##### 



FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---



For Quarter Ended March 31, 2002

Commission File no. 2-64309

GOLF HOST RESORTS, INC.




(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Colorado                                                       |  | 84-0631130                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

36750 US 19 N., Palm Harbor, Florida 34684




(Address of principal executive offices) (Zip Code)


(727) 942-2000




(Registrants telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
twelve months, and (2) has been subject to the filing requirements for the past
90 days.   Yes   x   
No   o

Issuer has no common stock subject to this report.

Page 1 of 23



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PART I  FINANCIAL INFORMATION

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

ASSETS
(Substantially all pledged)

|                            |                                   |                      |            |             |           |              |            |           |           | 
|--------------------------- | --------------------------------- | -------------------- | ---------- | ----------- | --------- | ------------ | ---------- | --------- | --------- | 
|                            |                                   |                      |            | March 31,   |           | December 31,
|                            |                                   |                      |            | 2002        |           | 2001        
|                            |                                   |                      |            |             |           |             
|                            |                                   |                      |            | (unaudited) |           |              |            |          
|CURRENT ASSETS:             |                                   |                      |            |             |           |              |            |          
|                            | Cash                              |                      | $          | 2,807,795   |           |              | $          | 665,402   |          
|                            | Restricted cash                   |                      |            | 517,421     |           |              |            | 1,413,326 |          
|                            | Accounts receivable, net          |                      |            | 4,393,182   |           |              |            | 2,056,232 |          
|                            | Other receivables                 |                      |            | 46,419      |           |              |            | 37,530    |          
|                            | Inventories and supplies          |                      |            | 981,532     |           |              |            | 1,070,280 |          
|                            | Prepaid expenses and other assets |                      |            | 649,639     |           |              |            | 613,962   |          
|                            |                                   |                      |            |             |           |              |            |          
|                            |                                   | Total current assets |            |             | 9,395,988 |              |            |           | 5,856,732 | 
|INTANGIBLES, net            |                                   |                      | 13,155,744 |             |           |              | 13,323,572 |          
|PROPERTY AND EQUIPMENT, net |                                   |                      | 39,504,089 |             |           |              | 40,180,206 |          
|OTHER ASSETS                |                                   |                      | 516,535    |             |           |              | 509,215    |          
|                            |                                   |                      |            |             |           |              |            |          
|                            |                                   | $                    | 62,572,356 |             |           | $            | 59,869,725 |          
|                            |                                   |                      |            |             |           |              |            |          

The accompanying notes are an integral part of these consolidated financial statements.

Page 2



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GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS DEFICIT

|                            |                                                                                               |                           |           |             |             |              |            |             |             | 
|--------------------------- | --------------------------------------------------------------------------------------------- | ------------------------- | --------- | ----------- | ----------- | ------------ | ---------- | ----------- | ----------- | 
|                            |                                                                                               |                           |           | March 31,   |             | December 31,
|                            |                                                                                               |                           |           | 2002        |             | 2001        
|                            |                                                                                               |                           |           |             |             |             
|                            |                                                                                               |                           |           | (unaudited) |             |              |            |            
|CURRENT LIABILITIES:        |                                                                                               |                           |           |             |             |              |            |            
|                            | Debt due within one year                                                                      |                           | $         | 79,533,089  |             |              | $          | 79,562,698  |            
|                            | Accounts payable                                                                              |                           |           | 7,306,287   |             |              |            | 7,762,297   |            
|                            | Accrued payroll costs                                                                         |                           |           | 976,179     |             |              |            | 772,296     |            
|                            | Accrued interest                                                                              |                           |           | 7,794,837   |             |              |            | 2,263,163   |            
|                            | Other payables                                                                                |                           |           | 3,717,202   |             |              |            | 2,775,026   |            
|                            | Deposits and prepaid fees                                                                     |                           |           | 2,228,010   |             |              |            | 2,695,273   |            
|                            | Due to related parties                                                                        |                           |           | 64,384      |             |              |            | 48,428      |            
|                            |                                                                                               |                           |           |             |             |              |            |            
|                            |                                                                                               | Total current liabilities |           |             | 101,619,988 |              |            |             | 95,879,181  | 
|DEBT DUE AFTER ONE YEAR     |                                                                                               |                           |          |             |             |              | 51,213     |            
|OTHER LONG-TERM LIABILITIES |                                                                                               |                           | 9,015,009 |             |             |              | 12,205,203 |            
|DEFERRED INCOME TAXES       |                                                                                               |                           | 1,255,000 |             |             |              | 1,255,000  |            
|                            |                                                                                               |                           |           |             |             |              |            |            
|                            |                                                                                               | Total liabilities         |           |             | 111,889,997 |              |            |             | 109,390,597 | 
|                            |                                                                                               |                           |           |             |             |              |            |            
|SHAREHOLDERS DEFICIT       |                                                                                               |                           |           |             |             |              |            |            
|                            | Common stock, $1 par, 5,000 shares
authorized, issued, and outstanding                        |                           |           | 5,000       |             |              |            | 5,000       |            
|                            | 5.6% cumulative preferred stock, $1 par,
4,577,000 shares authorized, issued,
and outstanding |                           |           | 4,577,000   |             |              |            | 4,577,000   |            
|                            | Paid-in capital                                                                               |                           |           | (8,487,323  | )           |              |            | (8,487,323  | )          
|                            | Accumulated deficit                                                                           |                           |           | (45,412,318 | )           |              |            | (45,615,549 | )          
|                            |                                                                                               |                           |           |             |             |              |            |            
|                            | Total shareholders deficit                                                                   |                           |           | (49,317,641 | )           |              |            | (49,520,872 | )          
|                            |                                                                                               |                           |           |             |             |              |            |            
|                            | Total liabilities and shareholders
deficit                                                   |                           | $         | 62,572,356  |             |              | $          | 59,869,725  |            
|                            |                                                                                               |                           |           |             |             |              |            |            

The accompanying notes are an integral part of these consolidated financial statements.

