##### 









SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549




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FORM 10-Q



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(Mark One)



|  |                                                    
|- | ---------------------------------------------------
|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended March 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

As of May 14, 2002, there were 39,523,879
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)


|                                                            |                                                                                                                                                                                               |                                            |         |          |         |  |         |         |         | 
|----------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | -------- | ------- |  | ------- | ------- | ------- | 
|                                                            |                                                                                                                                                                                               | March 31,                                  |         | June 30,
|                                                            |                                                                                                                                                                                               | 2002                                       |         | 2001    
|                                                            |                                                                                                                                                                                               |                                            |         |         
|ASSETS                                                     
|Current assets:                                             |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|                                                            | Cash and cash equivalents                                                                                                                                                                     |                                            | $       | 9,630    |         |  | $       | 9,909   |        
|                                                            | Restricted cash                                                                                                                                                                               |                                            |         | 667      |         |  |         | 500     |        
|                                                            | Accounts receivable, net                                                                                                                                                                      |                                            |         | 28,228   |         |  |         | 23,415  |        
|                                                            | Inventory                                                                                                                                                                                     |                                            |         | 7,116    |         |  |         | 7,232   |        
|                                                            | Current portion of Premier Club notes receivable                                                                                                                                              |                                            |         | 3,721    |         |  |         | 4,009   |        
|                                                            | Other current assets                                                                                                                                                                          |                                            |         | 2,583    |         |  |         | 6,003   |        
|                                                            | Net assets of discontinued operations                                                                                                                                                         |                                            |         |         |         |  |         | 45,711  |        
|                                                            |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|                                                            |                                                                                                                                                                                               | Total current assets                       |         |          | 51,945  |  |         |         | 96,779  | 
|Property and equipment, net                                 |                                                                                                                                                                                               |                                            | 827,966 |          |         |  | 792,094 |        
|Intangible assets, net                                      |                                                                                                                                                                                               |                                            | 34,496  |          |         |  | 34,518  |        
|Long-term portion of Premier Club notes
    receivable, net |                                                                                                                                                                                               |                                            | 7,882   |          |         |  | 8,224   |        
|Other assets                                                |                                                                                                                                                                                               |                                            | 14,127  |          |         |  | 14,517  |        
|                                                            |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|                                                            |                                                                                                                                                                                               | Total assets                               |         | $        | 936,416 |  |         | $       | 946,132 | 
|                                                            |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|LIABILITIES AND SHAREHOLDERS
    EQUITY                   
|Current liabilities:                                        |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|                                                            | Accounts payable and accrued expenses                                                                                                                                                         |                                            | $       | 36,019   |         |  | $       | 32,402  |        
|                                                            | Current portion of deferred revenue and advance
    deposits                                                                                                                                  |                                            |         | 27,542   |         |  |         | 18,683  |        
|                                                            | Net liabilities of discontinued operations                                                                                                                                                    |                                            |         | 9,898    |         |  |         |        |        
|                                                            | Current portion of credit lines and notes payable                                                                                                                                             |                                            |         | 222      |         |  |         | 209     |        
|                                                            |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|                                                            |                                                                                                                                                                                               | Total current liabilities                  |         |          | 73,681  |  |         |         | 51,294  | 
|Credit lines and notes payable                              |                                                                                                                                                                                               |                                            | 157     |          |         |  | 342     |        
|Deferred revenue, net of current portion                    |                                                                                                                                                                                               |                                            | 39,859  |          |         |  | 35,479  |        
|Other liabilities                                           |                                                                                                                                                                                               |                                            | 9,790   |          |         |  | 10,160  |        
|Deferred income taxes                                       |                                                                                                                                                                                               |                                            | 29,502  |          |         |  | 32,436  |        
|Senior subordinated notes payable                           |                                                                                                                                                                                               |                                            | 215,960 |          |         |  | 272,960 |        
|Premier Club refundable membership fees                     |                                                                                                                                                                                               |                                            | 56,630  |          |         |  | 57,818  |        
|Commitments and contingencies                               |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|Shareholders equity:                                       |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|                                                            | Class A Common Stock, $.01 par value,
    100,000,000 shares authorized and 39,506,110 and 39,621,027
    shares issued and outstanding at March 31, 2002 and
    June 30, 2001, respectively |                                            |         | 395      |         |  |         | 396     |        
|                                                            | Class B Common Stock, $.01 par value,
    10,000,000 shares authorized and 255,000 shares issued and
    outstanding at March 31, 2002 and June 30, 2001                                      |                                            |         | 3        |         |  |         | 3       |        
|                                                            | Contributed capital                                                                                                                                                                           |                                            |         | 464,249  |         |  |         | 464,626 |        
|                                                            | Retained earnings                                                                                                                                                                             |                                            |         | 46,190   |         |  |         | 20,618  |        
|                                                            |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|                                                            |                                                                                                                                                                                               | Total shareholders equity                 |         |          | 510,837 |  |         |         | 485,643 | 
|                                                            |                                                                                                                                                                                               |                                            |         |          |         |  |         |        
|                                                            |                                                                                                                                                                                               | Total liabilities and shareholders equity |         | $        | 936,416 |  |         | $       | 946,132 | 
|                                                            |                                                                                                                                                                                               |                                            |         |          |         |  |         |        

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 March 31


(In thousands, except per share
data)


(Unaudited)


|                                                                              |                                              |                          |         |        |        |   |         |        |        | 
|----------------------------------------------------------------------------- | -------------------------------------------- | ------------------------ | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                                                              |                                              | 2002                     |         | 2001  
|                                                                              |                                              |                          |         |       
|Leisure and recreation revenue                                                |                                              | $                        | 99,988  |        |        | $ | 101,986 |       
|Operating expenses:                                                           |                                              |                          |         |        |        |   |         |       
|                                                                              | Cost of leisure and recreation services      |                          |         | 37,091 |        |   |         | 37,055 |       
|                                                                              | Selling, general and administrative expenses |                          |         | 21,479 |        |   |         | 19,628 |       
|                                                                              | Amortization and depreciation                |                          |         | 8,615  |        |   |         | 7,699  |       
|                                                                              |                                              |                          |         |        |        |   |         |       
|                                                                              |                                              | Total operating expenses |         |        | 67,185 |   |         |        | 64,382 | 
|                                                                              |                                              |                          |         |        |        |   |         |       
|Operating income                                                              |                                              |                          | 32,803  |        |        |   | 37,604  |       
|Interest and other income                                                     |                                              |                          | 50      |        |        |   | 2,582   |       
|Interest and other expense                                                    |                                              |                          | (6,026  | )      |        |   | (10,514 | )     
|                                                                              |                                              |                          |         |        |        |   |         |       
|Income from continuing operations before income
    taxes                     |                                              |                          | 26,827  |        |        |   | 29,672  |       
|Provision for income taxes                                                    |                                              |                          | (10,731 | )      |        |   |        |       
|                                                                              |                                              |                          |         |        |        |   |         |       
|Income from continuing operations                                             |                                              |                          | 16,096  |        |        |   | 29,672  |       
|Loss from discontinued operations, net of income
    tax benefit              |                                              |                          |        |        |        |   | (1,273  | )     
|Extraordinary loss on early retirement of debt,
    net of income tax benefit |                                              |                          |        |        |        |   | (1,823  | )     
|                                                                              |                                              |                          |         |        |        |   |         |       
|Net income                                                                    |                                              | $                        | 16,096  |        |        | $ | 26,576  |       
|                                                                              |                                              |                          |         |        |        |   |         |       
|Income per share from continuing operations                                   |                                              | $                        | 0.40    |        |        | $ | 0.73    |       
|Income (loss) per share from discontinued
    operations                      |                                              |                          |        |        |        |   | (0.03   | )     
|Loss per share from extraordinary item                                        |                                              |                          |        |        |        |   | (0.04   | )     
|                                                                              |                                              |                          |         |        |        |   |         |       
|Net income per share  basic                                                  |                                              | $                        | 0.40    |        |        | $ | 0.65    |       
|                                                                              |                                              |                          |         |        |        |   |         |       
|Income per share from continuing operations                                   |                                              | $                        | 0.40    |        |        | $ | 0.71    |       
|Income (loss) per share from discontinued
    operations                      |                                              |                          |        |        |        |   | (0.03   | )     
|Loss per share from extraordinary item                                        |                                              |                          |        |        |        |   | (0.04   | )     
|                                                                              |                                              |                          |         |        |        |   |         |       
|Net income per share  diluted                                                |                                              | $                        | 0.40    |        |        | $ | 0.64    |       
|                                                                              |                                              |                          |         |        |        |   |         |       
|Shares used in computing income (loss) per
    share  basic                  |                                              |                          | 39,749  |        |        |   | 40,887  |       
|                                                                              |                                              |                          |         |        |        |   |         |       
|Shares used in computing income (loss) per
    share  diluted                |                                              |                          | 40,656  |        |        |   | 41,666  |       
|                                                                              |                                              |                          |         |        |        |   |         |       

