##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission File Number 000-51064
 
 GREAT WOLF RESORTS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of incorporation or organization)
    
    51-0510250(I.R.S. Employer Identification No.)122 West Washington Avenue 
Madison, Wisconsin 53703(Address of principal executive offices)
    
    53703(Zip Code)
 (608) 661-4700
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



Great Wolf Resorts, Inc.
 Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 2010
 INDEX
 PageNo.PART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009
    
    
    3Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2010
and 2009
    
    
    4Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    43Item 4. Controls and Procedures
    
    
    44PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    45Item 1A. Risk Factors
    
    
    45Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    45Item 3. Defaults Upon Senior Securities
    
    
    45Item 4. [Removed and Reserved]
    
    
    45Item 5. Other Information
    
    
    45Item 6. Exhibits
    
    
    45Signatures
    
    
    50EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS
 GREAT WOLF RESORTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except share and per share amounts)
 June 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    30,410
    
    
    $
    20,913Escrows
    
    
    2,774
    
    
    
    5,938Accounts receivable, net of allowance for doubtful accounts of $122 and $101
    
    
    4,173
    
    
    
    2,192Accounts receivable  affiliates
    
    
    2,833
    
    
    
    2,614Inventory
    
    
    6,453
    
    
    
    4,791Other current assets
    
    
    5,565
    
    
    
    4,252Total current assets
    
    
    52,208
    
    
    
    40,700Property and equipment, net
    
    
    665,170
    
    
    
    676,405Investments in and advances to affiliates
    
    
    27,134
    
    
    
    27,484Notes receivable
    
    
    
    
    
    
    8,268Other assets
    
    
    33,645
    
    
    
    29,058Intangible assets
    
    
    27,715
    
    
    
    23,829Total assets
    
    $
    805,872
    
    
    $
    805,744LIABILITIES AND EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    4,186
    
    
    $
    16,126Accounts payable
    
    
    7,806
    
    
    
    5,078Accounts payable  affiliates
    
    
    10
    
    
    
    Accrued expenses
    
    
    29,754
    
    
    
    21,970Advance deposits
    
    
    12,642
    
    
    
    7,114Other current liabilities
    
    
    5,419
    
    
    
    5,946Total current liabilities
    
    
    59,817
    
    
    
    56,234Mortgage debt
    
    
    457,185
    
    
    
    441,724Other long-term debt
    
    
    92,096
    
    
    
    92,221Deferred compensation liability
    
    
    1,050
    
    
    
    809Other long-term liabilities
    
    
    1,131
    
    
    
    Total liabilities
    
    
    611,279
    
    
    
    590,988Commitments and contingenciesGreat Wolf Resorts stockholders equity:Common stock, $0.01 par value; 250,000,000 shares authorized;
32,445,206 and 31,278,889 shares issued and outstanding
    
    
    324
    
    
    
    313Preferred stock, $0.01 par value, 10,000,000 shares authorized, no
shares issued or outstanding
    
    
    
    
    
    
    Additional paid-in-capital
    
    
    401,542
    
    
    
    400,930Accumulated deficit
    
    
    (207,112
    )
    
    
    (186,287
    )Deferred compensation
    
    
    (200
    )
    
    
    (200
    )Total Great Wolf Resorts stockholders equity
    
    
    194,554
    
    
    
    214,756Noncontrolling interest
    
    
    39
    
    
    
    Total equity
    
    
    194,593
    
    
    
    214,756Total liabilities and equity
    
    $
    805,872
    
    
    $
    805,744
  3




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##### Table of Contents



GREAT WOLF RESORTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited; dollars in thousands, except share and per share data)
 Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Rooms
    
    $
    39,460
    
    
    $
    40,310
    
    
    $
    81,248
    
    
    $
    76,655Food and beverage
    
    
    11,456
    
    
    
    11,305
    
    
    
    23,073
    
    
    
    21,207Other
    
    
    10,379
    
    
    
    10,160
    
    
    
    20,587
    
    
    
    19,125Management and other fees
    
    
    560
    
    
    
    402
    
    
    
    1,195
    
    
    
    991Management and other fees  affiliates
    
    
    960
    
    
    
    1,210
    
    
    
    1,980
    
    
    
    2,43462,815
    
    
    
    63,387
    
    
    
    128,083
    
    
    
    120,412Other revenue from managed properties  affiliates
    
    
    2,759
    
    
    
    5,238
    
    
    
    5,453
    
    
    
    10,520Other revenue from managed properties
    
    
    2,854
    
    
    
    
    
    
    
    5,571
    
    
    
    Total revenues
    
    
    68,428
    
    
    
    68,625
    
    
    
    139,107
    
    
    
    130,932Operating expenses by department:Rooms
    
    
    6,044
    
    
    
    5,948
    
    
    
    12,073
    
    
    
    10,977Food and beverage
    
    
    8,739
    
    
    
    8,865
    
    
    
    17,266
    
    
    
    16,280Other
    
    
    8,575
    
    
    
    8,424
    
    
    
    16,942
    
    
    
    15,692Other operating expenses:Selling, general and administrative
    
    
    14,486
    
    
    
    16,987
    
    
    
    33,228
    
    
    
    31,631Property operating costs
    
    
    8,170
    
    
    
    9,114
    
    
    
    17,204
    
    
    
    21,456Depreciation and amortization
    
    
    17,110
    
    
    
    14,630
    
    
    
    31,130
    
    
    
    27,216Loss on disposition of property
    
    
    9
    
    
    
    
    
    
    
    19
    
    
    
    19163,133
    
    
    
    63,968
    
    
    
    127,862
    
    
    
    123,443Other expenses from managed properties  affiliates
    
    
    2,759
    
    
    
    5,238
    
    
    
    5,453
    
    
    
    10,520Other expenses from managed properties
    
    
    2,854
    
    
    
    
    
    
    
    5,571
    
    
    
    Total operating expenses
    
    
    68,746
    
    
    
    69,206
    
    
    
    138,886
    
    
    
    133,963Net operating (loss) income
    
    
    (318
    )
    
    
    (581
    )
    
    
    221
    
    
    
    (3,031
    )Investment income  affiliates
    
    
    (276
    )
    
    
    (336
    )
    
    
    (565
    )
    
    
    (720
    )Interest income
    
    
    (180
    )
    
    
    (148
    )
    
    
    (433
    )
    
    
    (336
    )Interest expense
    
    
    12,459
    
    
    
    8,777
    
    
    
    21,658
    
    
    
    15,044Loss before income taxes and equity in
unconsolidated affiliates
    
    
    (12,321
    )
    
    
    (8,874
    )
    
    
    (20,439
    )
    
    
    (17,019
    )Income tax expense (benefit)
    
    
    189
    
    
    
    (3,635
    )
    
    
    369
    
    
    
    (6,783
    )Equity in loss (income) of unconsolidated affiliates,
net of tax
    
    
    210
    
    
    
    467
    
    
    
    (23
    )
    
    
    1,115Net loss
    
    
    (12,720
    )
    
    
    (5,706
    )
    
    
    (20,785
    )
    
    
    (11,351
    )Net loss attributable to noncontrolling interest, net
of tax
    
    
    40
    
    
    
    
    
    
    
    40
    
    
    
    Net loss attributable to Great Wolf Resorts, Inc.
    
    $
    (12,760
    )
    
    $
    (5,706
    )
    
    $
    (20,825
    )
    
    $
    (11,351
    )Basic loss per common share
    
    $
    (0.41
    )
    
    $
    (0.18
    )
    
    $
    (0.67
    )
    
    $
    (0.36
    )Diluted loss per common share
    
    $
    (0.41
    )
    
    $
    (0.18
    )
    
    $
    (0.67
    )
    
    $
    (0.36
    )Weighted average common shares outstanding:Basic
    
    
    31,000,179
    
    
    
    31,263,487
    
    
    
    30,919,023
    
    
    
    31,123,072Diluted
    
    
    31,000,179
    
    
    
    31,263,487
    
    
    
    30,919,023
    
    
    
    31,123,072
  4




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##### Table of Contents



GREAT WOLF RESORTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited; dollars in thousands)
 Six months endedJune 30,2010
    
    
    2009Operating activities:Net loss
    
    $
    (20,785
    )
    
    $
    (11,351
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    31,130
    
    
    
    27,216Bad debt expense
    
    
    193
    
    
    
    457Non-cash employee compensation and professional fees expense
    
    
    1,061
    
    
    
    469Loss on disposition of property
    
    
    19
    
    
    
    191Equity in (income) losses of unconsolidated affiliates
    
    
    (22
    )
    
    
    1,854Deferred tax benefit
    
    
    (224
    )
    
    
    (7,582
    )Changes in operating assets and liabilities:Accounts receivable and other assets
    
    
    (3,482
    )
    
    
    (5,025
    )Accounts payable, accrued expenses and other liabilities
    
    
    10,380
    
    
    
    2,106Net cash provided by operating activities
    
    
    18,270
    
    
    
