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SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549




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FORM 10-K/A

FOR ANNUAL AND TRANSITION REPORTS

PURSUANT TO SECTIONS 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934


(Mark One)



| |     |                                                                                      
| | --- | -------------------------------------------------------------------------------------
| | [X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
|
| |     | For the fiscal year ended June 30,
	2001                                             

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: 1-13173

Boca Resorts, Inc.

(Exact Name of Registrant as Specified in its
Charter)


|                                         |  |                                     
|---------------------------------------- |  | ------------------------------------
|Delaware                                 |  | 65-0676005                          
|(State of Incorporation)                 |  | (I.R.S. Employer Identification No.)
|                                        
|501 E. Camino Real, Boca Raton,
	Florida |  | 33432                               
|(Address of Principal Executive Offices) |  | (Zip Code)                          

Registrants telephone number, including
area code:  (561) 447-5300

Securities registered pursuant to
Section 12(b) of the Act:

|                                                |  |                                          
|----------------------------------------------- |  | -----------------------------------------
|Title of class                                  |  | Name of each exchange on which registered
|                                                |  |                                          
|Class A Common Stock,
	par value $.01 per share |  | New York Stock Exchange                  

Securities registered pursuant to
Section 12(g) of the Act:

None

(Title of class)


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

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.  o

As of September 17, 2001, the registrant had
39,583,392 shares of Class A common stock, $ .01 par value
(the Class A Common Stock), outstanding and, at
such date, the aggregate market value of the shares of
Class A Common Stock held by non-affiliates of the
registrant was approximately $354.7 million. As of
September 17, 2001 the registrant had 255,000 shares of
Class B common stock, $.01 par value (the
Class B Common Stock), outstanding, none of
which was held by a non-affiliate of the registrant.

DOCUMENTS INCORPORATED BY REFERENCE

Part III Portions of the Registrants Proxy
Statement relating to the 2001 Annual Meeting of Stockholders.

Part IV Portions of previously filed reports and
registration statements.









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INTRODUCTORY NOTE

The Companys Annual Report on
Form 10-K as filed with the Securities & Exchange
Commission on September 21, 2001, is being amended to
revise Managements Discussion and
Analysis  Results of Operations
(MD&A), to describe in further detail factors
responsible for changes in various line items of the
Companys historical results of operations and to place
such discussion before the unaudited pro forma information which
management believes provides a meaningful comparison of the
periods presented. Additionally, the table originally found in
the MD&A containing a three-year comparison of unaudited pro
forma data has been abbreviated to a two-year comparison.
Finally, the information contained in footnote 5 to the
consolidated financial statements containing the disclosure of
unaudited pro forma consolidated results of operations, which
excluded the operating results from the Arizona Biltmore Resort
& Spa because it was disposed of mid-way through the
Companys fiscal year in December 2000, has been replaced
with the historical results of operations of the Arizona
Biltmore Resort & Spa.

This information does not change the
Companys consolidated results of operations, or any line
item in the consolidated financial statements. Other than the
MD&A and the presentation of footnote 5, the Companys
Annual Report on Form 10-K is unchanged. The information in
this Annual Report on Form 10-K/A does not reflect any
subsequent information or events and remains as of June 30,
2001, or, as of the date of the filing of the original
Form 10-K, as required.



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INDEX

TO FORM 10-K


|         |  |                                                                                        |  |      |    | 
|-------- |  | -------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  |                                                                                        |  | Page
|         |  |                                                                                        |  |     
|PART I  
|Item 1.  |  | Business                                                                               |  |      | 1  | 
|Item 2.  |  | Properties                                                                             |  |      | 9  | 
|Item 3.  |  | Legal Proceedings                                                                      |  |      | 10 | 
|Item 4.  |  | Submission of Matters to a Vote of Security
	Holders                                   |  |      | 10 | 
|PART II 
|Item 5.  |  | Market for the Registrants Common Equity
	and Related Stockholder Matters             |  |      | 11 | 
|Item 6.  |  | Selected Financial Data                                                                |  |      | 12 | 
|Item 7.  |  | Managements Discussion and Analysis of
	Financial Condition and Results of Operations |  |      | 14 | 
|Item 7A. |  | Quantitative and Qualitative Disclosures About
	Market Risk                            |  |      | 23 | 
|Item 8.  |  | Financial Statements and Supplementary Data                                            |  |      | 24 | 
|Item 9.  |  | Changes in and Disagreements with Accountants on
	Accounting and Financial Disclosure  |  |      | 45 | 
|PART III
|Item 10. |  | Directors and Executive Officers of the Registrant                                     |  |      | 45 | 
|Item 11. |  | Executive Compensation                                                                 |  |      | 45 | 
|Item 12. |  | Security Ownership of Certain Beneficial Owners
	and Management                        |  |      | 45 | 
|Item 13. |  | Certain Relationships and Related Transactions                                         |  |      | 45 | 
|PART IV 
|Item 14. |  | Exhibits, Financial Statement Schedules and
	Reports on Form 8-K                       |  |      | 45 | 

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PART I

Item 1.     Business

Introduction

Boca Resorts, Inc. (the Company) is
an owner and operator of five luxury resorts located in Florida
with hotels, conference facilities, golf courses, spas, marinas
and private clubs (the leisure and recreation
business). The Company owned an entertainment and sports
business, which primarily included the operations of the Florida
Panthers Hockey Club (the Panthers) and related
arena management operations. This business was sold on
July 25, 2001 and, accordingly, the entertainment and
sports business has been accounted for as discontinued
operations.

The Companys resorts include the Boca Raton
Resort and Club (Boca Raton), the Registry Resort at Pelican Bay
(Naples), the Edgewater Beach Hotel (Naples), the Hyatt Regency
Pier 66 Hotel and Marina (Fort Lauderdale) and the Radisson
Bahia Mar Resort and Yachting Center (Fort Lauderdale). The
Company also owns and operates two championship golf courses
located in Florida (the Grande Oaks Golf Club in Davie and
Naples Grande Golf Club in Naples) that serve as additional
amenities to the Companys resorts as well as components of
the Companys exclusive social club, known as the Premier
Club. Previously, the Company owned the Arizona Biltmore Resort
& Spa, however, this property was sold on December 22,
2000.

The Companys resorts possess numerous
competitive and operational strengths. The resorts are unique,
irreplaceable assets in desirable locations with strong
recognition and positioning in their markets. The facilities and
amenities at the Companys resorts provide multiple and
diverse revenue streams and attract upscale business and leisure
customers. In addition, through the development of additional
guestrooms and/or resort amenities, the resorts have
opportunities to significantly increase revenue and cash flow.

For a discussion of the Companys revenue,
profits and assets, see Managements Discussion and
Analysis of Financial Condition and Results of Operations
and the Consolidated Financial Statements included later herein.
The Company was incorporated in Florida in 1996 and
re-incorporated in Delaware in 1997.

Business Strategy

While management continuously evaluates
ownership, acquisition and divestiture alternatives, its current
strategy is to focus on internal expansion and development
opportunities of its existing properties. The Companys
objective is to maximize the cash flow from, and the value of,
the Companys leisure and recreation business by:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Continuing Internal Growth Through Capital
	Improvements at the Resorts.Management believes that the Companys resorts have the
	opportunity for continued internal growth. In addition to normal
	recurring capital expenditures, during the past five years over
	$200 million has been invested (or is committed to be invested)
	in the resorts on capital projects including the Boca Raton
	Resort and Club marina wing complex (consisting of 112 new
	water-view luxury guestrooms), spa complex, golf clubhouse,
	marina slips, retail and restaurant space, conference center,
	golf course, tennis and fitness center, parking garage and
	accelerated guestroom renovation; the Registry Resort at Pelican
	Bay with a new pool complex, additional meeting space and
	beachfront improvements; the construction of Grande Oaks Golf
	Club and Naples Grande Golf Club; as well as room renovations at
	the Hyatt Regency Pier 66 Hotel and Marina, the Radisson
	Bahia Mar Resort and Yachting Center and the Edgewater Beach
	Hotel.

Management believes that these capital
expenditures have resulted in, and will continue to produce,
increases to the average daily room rates at its resorts.
Management also believes that the high quality of the
Companys resorts will continue to attract higher spending
corporate groups, which in turn will increase total revenue per
available room. For the year ended June 30, 2001, the
average daily room rate was $209.79, room revenue per available
room was $150.42 and total revenue per available room was
$353.97, excluding the

1



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Arizona Biltmore Resort & Spa. For the year
ended June 30, 2000, the average daily room rate was
$201.08, room revenue per available room was $141.09 and total
revenue per available room was $326.58, excluding the Arizona
Biltmore Resort & Spa.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Continued Focus on Upscale Business and
	Leisure Customers.Management believes
	that its focus on corporate group customers and upscale business
	and leisure customers allows the Company to maximize total
	revenue per available room. It has been managements
	experience that these customers are more likely to use the
	additional amenities and facilities available at the resorts,
	thereby increasing revenue. Additionally, group customers tend
	to book reservations 12 to 36 months in advance of their
	stay, thus enabling management to better estimate future revenue
	streams and manage corresponding expenses. Group business has
	also been used by the Company to fill off-peak leisure periods.
	Management believes that by targeting upscale customers the
	Company is well positioned to take advantage of demographic
	trends (which include an aging baby-boom population
	with increasing disposable income) that are creating increased
	demand for luxury resorts and related amenities. Management also
	believes the resorts will be able to capitalize on these trends
	given the properties unique nature and locations. The
	Companys ability to capitalize on these trends is enhanced
	by the high barriers of entry into the luxury resort industry.                                                                                 
|
| |  | Continuing to Capitalize on Integration and
	Cost-Saving Opportunities.Management
	believes the integration of certain aspects of the resort
	operations will allow the Company to realize significant
	operating efficiencies. Management is focusing on integrating
	the operations of all of its resorts, including reservations,
	purchasing, training, information systems, insurance and
	marketing, in order to achieve greater operating efficiencies
	and improved profit margins. In addition, management believes
	that managing all of the resorts by a single management team
	with established practices and systems will improve the
	efficiency of the resort operations and will offer employees
	internal promotional opportunities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Expanding Premier Club
	Concept.The Company continues to
	expand and develop its Premier Club concept, which was first
	introduced in 1991 at the Boca Raton Resort and Club. Membership
	in the Boca Raton Resort Premier Club allows Premier Club
	members access to the Boca Raton Resort and Club grounds,
	restaurants, recreational facilities and other private social
	functions, which are otherwise restricted to resort guests. The
	Company expanded its Premier Club operations, with the opening
	of Grande Oaks Golf Club in June 1999 and Naples Grande Golf
	Club in February 2000. In addition to attracting new club
	members who provide an additional revenue stream, the Company is
	able to offer guests of the Companys Fort Lauderdale and
	Naples resorts play at these new 18-hole championship facilities
	and is able to offer reciprocal amenities to the Boca Raton
	Resort and Club Premier Club members. With its Premier Clubs,
	the Company generates substantial incremental revenue from its
	existing facilities and services. Management anticipates that
	the Premier Club will continue to be successful in marketing
	resort amenities, including restaurants, pools, and where
	available, tennis, golf, spas and other leisure and recreational
	facilities to residents in local communities in a country
	club/social club setting.

2



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The following table sets forth a summary of the
key physical attributes of each of the Companys resorts:

|                                              |  |       |     |        |  |            |       |             |  |           |         |          |  |        |   |             |  |        |    |     |  |  |    |  |  |  |     |  |  |  |    |  |  |  |    | 
|--------------------------------------------- |  | ----- | --- | ------ |  | ---------- | ----- | ----------- |  | --------- | ------- | -------- |  | ------ | - | ----------- |  | ------ | -- | --- |  |  | -- |  |  |  | --- |  |  |  | -- |  |  |  | -- | 
|                                              |  |       |     |        |  |            |       |             |  | Access to |         |          |  |        |   |             |  | No.   
|                                              |  |       |     | No. of |  | Conference |       | Access to   |  | No. of    |         | No. of   |  | No. of |   | No. of Food |  | of    
|                                              |  |       |     | Rooms/ |  | Space      |       | No. of Golf |  | Tennis    |         | Swimming |  | Boat   |   | & Beverage  |  | Retail
|                                              |  | Acres |     | Suites |  | Sq. Ft.    |       | Courses     |  | Courts    |         | Pools    |  | Slips  |   | Sites       |  | Shops 
|                                              |  |       |     |        |  |            |       |             |  |           |         |          |  |        |   |             |  |       
|Boca Raton Resort and Club                    |  |       | 343 |        |  |            | 963   | (1)         |  |           | 146,890 |          |  |        | 4 | (2)         |  |        | 30 |     |  |  | 5  |  |  |  | 27  |  |  |  | 16 |  |  |  | 12 | 
|Registry Resort at Pelican Bay                |  |       | 24  |        |  |            | 474   |             |  |           | 43,020  |          |  |        | 4 | (3)         |  |        | 15 |     |  |  | 5  |  |  |  |    |  |  |  | 8  |  |  |  | 7  | 
|Edgewater Beach Hotel                         |  |       | 3   |        |  |            | 126   |             |  |           | 3,450   |          |  |        | 4 | (3)         |  |        | 15 | (4) |  |  | 1  |  |  |  |    |  |  |  | 3  |  |  |  | 1  | 
|Hyatt Regency Pier 66 Hotel and Marina        |  |       | 24  |        |  |            | 380   |             |  |           | 22,296  |          |  |        | 1 | (5)         |  |        | 2  |     |  |  | 2  |  |  |  | 136 |  |  |  | 6  |  |  |  | 2  | 
|Radisson Bahia Mar Resort and Yachting Center |  |       | 44  |        |  |            | 296   |             |  |           | 20,150  |          |  |        | 1 | (5)         |  |        | 4  |     |  |  | 1  |  |  |  | 330 |  |  |  | 3  |  |  |  | 5  | 
|                                              |  |       |     |        |  |            |       |             |  |           |         |          |  |        |   |             |  |        |    |     |  |  |    |  |  |  |     |  |  |  |    |  |  |  |    | 
|                                              |  |       | 438 | (6)    |  |            | 2,239 |             |  |           | 235,806 |          |  |        | 9 |             |  |        | 51 |     |  |  | 14 |  |  |  | 493 |  |  |  | 36 |  |  |  | 27 | 
|                                              |  |       |     |        |  |            |       |             |  |           |         |          |  |        |   |             |  |        |    |     |  |  |    |  |  |  |     |  |  |  |    |  |  |  |    | 






|    |                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Excludes 112 rooms currently under construction
	in a new marina wing.                                                                                                                                                        
|(2) | Boca Raton Resort and Club maintains one 18-hole
	golf course on premises and another at the resorts country
	club location. In addition, the resort has access to two 18-hole
	golf courses through use agreements.         
|(3) | Guests at the Registry Resort at Pelican Bay and
	the Edgewater Beach Hotel have access to the new 18-hole Naples
	Grande Golf Club, which is owned by the Company, and to three
	18-hole golf courses through use agreements.
|(4) | Edgewater Beach Hotel guests have access to the
	tennis courts at the Registry Resort at Pelican Bay.                                                                                                                         
|(5) | Hyatt Regency Pier 66 Hotel and Marina and
	Radisson Bahia Mar Resort and Yachting Center have access to
	Grande Oaks Golf Club, which is owned by the Company.                                                               
|(6) | Excludes the acreage associated with Grande Oaks
	and Naples Grande Golf Clubs.                                                                                                                                               

Amenities and services at the resorts include
conference facilities, golf courses, tennis facilities, spas,
fitness centers, marinas, restaurants, retail outlets, swimming
pools, and other activities and services. The diversity and
number of amenities and services at the facilities provide the
Company with substantial non-room revenue. For the year ended
June 30, 2001, approximately 58% of resort revenue was
generated from non-room sources. In addition, these luxury
amenities and services allow the Company to maintain premium
pricing for its rooms.