See accompanying notes to consolidated financial
statements.

2



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##### 



BOCA RESORTS, INC.



CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS


For the Nine Months Ended March 31


(In thousands, except per share
data)


(Unaudited)


|                                                                              |                                              |                          |         |        |         |   |         |         |         | 
|----------------------------------------------------------------------------- | -------------------------------------------- | ------------------------ | ------- | ------ | ------- | - | ------- | ------- | ------- | 
|                                                                              |                                              | 2002                     |         | 2001  
|                                                                              |                                              |                          |         |       
|Leisure and recreation revenue                                                |                                              | $                        | 197,290 |        |         | $ | 257,116 |        
|Operating expenses:                                                           |                                              |                          |         |        |         |   |         |        
|                                                                              | Cost of leisure and recreation services      |                          |         | 89,029 |         |   |         | 111,672 |        
|                                                                              | Selling, general and administrative expenses |                          |         | 61,627 |         |   |         | 69,770  |        
|                                                                              | Amortization and depreciation                |                          |         | 24,843 |         |   |         | 26,953  |        
|                                                                              |                                              |                          |         |        |         |   |         |        
|                                                                              |                                              | Total operating expenses |         |        | 175,499 |   |         |         | 208,395 | 
|                                                                              |                                              |                          |         |        |         |   |         |        
|Operating income                                                              |                                              |                          | 21,791  |        |         |   | 48,721  |        
|Interest and other income                                                     |                                              |                          | 1,034   |        |         |   | 4,067   |        
|Interest and other expense                                                    |                                              |                          | (18,138 | )      |         |   | (38,465 | )      
|                                                                              |                                              |                          |         |        |         |   |         |        
|Income from continuing operations before income
    taxes                     |                                              |                          | 4,687   |        |         |   | 14,323  |        
|Provision for income taxes                                                    |                                              |                          | (1,875  | )      |         |   |        |        
|                                                                              |                                              |                          |         |        |         |   |         |        
|Income from continuing operations                                             |                                              |                          | 2,812   |        |         |   | 14,323  |        
|Loss from discontinued operations, net of income
    tax benefit              |                                              |                          |        |        |         |   | (12,075 | )      
|Gain on disposition of discontinued operations,
    net of income taxes       |                                              |                          | 23,728  |        |         |   |        |        
|Extraordinary loss on early retirement of debt,
    net of income tax benefit |                                              |                          | (968    | )      |         |   | (1,823  | )      
|                                                                              |                                              |                          |         |        |         |   |         |        
|Net income                                                                    |                                              | $                        | 25,572  |        |         | $ | 425     |        
|                                                                              |                                              |                          |         |        |         |   |         |        
|Income per share from continuing operations                                   |                                              | $                        | 0.07    |        |         | $ | 0.35    |        
|Income (loss) per share from discontinued
    operations                      |                                              |                          | 0.60    |        |         |   | (0.30   | )      
|Loss per share from extraordinary item                                        |                                              |                          | (0.02   | )      |         |   | (0.04   | )      
|                                                                              |                                              |                          |         |        |         |   |         |        
|Net income per share  basic                                                  |                                              | $                        | 0.64    |        |         | $ | 0.01    |        
|                                                                              |                                              |                          |         |        |         |   |         |        
|Income per share from continuing operations                                   |                                              | $                        | 0.07    |        |         | $ | 0.35    |        
|Income (loss) per share from discontinued
    operations                      |                                              |                          | 0.59    |        |         |   | (0.29   | )      
|Loss per share from extraordinary item                                        |                                              |                          | (0.02   | )      |         |   | (0.04   | )      
|                                                                              |                                              |                          |         |        |         |   |         |        
|Net income per share  diluted                                                |                                              | $                        | 0.63    |        |         | $ | 0.01    |        
|                                                                              |                                              |                          |         |        |         |   |         |        
|Shares used in computing income (loss) per
    share  basic                  |                                              |                          | 39,798  |        |         |   | 40,887  |        
|                                                                              |                                              |                          |         |        |         |   |         |        
|Shares used in computing income (loss) per
    share  diluted                |                                              |                          | 40,557  |        |         |   | 41,502  |        
|                                                                              |                                              |                          |         |        |         |   |         |        

See accompanying notes to consolidated financial
statements.

3



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##### 



BOCA RESORTS, INC.



CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


For the Nine Months Ended March 31


(In thousands)


(Unaudited)


