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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
    [X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2003

                                       OR

    [ ]          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: 001-13003

                            SILVERLEAF RESORTS, INC.
             (Exact name of registrant as specified in its charter)

                  TEXAS                          75-2259890
        (State of incorporation)             (I.R.S. Employer
                                             Identification No.)

                        1221 RIVER BEND DRIVE, SUITE 120
                               DALLAS, TEXAS 75247
          (Address of principal executive offices, including zip code)

                                  214-631-1166
              (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined by Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Number of shares of common stock outstanding of the issuer's Common Stock, par
value $0.01 per share, as of November 14, 2003: 36,826,906

================================================================================

<PAGE>

                                EXPLANATORY NOTE

CERTAIN STATEMENTS CONTAINED IN THIS FORM 10-Q UNDER ITEMS 1 AND 2, IN ADDITION
TO CERTAIN STATEMENTS CONTAINED ELSEWHERE IN THIS 10-Q, INCLUDING STATEMENTS
QUALIFIED BY THE WORDS "BELIEVE," "INTEND," "ANTICIPATE," "EXPECTS," AND WORDS
OF SIMILAR IMPORT, ARE "FORWARD-LOOKING STATEMENTS" AND ARE THUS PROSPECTIVE.
THESE STATEMENTS REFLECT THE CURRENT EXPECTATIONS OF THE COMPANY REGARDING THE
COMPANY'S FUTURE PROFITABILITY, PROSPECTS, AND RESULTS OF OPERATIONS. ALL SUCH
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS, UNCERTAINTIES, AND OTHER
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM FUTURE RESULTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THESE RISKS,
UNCERTAINTIES, AND OTHER FACTORS ARE DISCUSSED UNDER THE HEADING "CAUTIONARY
STATEMENTS" BEGINNING ON PAGE 20 OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K/A
FILED ON OCTOBER 20, 2003 FOR THE YEAR ENDED DECEMBER 31, 2002. ALL
FORWARD-LOOKING STATEMENTS ARE MADE AS OF THE DATE OF THIS REPORT ON FORM 10-Q
AND THE COMPANY ASSUMES NO OBLIGATION TO UPDATE THE FORWARD-LOOKING STATEMENTS
OR TO UPDATE THE REASONS WHY ACTUAL RESULTS COULD DIFFER FROM THE PROJECTIONS IN
THE FORWARD-LOOKING STATEMENTS.

                                        1

<PAGE>

                            SILVERLEAF RESORTS, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                      Page
                                                                                      ----
<S>                                                                                   <C>
PART I.     FINANCIAL INFORMATION (Unaudited)

Item 1.     Condensed Consolidated Statements of Income for the three months
            and nine months ended September 30, 2003 and 2002 ..................        3

            Condensed Consolidated Balance Sheets as of September 30, 2003
            and December 31, 2002 ..............................................        4

            Condensed Consolidated Statement of Shareholders' Equity for the
            nine months ended September 30, 2003 ...............................        5

            Condensed Consolidated Statements of Cash Flows for the nine
            months ended September 30, 2003 and 2002 ...........................        6

            Notes to the Condensed Consolidated Financial Statements ...........        7

Item 2.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations ..............................................       16

Item 3.     Quantitative and Qualitative Disclosures about Market Risk .........       24

Item 4.     Controls and Procedures ............................................       25

PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings ..................................................       26

Item 5.     Other Information ..................................................       27

Item 6.     Exhibits and Reports on Form 8-K ...................................       28

            Signatures .........................................................       28
</TABLE>

                                        2

<PAGE>

                    PART I: FINANCIAL INFORMATION (UNAUDITED)

ITEM 1.  FINANCIAL STATEMENTS

                    SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               (in thousands, except share and per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              Three Months Ended                     Nine Months Ended
                                                                 September 30,                         September 30,
                                                        -------------------------------       -------------------------------
                                                            2003               2002               2003               2002
                                                        ------------       ------------       ------------       ------------
<S>                                                     <C>                <C>                <C>                <C>
REVENUES:
     Vacation Interval sales                            $     34,132       $     32,179       $     95,169       $     91,766
     Sampler sales                                               389                848              1,275              3,046
                                                        ------------       ------------       ------------       ------------
       Total sales                                            34,521             33,027             96,444             94,812

     Interest income                                           8,570              9,056             25,988             28,624
     Management fee income                                       300                483              1,247              1,431
     Other income                                              1,486              1,569              4,156              3,620
                                                        ------------       ------------       ------------       ------------

               Total revenues                                 44,877             44,135            127,835            128,487

COSTS AND OPERATING EXPENSES:
     Cost of Vacation Interval sales                           5,871              5,828             16,531             16,832
     Sales and marketing                                      16,654             17,288             50,056             49,837
     Provision for uncollectible notes                         6,827              6,436             47,988             18,352
     Operating, general and administrative                     7,378              7,296             21,288             24,898
     Depreciation and amortization                             1,116              1,248              3,461              3,797
     Interest expense and lender fees                          3,835              4,612             12,463             17,694
                                                        ------------       ------------       ------------       ------------

               Total costs and operating expenses             41,681             42,708            151,787            131,410

OTHER INCOME:
     Gain on sale of notes receivable                              -                897              2,832              5,381
     Gain on early extinguishment of debt                      5,118                  -              6,376             17,885
                                                        ------------       ------------       ------------       ------------

               Total other income                              5,118                897              9,208             23,266

     Income (loss) before (provision) benefit for
        income taxes                                           8,314              2,324            (14,744)            20,343
     (Provision) benefit for income taxes                        (10)             1,561                (83)             1,519
                                                        ------------       ------------       ------------       ------------

NET INCOME (LOSS)                                       $      8,304       $      3,885       $    (14,827)      $     21,862
                                                        ============       ============       ============       ============

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE             $       0.23       $       0.11       $      (0.40)      $       0.84
                                                        ============       ============       ============       ============

WEIGHTED AVERAGE BASIC SHARES OUTSTANDING                 36,826,906         36,826,906         36,826,906         26,129,567
                                                        ============       ============       ============       ============

WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING               36,826,906         36,926,568         36,826,906         26,135,186
                                                        ============       ============       ============       ============
</TABLE>

            See notes to condensed consolidated financial statements.

                                        3

<PAGE>

                SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
           (in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                                   September 30,    December 31,
                                                                        2003            2002
                                                                   --------------   ------------
                                                                    (Unaudited)
<S>                                                                 <C>              <C>
                  ASSETS

Cash and cash equivalents                                           $    5,411       $    1,153
Restricted cash                                                          1,541            3,624
Notes receivable, net of allowance for uncollectible notes of
   $52,257 and $28,547, respectively                                   191,174          233,237
Accrued interest receivable                                              2,150            2,325
Investment in Special Purpose Entity                                     5,349            6,656
Amounts due from affiliates                                                289              750
Inventories                                                            103,045          102,505
Land, equipment, buildings, and utilities, net                          30,596           33,778
Land held for sale                                                       1,956            4,545
Prepaid and other assets                                                 9,417            9,672
                                                                    ----------       ----------

               TOTAL ASSETS                                         $  350,928       $  398,245
                                                                    ==========       ==========

      LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Accounts payable and accrued expenses                               $    6,880       $    7,394
Accrued interest payable                                                   957            1,269
Amounts due to affiliates                                                1,383            2,221
Unearned revenues                                                        3,725            3,410
Notes payable and capital lease obligations                            214,600          236,413
Senior subordinated notes                                               36,591           45,919
                                                                    ----------       ----------

               Total Liabilities                                       264,136          296,626
                                                                    ----------       ----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Preferred stock, 10,000,000 shares authorized                                -                -
Common stock, par value $0.01 per share, 100,000,000
     shares authorized, 37,249,006 shares issued, and
     36,826,906 shares outstanding                                         372              372
Additional paid-in capital                                             116,999          116,999
Retained deficit                                                       (25,580)         (10,753)
Treasury stock, at cost (422,100 shares)                                (4,999)          (4,999)
                                                                    ----------       ----------

               Total Shareholders' Equity                               86,792          101,619
                                                                    ----------       ----------

               TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           $  350,928       $  398,245
                                                                    ==========       ==========
</TABLE>

            See notes to condensed consolidated financial statements.

                                        4

<PAGE>

                    SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
               (in thousands, except share and per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
                             Common Stock
                       -------------------------
                        Number of        $0.01       Additional                           Treasury Stock
                         Shares           Par         Paid-in        Retained       --------------------------
                         Issued          Value        Capital         Deficit         Shares           Cost           Total
                       ----------     ----------     ----------     ----------      ----------      ----------      ----------
<S>                    <C>            <C>            <C>            <C>             <C>             <C>             <C>
January 1, 2003        37,249,006     $      372     $  116,999     $  (10,753)       (422,100)     $   (4,999)     $  101,619

Net loss                        -              -              -        (14,827)              -               -         (14,827)
                       ----------     ----------     ----------     ----------      ----------      ----------      ----------

September 30, 2003     37,249,006     $      372     $  116,999     $  (25,580)       (422,100)     $   (4,999)     $   86,792
                       ==========     ==========     ==========     ==========      ==========      ==========      ==========
</TABLE>

            See notes to condensed consolidated financial statements.

                                        5

<PAGE>
                    SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                   Nine Months Ended
                                                                                     September 30,
                                                                               -------------------------
                                                                                  2003           2002
                                                                               ----------     ----------
<S>                                                                            <C>            <C>
OPERATING ACTIVITIES:
     Net income (loss)                                                         $  (14,827)    $   21,862
     Adjustments to reconcile net income (loss) to net cash
       used in operating activities:
       Provision for uncollectible notes                                           47,988         18,352
       Gain on sale of notes receivable                                            (2,832)        (5,381)
       Gain on early extinguishment of debt                                        (6,376)       (17,885)
       Gain on sale of land held for sale                                            (273)             -
       Loss on sale of Crown management properties                                     44              -
       Depreciation and amortization                                                3,461          3,797
       Increase (decrease) in cash from changes in assets and liabilities:
         Restricted cash                                                            2,083          1,624
         Notes receivable                                                         (29,833)       (25,591)
         Accrued interest receivable                                                  175            360
         Investment in Special Purpose Entity                                       1,307         (4,411)
         Amounts due to/from affiliates, net                                       (1,004)           932
         Inventories                                                               (2,635)           515
         Prepaid and other assets                                                     928         (1,912)
         Income tax receivable                                                          -            164
         Accounts payable and accrued expenses                                       (397)          (913)
         Accrued interest payable                                                    (140)         1,273
         Unearned revenues                                                            697         (1,763)
                                                                               ----------     ----------
            Net cash used in operating activities                                  (1,634)        (8,977)
                                                                               ----------     ----------

INVESTING ACTIVITIES:
     Purchases of land, equipment, buildings, and utilities                        (1,073)        (1,428)
     Proceeds from sale of land held for sale                                       2,862            616
                                                                               ----------     ----------
            Net cash provided by (used in) investing activities                     1,789           (812)
                                                                               ----------     ----------

FINANCING ACTIVITIES:
     Proceeds from borrowings                                                      66,896         66,501
     Payments on borrowings                                                       (91,628)      (116,290)
     Proceeds from sales of notes receivable                                       28,835         57,168
                                                                               ----------     ----------
            Net cash provided by financing activities                               4,103          7,379
                                                                               ----------     ----------

     Net change in cash and cash equivalents                                        4,258         (2,410)

CASH AND CASH EQUIVALENTS:
     Beginning of period                                                            1,153          6,204
                                                                               ----------     ----------
     End of period                                                             $    5,411     $    3,794
                                                                               ==========     ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
     Interest paid, net of amounts capitalized                                 $   12,454     $   13,746
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
     AND FINANCING ACTIVITIES:
     Issuance of common stock                                                  $        -     $    7,899
     Issuance of senior subordinated debt                                      $        -     $   28,467
     Retirement of senior subordinated debt                                    $        -     $   56,934
     Note receivable from sale of assets                                       $    1,000     $        -
</TABLE>

            See notes to condensed consolidated financial statements.

