##### Table of Contents



FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
   For Quarter Ended March 31, 2004
Commission File no. 2-64309 GOLF HOST RESORTS, INC. 
  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   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 þ           No o Issuer has no common stock subject to this report. Page 1 of 24




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TABLE OF CONTENTS PART I  FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsItem 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of OperationsItem 3.
    
    Quantitative and Qualitative Disclosures About Market RiskItem 4.
    
    Controls and ProceduresPART II  OTHER INFORMATIONItem 1.
    
    Legal ProceedingsItem 2.
    
    Changes in
Securities, Use of Proceeds and Issuer Purchases of Equity SecuritiesItem 3.
    
    Defaults Upon Senior SecuritiesItem 4.
    
    Submission of Matters to a Vote of Security HoldersItem 5.
    
    Other InformationItem 6.
    
    Exhibits and Reports on Form 8-KSIGNATURESEXHIBITS14
    
    Code of Ethics31.1
    
    Section 302 CEO Certification31.2
    
    Section 302 Principal Financial Officer Certification32.1
    
    Section 906 CEO Certification32.2
    
    Section 906 Principal Financial Officer CertificationEX-14 Code of EthicsEx 31.1 302 Certification of CEOEx 31.2 302 Certification of CFOEx 32.1 906 Certification of CEOEx 32.2 906 Certification of CFO




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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 31,2004
    
    2003(unaudited)CURRENT ASSETS:Cash
    
    $
    761,020
    
    
    $
    Restricted cash
    
    
    2,618,998
    
    
    
    2,489,761Accounts receivable, net
    
    
    2,999,936
    
    
    
    1,578,294Other receivables
    
    
    195,468
    
    
    
    120,966Inventories and supplies
    
    
    1,122,378
    
    
    
    1,348,526Prepaid expenses and other assets
    
    
    743,812
    
    
    
    350,161Total current assets
    
    
    8,441,612
    
    
    
    5,887,708INTANGIBLES, net
    
    
    11,386,747
    
    
    
    11,602,195PROPERTY AND EQUIPMENT, net
    
    
    37,137,309
    
    
    
    37,164,124OTHER ASSETS
    
    
    6,017,930
    
    
    
    6,279,340$
    62,983,598
    
    
    $
    60,933,367
 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 31,2004
    
    2003(unaudited)CURRENT LIABILITIES:Debt due within one year
    
    $
    78,975,000
    
    
    $
    78,975,000Accounts payable
    
    
    5,013,053
    
    
    
    4,501,132Accrued payroll costs
    
    
    1,357,521
    
    
    
    885,531Accrued interest
    
    
    26,031,539
    
    
    
    23,751,133Other payables and accrued expenses
    
    
    1,817,842
    
    
    
    2,541,365Deposits and deferred revenues
    
    
    1,907,219
    
    
    
    1,867,326Due to related parties
    
    
    1,750,808
    
    
    
    832,774Total current liabilities
    
    
    116,852,982
    
    
    
    113,354,261OTHER LONG-TERM LIABILITIES
    
    
    10,265,009
    
    
    
    10,265,009LONG TERM REFURBISHMENT
    
    
    6,960,748
    
    
    
    6,960,748DEFERRED INCOME TAXES
    
    
    1,255,000
    
    
    
    1,255,000Total liabilities
    
    
    135,333,739
    
    
    
    131,835,018SHAREHOLDERS DEFICITCommon stock, $1 par, 5,000 shares
authorized, issued, and outstanding
    
    
    5,000
    
    
    
    5,0005.6% cumulative preferred stock, $1 par,
4,577,000 shares authorized, issued,
and outstanding
    
    
    4,577,000
    
    
    
    4,577,000Paid-in capital
    
    
    (8,487,323
    )
    
    
    (8,487,323
    )Shareholder receivable
    
    
    (223,709
    )
    
    
    (223,709
    )Accumulated deficit
    
    
    (68,221,109
    )
    