|                                                  |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |          |         |          |  
|------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------- | ----------------------------------------- | ------- | ------- | ------- | ------- | -------- | ------- | -------- | -
|                                                  |                                                                                                                                                  | 2002                                                                    |                                           | 2001   
|                                                  |                                                                                                                                                  |                                                                         |                                           |        
|Operating activities:                             |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|                                                  | Net income                                                                                                                                       |                                                                         | $                                         | 25,572  |         |         | $       | 425      |        
|                                                  | Extraordinary loss on early extinguishment of
    debt, net of benefit for income taxes                                                          |                                                                         |                                           | 968     |         |         |         | 1,823    |        
|                                                  | Adjustments to reconcile income before
    extraordinary loss, net of benefit for income taxes to net cash
    provided by operating activities: |                                                                         |                                           |         |         |         |         |          |        
|                                                  |                                                                                                                                                  | Amortization and depreciation                                           |                                           |         | 24,843  |         |         |          | 26,953  |         
|                                                  |                                                                                                                                                  | Imputed interest on indebtedness with no stated
    rate                |                                           |         |        |         |         |          | 725     |         
|                                                  |                                                                                                                                                  | Loss from discontinued operations, net of benefit
    for income taxes  |                                           |         |        |         |         |          | 12,075  |         
|                                                  |                                                                                                                                                  | Gain on disposition of discontinued operations,
    net of income taxes |                                           |         | (23,728 | )       |         |          |        |         
|                                                  | Changes in operating assets and liabilities                                                                                                      |                                                                         |                                           |         |         |         |         |          |        
|                                                  |                                                                                                                                                  | Accounts receivable                                                     |                                           |         | (4,813  | )       |         |          | (16,525 | )       
|                                                  |                                                                                                                                                  | Other assets                                                            |                                           |         | 2,836   |         |         |          | 615     |         
|                                                  |                                                                                                                                                  | Accounts payable and accrued expenses                                   |                                           |         | 4,962   |         |         |          | 272     |         
|                                                  |                                                                                                                                                  | Deferred revenue and other liabilities                                  |                                           |         | 9,474   |         |         |          | 15,276  |         
|                                                  |                                                                                                                                                  | Net assets/liabilities from discontinued
    operations                 |                                           |         |        |         |         |          | (8,594  | )       
|                                                  |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|                                                  |                                                                                                                                                  |                                                                         | Net cash provided by operating activities |         |         | 40,114  |         |          |         | 33,045   |  
|                                                  |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|Investing activities:                             |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|                                                  | Net proceeds from the disposition of discontinued
    operations                                                                                 |                                                                         |                                           | 80,061  |         |         |         |         |        
|                                                  | Net proceeds from the sale of the Arizona
    Biltmore Resort & Spa                                                                              |                                                                         |                                           |        |         |         |         | 279,925  |        
|                                                  | Capital expenditures                                                                                                                             |                                                                         |                                           | (61,929 | )       |         |         | (47,988  | )      
|                                                  | Change in restricted cash                                                                                                                        |                                                                         |                                           | (167    | )       |         |         | (3,860   | )      
|                                                  | Cash provided by investing activities from
    discontinued operations                                                                           |                                                                         |                                           |        |         |         |         | 1,868    |        
|                                                  |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|                                                  |                                                                                                                                                  |                                                                         | Net cash provided by investing activities |         |         | 17,965  |         |          |         | 229,945  |  
|                                                  |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|Financing activities:                             |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|                                                  | Borrowings under credit facilities                                                                                                               |                                                                         |                                           | 24,500  |         |         |         | 38,430   |        
|                                                  | Payments under long-term debt agreements and
    credit facilities                                                                               |                                                                         |                                           | (24,672 | )       |         |         | (125,576 | )      
|                                                  | Repurchases of 9.875% senior subordinated notes
    payable                                                                                      |                                                                         |                                           | (57,000 | )       |         |         | (60,040  | )      
|                                                  | Repurchases of common stock                                                                                                                      |                                                                         |                                           | (2,306  | )       |         |         |         |        
|                                                  | Proceeds from exercise of stock options                                                                                                          |                                                                         |                                           | 1,120   |         |         |         | 147      |        
|                                                  | Cash used in financing activities from
    discontinued operations                                                                               |                                                                         |                                           |        |         |         |         | (2,500   | )      
|                                                  |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|                                                  |                                                                                                                                                  |                                                                         | Net cash used in financing activities     |         |         | (58,358 | )       |          |         | (149,539 | )
|                                                  |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|Cash provided by (used in) continuing operations  |                                                                                                                                                  |                                                                         | (80,340                                   | )       |         |         | 110,602 |         
|Cash provided by discontinued operations          |                                                                                                                                                  |                                                                         | 80,061                                    |         |         |         | 2,849   |         
|Cash and cash equivalents, at beginning of period |                                                                                                                                                  |                                                                         | 9,909                                     |         |         |         | 7,796   |         
|                                                  |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         
|Cash and cash equivalents, at end of period       |                                                                                                                                                  | $                                                                       | 9,630                                     |         |         | $       | 121,247 |         
|                                                  |                                                                                                                                                  |                                                                         |                                           |         |         |         |         |         

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 nine
months ended March 31, 2002 are not necessarily indicative of
the results to be expected for the entire year primarily due to
seasonal variations and because the nine months ended
March 31, 2002 included a non-recurring gain on the
disposition of the entertainment and sports business. See Notes
2 and 5. 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.

On July 25, 2001, 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. Accordingly, the Companys
entertainment and sports business has been accounted for as
discontinued operations and the accompanying Consolidated
Financial Statements presented herein have been restated to
report separately the net assets or liabilities and operating
results of this discontinued operation. See Note 5.

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.

|                                            |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 
|------------------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  |  | ------ |  |  |  | ------ | 
|                                            |  |                    |        |                  
|                                            |  | Three Months Ended |        | Nine Months Ended
|                                            |  | March 31,          |        | March 31,        
|                                            |  |                    |        |                  
|                                            |  | 2002               |        | 2001              |  | 2002 |        | 2001
|(In Thousands)                              |  |                    |        |                   |  |      |        |     
|Basic weighted average shares outstanding   |  |                    | 39,749 |                   |  |      | 40,887 |      |  |  | 39,798 |  |  |  | 40,887 | 
|Stock options                               |  |                    | 907    |                   |  |      | 779    |      |  |  | 759    |  |  |  | 615    | 
|                                            |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 
|Diluted weighted average shares outstanding |  |                    | 40,656 |                   |  |      | 41,666 |      |  |  | 40,557 |  |  |  | 41,502 | 
|                                            |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 

Options to purchase 5.8 million and 5.6 million
shares of common stock were outstanding at March 31, 2002
and 2001, respectively, but were not included in the computation
of earnings per share because the effect would be antidilutive.

4.  Income Taxes

The Company recorded a provision for income taxes
from continuing operations in the amount of $10.7 million during
the three months ended March 31, 2002 and $1.9 million during
the nine months ended

5



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##### 



BOCA RESORTS, INC.


NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS 

(Continued)


March 31, 2002. No provision for income
taxes was recorded during the three and nine months ended
March 31, 2001 due to an offsetting decrease in the
Companys tax valuation allowance. Realization of future
tax benefits related to deferred tax assets is dependent on many
factors, including the Companys ability to generate future
taxable income. The tax valuation allowance is adjusted in the
period management determines it is more likely than not that
deferred tax assets will or will not be realized. The Company
continued to maintain a tax valuation allowance at
March 31, 2001 because management believed the
Companys ability to generate future taxable income and
realization of the deferred tax asset was not more likely
than not due to the volatility of the entertainment and
sports business. This business was subsequently sold and,
therefore, the tax valuation allowance was released during the
three months ended June 30, 2001.

5.  Sale of Entertainment and Sports
Business

On July 25, 2001 the Company sold its
entertainment and sports business. The selling price for the
business, which incorporated certain working capital
adjustments, consisted of $83.5 million in cash, an $11.3
million secured promissory note (which was paid January 25,
2002) and the assumption by the purchasers of certain
off-balance sheet contingencies including a $10 million
construction obligation secured by a performance bond. The net
proceeds from the sale of the business after payment of disposal
costs and income taxes is expected to approach $70.0 million and
the gain on disposition was $23.7 million. Net liabilities from
discontinued operations included in the accompanying
Consolidated Balance Sheet in the amount of $9.9 million at
March 31, 2002 represents estimated income taxes payable
associated with the gain on the sale and other disposal costs.