    8,335Investing activities:Capital expenditures for property and equipment
    
    
    (6,229
    )
    
    
    (45,846
    )Loan repayment from unconsolidated affiliates
    
    
    490
    
    
    
    8,098Investment in affiliate
    
    
    (10
    )
    
    
    Investment in unconsolidated affiliates
    
    
    
    
    
    
    (303
    )Investment in development
    
    
    (358
    )
    
    
    1,086Proceeds from sale of assets
    
    
    15
    
    
    
    66Cash acquired in acquisition of Creative Kingdoms, LLC
    
    
    324
    
    
    
    (Increase) decrease in restricted cash
    
    
    (3
    )
    
    
    163Decrease (increase) in escrows
    
    
    3,164
    
    
    
    (1,379
    )Net cash used in investing activities
    
    
    (2,607
    )
    
    
    (38,115
    )Financing activities:Principal payments on long-term debt
    
    
    (215,941
    )
    
    
    (3,112
    )Proceeds from issuance of long-term debt
    
    
    219,337
    
    
    
    50,073Payment of loan costs
    
    
    (9,562
    )
    
    
    (8,377
    )Net cash (used in) provided by financing activities
    
    
    (6,166
    )
    
    
    38,584Net increase in cash and cash equivalents
    
    
    9,497
    
    
    
    8,804Cash and cash equivalents, beginning of period
    
    
    20,913
    
    
    
    14,231Cash and cash equivalents, end of period
    
    $
    30,410
    
    
    $
    23,035Supplemental Cash Flow Information:Cash paid for interest, net of capitalized interest
    
    $
    16,543
    
    
    $
    14,599Cash paid for income taxes, net of refunds
    
    $
    404
    
    
    $
    36Non-cash items:Construction in process accruals
    
    $
    
    
    
    $
    319Loan cost accruals
    
    $
    1,076
    
    
    $
    Conversion of note receivable and accrued interest to equity investment
    
    $
    9,963
    
    
    $
    
  5




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##### Table of Contents



GREAT WOLF RESORTS, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited; dollars in thousands, except share and per share amounts)
 1. ORGANIZATION
 ®
 Business Summary
 ® tm
    ®
  6




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##### Table of Contents



IndoorOwnership
    
    
    
    
    
    Number of
    
    Number of
    
    EntertainmentPercentage
    
    Opened
    
    Guest Suites
    
    Condo Units (1)
    
    Area (2)(approx. sq. ft.)Wisconsin Dells, WI (3)
    
    
    
    
    
    
    1997
    
    
    
    308
    
    
    
    77
    
    
    
    102,000Sandusky, OH (3)
    
    
    
    
    
    
    2001
    
    
    
    271
    
    
    
    
    
    
    
    41,000Traverse City, MI
    
    
    100
    %
    
    
    2003
    
    
    
    280
    
    
    
    
    
    
    
    57,000Kansas City, KS
    
    
    100
    %
    
    
    2003
    
    
    
    281
    
    
    
    
    
    
    
    57,000Sheboygan, WI
    
    
    100
    %
    
    
    2004
    
    
    
    182
    
    
    
    64
    
    
    
    54,000Williamsburg, VA (4)
    
    
    100
    %
    
    
    2005
    
    
    
    405
    
    
    
    
    
    
    
    87,000Pocono Mountains, PA (4)
    
    
    100
    %
    
    
    2005
    
    
    
    401
    
    
    
    
    
    
    
    101,000Niagara Falls, ONT (5)
    
    
    
    
    
    
    2006
    
    
    
    406
    
    
    
    
    
    
    
    104,000Mason, OH (4)
    
    
    100
    %
    
    
    2006
    
    
    
    401
    
    
    
    
    
    
    
    105,000Grapevine, TX (4)
    
    
    100
    %
    
    
    2007
    
    
    
    605
    
    
    
    
    
    
    
    110,000Grand Mound, WA (6)
    
    
    49
    %
    
    
    2008
    
    
    
    398
    
    
    
    
    
    
    
    74,000Concord, NC (4)
    
    
    100
    %
    
    
    2009
    
    
    
    402
    
    
    
    
    
    
    
    97,000
 
 (1)
    
    Condominium units are individually owned by third parties and are managed by us.(2)
    
    Our indoor entertainment areas generally include our indoor waterpark, game
arcade, childrens activity room, family tech center, MagiQuest and fitness
room, as well as our spa in the resorts that have such amenities.(3)
    
    These properties are owned by CNL Lifestyle Properties, Inc. (CNL), a real
estate investment trust focused on leisure and lifestyle properties. Prior to
August 2009, these properties were owned by a joint venture between CNL and us.
In August 2009, we sold our 30.26% joint venture interest to CNL for $6,000.
We currently manage both properties and license the Great Wolf Lodge brand to
these resorts.(4)
    
    Five of our properties (Great Wolf Lodge resorts in Williamsburg, VA; Pocono
Mountains, PA; Mason, OH; Grapevine, TX and Concord, NC) each had a book value
of fixed assets equal to ten percent or more of our total assets as of June 30,
2010 and each of those five properties had total revenues equal to ten percent
or more of our total revenues for the three and six months ended June 30, 2010.(5)
    
    An affiliate of Ripley Entertainment, Inc. (Ripley), our licensee, owns this
resort. We have granted Ripley a license to use the Great Wolf Lodge name for
this resort through April 2016. We managed the resort on behalf of Ripley
through April 2009.(6)
    
    This property is owned by a joint venture. The Confederated Tribes of the
Chehalis Reservation (Chehalis) owns a 51% interest in the joint venture, and
we own a 49% interest. We operate the property and license the Great Wolf Lodge
brand to the property under long-term agreements through April 2057, subject to
earlier termination in certain situations. The joint venture leases the land
for the resort from the United States Department of Interior, which is trustee
for Chehalis. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 General
 7




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##### Table of Contents



Principles of Consolidation
 Acquisition Accounting
 Goodwill
  June 30,
    
    
    December 31,2010
    
    
    2009Goodwill
    
    $
    2,276
    
    
    
    130,496Accumulated impairment losses
    
    
    
    
    
    
    (68,405
    )Goodwill related to sale of affiliate
    
    
    
    
    
    
    (62,091
    )$
    2,276
    
    
    $
    
 Noncontrolling Interests
 Income Taxes
 8




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##### Table of Contents



Segments
 
    
    Resort ownership/operation-revenues derived from our consolidated owned resorts; and
    
    Resort third-party management/licensing-revenues derived from management, license and
other related fees from unconsolidated managed resorts.
  Totals perResort Ownership/
    
    
    Resort Third-Party
    
    
    
    
    
    
    FinancialOperation
    
    
    Management/License
    
    
    Other
    
    
    StatementsThree months ended June 30,
2010Revenues
    
    $
    60,428
    
    
    $
    7,133
    
    
    $
    867
    
    
    $
    68,428Depreciation and amortization
    
    
    (16,416
    )
    
    
    
    
    
    
    (694
    )
    
    
    (17,110
    )Net operating (loss) income
    
    
    (1,664
    )
    
    
    1,520
    
    
    
    (174
    )
    
    
    (318
    )Investment income  affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (276
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (180
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,459Loss before income taxes and
equity in income of
unconsolidated affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (12,321
    )Additions to long-lived assets
    
    
    1,961
    
    
    
    
    
    
    
    487
    
    
    $
    2,448
 Totals perResort Ownership/
    
    
    Resort Third-Party
    
    
    
    
    
    
    FinancialOperation
    
    
    Management/License
    
    
    Other
    
    
    StatementsSix months ended June 30, 2010Revenues
    
    $
    124,041
    
    
    $
    14,199
    
    
    $
    867
    
    
    $
    139,107Depreciation and amortization
    
    
    (30,271
    )
    
    
    
    
    
    
    (859
    )
    
    
    (31,130
    )Net operating (loss) income
    
    
    (709
    )
    
    
    3,175
    
    
    
    (2,245
    )
    
    
    221Investment income  affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (565
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (433
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,658Loss before income taxes and
equity in income of
unconsolidated affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (20,439
    )Additions to long-lived assets
    
    
    5,790
    
    
    
    
    
    
    
    439
    
    
    $
    6,229Total assets
    
    
    685,381
    
    
    
    3,565
    
    
    
    116,926
    
    
    $
    805,872
 9




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##### Table of Contents



Totals perResort Ownership/
    
    
    Resort Third-Party
    
    
    
    
    
    
    FinancialOperation
    
    
    Management/License
    
    
    Other
    
    
    StatementsThree months ended June 30,
2009Revenues
    
    $
    61,775
    
    
    $
    6,850
    
    
    $
    
    
    
    $
    68,625Depreciation and amortization
    
    
    (14,474
    )
    
    
    
    
    
    
    (156
    )
    
    
    (14,630
    )Net operating (loss) income
    
    
    (777
    )
    
    
    1,612
    
    
    
    (1,416
    )
    