    
    (66,772,619
    )Total shareholders deficit
    
    
    (72,350,141
    )
    
    
    (70,901,651
    )Total liabilities and shareholders
deficit
    
    $
    62,983,598
    
    
    $
    60,933,367
 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 OPERATIONS Three months ended March 31,2004
    
    2003(unaudited)REVENUES:Resort facilities
    
    $
    3,750,216
    
    
    $
    4,075,577Food and beverage
    
    
    3,224,793
    
    
    
    3,426,201Golf
    
    
    3,971,287
    
    
    
    3,761,193Other
    
    
    1,494,970
    
    
    
    1,431,73312,441,266
    
    
    
    12,694,704COST AND OPERATION EXPENSES:Resort facilities
    
    
    2,787,817
    
    
    
    3,096,779Food and beverage
    
    
    2,316,995
    
    
    
    2,260,265Golf
    
    
    1,873,045
    
    
    
    1,705,533Other
    
    
    2,344,585
    
    
    
    2,341,420General and administrative
    
    
    1,327,185
    
    
    
    1,231,536Depreciation and amortization
    
    
    792,198
    
    
    
    747,19811,441,825
    
    
    
    11,382,731OPERATING INCOME
    
    
    999,441
    
    
    
    1,311,973INTEREST
EXPENSE, NET
    
    
    2,383,854
    
    
    
    2,229,459LOSS BEFORE PREFERRED
STOCK DIVIDEND
    
    
    (1,384,413
    )
    
    
    (917,486
    )DIVIDEND REQUIREMENTS ON
PREFERRED STOCK
    
    
    64,077
    
    
    
    64,077LOSS AVAILABLE
TO COMMON SHAREHOLDER
    
    $
    (1,448,490
    )
    
    $
    (981,563
    )
 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(unaudited) $1 Par Value
    
    5.6% CumulativeCommon Stock
    
    Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalPaid-In
    
    Shareholders
    
    Accumulated
    
    ShareholdersShares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Receivable
    
    Deficit
    
    DeficitBalance, December 31, 2003
    
    
    5,000
    
    
    $
    5,000
    
    
    
    4,577,000
    
    
    $
    4,577,000
    
    
    $
    (8,487,323
    )
    
    $
    (223,709
    )
    
    $
    (66,772,619
    )
    
    $
    (70,901,651
    )Loss available to common
shareholder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,448,490
    )
    
    
    (1,448,490
    )Balance, March 31, 2004
    
    
    5,000
    
    
    $
    5,000
    
    
    
    4,577,000
    
    
    $
    4,577,000
    
    
    $
    (8,487,323
    )
    
    $
    (223,709
    )
    
    $
    (68,221,109
    )
    
    $
    (72,350,141
    )
 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) 2004
    
    2003CASH FLOWS FROM OPERATING ACTIVITIES:Loss before dividend requirements
on preferred stock
    
    $
    (1,384,413
    )
    
    $
    (917,486
    )Adjustments to reconcile net income to net cash
provided by operations:Depreciation and amortization
    
    
    793,160
    
    
    
    747,198Provision for bad debts
    
    
    42,509
    
    
    
    180,943Amortization
of refurbishment costs
    
    
    215,448
    
    
    
    192,718Changes in operating working capital
    
    
    1,599,252
    
    
    
    1,139,319Cash provided by operations
    
    
    1,265,956
    
    
    
    1,342,692CASH FLOWS FROM INVESTING ACTIVITIES:Increase in other assets
    
    
    
    
    
    
    (11,805
    )Purchases of property and equipment
    
    
    (504,936
    )
    
    
    (404,136
    )Cash used in investing activities
    
    
    (504,936
    )
    
    
    (415,941
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of existing debt
    
    
    
    
    
    
    (33,842
    )Cash used in financing activities
    
    
    
    
    
    
    (33,842
    )NET INCREASE IN CASH
    
    
    761,020
    
    
    
    892,909CASH, BEGINNING OF PERIOD
    
    
    