                                        6

<PAGE>

                    SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BACKGROUND

These condensed consolidated financial statements of Silverleaf Resorts, Inc.
and subsidiaries (the "Company") presented herein do not include certain
information and disclosures required by accounting principles generally accepted
in the United States of America for complete financial statements. However, in
the opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the three and nine months
ended September 30, 2003 are not necessarily indicative of the results that may
be expected for the year ending December 31, 2003.

These condensed consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and footnotes included in the
Company's Form 10-K/A for the year ended December 31, 2002 as filed with the
Securities and Exchange Commission on October 20, 2003. The accounting policies
used in preparing these condensed consolidated financial statements are the same
as those described in such Form 10-K/A.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES SUMMARY

Principles of Consolidation -- The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries, excluding the
Company's special purpose entity ("SPE"). All significant intercompany accounts
and transactions have been eliminated in the consolidated financial statements.

Revenue and Expense Recognition -- A substantial portion of Vacation Interval
sales are made in exchange for mortgage notes receivable, which are secured by a
deed of trust on the Vacation Interval sold. The Company recognizes the sale of
a Vacation Interval under the accrual method after a binding sales contract has
been executed, the buyer has made a down payment of at least 10%, and the
statutory rescission period has expired. If all accrual method criteria are met
except that construction is not substantially complete, revenues are recognized
on the percentage-of-completion basis. Under this method, the portion of revenue
applicable to costs incurred, as compared to total estimated construction and
direct selling costs, is recognized in the period of sale. The remaining amount
is deferred and recognized as the remaining costs are incurred. The deferral of
sales and costs related to the percentage-of-completion method is not
significant.

Certain Vacation Interval sales transactions are deferred until the minimum down
payment has been received. The Company accounts for these transactions utilizing
the deposit method. Under this method, the sale is not recognized, a receivable
is not recorded, and inventory is not relieved. Any cash received is carried as
a deposit until the sale can be recognized. When these types of sales are
cancelled without a refund, deposits forfeited are recognized as income and the
interest portion is recognized as interest income.

In addition to sales of Vacation Intervals to new prospective owners, the
Company sells upgraded Vacation Intervals to existing Silverleaf Owners.
Revenues are recognized on these upgrade Vacation Interval sales when the
criteria described above are satisfied. The revenue recognized is the net of the
incremental increase in the upgrade sales price and cost of sales is the
incremental increase in the cost of the Vacation Interval purchased.

A provision for estimated customer returns is calculated and netted against
Vacation Interval sales. Customer returns represent cancellations of sales
transactions in which the customer fails to make the first installment payment.

The Company recognizes interest income as earned. Interest income is accrued on
notes receivable, net of an estimated amount that will not be collected, until
the individual notes become 90 days delinquent. Once a note becomes 90 days
delinquent, the accrual of additional interest income ceases until collection is
deemed probable.

Revenues related to one-time sampler contracts, which entitles the prospective
owner to sample a resort during certain periods, are recognized when earned.
Revenue recognition is deferred until the customer uses the stay, purchases a
Vacation Interval, or allows the contract to expire.

The Company receives fees for management services provided to the Clubs. These
revenues are recognized on an

                                        7

<PAGE>

accrual basis in the period the services are provided if collection is deemed
probable.

Utilities, services, and other income are recognized on an accrual basis in the
period the services are provided.

Sales and marketing costs are charged to expense in the period incurred.
Commissions, however, are recognized in the same period as the related sales.

Cash and Cash Equivalents -- Cash and cash equivalents consist of highly-liquid
investments with an original maturity of three months or less from date of
purchase. Cash and cash equivalents include cash, certificates of deposit, and
money market funds.

Restricted Cash -- Restricted cash consists of certificates of deposit that
serve as collateral for construction bonds and cash restricted for repayment of
debt.

Investment in Special Purpose Entity -- The Company is party to a $100 million
revolving credit agreement to finance Vacation Interval notes receivable through
an off-balance sheet SPE. The Company accounts for and evaluates its investment
in the SPE in accordance with SFAS 140, EITF 99-20, and SFAS 115, as applicable.
Sales of notes receivable from the Company to its SPE that meet certain
underwriting criteria occur on a periodic basis. The SPE funds these purchases
through advances under a credit agreement arranged for this purpose. The gain or
loss on the sale is determined based on the proceeds received, the fair value
assigned to the investment in SPE, and the recorded value of notes receivable
sold. The fair value of the investment in the SPE is estimated based on the
present value of future expected cash flows back to the Company from the notes
receivable sold. The Company utilized the following key assumptions to estimate
the fair value of such cash flows: customer prepayment rate - 4.3%; expected
accounts paid in full as a result of upgrades - 6.2%; expected credit losses -
8.1%; discount rate - 19%; base interest rate - 4.4%; agent fee - 2%; and loan
servicing fees - 1%. The Company's assumptions are based on experience with its
notes receivable portfolio, available market data, estimated prepayments, the
cost of servicing, and net transaction costs. Such assumptions are assessed
quarterly and, if necessary, adjustments are made to the carrying value of the
investment in SPE. The carrying value of the investment in SPE represents the
Company's maximum exposure to loss regarding its involvement with the SPE.

Provision for Uncollectible Notes -- Such provision is recorded at an amount
sufficient to maintain the allowance for uncollectible notes at a level
management considers adequate to provide for anticipated losses resulting from
customers' failure to fulfill their obligations under the terms of their notes.
Such allowance for uncollectible notes is adjusted based upon periodic analysis
of the notes receivable portfolio, historical credit loss experience, and
current economic factors. Credit losses take three forms. The first is the full
cancellation of the note, whereby the customer is relieved of the obligation and
the Company recovers the underlying inventory. The second form is a deemed
cancellation, whereby the Company records the cancellation of all notes that
become 90 days delinquent, net of notes that are no longer 90 days delinquent.
The third form is the note receivable reduction that occurs when a customer
trades a higher value product for a lower value product. In estimating the
allowance, the Company projects future cancellations, net of recovery of the
related inventory, for each sales year by using its historical cancellation
experience.

The allowance for uncollectible notes is reduced by actual cancellations and
losses experienced, including losses related to previously sold notes receivable
which became delinquent and were subsequently reacquired. Actual cancellations
and losses experienced represents all notes identified by management as being
probable of cancellation. Recourse to the Company on sales of customer notes
receivable is governed by the agreements between the purchasers and the Company.

The Company classifies the components of the provision for uncollectible notes
as either credit losses or customer returns (cancellations of sales whereby the
customer fails to make the first installment payment). The provision for
uncollectible notes pertaining to credit losses and customer returns are
classified in provision for uncollectible notes and Vacation Interval sales,
respectively.

Inventories -- Inventories are stated at the lower of cost or market value. Cost
includes amounts for land, construction materials, direct labor and overhead,
taxes, and capitalized interest incurred in the construction or through the
acquisition of resort dwellings held for timeshare sale. Timeshare unit costs
are capitalized as inventory and are allocated to Vacation Intervals based upon
their relative sales values. Upon sale of a Vacation Interval, these costs are
charged to cost of sales on a specific identification basis. Vacation Intervals
reacquired are placed back into inventory at the lower of their original
historical cost basis or market value.

                                        8

<PAGE>

The Company estimates the total cost to complete all amenities at each resort.
This cost includes both costs incurred to date and expected costs to be
incurred. The Company allocates the estimated total amenities cost to cost of
Vacation Interval sales based on Vacation Intervals sold in a given period as a
percentage of total Vacation Intervals expected to sell over the life of a
particular resort project.

Company management periodically reviews the carrying value of its inventory on
an individual project basis to ensure that the carrying value does not exceed
market value.

Land, Equipment, Buildings, and Utilities -- Land, equipment (including
equipment under capital lease), buildings, and utilities are stated at cost,
which includes amounts for construction materials, direct labor and overhead,
and capitalized interest. When assets are disposed of, the cost and related
accumulated depreciation are removed, and any resulting gain or loss is
reflected in income for the period. Maintenance and repairs are charged to
expense as incurred; significant betterments and renewals, which extend the
useful life of a particular asset, are capitalized. Depreciation is calculated
for all fixed assets, other than land, using the straight-line method over the
estimated useful life of the assets, ranging from 3 to 20 years. Company
management periodically reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.

Prepaid and Other Assets -- Prepaid and other assets consists primarily of
prepaid insurance, prepaid postage, intangibles, commitment fees, debt issuance
costs, novelty inventories, deposits, and miscellaneous receivables. Commitment
fees and debt issuance costs are amortized over the life of the related debt.
Intangibles are amortized over their useful lives, which do not exceed ten
years.

Income Taxes -- Deferred income taxes are recorded for temporary differences
between the bases of assets and liabilities as recognized by tax laws and their
carrying value as reported in the consolidated financial statements. A provision
is made or benefit recognized for deferred income taxes relating to temporary
differences for financial reporting purposes. To the extent a deferred tax asset
does not meet the criteria of "more likely than not" for realization, a
valuation allowance is recorded.

Earnings (Loss) Per Share -- Basic earnings (loss) per share is computed by
dividing net income (loss) by the weighted average shares outstanding. Earnings
per share assuming dilution is computed by dividing net income by the weighted
average number of shares and potentially dilutive shares outstanding. The number
of potentially dilutive shares is computed using the treasury stock method,
which assumes that the increase in the number of shares resulting from the
exercise of the stock options is reduced by the number of shares that could have
been repurchased by the Company with the proceeds from the exercise of the stock
options.

Use of Estimates -- The preparation of the consolidated financial statements
requires the use of management's estimates and assumptions in determining the
carrying values of certain assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the consolidated financial statements, and
the reported amounts for certain revenues and expenses during the reporting
period. Actual results could differ from those estimated. Significant management
estimates are included in the allowance for uncollectible notes, investment in
SPE, and the future sales plan used to allocate certain inventories to cost of
sales.

Recent Accounting Pronouncements--

SFAS No. 146 - In June 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" ("SFAS No. 146"). SFAS No. 146
supersedes previous accounting guidance, principally Emerging Issues Task Force
("EITF") Issue No. 94-3. SFAS No. 146 requires that the liability for costs
associated with an exit or disposal activity be recognized when the liability is
incurred. Under EITF No. 94-3, a liability for an exit cost was recognized at
the date of a company's commitment to an exit plan. SFAS No. 146 also
establishes that the liability should initially be measured and recorded at fair
value. Accordingly, SFAS No. 146 may affect the timing of recognizing future
restructuring costs as well as the amount recognized. The adoption of SFAS No.
146 in the first quarter of 2003 did not have any immediate effect on the
Company's results of operations, financial position, or cash flows.

FIN No. 45 - In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN No.
45"). FIN No. 45 requires that a guarantor recognize a liability for certain

                                        9

<PAGE>

guarantees and enhance disclosures for such guarantees. The recognition
provisions of FIN No. 45 are applicable on a prospective basis for guarantees
issued or modified after December 31, 2002. The disclosure requirements of FIN
No. 45 are effective for financial statements for periods ending after December
15, 2002. The adoption of FIN No. 45 did not have a material impact on the
Company's results of operations, financial position, or cash flows.

FIN No. 46 - In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN No.
46"). FIN No. 46 requires existing unconsolidated variable interest entities, as
defined, to be consolidated by their primary beneficiaries if the variable
interest entities do not effectively disperse risks among parties involved. FIN
No. 46 is effective immediately for variable interest entities created after
January 31, 2003, and to variable interest entities in which an enterprise
obtains an interest after that date. FIN No. 46 applies to financial statements
beginning after December 15, 2003, related to variable interest entities in
which an enterprise holds a variable interest that it acquired before February
1, 2003. The Company does not expect the adoption of FIN No. 46 will have a
material impact on its results of operations, financial position, or cash flows.

