |                          |                                      |         |        |        |                  |         |        |        |      |    |        |    |   |         |        |         |   |         |        |        |  |    |   
|Available room nights                                       |                          |                                      | 213,164 |        |        |                  | 205,988 |        |        |      | 3  | %      |    |   | 426,328 |        |         |   | 411,976 |        |        |  | 3  | % 
|Occupancy                                                   |                          |                                      | 54.6%   |        |        |                  | 51.4%   |        |        |      | 6  | %      |    |   | 54.7%   |        |         |   | 51.3%   |        |        |  | 7  | % 
|Average daily rate                                          |                          | $                                    | 215.16  |        |        | $                | 200.07  |        |        |      | 8  | %      |    | $ | 176.68  |        |         | $ | 165.84  |        |        |  | 7  | % 
|Room revenue per available room                             |                          | $                                    | 117.43  |        |        | $                | 102.76  |        |        |      | 14 | %      |    | $ | 96.73   |        |         | $ | 85.06   |        |        |  | 14 | % 
|Total leisure and recreation revenue per
    available room |                          | $                                    | 314.53  |        |        | $                | 280.52  |        |        |      | 12 | %      |    | $ | 265.85  |        |         | $ | 236.19  |        |        |  | 13 | % 

8



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##### 



Leisure and Recreation Revenue

Leisure and recreation revenue totaled
$67.0 million and $57.8 million for the three months
ended December 31, 2002 and 2001, respectively, and $113.3
million and $97.3 million for the six months ended
December 31, 2002 and 2001, respectively.

The $9.2 million increase in revenue for the
three months ended December 31, 2002, compared to the three
months ended December 31, 2001, was primarily the result of
stronger performances at the Companys Boca Raton and Fort
Lauderdale properties which yielded period over period advances
in room revenue per available room. Business at the
Companys Naples properties was disrupted by comprehensive
room renovations at both the Registry Resort and Edgewater Beach
Hotel during the recently concluded three-month period.
Renovation projects at both properties were completed in January
2003. Despite the disruptions, aggregate resort portfolio
occupancy increased to 54.6% for the three months ended
December 31, 2002, compared to 51.4% for the comparable
prior year period, while the average daily rate charged at the
Companys resorts increased to $215.16 for the recently
concluded three-month period, up from $200.07 for the prior year
quarter. The increase in occupancy also contributed to an
increase in certain ancillary non-room revenue from sources such
as food and beverage sales, retail sales and golf revenue for
the three months ended December 31, 2002, as compared to
the three months ended December 31, 2001. The increase in
leisure and recreation revenue did not correspond to the
increase in total revenue per available room for the periods
presented due to an increase in the number of available rooms
following the completion of the new marina wing (the Yacht
Club) featuring 112 water-view rooms, additional meeting
space and marina slips at the Boca Raton Resort & Club. Some
of the quarter over quarter increase in revenue was attributable
to the poor performance in the prior years quarter,
subsequent to the September 11, 2001 terrorist attacks.

The $16.0 million increase in revenue for
the six months ended December 31, 2002, compared to the six
months ended December 31, 2001, was primarily the result of
a strong financial performance at the Boca Raton Resort &
Club which yielded period over period advances in occupancy,
average daily rate and ancillary (non-room) customer spending.
Aggregate resort portfolio occupancy increased to 54.7% for the
six months ended December 31, 2002, compared to 51.3% for
the comparable prior year period, while the average daily rate
charged at the Companys resorts increased to $176.68 for
the recently concluded six-month period, up from $165.84 for the
comparable prior year period.