    
    
    
    CASH, END OF PERIOD
    
    $
    761,020
    
    
    $
    892,909NONCASH FINANCING AND INVESTING
ACTIVITIES:The Company satisfied its preferred
stock dividend liability to GHI
through the intercompany account
    
    $
    64,077
    
    
    $
    64,077Capital
lease extension
    
    $
    
    
    
    $
    49,542
 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(unaudited)  (1)
    
    BASIS OF PRESENTATIONThe financial statements for December 31, 2003 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, 2003, the Company has suffered recurring losses from operations, has negative working capital
and has a shareholders deficit. These issues raise substantial doubt about the Companys 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 6 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. (GHI) (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, 2003.The accompanying consolidated balance sheets for March 31, 2004, and consolidated statements of
operations and cash flows for the periods ended March 31, 2004 and 2003, 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 ASSETSThe 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
$215,000 and $215,000 for the three months ended March 31, 2004 and March 31, 2003, respectively. 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 (unaudited)  2)
    
    INTANGIBLE ASSETS (continued)At December 31, 2003, the Company reviewed the carrying value of the intangible asset and determined that
further impairment had not occurred. Advance booking and rental pool participation have stabilized from a
historical perspective, and pro-forma cash flows, based upon advance bookings indicate that no further
deterioration in the carrying value needs to be recognized.(3)
    
    DEBTDebt consists of the following: March 31,
    
    December 31,2004
    
    2003Participating mortgage note at varying pay
rates maturing in 2027 (in default)
    
    $
    69,975,000
    
    
    $
    69,975,000$9,000,000 participating mortgage
note credit facility maturing in 2007 (in default)
    
    
    9,000,000
    
    
    
    9,000,00078,975,000
    
    
    
    78,975,000Less current maturities
    
    
    (78,975,000
    )
    
    
    (78,975,000
    )$
    
    
    
    $
    
  (4)
    
    CONTINGENCIESThe Company, in the normal course of operations, is subject to claims and lawsuits. The Company does not
believe that the ultimate resolution of such matters will materially impair operations or have an adverse effect on
the Companys financial position and results of operations.GHI was named as a defendant in a consolidated class action lawsuit (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, a limitation of the total number of club memberships
and a limitation of golf course access to persons who are either condominium owners who are members, their
accompanied guests, or guests of the resort. Depositions of class members and others, including depositions
of former executives of the Company, have been taken and additional discovery remains. The Court has
postponed the previously scheduled trial date of February 3, 2003; a new trial date has not yet been set. As
of March 31, 2004, the Court had decertified the class and denied the plaintiffs subsequent motion to permit
additional owners to intervene in the lawsuit. In addition, the plaintiffs filed a complaint seeking to pierce the
corporate veil. The court dismissed the veil piercing complaint with prejudice. The plaintiffs appealed the 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(unaudited)  (4)
    
    CONTINGENCIES (continued)decertification of the class, the denial to intervene and the veil piercing dismissal to the Florida Court
of Appeals, Second District. The Court of Appeals has affirmed the lower courts decertification of
the class and has affirmed the lower courts dismissal with prejudice of the veil piercing case. No
decision on the intervention appeal has been made. As this litigation is still in progress, 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. However, the Company believes
GHI has successful defenses based upon consultations with legal counsel, and intends to vigorously
defend this action.The Company has recorded a liability and related asset in the approximate amount of $6,961,000,
in recognition of the Master Lease Agreement refurbishment reimbursement program. The liability
will be settled in accordance with the terms of the agreement and the asset is being amortized on
a straight line basis over the period from the time each phase of the refurbishment is placed is
service through the completion of payment in 2009. The amortization expense for the period ending
March 31, 2004 and 2003 was approximately $261,000 and $204,000, respectively.As noted in the Companys 10-K filed as of December 31, 2003, the Company has defaulted on its
primary mortgage with Golf Trust of America (GTA). The Company is engaged in negotiations with
GTA and is seeking a solution to its default status. At
the time of this filing, no definite or
final agreement has been reached. Page 9