The resorts conference facilities and other
amenities make them attractive locations for group functions.
The conference facilities include over 235,000 square feet of
conference space. The Company maintains its own in-house
planning and logistics capabilities that allow sales and
marketing personnel to market multiple resort locations to
corporate and association groups that prefer to change
conference locations from year to year.

The Company continues to expand and develop the
Premier Club concept, which was first introduced in 1991 at the
Boca Raton Resort and Club. Membership in the Boca Raton Resort
Premier Club allows Premier Club members access to the
Boca Raton Resort and Club grounds, restaurants, recreational
facilities and other private social functions, which are
otherwise restricted to resort guests. The Boca Raton Resort
Premier Club currently requires an initial membership fee of
$50,000 and annual social dues starting at $3,150. Additional
dues are required for members who wish to use the resorts
golf and tennis facilities. In addition, Premier Club members
generate revenue through the use of existing resort facilities
and services, which are available on a fee-for-use basis. The
Company opened Grande Oaks Golf Club in June 1999 and Naples
Grande Golf Club in February 2000 offering members and guests of
the Companys Fort Lauderdale and Naples resorts play at
these championship golf facilities as well as reciprocal
amenities to the Boca Resort Premier Club member. The Company
currently charges $33,500 and $30,000 for membership initiation
fees at Grande Oaks Golf Club and Naples Grande Golf Club,
respectively, and annual golf dues of $5,356 and $4,700 at
Grande Oaks Golf Club and Naples Grande Golf Club, respectively.

3



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Additional information relating to the
Companys resorts, including renovations and distinctions,
is set forth below.

Boca Raton Resort and Club



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Renovations/Expansion.In fiscal 2002, the Company is expected to complete construction
	of a new marina wing and additional marina slips. The
	eight-story marina wing complex will consist of 112 water-view
	luxury guestrooms and additional meeting space. Also in fiscal
	2002, the Company is expected to complete a new state-
	of-the-art 40,000 square foot spa complex and a new golf
	clubhouse and casual restaurant. In 2000, the Company opened a
	new Tuscan-style restaurant and added retail space. In 1999, the
	Company completed a parking facility, a chiller plant and
	commenced activity on an accelerated room renovation, which is
	expected to encompass most of the 963 luxury guestrooms and be
	concluded in December 2001. In January 1998, the Company
	completed a new 140,000 square foot conference facility, a
	state-of-the-art tennis and fitness center complex and a new
	Bates-designed 18-hole golf course, replacing one of its
	previous 18-hole golf courses. The completion of the conference
	center allows the Boca Raton Resort and Club to accommodate more
	than one large group at a time, resulting in better occupancy of
	it luxury guestrooms.
|
| |  | Distinctions.Boca
	Raton Resort and Club has been awarded the Readers Award
	as one of the Top Hotels in North America by Travel
	& Leisure magazine in 2001, received Meetings and
	Conventions Gold Key Award in 2001 and Corporate Meetings and
	Incentives Paragon Award in 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

Registry Resort at Pelican Bay



| |   |                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Renovations/Expansion.The Company added 6,000 square feet of flexible meeting space at
	the Registry Resort providing it with the largest meeting venue
	in the Naples market. The Company also completed a new pool
	complex with private cabana rentals and beach improvements.                                         
|
| |  | Distinctions.Registry Resort received AAAs Four Diamond Award and been
	named to Zagats Top 10 Resorts in Florida every year
	since 1988, was named among the Top 100 Worlds Best
	Resorts in the Continental U.S. by Travel & Leisure magazine
	in 2000 and received Meetings and Conventions Gold Key Award in
	2000.

Edgewater Beach Hotel



| |   |                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Renovations/Expansion.Edgewater Beach Hotel is expected to complete a room renovation
	in December 2001.                                                                                                           
|
| |  | Distinctions.Edgewater Beach Hotel has consistently received the AAAs
	Four Diamond Award and has been featured in Resorts and Great
	Hotels and named to Conde Nast Travelers Best Places to
	Stay in the World.

Hyatt Regency Pier 66 Hotel and
Marina



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Renovations/Expansion.Hyatt Regency Pier 66 completed an $8.4 million
	renovation of its guestrooms in November 1998.                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Distinctions.In
	2001, the general manager of Hyatt Regency Pier 66 was
	named General Manager of the Year by the Florida Hotel and Motel
	Association and was named United States General Manager of the
	Year for an Outstanding Medium Sized Property by the American
	Hotel and Lodging Association. In addition, Hyatt Regency
	Pier 66 has consistently received the AAAs Four
	Diamond Award, Successful Meetings Magazines Pinnacle
	Award in 2000 and Meetings and Conventions Gold Key Award in
	2000.
|
| |  | Franchise Agreement.Upon the acquisition of Hyatt Regency Pier 66, the Company
	assumed the rights under a 20-year franchise agreement with
	Hyatt Franchise Corporation. The Hyatt franchise agreement
	terminates in November 2014. The Hyatt franchise agreement
	provides for the payment of                                                                                                                                                                                                                  

4



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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | monthly royalty fees equal to 5% of gross room
	revenue. The Hyatt franchise agreement also provides for the
	payment to Hyatt of certain Hyatt allocable chain
	expenses relating to sales and marketing costs based on
	the total number of guestrooms at Hyatt Regency Pier 66
	compared to the average number of guestrooms in all Hyatt hotels
	in the United States, and the Hyatt franchise agreement provides
	for the payment of a fee for using the Hyatt reservation system.
	The Hyatt franchise agreement requires that Hyatt Regency
	Pier 66 maintain a reserve, equal to 4% of gross room
	revenue, for replacement of furniture, fixtures and equipment
	and for those repairs and maintenance costs that are
	capitalizable under generally accepted accounting principles.
	The franchise agreement requires significant renovations of
	guestrooms, corridors and other public areas every five to six
	years. The replacement of other furniture, fixtures and
	equipment, as defined in the agreement, is required every 10 to
	12 years.

Radisson Bahia Mar Resort and Yachting
Center



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Renovations/Expansion.Radisson Bahia Mar completed a comprehensive room renovation in
	2000.                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Distinctions.Radisson Bahia Mar has consistently received the Mobil Travel
	Guides Three Star Award and the AAAs Three Diamond
	Award and was previously awarded the Radisson Hotels Worldwide
	Presidents Award and the Anchor Award presented by Marine
	Industries Association of South Florida. Each Fall, the Radisson
	Bahia Mar marina is host to the International Boat Show, an
	annual six-day boating and marine event, which is believed to be
	the worlds largest in-water boat show.
|
| |  | License Agreement.Upon the acquisition of Radisson Bahia Mar, the Company assumed
	the rights under the Radisson license agreement with Radisson
	Hotels International, Inc., which expires in July 2004. The
	terms of the Radisson license agreement allow the Company to
	operate the hotel using Radissons proprietary hotel
	management system. Annual fees payable to Radisson pursuant to
	the Radisson license agreement are 5% of gross room sales.                                         
|
| |  | Leases.The site of
	the resort is subject to a land lease that expires in 2062.                                                                                                                                                                                                                                                                                                                                                                                                                       

In addition to the resort properties discussed
above, the Company also owns Grande Oaks Golf Club and Naples
Grande Golf Club. Grande Oaks Golf Club was formerly known as
Rolling Hills Golf Club, site of the hit comedy Caddy
Shack. The property now features a redesigned 18-hole
championship golf course designed by Raymond Floyd, a 35-acre,
newly designed practice facility and a newly constructed
clubhouse. Naples Grande Golf Club, which opened in February
2000, was designed by golf architect Rees Jones. He created an
optimum environment for golfers, relying on the natural
surroundings and existing foliage.

Customers and Marketing

The core customer base for the Companys
business consists of corporate and other group customers,
affluent local residents, upscale leisure travelers and
individual business travelers. The Companys marketing
efforts involve (1) use of a sales force to develop
national corporate and other group business for the resort
facilities by focusing on identifying, obtaining and maintaining
corporate and other group accounts whose employees conduct
business nationwide, and (2) the use of advertisements that
target individual business travelers and upscale leisure
travelers in magazines such as Conde Nast Traveler, Travel and
Leisure, Travel Weekly and Meetings and Conventions as well as
newspapers such as The New York Times. The Companys
franchised resorts also benefit from the strong distribution
resulting from the national reservation systems of the
franchisors of the Hyatt and Radisson brands. The Company
continues to focus on expanding its Internet presence and sales
capabilities to increase revenue and improve customer service.
In addition, the Company is enhancing its marketing efforts by
integrating the Companys proprietary customer databases,
in order to sell additional products and services to existing
customers, improve occupancy rates and create additional
marketing opportunities.

5



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##### 



Competition

The resort and hotel industry is highly
competitive. Competitive factors include room rates, quality of
accommodations, service levels, convenience of location,
reputation, reservation systems, name recognition, and
availability of alternative resort and hotel operations in local
markets. While some of the Companys competitors are
private management firms, several are large national and
international chains that own and operate hotels or manage
hotels owned by third parties. A variety of brands compete
directly with the Company.

Insurance

The Company maintains comprehensive insurance on
its properties, including liability, business interruption, fire
and extended coverage including windstorm and flood, in the
types and amounts management believes are customary for the
resort and hotel industry. Management uses its discretion in
determining amounts, coverage limits and deductibility
provisions of insurance, with a view to obtaining appropriate
insurance on its properties at a reasonable cost and on suitable
terms. This may result in insurance coverage that, in the event
of loss, might not be sufficient to pay the full current market
value of the property. In addition, in the event of such loss,
the insurance proceeds received by the Company might not be
adequate to restore its economic position.

Environmental Matters

Under various federal, state, and local
environmental laws and regulations, an owner or operator of real
property may be liable for the costs of removal or remediation
of certain hazardous or toxic substances on such real property,
as well as for the costs of complying with environmental laws
regulating on-going operations. In connection with the ownership
and operation of its properties, the Company may be potentially
liable for such costs. The Company has obtained Phase I
environmental site assessments for the real property on which
each of the resorts is located. In addition, Phase II
environmental assessments have been conducted at several
properties. Phase I assessments are intended to identify
existing, potential and suspected environmental contamination
and regulatory compliance concerns, and generally include
historical reviews of the property, reviews of certain public
records, preliminary visual investigations of the site and
surrounding properties and the preparation and issuance of
written reports. Phase II assessments involve the sampling
of environmental media, such as subsurface soil and groundwater,
to confirm whether contamination is present at areas of concern
identified during the course of a Phase I assessment.

The Phase I and Phase II assessments have not
revealed any environmental liability or compliance concerns that
management believes would have a material adverse effect on the
business, nor is management aware of any such material liability
or concern. Phase I and Phase II assessments cannot
provide full and complete knowledge of environmental conditions
and compliance matters. Therefore, management cannot assure you
that: (1) material environmental liabilities or compliance
concerns do not exist; (2) an identified matter that does
not appear reasonably likely to be material will not result in
significantly greater expenditures than is currently
anticipated; or (3) there are no material environmental
liabilities or compliance concerns of which management is
unaware.

Employees

At June 30, 2001, the Company employed 3,334
full-time and 392 part-time employees in connection with its
leisure and recreation business. In addition, the Company
employs 15 corporate administrative personnel. None of the
employees are subject to any collective bargaining agreement and
the Company believes that its relationship with its employees is
good.

Seasonality

The Companys revenue and income are
seasonal in nature and are directly affected by the strength and
seasonality of the tourism and leisure industry. Tourism is
dependent upon weather and the traditional seasons for travel.
Because of this variability in demand, the Companys
revenue fluctuates quarter-to-quarter, and

6



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##### 



revenue for the first quarter of each year can be
expected to be lower than the remaining quarters. Although
historically the trend in quarterly revenue for the second,
third and fourth quarters of each year is generally higher than
the first quarter, there can be no assurance that this will
occur in future periods. Accordingly, quarterly or other interim
results should not be considered indicative of results to be
expected for any quarter or for the full year.