6.  Legal Proceedings

Upon the sale of the Arizona Biltmore Resort
& Spa in December 2000, the Company remained contingently
liable for certain litigation relating to the property. Based on
discussions and a settlement offer made in January 2002, which
has been accepted by one plaintiff but remains subject to the
approval of a second plaintiff, the Company estimates that the
settlement amount resulting from the ultimate resolution of this
litigation will approximate $2.9 million. Such amount is
included in accounts payable and accrued liabilities at
March 31, 2002 in the accompanying Consolidated Balance
Sheet.

7.  Recently Implemented Accounting
Standards

On July 1, 2001, the Company adopted
Statement of Financial Accounting Standards (SFAS)
No. 142, Goodwill and Other Intangible Assets
which states, among other things, that goodwill is no longer
subject to amortization over its estimated useful life. Under
the statement, the Company was required to complete the goodwill
transition impairment test by December 31, 2001, which
resulted in no impairment charge. As a result of the adoption of
the provisions of this statement, amortization expense for the
nine months ended March 31, 2002 was $702,000 less than
during the nine months ended March 31, 2001.

The Financial Accounting Standards Board recently
issued SFAS No. 145, which rescinds SFAS No. 4. Under
SFAS No. 4, all gains and losses from extinguishment of
debt were required to be aggregated and, if material, classified
as an extraordinary item, net of related income tax effect. SFAS
No. 145 eliminates SFAS No. 4 and, thus, gains and losses
from extinguishment of debt should be classified as
extraordinary items only if they meet the criteria in APB
Opinion 30. Applying the provisions of APB Opinion 30 will
distinguish 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 provisions of this Statement related to the rescission
of SFAS No. 4 shall be applied in fiscal years beginning
after May 15, 2002. Any gain or loss on extinguishment of
debt that was classified as an extraordinary item in prior
periods presented, that does not

6



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##### 



BOCA RESORTS, INC.


NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS 

(Continued)


meet the criteria in APB Opinion No. 30 for
classification as an extraordinary item, shall be reclassified.
Early application of the provisions of this Statement related to
the rescission of Statement 4 is encouraged. Accordingly, upon
adoption of SFAS No. 145, the Company will reclassify
extraordinary losses resulting from the early extinguishment of
debt associated with previous periods to recurring operations.

8.  Comprehensive Income

Comprehensive income was the same as net income
for the three and nine months ended March 31, 2002 and 2001.

7



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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/A for the fiscal year ended
June 30, 2001.

Business Philosophy

The Companys current business strategy is
to focus on expanding the leisure and recreation business.
However, management continuously evaluates ownership,
acquisition and divestiture alternatives with the intention of
maximizing shareholder value.

Seasonality

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

Events of September 11

During the three-month period following the
September 11 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 experienced an increase
in demand during the three months ended March 31, 2002 and
management is optimistic that lodging fundamentals will continue
to advance and operations will continue to approach
pre-September 11 levels.

8



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##### 



RESULTS OF OPERATIONS  COMPARISON
TO PRIOR YEAR HISTORICAL

The accompanying table for the three and nine
months ended March 31 (expressed in 000s) is set
forth on a historical basis which includes operating results
from the Arizona Biltmore Resort & Spa (sold in December
2000) and the entertainment and sports business (presented as a
discontinued operation and sold in July 2001) during the prior
year.

|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |         |        |         | 
|----------------------------------------------------------------------------- | --------------------------------------------- | ---------------------- | ------------------------ | ----------------- | ------ | ------ | ------- | ------ | ------ | ------ | ------- | ------ | ------ | ------- | -------- | ------- | ------ | ------- | 
|                                                                              |                                               |                        |                          |                  
|                                                                              |                                               | Three Months Ended     |                          | Nine Months Ended
|                                                                              |                                               | March 31               |                          | March 31         
|                                                                              |                                               |                        |                          |                  
|                                                                              |                                               | 2002                   |                          | 2001              |        | 2002   |         | 2001  
|                                                                              |                                               |                        |                          |                   |        |        |         |       
|Leisure and recreation revenue                                                |                                               | $                      | 99,988                   |                   |        | $      | 101,986 |        |        | $      | 197,290 |        |        | $       | 257,116  |        
|Operating expenses:                                                           |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|                                                                              | Cost of leisure and recreation services       |                        |                          | 37,091            |        |        |         | 37,055 |        |        |         | 89,029 |        |         |          | 111,672 |       
|                                                                              | Selling, general and administrative expenses: |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |         |       
|                                                                              |                                               | Leisure and recreation |                          |                   | 18,766 |        |         |        | 17,621 |        |         |        | 55,079 |         |          |         | 62,969 |        
|                                                                              |                                               | Corporate              |                          |                   | 2,713  |        |         |        | 2,007  |        |         |        | 6,548  |         |          |         | 6,801  |        
|                                                                              | Amortization and depreciation:                |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |         |       
|                                                                              |                                               | Leisure and recreation |                          |                   | 8,556  |        |         |        | 7,620  |        |         |        | 24,655 |         |          |         | 26,724 |        
|                                                                              |                                               | Corporate              |                          |                   | 59     |        |         |        | 79     |        |         |        | 188    |         |          |         | 229    |        
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|                                                                              |                                               |                        | Total operating expenses |                   |        | 67,185 |         |        |        | 64,382 |         |        |        | 175,499 |          |         |        | 208,395 | 
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|                                                                              | Operating income (loss):                      |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |         |       
|                                                                              |                                               | Leisure and recreation |                          |                   | 35,575 |        |         |        | 39,690 |        |         |        | 28,527 |         |          |         | 55,751 |        
|                                                                              |                                               | Corporate              |                          |                   | (2,772 | )      |         |        | (2,086 | )      |         |        | (6,736 | )       |          |         | (7,030 | )      
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|                                                                              |                                               |                        | Total operating income   |                   |        | 32,803 |         |        |        | 37,604 |         |        |        | 21,791  |          |         |        | 48,721  | 
|Interest and other income                                                     |                                               |                        | 50                       |                   |        |        | 2,582   |        |        |        | 1,034   |        |        |         | 4,067    |        
|Interest and other expense                                                    |                                               |                        | (6,026                   | )                 |        |        | (10,514 | )      |        |        | (18,138 | )      |        |         | (38,465  | )      
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|Income from continuing operations before income
    taxes                     |                                               |                        | 26,827                   |                   |        |        | 29,672  |        |        |        | 4,687   |        |        |         | 14,323   |        
|Provision for income taxes                                                    |                                               |                        | (10,731                  | )                 |        |        |        |        |        |        | (1,875  | )      |        |         |         |        
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|Income from continuing operations                                             |                                               |                        | 16,096                   |                   |        |        | 29,672  |        |        |        | 2,812   |        |        |         | 14,323   |        
|Loss from discontinued operations, net of income
    tax benefit              |                                               |                        |                         |                   |        |        | (1,273  | )      |        |        |        |        |        |         | (12,075  | )      
|Gain on disposition of discontinued operations,
    net of income taxes       |                                               |                        |                         |                   |        |        |        |        |        |        | 23,728  |        |        |         |         |        
|Extraordinary loss on early retirement of debt,
    net of income tax benefit |                                               |                        |                         |                   |        |        | (1,823  | )      |        |        | (968    | )      |        |         | (1,823   | )      
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|Net income                                                                    |                                               | $                      | 16,096                   |                   |        | $      | 26,576  |        |        | $      | 25,572  |        |        | $       | 425      |        
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|Net cash provided by operating activities                                     |                                               | $                      | 31,416                   |                   |        | $      | 8,597   |        |        | $      | 40,114  |        |        | $       | 33,045   |        
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|Net cash provided by (used in) investing
    activities                       |                                               | $                      | (3,481                   | )                 |        | $      | (1,887  | )      |        | $      | 17,965  |        |        | $       | 229,945  |        
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|Net cash used in financing activities                                         |                                               | $                      | (23,964                  | )                 |        | $      | (90,187 | )      |        | $      | (58,358 | )      |        | $       | (149,539 | )      
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|EBITDA (loss):                                                                |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|                                                                              | Leisure and recreation                        |                        | $                        | 44,131            |        |        | $       | 47,310 |        |        | $       | 53,182 |        |         | $        | 82,475  |       
|                                                                              | Corporate                                     |                        |                          | (2,713            | )      |        |         | (2,007 | )      |        |         | (6,548 | )      |         |          | (6,801  | )     
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|                                                                              | Total                                         |                        | $                        | 41,418            |        |        | $       | 45,303 |        |        | $       | 46,634 |        |         | $        | 75,674  |       
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|Adjusted EBITDA (loss):                                                       |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|                                                                              | Leisure and recreation                        |                        | $                        | 45,633            |        |        | $       | 50,816 |        |        | $       | 57,282 |        |         | $        | 91,212  |       
|                                                                              | Corporate                                     |                        |                          | (2,713            | )      |        |         | (2,007 | )      |        |         | (6,548 | )      |         |          | (6,801  | )     
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        
|                                                                              | Total                                         |                        | $                        | 42,920            |        |        |         | 48,809 |        |        |         | 50,734 |        |         |          | 84,411  |       
|                                                                              |                                               |                        |                          |                   |        |        |         |        |        |        |         |        |        |         |          |        