SFAS No. 149 - In April 2003, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 149, "Amendment of Statement 133
on Derivative Instruments and Hedging Activities" ("SFAS No. 149"). SFAS No. 149
amends and clarifies financial accounting and reporting for derivative
instruments including certain derivative instruments embedded in other contracts
and for hedging activities under SFAS No. 133. SFAS No. 149 is effective for
contracts entered into or modified after June 30, 2003 and for hedging
relationships designated after June 30, 2003. The adoption of SFAS No. 149 is
not expected to have a material impact on the Company's results of operations,
financial position, or cash flows.

SFAS No. 150 - In May 2003, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity"
("SFAS No. 150"). SFAS No. 150 clarifies the accounting for certain financial
instruments with characteristics of both liabilities and equity and requires
that those instruments be classified as liabilities in statements of financial
position. Previously, many of these financial instruments were classified as
equity. SFAS No. 150 is effective for all financial instruments entered into or
modified after May 31, 2003 and is otherwise effective at the beginning of the
first interim period after June 15, 2003. The adoption of SFAS No. 150 is not
expected to have a material impact on the Company's results of operations,
financial position, or cash flows.

NOTE 3 - DEBT RESTRUCTURING

While the Company announced the completion of its restructuring and refinancing
transactions on May 2, 2002, the Company's ability to continue as a going
concern is dependent on other factors as well, including improving the Company's
operations. Among other aspects of these revised arrangements, the Company will
be required to operate within certain parameters of a revised business model and
satisfy the financial covenants set forth in the Amended Senior Credit
Facilities, including maintaining a minimum tangible net worth of $100 million
or greater, as defined, sales and marketing expenses as a percentage of sales
below 52.5%, notes receivable delinquency rate below 25%, a minimum interest
coverage ratio of 1.25 to 1.0, and a minimum net income. However, such results
cannot be assured.

Due to the results of the quarter ended March 31, 2003, the Company is not in
compliance with three of the financial covenants described above. First, sales
and marketing expense for the quarter ended March 31, 2003 was 56.1% of sales,
compared to a maximum threshold of 52.5%. Second, the interest coverage ratio
for the twelve months ended March 31, 2003 was 1.02 to 1.0, compared to a
minimum requirement of 1.25 to 1.0. And third, net loss for the two consecutive
quarters ended March 31, 2003 was $24.9 million, compared to a minimum
requirement of $1.00 net income. Also, due to the results for the six months
ended June 30, 2003, the Company is in default of two of the financial covenants
described above. First, the interest coverage ratio for the twelve months ended
June 30, 2003 was 0.13 to 1.0, compared to a minimum requirement of 1.25 to 1.0.
Second, net loss for the two consecutive quarters ended June 30, 2003 was $23.1
million, compared to a minimum requirement of $1.00 net income. In addition, due
to the results for the nine months ended September 30, 2003, the Company is in
default of one of the financial covenants described above. The interest coverage
ratio for the twelve months ended September 30, 2003 was 0.40 to 1.0, compared
to a minimum requirement of 1.25 to 1.0. Management notified its secured lenders
that it was not in compliance with the financial covenants, and has begun
discussions regarding waivers of the defaults and/or modifications to loan
agreements, which would bring the Company back into compliance. The lenders have
not waived the covenant defaults but have continued to fund and have not
declared a default. Management is attempting to negotiate waivers and or
modifications of its loan agreements, however, it cannot give any assurances

                                       10

<PAGE>

that it will be successful in these negotiations. Although the Company believes
that it will receive relief from its lenders and that its lenders will continue
to fund the Company's operations until negotiations can be completed, there can
be no assurance that the Company's lenders will continue to fund its operations.
A refusal by its lenders to continue funding will have a material adverse effect
on the Company's operations.

Due to uncertainties similar to those mentioned above, including a history of
losses and negative operating cash flows in 2000, 2001, and 2002, the
independent auditors report on the Company's financial statements for the period
ended December 31, 2002 contains an explanatory paragraph concerning the
Company's ability to continue as a going concern.

As a result of the loss for the quarter ended March 31, 2003, the Company's SPE
was in default of financial covenants with its lender. The lender has
subsequently waived the defaults as of March 31, 2003 and modified its agreement
with the SPE whereby there were no defaults for the quarter ended June 30, 2003
or September 30, 2003.

If the Company is able to resolve the existing covenant compliance issues,
future compliance with these covenants will require that improvements be made in
two significant aspects of the Company's operations. They are to reduce sales
and marketing expense as a percentage of sales and to improve customer credit
quality, which the Company believes will result in reduced credit losses. The
Company has already implemented changes in its sales and marketing operations,
which resulted in compliance with the sales and marketing ratio covenant for the
quarters ended June 30, 2003 and September 30, 2003. However, there is no
assurance that the Company will remain in compliance with the sales and
marketing expense ratio covenant in future periods. The Company has also
implemented changes in its sales policies, which resulted in improved customer
credit quality for customers purchasing Vacation Intervals in 2003, as compared
to customers who purchased in 2002 and before. Management believes that
soliciting customers with this level of credit quality will result in compliance
with the interest coverage and minimum net income covenants. However, there is
no assurance that the Company will remain in compliance with these two covenants
as well.

Management believes that if the improvements to its operations are successful,
the Company will be able to improve its operating results to achieve compliance
with the financial covenants during the term of the Amended Senior Credit
Facilities. However, the Company's plan to utilize certain of its assets,
predominantly inventory, extends for periods of up to fifteen years.
Accordingly, the Company will need to either extend the Amended Senior Credit
Facilities or obtain new sources of financing through the issuance of other
debt, equity, or collateralized mortgage-backed securities, the proceeds of
which would be used to refinance the debt under the Amended Senior Credit
Facilities, finance mortgages receivable, or for other purposes. The Company may
not have these additional sources of financing available to it at the times when
such financings are necessary.

NOTE 4 - EARNINGS PER SHARE

The following table illustrates the reconciliation between basic and diluted
weighted average shares outstanding for the three and nine months ended
September 30, 2003 and 2002:

<TABLE>
<CAPTION>
                                                          Three Months Ended             Nine Months Ended
                                                            September 30,                  September 30,
                                                      --------------------------     --------------------------
                                                         2003            2002           2003            2002
                                                      ----------      ----------     ----------      ----------
<S>                                                   <C>             <C>            <C>             <C>
Weighted average shares outstanding - basic           36,826,906      36,826,906     36,826,906      26,129,567
Issuance of shares from stock options exercisable              -         460,000              -         232,300
Repurchase of shares from stock options proceeds               -        (360,338)             -        (226,681)
                                                      ----------      ----------     ----------      ----------
Weighted average shares outstanding - diluted         36,826,906      36,926,568     36,826,906      26,135,186
                                                      ==========      ==========     ==========      ==========
</TABLE>

For the three and nine months ended September 30, 2003, the weighted average
shares outstanding assuming dilution was non-dilutive. Outstanding stock options
totaling 3,705,479 and 1,403,000 at September 30, 2003 and 2002, respectively,
were excluded from the computation of diluted earnings per share for these
periods because including such stock options would have been non-dilutive.

NOTE 5 - NOTES RECEIVABLE

The Company provides financing to the purchasers of Vacation Intervals, which
are collateralized by their interest in such Vacation Intervals. The notes
receivable generally have initial terms of seven to ten years. The average yield
on

                                       11

<PAGE>

outstanding notes receivable at September 30, 2003 was approximately 14.8%.
In connection with the sampler program, the Company routinely enters into notes
receivable with terms of 10 months. Notes receivable from sampler sales were
$1.4 million and $1.3 million at September 30, 2003 and 2002, respectively, and
are non-interest bearing.

The activity in gross notes receivable is as follows for the three and
nine-month periods ended September 30, 2003 and 2002 (in thousands):

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED            NINE MONTHS ENDED
                                        SEPTEMBER 30,                SEPTEMBER 30,
                                 -------------------------     -------------------------
                                    2003           2002           2003           2002
                                 ----------     ----------     ----------     ----------
<S>                              <C>            <C>            <C>            <C>
Balance, beginning of period ..  $  235,654     $  276,141     $  261,784     $  333,336
Sales .........................      28,895         27,247         78,893         80,229
Collections ...................     (14,661)       (12,470)       (43,391)       (46,736)
Receivables charged off .......      (6,457)        (8,246)       (18,755)       (25,538)
Sold notes receivable .........          --        (10,622)       (35,100)       (69,241)
                                 ----------     ----------     ----------     ----------
Balance, end of period ........  $  243,431     $  272,050     $  243,431     $  272,050
                                 ==========     ==========     ==========     ==========
</TABLE>

The Company considers accounts over 60 days past due to be delinquent, and
cancels all notes when they become 91 days past due. At September 30, 2003, $2.9
million of notes were between 61 and 90 days past due, and considered deliquent.
An additional $48.3 million of notes, approximately 20% of total gross notes
receivable, would have been considered to be delinquent had the Company not
granted payment concessions to the customers at some point since the inception
of these notes. The activity in the allowance for uncollectible notes is as
follows for the three and nine months ended September 30, 2003 and 2002 (in
thousands):

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED                NINE MONTHS ENDED
                                                                          SEPTEMBER 30,                    SEPTEMBER 30,
                                                                  ---------------------------       ---------------------------
                                                                     2003             2002             2003             2002
                                                                  ----------       ----------       ----------       ----------
<S>                                                               <C>              <C>              <C>              <C>
Balance, beginning of period...............................       $   51,887       $   39,504       $   28,547       $   54,744
Provision for credit losses ...............................            6,827            6,436           47,988           18,352
Receivables charged off ...................................           (6,457)          (8,246)         (18,755)         (25,538)
Allowance related to notes sold ...........................               --           (1,866)          (5,523)         (11,730)
                                                                  ----------       ----------       ----------       ----------
Balance, end of period.....................................       $   52,257       $   35,828       $   52,257       $   35,828
                                                                  ==========       ==========       ==========       ==========
</TABLE>

During the nine months ended September 30, 2003, the Company sold $35.1 million
of notes receivable and recognized pre-tax gains of $2.8 million. The SPE funded
these purchases through advances under a credit agreement arranged for this
purpose. In connection with these sales, the Company received cash consideration
of $28.8 million, which was used to pay down borrowings under its revolving loan
facilities.