Trademarks

The Company has registered trademarks and service
marks, some of which, including several relating to the Boca
Resort name, are of material importance to the Companys
business. The Companys other related marks, while
valuable, are not material to its business. Trademarks are valid
as long as they are in use and/or their registrations are
properly maintained and they have not been found to be generic.
The Company presently uses two national trade names for two of
its resorts pursuant to licensing arrangements with national
franchisors. The duration for use pursuant to the licensing
arrangements is disclosed under Franchise Agreement
and License Agreement.

Disposition Opportunities and Discontinued
Operations

Management periodically reviews the
Companys business with the view to identifying properties
or other assets that no longer complement its operations. On
July 25, 2001, the Company sold its entertainment and
sports business after a thorough examination of its strategic
relationship to the core leisure and recreation operations. The
purchase price for the business, which incorporated certain
working capital adjustments, consisted of $83.5 million in cash,
an $11.2 million secured promissory note and the assumption by
the purchasers of certain off-balance sheet contingencies
including a $10 million construction obligation secured by a
performance bond. The net proceeds from the sale of the business
after payment of disposal costs and income taxes is estimated to
be between $67.0 million and $69.0 million, and the gain on
disposition, which will be recorded during the three months
ended September 30, 2001, is estimated to be between $23.0
million and $25.0 million. Accordingly, the Companys
entertainment and sports business has been accounted for as
discontinued operations and the accompanying Consolidated
Financial Statements presented herein have been restated to
report separately the net assets and liabilities and operating
results of this discontinued operation.

On December 22, 2000, the Company executed a
definitive agreement and closed on the sale of the Arizona
Biltmore Resort & Spa for $335.0 million, plus certain
working capital adjustments. The Company received $283.0 million
in gross cash proceeds and the buyer of the property assumed
$59.4 million in indebtedness. The net proceeds from the asset
sale amounted to $279.0 million and was substantially used to
repay indebtedness.

Risk Factors

The business, financial condition, results of
operations and future prospects of the Company, and the
prevailing market price and performance of the Companys
Class A Common Stock, may be adversely affected by a number
of factors, including the matters discussed below. Such factors,
among other items, include:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company faces risks relating to
	travel.The Companys customers
	consist of corporate and other group customers, upscale leisure
	travelers and individual business travelers, many of which are
	dependent upon commercial airlines as a primary means of
	transportation. A change in travel patterns resulting from
	slowing economic conditions, a change in corporate policies
	relating to group meetings, air or other travel disruption,
	third party increases in travel costs or disruption caused by
	natural disaster, war or political unrest could have a material
	adverse effect on the Companys financial condition and
	results of operations.
|
| | The Company faces a variety of risks
	associated with operating resorts.The
	Company may encounter risks common to the operations of resorts,
	including over-building (which may lower room rates), increases
	in operating costs due to inflation or other factors and
	decreases in revenue due to moderate or severe economic
	downturns. The Company may also face risks relating to the
	concentration                                                                                                                                                                                                                                                         

7



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | of the resorts in South Florida. Any of these
	risks could have a material adverse effect on the Companys
	financial condition or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | The Company may make significant capital
	expenditures to further develop the resorts and these
	expenditures involve risks.The
	Companys growth strategy contemplates expanding the
	infrastructure at certain of its resorts or expanding its
	presence within one or more markets. The resorts may also need
	periodic renovations or other capital improvements to keep them
	well maintained and competitive. Unexpected excessive costs of
	any expansion or needed renovation or capital improvements could
	have a material adverse effect on the Companys financial
	condition or results of operations. Also, any capital
	expenditure for expansion, renovation or improvement of the
	resorts may not generate the financial returns expected. Such
	capital expenditures could involve certain risks, including the
	possibility of environmental problems; the possibility that cash
	to fund renovations will not be available or that financing for
	renovations will not be available on favorable terms;
	uncertainties as to market demand or deterioration in market
	demand after commencement of renovations; the emergence of
	unanticipated zoning and regulatory requirements; so called
	acts of God such as hurricanes that could adversely
	impact a project and competition from other resorts, hotels and
	alternative lodging facilities.
|
| | The Company may need to make substantial
	capital expenditures in order to comply with the Americans with
	Disabilities Act.The resorts and
	other properties are subject to the requirements of the
	Americans with Disabilities Act (the ADA), which
	generally requires that public accommodations be made accessible
	to disabled persons. Management believes that the resorts and
	other properties are in substantial compliance with the ADA and
	that the Company will not be required to make substantial
	capital expenditures to address the requirements of the ADA.
	However, compliance with the ADA could require removal of access
	barriers and noncompliance could result in the imposition of
	fines by the federal government or the award of damages to
	private litigants. If the Company were required to make
	substantial alterations in one or more of the resorts or the
	other properties in order to comply with the ADA, its
	financial condition and results of operations could be adversely
	affected.                                                                                                                                                                                                                                                                                                                                 
|
| | The Company may become subject to liabilities
	under environmental laws.Operating
	costs may be affected by the obligation to pay for the cost of
	complying with existing environmental laws, ordinances and
	regulations, including the cleanup of contamination, as well as
	the cost of complying with future legislation. In connection
	with the acquisition of the resorts and other properties,
	Phase I, and in some instances Phase II, environmental
	site assessments were obtained in order to evaluate potential
	environmental liabilities at these properties. Although these
	assessments have identified certain matters that will require
	the Company to incur costs to remedy, based on current
	information, none of these matters appears likely to have a
	material adverse effect on the business, assets, results of
	operations or liquidity. However, because these assessments
	cannot give full and complete knowledge of environmental
	liability and compliance matters, management cannot assure you
	that the costs of complying with environmental laws and of
	defending against claims of liability arising under
	environmental laws will not have a material adverse effect on
	the financial condition and results of operations.                                                                                                   
|
| | The Companys resort business is
	seasonal.The resort operations are
	generally seasonal. The resorts historically experience greater
	revenue, costs and profits in the second and third quarters of
	the fiscal year ended June 30 due to increased occupancy
	and room rates during the winter months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | The Company competes for
	customers.The hotel and leisure
	industry is highly competitive. The Companys properties
	compete for customers with other hotel and resort properties,
	and, with respect to its Premier Club, with other operators of
	social clubs and golf courses. Some of the Companys
	competitors may have substantially greater marketing and
	financial resources and they may improve their facilities,
	reduce their prices or expand or improve their marketing
	programs in ways that adversely affect the Companys
	operating results.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | The Companys financing agreements limit
	operating flexibility.Certain of the
	Companys loan agreements restrict, among other things, the
	ability to borrow money; pay dividends on stock or make certain
	other restricted payments; use assets as security in other
	transactions; make investments; enter into certain transactions
	with the affiliates; and sell certain assets or merge with other
	companies. These                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

8



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | debt instruments also require the Company to
	maintain specified consolidated financial ratios and satisfy
	certain consolidated financial tests. Although management is
	confident that the Company will satisfy all of these
	requirements, the Companys ability to meet those financial
	ratios and financial tests may be affected by events beyond its
	control, and management cannot assure you that the Company will
	meet those tests.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | Control by H. Wayne
	Huizenga.The Company has two classes
	of common stock, Class A Common Stock and Class B
	Common Stock. On each matter submitted for stockholder approval
	each share of Class A Common Stock is entitled to one vote,
	and each share of Class B Common Stock is entitled to
	10,000 votes. As of June 30, 2001, Mr. Huizenga, the
	Companys Chairman, beneficially owned voting stock of the
	Company with the power to vote approximately 98.5% of the total
	votes entitled to be cast on any matter submitted to a vote of
	stockholders. As the sole owner of Class B Common Stock,
	Mr. Huizenga has the ability to indirectly control the
	management and policies as well as the outcome of substantially
	all non-extraordinary matters submitted to the stockholders for
	approval, including the election of directors.                                                                                                                                                                                                                                                                                                                                                    
|
| | Nothing in the charter or bylaws restricts the
	transfer of Class B Common Stock. As a result,
	Mr. Huizenga may sell his controlling interest without the
	approval of the holders of Class A Common Stock and
	Mr. Huizenga may receive a substantial premium price for
	selling his controlling interest in the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | The Company depends on key
	personnel.For the foreseeable future,
	the Company will be materially dependent on the services of
	Mr. Huizenga. The loss of Mr. Huizengas services
	could have a material adverse effect on the business. The
	Company does not carry key man life insurance on
	Mr. Huizenga or on any of the officers or directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | The Company may face a variety of risks if it
	enters into business acquisitions, joint ventures and/or
	divestitures in the future.The
	Company may pursue acquisitions of resort-related or other types
	of businesses. In addition, the Company may pursue joint
	ventures and/or divestitures in the future. The Companys
	success will depend upon the ability to identify and finance
	attractive alternative business acquisitions, ventures and/or
	divestitures. The risks related to acquisitions, joint ventures
	and/or divestitures include: potential diversion of management;
	unanticipated liabilities or contingencies from acquired
	businesses or ventures; environmental and other regulatory
	costs; suitability of a joint venture partner; increased
	interest costs and costs related to integration of acquisitions;
	integrating the businesses that the Company acquires; need to
	manage growth of acquired businesses or joint ventures;
	potential corporate reorganization and reallocation of resources
	due to divestitures and potential one-time losses on
	divestitures.                                                                                              
|
| | The Company may seek additional
	financing.Management believes that
	the cash flow from operations, together with cash received from
	the sale of the entertainment and sports business, will be
	sufficient to finance the business operations, meet the debt
	obligations and fund the short-term growth strategy of the
	Company. However, management cannot assure you that the business
	will generate the level of cash flow from operations that it
	expects or that future borrowings under credit facilities will
	be available to the Company. If the plans or assumptions change
	or if the Company experiences unanticipated costs or competitive
	pressures, or if the Company cannot reduce its cost of borrowing
	or increase its borrowing base it may seek additional capital.
	Management believes the Company can obtain additional capital by
	selling debt (provided certain incurrence tests are met pursuant
	to existing debt agreements) or equity securities and/or by
	borrowing money, although no assurances can be provided that it
	will be able to do so. If additional capital is not obtained
	when it is needed, this may have a material adverse effect on
	the Company.

Item 2.     Properties

The Companys corporate headquarters are
located at the Boca Raton Resort and Club. The Company considers
its resorts to be leading establishments with respect to
desirability of location, size of facilities, physical
condition, quality and variety of services offered in the areas
in which they are located. See further

9



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description of properties under
Business. Certain of the Companys resorts
serve as security under a revolving credit facility. See Note 8
to the Consolidated Financial Statements included elsewhere
herein.


Item 3.     Legal
Proceedings

The Company is not involved in any material legal
proceedings. However, the Company may from time to time become a
party to legal proceedings arising in the ordinary course of
business, which are incidental to its business.

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

None.

10



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##### 



PART II

Item 5.     Market
for the Registrants Common Equity and Related Stockholder
Matters

The Class A Common Stock began trading on
The Nasdaq National Market on November 13, 1996 under the
symbol PUCK. On July 11, 1997, the Class A
Common Stock began trading on the New York Stock Exchange
(NYSE) under the symbol PAW. On
September 29, 1999, the Class A Common Stock began
trading on the NYSE under the symbol RST. The
following table sets forth, for the periods indicated, the range
of the high and low sales prices per share for the Class A
Common Stock.

|                                  |  |                        |         |     |  |   |         | 
|--------------------------------- |  | ---------------------- | ------- | --- |  | - | ------- | 
|                                  |  |                       
|                                  |  | Price Range of Class A
|                                  |  | Common Stock          
|                                  |  |                       
|                                  |  | High                   |         | Low
|                                  |  |                        |         |    
|Fiscal Year Ended June 30,
	2001: |  |                        |         |     |  |   |         | 
|First Quarter                     |  | $                      | 12.1250 |     |  | $ | 9.5625  | 
|Second Quarter                    |  |                        | 15.6875 |     |  |   | 10.7500 | 
|Third Quarter                     |  |                        | 14.3750 |     |  |   | 11.3300 | 
|Fourth Quarter                    |  |                        | 14.7300 |     |  |   | 10.8500 | 
|Fiscal Year Ended June 30,
	2000: |  |                        |         |     |  |   |         | 
|First Quarter                     |  | $                      | 11.125  |     |  | $ | 8.6875  | 
|Second Quarter                    |  |                        | 10.750  |     |  |   | 8.5000  | 
|Third Quarter                     |  |                        | 9.875   |     |  |   | 7.6250  | 
|Fourth Quarter                    |  |                        | 9.875   |     |  |   | 8.2500  | 

On September 17, 2001, the last reported
sales price of the Class A Common Stock on The New York
Stock Exchange was $11.85. As of the same date, there were
approximately 9,100 holders of record of the Class A Common
Stock.

Since its inception, the Company has not paid any
cash dividends on the Class A Common Stock or the
Class B Common Stock. The Company does not intend to pay
any cash dividends with respect to its common stock in the
foreseeable future. Certain of the Companys credit
facilities restrict the ability of the Company to pay dividends.
See Managements Discussion and Analysis of Financial
Condition and Results of Operations  Liquidity and
Capital Resources.