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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,
2004 and 2003. The operation of the Rental Pool is tied closely to that of Golf Host Resorts, Inc.
(the Company), and provides for distribution of a percentage of the Companys room
revenues, as defined in the Rental Pool Master Lease Agreements, to participating
condominium owners (Participants). The Innisbrook Rental Pool Operation is party to lease agreements with an affiliated
entity, whose ability to continue as a going concern is in substantial doubt. The operation of the Rental Pool is more fully discussed in Form 10-K for the
fiscal year ended December 31, 2003 (file No. 2-64309). Page 10




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INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS
DISTRIBUTION FUND March 31,2004
    
    December 31,(unaudited)
    
    2003ASSETSRECEIVABLE FROM GOLF HOST RESORTS, INC.
FOR DISTRIBUTION
    
    $
    1,338,413
    
    
    $
    1,040,282INTEREST RECEIVABLE FROM MAINTENANCE
ESCROW FUND
    
    
    5,001
    
    
    
    6,489$
    1,343,414
    
    
    $
    1,046,771LIABILITIES AND PARTICIPANTS FUND BALANCESDUE TO PARTICIPANTS FOR DISTRIBUTION
    
    $
    1,077,058
    
    
    $
    788,162DUE TO MAINTENANCE ESCROW FUND
    
    
    266,356
    
    
    
    258,609$
    1,343,414
    
    
    $
    1,046,771MAINTENANCE ESCROW FUNDASSETSCASH AND CASH EQUIVALENTS
    
    $
    377,117
    
    
    $
    246,192SHORT TERM
INVESTMENTS
    
    
    1,330,000
    
    
    
    1,330,000CONSTRUCTION
IN PROGRESS
    
    
    536
    
    
    
    535RECEIVABLE FROM DISTRIBUTION FUND
    
    
    266,356
    
    
    
    258,609INTEREST RECEIVABLE
    
    
    4,314
    
    
    
    15,858$
    1,978,323
    
    
    $
    1,851,194LIABILITIES AND PARTICIPANTS FUND BALANCESACCOUNTS PAYABLE
    
    $
    82,971
    
    
    $
    43,590CONSTRUCTION RETAINAGE
    
    
    47,524
    
    
    
    5,389INTEREST PAYABLE TO DISTRIBUTION FUND
    
    
    5,001
    
    
    
    6,489CARPET CARE PAYABLE
    
    
    11,364
    
    
    
    4,137PARTICIPANTS FUND BALANCES
    
    
    1,831,463
    
    
    
    1,791,589$
    1,978,323
    
    
    $
    1,851,194
 These statements were prepared from the books and records of the Rental Pool without audit and, in the
opinion of the Rental Pool Operators, include all adjustments which are necessary for a fair presentation. Page 11




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STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 2004 AND 2003
DISTRIBUTION FUND Year-to-Date2004
    
    2003(unaudited)GROSS REVENUES
    
    $
    3,689,094
    
    
    $
    4,012,261DEDUCTIONS:Agents commissions
    
    
    148,630
    
    
    
    178,435Credit card fees
    
    
    89,672
    
    
    
    95,197Audit fees
    
    
    6,250
    
    
    
    5,387Uncollectible room rents
    
    
    2,069
    
    
    
    2,119Linen replacements
    
    
    57,802
    
    
    
    52,907Rental Pool complimentary fees
    
    
    1,451
    
    
    
    975305,874
    
    
    
    335,020ADJUSTED GROSS REVENUES
    
    
    3,383,220
    
    
    
    3,677,241MANAGEMENT FEE
    
    
    (2,029,932
    )
    
    
    (2,206,292
    )GROSS INCOME DISTRIBUTION
    
    
    1,353,288
    
    
    
    1,470,949ADJUSTMENTS TO GROSS INCOME
DISTRIBUTION:General pooled expense
    
    
    (2,045
    )
    