NOTE 6 - DEBT

Notes payable, capital lease obligations, and senior subordinated notes as of
September 30, 2003 and December 31, 2002 (in thousands):

<TABLE>
<CAPTION>
                                                                                    SEPTEMBER 30,  DECEMBER 31,
                                                                                         2003           2002
                                                                                    -------------  ------------
<S>                                                                                 <C>            <C>
$60 million loan agreement, which contains certain financial covenants, due
   August 2003, principal and interest payable from the proceeds obtained on
   customer notes receivable pledged as collateral for the note, at an interest
   rate of LIBOR plus 3.55% (additional draws are no longer available under
    this facility) .............................................................      $     --       $  9,836

$70 million loan agreement, capacity reduced by amounts outstanding under the
   $10 million inventory loan agreement, which contains certain financial
   covenants, due August 2004, principal and interest payable from the proceeds
   obtained on customer notes receivable pledged as collateral for the note, at
   an interest rate  of LIBOR plus 2.65% (additional draws are no longer
   available under this facility) .............................................         18,988         25,549

$10 million supplemental revolving loan agreement, which contains certain
   financial covenants, due March 2007, principal and interest payable from the
   proceeds obtained on customer notes receivable pledged as collateral for the
   note, at an interest rate of LIBOR plus 2.67% (advances under this facility
   are limited to $9 million) .................................................          8,477          8,536

$56.9 million revolving loan agreement, which contains certain
   financial covenants, due March 2007, principal and interest payable from the
   proceeds obtained on customer notes receivable pledged as collateral for the
   note, at an interest rate of LIBOR plus 3% with a 6% floor (maximum advances
   under this facility are limited to the difference between $63.9 million and
   the  outstanding balance under the $15.1 million term loan described
   below) .....................................................................         48,084         46,078

$15.1 million term loan, which contains certain financial covenants, due March
   2007, principal and interest payable from the proceeds obtained on customer
   notes receivable pledged as collateral for the note, at an interest rate
   of 8% ......................................................................         14,099         14,665

$56.1 million revolving loan agreement, which contains certain financial
   covenants,
</TABLE>

                                       12

<PAGE>

<TABLE>
<S>                                                                                  <C>           <C>
   due March 2007, principal and interest payable from the proceeds obtained on
   customer notes receivable pledged as collateral for the note, at an interest
   rate of LIBOR plus 3% with a 6% floor (maximum advances under this facility
   are limited to the difference between $63.0 million and the outstanding
   balance under the $14.9 million term loan described below) .................         41,111         44,288

$14.9 million term loan, which contains certain financial covenants, due March
   2007, principal and interest payable from the proceeds obtained on customer
   notes receivable pledged as collateral for the note, at an interest rate
   of 8% ......................................................................         13,903         14,461

$8.1 million revolving loan agreement, which contains certain financial
   covenants, due March 2007, principal and interest payable from the proceeds
   obtained on customer notes receivable pledged as collateral for the note, at
   an interest rate of Prime plus 3% with a 6% floor (maximum advances under
   this facility are limited to the difference between $9.1 million and the
   outstanding balance under the $2.1 million term loan described below) ......          6,683          6,493

$2.1 million term loan, which contains certain financial covenants,
   due March 2007, principal and interest payable from the proceeds
   obtained on customer notes receivable pledged as collateral for
   the note, at an interest rate of 8% ........................................          1,997          2,078

$38 million revolving loan agreement, which contains certain financial
   covenants, due March 2007, principal and interest payable from the proceeds
   obtained on customer notes receivable pledged as collateral for the note, at
   an interest rate of Federal Funds plus 2.75% with a 6% floor ...............         30,630         31,128

$10 million term loan, which contains certain financial covenants,
   due March 2007, principal and interest payable from the proceeds
   obtained on customer notes receivable pledged as collateral for
   the note, at an interest rate of 8% ........................................          8,100          9,465

$10 million inventory loan agreement, which contains certain
   financial covenants, due March 2007, interest payable monthly, at
   an interest rate of LIBOR plus 3.50% .......................................          9,696          9,936

$10 million inventory loan agreement, which contains certain financial
   covenants, due March 2007, interest payable monthly, at an interest rate of
   LIBOR plus 3.25% ...........................................................          9,375          9,375

Various notes, due from April 2004 through February 2009, collateralized by
   various assets with interest rates ranging from 0.9% to 10.3% ..............          1,749          2,035
                                                                                      --------       --------
          Total notes payable .................................................        212,892        233,923
Capital lease obligations .....................................................          1,708          2,490
                                                                                      --------       --------
          Total notes payable and capital lease obligations ...................        214,600        236,413

6.0% senior subordinated notes, due 2007, interest payable semiannually on
   April 1 and October 1, guaranteed by all of the Company's present and future
   domestic restricted subsidiaries ...........................................         28,467         28,467

10 1/2% senior subordinated notes, subordinate to the 6.0% senior subordinated
   notes above, due 2008, interest payable semiannually on April 1 and October
   1, guaranteed by all of the Company's present and future domestic restricted
   subsidiaries ...............................................................          2,146          9,766

Interest on the 6.0% senior subordinated notes, due 2007, interest payable
   semiannually on April 1 and October 1, guaranteed by all of the Company's
   present and future domestic restricted subsidiaries ........................          5,978          7,686
                                                                                      --------       --------

          Total senior subordinated notes .....................................         36,591         45,919
                                                                                      --------       --------

          Total ...............................................................       $251,191       $282,332
                                                                                      ========       ========
</TABLE>

The Company's ability to borrow any new amounts under its loan agreements with
all its current senior lenders will expire on March 31, 2004. The Company is
currently negotiating amendments to those agreements which would extend the time
period during which the Company could continue to borrow under those agreements;
however, there can be no assurances that the Company will be successful in
obtaining these amendments. Failure to extend the period during which the
Company may continue to borrow funds under the bank loan agreements or to obtain
alternative lines of credit would materially impact the Company's liquidity and
ability to finance its operations at existing levels and would likely result in
a sharp curtailment of the Company's current operations.

At September 30, 2003, LIBOR rates were from 1.11% to 1.28%, and the Prime rate
was 4.00%. At December 31, 2002, LIBOR rates were from 1.76% to 1.82%, and the
Prime rate was 4.25%.

In March 2003, the Company paid off the remaining $8.8 million balance of its
$60 million loan agreement, due August 2003, and recognized a $1.3 million gain
on early extinguishment of debt.

In July 2003, the Company recognized a gain on early extinguishment of debt of
$5.1 million, related to the early extinguishment of $7.6 million of 10 1/2%
senior subordinated notes due 2008.

                                       13

<PAGE>

The Company is not in compliance with certain financial covenants. See Note 3
for a description of these covenant issues.

NOTE 7 - SUBSIDIARY GUARANTEES

As of September 30, 2003, all subsidiaries of the Company, except the SPE, have
guaranteed the $36.6 million of senior subordinated notes. Separate financial
statements and other disclosures concerning each guaranteeing subsidiary (each,
a "Guarantor Subsidiary") are not presented herein because the guarantee of each
Guarantor Subsidiary is full and unconditional and joint and several, and each
Guarantor Subsidiary is a wholly-owned subsidiary of the Company, and together
comprise all direct and indirect subsidiaries of the Company.

The Guarantor Subsidiaries had no operations for the nine months ended September
30, 2003 and 2002. Combined summarized balance sheet information as of September
30, 2003 for the Guarantor Subsidiaries is as follows (in thousands):

<TABLE>
<CAPTION>
                                                    September 30,
                                                        2003
                                                    ------------
<S>                                                 <C>
Other assets                                        $          1
                                                    ------------
  Total assets                                      $          1
                                                    ============

Investment by parent (includes equity
  and amounts due to parent)                        $          1
                                                    ------------
  Total liabilities and equity                      $          1
                                                    ============
</TABLE>

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Holiday Hills Condominium Association, Inc. et al v. Silverleaf Resorts, Inc. et
al, Circuit Court of Christian County, Missouri, and Ozark Mountain Condominium
Association, Inc. et al v. Silverleaf Resorts, Inc., Stone County, Missouri. The
homeowners' associations of three condominium projects that a former subsidiary
of the Company constructed in Missouri filed separate actions of unspecified
amounts against the Company alleging construction defects and breach of
management agreements. This litigation has been ongoing for several years.
Discovery continued in the lawsuit during the period ended September 30, 2003,
but is still far from complete. Among other things, the plaintiffs have not yet
turned over the reports of their expert witnesses and the Company is unclear as
to exactly what damages are being claimed by the Plaintiffs. At this time, a
majority of the Company's legal fees and costs of litigation are being paid by
two insurance carriers, subject to a reservation of rights by these insurers.
Since the Company does not know what damages are being claimed, and cannot
predict the final outcome of these claims, it cannot estimate the additional
costs it could incur, or whether its insurance carriers will continue to cover
its costs in connection with these claims. The second action is scheduled for
trial in June 2004.

Huizar et al v. Silverleaf Resorts, Inc., District Court, 73rd Judicial
District, Bexar County, Texas. A further purported class action was filed
against the Company on February 26, 2002, by a couple who purchased a Vacation
Interval from the Company. The Plaintiffs alleged that the Company violated the
Texas Government Code by charging a document preparation fee in regard to
instruments affecting title to real estate. Alternatively, the Plaintiffs
alleged that the $275 document preparation fee constituted a partial prepayment
that should have been credited against their note and sought a declaratory
judgment. The petition asserted Texas class action allegations and sought
recovery of the document preparation fee and treble damages on behalf of both
the Plaintiffs and the alleged class they purported to represent, and an
injunctive relief preventing the Company from engaging in the unauthorized
practice of law in connection with the sale of its Vacation Intervals in Texas.
The Company and the Plaintiffs executed a Stipulation and Agreement of
Compromise ("Settlement"), which was determined by the Court to be a fair,
reasonable, and adequate settlement of the class claims at a hearing held on
September 4, 2003. In accordance with the Settlement, the Company has refunded
all amounts paid by the two named Plaintiffs who conveyed their Vacation
Interval back to the Company. Additionally, the Company will issue to each
timeshare owner who was a member of the class a $275 certificate, which can be
used for an upgrade, as a credit on the purchase of an additional Vacation
Interval, or for a limited stay at one of the Company's resorts. The Company
estimates that there are approximately 16,400 members of the class. The
Settlement also provided for payment of the named Plaintiffs' attorney fees in
the amount of $400,000, plus expenses, both of which were expensed in the
quarter ended September 30, 2003. The Company has been released from

                                       14

<PAGE>

all liability with respect to the settled claims, and the action has been
dismissed by the named Plaintiffs and the class with prejudice.

Other. In January 2003, a group of eight related individuals and entities who
were then holders of certain of the Company's 10 1/2% senior subordinated notes
due 2008 (the "10 1/2% Notes") made oral claims against the Company and a number
of its present and former officers and directors concerning the claimants' open
market purchases of 10 1/2% Notes during 2000 and 2001. The 10 1/2% Notes were
allegedly purchased by the eight claimants for an aggregate purchase price of
$3.7 million. One of the eight claimants previously owned common stock in the
Company acquired between 1998 and 2000 and also made claims against the Company
with regard to approximately $598,000 in losses allegedly suffered in connection
with open market purchases and sales of the Company's common stock. In February
2003, these eight claimants, the Company, and certain of its former officers and
directors entered into a tolling agreement for the purposes of preserving the
claimants' rights during the term of the agreement by tolling applicable
statutes of limitations while negotiations between the claimants and the Company
take place. The 10 1/2% Notes were not in default and the Company denied all
liability with regard to the alleged claims of these eight claimants. No
litigation was filed against the Company or any of its affiliates by these eight
claimants; however, on February 27, 2003, these eight claimants did file suit in
state district court in Dallas, Texas, against the Company's former auditors,
Deloitte & Touche, LLP, alleging violation by Deloitte & Touche of the Texas
Securities Act, common law fraud, negligent misrepresentation, fraud in a stock
transaction, and accounting malpractice. The claims against Deloitte & Touche
arise from the same purchases of the Company's 10 1/2% Notes and common stock
that formed the basis for the tolling agreement. In order to resolve this issue
with these eight claimants, the Company agreed on June 16, 2003 to rescind the
purchases of the 10 1/2% Notes held by the claimants. Under the terms of the
settlement, which was closed on July 10, 2003, the Company acquired all the 10
1/2% Notes held by the eight claimants. Additionally, the Company received a
full and complete release of any claims which the eight claimants alleged to
hold against the Company, or any of its present or former officers, directors,
or affiliates, regarding purchases of the 10 1/2% Notes or common stock of the
Company. Additionally, the eight claimants agreed to release their alleged
claims against Deloitte & Touche and to dismiss with prejudice the
above-described lawsuit which the eight claimants filed against Deloitte &
Touche in February 2003. On July 23, 2003, the Company cancelled all the 10 1/2%
Notes acquired from these eight claimants. The face amount of the cancelled 10
1/2% Notes was $7,620,000. The Company paid a cash settlement to the claimants
of $2,393,383, which resulted in a one-time gain to the Company of approximately
$5.1 million for early extinguishment of debt. This gain was recognized by the
Company in its quarter ending September 30, 2003. As a part of the settlement,
the Company also agreed to pay $75,000 towards the eight claimants' legal fees.