    
    (581
    )Investment income  affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (336
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (148
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,777Loss before income taxes and
equity in losses of
unconsolidated affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (8,874
    )Additions to long-lived assets
    
    
    16,064
    
    
    
    
    
    
    
    104
    
    
    $
    16,168
 Totals perResort Ownership/
    
    
    Resort Third-Party
    
    
    
    
    
    
    FinancialOperation
    
    
    Management/License
    
    
    Other
    
    
    StatementsSix months ended June 30, 2009Revenues
    
    $
    116,987
    
    
    $
    13,945
    
    
    $
    
    
    
    $
    130,932Depreciation and amortization
    
    
    (26,845
    )
    
    
    
    
    
    
    (371
    )
    
    
    (27,216
    )Net operating (loss) income
    
    
    (3,659
    )
    
    
    3,425
    
    
    
    (2,797
    )
    
    
    (3,031
    )Investment income  affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (720
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (336
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,044Loss before income taxes and
equity in losses of
unconsolidated affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (17,019
    )Additions to long-lived assets
    
    
    45,619
    
    
    
    
    
    
    
    227
    
    
    $
    45,846Total assets (as of December 31, 2009)
    
    
    707,472
    
    
    
    2,942
    
    
    
    95,330
    
    
    $
    805,744
  Recent Accounting Pronouncements 
 10




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##### Table of Contents



3. INVESTMENT IN AFFILIATES
 CNL Joint Venture
   Three months
    
    
    Six monthsended June 30,
    
    
    ended June 30,2009
    
    
    2009Operating data:Revenue
    
    $
    7,041
    
    
    $
    14,650Operating expenses
    
    $
    (9,592
    )
    
    $
    (19,830
    )Net loss
    
    $
    (2,551
    )
    
    $
    (5,180
    )
 Grand Mound Joint Venture
  11




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##### Table of Contents



June 30,
    
    December 31,2010
    
    2009Balance sheet data:Total assets
    
    $
    144,624
    
    
    $
    145,247Total liabilities
    
    $
    113,358
    
    
    $
    114,129
 Three months ended
    
    Six months endedJune 30,
    
    June 30,2010
    
    2009
    
    2010
    
    2009Operating data:Revenue
    
    $
    10,563
    
    
    $
    10,156
    
    
    $
    21,776
    
    
    $
    20,133Operating expenses
    
    $
    (10,957
    )
    
    $
    (8,718
    )
    
    $
    (20,381
    )
    
    $
    (17,302
    )Net income (loss)
    
    $
    (457
    )
    
    $
    (22
    )
    
    $
    60
    
    
    $
    (186
    )
  4. VARIABLE INTEREST ENTITIES
   
    
    We have equity investments in and a loan to the joint venture that owns the Great
Wolf Lodge resort Grand Mound, Washington. We manage that resort and we have
concluded that the joint venture is a variable interest entity because the
management fees we receive represent a variable interest. The management contract,
however, does not provide us with power over the activities that most significantly
impact the economic performance of the joint venture. As we lack the ability to
direct the activities that most significantly affect the resorts performance, we
are not the primary beneficiary of the joint venture and, therefore, we do not
consolidate this entity at June 30, 2010. During the three and six months ended
June 30, 2010 and 2009, we did not provide any support to this entity that we were
not contractually obligated to do so. Our maximum exposure to loss related to our
involvement with this entity as of June 30, 2010 is limited to the carrying value of
our equity investments in and loans to the joint venture as of that date. The total
carrying values of those items on our balance sheet as of June 30, 2010 is $27,017.
    
    We have equity investments in two subsidiaries which are Delaware statutory
trusts, both of which were used to issue trust preferred securities through private
offerings. We have concluded that both of these trusts are variable interest
entities. As we lack the ability to direct the activities that most significantly
impact the trusts performance, however, we are not the primary beneficiary and
therefore, we do not consolidate these entities at June 30, 2010. During the three
and six months ended June 30, 2010 and 2009, we did not provide any support to these
entities that we were not contractually obligated to do so.
Our maximum exposure to loss related to our involvement with these entities as of June
30, 2010 is
 12




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##### Table of Contents



limited to the carrying value of our equity investments in the entities as
of that date. The total carrying values of those items on our balance sheet as of
June 30, 2010 is $2,420.
 5. ACQUISTION OF CREATIVE KINGDOMS
 ®
  6. SHARE-BASED COMPENSATION
      Stock Options
    13




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##### Table of Contents



WeightedWeighted
    
    
    AverageAverage
    
    
    RemainingExercise
    
    
    ContractualShares
    
    
    Price
    
    
    LifeNumber of shares under option:Outstanding at beginning of period
    
    
    441,000
    
    
    $
    17.53
    
    
    4.59 yearsExercised
    
    
    Forfeited
    
    
    Outstanding at end of period
    
    
    441,000
    
    
    $
    17.53
    
    
    4.59 yearsExercisable at end of period
    
    
    441,000
    
    
    $
    17.53
    
    
    4.59 years
  Market Condition Share Awards
    
    
    333,060 were based on our common stocks performance in 2010 relative to a stock index,
as designated by the Compensation Committee of the Board of Directors. These shares vest
ratably over a three-year period, 2010-2012. The per share fair value of these market
condition shares was $2.43 as of the grant date.
  Dividend yield
    
    
    Weighted average, risk free interest rate
    
    
    0.26
    %Expected stock price volatility
    
    
    108.06
    %Expected stock price volatility (small-cap stock index)
    
    
    40.92
    %
  
    
    91,463 were based on our common stocks absolute performance during the three year period
2010-2012. For shares that are earned, half of the shares vest on December 31, 2012, and
the other half vest on December 31, 2013. The per share fair value of these market
condition shares was $2.53 as of the grant date.
  14




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##### Table of Contents



Dividend yield
    
    
    Weighted average, risk free interest rate
    
    
    1.27
    %Expected stock price volatility
    
    
    95.21
    %
  
    
    91,463 were based on our common stocks performance in 2010-2012 relative to a stock
index, as designated by the Compensation Committee of the Board of Directors. For shares
that are earned, half of the shares vest on December 31, 2012, and the other half vest on
December 31, 2013. The per share fair value of these market condition shares was $2.61 as
of the grant date.
  Dividend yield
    
    
    Weighted average, risk free interest rate
    
    
    1.27
    %Expected stock price volatility
    
    
    95.21
    %Expected stock price volatility (small-cap stock index)
    
    
    37.51
    %
   
    
    541,863 were based on our common stocks performance in 2009 relative to a stock index,
as designated by the Compensation Committee of the Board of Directors. These shares vest
ratably over a three-year period, 2009-2011. The per share fair value of these market
condition shares was $1.26 as of the grant date.
  Dividend yield
    
    
    Weighted average, risk free interest rate
    
    
    0.62
    %Expected stock price volatility
    
    
    96.51
    %Expected stock price volatility (small-cap stock index)
    
    
    37.89
    %
   15




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##### Table of Contents




    
    81,293 are based on our common stocks absolute performance during the three-year period
2007-2009. Half of these shares vested on December 31, 2009, and the other half vest on
December 31, 2010. The per share fair value of these market condition shares was $6.65.
  Dividend yield
    
    
    Weighted average, risk free interest rate
    
    
    4.73
    %Expected stock price volatility
    
    
    42.13
    %
   
    
    81,293 were based on our common stocks performance in 2007-2009 relative to a stock
index, as designated by the Compensation Committee of the Board of directors. Half of these
 shares vested December 31, 2009, and the other half vest on December 31, 2010. The per share
fair value of these market condition shares was $8.24.
  Dividend yield
    
    
    Weighted average, risk free interest rate
    
    
    4.73
    %Expected stock price volatility
    
    
    42.13
    %Expected stock price volatility (small-cap stock index)
    
    
    16.64
    %
   Performance Share Awards
  16




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##### Table of Contents




    
    Employees earned and were issued 162,559 performance shares in March 2010 related to
2009 grants and
    
    Employees earned and were issued 18,084 performance shares in February 2009 related to
the 2008 grants.
 Deferred Compensation Awards
   Non-vested Shares
   WeightedAverageGrant DateShares
    
    
    Fair ValueNon-vested shares balance at beginning of period
    
    
    483,468
    
    
    $
    5.13Granted
    
    
    1,306,653
    
    
    $
    2.10Forfeited
    
    
    (6,400
    )
    
    $
    5.42Vested
    
    
    (365,352
    )
    
    $
    2.95Non-vested shares balance at end of period
    
    
    1,418,369
    
    
    $
    2.72
   17




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##### Table of Contents



Vested Shares
  
    
    In connection with the elections related to 2008 bonus amounts, we issued 17,532 shares
in February 2009. We valued these shares at $32 based on the closing market value of our
common stock on the date of the grant.
    