Leisure and Recreation Operating
Expenses

Cost of leisure and recreation services totaled
$31.7 million, or 47% of revenue, for the three months
ended December 31, 2002, compared to cost of leisure and
recreation services of $27.9 million, or 48% of revenue,
for the three months ended December 31, 2001. Cost of
leisure and recreation services totaled $58.1 million, or
51% of revenue, for the six months ended December 31, 2002,
compared to cost of leisure and recreation services of
$51.9 million, or 53% of revenue, for the six months ended
December 31, 2001. 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
$18.9 million, or 28% of revenue, for the three months
ended December 31, 2002, compared to S,G&A of
$18.6 million, or 32% of revenue, for the three months
ended December 31, 2001. Leisure and recreation S,G&A
totaled $37.7 million, or 33% of revenue, for the six
months ended December 31, 2002, compared to S,G&A of
$36.3 million, or 37% of revenue, for the six months ended
December 31, 2001. 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.

Cost of leisure and recreation services and
leisure and recreation S,G&A as a percent of revenue for the
three and six months ended December 31, 2001 was
disproportionately high due to a decrease in revenue following
the September 11, 2001 terrorist attacks.

Leisure and recreation depreciation expense
totaled $9.0 million and $8.5 million for the three months
ended December 31, 2002 and 2001, respectively, and
$17.9 million and $16.1 million for the six months

9



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##### 



ended December 31, 2002 and 2001,
respectively. The increase in depreciation expense for the three
and six months ended December 31, 2002, compared to the
three and six months ended December 31, 2001 was primarily
the result of an increase in depreciation expense following the
completion of several capital projects at the Boca Raton Resort
& Club, including the new Yacht Club, a new state-of-the-art
50,000 square foot world-class spa complex and a new golf
clubhouse and casual restaurant.


Leisure and Recreation Operating Income
(Loss)

Leisure and recreation operations reported
operating income of $7.5 million and $2.9 million for
the three months ended December 31, 2002 and 2001,
respectively, and an operating loss of $319,000 and
$7.0 million for the six months ended December 31,
2002 and 2001, respectively. The improvement in operating
results for the three and six months ended December 31,
2002, compared to the three and six months ended
December 31, 2001, was primarily because the prior year
figures were adversely impacted by a decrease in revenue and
corresponding earnings following the September 11, 2001
terrorist attacks.

Corporate General and Administrative
Expenses

Corporate general and administrative expenses
totaled $2.4 million and $2.3 million for the three
months ended December 31, 2002 and 2001, respectively, and
$3.7 million and $3.8 million for the six months ended
December 31, 2002 and 2001, respectively. Pursuant to the
management services agreement, Huizenga Holdings, Inc., a
corporation whose sole shareholder is the Companys
Chairman, provides certain administrative, financing, tax,
investor relations and strategy related services to the Company.
For the fiscal year ending on June 30, 2003, the management
fee paid to Huizenga Holdings, Inc. has been limited to the
lesser of 1% of revenue, or $1.9 million. Prior to fiscal
2003, the agreement provided for a management fee equal to 1% of
total revenue. Because revenue for the three and six months
ended December 31, 2001 was adversely impacted by the
terrorist attacks of September 11, 2001 (thereby
effectively reducing the management fee paid immediately
following the September 11, 2001 attacks), the decreases in
the management fee for the three and six-month periods was not
material.

Loss on Early Retirement of Debt

The Company recorded a loss of $149,000 and
$198,000 relating to the repurchase of its 9.875% senior
subordinated notes during the three months ended
December 31, 2002 and 2001, respectively, and $149,000 and
$1.6 million during the six months ended December 31,
2002 and 2001, respectively. The loss represents the non-cash
charge-off of a pro rata portion of the debt issuance costs
previously capitalized when the notes were issued, together with
the premium paid to acquire the notes.

Interest and Other Income

Interest and other income totaled $9,000 and
$267,000 for the three months ended December 31, 2002 and
2001, respectively, and $39,000 and $984,000 for the six months
ended December 31, 2002 and 2001, respectively. The
decrease in interest and other income for the three and six
months ended December 31, 2002 compared to the three and
six months ended December 31, 2001 was primarily because
the Company invested a portion of the proceeds from the sale of
the entertainment and sports business in time deposit accounts
during the prior year periods until such proceeds were
subsequently used to repurchase a portion of the Companys
outstanding 9.875% senior subordinated notes. In addition,
during the six months ended December 31, 2002, interest and
other income included a $2.3 million gain on the sale of a
land parcel located in Naples, Florida, as well as, an
impairment loss of $2.4 million to reflect the difference
between the carrying value of a land parcel located in
Plantation, Florida and the net proceeds. See Note 6 to the
Unaudited Condensed Consolidated Financial Statements.