Page 3



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GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)CONSOLIDATED STATEMENTS OF INCOME(unaudited)

|                                           |                               |   |                          |           |      |   |            |           | 
|------------------------------------------ | ----------------------------- | - | ------------------------ | --------- | ---- | - | ---------- | --------- | 
|                                           |                               |   | Quarters Ended March 31,
|                                           |                               |   |                         
|                                           |                               |   | 2002                     |           | 2001
|                                           |                               |   |                          |           |     
|REVENUES:                                  |                               |   |                          |           |      |   |            |          
|                                           | Resort facilities             |   | $                        | 5,018,165 |      |   | $          | 7,780,255 | 
|                                           | Food and beverage             |   |                          | 3,593,430 |      |   |            | 5,334,599 | 
|                                           | Golf                          |   |                          | 4,556,741 |      |   |            | 5,784,160 | 
|                                           | Other                         |   |                          | 1,302,492 |      |   |            | 1,926,638 | 
|                                           |                               |   |                          |           |      |   |            |          
|                                           |                               |   | 14,470,828               |           |      |   | 20,825,652 |          
|                                           |                               |   |                          |           |      |   |            |          
|COST AND OPERATION EXPENSES:               |                               |   |                          |           |      |   |            |          
|                                           | Resort facilities             |   |                          | 3,340,963 |      |   |            | 4,851,535 | 
|                                           | Food and beverage             |   |                          | 2,392,376 |      |   |            | 3,215,893 | 
|                                           | Golf                          |   |                          | 1,585,600 |      |   |            | 1,970,617 | 
|                                           | Other                         |   |                          | 2,424,139 |      |   |            | 2,902,072 | 
|                                           | General and administrative    |   |                          | 1,217,178 |      |   |            | 1,606,649 | 
|                                           | Depreciation and amortization |   |                          | 872,829   |      |   |            | 968,284   | 
|                                           |                               |   |                          |           |      |   |            |          
|                                           |                               |   | 11,833,085               |           |      |   | 15,515,050 |          
|                                           |                               |   |                          |           |      |   |            |          
|INCOME BEFORE LOSS ON LEASED
ASSET         |                               |   | 2,637,743                |           |      |   | 5,310,602  |          
|LOSS ON LEASED ASSET                       |                               |   |                         |           |      |   | 664,681    |          
|INTEREST, NET                              |                               |   | 2,370,435                |           |      |   | 2,421,198  |          
|                                           |                               |   |                          |           |      |   |            |          
|NET INCOME                                 |                               |   | 267,308                  |           |      |   | 2,224,723  |          
|DIVIDEND REQUIREMENTS ON
PREFERRED STOCK   |                               |   | 64,077                   |           |      |   | 64,077     |          
|                                           |                               |   |                          |           |      |   |            |          
|NET INCOME AVAILABLE
TO COMMON SHAREHOLDER |                               | $ | 203,231                  |           |      | $ | 2,160,646  |          
|                                           |                               |   |                          |           |      |   |            |          

The accompanying notes are an integral part of these consolidated financial statements.

Page 4



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GOLF HOST RESORTS, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS DEFICIT

|                                           |  |              |       |                 |  |         |       |          |  |               |           |         |  |         |           |  |  |   |             |   |  |   |             |   |  |   |             |  
|------------------------------------------ |  | ------------ | ----- | --------------- |  | ------- | ----- | -------- |  | ------------- | --------- | ------- |  | ------- | --------- |  |  | - | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                           |  | $1 Par Value |       | 5.6% Cumulative |  |         |       |          |  |               |           |         |  |         |           | 
|                                           |  | Common Stock |       | Preferred Stock |  |         |       |          |  |               |           |         |  | Total  
|                                           |  |              |       |                 |  | Paid-In |       | Retained |  | Shareholder's
|                                           |  | Shares       |       | Amount          |  | Shares  |       | Amount   |  | Capital       |           | Deficit |  | Deficit
|                                           |  |              |       |                 |  |         |       |          |  |               |           |         |  |        
|Balance, December 31, 2000                 |  |              | 5,000 |                 |  | $       | 5,000 |          |  |               | 4,577,000 |         |  | $       | 4,577,000 |  |  | $ | (13,557,000 | ) |  | $ | (33,744,244 | ) |  | $ | (42,719,244 | )
|Net loss allocated to
common shareholder   |  |              |      |                 |  |         |      |          |  |               |          |         |  |         |          |  |  |   |            |   |  |   | (10,610,891 | ) |  |   | (10,610,891 | )
|Forgiveness of operating deficits          |  |              |      |                 |  |         |      |          |  |               |          |         |  |         |          |  |  |   | 5,069,677   |   |  |   |            |   |  |   | 5,069,677   |  
|Contribution from shareholder              |  |              |      |                 |  |         |      |          |  |               |          |         |  |         |          |  |  |   |            |   |  |   | 2,667,921   |   |  |   | 2,667,921   |  
|Distribution to shareholder                |  |              |      |                 |  |         |      |          |  |               |          |         |  |         |          |  |  |   |            |   |  |   | (3,928,335  | ) |  |   | (3,928,335  | )
|                                           |  |              |       |                 |  |         |       |          |  |               |           |         |  |         |           |  |  |   |             |   |  |   |             |   |  |   |             |  
|Balance, December 31, 2001                 |  |              | 5,000 |                 |  |         | 5,000 |          |  |               | 4,577,000 |         |  |         | 4,577,000 |  |  |   | (8,487,323  | ) |  |   | (45,615,549 | ) |  |   | (49,520,872 | )
|Net income allocated to
common shareholder |  |              |      |                 |  |         |      |          |  |               |          |         |  |         |          |  |  |   |            |   |  |   | 203,231     |   |  |   | 203,231     |  
|                                           |  |              |       |                 |  |         |       |          |  |               |           |         |  |         |           |  |  |   |             |   |  |   |             |   |  |   |             |  
|Balance, March 31, 2002 (unaudited)        |  |              | 5,000 |                 |  | $       | 5,000 |          |  |               | 4,577,000 |         |  | $       | 4,577,000 |  |  | $ | (8,487,323  | ) |  | $ | (45,412,318 | ) |  | $ | (49,317,641 | )
|                                           |  |              |       |                 |  |         |       |          |  |               |           |         |  |         |           |  |  |   |             |   |  |   |             |   |  |   |             |  

The accompanying notes are an integral part of these consolidated financial statements.