    
    (24
    )Corporate complimentary occupancy fees
    
    
    3,870
    
    
    
    2,762Interest
expense (Paragraph 3.1 (3))
    
    
    (3,183
    )
    
    
    (3,183
    )GMLA guaranteed payment
    
    
    
    
    
    
    1,592Occupancy fees
    
    
    (295,950
    )
    
    
    (307,369
    )Advisory Committee expenses
    
    
    (50,918
    )
    
    
    (47,394
    )Life-safety reimbursement
    
    
    
    
    
    
    (88,543
    )NET INCOME DISTRIBUTION
    
    
    1,005,062
    
    
    
    1,028,790ADJUSTMENTS TO NET INCOME DISTRIBUTION:Occupancy fees
    
    
    295,950
    
    
    
    307,369Hospitality suite fees
    
    
    1,925
    
    
    
    1,440Westin Associate room fees
    
    
    35,476
    
    
    
    24,156Interest
income
    
    
    
    
    
    
    73,921AMOUNT AVAILABLE FOR DISTRIBUTION
TO PARTICIPANTS
    
    $
    1,338,413
    
    
    $
    1,435,676Average daily distribution
    
    $
    25.47
    
    
    $
    27.66Average room rate
    
    $
    155.64
    
    
    $
    163.24Occupied room nights
    
    
    23,703
    
    
    
    24,579Available room nights
    
    
    52,556
    
    
    
    51,907Occupancy percentage
    
    
    45.1
    %
    
    
    47.4
    %Average number of available units
    
    
    578
    
    
    
    577
 These statements were prepared from the books and records of the Rental Pool without audit and, in the opinion of the
Rental Pool Operators, include all adjustments which are necessary for a fair presentation. Page 12




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INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS FUND BALANCES
FOR THE QUARTERS ENDED MARCH 31, 2004 AND 2003 DISTRIBUTION FUND Year-to-date2004
    
    2003(unaudited)BALANCE, beginning of period
    
    $
    
    
    
    $
    ADDITIONS:Amount available for distribution
    
    
    1,338,413
    
    
    
    1,435,676Interest received or receivable from
Maintenance Escrow Fund
    
    
    5,001
    
    
    
    10,972REDUCTIONS:Amounts
withheld for Maintenance Escrow Fund
    
    
    (266,356
    )
    
    
    (277,222
    )Amounts accrued or paid to participants
    
    
    (1,077,058
    )
    
    
    (1,169,426
    )BALANCE, end of period
    
    $
    
    
    
    $
    MAINTENANCE ESCROW FUNDBALANCE, beginning of period
    
    $
    1,791,589
    
    
    $
    3,444,280ADDITIONS:Amounts withheld from occupancy fees
    
    
    266,356
    
    
    
    277,222Interest earned
    
    
    5,001
    
    
    
    10,972Charges to participants to establish
or restore escrow balances
    
    
    20,025
    
    
    
    1,539,048REDUCTIONS:Maintenance charges
    
    
    (211,093
    )
    
    
    (249,986
    )Refurbishment
costs
    
    
    
    
    
    
    (400,257
    )Carpet care reserve deposit
    
    
    (17,756
    )
    
    
    (15,368
    )Interest accrued or paid to Distribution Fund
    
    
    (5,001
    )
    
    
    (10,972
    )Refunds to participants as prescribed by
the master lease agreements
    
    
    (17,658
    )
    
    
    (26,277
    )BALANCE, end of period
    
    $
    1,831,463
    
    
    $
    4,568,662
 These statements were prepared from the books and records of the Rental Pool without
audit and, in the opinion of the Rental Pool Operators, include all adjustments which
are necessary for a fair presentation. Page 13