The Company is currently subject to other litigation arising in the normal
course of its business. From time to time, such litigation includes claims
regarding employment, tort, contract, truth-in-lending, the marketing and sale
of Vacation Intervals, and other consumer protection matters. Litigation has
been initiated from time to time by persons seeking individual recoveries for
themselves, as well as, in some instances, persons seeking recoveries on behalf
of an alleged class. In the judgment of the Company, none of these lawsuits or
claims against the Company, either individually or in the aggregate, is likely
to have a material adverse effect on the Company, its business, results of
operations, or financial condition.

During 2001, Silverleaf Club entered into a loan agreement for $1.8 million,
whereby the Company guaranteed such debt with certain of its aircraft or related
sales proceeds. As of September 30, 2003, Silverleaf Club's related note payable
balance was $1.1 million.

NOTE 9 - STOCK-BASED COMPENSATION

The Company accounts for stock options using the intrinsic value method. Had
compensation cost for the Company's stock option grants been determined based on
the fair value at the date of said grants, the Company's net income (loss) and
net income (loss) per share would have been the following pro-forma amounts for
the nine months ended September 30, 2003 and 2002:

<TABLE>
<CAPTION>
                                                   SEPTEMBER 30,   SEPTEMBER 30,
                                                       2003            2002
                                                     --------        --------
<S>                                                <C>             <C>
Net income (loss), as reported                       $(14,827)       $ 21,862
Stock-based compensation expense recorded
   under the intrinsic value method                        --              --
Pro forma stock-based compensation expense
   computed under the fair value method                  (379)           (680)
                                                     --------        --------
Pro forma net income (loss)                          $(15,206)       $ 21,182
                                                     ========        ========

Net income (loss) per share, basic and diluted
</TABLE>

                                       15

<PAGE>

<TABLE>
<S>                                         <C>             <C>
As reported                                 $  (0.40)       $   0.84
Pro forma                                   $  (0.41)       $   0.81
</TABLE>

The fair value of the stock options granted during the nine months ended
September 30, 2003 and 2002 were $0.32 and $0.29, respectively. The fair value
of the stock options granted is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions: expected volatility ranging from 145.3% to 211.1% for all grants,
risk-free interest rates which vary for each grant and range from 4.2% to 6.2%,
expected life of 7 years for all grants, and no distribution yield for all
grants.

NOTE 10 - SUBSEQUENT EVENTS

In October 2003, the Company recognized a pre-tax gain of $225,000 associated
with the sale of land located in Kansas City, Missouri. In conjunction with this
sale, the Company received cash consideration of $1.7 million, which was used to
pay down borrowings under its credit facilities.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Certain matters discussed throughout this Form 10-Q filing are forward-looking
statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Such risks and uncertainties
include, but are not limited to, those discussed in the Company's Form 10-K/A
filed on October 20, 2003 for the year ended December 31, 2002.

As of September 30, 2003, the Company owned and operated 12 resorts in various
stages of development. These resorts offer a wide array of country club-like
amenities, such as golf, swimming, horseback riding, boating, and many organized
activities for children and adults. The Company represents an owner base of over
109,000. The condensed consolidated financial statements of the Company include
the accounts of Silverleaf Resorts, Inc. and its subsidiaries except Silverleaf
Finance I, Inc., all of which are wholly-owned.

                                       16

<PAGE>

RESULTS OF OPERATIONS

The following table sets forth certain operating information for the Company.

<TABLE>
<CAPTION>
                                                    Three Months Ended         Nine Months Ended
                                                       September 30,             September 30,
                                                    ------------------        ------------------
                                                     2003         2002         2003         2002
                                                    -----        -----        -----        -----
<S>                                                 <C>          <C>          <C>          <C>
As a percentage of total revenues:
  Vacation Interval sales                            76.0%        72.9%        74.4%        71.4%
  Sampler sales                                       0.9%         1.9%         1.0%         2.4%
                                                    -----        -----        -----        -----
    Total sales                                      76.9%        74.8%        75.4%        73.8%

  Interest income                                    19.1%        20.5%        20.3%        22.3%
  Management fee income                               0.7%         1.1%         1.0%         1.1%
  Other income                                        3.3%         3.6%         3.3%         2.8%
                                                    -----        -----        -----        -----
    Total revenues                                  100.0%       100.0%       100.0%       100.0%

As a percentage of Vacation Interval sales:
  Cost of Vacation Interval sales                    17.2%        18.1%        17.4%        18.3%
  Provision for uncollectible notes                  20.0%        20.0%        50.4%        20.0%

As a percentage of total sales:
  Sales and marketing                                48.2%        52.3%        51.9%        52.6%

As a percentage of total revenues:
  Operating, general and administrative              16.4%        16.5%        16.7%        19.4%
  Depreciation and amortization                       2.5%         2.8%         2.7%         3.0%

As a percentage of interest income:
  Interest expense and lender fees                   44.7%        50.9%        48.0%        61.8%

As a percentage of total revenues:
  Gain on sale of notes receivable                    0.0%         2.0%         2.2%         4.2%
  Gain on early extinguishment of debt               11.4%         0.0%         5.0%        13.9%
</TABLE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002

Revenues

Revenues for the quarter ended September 30, 2003 were $44.9 million,
representing a $742,000 or 1.7% increase from revenues of $44.1 million for the
quarter ended September 30, 2002. The increase was primarily due to increased
Vacation Interval sales.

Vacation Interval sales increased $2.0 million to $34.1 million during the third
quarter of 2003, up from $32.2 million in the same period of 2002. For the
quarter ended September 30, 2003, the number of Vacation Intervals sold,
exclusive of in-house Vacation Intervals, decreased 11.4% to 1,839 from 2,075 in
the third quarter of 2002. The average price per interval, excluding upgrades,
increased to $10,249 in the third quarter of 2003 versus $9,648 for the third
quarter of 2002. Total Vacation Interval sales for the third quarter of 2003
included 212 biennial intervals (counted as 106 Vacation Intervals) compared to
175 (88 Vacation Intervals) in the third quarter of 2002. During the third
quarter of 2003, 1,364 upgrade in-house Vacation Intervals were sold at an
average price of $7,152, compared to 1,814 upgrade in-house Vacation Intervals
sold at an average price of $6,172 during the comparable 2002 period. In 2003,
the Company's in-house sales force also sold 730 second Vacation Intervals to
existing owners at an average sales price of $7,574, compared to 97 second
Vacation Intervals at an average sales price of $9,942 during the comparable
2002 period. Combined, third quarter 2003 in-house revenue from upgrades and
second week sales increased $3.1 million or 25.7% over third quarter 2002.


                                       17

<PAGE>

Sampler sales decreased $459,000 to $389,000 for the quarter ended September 30,
2003, compared to $848,000 for the same period in 2002. Sampler sales are not
recognized as revenue until the Company's obligation has elapsed, which often
does not occur until the sampler contract expires eighteen months after the sale
is consummated. Hence, a significant portion of sampler sales recognized in the
third quarters of 2003 and 2002 relate to sales from the first quarters of 2002
and 2001, respectively. The Company had significantly lower sales volume in 2002
versus 2001, which resulted in a reduction in sampler sales recognized by the
Company during the third quarter of 2003 versus the same period of 2002.

Interest income decreased 5.4% to $8.6 million for the quarter ended September
30, 2003, from $9.1 million for the same period of 2002. This decrease primarily
resulted from a decrease in notes receivable, net of allowance for doubtful
notes, in 2003 compared to 2002, primarily due to sales of notes receivable to
the SPE.

Management fee income, which consists of management fees collected from the
resorts' management clubs, can not exceed the management clubs' net income.
Management fee income decreased $183,000 to $300,000 for the third quarter of
2003, versus $483,000 for the third quarter of 2002, due to the July 2003 sale
of the Company's management rights of seven timeshare resorts it had managed
since 1998.

Other income consists of water and utilities income, marina income, golf course
and pro shop income, and other miscellaneous items. Other income remained
relatively constant at $1.5 million for the third quarter of 2003 compared to
$1.6 million for the same period of 2002.

Cost of Vacation Interval Sales

Cost of Vacation Interval sales as a percentage of Vacation Interval sales
decreased to 17.2% during the third quarter of 2003 versus 18.1% for the same
period of 2002 primarily due to increased sales prices of upgrades in 2003
compared to 2002. Overall, the $43,000 increase in cost of Vacation Interval
sales in the third quarter of 2003 compared to the third quarter of 2002 was
primarily due to the increase in Vacation Interval sales.

Sales and Marketing

Sales and marketing costs as a percentage of total sales decreased to 48.2% for
the quarter ended September 30, 2003, from 52.3% for the same period of 2002.
The percentage decrease resulted from an increase in upgrade sales prices in
2003 without a proportionate increase in sales and marketing expense. The
$634,000 overall decrease in sales and marketing expense is primarily
attributable to cost reductions in the call centers since the third quarter of
2002.

Provision for Uncollectible Notes

The provision for uncollectible notes as a percentage of Vacation Interval sales
remained unchanged at 20.0% for the third quarters of both 2003 and 2002.

Operating, General and Administrative

Operating, general and administrative expenses as a percentage of total revenues
remained fairly constant at 16.4% for the third quarter of 2003 versus 16.5% for
the same period of 2002.

Depreciation and Amortization

Depreciation and amortization expense as a percentage of total revenues
decreased to 2.5% for the quarter ended September 30, 2003 versus 2.8% for the
same quarter of 2002. Overall, depreciation and amortization expense decreased
$132,000 for the third quarter of 2003, as compared to 2002, primarily due to a
general reduction in capital expenditures since 2000.

Interest Expense and Lender Fees

Interest expense and lender fees as a percentage of interest income decreased to
44.7% for the third quarter of 2003, from 50.9% for the same period of 2002.
This decrease is primarily the result of decreased borrowings against pledged
notes receivable and decreased senior subordinated notes due to the debt
restructuring completed in May 2002.

                                       18

<PAGE>

Gain on Sale of Notes Receivable

There was no gain on sale of notes receivable in the third quarter of 2003. The
$897,000 gain in the third quarter of 2002 resulted from the sale of $10.6
million of notes receivable to the SPE.

Gain on Early Extinguishment of Debt

Gain on early extinguishment of debt was $5.1 million for the quarter ended
September 30, 2003, compared to $0 in the same period of 2002. The gain in 2003
resulted from the early extinguishment of $7.6 million of 10 1/2% senior
subordinated notes due 2008, as discussed in Note 8.

Income before (Provision) Benefit for Income Taxes

Income before (provision) benefit for income taxes increased to $8.3 million for
the quarter ended September 30, 2003, as compared to $2.3 million for the
quarter ended September 30, 2002, as a result of the above mentioned operating
results.

(Provision) Benefit for Income Taxes

(Provision) benefit for income taxes as a percentage of income before
(provision) benefit for income taxes was a provision of 0.1% in the third
quarter of 2003, as compared to a benefit of 67.2% for the third quarter of
2002. In the third quarter of 2002, the Company received a $1.6 million refund
due to a tax law change that allowed the Company to recoup additional AMT paid
in previous years. The effective income tax rate is also the result of the 2002
and 2003 projected income tax benefits being reduced by the effect of a
valuation allowance, which reduces the projected net deferred tax assets to zero
due to the unpredictability of recovery.

Net Income

Net income increased to $8.3 million for the quarter ended September 30, 2003,
as compared to $3.9 million for the quarter ended September 30, 2002, as a
result of the above mentioned operating results.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002

Revenues

Revenues for the nine months ended September 30, 2003 were $127.8 million,
representing a $652,000 or 0.5% decrease from revenues of $128.5 million for the
nine months ended September 30, 2002. The decrease was primarily due to reduced
sampler sales and interest income, partially offset by increased Vacation
Interval sales and other income.