Page 5



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GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
(unaudited)

|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |            |           |  
|---------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ----------------------------------------------- | --------- | --------- | --------- | ---- | --------- | ---------- | --------- | -
|                                                                                                     |                                                                         |                                                 |           | 2002      |           | 2001
|                                                                                                     |                                                                         |                                                 |           |           |           |     
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                |                                                                         |                                                 |           |           |           |      |           |           
|                                                                                                     | Net income before dividend requirements
on preferred stock              |                                                 | $         | 267,308   |           |      | $         | 2,224,723  |          
|                                                                                                     | Adjustments to reconcile net income to net cash
provided by operations: |                                                 |           |           |           |      |           |            |          
|                                                                                                     |                                                                         | Depreciation and amortization                   |           |           | 872,829   |      |           |            | 968,284   |  
|                                                                                                     |                                                                         | Provision for bad debts                         |           |           | 223,933   |      |           |            | 149,063   |  
|                                                                                                     | Changes in operating working capital                                    |                                                 |           | 1,018,607 |           |      |           | (2,113,984 | )        
|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |           
|                                                                                                     |                                                                         | Cash provided by operations                     |           |           | 2,382,677 |      |           |            | 1,228,086 |  
|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                                |                                                                         |                                                 |           |           |           |      |           |           
|                                                                                                     | (Increase)/decrease in other assets                                     |                                                 |           | (7,320    | )         |      |           | 369,801    |          
|                                                                                                     | Purchases of property and equipment                                     |                                                 |           | (28,886   | )         |      |           | (214,793   | )        
|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |           
|                                                                                                     |                                                                         | Cash (used in)/provided by investing activities |           |           | (36,206   | )    |           |            | 155,008   |  
|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                |                                                                         |                                                 |           |           |           |      |           |           
|                                                                                                     | Repayment of existing debt                                              |                                                 |           | (80,822   | )         |      |           | (88,761    | )        
|                                                                                                     | Repayment of line of credit                                             |                                                 |           |          |           |      |           | (667,141   | )        
|                                                                                                     | (Decreases)/increases in other long-term liabilities                    |                                                 |           | (123,256  | )         |      |           | 71,056     |          
|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |           
|                                                                                                     |                                                                         | Cash used in financing activities               |           |           | (204,078  | )    |           |            | (684,846  | )
|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |           
|NET INCREASE IN CASH                                                                                 |                                                                         |                                                 | 2,142,393 |           |           |      | 698,248   |           
|CASH, BEGINNING OF PERIOD                                                                            |                                                                         |                                                 | 665,402   |           |           |      | 565,400   |           
|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |           
|CASH, END OF PERIOD                                                                                  |                                                                         | $                                               | 2,807,795 |           |           | $    | 1,263,648 |           
|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |           
|NONCASH FINANCING AND INVESTING
ACTIVITIES:                                                          |                                                                         |                                                 |           |           |           |      |           |           
|The Company satisfied its preferred
stock dividend liability to GHI
through the intercompany account |                                                                         | $                                               | 64,077    |           |           | $    | 64,077    |           
|                                                                                                     |                                                                         |                                                 |           |           |           |      |           |           

The accompanying notes are an integral part of these consolidated financial statements.

Page 6



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GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The financial statements for December 31, 2001 were prepared assuming the Company will continue as a
going concern. As discussed in the notes to consolidated financial statements on Form 10-K dated
December 31, 2001, the Company has suffered recurring losses from operations, has negative working
capital and has a shareholders deficit that raise substantial doubt about its ability to continue as a going
concern. Managements plans in regard to these matters are also discussed in the footnotes. Additionally,
as described in Note 7 of the notes to consolidated financial statements on Form 10-K, the Company has
defaulted under the terms of its debt agreement and Golf Host, Inc. (the Companys parent company) is a
defendant to a class action lawsuit. These financial statements do not include any adjustments that might
result from the outcome of the uncertainties.
|
| | These financial statements and related notes are presented for interim periods in accordance with the
requirements of Form 10-Q and, consequently, do not include all disclosures normally provided in the
Companys Annual Report on Form 10-K. Accordingly, these financial statements and related notes
should be read in conjunction with the Companys Annual Report on Form 10-K for the year ended
December 31, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | The accompanying consolidated balance sheet for March 31, 2002, and consolidated statements of
operations and cash flows for the periods ended March 31, 2002 and 2001, are unaudited but reflect all
adjustments which are, in the opinion of management, necessary for a fair presentation of the results for
the interim periods presented. All such adjustments are of a normal recurring nature.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | The Companys business is seasonal. Therefore, the results of operations for the interim periods shown in
this report are not necessarily indicative of results to be expected for the fiscal years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

(2)  INTANGIBLE ASSETS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company recorded at closing in 1997, a resort intangible asset of approximately $30,400,000. This
intangible related to the purchase of the Innisbrook Resort, which contained an existing rental pool agreement
and a recently executed management agreement with Westin Hotels. The intangible is being amortized over
twenty years on a straight-line basis. Amortization expense for all intangible assets was approximately
$168,000 and $386,000 for the three months ended March 31, 2002
and March 31, 2001, respectively.
|
| | As noted in the Companys 10-K for December 31, 2001, management had determined that due to declining
demand in the resort business and reduced rental pool participation which led to declines in operating results,
impairment had occurred. At December 31,                                                                                                                                                                                                                                                                        

Page 7



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GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(2) INTANGIBLE ASSETS



| |                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2000, an impairment charge of $7,441,000
was recorded. As a result of the continued decline in destination
golf resort business during 2001 and the events of
September 11, 2001, the Company determined that further impairment
had occurred and consequently
had recognized an additional $3,000,000 impairment charge during the
quarter ended September 30, 2001.

(3) DEBT



| |                                
| | -------------------------------
| | Debt consists of the following:

|                                                                               |  |           |             |              |  |   |             |  
|------------------------------------------------------------------------------ |  | --------- | ----------- | ------------ |  | - | ----------- | -
|                                                                               |  | March 31, |             | December 31,
|                                                                               |  | 2002      |             | 2001        
|                                                                               |  |           |             |             
|Participating mortgage note at varying pay
rates maturing in 2027 (in default) |  | $         | 69,975,000  |              |  | $ | 69,975,000  |  
|$9,000,000 participation mortgage
note credit facility (in default)            |  |           | 9,000,000   |              |  |   | 9,000,000   |  
|Capital leases                                                                 |  |           | 558,089     |              |  |   | 638,911     |  
|                                                                               |  |           |             |              |  |   |             |  
|                                                                               |  |           | 79,533,089  |              |  |   | 79,613,911  |  
|Less current maturities                                                        |  |           | (79,533,089 | )            |  |   | (79,562,698 | )
|                                                                               |  |           |             |              |  |   |             |  
|                                                                               |  | $         |            |              |  | $ | 51,213      |  
|                                                                               |  |           |             |              |  |   |             |  