9



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##### 



Select operating data for the Companys
leisure and recreation business for the three and nine months
ended March 31 is set forth below (in 000s except
operating statistics):

|                                                            |                          |                                      |         |                   |        |        |         |        |         |      |    |        |    |    |         |         |         |   |         |         |         |  |     |     |     |   
|----------------------------------------------------------- | ------------------------ | ------------------------------------ | ------- | ----------------- | ------ | ------ | ------- | ------ | ------- | ---- | -- | ------ | -- | -- | ------- | ------- | ------- | - | ------- | ------- | ------- |  | --- | --- | --- | --
|                                                            |                          |                                      |         |                  
|                                                            |                          | Three Months Ended                   |         | Nine Months Ended
|                                                            |                          |                                      |         |                  
|                                                            |                          | 2002                                 |         | 2001              |        | % Chg. |         | 2002   |         | 2001 |    | % Chg.
|                                                            |                          |                                      |         |                   |        |        |         |        |         |      |    |       
|Revenue:                                                    |                          |                                      |         |                   |        |        |         |        |         |      |    |        |    |    |         |         |         |   |         |         |         |  |     |    
|                                                            | Room revenue             |                                      | $       | 45,108            |        |        | $       | 47,762 |         |      |    | (6     | )% |    | $       | 80,151  |         |   | $       | 109,408 |         |  |     | (27 | )% 
|                                                            | Non-room related revenue |                                      |         | 54,880            |        |        |         | 54,224 |         |      |    | 1      | %  |    |         | 117,139 |         |   |         | 147,708 |         |  |     | (21 | )% 
|                                                            |                          |                                      |         |                   |        |        |         |        |         |      |    |        |    |    |         |         |         |   |         |         |         |  |     |    
|                                                            |                          | Total leisure and recreation revenue |         | $                 | 99,988 |        |         | $      | 101,986 |      |    |        | (2 | )% |         | $       | 197,290 |   |         | $       | 257,116 |  |     |     | (23 | )%
|Operating Statistics:                                       |                          |                                      |         |                   |        |        |         |        |         |      |    |        |    |    |         |         |         |   |         |         |         |  |     |    
|Available room nights                                       |                          |                                      | 205,266 |                   |        |        | 201,510 |        |         |      | 2  | %      |    |    | 617,242 |         |         |   | 739,676 |         |         |  | (17 | )% 
|Average daily rate                                          |                          | $                                    | 282.46  |                   |        | $      | 287.75  |        |         |      | (2 | )%     |    | $  | 216.04  |         |         | $ | 214.74  |         |         |  | 1   | %  
|Occupancy                                                   |                          |                                      | 77.8%   |                   |        |        | 82.4%   |        |         |      | (6 | )%     |    |    | 60.1%   |         |         |   | 68.9%   |         |         |  | (13 | )% 
|Room revenue per available room                             |                          | $                                    | 219.76  |                   |        | $      | 237.02  |        |         |      | (7 | )%     |    | $  | 129.85  |         |         | $ | 147.91  |         |         |  | (12 | )% 
|Total leisure and recreation revenue per
    available room |                          | $                                    | 487.11  |                   |        | $      | 506.11  |        |         |      | (4 | )%     |    | $  | 319.64  |         |         | $ | 347.61  |         |         |  | (8  | )% 

Revenue

Leisure and recreation revenue totaled $100.0
million and $102.0 million during the three months ended
March 31, 2002 and 2001, respectively, and $197.3 million
and $257.1 million during the nine months ended March 31,
2002 and 2001, respectively.

The $2.0 million decrease in leisure and
recreation revenue during the three months ended March 31,
2002 compared to the three months ended March 31, 2001 was
primarily due to a decline in occupancy to 77.8% for the three
months ended March 31, 2002, from 82.4% for the same period
of the prior year and a decline in the average daily rate to
$282.46 for the three months ended March 31, 2002, from $287.75
for the year ago period. While the Company continued to face a
challenging operating environment, demand rebounded during the
recently completed three-month period as compared to that
experienced in the months immediately subsequent to the
September 11 terrorist attacks. The decrease in leisure and
recreation revenue did not correspond to the decrease in total
revenue per available room due to an increase in the number of
available rooms following the completion of a new Yacht Club at
the Boca Raton Resort & Club.

The $59.8 million decrease in leisure and
recreation revenue during the nine months ended March 31,
2002 compared to the nine months ended March 31, 2001 was
partially because the prior year nine-month period included
$39.9 million in revenue from the Arizona Biltmore Resort &
Spa, which was sold in December 2000. In addition, leisure and
recreation revenue decreased due to a decline in same-resort
occupancy to 60.1% for the nine months ended March 31,
2002, from 68.9% for the same period of the prior year as a
result of travel disruption and short-term cancellations of
group business in the wake of the September 11 terrorist
attacks.

Resort Operating Expenses

Cost of leisure and recreation services totaled
$37.1 million, or 37% of revenue, during the three months ended
March 31, 2002 compared to cost of leisure and recreation
services of $37.1 million, or 36% of revenue, during the three
months ended March 31, 2001. Cost of leisure and recreation
services totaled $89.0 million, or 45% of revenue, during the
nine months ended March 31, 2002 compared to cost of
leisure and recreation services of $111.7 million, or 43% of
revenue, during the nine months ended March 31, 2001. The
increase in cost of services as a percent of revenue during the
current year periods was substantially due to the decrease in
revenue following the September 11 terrorist attacks.