11



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##### 



Item 6.  Selected Financial
Data

The financial data set forth below should be read
in conjunction with the Companys Consolidated Financial
Statements and Notes thereto contained in Part II, Item 8
of this Annual Report on Form 10-K. On July 25, 2001,
the Company sold its entertainment and sports business, which
primarily consisted of the operations of the Florida Panthers
Hockey Club and related arena management operations.
Accordingly, the Companys entertainment and sports
business has been accounted for as discontinued operations and
the accompanying selected financial data has been restated to
report separately the net assets and operating results of this
discontinued operation.

|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |         |         |  
|----------------------------------------------- | ------------------------------------------------------------------------------------ | ----------------------------------- | ------- | ------- | ----- | ---- | ------- | ------- | ------ | ------- | ------- | ------- | ----- | - | ------- | ------- | ----- | - | ------ | ------- | ------- | -
|                                                |                                                                                      |                                    
|                                                |                                                                                      | Year Ended June 30,                
|                                                |                                                                                      |                                    
|                                                |                                                                                      | 2001                                |         | 2000    |       | 1999 |         | 1998(1) |        | 1997(1)
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |        
|                                                |                                                                                      |                                    
|                                                |                                                                                      | In thousands, except per share data
|Statement of Operations Data:                   |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|Leisure and recreation revenue                  |                                                                                      | $                                   | 329,171 |         |       | $    | 361,360 |         |        | $       | 327,001 |         |       | $ | 252,603 |         |       | $ | 17,567 |        
|Operating expenses:                             |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|                                                | Cost of leisure and recreation services                                              |                                     |         | 143,567 |       |      |         | 156,620 |        |         |         | 141,456 |       |   |         | 110,084 |       |   |        | 6,658   |        
|                                                | Selling, general and administrative expenses                                         |                                     |         | 89,624  |       |      |         | 98,731  |        |         |         | 94,856  |       |   |         | 81,300  |       |   |        | 6,929   |        
|                                                | Amortization and depreciation                                                        |                                     |         | 35,490  |       |      |         | 34,436  |        |         |         | 28,343  |       |   |         | 17,987  |       |   |        | 1,459   |        
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|                                                | Total operating expenses                                                             |                                     |         | 268,681 |       |      |         | 289,787 |        |         |         | 264,655 |       |   |         | 209,371 |       |   |        | 15,046  |        
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|                                                | Operating income                                                                     |                                     |         | 60,490  |       |      |         | 71,573  |        |         |         | 62,346  |       |   |         | 43,232  |       |   |        | 2,521   |        
|                                                | Interest and other income                                                            |                                     |         | 5,164   |       |      |         | 1,529   |        |         |         | 2,826   |       |   |         | 2,064   |       |   |        | 1,669   |        
|                                                | Interest and other expense                                                           |                                     |         | (47,150 | )     |      |         | (55,040 | )      |         |         | (55,377 | )     |   |         | (25,290 | )     |   |        | (1,192  | )      
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|                                                | Income from continuing operations before income
	taxes                               |                                     |         | 18,504  |       |      |         | 18,062  |        |         |         | 9,795   |       |   |         | 20,006  |       |   |        | 2,998   |        
|                                                | Provision for income taxes                                                           |                                     |         | 4,724   |       |      |         | 805     |        |         |         | 1,300   |       |   |         |        |       |   |        |        |        
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|                                                | Income from continuing operations                                                    |                                     |         | 13,780  |       |      |         | 17,257  |        |         |         | 8,495   |       |   |         | 20,006  |       |   |        | 2,998   |        
|                                                | Loss from discontinued operations, net of income
	taxes                              |                                     |         | (8,862  | )     |      |         | (3,771  | )      |         |         | (436    | )     |   |         | (18,733 | )     |   |        | (13,258 | )      
|                                                | Extraordinary loss on early extinguishment of
	debt, net of benefit for income taxes |                                     |         | (1,236  | )     |      |         |        |        |         |         | (2,658  | )     |   |         |        |       |   |        |        |        
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|                                                |                                                                                      | Net income (loss)                   |         | $       | 3,682 |      |         | $       | 13,486 |         |         | $       | 5,401 |   |         | $       | 1,273 |   |        | $       | (10,260 | )
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|Basic and diluted net income (loss) per
	share: |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|                                                | Income from continuing operations                                                    |                                     | $       | 0.34    |       |      | $       | 0.42    |        |         | $       | 0.23    |       |   | $       | 0.57    |       |   | $      | 0.22    |        
|                                                | Loss from discontinued operations                                                    |                                     |         | (0.22   | )     |      |         | (0.09   | )      |         |         | (0.01   | )     |   |         | (0.53   | )     |   |        | (0.96   | )      
|                                                | Extraordinary loss on early extinguishment of debt                                   |                                     |         | (0.03   | )     |      |         |        |        |         |         | (0.07   | )     |   |         |        |       |   |        |        |        
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|                                                |                                                                                      | Net income (loss) per share         |         | $       | 0.09  |      |         | $       | 0.33   |         |         | $       | 0.15  |   |         | $       | 0.04  |   |        | $       | (0.74   | )
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|Other Data:                                     |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|EBITDA (2)                                      |                                                                                      | $                                   | 95,980  |         |       | $    | 106,009 |         |        | $       | 90,689  |         |       | $ | 61,219  |         |       | $ | 3,980  |        
|Membership fees deferred during the period(3)   |                                                                                      |                                     | 11,848  |         |       |      | 12,532  |         |        |         | 8,198   |         |       |   | 5,814   |         |       |   |       |        
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|Adjusted EBITDA (4)                             |                                                                                      | $                                   | 107,828 |         |       | $    | 118,541 |         |        | $       | 98,887  |         |       | $ | 67,033  |         |       | $ | 3,980  |        
|                                                |                                                                                      |                                     |         |         |       |      |         |         |        |         |         |         |       |   |         |         |       |   |        |        
|EBITDA margin(5)                                |                                                                                      |                                     | 29%     |         |       |      | 29%     |         |        |         | 28%     |         |       |   | 24%     |         |       |   | 23%    |        
|Adjusted EBITDA margin(6)                       |                                                                                      |                                     | 32%     |         |       |      | 32%     |         |        |         | 30%     |         |       |   | 26%     |         |       |   | 23%    |        
|Capital expenditures                            |                                                                                      | $                                   | 60,778  |         |       | $    | 63,090  |         |        | $       | 98,514  |         |       | $ | 50,736  |         |       | $ | 436    |        

12



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##### 



|                          |  |             |         |      |  |      |           |      |  |      |           |  |  |   |           |  |  |   |         | 
|------------------------- |  | ----------- | ------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | --------- |  |  | - | ------- | 
|                          |  |            
|                          |  | At June 30,
|                          |  |            
|                          |  | 2001        |         | 2000 |  | 1999 |           | 1998 |  | 1997
|                          |  |             |         |      |  |      |           |      |  |     
|Balance Sheet Data:       |  |             |         |      |  |      |           |      |  |      |           |  |  |   |           |  |  |   |         | 
|Cash and cash equivalents |  | $           | 9,909   |      |  | $    | 7,796     |      |  | $    | 7,926     |  |  | $ | 32,162    |  |  | $ | 6,484   | 
|Restricted cash           |  | $           | 500     |      |  | $    | 10,176    |      |  | $    | 31,686    |  |  | $ | 18,207    |  |  | $ | 30,110  | 
|Total current assets      |  | $           | 96,779  |      |  | $    | 106,802   |      |  | $    | 124,499   |  |  | $ | 130,740   |  |  | $ | 109,376 | 
|Total assets              |  | $           | 946,132 |      |  | $    | 1,271,115 |      |  | $    | 1,256,524 |  |  | $ | 1,092,835 |  |  | $ | 585,232 | 
|Total current liabilities |  | $           | 51,294  |      |  | $    | 135,108   |      |  | $    | 93,325    |  |  | $ | 373,801   |  |  | $ | 34,524  | 
|Total debt                |  | $           | 273,511 |      |  | $    | 583,195   |      |  | $    | 584,105   |  |  | $ | 540,626   |  |  | $ | 186,056 | 
|Non-current obligations   |  | $           | 409,195 |      |  | $    | 633,813   |      |  | $    | 672,919   |  |  | $ | 288,523   |  |  | $ | 249,555 | 
|Shareholders equity      |  | $           | 485,643 |      |  | $    | 502,194   |      |  | $    | 490,280   |  |  | $ | 430,511   |  |  | $ | 301,153 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company acquired substantially all of its
	properties comprising the leisure and recreation business during
	fiscal 1997 and 1998.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | EBITDA represents earnings before interest
	expense, interest income, income taxes, depreciation,
	amortization, extraordinary items and discontinued operations.
	EBITDA and Adjusted EBITDA (see below) are used by management
	and certain investors as indicators of the Companys
	historical ability to service debt, to sustain potential future
	increases in debt and to satisfy capital requirements. However,
	neither EBITDA nor Adjusted EBITDA is intended to represent cash
	flows for the period. In addition, they have not been presented
	as alternatives to either (a) operating income (as
	determined by GAAP) as an indicator of operating performance or
	(b) cash flows from operating, investing and financing
	activities (as determined by GAAP) and are thus susceptible to
	varying calculations. EBITDA as presented may not be comparable
	to other similarly titled measures of other companies.
|(3) | Represents the annual change in deferred revenue
	from the Companys Premier Clubs. The Premier Clubs
	currently require a non-refundable initial membership fee.
	Initial membership fees are recorded as revenue over the
	estimated life of the membership. Unrecognized portions of the
	initial membership fees are included in deferred revenue in the
	accompanying Consolidated Balance Sheets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(4) | Adjusted EBITDA represents EBITDA plus the amount
	of the Companys Premier Club net membership fees deferred
	during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(5) | EBITDA margin is defined as EBITDA divided by
	revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(6) | Adjusted EBITDA margin is defined as Adjusted
	EBITDA divided by the sum of revenue plus the Companys
	Premier Club net membership fees deferred during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

13



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##### 



Item 7. Managements Discussion
and Analysis of Financial Condition and Results of
Operations

The following discussion should be read in
conjunction with the Consolidated Financial Statements and Notes
thereto of the Company, which are included elsewhere herein.

Business Philosophy

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

Seasonality

The resort operations are generally seasonal. The
resorts historically experience greater revenue, costs and
profits in the second and third quarters of the fiscal year
ended June 30 due to increased occupancy and room rates
during the winter months.

Impact of Inflation

Inflation and changing prices have not had a
material impact on the Companys revenue and results of
operations. Based on the current economic climate, the Company
does not expect that inflation and changing prices will have a
material impact on the Companys revenue or earnings during
fiscal 2002. Many of the costs of operating the resorts can be
fixed for certain periods of time, reducing the short-term
effects of changes in the rate of inflation. Room rates, which
are set on a daily basis, can be rapidly changed to meet changes
in inflation rates (as well as other changing market
conditions). The Company has less flexibility in changing group
rates since guest reservations are typically made 12 to
36 months in advance of the stay. To the extent
inflationary trends affect short-term interest rates, a portion
of the Companys debt service costs may be adversely
affected. See Note 8 to the Consolidated Financial Statements.

Impact of Recently Issued Accounting
Standards

Statement of Financial Accounting Standard
(SFAS) No. 141, Business
Combinations prohibits the pooling method of accounting
for business combinations and requires business combinations to
be accounted for using the purchase method of accounting. The
requirements of this statement should be applied to business
combinations initiated after June 30, 2001. The Company
believes the adoption of SFAS No. 141 will not have a
material impact on its results of operations or financial
position.

SFAS No. 142, Goodwill and Other
Intangible Assets addresses financial accounting and
reporting for acquired goodwill and other intangible assets and
supercedes APB Opinion No. 17, Intangible
Assets. SFAS No. 142 addresses how intangible assets
that are acquired individually, or with a group of assets,
should be accounted for in financial statements upon their
acquisition. It also addresses how goodwill and other intangible
assets should be accounted for after they have been initially
recognized in the financial statements. Under SFAS No. 142,
goodwill shall not be amortized. Goodwill shall be tested for
impairment at a level of reporting referred to as a reporting
unit. If the carrying amount of reporting unit goodwill exceeds
the implied fair value of that goodwill, an impairment loss
shall be recognized in an amount equal to that excess. The
provisions of this statement are required to be applied starting
with fiscal years beginning after December 15, 2001. Early
adoption is permitted for entities with fiscal years beginning
after March 15, 2001, provided that the first interim
financial statements have not previously been issued. This
statement is required to be applied at the beginning of an
entitys fiscal year and to be applied to all goodwill and
other intangible assets recognized in its financial statements
at that date. Impairment losses for goodwill and
indefinite-lived intangible assets that arise due to the initial
application of this statement (resulting from a transitional
impairment test) are to be reported as resulting from a change
in accounting principle. The Company is currently evaluating
whether it will early adopt the provisions of SFAS No. 142
and will not be able to determine the ultimate impact of this
statement on its results of operations or financial position
until such time as the Company applies its provisions.
Amortization of goodwill totaled $1.7 million for the year ended

14



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##### 



June 30, 2001, however, this is not intended
to be indicative of the expected impact on the Companys
future results of operations.


SFAS No. 143, Accounting for Asset
Retirement Obligations addresses financial accounting and
reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement
costs. SFAS No. 143 is effective for financial statements
issued for fiscal years beginning after June 15, 2002. The
Company believes the adoption of SFAS No. 143 will not have
a material impact on its results of operations or financial
position and will adopt such standards on July 1, 2002, as
required.