(4) CONTINGENCIES



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Golf Hosts, Inc., the Companys
parent, has been named as a defendant in a consolidated class action
lawsuit whereby the plaintiffs allege breaches of contract, including breaches in connection with the
Rental Pool Master Lease Agreement. The plaintiffs are seeking unspecified damages and declaratory
judgment stating that the plaintiffs are entitled to participate in the rental pool if one exists and a
limitation of golf course access to persons who are either condominium owners, members, their
accompanied guests, or guests of the resort. Deposition of class members and others, including
depositions of prior executives of Golf Host Resorts, have been taken and additional discovery remains.
The previously scheduled trial date of February 3, 2002 has been postponed by the Court; a new trial date
has not yet been set. As this litigation continues, the Company is not yet able to determine whether the
resolution of this matter will have a material adverse effect on the Companys financial condition or results
of operations although the Company believes Golf Hosts, Inc. has successful defenses based upon
consultations with legal counsel and intends to vigorously defend this action.

Page 8



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GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5) TAMARRONS RESULTS OF OPERATIONS



| |                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company assumed responsibility for the net income (loss) of Tamarron under the terms of the lease
agreement between the Company and Golf Host II, Inc. entered into during 2000. The net loss is as
follows and is included in loss on leased asset in the statement of operations:

|                           |                            |   |                |           | 
|-------------------------- | -------------------------- | - | -------------- | --------- | 
|                           |                            |   | Quarter ended 
|                           |                            |   | March 31, 2001
|                           |                            |   |               
|Revenue:                   |                            |   |                |          
|                           | Hotel                      |   | $              | 654,127   | 
|                           | Food and beverage          |   |                | 513,680   | 
|                           | Golf                       |   |                | 169,449   | 
|                           | Other                      |   |                | 499,100   | 
|                           |                            |   |                |          
|                           |                            |   | 1,836,356      |          
|                           |                            |   |                |          
|Costs & operating expense: |                            |   |                |          
|                           | Hotel                      |   |                | 276,496   | 
|                           | Food and beverage          |   |                | 361,835   | 
|                           | Golf                       |   |                | 97,668    | 
|                           | Other                      |   |                | 664,511   | 
|                           | General and administrative |   |                | 1,071,205 | 
|                           | Interest expense           |   |                | 29,322    | 
|                           |                            |   |                |          
|                           |                            |   | 2,501,037      |          
|                           |                            |   |                |          
|Net loss                   |                            | $ | (664,681       | )        
|                           |                            |   |                |          



| |                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On November 19, 2001, GH II, an affiliated company and lessor of
Tamarron, sold Tamarron for $9,500,000.
A portion of the proceeds were contributed to the Company as a capital contribution and were used to
settle the remaining balance due under the $5,000,000 mortgage note from the previous owners.

Page 9



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##### 



GOLF HOST RESORTS, INC.
Managements Discussion and Analysis
of Financial Condition and Results of Operations

ITEM 2. Managements
Discussion and Analysis of Financial Condition and Results of Operations



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | The comparative results for 2001 exclude the activities of the Tamarron Resort, which the Company assumed responsibility for the net income (loss) under the
terms of a lease agreement entered into between the Company and Golf Host II during 2000. Golf Host II sold the Tamarron Resort on November 19, 2001. The
exclusion of Tamarrons results allows for an appropriate comparison on a period to period basis for the Innisbrook property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | During the first quarter of 2002, business results reflect our customers increased caution and concerns about travel subsequent to the 9/11 tragedy. Total
room nights at the Innisbrook property were down 9,055 or 23.7% as a result of our contingency of business segment having postponed or reduced their travel
budget and plans. This decrease was primarily driven by our group business sector as the actual group room nights were down 8,834 or 29.5%. Group meeting
planners are scheduling meetings for shorter durations and the booking window has been reduced from 12 to 18 months to 6 to 12 months. It is also more
difficult to get these customers to commit to booking time at the resort due to their perception of the uncertain U.S. economy. Coupled with the reduction
in room nights, average guest spending dropped from $544.87 to $496.15 per room night for the comparative periods. The combination of reduced room nights
and spending per room night produced gross revenue reductions of $6,355,000 or 30.5%. In an effort to respond to these unsatisfactory changes, the Company
aggressively reduced operating expenses, in the aggregate of $3,682,000 or 23.7%, in order to manage performance for the first quarter of 2002. The
reduction in revenue and the Companys inability to offset its fixed costs of operating the Innisbrook property resulted in a net reduction of operating
income before income (loss) leased assets of $2,638,000.
|
| | Interest expense of approximately $2,370,000 in 2002 is relatively consistent with the 2001 amount of $2,421,000. The Company continues to accrue its
monthly interest liability associated with the Golf Trust of America participating mortgage even though it has been unable to make the cash payments of
principal and interest beginning with the October 1, 2001 due date. The Company is still negotiating with Golf Trust and expects to arrive at an amicable
solution before the end of first half of 2003. Note 7 of the Companys 2001 10-K and the Financial Condition and Liquidity discussion provide a more detailed
description regarding this mortgage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | During the quarter, the Company has set aside $580,000 to be utilized for capital improvements. Expenditures during the quarter include $109,000 that have
been utilized to fund golf cart, golf course equipment, computer equipment and food & beverage equipment leases. In addition, $19,000 was used for
maintenance and minor repairs on the food and beverage facilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | Financial Condition and Liquidity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | The Companys working capital position inclusive of loans in default in the amount of $78,975,000, has decreased to approximately $89,157,000 as of March 31,
2002. An $865,000 improvement in working capital from the December 31, 2001 deficit of $90,022,000 is primarily the result of net income after interest of
$203,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | The Company experiences seasonal fluctuations in operations, which impact its net working capital position. Fluctuations in working capital have been
managed in the past through the utilization of a $3,000,000 accounts receivable revolving credit line. As described below, the company has defaulted on its
mortgage obligation to Golf Trust of America (GTA). As a result of that default, Wells Fargo Business Credit, Inc. elected to terminate their credit line
with Golf Host Resorts effective May 23, 2002. While the company has utilized this credit line to facilitate short-term cash needs in past years, its
utilization during 2002 has been limited. The Resort will attempt to develop a replacement facility upon completion of the loan settlement agreement.
Management believes that the Company will have to restructure the GTA loan for the economic viability of the Resort.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Page 10