    There were no shares issued in the six months ended June 30, 2010 related to 2009 bonus
amounts.
  7. PROPERTY AND EQUIPMENT
  June 30,
    
    
    December 31,2010
    
    
    2009Land and improvements
    
    $
    60,718
    
    
    $
    60,718Building and improvements
    
    
    430,580
    
    
    
    427,602Furniture, fixtures and equipment
    
    
    357,937
    
    
    
    341,529Construction in process
    
    
    847
    
    
    
    327850,082
    
    
    
    830,176Less accumulated depreciation
    
    
    (184,912
    )
    
    
    (153,771
    )Property and equipment, net
    
    $
    665,170
    
    
    $
    676,405Depreciation expense was $12,337 and $24,508 for the three months and six months ended June 30,
2010, respectively. Depreciation expense was $12,975 and $24,480 for the three and six months
ended June 30, 2009, respectively.8. LONG-TERM DEBTLong-term debt consists of the following:June 30,
    
    
    December 31,2010
    
    
    2009Long-Term Debt:Traverse City/Kansas City mortgage loan
    
    $
    68,011
    
    
    $
    68,773Mason mortgage loan
    
    
    
    
    
    
    73,800Pocono Mountains mortgage loan
    
    
    94,867
    
    
    
    95,458Williamsburg mortgage loan
    
    
    
    
    
    
    63,125Grapevine mortgage loan
    
    
    
    
    
    
    77,909
 18




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##### Table of Contents



June 30,
    
    
    December 31,2010
    
    
    2009Concord mortgage loan
    
    
    78,588
    
    
    
    78,549First mortgage notes (net of discount of $10,343)
    
    
    219,657
    
    
    
    Junior subordinated debentures
    
    
    80,545
    
    
    
    80,545Other Debt:City of Sheboygan bonds
    
    
    8,564
    
    
    
    8,544City of Sheboygan loan
    
    
    3,172
    
    
    
    3,290Other
    
    
    63
    
    
    
    78553,467
    
    
    
    550,071Less current portion of long-term debt
    
    
    (4,186
    )
    
    
    (16,126
    )Total long-term debt
    
    $
    549,281
    
    
    $
    533,945
 Traverse City/Kansas City Mortgage Loan
    Mason Mortgage Loan
 Pocono Mountains Mortgage Loan 
 19




---



##### Table of Contents



Williamsburg Mortgage Loan 
 Grapevine Mortgage Loan
 Concord Mortgage Loan
  First Mortgage Notes
   Junior Subordinated Debentures
 20




---



##### Table of Contents



City of Sheboygan Bonds
 City of Sheboygan Loan
 Future Maturities
 ThroughJune 30,2011
    
    $
    4,1862012
    
    
    80,7802013
    
    
    3,5382014
    
    
    3,8182015
    
    
    63,003Thereafter
    
    
    408,485Total
    
    $
    563,810
 21




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##### Table of Contents



9. FAIR VALUE OF FINANCIAL INSTRUMENTS
       June 30, 2010
 Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalInterest rate caps
    
    $
    
    
    
    $
    7
    
    
    $
    
    
    
    $
    7
 December 31, 2009
 Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalInterest rate caps
    
    $
    
    
    
    $
    133
    
    
    $
    
    
    
    $
    133
    10. EARNINGS PER SHARE
  22




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net loss attributable to Great Wolf Resorts, Inc.
    
    $
    (12,760
    )
    
    $
    (5,706
    )
    
    $
    (20,825
    )
    
    $
    (11,351
    )Weighted average common shares outstanding 
basic
    
    
    31,000,179
    
    
    
    31,263,487
    
    
    
    30,919,023
    
    
    
    31,123,072Weighted average common shares outstanding 
diluted
    
    
    31,000,179
    
    
    
    31,263,487
    
    
    
    30,919,023
    
    
    
    31,123,072Net loss attributable to Great Wolf Resorts,
Inc. per share  basic
    
    $
    (0.41
    )
    
    $
    (0.18
    )
    
    $
    (0.67
    )
    
    $
    (0.36
    )Net loss attributable to Great Wolf Resorts,
Inc. per share  diluted
    
    $
    (0.41
    )
    
    $
    (0.18
    )
    
    $
    (0.67
    )
    
    $
    (0.36
    )
 
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 This Managements Discussion and Analysis of Financial condition and Results of Operations
is a discussion and analysis of the financial condition, results of operations and liquidity and
capital resources. The following discussion should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this report. We make statements in this section
that are forward-looking statements within the meaning of the federal securities laws. For a
complete discussion of forward-looking statements, see the section in Item 1 of our Annual Report
on Form 10-K entitled, Forward-Looking Statements. All dollar amounts in this discussion, except
for per share data and operating statistics, ADR, RevPAR and RevPOR, are in thousands.
 Overview
  Business.
 23




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##### Table of Contents



®
  IndoorOwnership
    
    
    
    
    
    
    Number of
    
    
    Number of
    
    
    EntertainmentPercentage
    
    
    Opened
    
    
    Guest Suites
    
    
    Condo Units (1)
    
    
    Area (2)(approx. sq. ft.)Wisconsin Dells, WI (3)
    
    
    
    
    
    
    1997
    
    
    
    308
    
    
    
    77
    
    
    
    102,000Sandusky, OH (3)
    
    
    
    
    
    
    2001
    
    
    
    271
    
    
    
    
    
    
    
    41,000Traverse City, MI
    
    
    100
    %
    
    
    2003
    
    
    
    280
    
    
    
    
    
    
    
    57,000Kansas City, KS
    
    
    100
    %
    
    
    2003
    
    
    
    281
    
    
    
    
    
    
    
    57,000Sheboygan, WI
    
    
    100
    %
    
    
    2004
    
    
    
    182
    
    
    
    64
    
    
    
    54,000Williamsburg, VA (4)
    
    
    100
    %
    
    
    2005
    
    
    
    405
    
    
    
    
    
    
    
    87,000Pocono Mountains, PA (4)
    
    
    100
    %
    
    
    2005
    
    
    
    401
    
    
    
    
    
    
    
    101,000Niagara Falls, ONT (5)
    
    
    
    
    
    
    2006
    
    
    
    406
    
    
    
    
    
    
    
    104,000Mason, OH (4)
    
    
    100
    %
    
    
    2006
    
    
    
    401
    
    
    
    
    
    
    
    105,000Grapevine, TX (4)
    
    
    100
    %
    
    
    2007
    
    
    
    605
    
    
    
    
    
    
    
    110,000Grand Mound, WA (6)
    
    
    49
    %
    
    
    2008
    
    
    
    398
    
    
    
    
    
    
    
    74,000Concord, NC (4)
    
    
    100
    %
    
    
    2009
    
    
    
    402
    
    
    
    
    
    
    
    97,000
 
 (1)
    
    Condominium units are individually owned by third parties and are managed by us.(2)
    
    Our indoor entertainment areas generally include our indoor waterpark, game
arcade, childrens activity room, family tech center, MagiQuest and fitness
room, as well as our spa in the resorts that have such amenities.(3)
    
    These properties are owned by CNL Lifestyle Properties, Inc. (CNL), a real
estate investment trust focused on leisure and lifestyle properties. Prior to
August 2009, these properties were owned by a joint venture between CNL and us.
In August 2009 we sold our 30.26% joint venture interest to CNL for $6,000.
We currently manage both properties and license the Great Wolf Lodge brand to
these resorts.(4)
    
    Five of our properties (Great Wolf Lodge resorts in Williamsburg, VA; Pocono
Mountains, PA; Mason, OH; Grapevine, TX and Concord NC) each had a book value
of fixed assets equal to ten percent or more of our total assets as of June 30,
2010 and each of those five properties had total revenues equal to ten percent
or more of our 24




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##### Table of Contents



total revenues for the three and six months ended June 30, 2010.(5)
    
    An affiliate of Ripley Entertainment, Inc. (Ripley), our licensee, owns this
resort. We have granted Ripley a license to use the Great Wolf Lodge name for
this resort through April 2016. We managed the resort on behalf of Ripley
through April 2009.(6)
    
    This property is owned by a joint venture. The Confederated Tribes of the
Chehalis Reservation (Chehalis) owns a 51% interest in the joint venture, and
we own a 49% interest. We operate the property and license the Great Wolf Lodge
brand to the property under long-term agreements through April 2057, subject to
earlier termination in certain situations. The joint venture leases the land
for the resort from the United States Department of Interior, which is trustee
for Chehalis. Acquisition of Creative Kingdoms, LLC.
 Industry Trends.
    Outlook.
  25




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##### Table of Contents




    
    leveraging our competitive advantages and increasing domestic geographic
diversification through a licensing-based business model and joint venture investments
in target markets;
    
    expanding our brand footprint internationally;
    
    selective sales of ownership interests/recycling of capital;
    
    expanding and enhancing existing resorts;
    
    continuing to innovate;
    
    maximizing total resort revenues;
    
    minimizing total resort costs; and
    
    building upon our existing brand awareness and loyalty.
  
    
    development and licensing of properties;
    
    increases in costs of constructing, operating and maintaining our resorts;
    
    competition from other entertainment companies, both within and outside our industry
segment; and
    
    external economic risks, including family vacation patterns and trends.
   
    
    severe turbulence in the banking and lending sectors, which has led to a general
lessening of the availability of credit to consumers;
    
    an increased national unemployment rate;
    
    a continuing decline in the national average of home prices and an increase in the
national home foreclosure rate; and
    
    high volatility in the stock market that led to substantial declines in leading
market averages and aggregate household savings from 2007 to 2010.
  26




---



##### Table of Contents




    
    We believe that our Traverse City and Sandusky resorts have been and will
continue to be affected by especially adverse general economic circumstances in the
Michigan/Northern Ohio region (such as bankruptcies of several major companies and/or large
announced layoffs by major employers) and increased competition that has occurred in these
markets over the past few years. The Michigan/Northern Ohio region includes cities that
have historically been the Traverse City and Sandusky resorts largest source of customers.
We believe the adverse general economic circumstances in the region have negatively
impacted overall discretionary consumer spending in that region over the past few years and
may continue to do so going forward. Although we have taken steps to reduce our operating
costs at these resorts, we believe the general regional economic downturn has and may
continue to have an impact on the operating performance of our Traverse City and Sandusky
resorts.
    