RESULTS OF
OPERATIONS  HISTORICAL COMPARISON

The accompanying table for the years ended
June 30 (expressed in 000s) is set forth on a
historical basis which includes operating results from the
Arizona Biltmore Resort & Spa (sold in December 2000) and
the entertainment and sports business (presented as a
discontinued operation and sold in July 2001).

|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |         |        |         | 
|-------------------------------------------------------------------------- | --------------------------------------------- | ---------------------- | ------------------------ | ------- | ------ | ------- | ------- | ------- | ------ | ------- | -------- | ------- | ------ | ------- | 
|                                                                           |                                               | 2001                   |                          | 2000    |        | 1999   
|                                                                           |                                               |                        |                          |         |        |        
|Leisure and recreation revenue                                             |                                               | $                      | 329,171                  |         |        | $       | 361,360 |         |        | $       | 327,001  |        
|Operating expenses:                                                        |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|                                                                           | Cost of leisure and recreation services       |                        |                          | 143,567 |        |         |         | 156,620 |        |         |          | 141,456 |       
|                                                                           | Selling, general and administrative expenses: |                        |                          |         |        |         |         |         |        |         |          |         |       
|                                                                           |                                               | Leisure and recreation |                          |         | 81,398 |         |         |         | 89,271 |         |          |         | 86,301 |        
|                                                                           |                                               | Corporate              |                          |         | 8,226  |         |         |         | 9,460  |         |          |         | 8,555  |        
|                                                                           | Amortization and depreciation:                |                        |                          |         |        |         |         |         |        |         |          |         |       
|                                                                           |                                               | Leisure and recreation |                          |         | 35,195 |         |         |         | 34,265 |         |          |         | 28,225 |        
|                                                                           |                                               | Corporate              |                          |         | 295    |         |         |         | 171    |         |          |         | 118    |        
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|                                                                           |                                               |                        | Total operating expenses |         |        | 268,681 |         |         |        | 289,787 |          |         |        | 264,655 | 
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|                                                                           | Operating income (loss):                      |                        |                          |         |        |         |         |         |        |         |          |         |       
|                                                                           |                                               | Leisure and recreation |                          |         | 69,011 |         |         |         | 81,204 |         |          |         | 71,019 |        
|                                                                           |                                               | Corporate              |                          |         | (8,521 | )       |         |         | (9,631 | )       |          |         | (8,673 | )      
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|                                                                           |                                               |                        | Total operating income   |         |        | 60,490  |         |         |        | 71,573  |          |         |        | 62,346  | 
|Interest and other income                                                  |                                               |                        | 5,164                    |         |        |         | 1,529   |         |        |         | 2,826    |        
|Interest and other expense                                                 |                                               |                        | (47,150                  | )       |        |         | (55,040 | )       |        |         | (55,377  | )      
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|Income from continuing operations before income
	taxes                     |                                               |                        | 18,504                   |         |        |         | 18,062  |         |        |         | 9,795    |        
|Benefit for income taxes                                                   |                                               |                        | 4,724                    |         |        |         | 805     |         |        |         | 1,300    |        
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|Income from continuing operations                                          |                                               |                        | 13,780                   |         |        |         | 17,257  |         |        |         | 8,495    |        
|Loss from discontinued operations, net of income
	tax benefit              |                                               |                        | (8,862                   | )       |        |         | (3,771  | )       |        |         | (436     | )      
|Extraordinary loss on early retirement of debt,
	net of income tax benefit |                                               |                        | (1,236                   | )       |        |         |        |         |        |         | (2,658   | )      
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|Net income                                                                 |                                               | $                      | 3,682                    |         |        | $       | 13,486  |         |        | $       | 5,401    |        
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|Net cash provided by operating activities                                  |                                               | $                      | 37,033                   |         |        | $       | 40,027  |         |        | $       | 71,590   |        
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|Net cash provided by (used in) investing
	activities                       |                                               | $                      | 222,347                  |         |        | $       | (36,913 | )       |        | $       | (115,445 | )      
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|Net cash provided by (used in) financing
	activities                       |                                               | $                      | (257,267                 | )       |        | $       | (3,244  | )       |        | $       | 19,619   |        
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|EBITDA (loss):                                                             |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|                                                                           | Leisure and recreation                        |                        | $                        | 104,206 |        |         | $       | 115,469 |        |         | $        | 99,244  |       
|                                                                           | Corporate                                     |                        |                          | (8,226  | )      |         |         | (9,460  | )      |         |          | (8,555  | )     
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|                                                                           |                                               |                        | Total                    |         | $      | 95,980  |         |         | $      | 106,009 |          |         | $      | 90,689  | 
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|Adjusted EBITDA (loss):                                                    |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|                                                                           | Leisure and recreation                        |                        | $                        | 116,054 |        |         | $       | 128,001 |        |         | $        | 107,442 |       
|                                                                           | Corporate                                     |                        |                          | (8,226  | )      |         |         | (9,460  | )      |         |          | (8,555  | )     
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        
|                                                                           |                                               |                        | Total                    |         | $      | 107,828 |         |         | $      | 118,541 |          |         | $      | 98,887  | 
|                                                                           |                                               |                        |                          |         |        |         |         |         |        |         |          |        

15



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Select operating data for the Companys
leisure and recreation business for the years ended June 30
is set forth below (in 000s except operating statistics):

|                                                         |                          |                                      |         |          |         |      |     |          |    |      |           |         |         |  |   |    |    |   |           |         |         | 
|-------------------------------------------------------- | ------------------------ | ------------------------------------ | ------- | -------- | ------- | ---- | --- | -------- | -- | ---- | --------- | ------- | ------- |  | - | -- | -- | - | --------- | ------- | ------- | 
|                                                         |                          | 2001                                 |         | % Change |         | 2000 |     | % Change |    | 1999
|                                                         |                          |                                      |         |          |         |      |     |          |    |     
|Revenue:                                                 |                          |                                      |         |          |         |      |     |          |    |      |           |         |         |  |   |    |    |   |           |        
|                                                         | Room revenue             |                                      | $       | 139,107  |         |      |     | (11      | )% |      | $         | 156,607 |         |  |   | 9  | %  |   | $         | 143,264 |        
|                                                         | Non-room related revenue |                                      |         | 190,064  |         |      |     | (7       | )% |      |           | 204,753 |         |  |   | 11 | %  |   |           | 183,737 |        
|                                                         |                          |                                      |         |          |         |      |     |          |    |      |           |         |         |  |   |    |    |   |           |        
|                                                         |                          | Total leisure and recreation revenue |         | $        | 329,171 |      |     |          | (9 | )%   |           | $       | 361,360 |  |   |    | 11 | % |           | $       | 327,001 | 
|Operating Statistics:                                    |                          |                                      |         |          |         |      |     |          |    |      |           |         |         |  |   |    |    |   |           |        
|Available room nights                                    |                          |                                      | 943,425 |          |         |      | (12 | )%       |    |      | 1,074,672 |         |         |  | 4 | %  |    |   | 1,036,453 |        
|ADR                                                      |                          | $                                    | 209.68  |          |         |      |    | %        |    | $    | 209.42    |         |         |  | 4 | %  |    | $ | 200.70    |        
|Occupancy                                                |                          |                                      | 70.3    | %        |         |      | 1   | %        |    |      | 69.6      | %       |         |  | 1 | %  |    |   | 68.9      | %      
|Room revenue per available room                          |                          | $                                    | 147.45  |          |         |      | 1   | %        |    | $    | 145.73    |         |         |  | 5 | %  |    | $ | 138.23    |        
|Total leisure and recreation revenue per
	available room |                          | $                                    | 348.91  |          |         |      | 4   | %        |    | $    | 336.25    |         |         |  | 7 | %  |    | $ | 315.50    |        

Resort Revenue

The leisure and recreation business generates a
diversified stream of revenue. Leisure and recreation revenue
totaled $329.2 million, $361.4 million and $327.0 million for
the years ended June 30, 2001, 2000 and 1999, respectively.
Non-room revenue, which represented over 56% of leisure and
recreation revenue for each period presented, was derived from
sources such as food and beverage sales, yachting and marina
revenue, golf revenue, club membership fees and dues, retail
sales and other resort amenities.

The decrease in leisure and recreation revenue
during the year ended June 30, 2001 compared to the year ended
June 30, 2000 followed a decrease in available room nights
due to the sale of the Arizona Biltmore Resort & Spa mid-way
through the fiscal year in December 2000. The decrease in
revenue resulting from the sale of the Arizona Biltmore Resort
& Spa was partially offset by an overall increase in revenue
derived from the Companys other resort properties. See
discussion of same store operating results under Results
of Operations  Pro Forma to Exclude the Arizona
Biltmore Resort & Spa later herein.

The increase in leisure and recreation revenue
during the year ended June 30, 2000 compared to the year ended
June 30, 1999 was the result of increases in ADR,
occupancy, along with total available rooms (due to the
completion of a 120 guestroom addition at the Arizona Biltmore
Resort & Spa in September 1999). In addition, non-room
revenue increased during this same period due, in part, to a
rise in revenue generated from the Companys exclusive
social club, known as the Premier Club.

Resort Operating Expenses

Cost of leisure and recreation services totaled
$143.6 million or 44% of revenue for the year ended
June 30, 2001, $156.6 million or 43% of revenue for the
year ended June 30, 2000 and $141.5 million or 43% of
revenue for the year ended June 30, 1999. Cost of leisure
and recreation services primarily consisted of direct costs to
service rooms, marinas, food and beverage operations, retail
establishments and other amenities at the resorts.

Selling, general and administrative expenses
(S,G&A) of the leisure and recreation business
totaled $81.4 million, or 25% of revenue during the year ended
June 30, 2001, $89.3 million or 25% of revenue during the
year ended June 30, 2000 and $86.3 million or 26% of revenue for
year ended June 30, 1999. S,G&A of the leisure and
recreation business primarily consisted of utility and property
costs, real estate taxes, insurance, franchise agreement fees
and administrative salaries and expenses.

Amortization and depreciation expense for the
leisure and recreation business totaled $35.2 million, $34.3
million and $28.2 million for the years ended June 30,
2001, 2000 and 1999, respectively. The increase in amortization
and depreciation expense during the year ended June 30,
2001 compared to the year ended June 30, 2000 was primarily
due to the completion of several capital projects at the Boca
Raton Resort and Club and Registry Resort resulting in
additional depreciation expense, offset by a $4.2 million
decrease in

16



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##### 



amortization and depreciation expense due to the
sale of the Arizona Biltmore Resort & Spa. The increase in
amortization and depreciation expense during the year ended
June 30, 2000 compared to the year ended June 30, 1999
was primarily due to the completion of several capital projects
including a 120 guestroom addition at the Arizona Biltmore
Resort and Spa, the redesign and construction at Grande Oaks
Golf Club and the development of Naples Grande Golf Club.


Resort Operating Income

Operating income for the leisure and recreation
business totaled $69.0 million, $81.2 million and $71.0 million
for the years ended June 30, 2001, 2000 and 1999,
respectively. The decrease in operating income for the leisure
and recreation business during the year ended June 30, 2001
compared to the year ended June 30, 2000 was due to a $17.6
million decline in operating income resulting from the sale of
the Arizona Biltmore mid-way through the fiscal year, offset by
an overall increase in operating income from the Companys
other resort properties. See discussion of same store operating
results under Results of Operations  Pro Forma to
Exclude the Arizona Biltmore Resort & Spa later
herein. The primary factors contributing to the improvement in
operating income for the leisure and recreation business during
the year ended June 30, 2000 compared to the year ended
June 30, 1999 were (1) an increase in non-room revenue
(2) an increase in ADR (3) an increase in rooms
available for occupancy due to the construction of additional
rooms at the Arizona Biltmore Resort & Spa and
(4) higher profit margins as a result of cost efficiencies
from business integration.

Corporate General and Administrative
Expenses

Corporate general and administrative expenses
totaled $8.2 million, $9.5 million and $8.6 million for the
years ended June 30, 2001, 2000, and 1999, respectively.
The decrease in corporate general and administrative expenses
during the year ended June 30, 2001 compared to the year
ended June 30, 2000 was primarily because of a decline in
legal expense and because of a decrease in the management fee,
equal to 1% of total revenue, payable to Huizenga Holdings,
Inc., a corporation whose sole shareholder is the Companys
Chairman. Pursuant to the management services agreement,
Huizenga Holdings, Inc. provides certain administrative,
financing, tax, investor relations and strategy related services
to the Company. The decrease in total revenue during the year
ended June 30, 2001 compared to the year ended
June 30, 2000 was substantially due to the sale of the
Arizona Biltmore Resort & Spa as indicated above. The
increase in corporate general and administrative expenses during
the year ended June 30, 2000 compared to the year ended
June 30, 1999 was primarily due to an increase in certain
non-recurring legal fees and an increase in the management fee
that varies with the Companys total revenue.

Interest and Other Income

Interest and other income totaled $5.2 million,
$1.5 million, and $2.8 million for the years ended June 30,
2001, 2000 and 1999, respectively. The increase in interest and
other income during the year ended June 30, 2001 compared
to the year ended June 30, 2000 was because the Company
invested proceeds from the sale of the Arizona Biltmore Resort
& Spa in interest bearing time deposit accounts until such
proceeds were used to reduce higher rate indebtedness. See
discussion of interest and other expense to follow. The decrease
in interest and other income during the year ended June 30,
2000 compared to the year ended June 30, 1999 was because
the Company recognized less interest income due to a decline in
interest bearing cash on hand.

Interest and Other Expense

Interest and other expense totaled $47.2 million,
$55.0 million and $55.4 million for the years ended
June 30, 2001, 2000 and 1999, respectively. The
Companys average cost of borrowing was 10.0%, 10.0% and
10.7% for the years ended June 30, 2001, 2000 and 1999,
respectively. The Companys average outstanding
indebtedness was $472 million, $550 million and $518 million for
the years ended June 30, 2001, 2000 and 1999, respectively.
The decrease in the average outstanding indebtedness during the
year ended June 30, 2001 compared to the year ended
June 30, 2000 was primarily because the Company reduced
debt during the second half of its fiscal year with the proceeds
from the sale of the Arizona Biltmore Resort & Spa. As of

17



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##### 



June 30, 2001, the Companys
indebtedness has been reduced to $273.5 million. The increase in
the average outstanding indebtedness during the year ended
June 30, 2000 compared to the year ended June 30, 1999
was primarily because the Company financed certain capital
expenditures associated with resort expansion.


EBITDA

EBITDA represents earnings before extraordinary
items, interest expense, interest income, income taxes,
depreciation and discontinued operations. EBITDA totaled $96.0
million, $106.0 million, and $90.7 million during the years
ended June 30, 2001, 2000, and 1999 respectively. The
decrease in EBITDA during the year ended June 30, 2001 over
the prior year period was primarily the result of the sale of
the Arizona Biltmore in December 2000, partially offset by an
increase in revenue and profits derived at the Companys
other resort properties. See discussion of same store operating
results under Results of Operations  Pro Forma to
Exclude the Arizona Biltmore Resort & Spa later
herein. The increase in EBITDA during the year ended
June 30, 2000 over June 30, 1999 was substantially
attributable to better operating results (including stronger
profit margins) for the leisure and recreation business. EBITDA
and Adjusted EBITDA (see below) are used by management and
certain investors as indicators of the Companys historical
ability to service debt, to sustain potential future increases
in debt and to satisfy capital requirements. However, neither
EBITDA nor Adjusted EBITDA is intended to represent cash flows
for the period. In addition, they have not been presented as
alternatives to either (a) operating income (as determined
by GAAP) as an indicator of operating performance or
(b) cash flows from operating, investing and financing
activities (as determined by GAAP) and are thus susceptible to
varying calculations. EBITDA as presented may not be comparable
to other similarly titled measures of other companies.