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##### 



GOLF HOST RESORTS, INC.
Managements Discussion and Analysis
of Finanical Condition and Results of Operations

ITEM 2. Managements Discussion and Analysis
of Financial Condition and Results of Operations Continued



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In order to preserve its legal position,
GTA has asserted its right to accelerate payments of the total
outstanding principal and interest amounts and continues to
negotiate a settlement as described below. As of January, 2003. The Company is seeking to negotiate a Settlement Agreement with GTA. In connection with the
proposed Settlement Agreement, the Company would transfer to GTA the resort property, three condominium properties located at the Innisbrook Resort, the
Companys GTA stock interests, and all rights, title and interests of the Company under existing contracts and agreements. In addition, the Company would
provide a limited indemnity to defend and hold harmless GTA (and its affiliates) from and against any and all costs, liabilities, claims, losses, judgments
or damages arising out of or in connection with the Class Action Lawsuit, as well as liabilities accruing on or before the closing date related to employee
benefits and liabilities for contracts or agreements not disclosed by the Company to GTA. In return, it is anticipated the GTA would deliver to the Company
a duly executed release. No Settlement Agreement has yet been signed and no terms are definite. Neither GTA nor any of its affiliates is under any
obligation to continue negotiating with the Company or to execute the Settlement Agreement and could initiate foreclosure proceedings and pursue its other
remedies at any time.
|
| | As noted in the Companys 10-K for December 31, 2001, management determined that due to declining demand in the hotel golf resort business and reduced rental
pool participation which led to declines in operating results, impairment had occurred. At December 31, 2000, an impairment charge of $7,441,000 was
recorded. As a result of the continued decline in destination golf resort business during 2001 and the events of September 11, 2001, the Company determined
that further impairment had occurred and, consequently, recognized an additional $3,000,000 impairment during the quarter ended September 30, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk



| |                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Registrant does not have significant market risk with respect to foreign currency exchanges or other market rates. The Registrants debt has a fixed
contractual interest rate through the year 2027 and, accordingly, fluctuations in interest rates are not expected to affect financial results.

ITEM 4. Controls and Procedures



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Within the 90 days prior to the date of this report, the Registrants management, including the Chief Executive Officer, the Principal Financial Officer and
the Registrants agent (Westin North American Management Company), carried out an evaluation of the effectiveness of the design and operation of the
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.
Based upon the evaluation, the Registrants Chief Executive Officer and the
Principal Financial Officer concluded that the Registrants disclosure
controls and procedures are effective in timely alerting them to material information
to be included in the Registrants periodic SEC filings.
|
| | There have been no significant changes in the Registrants internal controls or in other factors that could significantly affect internal controls subsequent
to the date the Chief Executive Officer and the Principal Financial Officer carried out this evaluation.                                                                                                                                                                                                                                                                                                                                                                                                                      

Page 11



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##### 



PART II  OTHER INFORMATION

Item 1. Legal Proceedings



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Golf Hosts, Inc. the Companys parent, has
been named as a defendant in a consolidated class action lawsuit
whereby the plaintiffs allege breaches of contract, including breaches in
connection with the Rental Pool Master
Lease Agreement. The plaintiffs are seeking unspecified damages and
declaratory judgment stating that the
the plaintiffs are entitled to participate in the rental pool if one
exists and a limitation of golf course access to
persons who are either condominium owners, members, their accompanied
guest, or guests of the resort.
Deposition of class members and others, including depositions of prior
executives of Golf Host Resorts, have
been taken and additional discovery remains. The previously scheduled
trial date of February 3, 2002 has been
postponed by the Court; a new trial date has not yet been set. As this
litigation continues, the Company is not
yet able to determine whether the resolution of this matter will have a
material adverse effect on the Companys
financial condition or results of operations although the Company believes
Golf Hosts, Inc. has successful
defenses based upon consultations with legal counsel and intends to
vigorously defend this action.

Item 2. Changes in Securities and Use of Proceeds



| |                
| | ---------------
| | Not applicable.

Item 3. Defaults Upon Senior Securities



| |               
| | --------------
| | Not applicable

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



| |               
| | --------------
| | Not applicable

Item 5. Other Information



| |                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pursuant to an agreement with the SEC staff, included in the 10-Q filing are unaudited financial statements
of the Innisbrook Rental Pool Lease Operation for the quarters ended March 31, 2002 and 2001 and of the
Tamarron Rental Pool Lease Operation for the quarter ended March 31, 2001.

Item 6. Exhibits and Reports on Form 8-K



| |                                                           
| | ----------------------------------------------------------
| | (a) The following exhibits are included in this Form 10-Q:

|     |  |                                                                                                 
|---- |  | ------------------------------------------------------------------------------------------------
|99.1 |  | President Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.                  
|99.2 |  | Principal Financial Officer Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.



| |                                                                                       
| | --------------------------------------------------------------------------------------
| | (b) The Registrant did not file Form 8-K during the three months ended March 31, 2002.

Page 12



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##### 



SIGNATURES

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

GOLF HOST RESORTS, INC.

|                    |  |     |  |                                                                         
|------------------- |  | --- |  | ------------------------------------------------------------------------
|Date: March 6, 2003 |  | By: |  | /s/ Merrick Kleeman                                                     
|                    |  |     |  |                                                                         
|                    |  |     |  | Merrick Kleeman
President                                               
|                   
|Date: March 6, 2003 |  | By: |  | /s/ R. Keith Wilt                                                       
|                    |  |     |  |                                                                         
|                    |  |     |  | R. Keith Wilt
Vice President and Treasurer
(Principal Financial Officer)

Page 13



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##### 



RENTAL POOL LEASE OPERATION

The following unaudited financial statements of the Innisbrook Rental Pool Lease
Operation (the Rental Pool) are for the quarters ended March 31, 2002 and 2001.

The operation of the Rental Pool is tied closely to that of Golf Host Resorts, Inc.
(the Company), and provide for distribution of a percentage of the Companys room
revenues, as defined in the Rental Pool Master Lease Agreements
(MLA), to participating
condominium owners (Participants).

Effective January 1, 2002, the Company
replaced the MLA, which expired on December 31, 2001, with a new
Mater Lease Agreement (NMLA). The NMLA provides for
Adjusted Gross Revenues, as defined, to be divided 40% to the
Innisbrook participants and 60% to the Company. At December 31,
2001, 605 condominium owners had elected to participate in the NMLA
while 13 had elected to participate or remain in the Guaranteed
Distribution Master Lease Agreement (GMLA).