Selling, general and administrative expenses
(S,G&A) of the leisure and recreation business
totaled $18.8 million, or 19% of revenue, during the three
months ended March 31, 2002, compared to S,G&A of $17.6
million, or 17% of revenue, during the three months ended
March 31, 2001. S,G&A of the leisure and recreation
business totaled $55.1 million, or 28% of revenue, during the
nine months ended March 31, 2002,

10



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##### 



compared to S,G&A of $63.0 million, or 24% of
revenue, during the nine months ended March 31, 2001. The
increase S,G&A as a percent of revenue during the current
year periods was substantially due to the decrease in revenue
following the September 11 terrorist attacks. In addition,
the prior year nine-month period included a $1.3 million credit
to S,G&A expense for non-recurring insurance proceeds, while
the current year nine-month period included an increase in
property taxes and certain non-recurring severance and
compensation charges. S,G&A of the leisure and recreation
business 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.


While certain reductions were made to both
variable cost of services and S,G&A expenses such as labor
costs by March 31, 2002, management continues to actively
work with the Companys resort managers to substantially
reduce the operating costs of each resort. These initiatives
include further reducing labor costs and streamlining staffing
and service delivery.

Amortization and depreciation expense for the
leisure and recreation business totaled $8.6 million and $7.6
million during the three months ended March 31, 2002 and
2001, respectively, and $24.7 million and $26.7 million during
the nine months ended March 31, 2002 and 2001,
respectively. The increase in amortization and depreciation
expense during the three months ended March 31, 2002
compared to the three months ended March 31, 2001 was
primarily the result of an increase in depreciation expense
following the completion of several capital projects at the Boca
Raton Resort and Club and Registry Resort, offset by a reduction
to amortization expense pursuant to the provisions of SFAS No.
142, Goodwill and Other Intangible Assets. The
decrease in amortization and depreciation expense during the
nine months ended March 31, 2002 compared to the nine
months ended March 31, 2001 was primarily because the prior
year nine-month period included $4.5 million in amortization and
depreciation expense associated with the Arizona Biltmore Resort
& Spa, which was partially offset by a $2.5 million increase
in depreciation expense during the current year following the
completion of several capital projects at the Boca Raton Resort
and Club and Registry Resort

Resort Operating Income

Operating income for the leisure and recreation
business totaled $35.6 million and $39.7 million during the
three months ended March 31, 2002 and 2001, respectively,
and $28.5 million and $55.8 million during the nine months ended
March 31, 2002 and 2001, respectively. The decrease in
operating income of the leisure and recreation business during
the three months ended March 31, 2002 compared to the three
months ended March 31, 2001 was primarily due to the slow
business recovery following the September 11 terrorist
attacks. The decrease in operating income of the leisure and
recreation business during the nine months ended March 31,
2002 compared to the nine months ended March 31, 2001 was
primarily because of a decrease in revenue and corresponding
earnings following the September 11 terrorist attacks and
because the prior year nine-month period included $8.4 million
in operating income from the Arizona Biltmore Resort & Spa.

Corporate General and Administrative
Expenses

Corporate general and administrative expenses
totaled $2.7 million and $2.0 million during the three months
ended March 31, 2002 and 2001, respectively, and $6.5
million and $6.8 million during the nine months ended
March 31, 2002 and 2001, respectively. While the current
and prior year period included certain non-recurring items, the
decrease in corporate general and administrative expense during
the nine months ended March 31, 2002 compared to the nine
months ended March 31, 2001 was primarily due to a decline
in the management fee, equal to 1% of total revenue, payable to
Huizenga Holdings, Inc., a corporation whose sole shareholder is
the Companys Chief Executive Officer and Chairman.
Pursuant to the management services agreement, Huizenga
Holdings, Inc. provides certain administrative, financing, tax,
investor relations and strategy related services to the Company.

11



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##### 



Interest and Other Income

Interest and other income totaled $50,000 and
$2.6 million during the three months ended March 31, 2002
and 2001, respectively, and $1.0 million and $4.1 million during
the nine months ended March 31, 2002 and 2001,
respectively. The decrease in interest and other income during
the three and nine months ended March 31, 2002 compared to
the three and nine months ended March 31, 2001 was
primarily because the Company invested a portion of the proceeds
from the sale of the Arizona Biltmore Resort & Spa in time
deposit accounts during the prior year nine-month period until
such proceeds were ultimately used to pay down higher rate
indebtedness.

Interest and Other Expense

Interest and other expense totaled $6.0 million
and $10.5 million during the three months ended March 31,
2002 and 2001, respectively, and $18.1 million and $38.5 million
during the nine months ended March 31, 2002 and 2001,
respectively. The decrease in interest and other expense
followed a reduction in indebtedness with the proceeds from the
sale of the Arizona Biltmore Resort & Spa. The
Companys consolidated indebtedness totaled $216.3 million
and $377.3 million at March 31, 2002 and 2001, respectively.

Provision for Income Taxes

The Company recorded a provision for income taxes
from continuing operations in the amount of $10.7 million during
the three months ended March 31, 2002 and $1.9 million during
the nine months ended March 31, 2002. No provision for
income taxes was recorded during the three and nine months ended
March 31, 2001 due to an offsetting decrease in the
Companys tax valuation allowance. Realization of future
tax benefits related to deferred tax assets is dependent on many
factors, including the Companys ability to generate future
taxable income. The tax valuation allowance is adjusted in the
period management determines it is more likely than not that
deferred tax assets will or will not be realized. The Company
continued to maintain a tax valuation allowance at
March 31, 2001 because management believed the
Companys ability to generate future taxable income and
realization of the deferred tax asset was not more likely
than not due to the volatility of the entertainment and
sports business. This business was subsequently sold and,
therefore, the tax valuation allowance was released during the
three months ended June 30, 2001.

EBITDA/Adjusted EBITDA

EBITDA represents earnings before extraordinary
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

EBITDA totaled $41.4 million and $45.3 million
during the three months ended March 31, 2002 and 2001,
respectively, and $46.6 million and $75.7 million during the
nine months ended March 31, 2002 and 2001, respectively.
While the prior year nine-month period included $13.0 million in
EBITDA from the Arizona Biltmore Resort & Spa, the decrease
in EBITDA for the periods presented was primarily the result of
a decrease in revenue and corresponding earnings following the
September 11 terrorist attacks.

12



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##### 



Adjusted EBITDA

Adjusted EBITDA represents EBITDA plus the amount
of net membership fees deferred during the periods presented.
The net membership fees deferred represents the quarterly change
in deferred revenue arising from the Premier Clubs at the Boca
Raton Resort & Club, Naples Grande and Grande Oaks Golf
Clubs. Net memberships deferred totaled $1.5 million and $3.5
million during the three months ended March 31, 2002 and
2001, respectively, and $4.1 million and $8.7 million during the
nine months ended March 31, 2002 and 2001, respectively.
The Company opened Naples Grande Golf Club in February 2000,
which resulted in strong introductory membership sales during
its initial twelve-month sales season, which are reflected in
the net memberships deferred during the three and nine months
ended March 31, 2001.