Interest Expense

Interest expense totaled $5.4 million and
$5.2 million for the three months ended December 31,
2002 and 2001, respectively, and $11.0 million and
$12.1 million for the six months ended December 31,
2002 and 2001,

10



---



##### 



respectively. The change in interest expense
during the three months ended December 31, 2002 and 2001
was primarily the result of fluctuations in the amount of
capitalized interest on projects under construction. Interest
capitalized during the three months ended December 31, 2002
and 2001 totaled $364,000 and $1.0 million, respectively.
Fluctuations in the amount of interest capitalized on projects
under construction during the six-month periods presented were
nearly offset by the fluctuations in interest expense resulting
from changes in the average outstanding indebtedness during the
periods.


Benefit for Income Taxes

The Company recorded a benefit for income taxes
totaling $208,000, or 38.5% of pretax loss from continuing
operations, and $1.8 million, or 40% of pretax loss from
continuing operations, for the three months ended
December 31, 2002 and 2001, respectively. The Company
recorded a benefit for income taxes totaling $5.9 million,
or 38.5% of pretax loss from continuing operations, and
$9.5 million, or 40% of pretax loss from continuing
operations, for the six months ended December 31, 2002 and
2001, respectively. The decrease in the Companys effective
income tax rate for the three and six months ended
December 31, 2002, compared to the three and six months
ended December 31, 2001, was due to a decrease in permanent
differences.

EBITDA/Adjusted EBITDA

EBITDA represents earnings (losses) before
extraordinary and non-recurring items, interest expense,
interest income, income taxes, depreciation and amortization.
Adjusted EBITDA represents EBITDA plus the amount of net
membership fees deferred during the periods presented. EBITDA
and Adjusted EBITDA (see below) are used by management and
certain investors as indicators of the Companys historical
ability to service debt, to sustain potential future increases
in debt and to satisfy capital requirements. However, neither
EBITDA, nor Adjusted EBITDA, is intended to represent cash flows
for the period. In addition, they have not been presented as
alternatives to either (a) operating income (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 are thus susceptible to
varying calculations. EBITDA as presented may not be comparable
to other similarly titled measures of other companies.

EBITDA totaled $14.1 million and
$9.0 million for the three months ended December 31,
2002 and 2001, respectively, and $13.9 million and
$5.2 million for the six months ended December 31,
2002 and 2001, respectively. The improvement in EBITDA for the
three and six months ended December 31, 2002, compared to
the three and six months ended December 31, 2001, was
primarily because the prior year figures were adversely impacted
by a decrease in revenue and corresponding earnings following
the September 11, 2001 terrorist attacks.

Adjusted EBITDA represents EBITDA plus the amount
of net membership fees. Adjusted EBITDA totaled
$14.3 million and $11.1 million for the three months
ended December 31, 2002 and 2001, respectively, and
$13.9 million and $7.8 million for the six months ended
December 31, 2002 and 2001, respectively.

Liquidity and Capital Resources

Unrestricted cash and cash equivalents increased
to $13.8 million at December 31, 2002, from
$3.7 million at June 30, 2002. The major components of
the change are discussed below.



| |                                              
| | ---------------------------------------------
| | Net Cash Provided by Operating
    Activities

Net cash provided by operating activities totaled
$13.5 million and $8.7 million for the six months ended
December 31, 2002 and 2001, respectively. The increase in
net cash provided by operating activities for the six months
ended December 31, 2002, compared to the six months ended
December 31, 2001, was because during the prior year
six-month period the Company received significantly less cash
from its business than during the current year period due to a
decline in earnings and corresponding net cash flow following
the September 11, 2001 terrorist attacks.