Vacation Interval sales increased $3.4 million to $95.2 million during the first
nine months of 2003, up from $91.8 million in the same period of 2002. For the
nine months ended September 30, 2003, the number of Vacation Intervals sold,
exclusive of in-house Vacation Intervals, decreased 11.6% to 5,100 from 5,771 in
the first nine months of 2002. The average price per interval increased to
$10,317 in the first nine months of 2003 versus $10,227 for the first nine
months of 2002. Total Vacation Interval sales for the first nine months of 2003
included 647 biennial intervals (counted as 324 Vacation Intervals) compared to
937 (469 Vacation Intervals) in the first nine months of 2002. During the first
three quarters of 2003, 3,565 upgrade in-house Vacation Intervals were sold at
an average price of $6,679, compared to 6,045 upgrade in-house Vacation
Intervals sold at an average price of $5,206 during the comparable 2002 period.
In the first nine months of 2003, the Company's in-house sales force also sold
2,382 second Vacation Intervals to existing owners at an average sales price of
$7,868, which when combined with upgrade sales generated an increase of $9.8
million in in-house sales.

Sampler sales decreased $1.8 million to $1.3 million for the nine months ended
September 30, 2003, compared to $3.0 million for the same period in 2002.
Sampler sales are not recognized as revenue until the Company's obligation has
elapsed, which often does not occur until the sampler contract expires eighteen
months after the sale is consummated. Hence, a significant portion of sampler
sales recognized in the first nine months of 2003 relate to sales from the last
half of 2001 and the first quarter of 2002, whereas a significant portion of
sampler sales recognized in the first nine months of 2002 relate to sales from
the last half of 2000 and the first quarter of 2001.

                                       19

<PAGE>

The Company had significantly lower sales volume during the second half of 2001
and the first quarter of 2002 versus the second half of 2000 and the first
quarter of 2001, which resulted in a reduction in sampler sales for the first
nine months of 2003 versus the same period of 2002.

Interest income decreased 9.2% to $26.0 million for the nine months ended
September 30, 2003, from $28.6 million for the same period of 2002. This
decrease primarily resulted from a decrease in notes receivable, net of
allowance for doubtful notes, in 2003 compared to 2002, primarily due to sales
of notes receivable to the SPE.

Management fee income, which consists of management fees collected from the
resorts' management clubs, can not exceed the management clubs' net income.
Management fee income decreased 12.9% to $1.2 million for the first nine months
of 2003, from $1.4 million during the same period of 2002. The decrease is
attributable to the July 2003 sale of the Company's management rights of seven
timeshare resorts it had managed since 1998.

Other income consists of water and utilities income, marina income, golf course
and pro shop income, and other miscellaneous items. Other income increased
$536,000 to $4.2 million for the first nine months of 2003 compared to $3.6
million for the same period of 2002. The increase primarily relates to a
$273,000 gain associated with the sale of land located in Las Vegas, Nevada, as
well as increased water and utilities income.

Cost of Vacation Interval Sales

Cost of Vacation Interval sales as a percentage of Vacation Interval sales
decreased to 17.4% during the first nine months of 2003 versus 18.3% for the
same period of 2002 primarily due to increased sales prices of upgrades in 2003
compared to 2002. The overall decrease of $301,000 in cost of Vacation Interval
sales in the first nine months of 2003 compared to the same period of 2002 was
due to the lower sales level of Vacation Intervals sold in the current year.

Sales and Marketing

Sales and marketing costs as a percentage of total sales decreased to 51.9% for
the nine months ended September 30, 2003, from 52.6% for the same period of
2002. The percentage decrease resulted from an increase in upgrade sales prices
in 2003 without a proportionate increase in sales and marketing expense. The
$219,000 increase in sales and marketing expense is primarily attributable to
the development of new upgrade and second-week ownership marketing programs in
2003 that did not exist in 2002.

Provision for Uncollectible Notes

The provision for uncollectible notes as a percentage of Vacation Interval sales
increased substantially in the nine months ended September 30, 2003 to 50.4%
compared to 20.0% for the same period of 2002. Management observed that
cancellations in the first quarter of 2003 significantly exceeded the level
expected under its estimate for the December 31, 2002 allowance for
uncollectible notes. Accordingly, the estimate was revised in the quarter ended
March 31, 2003 as follows:

-    the basis of the estimate of future cancellations was changed from Vacation
     Interval sales to incremental amounts financed, resulting in an increase of
     $1.6 million,

-    certain historical cancellations from 2000 and 2001 that were previously
     excluded from predictive cancellations, as such cancellations were assumed
     to be uncharacteristically large as a result of the Company's class action
     notices to all customers and announcements about its liquidity and possible
     bankruptcy issues in the first half of 2001, were included in predictive
     cancellations, resulting in an increase of $5.6 million,

-    the estimate of cancellations in years 7, 8, and 9 after a sale were
     increased, resulting in an increase of $1.6 million,

-    the estimate of inventory recoveries resulting from cancellations was
     revised, resulting in an increase of $300,000,

-    the ratio of the excess of cancellations in the first quarter over the
     estimated cancellations for the same period based on the weighted average
     rate of cancellations divided by the incremental amounts financed for the
     period 1997 through 2002, was applied to all future estimated
     cancellations, resulting in an increase of $15.0 million, and

-    an estimate was added for current notes with customers who received payment
     or term concessions that would have been deemed cancellations were it not
     for the concessions, resulting in an increase of $4.7 million.

                                       20

<PAGE>

The result of these revisions to the estimate was a $28.7 million increase from
the original estimate for the provision for uncollectible notes in the first
quarter of 2003. A further result of the revision to the estimate is that the
allowance for doubtful accounts was 21.5% of gross notes receivable as of
September 30, 2003 compared to 10.9% at December 31, 2002. Management will
continue its current collection programs and seek new programs to reduce note
defaults and improve the credit quality of its customers. However, there can be
no assurance that these efforts will be successful.

Operating, General and Administrative

Operating, general and administrative expenses as a percentage of total revenues
decreased to 16.7% for the first nine months of 2003, from 19.4% for the same
period of 2002. Overall, operating, general and administrative expense decreased
by $3.6 million for the first nine months of 2003, as compared to the same
period of 2002. This was partially due to $2.0 million of professional fees that
were incurred in the first nine months of 2002 associated with the restructuring
of the Company. In addition, the Company incurred $1.0 million of audit fees in
the first nine months of 2002 related to the completion of the 2000 audit.

Depreciation and Amortization

Depreciation and amortization expense as a percentage of total revenues
decreased to 2.7% in the first nine months of 2003 compared to 3.0% in the same
period of 2002. Overall, depreciation and amortization expense decreased
$336,000 for the first nine months of 2003, as compared to 2002, primarily due
to a general reduction in capital expenditures since 2000.

Interest Expense and Lender Fees

Interest expense and lender fees as a percentage of interest income decreased to
48.0% for the first nine months of 2003, from 61.8% for the same period of 2002.
This decrease is primarily the result of decreased borrowings against pledged
notes receivable and decreased senior subordinated notes due to the debt
restructuring completed in May 2002.

Gain on Sale of Notes Receivable

Gain on sale of notes receivable was $2.8 million for the first nine months of
2003, compared to $5.4 million in the same period of 2002. The gain in the first
nine months of 2003 resulted from the sale of $35.1 million of notes receivable
to the SPE in the first nine months of 2003. The gain in the same period of 2002
resulted from the sale of $69.3 million of notes receivable to the SPE.

Gain on Early Extinguishment of Debt

Gain on early extinguishment of debt was $6.4 million for the nine months ended
September 30, 2003, compared to $17.9 million in the same period of 2002. $5.1
million of the gain in 2003 resulted from the early extinguishment of $7.6
million of 10 1/2% senior subordinated notes due 2008, as discussed in Note 8.
In addition, the Company recognized a gain on early extinguishment of debt of
$1.3 million during the first nine months of 2003, related to the early
extinguishment of the $8.8 million remaining balance of the Company's $60
million loan agreement, which would have been due August 2003. The gain in 2002
resulted from the early extinguishment of $56.9 million of 10 1/2% senior
subordinated notes in connection with the restructuring of the Company's debt,
completed in May 2002.

Income (Loss) before (Provision) Benefit for Income Taxes

Income (loss) before (provision) benefit for income taxes decreased to a loss of
$14.7 million for the nine months ended September 30, 2003, as compared to
income of $20.3 million for the nine months ended September 30, 2002, as a
result of the above mentioned operating results.

(Provision) Benefit for Income Taxes

(Provision) benefit for income taxes as a percentage of income (loss) before
(provision) benefit for income taxes was a provision of 0.6% in the first nine
months of 2003, as compared to a benefit of 7.5% for the same period of 2002.
During the first nine months of 2002, the Company received a $1.6 million refund
due to a tax law change that allowed the Company to recoup additional AMT paid
in previous years. The effective income tax rate is the result of

                                       21

<PAGE>

the 2002 and 2003 projected income tax benefits being reduced by the effect of a
valuation allowance, which reduces the projected net deferred tax assets to zero
due to the unpredictability of recovery.

Net Income (Loss)

Net income (loss) decreased to a loss of $14.8 million for the nine months ended
September 30, 2003, as compared to income of $21.9 million for the nine months
ended September 30, 2002, as a result of the above mentioned operating results.

LIQUIDITY AND CAPITAL RESOURCES

FINANCIAL COVENANTS. Due to the results of the quarter ended March 31, 2003, the
Company is not in compliance with three of the financial covenants described
above. First, sales and marketing expense for the quarter ended March 31, 2003
was 56.1% of sales, compared to a maximum threshold of 52.5%. Second, the
interest coverage ratio for twelve months ended March 31, 2003 was 1.02 to 1.0,
compared to a minimum requirement of 1.25 to 1.0. And third, net loss for the
two consecutive quarters ended March 31, 2003 was $24.9 million, compared to a
minimum requirement of $1.00 net income. Also, due to the results for the six
months ended June 30, 2003, the Company is in default of two of the financial
covenants described above. First, the interest coverage ratio for the twelve
months ended June 30, 2003 was 0.13 to 1.0, compared to a minimum requirement of
1.25 to 1.0. Second, net loss for the two consecutive quarters ended June 30,
2003 was $23.1 million, compared to a minimum requirement of $1.00 net income.
In addition, due to the results for the nine months ended September 30, 2003,
the Company is in default of one of the financial covenants described above. The
interest coverage ratio for the twelve months ended September 30, 2003 was 0.40
to 1.0, compared to a minimum requirement of 1.25 to 1.0. Management notified
its secured lenders that it was not in compliance with the financial covenants,
and has begun discussions regarding waivers of the defaults and/or modifications
to loan agreements which would bring the Company back into compliance. The
lenders have not waived the covenant defaults but have continued to fund and
have not declared a default. Management is attempting to negotiate waivers and
or modifications of its loan agreements, however, it cannot give any assurances
that it will be successful in these negotiations. Although the Company believes
that it will receive relief from its lenders and that its lenders will continue
to fund the Company's operations until negotiations can be completed, there can
be no assurance that the Company's lenders will continue to fund its operations.
A refusal by its lenders to continue funding will have a material and adverse
effect on the Company's operations. Additionally, the Company's ability to
borrow any new amounts under its loan agreements with all its current senior
lenders will expire on March 31, 2004. The Company is currently negotiating
amendments to those agreements which would extend the time period during which
the Company could continue to borrow under those agreements; however, there can
be no assurances that the Company will be successful in obtaining these
amendments. Failure to extend the period during which the Company may continue
to borrow funds under the bank loan agreements or to obtain alternative lines of
credit would materially impact the Company's liquidity and ability to finance
its operations at existing levels and would likely result in a sharp curtailment
of the Company's current operations.