Discontinued Operations

On July 25, 2001 the Company sold its
entertainment and sports business. The selling price for the
business, which incorporated certain working capital
adjustments, consisted of $83.5 million in cash, an $11.3
million secured promissory note (which was paid January 25,
2002) and the assumption by the purchasers of certain
off-balance sheet contingencies including a $10 million
construction obligation secured by a performance bond. The net
proceeds from the sale of the business after payment of disposal
costs and income taxes is estimated to approach $70.0 million
and the gain on disposition was $23.7 million.

Extraordinary Loss

The Company recorded a $968,000 extraordinary
loss (net of a benefit for income taxes) relating to the
repurchase of $57.0 million principal amount of its 9.875%
senior subordinated notes during the nine months ended
March 31, 2002. The Company recorded a $1.8 million
extraordinary loss relating to the repurchase of $60.0 million
principal amount of its 9.875% senior subordinated notes during
the nine months ended March 31, 2001. The extraordinary
losses substantially represent the non-cash charge-off of a pro
rata portion of the debt issuance costs previously capitalized
when the notes were issued.

13



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##### 



RESULTS OF OPERATIONS  COMPARISON
TO PRIOR YEAR PRO FORMA

The accompanying table for the nine months ended
March 31 (expressed in 000s) is set forth on a pro
forma basis for the prior year, which excludes the operating
results from the Arizona Biltmore Resort & Spa, which was
sold in December 2000. Management believes the pro forma
information, which is supplemental to the historical discussion
(which appears under the heading Results of
Operations  Comparison to Prior Year
Historical), provides readers with a meaningful comparison
of the periods presented on a same-resort basis.

|                               |                                               |                        |                          |        |        |         |         |        |        |         | 
|------------------------------ | --------------------------------------------- | ---------------------- | ------------------------ | ------ | ------ | ------- | ------- | ------ | ------ | ------- | 
|                               |                                               | 2002                   |                          | 2001  
|                               |                                               |                        |                          |       
|Leisure and recreation revenue |                                               | $                      | 197,290                  |        |        | $       | 217,260 |       
|Operating expenses:            |                                               |                        |                          |        |        |         |         |       
|                               | Cost of leisure and recreation services       |                        |                          | 89,029 |        |         |         | 94,998 |       
|                               | Selling, general and administrative expenses: |                        |                          |        |        |         |         |        |       
|                               |                                               | Leisure and recreation |                          |        | 55,079 |         |         |        | 52,753 |        
|                               |                                               | Corporate              |                          |        | 6,548  |         |         |        | 6,402  |        
|                               | Amortization and depreciation:                |                        |                          |        |        |         |         |        |       
|                               |                                               | Leisure and recreation |                          |        | 24,655 |         |         |        | 22,203 |        
|                               |                                               | Corporate              |                          |        | 188    |         |         |        | 229    |        
|                               |                                               |                        |                          |        |        |         |         |       
|                               |                                               |                        | Total operating expenses |        |        | 175,499 |         |        |        | 176,585 | 
|                               |                                               |                        |                          |        |        |         |         |       
|Operating income (loss):       |                                               |                        |                          |        |        |         |         |       
|                               | Leisure and recreation                        |                        |                          | 28,527 |        |         |         | 47,306 |       
|                               | Corporate                                     |                        |                          | (6,736 | )      |         |         | (6,631 | )     
|                               |                                               |                        |                          |        |        |         |         |       
|                               |                                               |                        | Total operating income   |        | $      | 21,791  |         |        | $      | 40,675  | 
|                               |                                               |                        |                          |        |        |         |         |       
|EBITDA (loss):                 |                                               |                        |                          |        |        |         |         |       
|                               | Leisure and recreation                        |                        | $                        | 53,182 |        |         | $       | 69,509 |       
|                               | Corporate                                     |                        |                          | (6,548 | )      |         |         | (6,402 | )     
|                               |                                               |                        |                          |        |        |         |         |       
|                               | Total                                         |                        | $                        | 46,634 |        |         | $       | 63,107 |       
|                               |                                               |                        |                          |        |        |         |         |       
|Adjusted EBITDA (loss):        |                                               |                        |                          |        |        |         |         |       
|                               | Leisure and recreation                        |                        | $                        | 57,282 |        |         | $       | 78,246 |       
|                               | Corporate                                     |                        |                          | (6,548 | )      |         |         | (6,402 | )     
|                               |                                               |                        |                          |        |        |         |         |       
|                               | Total                                         |                        | $                        | 50,734 |        |         | $       | 71,844 |       
|                               |                                               |                        |                          |        |        |         |         |       

Select operating data for the Companys
leisure and recreation business for the nine months ended
March 31 is set forth below (in 000s except operating
statistics and pro forma information for the prior year):

|                                                            |                          |                                      |         |         |         |        |         |         |         |  |     |     |    |   
|----------------------------------------------------------- | ------------------------ | ------------------------------------ | ------- | ------- | ------- | ------ | ------- | ------- | ------- |  | --- | --- | -- | --
|                                                            |                          | 2002                                 |         | 2001    |         | % Chg.
|                                                            |                          |                                      |         |         |         |       
|Revenue:                                                    |                          |                                      |         |         |         |        |         |         |         |  |     |    
|                                                            | Room revenue             |                                      | $       | 80,151  |         |        | $       | 93,245  |         |  |     | (14 | )%
|                                                            | Non-room related revenue |                                      |         | 117,139 |         |        |         | 124,015 |         |  |     | (6  | )%
|                                                            |                          |                                      |         |         |         |        |         |         |         |  |     |    
|                                                            |                          | Total leisure and recreation revenue |         | $       | 197,290 |        |         | $       | 217,260 |  |     |     | (9 | )%
|Operating Statistics:                                       |                          |                                      |         |         |         |        |         |         |         |  |     |    
|Available room nights                                       |                          |                                      | 617,242 |         |         |        | 613,588 |         |         |  | 1%  |    
|Average daily rate                                          |                          | $                                    | 216.04  |         |         | $      | 215.80  |         |         |  |    |    
|Occupancy                                                   |                          |                                      | 60.1%   |         |         |        | 70.4%   |         |         |  | (15 | )% 
|Room revenue per available room                             |                          | $                                    | 129.85  |         |         | $      | 151.97  |         |         |  | (15 | )% 
|Total leisure and recreation revenue per
    available room |                          | $                                    | 319.64  |         |         | $      | 354.09  |         |         |  | (10 | )% 

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Liquidity and Capital Resources

Unrestricted cash and cash equivalents decreased
to $9.6 million at March 31, 2002, from $9.9 million at
June 30, 2001. The major components of the change are
discussed below.

Net
Cash Provided by Operating Activities

Net cash provided by operating activities totaled
$40.1 million and $33.0 million during the nine months ended
March 31, 2002 and 2001, respectively. The increase in net
cash provided by activities during the nine months ended March
31, 2002 compared to the nine months ended March 31, 2001
was because during the prior year nine-month period the Company
paid $8.6 million to fund operating losses of its entertainment
and sports business. The Company sold this business in July
2001, and therefore, had no operating activities associated with
this discontinued operation during the current year. While the
Company received significantly less cash from its leisure and
recreation business during the nine months ended March 31,
2002 than during the nine months ended March 31, 2001
because of a decline in earnings and corresponding net cash flow
following the September 11 terrorist attacks and because of
the sale of the Arizona Biltmore Resort & Spa, this decrease
was nearly offset by a reduction in interest paid over the same
periods because the Company used the proceeds from these sales
to repay indebtedness.