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GOLF HOST RESORTS, INC. 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Quarter ended March 31, 2004 During the first quarter of
2004, the Companys results of operations continued
to reflect the soft trend in the hospitality industry and the destination golf
resort segment of that industry. Occupied room nights at the Innisbrook
resort were 3.6% less than the same three-month period for the prior year.
Total room nights were down 876 for the period ended March 31,
2004 as
compared to the three months ended March 31, 2003. Group room nights were down
3,094 while transient rooms increased by 2,218 room nights, as compared to the
same period last year. Total revenue per room night increased by 1.6%
or $8.40
over the prior year. Gross revenue per room night for the three months ended
March 31, 2004 was $524.88 as compared to $516.49 for the three months ended
March 31, 2003. These net reductions in room nights offset with the increase
in room night spending levels produced a net decrease in gross revenue of
approximately $253,000 or 2.0%. Expenses are being managed in response to the reduced demand in the market
place, excluding the day-to-day maintenance costs of the four golf courses. The decrease in revenue combined with the net increases in operating expenses
and depreciation and amortization noted above, produced a net reduction in the
comparative three-month operating income of approximately $313,000 or 23.8%.
Operating income, before interest expense and preferred dividend requirements,
was approximately $999,000 versus income of approximately $1,312,000 for the
three months ended March 31, 2004 and March 31, 2003, respectively. Interest expense, net of interest income, reflects the continued accrual of the
Companys GTA interest obligations. Total interest expense increased by
approximately $154,000 or 6.9%. Capital expenditure reserves in the amount of approximately $619,000 were
set-aside during the quarter ended March 31, 2004. During the quarter
approximately $424,000 was used to fund the installation of the telephone
switch; approximately $77,000 was used to fund lease payments on
operating assets such as golf carts, golf grounds equipment and computer
equipment while $77,000 was used to replace and repair the conference center
and clubhouse HVAC, roofing systems, pool pump equipment and miscellaneous
deferred maintenance projects. The following information may contain forward-looking statements within the
meaning of Section 27A of the Securities Act, and Section 21E of the Exchange
Act. Such statements may be identified by the inclusion of terms such as
believe, expect, hope or may. Although the Company believes that such
forward-looking statements are based upon sound and reasonable assumptions,
given the circumstances in which the statements are made, the actual results
could differ significantly from those described in the forward-looking
statements. Certain factors that might cause such a difference include the following:
changes in general economic conditions that may influence group conferences and
guests vacations plans; changes in travel patterns; changes in consumer tastes
in destinations or accommodations for group conferences and vacations; changes
in rental pool participation by the current condominium owners; reaching a
settlement agreement with the Companys primary lender; settlement of the Class
Action Lawsuit; the ability of the Company to continue to operate the
Innisbrook property under its management contracts; and the resale of
condominiums to owners who elect neither to participate in the rental pool nor
to become Club members. Given these uncertainties, readers are cautioned not
to put undue reliance on such statements. Page 14




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GOLF HOST RESORTS, INC.  Item 2.
    Managements Discussion and Analysis of Financial Condition and
Results of Operations (Continued) Liquidity and Capital Resources The Companys working capital position has decreased to a deficit of
approximately $108,411,000. This is a reduction of approximately $944,000 in
working capital from the December 31, 2003 deficit of approximately
$107,467,000. The Company continues to experience seasonal fluctuations in its net working
capital position. These fluctuations have been managed in the past through the
utilization of an accounts receivable revolving credit line. Effective May 23,
2002, the revolving credit line with Wells Fargo Business Credit was terminated
by Wells Fargo as a result of the Companys default on the participating
mortgage with GTA. The Company was informed by GTA on November 29, 2001 that the Company is in
default on the $78,975,000 mortgage and accrued interest, arising from the
Companys failure to pay the October 2001 interest and all subsequent monthly
installments. GTA has asserted its right to accelerate payment of the total
outstanding principal and interest amounts. As of May 2004, 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 Innisbrook resort property, three condominium units located
at the resort, the Companys ownership interests in GTA stock, and all rights,
title and interests of the Company under existing contracts and agreements. In
addition, the Company would provide limited indemnity to defend and hold
harmless GTA (and its affiliates) from and against any and all costs,
liabilities, claims, losses, judgments or damages arising out of or in
connection with the Class Action Lawsuit, as well as liabilities accruing on or
before the closing date relating to employee benefits and liabilities for
contracts or agreements not disclosed by the Company to GTA. In return, it is
anticipated that GTA would deliver to the Company a duly executed release. No
Settlement Agreement has yet been signed and no terms are definite. Neither
GTA nor any of its affiliates are under any obligation to execute the
Settlement Agreement and GTA could initiate foreclosure proceedings or pursue
any other legal remedies available to it at any time. As described in Note 4 of the notes to consolidated financial statements on the
Companys Form 10-K for December 31, 2003, management had determined that due
to declining demand in the hotel golf resort business and related rental pool
participation, which led to declines in operating results, impairment of the
intangible asset 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 had determined that further impairment had occurred and consequently
recorded an additional $3,000,000 impairment charge during the quarter ended
September 30, 2001. No further impairment has been recognized subsequent to
the period ended September 30, 2001. Page 15