Adjusted EBITDA

Adjusted EBITDA represents EBITDA plus the amount
of net membership fees deferred during the periods presented.
The net membership fees deferred represents the annual change in
deferred revenue arising from the Premier Clubs at the Boca
Raton Resort and Club, Naples Grande and Grande Oaks Golf Clubs.
Net memberships deferred totaled $11.8 million, $ 12.5 million,
and $8.2 million during the years ended June 30, 2001,
2000, and 1999 respectively. The Company opened Naples Grande
Golf Club in February 2000, which resulted in strong
introductory membership sales during the year ended
June 30, 2000.

Discontinued Operations

The Company sold its entertainment and sports
business in July 2001. Accordingly, the operations have been
accounted for as discontinued operations. The losses from
discontinued operations were $8.9 million, $3.8 million and
$436,000, for the years ended June 30, 2001, 2000 and 1999,
respectively. The figures for the year ended June 30, 2001
and June 30, 2000 are net of a $5.4 million and $805,000
benefit for income taxes, respectively. The figure for the year
ended June 30, 1999 is net of a provision for income taxes
of $329,000. The decrease in operating results before income
taxes during the periods presented was primarily due to a
decline in average paid attendance at Panther home games and
higher players salaries.

A portion of the Companys interest expense
has been allocated to discontinued operations based upon its
average borrowing cost and the average funds the discontinued
operations borrowed from the parent. Certain selling, general
and administrative expenses incurred by the Company have been
allocated to discontinued operations based upon the specific
identification method.

Extraordinary Loss on Early Extinguishment of
Debt, Net of Income Tax Benefit

During the year ended June 30, 2001 the
Company repurchased $67.0 million principal amount of its 9.875%
senior subordinated notes payable and recognized an
extraordinary loss of $2.0 million (or $1.2 million, net of a
benefit for income taxes). The extraordinary loss substantially
represents the non-cash charge-off of a pro rata portion of the
debt issuance costs previously capitalized when the notes were
issued.

18



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##### 



During the year ended June 30, 1999, the
Company charged to operations debt issuance costs relating to
certain extinguished debt and recognized a $4.3 million
extraordinary loss (or $2.7 million, net of a benefit for income
taxes).

RESULTS OF OPERATIONS  PRO
FORMA TO EXCLUDE THE ARIZONA BILTMORE RESORT & SPA

The accompanying table for the years ended
June 30 (expressed in 000s) and related discussion is
set forth on a pro forma basis, which excludes the operating
results from the Arizona Biltmore Resort & Spa, which was
sold in December 2000. Management believes the pro forma
information, which is supplemental to the historical discussion,
provides readers with a meaningful comparison to the previous
year.

|                               |                                               |                        |                          |         |        |         |         |         |        |         | 
|------------------------------ | --------------------------------------------- | ---------------------- | ------------------------ | ------- | ------ | ------- | ------- | ------- | ------ | ------- | 
|                               |                                               | 2001                   |                          | 2000   
|                               |                                               |                        |                          |        
|Leisure and recreation revenue |                                               | $                      | 289,315                  |         |        | $       | 267,744 |        
|Operating expenses:            |                                               |                        |                          |         |        |         |         |        
|                               | Cost of leisure and recreation services       |                        |                          | 126,892 |        |         |         | 121,062 |       
|                               | Selling, general and administrative expenses: |                        |                          |         |        |         |         |         |       
|                               |                                               | Leisure and recreation |                          |         | 70,784 |         |         |         | 66,024 |        
|                               |                                               | Corporate              |                          |         | 8,226  |         |         |         | 8,524  |        
|                               | Amortization and depreciation:                |                        |                          |         |        |         |         |         |       
|                               |                                               | Leisure and recreation |                          |         | 30,674 |         |         |         | 25,579 |        
|                               |                                               | Corporate              |                          |         | 295    |         |         |         | 118    |        
|                               |                                               |                        |                          |         |        |         |         |        
|                               |                                               |                        | Total operating expenses |         |        | 236,871 |         |         |        | 221,307 | 
|                               |                                               |                        |                          |         |        |         |         |        
|                               | Operating income (loss):                      |                        |                          |         |        |         |         |         |       
|                               |                                               | Leisure and recreation |                          |         | 60,965 |         |         |         | 55,079 |        
|                               |                                               | Corporate              |                          |         | (8,521 | )       |         |         | (8,642 | )      
|                               |                                               |                        |                          |         |        |         |         |        
|                               |                                               |                        | Total operating income   |         | $      | 52,444  |         |         | $      | 46,437  | 
|                               |                                               |                        |                          |         |        |         |         |        
|EBITDA:                        |                                               |                        |                          |         |        |         |         |        
|                               | Leisure and recreation                        |                        | $                        | 91,639  |        |         | $       | 80,658  |       
|                               | Corporate                                     |                        |                          | (8,226  | )      |         |         | (8,524  | )     
|                               |                                               |                        |                          |         |        |         |         |        
|                               |                                               |                        | Total                    |         | $      | 83,413  |         |         | $      | 72,134  | 
|                               |                                               |                        |                          |         |        |         |         |        
|Adjusted EBITDA:               |                                               |                        |                          |         |        |         |         |        
|                               | Leisure and recreation                        |                        | $                        | 103,487 |        |         | $       | 93,190  |       
|                               | Corporate                                     |                        |                          | (8,226  | )      |         |         | (8,524  | )     
|                               |                                               |                        |                          |         |        |         |         |        
|                               |                                               |                        | Total                    |         | $      | 95,261  |         |         | $      | 84,666  | 
|                               |                                               |                        |                          |         |        |         |         |        

The increase in pro forma operating income during
the year ended June 30, 2001 compared to the year ended
June 30, 2000 was primarily due to improved leisure and
recreation business operating results arising from higher
revenue and slightly improved profit margins, partially offset
by an increase in depreciation expense. Specifically, both
consolidated EBITDA and Adjusted EBITDA margins improved two
percentage points during the year ended June 30, 2001
compared to the year ended June 30, 2000 because of growth
in revenue and certain efficiencies in direct room labor costs.
Additional information relating to the operating results of the
Companys business is set forth below.

19



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Select pro forma operating data for the
Companys leisure and recreation business for the year
ended June 30 is set forth below (in 000s except
operating statistics):

|                                                         |                          |                                      |         |         |         |          |         |         |         |  |   |   |   |  
|-------------------------------------------------------- | ------------------------ | ------------------------------------ | ------- | ------- | ------- | -------- | ------- | ------- | ------- |  | - | - | - | -
|                                                         |                          | 2001                                 |         | 2000    |         | % Change
|                                                         |                          |                                      |         |         |         |         
|Revenue:                                                 |                          |                                      |         |         |         |          |         |         |         |  |   |  
|                                                         | Room revenue             |                                      | $       | 122,943 |         |          | $       | 115,668 |         |  |   | 6 | %
|                                                         | Non-room related revenue |                                      |         | 166,372 |         |          |         | 152,076 |         |  |   | 9 | %
|                                                         |                          |                                      |         |         |         |          |         |         |         |  |   |  
|                                                         |                          | Total leisure and recreation revenue |         | $       | 289,315 |          |         | $       | 267,744 |  |   |   | 8 | %
|Operating Statistics:                                    |                          |                                      |         |         |         |          |         |         |         |  |   |  
|Available room nights                                    |                          |                                      | 817,337 |         |         |          | 819,840 |         |         |  |  | %
|Average daily rate                                       |                          | $                                    | 209.79  |         |         | $        | 201.08  |         |         |  | 4 | %
|Occupancy                                                |                          |                                      | 71.7    | %       |         |          | 70.2    | %       |         |  | 2 | %
|Room revenue per available room                          |                          | $                                    | 150.42  |         |         | $        | 141.09  |         |         |  | 7 | %
|Total leisure and recreation revenue per
	available room |                          | $                                    | 353.97  |         |         | $        | 326.58  |         |         |  | 8 | %

Pro forma Resort Revenue

Pro forma leisure and recreation revenue totaled
$289.3 million and $267.7 million during the years ended
June 30, 2001 and 2000, respectively. The leisure and
recreation business generates a diversified stream of revenue.
Pro forma non-room revenue, which represented 57% of leisure and
recreation revenue for each period presented, was derived from
sources such as food and beverage sales, yachting and marina
revenue, golf revenue, club membership fees and dues, retail
sales and other resort amenities. The increase in non-room
revenue during the year ended June 30, 2001 compared to the
year ended June 30, 2000 was primarily associated with
increases in golf related revenue at Naples Grande and Grande
Oaks Golf Clubs. As outlined above, the resort portfolio also
yielded increases in ADR and occupancy during the year ended
June 30, 2001 compared to the prior year periods. Increases
to ADR and occupancy were primarily attributable to an expanded
amenity base at the Companys resorts coupled with certain
room renovations. The decrease in available rooms nights during
the year ended June 30, 2001 versus the prior year period
was primarily because the prior year period included one
additional room night due to leap year.

Pro forma Resort Operating Expenses

Pro forma cost of leisure and recreation services
totaled $126.9 million, or 44% of pro forma revenue, during the
year ended June 30, 2001, compared to $121.1 million, or
45% of pro forma revenue, during the year ended June 30,
2000. Pro forma cost of services, as a percent of pro forma
revenue, decreased during the year ended June 30, 2001
compared to the prior year period primarily because of an
increase in ADR together with room labor cost efficiencies.

Pro forma S,G&A of the leisure and recreation
business totaled $70.8 million and $66.0 million during the
years ended June 30, 2001 and 2000, respectively, and was
25% of pro forma revenue for each of the periods presented
despite an increase in energy and insurance during the year
ended June 30, 2001. Pro forma S,G&A of the leisure and
recreation business includes, among other items, administrative
payroll costs, selling and marketing expenses, energy and
property costs, insurance, real estate taxes, franchise
agreement fees and other administrative expenses.

Pro forma amortization and depreciation expense
for the leisure and recreation business totaled $30.7 million
and $25.6 million during the years ended June 30, 2001 and
2000, respectively. The increase during the year ended
June 30, 2001 compared to the year ended June 30, 2000
was primarily due to the completion of several capital projects
at the Boca Raton Resort and Club and Registry Resort resulting
in additional depreciation expense.

Pro forma Resort Operating Income

Pro forma operating income for the leisure and
recreation business totaled $61.0 million and $55.1 million
during the years ended June 30, 2001 and 2000,
respectively. The increase in pro forma operating income during
the year ended June 30, 2001 compared to the year ended
June 30, 2000 was primarily the result of an

20



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##### 



increase in revenue and profit margins, partially
offset by additional depreciation expense associated with
recently completed capital projects.


Pro forma Corporate General and Administrative
Expenses

Pro forma corporate general and administrative
expenses totaled $8.2 million and $8.5 million during the years
ended June 30, 2001 and 2000, respectively. Pro forma
corporate general and administrative expenses decreased during
the year ended June 30, 2001 because certain non-recurring
legal fees were incurred during the year ended June 30,
2000.

Pro forma EBITDA

Pro forma EBITDA represents earnings before
extraordinary items, interest expense, interest income, income
taxes, depreciation and discontinued operations. Pro forma
EBITDA totaled $83.4 million and $72.1 million during the years
ended June 30, 2001 and 2000, respectively. The increase in
pro forma EBITDA during the year ended June 30, 2001 over
the prior year period was primarily due to an increase in
revenue and profit margins. See discussion of business segment
financial performance above for additional information on
comparative operating results. EBITDA and Adjusted EBITDA (see
below) are used by management and certain investors as
indicators of the Companys historical ability to service
debt, to sustain potential future increases in debt and to
satisfy capital requirements. However, neither EBITDA nor
Adjusted EBITDA is intended to represent cash flows for the
period. In addition, they have not been presented as
alternatives to either (a) operating income (as determined
by GAAP) as an indicator of operating performance or
(b) cash flows from operating, investing and financing
activities (as determined by GAAP) and are thus susceptible to
varying calculations. EBITDA as presented may not be comparable
to other similarly titled measures of other companies.

Pro forma Adjusted EBITDA

Pro forma Adjusted EBITDA represents EBITDA plus
the amount of net membership fees deferred during the periods
presented. The net membership fees deferred represents the
annual change in deferred revenue arising from the Premier Clubs
at the Boca Raton Resort and Club, Naples Grande and Grande Oaks
Golf Clubs. Net memberships deferred totaled $11.8 million and
$12.5 million during the years ended June 30, 2001and 2000,
respectively. The Company opened Naples Grande Golf Club in
February 2000, which resulted in strong introductory membership
sales during the year ended June 30, 2000.

Liquidity

Unrestricted cash and cash equivalents increased
to $9.9 million at June 30, 2001, from $7.8 million at
June 30, 2000 and $7.9 million at June 30, 1999. The
major components of the change are discussed below.

Net
Cash Provided by Operating Activities

Net cash provided by operating activities totaled
$37.0 million, $40.0 million and $71.6 million during the years
ended June 30, 2001, 2000 and 1999, respectively. The
decrease in cash flow from operations during the year ended
June 30, 2001 compared to the year ended June 30, 2000
was primarily the result of an increase of $9.8 million in
income taxes paid, partially offset by an increase in cash
derived from the leisure and recreation business. The income
taxes paid during 2001 included certain estimated quarterly tax
payments for fiscal 2001 as well as actual income taxes incurred
for fiscal 2000. Income taxes paid for fiscal 1999 were nominal
because the Company had available net operating losses to offset
taxable income for that year. The decrease in cash flow from
operations during the year ended June 30, 2000 compared to
the year ended June 30, 1999 was due to a combination of
factors including having an increase in accounts receivable for
the leisure and recreation business due to the timing of
collection on certain group contracts and incurring an increase
in cash paid for certain corporate professional fees (a
significant portion of such professional fees were accrued but
unpaid as of June 30, 1999).