    Our Wisconsin Dells property has been significantly impacted by the abundance
of competing indoor waterpark resorts in that market. The Wisconsin Dells market has
approximately 16 indoor waterpark resorts that compete with us. We believe this large
number of competing properties in a relatively small tourist destination location has and
will likely continue to have an adverse impact on the operating performance of our
Wisconsin Dells resort.
    
    We have experienced much lower than expected occupancy and lower than expected
average daily room rates at our Sheboygan, Wisconsin property since its opening in 2004. We
believe this operating weakness has been primarily attributable to the fact that the
overall development of Sheboygan as a tourist destination continues to lag significantly
behind our initial expectations. We believe this has materially impacted and will likely
continue to impact the consumer demand for our indoor waterpark resort in that market and
the operations of the resort. As a result of those conditions, we recorded an impairment
charge in 2009 to decrease the resorts carrying value to its estimated fair value (net of
disposal costs). In May 2010, we listed the resort for sale.
   Revenue and Key Performance Indicators.
 
    
    monitoring our historical trends for occupancy and estimating our high
occupancy nights;
 27




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##### Table of Contents




    
    offering the highest discounts to previous guests in off-peak periods to build
customer loyalty and enhance our ability to charge higher rates in peak periods;
    
    structuring rates to allow us to offer our previous guests the best rate while
simultaneously working with a promotional partner or offering internet specials;
    
    monitoring sales of room types daily to evaluate the effectiveness of offered
discounts; and
    
    offering specials on standard suites and yielding better rates on larger
suites when standard suites sell out.
   
    
    occupancy;
    
    average daily room rate, or ADR;
    
    revenue per available room, or RevPAR;
    
    total revenue per available room, or Total RevPAR;
    
    total revenue per occupied room, or Total RevPOR; and
    
    earnings before interest, taxes, depreciation and amortization, or EBITDA.
  
    
    Occupancy is calculated by dividing total occupied rooms by total available
rooms.
    
    ADR is calculated by dividing total rooms revenue by total occupied rooms.
    
    RevPAR is the product of occupancy and ADR.
  
    
    Total RevPAR is calculated by dividing total revenue by total available rooms.
    
    Total RevPOR is calculated by dividing total revenue by total occupied rooms.
   28




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##### Table of Contents



Critical Accounting Policies and Estimates
  Acquisition
Accounting
 Goodwill
  June 30,
    
    
    December 31,2010
    
    
    2009Goodwill
    
    $
    2,276
    
    
    
    130,496Accumulated impairment losses
    
    
    
    
    
    
    (68,405
    )Goodwill related to sale of affiliate
    
    
    
    
    
    
    (62,091
    )$
    2,276
    
    
    $
    
 Noncontrolling Interests
 29




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##### Table of Contents



Recent Accounting Pronouncements
     Non-GAAP Financial Measures
  30




---



##### Table of Contents




    
    a significant portion of our assets consists of property and equipment that are
depreciated over their remaining useful lives in accordance with GAAP. Because depreciation
and amortization are non-cash items, we believe that presentation of EBITDA is a useful
measure of our operating performance;
    
    it is widely used in the hospitality and entertainment industries to measure operating
performance without regard to items such as depreciation and amortization; and
    
    we believe it helps investors meaningfully evaluate and compare the results of our
operations from period to period by removing the impact of items directly resulting from our
asset base, primarily depreciation and amortization, from our operating results.
  
    
    as a measurement of operating performance because it assists us in comparing our
operating performance on a consistent basis as it removes the impact of items directly
resulting from our asset base, primarily depreciation and amortization, from our operating
results;
    
    for planning purposes, including the preparation of our annual operating budget;
    
    as a valuation measure for evaluating our operating performance and our capacity to incur
and service debt, fund capital expenditures and expand our business; and
    
    as one measure in determining the value of other acquisitions and dispositions.
   Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net loss attributable to Great
Wolf Resorts, Inc.
    
    $
    (12,760
    )
    
    $
    (5,706
    )
    
    $
    (20,825
    )
    
    $
    (11,351
    )Adjustments:Interest expense, net of
interest income
    
    
    12,279
    
    
    
    8,629
    
    
    
    21,225
    
    
    
    14,708Income tax expense (benefit)
    
    
    194
    
    
    
    (3,966
    )
    
    
    369
    
    
    
    (7,523
    )Depreciation and amortization
    
    
    17,110
    
    
    
    14,630
    
    
    
    31,130
    
    
    
    27,216EBITDA
    
    $
    16,823
    
    
    $
    13,587
    
    
    $
    31,899
    
    
    $
    23,050
 31




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##### Table of Contents



Results of Operations
 General
  
    
    our subsidiary entity that provides resort development and
management/licensing services;
    
    our Traverse City, Kansas City, Sheboygan, Williamsburg, Pocono Mountains,
Mason, Grapevine and Concord wholly-owned resorts;
    
    our subsidiary that is the developer of experiential gaming products, less our
noncontrolling interest; and
    
    our equity interests in the Wisconsin Dells and Sandusky resorts through
August 2009, when we sold our minority ownership interests in those resorts, and our equity
interest in Grand Mound resort in which we have an ownership interest but which we do not
consolidate.Revenues.Our revenues consist of:
    
    lodging revenue, which includes rooms, food and beverage, and other department
revenues from our resorts;
    
    revenue from our subsidiary that is the developer of experiential gaming
products, which includes product sales, admission fees and retail revenues;
    
    management fee and other revenue from resorts, which includes fees received
under our management, license, development and construction management agreements; and
    
    other revenue from managed properties. We employ the staff at our managed
properties. Under our management agreements, the resort owners reimburse us for payroll,
benefits and certain other costs related to the operations of the managed properties. We
include the reimbursement of payroll, benefits and costs, recorded as revenue on our
statements of operations, with a corresponding expense recorded as other expenses from
managed properties.Operating Expenses.Our departmental operating expenses consist of rooms, food and beverage
and other department expenses.Our other operating expenses include the following items:
    
    selling, general and administrative expenses, which are associated with the
operations and management of resorts and which consist primarily of expenses such as
corporate payroll and related benefits, operations management,
 32




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##### Table of Contents



sales and marketing, finance, legal, information technology support, human resources and
other support services, as well as general corporate expenses;
    
    property operation and maintenance expenses, such as utility costs and
property taxes;
    
    depreciation and amortization; and
    
    other expenses from managed properties.
 Three months ended June 30, 2010, compared with the three months ended June 30, 2009
  Same Store Comparison(b)Increase/All Properties(a)
    
    
    
    
    
    
    
    
    
    
    (Decrease)2010
    
    
    2010
    
    
    2009
    
    
    $
    
    
    %Occupancy
    
    
    59.0
    %
    
    
    59.6
    %
    
    
    61.6
    %
    
    
    N/A
    
    
    
    (3.2
    )%ADR
    
    $
    239.11
    
    
    $
    237.58
    
    
    $
    230.26
    
    
    $
    7.32
    
    
    
    3.2
    %RevPAR
    
    $
    140.99
    
    
    $
    141.66
    
    
    $
    141.79
    
    
    $
    (0.13
    )
    
    
    (0.1
    )%Total RevPOR
    
    $
    371.17
    
    
    $
    369.32
    
    
    $
    358.65
    
    
    $
    10.67
    
    
    
    3.0
    %Total RevPAR
    
    $
    218.85
    
    
    $
    220.22
    
    
    $
    220.85
    
    
    $
    (0.63
    )
    
    
    (0.3
    )%Non-rooms revenue per occupied room
    
    $
    132.06
    
    
    $
    131.74
    
    
    $
    128.39
    
    
    $
    3.35
    
    
    
    2.6
    %
 
 (a)
    
    Includes results for properties that were open for any portion of the period, for all owned,
managed and/or licensed resorts.(b)
    
    Same store comparison includes properties that were open for the full periods and with
comparable number of rooms in 2010 and 2009 (that is, all properties other than our Concord
resort).   Three months endedJune 30,2010
    
    
    2009
    
    
    Increase/ (Decrease)Revenues
    
    $
    68,428
    
    
    $
    68,625
    
    
    $
    (197
    )Operating expenses:Departmental operating expenses
    
    
    23,358
    
    
    
    23,237
    
    
    
    121Selling, general and administrative
    
    
    14,486
    
    
    
    16,987
    
    
    
    (2,501
    )Property operating costs
    
    
    8,170
    
    
    
    9,114
    
    
    
    (944
    )Depreciation and amortization
    
    
    17,110
    
    
    
    14,630
    
    
    
    2,480Net operating loss
    
    
    (318
    )
    
    
    (581
    )
    
    
    263Interest expense, net of interest income
    
    
    12,279
    
    
    
    8,629
    
    
    
    3,650Income tax expense (benefit)
    
    
    189
    
    
    
    (3,635
    )
    
    
    3,824Net loss attributable to Great Wolf Resorts, Inc.
    