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

The operation of the Rental Pool is more fully discussed in Form 10-K, for the
fiscal year ended December 31, 2001 (file No. 2-64309).

Page 14



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##### 



INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS

DISTRIBUTION FUND

|                                                         |  |             |           |              |  |   |           | 
|-------------------------------------------------------- |  | ----------- | --------- | ------------ |  | - | --------- | 
|                                                         |  | March 31,   |           |              |  |  
|                                                         |  | 2002        |           | December 31,
|                                                         |  | (unaudited) |           | 2001        
|                                                         |  |             |           |             
|ASSETS                                                  
|RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION |  | $           | 1,790,798 |              |  | $ | 948,703   | 
|INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND         |  |             | 15,856    |              |  |   | 17,408    | 
|                                                         |  |             |           |              |  |   |           | 
|                                                         |  | $           | 1,806,654 |              |  | $ | 966,111   | 
|                                                         |  |             |           |              |  |   |           | 
|LIABILITIES AND PARTICIPANTS FUND BALANCES             
|DUE TO PARTICIPANTS FOR DISTRIBUTION                     |  |             | 1,480,977 |              |  |   | 763,301   | 
|DUE TO MAINTENANCE ESCROW FUND                           |  |             | 325,677   |              |  |   | 202,810   | 
|                                                         |  |             |           |              |  |   |           | 
|                                                         |  | $           | 1,806,654 |              |  | $ | 966,111   | 
|                                                         |  |             |           |              |  |   |           | 
|MAINTENANCE ESCROW FUND                                 
|ASSETS                                                  
|CASH AND CASH EQUIVALENTS                                |  | $           | 2,806,956 |              |  | $ | 1,242,415 | 
|SHORT-TERM INVESTMENTS                                   |  |             | 2,185,000 |              |  |   | 1,330,000 | 
|RECEIVABLE FROM DISTRIBUTION FUND                        |  |             | 325,677   |              |  |   | 202,810   | 
|CONSTRUCTION WORK IN PROGRESS                            |  |             | 7,284     |              |  |   |          | 
|CARPET CARE RECEIVABLE                                   |  |             | 23,576    |              |  |   | 13,692    | 
|INTEREST RECEIVABLE                                      |  |             | 9,012     |              |  |   | 13,925    | 
|                                                         |  |             |           |              |  |   |           | 
|                                                         |  | $           | 5,357,505 |              |  | $ | 2,802,842 | 
|                                                         |  |             |           |              |  |   |           | 
|LIABILITIES AND PARTICIPANTS FUND BALANCES             
|ACCOUNTS PAYABLE                                         |  | $           | 2,820     |              |  | $ | 58,976    | 
|INTEREST PAYABLE TO DISTRIBUTION FUND                    |  |             | 15,856    |              |  |   | 17,408    | 
|PARTICIPANTS FUND BALANCES                              |  |             | 5,338,829 |              |  |   | 2,726,458 | 
|                                                         |  |             |           |              |  |   |           | 
|                                                         |  | $           | 5,357,505 |              |  | $ | 2,802,842 | 
|                                                         |  |             |           |              |  |   |           | 

These statements were prepared from the books and records of the Rental Pool without audit and, in the
opinion of the Rental Pool Operation, include all adjustments which are necessary for a fair presentation.

Page 15



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##### 



INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 2002 AND 2001
(unaudited)

DISTRIBUTION FUND

|                                                  |                                        |   |              |          |      |   |            |          |  
|------------------------------------------------- | -------------------------------------- | - | ------------ | -------- | ---- | - | ---------- | -------- | -
|                                                  |                                        |   | Year-to-Date
|                                                  |                                        |   |             
|                                                  |                                        |   | 2002         |          | 2001
|                                                  |                                        |   |              |          |     
|GROSS REVENUES                                    |                                        | $ | 4,927,742    |          |      | $ | 7,267,850  |         
|                                                  |                                        |   |              |          |      |   |            |         
|DEDUCTIONS:                                       |                                        |   |              |          |      |   |            |         
|                                                  | Agents commissions                    |   |              | 194,790  |      |   |            | 298,642  |  
|                                                  | Credit card fees                       |   |              | 116,319  |      |   |            | 51,265   |  
|                                                  | Audit fees                             |   |              | 4,562    |      |   |            | 3,625    |  
|                                                  | Uncollectable room rents               |   |              | 16,132   |      |   |            |         |  
|                                                  | Linen replacements                     |   |              | 42,921   |      |   |            |         |  
|                                                  | Rental pool complimentary fees         |   |              | 795      |      |   |            |         |  
|                                                  |                                        |   |              |          |      |   |            |         
|                                                  |                                        |   | 375,519      |          |      |   | 353,532    |         
|                                                  |                                        |   |              |          |      |   |            |         
|ADJUSTED GROSS REVENUES                           |                                        |   | 4,552,223    |          |      |   | 6,914,318  |         
|MANAGEMENT FEE                                    |                                        |   | (2,728,932   | )        |      |   | (3,446,207 | )       
|                                                  |                                        |   |              |          |      |   |            |         
|GROSS INCOME DISTRIBUTION                         |                                        |   | 1,823,291    |          |      |   | 3,468,111  |         
|ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:         |                                        |   |              |          |      |   |            |         
|                                                  | Management fee                         |   |              | (1,412   | )    |   |            | (378,788 | )
|                                                  | Marketing fee                          |   |              | (770     | )    |   |            | (206,612 | )
|                                                  | Miscellaneous pooled expense           |   |              | (92      | )    |   |            | (22,130  | )
|                                                  | Corporate complimentary occupancy fees |   |              | 3,818    |      |   |            | 10,796   |  
|                                                  | Interest (Paragraph 3.1 (3))           |   |              | (3,183   | )    |   |            |         |  
|                                                  | Westin Associate room fees             |   |              | 22,736   |      |   |            | 24,059   |  
|                                                  | Occupancy fees                         |   |              | (361,863 | )    |   |            | (484,363 | )
|                                                  | Advisory Committee expenses            |   |              | (55,451  | )    |   |            | (36,626  | )
|                                                  |                                        |   |              |          |      |   |            |         
|NET INCOME DISTRIBUTION                           |                                        |   | 1,427,074    |          |      |   | 2,374,447  |         
|ADJUSTMENTS TO NET INCOME DISTRIBUTION:           |                                        |   |              |          |      |   |            |         
|                                                  | Occupancy fees                         |   |              | 361,863  |      |   |            | 484,363  |  
|                                                  | Hospitality suite fees                 |   |              | 1,861    |      |   |            |         |  
|                                                  | Greens fees                            |   |              |         |      |   |            | 3,874    |  
|                                                  | Additional participation credit        |   |              |         |      |   |            | 720      |  
|                                                  |                                        |   |              |          |      |   |            |         
|AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS |                                        | $ | 1,790,798    |          |      | $ | 2,863,404  |         
|                                                  |                                        |   |              |          |      |   |            |         
|Average daily distribution                        |                                        | $ | 35.32        |          |      | $ | 49.76      |         
|Average room rate                                 |                                        | $ | 168.96       |          |      | $ | 190.15     |         
|Occupied room nights                              |                                        |   | 29,166       |          |      |   | 38,221     |         
|Available room nights                             |                                        |   | 50,707       |          |      |   | 57,549     |         
|Occupancy percentage                              |                                        |   | 57.5         | %        |      |   | 66.4       | %       
|Average number of available units                 |                                        |   | 563          |          |      |   | 639        |         