21



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Net
Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities
amounted to $222.3 million during the year ended June 30,
2001 compared to cash used in investing activities of $36.9
million and $115.4 million during the years ended June 30,
2000 and 1999, respectively. The significant change was
primarily the result of the sale of the Arizona Biltmore Resort
& Spa during the year ended June 30, 2001, which
yielded net proceeds to the Company of $279.0 million.

Capital expenditures totaled $60.8 million, $63.1
million and $98.5 million during the years ended June 30,
2001, 2000 and 1999, respectively. During the year ended
June 30, 2001, capital spending at the Boca Raton Resort
and Club commenced on new projects including an eight-story
marina wing complex consisting of 112 water-view luxury
guestrooms, a spa complex, a golf clubhouse and marina slips, as
well as continued spending on room renovations, with 80% of the
guestrooms completed. In addition, at the Boca Raton Resort and
Club the Company completed a new Tuscan style restaurant and
retail pavilion, which opened in November 2000. During the year
ended June 30, 2001, the Company also completed a new
pool/aquatic center, 6,000 square feet of additional conference
space and enhancements to the beach facility and boardwalk at
the Registry Resort and renovated its 296 guestrooms at the
Bahia Mar Resort and Yachting Center.

During the year ended June 30, 2000, capital
spending primarily related to the construction of a guest
parking facility and commencement of a luxury guestroom
renovation at the Boca Raton Resort and Club, golf related
improvements at the Naples Grande golf course and the
acquisition of commercial property located near the
Companys Fort Lauderdale resorts.

During the year ended June 30, 1999, capital
spending related to continued development and construction at
Grande Oaks Golf Club, continued construction of a 120 guestroom
addition at the Arizona Biltmore Resort & Spa, the
acquisition of land in Naples and Plantation, Florida and other
recurring furniture, fixture and equipment improvements at the
resorts.

Restricted cash totaled $500,000, $10.2 million
and $31.7 million at June 30, 2001, 2000 and 1999, respectively.
The change in restricted cash primarily related to escrow
accounts maintained in accordance with the terms of
mortgage-note agreements, which notes were subsequently paid by
the Company.

Cash used in investing activities from
discontinued operations totaled $2.3 million during the year
ended June 30, 2001 and $3.5 million during the year ended
June 30, 1999. Cash provided by investing activities from
discontinued operations totaled $8.7 million during the year
ended June 30, 2000 and included a $10.5 million
termination fee pursuant to the termination of the Miami Arena
Contract, a portion of which was paid to vendors and outside
minority interest holders. See Note 14 to the Consolidated
Financial Statements included later herein.

Net
Cash Provided by (Used in) Financing Activities

Net cash used in financing activities totaled
$257.3 million and $3.2 million during the years ended
June 30, 2001 and 2000, respectively. Net cash provided by
financing activities totaled $19.6 million during the year ended
June 30, 1999. Cash flows for each period primarily
represent borrowings under credit facilities, net of the
repayment of indebtedness (including the repurchase of senior
subordinated notes) and sales/repurchases of Class A Common
Stock. During the year ended June 30, 2001 a substantial
amount of indebtedness was repaid, and Class A Common Stock
repurchased, using a portion of the proceeds from the sale of
the Arizona Biltmore Resort & Spa.

Capital Resources

The Companys capital resources are provided
from both internal and external sources. The primary capital
resources from internal operations include (1) room
rentals, food and beverage sales, retail sales, golf revenue,
tennis revenue, marina and conference services at the resorts
and (2) Premier Club memberships. The primary external
sources of liquidity have been the issuance of debt securities
and borrowing under term loans and credit lines.

22



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As of August 31, 2001, the Company had
immediate availability of $144.7 million under its revolving
credit line, which matures in April 2002. While management
expects to renew/replace its existing revolving credit line upon
maturity, no assurances can be given that management will be
successful in doing so. As a result of the current availability
under this credit line, combined with cash on hand due to the
sale of the entertainment and sports business in July 2001 which
is estimated to be between $67.0 million and $69.0 million and
expected cash from operations, management believes the Company
has sufficient funds to continue its capital maintenance and
expansion plans and support on-going operations, including
meeting debt service obligations as they come due.

Working Capital

Current assets exceeded current liabilities by
$45.5 million at June 30, 2001. Current liabilities
exceeded current assets by $28.3 million at June 30, 2000.
The improvement from June 30, 2000 to June 30, 2001
was primarily because the Company sold the Arizona Biltmore
Resort & Spa and received net proceeds of $279.0 million. A
portion of such proceeds was used to repay indebtedness.

Recent Events

On September 11, 2001, there were terrorist
attacks on New Yorks two World Trace Center towers as well
as the Pentagon, which involved the hijacking of four U.S.
commercial aircraft. Management is currently evaluating the
impact of these events on its near-term results of operations
and financial condition.

Forward Looking Statements

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

These risk factors have been previously described
and include, among others, the Companys ability to obtain
financing on acceptable terms to meet operating expenses and
finance its growth, competition in the Companys principal
businesses, the Companys ability to integrate and
successfully operate acquired businesses and the risks
associated with these businesses, the Companys dependence
on key personnel and the Companys ability to properly
assess and capitalize on future business opportunities.

Item 7A. Quantitative and Qualitative
Disclosure About Market Risk

Not applicable.

23



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Item 8.     Financial
Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS

|                                                                                                  |  |      |    | 
|------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                  |  | Page
|                                                                                                  |  |     
|Report of Independent Certified Public Accountants                                                |  |      | 25 | 
|Consolidated Balance Sheets as of June 30,
	2001 and 2000                                         |  |      | 26 | 
|Consolidated Statements of Operations for the
	Years Ended June 30, 2001, 2000 and 1999           |  |      | 27 | 
|Consolidated Statements of Shareholders
	Equity for the Years Ended June 30, 2001, 2000 and 1999 |  |      | 28 | 
|Consolidated Statements of Cash Flows for the
	Years Ended June 30, 2001, 2000 and 1999           |  |      | 29 | 
|Notes to Consolidated Financial Statements                                                        |  |      | 30 | 

24



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##### 



REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS

To the Shareholders of Boca Resorts, Inc.:

We have audited the accompanying consolidated
balance sheets of Boca Resorts, Inc. (a Delaware corporation)
and subsidiaries as of June 30, 2001 and 2000, and the
related consolidated statements of operations,
shareholders equity and cash flows for each of the three
years in the period ended June 30, 2001. These financial
statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial
position of Boca Resorts, Inc. and subsidiaries as of
June 30, 2001 and 2000, and the results of their operations
and their cash flows for each of the three years in the period
ended June 30, 2001, in conformity with accounting
principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Fort Lauderdale, Florida,

August 6, 2001.


25



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##### 



BOCA RESORTS, INC.

CONSOLIDATED BALANCE SHEETS

As of June 30,


|                                                         |                                                                                                                                                                            |                                            |         |         |         |  |           |         |           | 
|-------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------- | ------- |  | --------- | ------- | --------- | 
|                                                         |                                                                                                                                                                            | 2001                                       |         | 2000   
|                                                         |                                                                                                                                                                            |                                            |         |        
|                                                         |                                                                                                                                                                            |                                           
|                                                         |                                                                                                                                                                            | (In thousands, except                     
|                                                         |                                                                                                                                                                            | share data)                               
|ASSETS                                                  
|Current assets:                                          |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|                                                         | Cash and cash equivalents                                                                                                                                                  |                                            | $       | 9,909   |         |  | $         | 7,796   |          
|                                                         | Restricted cash                                                                                                                                                            |                                            |         | 500     |         |  |           | 10,176  |          
|                                                         | Accounts receivable, net                                                                                                                                                   |                                            |         | 23,415  |         |  |           | 26,327  |          
|                                                         | Inventory                                                                                                                                                                  |                                            |         | 7,232   |         |  |           | 7,820   |          
|                                                         | Current portion of Premier Club notes receivable                                                                                                                           |                                            |         | 4,009   |         |  |           | 4,001   |          
|                                                         | Other current assets                                                                                                                                                       |                                            |         | 6,003   |         |  |           | 4,417   |          
|                                                         | Net assets of discontinued operations                                                                                                                                      |                                            |         | 45,711  |         |  |           | 46,265  |          
|                                                         |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|                                                         |                                                                                                                                                                            | Total current assets                       |         |         | 96,779  |  |           |         | 106,802   | 
|Property and equipment, net                              |                                                                                                                                                                            |                                            | 792,094 |         |         |  | 1,054,553 |        
|Intangible assets, net                                   |                                                                                                                                                                            |                                            | 34,518  |         |         |  | 83,840    |        
|Long-term portion of Premier Club notes
	receivable, net |                                                                                                                                                                            |                                            | 8,224   |         |         |  | 7,487     |        
|Other assets                                             |                                                                                                                                                                            |                                            | 14,517  |         |         |  | 18,433    |        
|                                                         |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|                                                         |                                                                                                                                                                            | Total assets                               |         | $       | 946,132 |  |           | $       | 1,271,115 | 
|                                                         |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|LIABILITIES AND SHAREHOLDERS
	EQUITY                   
|Current liabilities:                                     |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|                                                         | Accounts payable and accrued expenses                                                                                                                                      |                                            | $       | 32,402  |         |  | $         | 45,892  |          
|                                                         | Current portion of deferred revenue                                                                                                                                        |                                            |         | 18,683  |         |  |           | 18,167  |          
|                                                         | Current portion of credit lines and notes payable                                                                                                                          |                                            |         | 209     |         |  |           | 71,049  |          
|                                                         |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|                                                         |                                                                                                                                                                            | Total current liabilities                  |         |         | 51,294  |  |           |         | 135,108   | 
|Credit lines and notes payable                           |                                                                                                                                                                            |                                            | 342     |         |         |  | 172,146   |        
|Deferred revenue, net of current portion                 |                                                                                                                                                                            |                                            | 35,479  |         |         |  | 25,650    |        
|Other liabilities                                        |                                                                                                                                                                            |                                            | 10,160  |         |         |  |          |        
|Deferred income taxes                                    |                                                                                                                                                                            |                                            | 32,436  |         |         |  | 35,643    |        
|Senior subordinated notes payable                        |                                                                                                                                                                            |                                            | 272,960 |         |         |  | 340,000   |        
|Premier Club refundable membership fees                  |                                                                                                                                                                            |                                            | 57,818  |         |         |  | 60,374    |        
|Commitments and contingencies (Note 12)                  |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|Shareholders equity:                                    |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|                                                         | Class A Common Stock, $.01 par value,
	100,000,000 shares authorized and 39,621,027 and 40,606,072
	shares issued and outstanding at June 30, 2001 and 2000,
	respectively |                                            |         | 396     |         |  |           | 406     |          
|                                                         | Class B Common Stock, $.01 par value,
	10,000,000 shares authorized and 255,000 shares issued and
	outstanding at June 30, 2001 and 2000                                   |                                            |         | 3       |         |  |           | 3       |          
|                                                         | Contributed capital                                                                                                                                                        |                                            |         | 464,626 |         |  |           | 484,849 |          
|                                                         | Retained earnings                                                                                                                                                          |                                            |         | 20,618  |         |  |           | 16,936  |          
|                                                         |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|                                                         |                                                                                                                                                                            | Total shareholders equity                 |         |         | 485,643 |  |           |         | 502,194   | 
|                                                         |                                                                                                                                                                            |                                            |         |         |         |  |           |        
|                                                         |                                                                                                                                                                            | Total liabilities and shareholders equity |         | $       | 946,132 |  |           | $       | 1,271,115 | 
|                                                         |                                                                                                                                                                            |                                            |         |         |         |  |           |        

See accompanying notes to consolidated financial
statements.

26



---



##### 



BOCA RESORTS, INC.

CONSOLIDATED STATEMENTS OF
OPERATIONS

For the Years Ended June 30,


|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |         |         | 
|------------------------------------------------------------------------------------ | -------------------------------------------------- | ------------------------------------- | ------- | ------- | ------- | ---- | ------- | ------- | ------- |  | ------- | ------- | ------- | 
|                                                                                     |                                                    | 2001                                  |         | 2000    |         | 1999
|                                                                                     |                                                    |                                       |         |         |         |     
|                                                                                     |                                                    |                                      
|                                                                                     |                                                    | (In thousands, except per share data)
|Revenue:                                                                             |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|                                                                                     | Leisure and recreation                             |                                       | $       | 329,171 |         |      | $       | 361,360 |         |  | $       | 327,001 |        
|Operating expenses:                                                                  |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|                                                                                     | Cost of leisure and recreation services            |                                       |         | 143,567 |         |      |         | 156,620 |         |  |         | 141,456 |        
|                                                                                     | Selling, general and administrative expenses       |                                       |         | 89,624  |         |      |         | 98,731  |         |  |         | 94,856  |        
|                                                                                     | Amortization and depreciation                      |                                       |         | 35,490  |         |      |         | 34,436  |         |  |         | 28,343  |        
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|                                                                                     |                                                    | Total operating expenses              |         |         | 268,681 |      |         |         | 289,787 |  |         |         | 264,655 | 
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|Operating income                                                                     |                                                    |                                       | 60,490  |         |         |      | 71,573  |         |         |  | 62,346  |        
|Interest and other income                                                            |                                                    |                                       | 5,164   |         |         |      | 1,529   |         |         |  | 2,826   |        
|Interest and other expense                                                           |                                                    |                                       | (47,150 | )       |         |      | (55,040 | )       |         |  | (55,377 | )      
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|Income from continuing operations before income
	taxes                               |                                                    |                                       | 18,504  |         |         |      | 18,062  |         |         |  | 9,795   |        
|Provision for income taxes                                                           |                                                    |                                       | 4,724   |         |         |      | 805     |         |         |  | 1,300   |        
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|Income from continuing operations                                                    |                                                    |                                       | 13,780  |         |         |      | 17,257  |         |         |  | 8,495   |        
|Loss from discontinued operations, net of benefit
	for income taxes                  |                                                    |                                       | (8,862  | )       |         |      | (3,771  | )       |         |  | (436    | )      
|Extraordinary loss on early extinguishment of
	debt, net of benefit for income taxes |                                                    |                                       | (1,236  | )       |         |      |        |         |         |  | (2,658  | )      
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|                                                                                     |                                                    | Net income                            |         | $       | 3,682   |      |         | $       | 13,486  |  |         | $       | 5,401   | 
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|Basic and diluted net income per share:                                              |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|                                                                                     | Income from continuing operations                  |                                       | $       | 0.34    |         |      | $       | 0.42    |         |  | $       | 0.23    |        
|                                                                                     | Loss from discontinued operations                  |                                       |         | (0.22   | )       |      |         | (0.09   | )       |  |         | (0.01   | )      
|                                                                                     | Extraordinary loss on early extinguishment of debt |                                       |         | (0.03   | )       |      |         |        |         |  |         | (0.07   | )      
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|                                                                                     |                                                    | Net income per share                  |         | $       | 0.09    |      |         | $       | 0.33    |  |         | $       | 0.15    | 
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|Shares used in computing net income per
	share  basic                               |                                                    |                                       | 40,317  |         |         |      | 40,861  |         |         |  | 36,993  |        
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        
|Shares used in computing net income per
	share  diluted                             |                                                    |                                       | 40,958  |         |         |      | 40,868  |         |         |  | 37,146  |        
|                                                                                     |                                                    |                                       |         |         |         |      |         |         |         |  |         |        

See accompanying notes to consolidated financial
statements.