    
    (12,760
    )
    
    
    (5,706
    )
    
    
    (7,054
    )
 33




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##### Table of Contents



Operating expenses.
 
    
    Total selling, general and administrative expenses decreased by $2,501 in the three
months ended June 30, 2010, as compared to the three months ended June 30, 2009, due
primarily to a settlement received at our Poconos resort related to wastewater treatment
litigation as well as a decrease in corporate development-related expenditures.
    
    Opening-related costs (included in total property operating costs) related to our
resorts were $1,339 for the three months ended June 30, 2009, due primarily to the opening
of our Concord resort in March 2009. There were no similar opening-related resort costs
for the three months ended June 30, 2010.
    
    Total depreciation and amortization increased for the three months ended June 30, 2010,
as compared to the three months ended June 30, 2009, primarily due to unamortized loan fees
expensed in the amount of $3,500 related to our existing Williamsburg, Mason and Grapevine
loans that were repaid with the net proceeds of the first mortgage notes. This increase was
partially offset by a decrease in depreciation on our Sheboygan resort due to the asset
impairment loss recorded in 2009.
 Net loss attributable to Great Wolf Resorts, Inc.
 
    
    An increase in net interest expense of $3,650, mainly due to interest expense related
to our first mortgage notes.
    
    An increase in income tax expense of $3,824 recorded in the three months ended June
30, 2010 as compared to the three months ended June 30, 2009 as a result of fully
reserving deferred tax assets resulting from net operating losses in 2010. We did not
record a similar reserve in the three months ended June 30, 2009.
 Six months ended June 30, 2010, compared with the six months ended June 30, 2009
  Same Store Comparison(b)All Properties(a)
    
    
    
    
    
    
    
    
    
    
    Increase/ (Decrease)2010
    
    
    2010
    
    
    2009
    
    
    $
    
    
    %Occupancy
    
    
    59.2
    %
    
    
    59.9
    %
    
    
    60.4
    %
    
    
    N/A
    
    
    
    (0.8
    )%ADR
    
    $
    248.42
    
    
    $
    247.87
    
    
    $
    240.88
    
    
    $
    6.99
    
    
    
    2.9
    %RevPAR
    
    $
    147.14
    
    
    $
    148.60
    
    
    $
    145.47
    
    
    $
    3.13
    
    
    
    2.2
    %Total RevPOR
    
    $
    384.97
    
    
    $
    384.62
    
    
    $
    373.31
    
    
    $
    11.31
    
    
    
    3.0
    %Total RevPAR
    
    $
    228.02
    
    
    $
    230.58
    
    
    $
    225.44
    
    
    $
    5.14
    
    
    
    2.3
    %Non-rooms revenue per occupied room
    
    $
    136.55
    
    
    $
    136.75
    
    
    $
    132.43
    
    
    $
    4.32
    
    
    
    3.3
    %
 
 (a)
    
    Includes results for properties that were open for any portion of the period, for all owned,
managed and/or licensed resorts.(b)
    
    Same store comparison includes properties that were open for the full periods and with
comparable number of rooms in 2010 and 2009 (that is, all properties other than our Concord
resort). 34




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##### Table of Contents



Six months endedJune 30,2010
    
    
    2009
    
    
    Increase/ (Decrease)Revenues
    
    $
    139,107
    
    
    $
    130,932
    
    
    $
    8,175Operating expenses:Departmental operating expenses
    
    
    46,281
    
    
    
    42,949
    
    
    
    3,332Selling, general and administrative
    
    
    33,228
    
    
    
    31,631
    
    
    
    1,597Property operating costs
    
    
    17,204
    
    
    
    21,456
    
    
    
    (4,252
    )Depreciation and amortization
    
    
    31,130
    
    
    
    27,216
    
    
    
    3,914Net operating income (loss)
    
    
    221
    
    
    
    (3,031
    )
    
    
    3,252Interest expense, net of interest income
    
    
    21,225
    
    
    
    14,708
    
    
    
    6,517Income tax expense (benefit)
    
    
    369
    
    
    
    (6,783
    )
    
    
    7,152Net loss attributable to Great Wolf Resorts, Inc.
    
    
    (20,825
    )
    
    
    (11,351
    )
    
    
    (9,474
    )
 Revenues.
 
    
    An increase in revenue from our Concord resort, which opened in March 2009.
 Operating expenses.
 
    
    Departmental expenses increased by $3,332 for the six months ended June 30, 2010, as
compared to the six months ended June 30, 2009, due primarily to the opening of our Concord
resort.
    
    Total selling, general and administrative expenses increased by $1,597 in the six months
ended June 30, 2010, as compared to the six months ended June 30, 2009, due primarily to the
opening of our Concord resort offset by a settlement received at our Poconos resort related
to wastewater treatment litigation during the six months ended June 30, 2010 as compared to
the six months ended June 30, 2009.
    
    Opening-related costs (included in total property operating costs) related to our
resorts were $5,583 for the six months ended June 30, 2009, due primarily to the expansion
of our Grapevine property in January 2009 and opening of our Concord resort in March 2009.
There were no similar opening-related costs for the six months ended June 30, 2010.
    
    Total depreciation and amortization increased for the six months ended June 30, 2010, as
compared to the six months ended June 30, 2009, primarily due to unamortized loan fees
expensed in the amount of $3,500 related to our existing Williamsburg, Mason and Grapevine
loans that were repaid with the net proceeds of the first mortgage notes. This increase was
partially offset by a decrease in depreciation on our Sheboygan resort due to the asset
impairment loss recorded in 2009.
 35




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##### Table of Contents



Net operating income (loss).
 Net loss attributable to Great Wolf Resorts, Inc.
 
    
    An increase in net interest expense of $6,517, mainly due to interest expense on our
first mortgage notes, and less interest being capitalized to development properties in
2010 as compared to 2009 due to fewer properties being developed.
    
    An increase in income tax expense of $7,152 recorded in the six months ended June 30,
2010 as compared to the six months ended June 30, 2009 as a result of fully reserving
deferred tax assets resulting from net operating losses in 2010. We did not record a
similar reserve in the six months ended June 30, 2009.
 Segments
  
    
    resort ownership/operation-revenues derived from our consolidated owned resorts; and
    
    resort third-party management/licensing-revenues derived from management, license and
other related fees from unconsolidated managed resorts.
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,Increase /
    
    
    
    
    
    
    
    
    
    
    Increase /2010
    
    
    2009
    
    
    (Decrease)
    
    
    2010
    
    
    2009
    
    
    (Decrease)Resort Ownership/OperationRevenues
    
    $
    60,428
    
    
    $
    61,775
    
    
    $
    (1,347
    )
    
    $
    124,041
    
    
    $
    116,987
    
    
    $
    7,054EBITDA
    
    
    14,758
    
    
    
    13,697
    
    
    
    1,061
    
    
    
    29,569
    
    
    
    23,185
    
    
    
    6,384Resort Third-Party
Management/LicenseRevenues
    
    
    7,133
    
    
    
    6,850
    
    
    
    283
    
    
    
    14,199
    
    
    
    13,945
    
    
    
    254EBITDA
    
    
    1,520
    
    
    
    1,612
    
    
    
    (92
    )
    
    
    3,175
    
    
    
    3,425
    
    
    
    (250
    )OtherRevenues
    
    
    867
    
    
    
    
    
    
    
    867
    
    
    
    867
    
    
    
    
    
    
    
    867EBITDA
    
    
    545
    
    
    
    (1,722
    )
    
    
    2,267
    
    
    
    (845
    )
    
    
    (3,560
    )
    
    
    2,715
  Liquidity and Capital Resources
  36




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##### Table of Contents



June 30,
    
    
    December 31,2010
    
    
    2009Long-Term Debt:Traverse City/Kansas City mortgage loan
    
    $
    68,011
    
    
    $
    68,773Mason mortgage loan
    
    
    