11



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##### 





| |                                                        
| | -------------------------------------------------------
| | Net Cash Provided by (Used In) Investing
    Activities

Net cash used in investing activities totaled
$17.9 million for the six months ended December 31,
2002, compared to net cash provided by investing activities of
$21.4 million for the six months ended December 31,
2001. The change was partially because the Company received
$72.4 million from the sale of the entertainment and sports
business during the prior year period, while during the six
months ended December 31, 2002, the Company received $12.8
million from the sale of land parcels located in Naples, Florida
and Plantation, Florida.

Additionally, capital expenditures totaled
$30.7 million and $50.8 million for the six months
ended December 31, 2002 and 2001, respectively. During the
six months ended December 31, 2002, capital projects
included a comprehensive room renovation at the Registry Resort
covering 395 guestrooms, which includes all new furnishings and
new five fixture bathrooms. The Company also renovated
approximately 60 guest suites at the Edgewater Beach Hotel and
began work on a marina renovation at the Bahia Mar Resort and
Yachting Center, which includes the reconfiguration of the
existing boat slips. This extensive marina renovation will
result in a state-of-the art yachting center with 242
reconfigured boat slips, sized to accommodate larger yachts
ranging from 80 feet to 200+ feet, without reducing the linear
rentable feet. During the six months ended December 31,
2001, the Company continued construction on various projects at
the Boca Raton Resort & Club including the new Yacht Club,
as well as, a new 50,000 square foot state-of-the-art spa
complex and a new golf clubhouse with casual restaurant.

The change in restricted cash was not material
from June 30, 2002 to December 31, 2002 or from
June 30, 2001 to December 31, 2001.



| |                                                    
| | ---------------------------------------------------
| | Cash Provided by (Used in) Financing
    Activities

Net cash provided by financing activities totaled
$14.5 million for the six months ended December 31,
2002, compared to net cash used in financing activities of
$34.4 million for the six months ended December 31,
2001. Financing activities for the periods presented primarily
includes borrowings, net of repayments, under the Companys
revolving credit facility, as well as, repurchases of the
Companys common stock and 9.875% senior subordinated
notes. The change in net cash flow for the periods presented was
primarily because the Company repurchased $2.8 million in
senior subordinated notes during the six months ended
December 31, 2002, compared to $57.0 million in senior
subordinated notes during the six months ended December 31,
2001.



| |                  
| | -----------------
| | Capital Resources

The Companys capital resources are provided
from both internal and external sources. The primary capital
resources from internal operations include (1) room
rentals, food and beverage sales, retail sales, golf and tennis
revenue, spa revenue, marina and conference services at the
resorts and (2) Premier Club memberships. The primary
external sources of liquidity have been the issuance of debt
securities and borrowing under term loans and credit lines.

As of December 31, 2002, the Company had
$42.2 million outstanding under its revolving credit line
(which matures on October 31, 2003) and had $59.8 million
in immediate availability. While management expects to
renew/replace its existing revolving credit line prior to
maturity, no assurances can be given that management will be
successful in doing so. Nonetheless, 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 fiscal 2003 and support
on-going operations, including meeting debt service obligations
as they come due.

12



---



##### 



Financial Condition

Significant changes in balance sheet data from
June 30, 2002 to December 31, 2002 are discussed below.



| |                    
| | -------------------
| | Accounts Receivable

Accounts receivable decreased to
$17.3 million at December 31, 2002, from
$21.6 million at June 30, 2002. It is customary for
the Companys trade receivables to decrease during certain
periods of the year as a result of the seasonality of its
business. In addition, the Registry Resort completed a
comprehensive room renovation, which has led to disruption in
business during the six months ended December 31, 2002, as
well as, a corresponding decrease in accounts receivable.