These statements were prepared from the books and records of the Rental Pool without
audit and, in the opinion of the Rental Pool Operation, include all adjustments which are
necessary for a fair presentation.

Page 16



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##### 



INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS FUND BALANCES
FOR THE QUARTERS ENDED MARCH 31, 2002 AND 2001
(unaudited)

DISTRIBUTION FUND

|                             |                                                                      |   |              |            |      |   |           |            |  
|---------------------------- | -------------------------------------------------------------------- | - | ------------ | ---------- | ---- | - | --------- | ---------- | -
|                             |                                                                      |   | Year-to-date
|                             |                                                                      |   |             
|                             |                                                                      |   | 2002         |            | 2001
|                             |                                                                      |   |              |            |     
|BALANCE, beginning of period |                                                                      | $ |             |            |      | $ |          |           
|ADDITIONS:                   |                                                                      |   |              |            |      |   |           |           
|                             | Amount available for distribution                                    |   |              | 1,790,798  |      |   |           | 2,863,404  |  
|                             | Interest received or receivable from
Maintenance Escrow Fund         |   |              | 15,856     |      |   |           | 24,172     |  
|REDUCTIONS:                  |                                                                      |   |              |            |      |   |           |           
|                             | Amounts withheld for Maintenance Escrow Fund                         |   |              | (325,677   | )    |   |           | (432,074   | )
|                             | Amounts accrued or paid to participants                              |   |              | (1,480,977 | )    |   |           | (2,455,502 | )
|                             |                                                                      |   |              |            |      |   |           |           
|BALANCE, end of period       |                                                                      | $ |             |            |      | $ |          |           
|                             |                                                                      |   |              |            |      |   |           |           
|MAINTENANCE ESCROW FUND     
|BALANCE, beginning of period |                                                                      | $ | 2,726,458    |            |      | $ | 1,929,901 |           
|ADDITIONS:                   |                                                                      |   |              |            |      |   |           |           
|                             | Amounts withheld from occupancy fees                                 |   |              | 325,677    |      |   |           | 432,074    |  
|                             | Interest earned                                                      |   |              | 15,856     |      |   |           | 24,172     |  
|                             | Other cost reimbursement                                             |   |              |           |      |   |           | 397,412    |  
|                             | Charges to participants to establish
or restore escrow balances      |   |              | 4,176,234  |      |   |           | 222,168    |  
|REDUCTIONS:                  |                                                                      |   |              |            |      |   |           |           
|                             | Maintenance charges                                                  |   |              | (172,738   | )    |   |           | (161,024   | )
|                             | Refurbishment Phase II                                               |   |              | (1,152,467 | )    |   |           |           |  
|                             | Carpet care reserve deposit                                          |   |              | (14,475    | )    |   |           | (24,219    | )
|                             | Interest accrued or paid to Distribution Fund                        |   |              | (15,856    | )    |   |           | (24,172    | )
|                             | Refunds to participants as prescribed by
the master lease agreements |   |              | (549,860   | )    |   |           | (57,806    | )
|                             |                                                                      |   |              |            |      |   |           |           
|BALANCE, end of period       |                                                                      | $ | 5,338,829    |            |      | $ | 2,738,506 |           
|                             |                                                                      |   |              |            |      |   |           |           

These statements were prepared from the books and records of the Rental Pool without audit and, in the
opinion of the Rental Pool Operation, include all adjustments which are necessary for a fair presentation.

Page 17



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##### 



RENTAL POOL LEASE OPERATION

The following unaudited financial statements of the Tamarron Rental Pool Lease
Operation (the Rental Pool) are for the quarter ended March 31, 2001.

The operation of the Rental Pool was tied closely to that of Golf Host Resorts, Inc.
(the Company), and provided for distribution of a percentage of the Companys room
revenues, as defined in the Rental Pool Master Lease Agreement, to participating
condominium owners (Participants).

On November 19, 2001, Golf Host II, Inc., owners of Tamarron, sold the Tamarron
Resort for $9,500,000.

The operation of the Rental Pool is more fully discussed in Form 10-K, for the
fiscal year ended December 31, 2001 (file No. 2-64309).