    
    
    
    73,800Pocono Mountains mortgage loan
    
    
    94,867
    
    
    
    95,458Williamsburg mortgage loan
    
    
    
    
    
    
    63,125Grapevine mortgage loan
    
    
    
    
    
    
    77,909Concord mortgage loan
    
    
    78,588
    
    
    
    78,549First mortgage notes (net of discount of $10,343)
    
    
    219,657
    
    
    
    Junior subordinated debentures
    
    
    80,545
    
    
    
    80,545Other Debt:City of Sheboygan bonds
    
    
    8,564
    
    
    
    8,544City of Sheboygan loan
    
    
    3,172
    
    
    
    3,290Other
    
    
    63
    
    
    
    78553,467
    
    
    
    550,071Less current portion of long-term debt
    
    
    (4,186
    )
    
    
    (16,126
    )Total long-term debt
    
    $
    549,281
    
    
    $
    533,945
 Traverse City/Kansas City Mortgage Loan
    Mason Mortgage Loan
 Pocono Mountains Mortgage Loan 
 37




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##### Table of Contents



Williamsburg Mortgage Loan 
 Grapevine Mortgage Loan
 Concord Mortgage Loan
  First Mortgage Notes
   38




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##### Table of Contents



Junior Subordinated Debentures
      City of Sheboygan Bonds
 City of Sheboygan Loan
 39




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##### Table of Contents



Future Maturities
 ThroughJune 30,2011
    
    $
    4,1862012
    
    
    80,7802013
    
    
    3,5382014
    
    
    3,8182015
    
    
    63,003Thereafter
    
    
    408,485Total
    
    $
    563,810
 Short-Term Liquidity Requirements
  
    
    recurring maintenance, repairs and other operating expenses necessary to properly
maintain and operate our resorts;
    
    debt maturities within the next year;
    
    property taxes and insurance expenses;
    
    interest expense and scheduled principal payments on outstanding indebtedness;
    
    general and administrative expenses; and
    
    income taxes.
  Long-Term Liquidity Requirements
  
    
    scheduled debt maturities;
    
    costs associated with the development of new resorts;
    
    renovations, expansions and other non-recurring capital expenditures that need to be made
periodically to our resorts; and
    
    capital contributions and loans to unconsolidated joint ventures.
  
    
    existing working capital,
 40




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##### Table of Contents




    
    cash provided by operations,
    
    proceeds from investing activities, including sales of partial or whole ownership
interests in certain of our resorts; and
    
    proceeds from financing activities, including mortgage financing on properties being
developed, additional or replacement borrowings under future credit facilities,
contributions from joint venture partners, and the issuance of equity instruments, including
common stock, or additional or replacement debt, including debt securities, as market
conditions permit.
    Off Balance Sheet Arrangements
    41




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##### Table of Contents



Contractual Obligations
  Payment TermsMoreLess Than
    
    
    
    
    
    
    
    
    
    
    ThanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsDebt obligations (1)
    
    $
    796,304
    
    
    $
    39,392
    
    
    $
    155,011
    
    
    $
    134,870
    
    
    $
    467,031Operating lease obligations
    
    
    4,787
    
    
    
    1,030
    
    
    
    1,816
    
    
    
    1,282
    
    
    
    659Reserve on unrecognized tax benefits
    
    
    1,268
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,268Total
    
    $
    802,359
    
    
    $
    40,422
    
    
    $
    156,827
    
    
    $
    136,152
    
    
    $
    468,958
 
 (1)
    
    Amounts include interest (for fixed rate debt) and principal. They also include $8,564 of fixed rate
debt recognized as a liability related to certain bonds issued by the City of Sheboygan and $3,172 of
fixed rate debt recognized as a liability related to a loan from the City of Sheboygan. These
liabilities will be satisfied by certain future minimum guaranteed amounts of real and personal
property tax payments and room tax payments to be made by our Sheboygan resort.  Working Capital
  Cash Flows
 Six months ended June 30, 2010, compared with the six months ended June 30, 2009
 Increase/2010
    
    
    2009
    
    
    (Decrease)Net cash provided by operating activities
    
    $
    18,270
    
    
    $
    8,335
    
    
    $
    9,935Net cash used in investing activities
    
    
    (2,607
    )
    
    
    (38,115
    )
    
    
    (35,508
    )Net cash (used in) provided by financing activities
    
    
    (6,166
    )
    
    
    38,584
    
    
    
    (44,750
    )
 Operating Activities.
 42




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##### Table of Contents



Investing Activities.
 Financing Activities.
 Inflation
  
 ITEM 3 . QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
    
    $68,011 of fixed rate debt secured by two of our resorts. This debt bears interest at
6.96%.
    
    $94,867 of fixed rate debt secured by one of our resorts. This debt bears interest at
6.10%.
    
    $78,588 of variable rate debt secured by one of our resorts. This debt bears interest
at a floating annual rate of LIBOR plus a spread of 310 basis points, with a minimum rate
of 6.50% per annum. The effective rate was 6.50% at June 30, 2010.
    
    $219,657 (net of discount of $10,343) of first mortgage notes that are secured by first
priority liens on three of our resorts. This debt bears interest at 10.875%. The notes
are due April 2017.
    
    $51,550 of subordinated debentures that bear interest at a fixed rate of 7.80% through
March 2015 and then at a floating rate of LIBOR plus 310 basis points thereafter. The
securities mature in March 2035.
    
    $28,995 of subordinated debentures that bear interest at a fixed rate of 7.90% through
June 2012 and then at a floating rate of LIBOR plus 300 basis points thereafter. The
securities mature in June 2017.
    
    $8,564 of fixed rate debt (effective interest rate of 10.67%) recognized as a liability
related to certain bonds issued by the City of Sheboygan and $3,172 of non-interest bearing
debt recognized as a liability related to a loan from
the City of Sheboygan. These liabilities will be satisfied by certain future minimum
guaranteed amounts of real and personal property tax payments and room tax payments to be
made by the Sheboygan resort.
    
    $63 related to a capital lease that was entered into in June 2009. The lease matures in
May 2012.
 43




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Remediation of Material Weaknesses
  44




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##### Table of Contents



Changes in Internal Control
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. [Removed and Reserved]
 
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 
 45




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##### Table of Contents



ExhibitNumber
    
    Description2.1
    
    Form of Merger Agreement (Delaware) (incorporated herein by
reference to Exhibit 2.1 to the Companys Registration
Statement on Form S-1 filed August 12, 2004)2.2
    
    Form of Merger Agreement (Wisconsin) (incorporated herein by
reference to Exhibit 2.2 to the Companys Registration
Statement on Form S-1 filed August 12, 2004)3.1
    
    Form of Amended and Restated Certificate of Incorporation for
Great Wolf Resorts, Inc. dated December 9, 2004 (incorporated
herein by reference to Exhibit 3.1 to the Companys
Registration Statement on Form S-1 filed August 12, 2004)3.2
    
    Form of Amended and Restated Bylaws of Great Wolf Resorts,
Inc. effective September 12, 2007 (incorporated herein by
reference to Exhibit 4.1 to the Companys Current Report on
Form S-1 filed September 18, 2007)4.1
    
    Form of the Common Stock Certificate of Great Wolf Resorts,
Inc. (incorporated herein by reference to Exhibit 4.1 to the
Companys Registration Statement on Form S-1 filed October
21, 2004)4.2
    
    Junior Subordinated Indenture, dated as of March 15, 2005,
between Great Wolf Resorts, Inc. and JPMorgan Chase Bank,
National Association, as trustee (incorporated herein by
reference to Exhibit 4.1 to the Companys Current Report on
Form 8-K filed March 18, 2005)4.3
    
    Amended and Restated Trust Agreement, dated as of March 15,
2005, by and among Chase Manhattan Bank USA, National
Association, as Delaware trustee; JPMorgan Chase Bank,
National Association, as property trustee; Great Wolf
Resorts, Inc., as depositor; and James A. Calder, Alex G.
Lombardo and J. Michael Schroeder, as administrative trustees
(incorporated herein by reference to Exhibit 4.2 to the
Companys Current Report on Form 8-K filed March 18, 2005)10.1
    
    License Agreement, dated January 30, 2004, by and between The
Great Lakes Companies, Inc. and Jim Pattison Entertainment
Ltd. (incorporated herein by reference to Exhibit 10.1 to the
Companys Registration Statement on Form S-1 filed September
23, 2004)10.2
    
    Development Agreement, dated as of July 30, 2003, among the
City of Sheboygan, Wisconsin, the Redevelopment Authority of
the City of Sheboygan, Wisconsin, The Great Lakes Companies,
Inc., Blue Harbor Resort Sheboygan, LLC, and Blue Harbor
Resort Condominium, LLC (incorporated herein by reference to
Exhibit 10.2 to the Companys Registration Statement on Form
S-1 filed August 12, 2004)10.3
    