Net
Cash Provided by Investing Activities

Net cash provided by investing activities
amounted to $18.0 million and $229.9 million during the nine
months ended March 31, 2002 and 2001, respectively. The
change was largely because of the Companys disposition
activities. During the nine months ended March 31, 2002 the
Company received $80.1 million from the sale of the
entertainment and sports business while during the nine months
ended March 31, 2001 the Company received $279.9 million in
net proceeds from the disposition of the Arizona Biltmore Resort
& Spa. Other changes in investing activities are discussed
below.

Capital expenditures totaled $61.9 million and
$48.0 million during the nine months ended March 31, 2002
and 2001, respectively. During the nine months ended
March 31, 2002, the Company continued construction on
various projects at the Boca Raton Resort & Club including
112 new water-view rooms (theYacht Club), which
opened in January 2002 and a new 50,000 square foot
state-of-the-art spa complex (the Spa Palazzo), as
well as, a new golf clubhouse with casual restaurant, which
opened in December 2001.

During the nine months ended March 31, 2001,
capital spending primarily related to continued spending on a
luxury guestroom renovation at the Boca Raton Resort & Club;
construction of a new pool/aquatic center, 6,000 square feet of
additional conference space and enhancements to the beach
facility and boardwalk at the Registry Resort; and spending on a
guestroom renovation at the Bahia Mar Resort and Yachting Center.

Restricted cash increased $167,000 from
June 30, 2001 to March 31, 2002 and increased $3.9
million from June 30, 2000 to March 31, 2001. The $3.9
million increase during the nine months ended March 31,
2001 related to escrow accounts maintained in accordance with
the terms of mortgage-note agreements, which notes were
subsequently paid by the Company.

Cash provided by investing activities from
discontinued operations totaled $1.9 million during the nine
months ended March 31, 2001 and represents the decrease in
restricted cash associated with the entertainment and sports
business. No cash was generated from investing activities from
discontinued operations during the nine months ended
March 31, 2002 as a result of the sale of this business.

Cash
Used in Financing Activities

Net cash used in financing activities amounted to
$58.4 million during the nine months ended March 31, 2002
and includes the repurchase of $57.0 million principal amount of
9.875% senior subordinated notes. Net cash used in financing
activities during the nine months ended March 31, 2001
totaled $149.5 million and

15



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##### 



includes $87.1 million in net repayments under
various credit agreements as well as the repurchase of $60.0
million principal amount of 9.875% senior subordinated notes.


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 May 14, 2002, the Company had no
outstanding balance under its revolving credit line (which
matures on October 31, 2003) and had $129.3 million in
immediate availability. As a result of the current availability
under this credit line, combined with cash on hand, management
believes the Company has sufficient funds to continue its
capital enhancement plans and support on-going operations,
including meeting debt service obligations as they come due.

Financial Condition

Significant changes in balance sheet data from
June 30, 2001 to March 31, 2002 are discussed below.

Accounts
Receivable

Accounts receivable increased to $28.2 million at
March 31, 2002, from $23.4 million at June 30, 2001.
It is customary for the Companys trade receivables to be
highest following the March 31 operating quarter as a
result of the seasonality of its business.

Other
Current Assets

Other current assets decreased to $2.6 million at
March 31, 2002, from $6.0 million at June 30, 2001
primarily due to the amortization of prepaid property insurance.

Property
and Equipment

Property and equipment increased to $828.0
million at March 31, 2002, from $792.1 million at
June 30, 2001. The increase primarily relates to capital
spending at the Boca Raton Resort & Club on projects
including a Yacht Club consisting of 112 water-view luxury
guestrooms, a spa complex, a golf clubhouse and marina slips,
offset by depreciation expense.

Accounts
Payable and Accrued Expenses

Accounts payable and accrued expenses increased
to $36.0 million at March 31, 2002, from $32.4 million at
June 30, 2001. The increase was primarily due to higher
accrued interest on the Companys 9.875% senior
subordinated notes. Interest on the notes is paid semi-annually
on October 15 and April 15. At March 31, 2002, the
accrual for interest totaled $9.9 million (and represented
interest for 167 days on $216 million outstanding notes).
At June 30, 2001, the accrual for interest totaled $5.7
million (and represented interest for 76 days on $273
million outstanding notes).

Current
Portion of Deferred Revenue and Advance Deposits

Current portion of deferred revenue and advance
deposits increased to $27.5 million at March 31, 2002, from
$18.7 million at June 30, 2001. Approximately $5.0 million
of the increase related to annual Premier Club dues collected at
the Boca Raton Resort & Club, which will be recognized as
revenue ratably over the residual six months of the membership
year. The remaining $3.8 million increase in this account from
June 30, 2001 to March 31, 2002 relates to higher
group and leisure traveler deposits for future bookings at the
Companys resorts, which tend to increase around the
Companys peak operating season.

16



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##### 



Net
Assets/Liabilities of Discontinued Operations

Net liabilities of discontinued operations
totaled $9.9 million at March 31, 2002 and primarily represent
estimated income taxes payable associated with the gain on the
sale and other disposal costs.

Deferred
Revenue, Net of Current Portion

Deferred revenue, net of current portion,
increased to $39.9 million at March 31, 2002, from $35.5
million at June 30, 2001 due to additional memberships
sales for the Companys exclusive social club known as the
Premier Club.

Senior
Subordinated Notes Payable

Senior subordinated notes payable decreased to
$216.0 million at March 31, 2002, from $273.0 million at
June 30, 2001. The decrease was the result of the
repurchase of $57.0 million principal amount of such notes.

Working
Capital

Current liabilities exceeded current assets by
$21.7 million at March 31, 2002, compared to positive
working capital of $45.5 million at June 30, 2001. The
change is primarily because the Company used cash to repurchase
$57.0 million principal amount of notes, which would have
otherwise matured in April 2009. However, the ratio of current
liabilities to current assets is not indicative of a lack of
liquidity as the Company maintains a revolving credit line that
represents an additional and immediate potential source of
liquidity. See Capital Resources.

Forward-Looking Statements

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

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

Item 3.  Quantitative and
Qualitative Disclosures About Market Risk

Not Applicable.

17



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##### 



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

None.

Item 5.  Other
Information

None.

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

(a) Exhibits

None.

(b) Reports on Form 8-K

None.

18



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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: May 15, 2002


| |     |                      
| | --- | ---------------------
| | By: | /s/ WILLIAM M. PIERCE

| |                                     
| | ------------------------------------
| |                                     
| | William M. Pierce                   
| | Senior Vice President, Treasurer and
| | Chief Financial Officer             
| | (Principal Financial Officer)       



| |     |                     
| | --- | --------------------
| | By: | /s/ STEVEN M. DAURIA

| |                                        
| | ---------------------------------------
| |                                        
| | Steven M. Dauria                       
| | Vice President and Corporate Controller
| | (Principal Accounting Officer)         

19