Page 18



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##### 



TAMARRON RENTAL POOL LEASE OPERATION
BALANCE SHEETS

DISTRIBUTION FUND

|                                                         |                        |   |             |        | 
|-------------------------------------------------------- | ---------------------- | - | ----------- | ------ | 
|                                                         |                        |   | March 31,  
|                                                         |                        |   | 2001       
|                                                         |                        |   |            
|                                                         |                        |   | (unaudited)
|ASSETS                                                  
|CASH                                                     |                        | $ | 1,000       |       
|RECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION |                        |   | 263,981     |       
|INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND         |                        |   | 1,123       |       
|                                                         |                        |   |             |       
|                                                         |                        | $ | 266,104     |       
|                                                         |                        |   |             |       
|LIABILITIES AND PARTICIPANTS FUND BALANCES             
|DUE TO PARTICIPANTS FOR DISTRIBUTION                     |                        | $ | 205,042     |       
|DUE TO MAINTENANCE ESCROW FUND                           |                        |   | 61,062      |       
|                                                         |                        |   |             |       
|                                                         |                        | $ | 266,104     |       
|                                                         |                        |   |             |       
|MAINTENANCE ESCROW FUND                                 
|ASSETS                                                  
|CASH AND CASH EQUIVALENTS                                |                        | $ | 102,691     |       
|DUE FROM DISTRIBUTION FUND                               |                        |   | 61,062      |       
|INVENTORY:                                               |                        |   |             |       
|                                                         | Linen                  |   |             | 45,343 | 
|                                                         | Materials and supplies |   |             | 6,597  | 
|DEPOSITS                                                 |                        |   | 4,829       |       
|                                                         |                        |   |             |       
|                                                         |                        | $ | 220,522     |       
|                                                         |                        |   |             |       
|LIABILITIES AND PARTICIPANTS FUND BALANCES             
|ACCOUNTS PAYABLE                                         |                        | $ | 3,428       |       
|INTEREST PAYABLE TO DISTRIBUTION FUND                    |                        |   | 1,123       |       
|PARTICIPANTS FUND BALANCES                              |                        |   | 215,971     |       
|                                                         |                        |   |             |       
|                                                         |                        | $ | 220,522     |       
|                                                         |                        |   |             |       

These statements were prepared from the books and records of the Rental Pool
without audit and, in the opinion of the Rental Pool Operation, include all
adjustments which are necessary for a fair presentation.

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##### 



TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 2001
(unaudited)

DISTRIBUTION FUND

|                                          |                              |                                        |          |              |         |  
|----------------------------------------- | ---------------------------- | -------------------------------------- | -------- | ------------ | ------- | -
|                                          |                              |                                        |          | Year-to-date
|                                          |                              |                                        |          | 2001        
|                                          |                              |                                        |          |             
|GROSS REVENUES                            |                              | $                                      | 607,826  |             
|                                          |                              |                                        |          |             
|DEDUCTIONS:                               |                              |                                        |          |             
|                                          | Agents commissions          |                                        |          | 27,085       |        
|                                          | Sales and marketing expenses |                                        |          | 45,587       |        
|                                          | Audit fees                   |                                        |          | 3,255        |        
|                                          |                              |                                        |          |             
|                                          |                              |                                        | 75,927   |             
|                                          |                              |                                        |          |             
|ADJUSTED GROSS REVENUES                   |                              |                                        | 531,899  |             
|MANAGEMENT FEE                            |                              |                                        | (265,949 | )           
|                                          |                              |                                        |          |             
|GROSS INCOME DISTRIBUTION                 |                              |                                        | 265,950  |             
|ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION: |                              |                                        |          |             
|                                          |                              | Corporate complimentary occupancy fees |          |              | 769     |  
|                                          |                              | Occupancy fees                         |          |              | (98,032 | )
|                                          |                              | Designated items                       |          |              | (11,045 | )
|                                          |                              | Advisory Committee expenses            |          |              | (2,174  | )
|                                          |                              |                                        |          |             
|POOLED INCOME                             |                              |                                        | 155,468  |             
|ADJUSTMENTS TO POOLED INCOME:             |                              |                                        |          |             
|                                          |                              | Occupancy fees                         |          |              | 98,032  |  
|                                          |                              |                                        |          |             
|NET INCOME DISTRIBUTION                   |                              | $                                      | 253,500  |             
|                                          |                              |                                        |          |             
|                                          |                              | Average daily distribution             |          | $            | 12.15   |  
|                                          |                              | Average room rate                      |          | $            | 82.83   |  
|                                          |                              | Room nights                            |          |              | 7,338   |  
|                                          |                              | Available room nights                  |          |              | 20,856  |  
|                                          |                              | Occupancy percentage                   |          |              | 35.0    | %
|                                          |                              | Average number of available units      |          |              | 233     |  

These statements were prepared from the books and records of the Rental Pool without audit and,
in the opinion of the Rental Pool Operation, include all adjustments which are necessary for a
fair presentation.

Page 20



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##### 



TAMARRON RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS FUND BALANCES
FOR THE QUARTER ENDED MARCH 31, 2001
(unaudited)

DISTRIBUTION FUND

|                             |                                                                 |   |         |              |   | 
|---------------------------- | --------------------------------------------------------------- | - | ------- | ------------ | - | 
|                             |                                                                 |   |         | Year-to-date
|                             |                                                                 |   |         | 2001        
|                             |                                                                 |   |         |             
|BALANCE, beginning of period |                                                                 | $ |        |             
|ADDITIONS:                   |                                                                 |   |         |             
|                             | Amounts available for distribution                              |   |         | 253,500      |  
|                             | Interest received or receivable from
Maintenance Escrow Fund    |   |         | 1,123        |  
|REDUCTIONS:                  |                                                                 |   |         |             
|                             | Amounts withheld for Maintenance Escrow Fund                    |   |         | (49,581      | )
|                             | Amounts accrued or paid to participants                         |   |         | (205,042     | )
|                             |                                                                 |   |         |             
|BALANCE, end of period       |                                                                 | $ |        |             
|                             |                                                                 |   |         |             
|MAINTENANCE ESCROW FUND     
|BALANCE, beginning of period |                                                                 | $ | 174,714 |             
|ADDITIONS:                   |                                                                 |   |         |             
|                             | Amounts withheld from occupancy fees                            |   |         | 49,016       |  
|                             | Interest earned                                                 |   |         | 1,123        |  
|                             | Reimbursement of designated items                               |   |         | 11,045       |  
|                             | Charges to participants to establish
or restore escrow balances |   |         | 27,772       |  
|REDUCTIONS:                  |                                                                 |   |         |             
|                             | Maintenance and inventory charges                               |   |         | (33,005      | )
|                             | Refurbishing charges                                            |   |         |             |  
|                             | Interest accrued or paid to
Distribution Fund                   |   |         | (1,123       | )
|                             | Designated items                                                |   |         | (11,045      | )
|                             | Refunds to participants as prescribed
by Master Lease Agreement |   |         | (2,526       | )
|                             |                                                                 |   |         |             
|BALANCE, end of period       |                                                                 | $ | 215,971 |             
|                             |                                                                 |   |         |             

These statements were prepared from the books and records of the Rental Pool without audit
and, in the opinion of the Rental Pool Operation, include all adjustments which are necessary
for a fair presentation.

Page 21