SOURCES OF CASH. The Company generates cash primarily from the cash received
from the sale of Vacation Intervals, the financing of customer notes receivable
from Silverleaf Owners, the sale of notes receivable to the SPE, management
fees, sampler sales, and resort and utility operations. The Company typically
receives a 10% down payment on sales of Vacation Intervals and finances the
remainder by receipt of a seven-year to ten-year customer promissory note. The
Company generates cash from customer notes receivable by (i) borrowing against
its revolving credit facilities at an advance rate of up to 75% of eligible
customer notes receivable, (ii) selling notes receivable, and (iii) from the
spread between interest received on customer notes receivable and interest paid
on related borrowings. Because the Company uses significant amounts of cash in
the development and marketing of Vacation Intervals, but collects cash on
customer notes receivable over a seven-year to ten-year period, borrowing
against receivables has historically been a necessary part of normal operations.
During the nine months ended September 30, 2003, the Company's operating
activities reflected cash used in operating activities of $1.6 million. During
the same period of 2002, the Company's operating activities reflected cash used
in operating activities of $9.0 million. In 2003, the decrease in cash used in
operating activities was primarily the result of an increase in cash flows back
to the Company for the notes receivable sold to the SPE, a decrease in prepaid
spending, and a decrease in operational payments due to timing.

During the nine months ended September 30, 2003, net cash provided by financing
activities was $4.1 million compared to $7.4 million in the comparable 2002
period. The $3.3 million decrease in cash provided by financing activities was
primarily the net result of having $28.3 million less proceeds from sales of
notes receivable in 2003

                                       22

<PAGE>

and $24.7 million less in payments on borrowings against pledged notes
receivable. At September 30, 2003, the Company's revolving credit facilities
provided for loans of up to $230.1 million of which approximately $212.1 million
of principal and interest related to advances under the credit facilities was
outstanding. For the nine months ended September 30, 2003, the weighted average
cost of funds for all borrowings, including the senior subordinated debt, was
6.1%. Customer defaults have a significant impact on cash available to the
Company from financing customer notes receivable, in that notes more than 60
days past due are not eligible as collateral. As a result, the Company's
borrowing base is reduced for such delinquent notes.

Effective October 30, 2000, the Company entered into a $100 million revolving
credit agreement to finance Vacation Interval notes receivable through an
off-balance sheet SPE, formed on October 16, 2000. The agreement presently has a
term of 5 years. However, on April 30, 2004, the second anniversary date of the
amended facility, the SPE's lender under the credit agreement has the right to
put, transfer, and assign to the SPE all of its rights, title, and interest in
and to all of the assets securing the facility at a price equal to the then
outstanding principal balance under the facility. At September 30, 2003, the SPE
held notes receivable totaling $106.8 million, with related borrowings of $91.5
million. The Company is not obligated to repurchase defaulted or any other
contracts sold to the SPE. It is anticipated, however, that the Company will
place bids in accordance with the terms of the conduit agreement to repurchase
some defaulted contracts in public auctions to facilitate the re-marketing of
the underlying collateral.

During the nine months ended September 30, 2003, the Company sold $35.1 million
of notes receivable and recognized pre-tax gains of $2.8 million. The SPE funded
these purchases through advances under a credit agreement arranged for this
purpose. In connection with these sales, the Company received cash consideration
of $28.8 million, which was used to pay down borrowings under its revolving loan
facilities.

For regular federal income tax purposes, the Company reports substantially all
of the Vacation Interval sales it finances under the installment method. Under
this method, income on sales of Vacation Intervals is not recognized until cash
is received, either in the form of a down payment or as installment payments on
customer notes receivable. The deferral of income tax liability conserves cash
resources on a current basis. Interest is imposed, however, on the amount of tax
attributable to the installment payments for the period beginning on the date of
sale and ending on the date the payment is received. If the Company is otherwise
not subject to tax in a particular year, no interest is imposed since the
interest is based on the amount of tax paid in that year. The consolidated
financial statements do not contain an accrual for any interest expense that
would be paid on the deferred taxes related to the installment method as the
interest expense is not estimatable. In addition, the Company is subject to
current alternative minimum tax ("AMT") as a result of the deferred income that
results from the installment sales treatment, although due to existing AMT loss
carryforwards, it is anticipated that no such current AMT liability exists.
Payment of AMT creates a deferred tax asset in the form of a minimum tax credit,
which, unless otherwise limited, reduces the future regular tax liability
attributable to Vacation Interval sales. In 1998, the Internal Revenue Service
approved a change in the method of accounting for installment sales effective as
of January 1, 1997. As a result, the Company's alternative minimum taxable
income for 1997 through 1999 was increased each year by approximately $9.0
million for the pre-1997 adjustment, which resulted in the Company paying
substantial additional federal and state taxes in those years. Subsequent to
December 31, 2000, the Company applied for and received refunds of $8.3 million
and $1.6 million during 2001 and 2002, respectively, as the result of the
carryback of its 2000 AMT loss to 1999, 1998, and 1997. Accordingly, no minimum
tax credit exists currently.

The net operating losses ("NOLs") expire between 2012 through 2021. Realization
of the deferred tax assets arising from NOLs is dependent on generating
sufficient taxable income prior to the expiration of the loss carryforwards.
Management currently does not believe that it will be able to utilize its NOL
from normal operations. At present, future NOL utilization is expected to be
limited to the temporary differences creating deferred tax liabilities. If
necessary, management could implement a strategy to accelerate income
recognition for federal income tax purposes to utilize the existing NOL. The
amount of the deferred tax asset considered realizable could be decreased if
estimates of future taxable income during the carryforward period are reduced.

Due to the restructuring completed in May 2002, an ownership change within the
meaning of Section 382(g) of the Internal Revenue Code ("the Code") occurred. As
a result, a portion of the Company's NOL is subject to an annual limitation for
taxable years beginning after the date of the exchange ("change date"), and a
portion of the taxable year which includes the change date. The annual
limitation will be equal to the value of the stock of the Company immediately
before the ownership change, multiplied by the long-term tax-exempt rate (i.e.,
the highest of the adjusted Federal long-term rates in effect for any month in
the three-calendar-month period ending with the calendar month in which the
change date occurs). This annual limitation may be increased for any recognized
built-in gain to the extent

                                       23

<PAGE>

allowed in Section 382(h) of the Code. The ownership change may also limit, as
described above, the use of the Company's minimum tax credit, if any, as
provided in Section 383 of the Code.

Given its current economic condition, the Company's access to capital and other
financial markets is anticipated to be limited. However, to finance the
Company's growth, development, and any future expansion plans, the Company may
at some time be required to consider the issuance of other debt, equity, or
collateralized mortgage-backed securities, the proceeds of which would be used
to finance future acquisitions, refinance debt, finance mortgage receivables, or
for other purposes. Any debt incurred or issued by the Company may be secured or
unsecured, have fixed or variable rate interest, and may be subject to such
terms as management deems prudent.

Due to the uncertainties mentioned above, the independent auditors report on the
Company's financial statements for the period ended December 31, 2002 contains
an explanatory paragraph concerning the Company's ability to continue as a going
concern.

USES OF CASH. Investing activities typically reflect a net use of cash due to
capital additions. However, net cash provided by investing activities for the
nine months ended September 30, 2003 was $1.8 million compared to net cash used
in investing activities of $812,000 during the same period of 2002. The increase
in net cash provided by investing activities relates to proceeds from the sale
of land held for sale of $2.9 million in 2003 and a reduction in equipment
purchases in 2003. The Company evaluates sites for additional new resorts or
acquisitions on an ongoing basis. Certain debt agreements include restrictions
on the Company's ability to pay dividends based on minimum levels of net income
and cash flow.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of and for the nine months ended September 30, 2003, the Company had no
significant derivative financial instruments or foreign operations. Interest on
the Company's notes receivable portfolio, senior subordinated debt, capital
leases, and miscellaneous notes is fixed, whereas interest on the Company's
primary loan agreements, which totaled $211.1 million at September 30, 2003, is
variable. The impact of a one-point interest rate change on the outstanding
balance of variable-rate financial instruments at September 30, 2003, on the
Company's results of operations for the first nine months of 2003 would be
approximately $1.6 million, or approximately $0.04 per share.

At September 30, 2003, the carrying value of the Company's notes receivable
portfolio approximates fair value because the weighted average interest rate on
the portfolio approximates current interest rates received on similar notes. If
interest rates on the Company's notes receivable are increased or perceived to
be above market rates, the fair market value of the Company's fixed-rate notes
will decline, which may negatively impact the Company's ability to sell new
notes. The impact of a one-point interest rate change on the portfolio could
result in a fair value impact of $5.7 million or approximately $0.15 per share.

Credit Risk -- The Company is exposed to on-balance sheet credit risk related to
its notes receivable. The Company is exposed to off-balance sheet credit risk
related to its notes receivable sold.

The Company offers financing to the buyers of Vacation Intervals at the
Company's resorts. These buyers generally make a down payment of at least 10% of
the purchase price and deliver a promissory note to the Company for the balance.
The promissory notes generally bear interest at a fixed rate, are payable over a
seven-year to ten-year period, and are secured by a first mortgage on the
Vacation Interval. The Company bears the risk of defaults on these promissory
notes, and this risk is heightened inasmuch as the Company generally does not
verify the credit history of its customers and will provide financing if the
customer is presently employed and meets certain household income criteria.

If a buyer of a Vacation Interval defaults, the Company generally must foreclose
on the Vacation Interval and attempt to resell it. The associated marketing,
selling, and administrative costs from the original sale are not recovered and
such costs must be incurred again to resell the Vacation Interval. Although the
Company in many cases may have recourse against a Vacation Interval buyer for
the note balance, certain states have laws that limit the Company's ability to
recover personal judgments against customers who have defaulted on their loans.
Accordingly, the Company has generally not pursued this remedy.

Interest Rate Risk -- The Company has historically derived net interest income
from its financing activities because the interest rates it charges its
customers who finance the purchase of their Vacation Intervals exceed the
interest rates the Company pays to its lenders. Because the Company's
indebtedness bears interest at variable rates and the

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<PAGE>

Company's customer receivables bear interest at fixed rates, increases in
interest rates will erode the spread in interest rates that the Company has
historically obtained and could cause the rate on the Company's borrowings to
exceed the rate at which the Company provides financing to its customers. The
Company has not engaged in interest rate hedging transactions. Therefore, any
increase in interest rates, particularly if sustained, could have a material
adverse effect on the Company's results of operations, cash flows, and financial
position.

Availability of Funding Sources -- The Company funds substantially all of the
notes receivable, timeshare inventories, and land inventories which it
originates or purchases with borrowings through its financing facilities, sales
of notes receivable, internally generated funds, and proceeds from public debt
and equity offerings. Borrowings are in turn repaid with the proceeds received
by the Company from repayments of such notes receivable. The Company's ability
to borrow any new amounts under its loan agreements with all its current senior
lenders will expire on March 31, 2004. The Company is currently negotiating
amendments to those agreements which would extend the time period during which
the Company could continue to borrow under those agreements; however, there can
be no assurances that the Company will be successful in obtaining these
amendments. Failure to extend the period during which the Company may continue
to borrow funds under the bank loan agreements or to obtain alternative lines of
credit would materially impact the Company's liquidity and ability to finance
its operations at existing levels and would likely result in a sharp curtailment
of the Company's current operations.

Geographic Concentration -- The Company's notes receivable are primarily
originated in Texas, Missouri, Illinois, Massachusetts, and Georgia. The risk
inherent in such concentrations is dependent upon regional and general economic
stability, which affects property values and the financial stability of the
borrowers. The Company's Vacation Interval inventories are concentrated in
Texas, Missouri, Illinois, Massachusetts, and Georgia. The risk inherent in such
concentrations is in the continued popularity of the resort destinations, which
affects the marketability of the Company's products and the collection of notes
receivable.