    First Amendment to the Development Agreement, dated June 25,
2004, by and among the City of Sheboygan, Wisconsin, the
Redevelopment Authority of the City of Sheboygan, Wisconsin,
The Great Lakes Companies, Inc., Blue Harbor Resort
Sheboygan, LLC, and Blue Harbor Resort Condominium, LLC
(incorporated herein by reference to Exhibit 10.3 to the
Companys Registration Statement on Form S-1 filed August 12,
2004)10.4
    
    Tall Pines Exclusive License and Royalty Agreement, dated
July 25, 2004, between Tall Pines Development Corporation and
The Great Lakes Companies, Inc. (incorporated herein by
reference to Exhibit 10.4 to the Companys Registration
Statement on Form S-1 filed December 7, 2004)10.5
    
    Employment Agreement between Great Wolf Resorts, Inc., and
Kimberly Schaefer, dated December 13, 2004 (incorporated
herein by reference to Exhibit 10.5 to the Companys Annual
Report on Form 10-K filed March 2, 2010)
 46




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##### Table of Contents



ExhibitNumber
    
    Description10.6
    
    Employment Agreement between Great Wolf Resorts, Inc. and
James Calder, dated December 13, 2004 (incorporated herein by
reference to Exhibit 10.6 to the Companys Annual Report on
Form 10-K filed March 2, 2010)10.7
    
    Employment Agreement between Great Wolf Resorts, Inc. and J.
Michael Schroeder, dated December 13, 2004 (incorporated
herein by reference to Exhibit 10.7 to the Companys Annual
Report on Form 10-K filed March 2, 2010)10.8
    
    First Amendment to Employment Agreement between Great Wolf
Resorts, Inc. and J. Michael Schroeder, dated May 28, 2008
(incorporated herein by reference to Exhibit 10.8 to the
Companys Annual Report on Form 10-K filed March 2, 2010)10.9
    
    Second Amendment to Employment Agreement between Great Wolf
Resorts, Inc. and J. Michael Schroeder, dated July 2, 2008
(incorporated herein by reference to Exhibit 10.9 to the
Companys Annual Report on Form 10-K filed March 2, 2010)10.10
    
    Employment Agreement between Great Wolf Resorts, Inc. and
Timothy Black, dated March 20, 2009 (incorporated herein by
reference to Exhibit 10.10 to the Companys Annual Report on
Form 10-K filed March 2, 2010)10.11
    
    First Amendment to Employment Agreement between Great Wolf
Resorts, Inc. and Timothy Black, dated December 16, 2009
(incorporated herein by reference to Exhibit 10.11 to the
Companys Annual Report on Form 10-K filed March 2, 2010)10.12
    
    Registration Statement on Form S-1 filed January 21, 2005)
Form of Noncompete Agreement, Trade Secret and Confidentiality
Agreement (incorporated herein by reference to Exhibit 10.6 to
the Companys Registration Statement on Form S-1 filed January
21, 2005)10.13
    
    Form of Officers and Directors Indemnification Agreement
(incorporated herein by reference to Exhibit 10.7 to the
Companys Registration Statement on Form S-1 filed August 12,
2004)10.14
    
    Form of Indemnity Agreement (incorporated herein by reference
to Exhibit 10.8 to the Companys Registration Statement on
Form S-1 filed September 23, 2004)10.15
    
    Form of Great Wolf Resorts, Inc. Employee Stock Purchase Plan
(incorporated herein by reference to Exhibit 10.9 to the
Companys Registration Statement on Form S-1 filed August 12,
2004)10.16
    
    Form of Great Wolf Resorts, Inc. 2004 Incentive Stock Plan
(incorporated herein by reference to Exhibit 10.10 to the
Companys Registration Statement on Form S-1 filed November
26, 2004)10.17
    
    Form of Great Wolf Resorts, Inc. Deferred Compensation Plan
(incorporated herein by reference to Exhibit 10.11 to the
Companys Registration Statement on Form S-1 filed August 12,
2004)10.18
    
    Loan Agreement by and among Great Wolf Resorts, Inc.,
Citigroup Global Markets Realty Corp. and The Travelers
Insurance Company (incorporated herein by reference to Exhibit
10.16 to Companys Registration Statement on Form S-1 filed
January 21, 2005)10.19
    
    Purchase Agreement, dated as of March 15, 2005, among Great
Wolf Resorts, Inc., Great Wolf Capital Trust I, Taberna
Preferred Funding I, Ltd and Merrill Lynch International
(incorporated herein by reference to Exhibit 1.1 to the
Companys Current Report on Form 8-K filed March 18, 2005)10.20
    
    Loan Agreement dated July 28, 2007, among Great Wolf Lodge of
Grapevine, LLC, as borrower, and Merrill Lynch Capital and HSH
Nordbank, as lenders (incorporated herein by reference to
Exhibit 1.1 to the Companys Current Report on Form 8-K filed
July 31, 2007).
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##### Table of Contents



ExhibitNumber
    
    Description10.21
    
    Third Amendment to Loan Agreement dated July 31, 2009, among
Great Wolf Lodge of Grapevine, LLC, as borrower, and GE Business Financial Services Inc. (f/k/a Merrill Lynch Business
Financial Services, Inc. through its division Merrill Lynch
Capital), as administrative agent on behalf of the lenders
(incorporated herein by reference to Exhibit 1.1 to the
Companys Current Report on Form 8-K filed July 31, 2009).10.22
    
    Loan Agreement dated December 6, 2007, between Great Wolf
Lodge of the Poconos, LLC, as borrower, and Citigroup Global
Markets Realty Corp., as lender (incorporated herein by
reference to Exhibit 1.1 to the Companys Current Report on
Form 8-K filed December 13, 2007).10.23
    
    Loan Agreement dated August 4, 2008, between Great Wolf Lodge
Williamsburg SPE, LLC, as borrower, and Calyon New York Branch
and Capmark Bank, as lenders (incorporated herein by reference
to the Companys Current Report on Form 10-Q filed August 5,
2008).
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##### Table of Contents



ExhibitNumber
    
    Description10.24
    
    Amendment to Loan Agreement dated January 15, 2010, among
Great Wolf Lodge Williamsburg SPE, LLC, as borrower, and
Calyon New York Branch, as agent, and Calyon New York Branch
and Capmark Bank, as lenders (incorporated herein by reference
to the Companys Annual Report on Form 10-K filed March 2,
2010).10.25
    
    Loan Agreement dated April 30, 2008, among Great Wolf Lodge of
the Carolinas, LLC, as borrower, Marshall Financial Group, as
administrative agent, and the several banks and other
financial institutions from time to time party thereto, as
lenders (incorporated herein by reference to Exhibit 1.1 to
the Companys Current Report on Form 8-K filed May 6, 2008).10.26
    
    Fifth Amendment to Lease, dated January 22, 2009, between the
registrant and Hovde Building, LLC, (incorporated herein by
reference to the Companys Current Report on Form 8-K filed
January 28, 2009).10.27
    
    Note Purchase Agreement dated as of March 30, 2010, by and
among (i) GWR Operating Partnership, L.L.L.P., a Delaware
limited liability limited partnership (GWR OP), and Great
Wolf Finance Corp., a Delaware corporation, (ii) Mason Family
Resorts, LLC, Great Wolf Lodge of Grapevine, LLC and Great
Wolf Williamsburg SPE, LLC, (iii) Great Wolf Resorts, Inc. and
GWR OP General Partner, LLC, a Delaware limited liability
company and certain other direct and indirect subsidiaries of
GWR OP; and (iv) Deutsche Bank Securities, Inc., Banc of
America Securities, LLC, Wells Fargo Securities, LLC and
Credit Agricole Securities (USA) Inc. (incorporated herein by
reference to the Companys quarterly report on Form 10-Q filed
May 5, 2010).10.28
    
    Indenture dated as of April 7, 2010, by and among (i) GWR
Operating Partnership, L.L.L.P., a Delaware limited liability
limited partnership (GWR OP), and Great Wolf Finance Corp.,
a Delaware corporation, (ii) Mason Family Resorts, LLC, Great
Wolf Lodge of Grapevine, LLC and Great Wolf Williamsburg SPE,
LLC, (iii) Great Wolf Resorts, Inc. and GWR OP General
Partner, LLC, a Delaware limited liability company and certain
other direct and indirect subsidiaries of GWR OP and (iv) U.S.
Bank National Association, as trustee (incorporated herein by
reference to the Companys quarterly report on Form 10-Q filed
May 5, 2010).31.1*
    
    Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a  14(a) and Rule 15d  14(a)31.2*
    
    Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a  14(a) and Rule 15d  14(a)32.1*
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 135032.2*
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
 
 *
    
    Filed herewith.+
    
    Indicated management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to Item 15(c) of Form
10-K. 49




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SIGNATURE
  GREAT WOLF RESORTS, INC./s/ James A. CalderJames A. CalderChief Financial Officer
(Duly authorized officer)
(Principal Financial and Accounting Officer)  50