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GOLF HOST RESORTS, INC. 
  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. 
 PART II  OTHER INFORMATION 
  Item 1.
    Legal Proceedings  The Company, in the normal course of operations, is subject to claims and lawsuits. The Company
does not believe that the ultimate resolution of such matters will materially impair operations or have
an adverse effect on the Companys financial position and results of operations.GHI was named as a defendant in a consolidated class action lawsuit (class action lawsuit)
whereby the plaintiffs allege breaches of contract, including breaches in connection with the Rental
Pool Lease Agreement. The plaintiffs are seeking unspecified damages and a declaratory judgment
stating that the plaintiffs are entitled to participate in the rental pool if one exists, a limitation of the
total number of club memberships and a limitation of golf course access to persons who are either
condominium owners who are members, their accompanied guests, or guests of the resort.
Depositions of class members and others, including depositions of former executives of the
Company, have been taken and additional discovery remains. The Court has postponed the
previously scheduled trial date of February 3, 2003; a new trial date has not yet been set. As of
March 31, 2004, the Court had decertified the class and denied the plaintiffs subsequent motion to
permit additional owners to intervene in the lawsuit. In addition, the plaintiffs filed a complaint
seeking to pierce the corporate veil. The court dismissed the veil piercing complaint with
prejudice. The plaintiffs appealed the decertification of the class, the denial to intervene and the Page 16




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Item 1.
    Legal Proceedings (continued)  veil piercing dismissal to the Florida Court of Appeals, Second District. The Court of Appeals has
affirmed the lower courts decertification of the class and has affirmed the lower courts dismissal
with prejudice of the veil piercing case. No decision on the
intervention appeal has been made.
As this litigation is still in progress, 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. However, the Company believes GHI has successful defenses based upon consultations
with legal counsel, and intends to vigorously defend this action. 
  Item 2.
    Changes in Securities, Use of Proceeds and Issuer
Purchases of Equity Securities  Not applicable. 
  Item 3.
    Defaults Upon Senior Securities  Not applicable. 
  Item 4.
    Submission of Matters to a Vote of Security Holders  Not applicable. 
  Item 5.
    Other Information  Pursuant to an agreement with the SEC staff, included in the 10-Q filing are unaudited financial statements
of the Innisbrook Rental Pool Lease Operation for the quarters ended March 31, 2004 and 2003. 
  Item 6.
    Exhibits and Reports on Form 8-K  (a)
    
    The following exhibits are included in this Form 10-Q:14
    
    Code of Ethics31.1
    
    President Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.31.2
    
    Principal Financial Officer Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.32.1
    
    President Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.32.2
    
    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, 2004. Page 17




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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: May 21, 2004
    By:
    /s/ Merrick KleemanMerrick KleemanPresidentDate: May 21, 2004
    By:
    /s/ R. Keith WiltR. Keith WiltVice President and Treasurer
(Principal Financial Officer) Page 18