ITEM 4.  CONTROLS AND PROCEDURES

As of the end of the quarter covered by this report, management, including the
Company's Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of the Company's disclosure controls and procedures. Based on, and
as of the date of, that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the disclosure controls and procedures were
effective, in all material respects, to ensure that information required to be
disclosed in the reports the Company files and submits under the Exchange Act is
recorded, processed, summarized, and reported as and when required.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect internal controls during the period
covered by this report.

                                       25

<PAGE>

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Holiday Hills Condominium Association, Inc. et al v. Silverleaf Resorts, Inc. et
al, Circuit Court of Christian County, Missouri, and Ozark Mountain Condominium
Association, Inc. et al v. Silverleaf Resorts, Inc., Stone County, Missouri. The
homeowners' associations of three condominium projects that a former subsidiary
of the Company constructed in Missouri filed separate actions of unspecified
amounts against the Company alleging construction defects and breach of
management agreements. This litigation has been ongoing for several years.
Discovery continued in the lawsuit during the period ended September 30, 2003,
but is still far from complete. Among other things, the plaintiffs have not yet
turned over the reports of their expert witnesses and the Company is unclear as
to exactly what damages are being claimed by the Plaintiffs. At this time, a
majority of the Company's legal fees and costs of litigation are being paid by
two insurance carriers, subject to a reservation of rights by these insurers.
Since the Company does not know what damages are being claimed, and cannot
predict the final outcome of these claims, it cannot estimate the additional
costs it could incur, or whether its insurance carriers will continue to cover
its costs in connection with these claims. The second action is scheduled for
trial in June 2004.

Huizar et al v. Silverleaf Resorts, Inc., District Court, 73rd Judicial
District, Bexar County, Texas. A further purported class action was filed
against the Company on February 26, 2002, by a couple who purchased a Vacation
Interval from the Company. The Plaintiffs alleged that the Company violated the
Texas Government Code by charging a document preparation fee in regard to
instruments affecting title to real estate. Alternatively, the Plaintiffs
alleged that the $275 document preparation fee constituted a partial prepayment
that should have been credited against their note and sought a declaratory
judgment. The petition asserted Texas class action allegations and sought
recovery of the document preparation fee and treble damages on behalf of both
the Plaintiffs and the alleged class they purported to represent, and an
injunctive relief preventing the Company from engaging in the unauthorized
practice of law in connection with the sale of its Vacation Intervals in Texas.
The Company and the Plaintiffs executed a Stipulation and Agreement of
Compromise ("Settlement"), which was determined by the Court to be a fair,
reasonable, and adequate settlement of the class claims at a hearing held on
September 4, 2003. In accordance with the Settlement, the Company has refunded
all amounts paid by the two named Plaintiffs who conveyed their Vacation
Interval back to the Company. Additionally, the Company will issue to each
timeshare owner who was a member of the class a $275 certificate, which can be
used for an upgrade, as a credit on the purchase of an additional Vacation
Interval, or for a limited stay at one of the Company's resorts. The Company
estimates that there are approximately 16,400 members of the class. The
Settlement also provided for payment of the named Plaintiffs' attorney fees in
the amount of $400,000, plus expenses, both of which were expensed in the
quarter ended September 30, 2003. The Company has been released from all
liability with respect to the settled claims, and the action has been dismissed
by the named Plaintiffs and the class with prejudice.

Other. In January 2003, a group of eight related individuals and entities who
were then holders of certain of the Company's 10 1/2% senior subordinated notes
due 2008 (the "10 1/2% Notes") made oral claims against the Company and a number
of its present and former officers and directors concerning the claimants' open
market purchases of 10 1/2% Notes during 2000 and 2001. The 10 1/2% Notes were
allegedly purchased by the eight claimants for an aggregate purchase price of
$3.7 million. One of the eight claimants previously owned common stock in the
Company acquired between 1998 and 2000 and also made claims against the Company
with regard to approximately $598,000 in losses allegedly suffered in connection
with open market purchases and sales of the Company's common stock. In February
2003, these eight claimants, the Company, and certain of its former officers and
directors entered into a tolling agreement for the purposes of preserving the
claimants' rights during the term of the agreement by tolling applicable
statutes of limitations while negotiations between the claimants and the Company
take place. The 10 1/2% Notes were not in default and the Company denied all
liability with regard to the alleged claims of these eight claimants. No
litigation was filed against the Company or any of its affiliates by these eight
claimants; however, on February 27, 2003, these eight claimants did file suit in
state district court in Dallas, Texas, against the Company's former auditors,
Deloitte & Touche, LLP, alleging violation by Deloitte & Touche of the Texas
Securities Act, common law fraud, negligent misrepresentation, fraud in a stock
transaction, and accounting malpractice. The claims against Deloitte & Touche
arise from the same purchases of the Company's 10 1/2% Notes and common stock
that formed the basis for the tolling agreement. In order to resolve this issue
with these eight claimants, the Company agreed on June 16, 2003 to rescind the
purchases of the 10 1/2% Notes held by the claimants. Under the terms of the
settlement, which was closed on July 10, 2003, the Company acquired all the 10
1/2% Notes held by the eight claimants. Additionally, the Company received a
full and complete release of any claims which the eight claimants alleged to
hold against the Company, or any of its present or former officers, directors,
or affiliates, regarding purchases of the 10 1/2%

                                       26

<PAGE>

Notes or common stock of the Company. Additionally, the eight claimants agreed
to release their alleged claims against Deloitte & Touche and to dismiss with
prejudice the above-described lawsuit which the eight claimants filed against
Deloitte & Touche in February 2003. On July 23, 2003, the Company cancelled all
the 10 1/2% Notes acquired from these eight claimants. The face amount of the
cancelled 10 1/2% Notes was $7,620,000. The Company paid a cash settlement to
the claimants of $2,393,383, which resulted in a one-time gain to the Company of
approximately $5.1 million for early extinguishment of debt. This gain was
recognized by the Company in its quarter ending September 30, 2003. As a part of
the settlement, the Company also agreed to pay $75,000 towards the eight
claimants' legal fees.

The Company is currently subject to other litigation arising in the normal
course of its business. From time to time, such litigation includes claims
regarding employment, tort, contract, truth-in-lending, the marketing and sale
of Vacation Intervals, and other consumer protection matters. Litigation has
been initiated from time to time by persons seeking individual recoveries for
themselves, as well as, in some instances, persons seeking recoveries on behalf
of an alleged class. In the judgment of the Company, none of these lawsuits or
claims against the Company, either individually or in the aggregate, is likely
to have a material adverse effect on the Company, its business, results of
operations, or financial condition.

ITEM 5.  OTHER INFORMATION

National Do-Not-Call Rules -- The Company relies heavily on telemarketing
activities to arrange tours of its resorts to potential customers. On July 3,
2003, the Federal Communications Commission ("FCC") released new rules and
regulations promulgated under the Telephone Consumer Protection Act of 1991,
which could have a negative impact on the Company's telemarketing activities.
The FCC will implement, in conjunction with the Federal Trade Commission
("FTC"), a national do-not-call list, which will apply to both interstate and
intrastate commercial telemarketing calls. The FTC expects that approximately 60
million telephone numbers will be registered on the national do-not-call list by
mid-2004, which could sharply limit the number of contacts the Company will be
able to make through its telemarketing activities. The Company will continue to
telemarket to individuals who do not place their telephone numbers on a
do-not-call list and those with whom the Company has an established business
relationship. The Company's use of autodialers to call potential customers in
its database could also be restricted by new call abandonment standards
specified in the FCC rules and regulations. The Company cannot currently
determine the impact that these new regulations could have on the Company's
sales; however, wide-spread registration of telephone numbers on the national
do-not-call list and the restrictions on the use of autodialers by the Company
could negatively affect the Company's sales and marketing efforts and require
the Company use less effective, more expensive alternative marketing methods. A
telemarketing industry trade group has filed a lawsuit against the FCC seeking
relief from the implementation of these rules and regulations by the FCC, but
the Court refused to block the implementation of the national do not call list
which went into effect on October 1, 2003. The Court will hold additional
hearings in November 2003 on this issue. The Company cannot predict what success
this lawsuit may have. While the new rules only became effective on October 1,
2003, the Company has experienced a decline in the number of telemarketing calls
it is able to complete as a result of the changes in the rules relating to the
use of automatic dialers. The Company's required compliance with these rules has
contributed to an approximately 15% decrease in the number of resort tours which
have been scheduled for potential customers since the effective date of the
rules. All companies involved in telemarketing expect some negative impact to
their businesses as a result of the do-not-call rules and other federal and
state legislation which seeks to protect the privacy of consumers from various
types of marketing solicitations. Because of its historical dependence on
telemarketing, the Company believes that these recent changes in the law will
clearly have a material impact on its operations and will require the Company to
modify its historical marketing practices in order to both remain compliant with
the law and to achieve the levels of resort tours by consumers which are
necessary for the profitable operation of the Company. Because the changes
mandated by the rules which went into effect on October 1, 2003 are so recent,
the Company will continue to assess both the rules' impact on operations and
alternative methods of marketing that are not impacted by the new rules.

Disposition of Managed Resort Assets -- In July 2003, the Company sold its
management rights and unsold timeshare inventory in seven timeshare resorts the
Company has managed since 1998. In connection with this sale, the Company
received consideration of approximately $1.3 million in cash, notes, and other
consideration. The seven timeshare resorts included in this sale of management
rights and timeshare inventory are (i) Alpine Bay located in Alpine, Alabama,
(ii) Beach Mountain Lakes located in Drums, Pennsylvania, (iii) Treasure Lake
located in Dubois, Pennsylvania, (iv) Foxwood Hills located in Westminister,
South Carolina, (v) Hickory Hills located in Gautier, Mississippi, (vi) Lake
Tansi Village located in Crossville, Tennessee, and (vii) Westwood Manor located
in Bridgeport, Texas. The Company originally acquired the management rights and
unsold inventory of timeshare intervals in these seven resorts from Crown
Resorts Co., LLC in May 1998. Due to liquidity concerns announced by the Company
in the first quarter of 2001, the Company discontinued its efforts to sell
timeshare intervals in these seven resorts in 2001. The Company pursued a sale
of its rights in these seven managed resorts so that it could concentrate its
development, sales, and marketing activities at the resorts it owns in Texas,
Missouri, Illinois, Massachusetts, and Georgia. The proceeds of this sale
related to these seven managed resorts will be used by the Company to repay debt
to senior

                                       27

<PAGE>

lenders.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits filed herewith.

        10.1     Contract of Sale dated October 8, 2003 between the Company and
                 Reed Kline.

        10.2     First Amendment to Employment Agreement dated August 18, 2003
                 between the Company and Sharon K. Brayfield.

        31.1     Certification of CEO Pursuant to Section 302 of the
                 Sarbanes-Oxley Act of 2002

        31.2     Certification of CFO Pursuant to Section 302 of the
                 Sarbanes-Oxley Act of 2002

        32.1     Certification of CEO Pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002

        32.2     Certification of CFO Pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002
-------

(b)    Reports on Form 8-K

       The Company filed the following Current Reports on Form 8-K with the
SEC during the quarter ended September 30, 2003:

       None.

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.

Dated: November 14, 2003                   By: /s/ ROBERT E. MEAD
                                               ---------------------------------
                                               Robert E. Mead
                                               Chairman of the Board and
                                               Chief Executive Officer

Dated: November 14, 2003                   By: /s/ HARRY J. WHITE, JR.
                                               ---------------------------------
                                               Harry J. White, Jr.
                                               Chief Financial Officer

                                       28

<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO.                               DESCRIPTION
-----------                               -----------
<S>               <C>
10.1              Contract of Sale dated October 8, 2003 between the Company and
                  Reed Kline.

10.2              First Amendment to Employment Agreement dated August 18, 2003
                  between the Company and Sharon K. Brayfield.

31.1              Certification of CEO Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002

31.2              Certification of CFO Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002

32.1              Certification of CEO Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002

32.2              Certification of CFO Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002
</TABLE>

                                       29