| |             
| | ------------
| | Other Assets

Other assets decreased to $10.6 million at
December 31, 2002, from $13.1 million at June 30,
2002. The decrease in other assets is partially the result of
amortizing debt issuance costs, which are included in other
assets in the accompanying Condensed Consolidated Balance
Sheets. In addition, a receivable was liquidated that arose in
connection with the Company incurring expenditures as a result
of construction on a public bridge that adversely affected
access, among other things, to one of the Companys resort
properties.



| |                                          
| | -----------------------------------------
| | Accounts Payable and Accrued
    Expenses

Accounts payable and accrued expenses decreased
to $24.3 million at December 31, 2002, from
$30.2 million at June 30, 2002. The decrease was
primarily the result of the payment of annual real estate taxes
on the Companys resort properties as well as a
$2.9 million decrease in accrued legal settlements as
certain litigation retained in connection with the Arizona
Biltmore Resort & Spa was settled and paid in July 2002.



| |                                                             
| | ------------------------------------------------------------
| | Current Portion of Deferred Revenue and
    Advance Deposits

Current portion of deferred revenue and advance
deposits increased to $32.6 million at December 31,
2002, from $22.4 million at June 30, 2002. The
increase is substantially related to the collection of annual
Premier Club dues at the Boca Raton Resort & Club. The
annual dues are being recognized as revenue ratably over the
membership year, which commenced on October 1.



| |                                                    
| | ---------------------------------------------------
| | Current Portion of Credit Line and Note
    Payable

Current portion of credit line and note payable
increased to $42.4 million at December 31, 2002, from
$227,000 at June 30, 2002. The increase is because the
Company had made additional borrowings under this credit
facility and because the facility expires in October 2003, and
accordingly, the outstanding balance has moved from a long-term
obligation to a current obligation.



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

Current liabilities exceeded current assets by
$55.5 million and $16.2 million at December 31, 2002
and June 30, 2002, respectively. 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.

13



---



##### 



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, 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

Within the 90 days prior to the date of this
report, 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. Based upon
that evaluation, the chairman and chief financial officer
concluded that the Companys disclosure controls and
procedures are 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 Securities and Exchange Commission filings.

There have been no significant changes in the
Companys internal controls or in other factors, which
could significantly affect internal controls subsequent to the
date the Company carried out its evaluation.

14



---



##### 



PART II  OTHER
INFORMATION

Item 1.     Legal
Proceedings

The Company is not involved in any material legal
proceedings. However, the Company may from time to time become a
party to legal proceedings arising in the ordinary course of
business, which are incidental to the business. While the
results of proceedings which arose in the normal course of
business cannot be predicted with certainty, management believes
that losses, if any, resulting from the ultimate resolution of
these matters will not have a material adverse effect on the
Companys consolidated results of operations, consolidated
cash flows or consolidated financial position.

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 19, 2002, the shareholders voted to elect the
directors named in the proxy materials dated October 3,
2002, voted to increase by 1,500,000 shares the number of shares
of Class A Common Stock issuance upon the exercise of stock
options granted or to be granted under the Companys stock
option plan and voted to ratify the selection of Ernst &
Young LLP as the Companys independent public accountants
for the year ending June 30, 2003. The results of the
voting were as follows:

|                                          |                        |     |               |               |  |         |   |           |  |          |           |   |  |  |        |   |  |  |               |               | 
|----------------------------------------- | ---------------------- | --- | ------------- | ------------- |  | ------- | - | --------- |  | -------- | --------- | - |  |  | ------ | - |  |  | ------------- | ------------- | 
|                                          |                        | For |               | Withheld      |  | Against |   | Abstain   |  | Total(1)
|                                          |                        |     |               |               |  |         |   |           |  |         
|Election of Directors:                    |                        |     |               |               |  |         |   |           |  |          |           |   |  |  |        |   |  |  |               |              
|                                          | Steven R. Berrard      |     |               | 2,579,380,898 |  |         |   | 3,755,288 |  |          |           |  |  |  |        |  |  |  |               | 2,583,136,186 | 
|                                          | Dennis J. Callaghan    |     |               | 2,579,843,619 |  |         |   | 3,292,567 |  |          |           |  |  |  |        |  |  |  |               | 2,583,136,186 | 
|                                          | Michael S. Egan        |     |               | 2,579,774,686 |  |         |   | 3,361,500 |  |          |           |  |  |  |        |  |  |  |               | 2,583,136,186 | 
|                                          | Harris W. Hudson       |     |               | 2,579,843,162 |  |         |   | 3,293,024 |  |          |           |  |  |  |        |  |  |  |               | 2,583,136,186 | 
|                                          | H. Wayne Huizenga      |     |               | 2,579,843,169 |  |         |   | 3,293,017 |  |          |           |  |  |  |        |  |  |  |               | 2,583,136,186 | 
|                                          | George D. Johnson, Jr. |     |               | 2,579,843,364 |  |         |   | 3,292,822 |  |          |           |  |  |  |        |  |  |  |               | 2,583,136,186 | 
|                                          | Henry Latimer          |     |               | 2,579,382,298 |  |         |   | 3,753,888 |  |          |           |  |  |  |        |  |  |  |               | 2,583,136,186 | 
|                                          | Peter H. Roberts       |     |               | 2,579,383,098 |  |         |   | 3,753,088 |  |          |           |  |  |  |        |  |  |  |               | 2,583,136,186 | 
|                                          | Richard C. Rochon      |     |               | 2,579,843,079 |  |         |   | 3,293,107 |  |          |           |  |  |  |        |  |  |  |               | 2,583,136,186 | 
|Amend Stock Option Plan                   |                        |     | 2,577,024,768 |               |  |         |  |           |  |          | 6,096,444 |   |  |  | 14,974 |   |  |  | 2,583,136,186 |              
|Ratify Selection of Ernst & Young
    LLP |                        |     | 2,582,452,369 |               |  |         |  |           |  |          | 682,238   |   |  |  | 1,579  |   |  |  | 2,583,136,186 |              



---



|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(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.

15



---



##### 



Item 5.     Other
Information

None.

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

(a) Exhibits

|         |      |  |  |                        |   |  |  |                                                                                                                                                                            
|-------- | ---- |  |  | ---------------------- | - |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |      |  |  | Description Of Exhibit
|         |      |  |  |                       
|         | 99.1 |  |  |                        |  |  |  | Certification of Chief Executive Officer and
    Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
    as added by Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports
on Form 8-K

None.

16



---



##### 



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.                                                                                                             
|                      
|Date: February 3, 2003 |  | By: /s/ WAYNE MOORWayne Moor
    Senior Vice President, Treasurer and Chief
    Financial Officer (Principal Financial Officer)
|                      
|                       |  | By: /s/ MARYJO FINOCCHIAROMaryJo Finocchiaro
    Vice President and Corporate Controller
    (Principal Accounting Officer)    

17



---



##### 



SECTION 302 CERTIFICATIONS

I, H. Wayne Huizenga, certify that:

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

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

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

4. The registrants other certifying
officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

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



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    

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

|                       |  |                                                                                                                                            
|---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Date: February 3, 2003 |  | /s/ H. WAYNE HUIZENGA
    -----------------------------------------------------
    Chairman of the Board
    (Principal Executive Officer)

18



---



##### 



SECTION 302 CERTIFICATIONS CONTINUED

I, Wayne Moor, certify that:

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

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

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

4. The registrants other certifying
officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and
    procedures to ensure that material information relating to the
    registrant, including its consolidated subsidiaries, is made
    known to us by others within those entities, particularly during
    the period in which this quarterly report is being prepared;
|
| | b) evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and                                                                                                      
|
| | c) presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

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



| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and
|
| | b) any fraud, whether or not material, that
    involves management or other employees who have a significant
    role in the registrants internal controls; and                                                                                                                                                    

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

|                       |  |                                                                                                                                              
|---------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|Date: February 3, 2003 |  | /s/ WAYNE MOOR
    -----------------------------------------------------
    Senior Vice President, Treasurer and Chief
    Financial Officer

19