27



---



##### 



BOCA RESORTS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS
EQUITY

|                       |                                                  |                |        |              |      |        |     |          |    |             |     |              |   |               |   |   |   |   |         |        |        |   |        |        |   |   |         |        |        |  
|---------------------- | ------------------------------------------------ | -------------- | ------ | ------------ | ---- | ------ | --- | -------- | -- | ----------- | --- | ------------ | - | ------------- | - | - | - | - | ------- | ------ | ------ | - | ------ | ------ | - | - | ------- | ------ | ------ | -
|                       |                                                  |                |        |              |      |        |     |          |    |            
|                       |                                                  | Class A        |        | Class B      |      |        |     |          |    |            
|                       |                                                  | Common Stock   |        | Common Stock |      |        |     |          |    |            
|                       |                                                  |                |        |              |      |        |     | Retained |    |            
|                       |                                                  | Number         |        |              |      | Number |     |          |    |             |     | Earnings/    |   | Total        
|                       |                                                  | of             |        |              |      | of     |     |          |    | Contributed |     | (Accumulated |   | Shareholders
|                       |                                                  | Shares         |        | Amount       |      | Shares |     | Amount   |    | Capital     |     | Deficit)     |   | Equity       
|                       |                                                  |                |        |              |      |        |     |          |    |             |     |              |   |              
|                       |                                                  |               
|                       |                                                  | (In thousands)
|Balance, June 30, 1998 |                                                  |                | 34,888 |              |      | $      | 349 |          |    |             | 255 |              |   | $             | 3 |   |   | $ | 432,110 |        |        | $ | (1,951 | )      |   | $ | 430,511 |       
|                       | Sales of common stock                            |                |        | 5,598        |      |        |     | 56       |    |             |     |             |   |               |   |  |   |   |         | 55,672 |        |   |        |       |   |   |         | 55,728 |       
|                       | Net income                                       |                |        |             |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         |       |        |   |        | 5,401  |   |   |         | 5,401  |       
|                       | Stock issued in acquisitions                     |                |        | 63           |      |        |     | 1        |    |             |     |             |   |               |   |  |   |   |         | 549    |        |   |        |       |   |   |         | 550    |       
|                       | Tax effect of stock issuance to acquire an asset |                |        |             |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         | (1,930 | )      |   |        |       |   |   |         | (1,930 | )     
|                       | Exercise of stock options                        |                |        | 2            |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         | 20     |        |   |        |       |   |   |         | 20     |       
|                       |                                                  |                |        |              |      |        |     |          |    |             |     |              |   |               |   |   |   |   |         |        |        |   |        |        |   |   |         |       
|Balance, June 30, 1999 |                                                  |                | 40,551 |              |      |        | 406 |          |    |             | 255 |              |   |               | 3 |   |   |   | 486,421 |        |        |   | 3,450  |        |   |   | 490,280 |       
|                       | Net income                                       |                |        |             |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         |       |        |   |        | 13,486 |   |   |         | 13,486 |       
|                       | Warrant activity                                 |                |        |             |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         | (1,080 | )      |   |        |       |   |   |         | (1,080 | )     
|                       | Stock issued in acquisitions                     |                |        | 50           |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         | 539    |        |   |        |       |   |   |         | 539    |       
|                       | Tax effect of stock issuance to acquire an asset |                |        |             |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         | (1,078 | )      |   |        |       |   |   |         | (1,078 | )     
|                       | Exercise of stock options                        |                |        | 5            |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         | 47     |        |   |        |       |   |   |         | 47     |       
|                       |                                                  |                |        |              |      |        |     |          |    |             |     |              |   |               |   |   |   |   |         |        |        |   |        |        |   |   |         |       
|Balance, June 30, 2000 |                                                  |                | 40,606 |              |      |        | 406 |          |    |             | 255 |              |   |               | 3 |   |   |   | 484,849 |        |        |   | 16,936 |        |   |   | 502,194 |       
|                       | Net income                                       |                |        |             |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         |       |        |   |        | 3,682  |   |   |         | 3,682  |       
|                       | Repurchase of Class A                            |                |        |              |      |        |     |          |    |             |     |              |   |               |   |   |   |   |         |        |        |   |        |        |   |   |         |        |       
|                       |                                                  | Common Stock   |        |              | (593 | )      |     |          | (6 | )           |     |              |  |               |   |   |  |   |         |        | (6,821 | ) |        |        |  |   |         |        | (6,827 | )
|                       | Tax effect of stock issuance to acquire an asset |                |        |             |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         | (4,561 | )      |   |        |       |   |   |         | (4,561 | )     
|                       | Expiration of exchange rights                    |                |        | (448         | )    |        |     | (4       | )  |             |     |             |   |               |   |  |   |   |         | (9,639 | )      |   |        |       |   |   |         | (9,643 | )     
|                       | Exercise of stock options                        |                |        | 56           |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         | 546    |        |   |        |       |   |   |         | 546    |       
|                       | Other stock option activity                      |                |        |             |      |        |     |         |    |             |     |             |   |               |   |  |   |   |         | 252    |        |   |        |       |   |   |         | 252    |       
|                       |                                                  |                |        |              |      |        |     |          |    |             |     |              |   |               |   |   |   |   |         |        |        |   |        |        |   |   |         |       
|Balance, June 30, 2001 |                                                  |                | 39,621 |              |      | $      | 396 |          |    |             | 255 |              |   | $             | 3 |   |   | $ | 464,626 |        |        | $ | 20,618 |        |   | $ | 485,643 |       
|                       |                                                  |                |        |              |      |        |     |          |    |             |     |              |   |               |   |   |   |   |         |        |        |   |        |        |   |   |         |       

See accompanying notes to consolidated financial
statements.

28



---



##### 



BOCA RESORTS, INC.

CONSOLIDATED STATEMENTS OF CASH
FLOWS

For the Years Ended June 30,


|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |          |        |          |  
|-------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------- | ---------------------------------------------------- | -------- | ------ | -------- | ------ | ------- | ------- | ------- | ------- | -------- | ------ | -------- | -
|                                                   |                                                                                                                                            | 2001                                                                |                                                      | 2000     |        | 1999    
|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |         
|                                                   |                                                                                                                                            |                                                                    
|                                                   |                                                                                                                                            | (In thousands)                                                     
|Operating activities:                              |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|                                                   | Net income                                                                                                                                 |                                                                     | $                                                    | 3,682    |        |          | $      | 13,486  |         |         | $       | 5,401    |       
|                                                   | Extraordinary loss on early extinguishment of
	debt, net of benefit for income taxes                                                       |                                                                     |                                                      | 1,236    |        |          |        |        |         |         |         | 2,658    |       
|                                                   | Adjustments to reconcile income before
	extraordinary loss, net of benefit for income taxes to net cash
	provided by operating activities: |                                                                     |                                                      |          |        |          |        |         |         |         |         |          |       
|                                                   |                                                                                                                                            | Amortization and depreciation                                       |                                                      |          | 35,490 |          |        |         | 34,436  |         |         |          | 28,343 |         
|                                                   |                                                                                                                                            | Imputed interest on indebtedness with no stated
	rate               |                                                      |          | 725    |          |        |         | 1,868   |         |         |          | 1,283  |         
|                                                   |                                                                                                                                            | Loss from discontinued operations, net of benefit
	for income taxes |                                                      |          | 8,862  |          |        |         | 3,771   |         |         |          | 436    |         
|                                                   | Changes in operating assets and liabilities                                                                                                |                                                                     |                                                      |          |        |          |        |         |         |         |         |          |       
|                                                   |                                                                                                                                            | Accounts receivable                                                 |                                                      |          | (5,701 | )        |        |         | (5,014  | )       |         |          | 2,496  |         
|                                                   |                                                                                                                                            | Other assets                                                        |                                                      |          | (1,788 | )        |        |         | (595    | )       |         |          | 12,546 |         
|                                                   |                                                                                                                                            | Accounts payable and accrued expenses                               |                                                      |          | (5,644 | )        |        |         | (6,531  | )       |         |          | 13,211 |         
|                                                   |                                                                                                                                            | Deferred revenue and other liabilities                              |                                                      |          | 6,221  |          |        |         | 8,833   |         |         |          | 8,953  |         
|                                                   |                                                                                                                                            | Net assets from discontinued operations                             |                                                      |          | (6,050 | )        |        |         | (10,227 | )       |         |          | (3,737 | )       
|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|                                                   |                                                                                                                                            |                                                                     | Net cash provided by operating activities            |          |        | 37,033   |        |         |         | 40,027  |         |          |        | 71,590   |  
|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|Investing activities:                              |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|                                                   | Net proceeds from the sale of the Arizona
	Biltmore Resort & Spa                                                                           |                                                                     |                                                      | 278,968  |        |          |        |        |         |         |         |         |       
|                                                   | Cash used in business acquisitions                                                                                                         |                                                                     |                                                      |         |        |          |        | (4,016  | )       |         |         |         |       
|                                                   | Capital expenditures                                                                                                                       |                                                                     |                                                      | (60,778  | )      |          |        | (63,090 | )       |         |         | (98,514  | )     
|                                                   | Change in restricted cash                                                                                                                  |                                                                     |                                                      | 6,415    |        |          |        | 21,510  |         |         |         | (13,479  | )     
|                                                   | Cash provided by (used in) investing activities
	from discontinued operations                                                              |                                                                     |                                                      | (2,258   | )      |          |        | 8,683   |         |         |         | (3,452   | )     
|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|                                                   |                                                                                                                                            |                                                                     | Net cash provided by (used in) investing
	activities |          |        | 222,347  |        |         |         | (36,913 | )       |          |        | (115,445 | )
|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|Financing activities:                              |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|                                                   | Borrowings under credit facilities                                                                                                         |                                                                     |                                                      | 38,430   |        |          |        | 43,753  |         |         |         | 518,134  |       
|                                                   | Payments under long-term debt agreements and
	credit facilities                                                                            |                                                                     |                                                      | (222,376 | )      |          |        | (46,929 | )       |         |         | (553,837 | )     
|                                                   | Repurchases of 9.875% senior subordinated notes
	payable                                                                                   |                                                                     |                                                      | (67,040  | )      |          |        |        |         |         |         |         |       
|                                                   | Proceeds from sale of common stock                                                                                                         |                                                                     |                                                      |         |        |          |        |        |         |         |         | 55,728   |       
|                                                   | Repurchases of common stock                                                                                                                |                                                                     |                                                      | (6,827   | )      |          |        |        |         |         |         |         |       
|                                                   | Proceeds from exercise of stock options                                                                                                    |                                                                     |                                                      | 546      |        |          |        | 47      |         |         |         | 20       |       
|                                                   | Cash used in financing activities from
	discontinued operations                                                                            |                                                                     |                                                      |         |        |          |        | (115    | )       |         |         | (426     | )     
|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|                                                   |                                                                                                                                            |                                                                     | Net cash provided by (used in) financing
	activities |          |        | (257,267 | )      |         |         | (3,244  | )       |          |        | 19,619   |  
|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|Cash provided by (used in) continuing operations   |                                                                                                                                            |                                                                     | 1,559                                                |          |        |          | (2,242 | )       |         |         | (17,057 | )       
|Cash provided by (used in) discontinued operations |                                                                                                                                            |                                                                     | 554                                                  |          |        |          | 2,112  |         |         |         | (7,179  | )       
|Cash and cash equivalents, at beginning of period  |                                                                                                                                            |                                                                     | 7,796                                                |          |        |          | 7,926  |         |         |         | 32,162  |         
|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         
|Cash and cash equivalents, at end of period        |                                                                                                                                            | $                                                                   | 9,909                                                |          |        | $        | 7,796  |         |         | $       | 7,926   |         
|                                                   |                                                                                                                                            |                                                                     |                                                      |          |        |          |        |         |         |         |         |         

See accompanying notes to consolidated financial
statements.

29



---



##### 



BOCA RESORTS, INC.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

June 30, 2001


1. Nature of Operations

Boca Resorts, Inc. (the Company) is
an owner and operator of five luxury resorts located in Florida
with hotels, conference facilities, golf courses, spas, marinas
and private clubs. The Companys resorts include the Boca
Raton Resort and Club (Boca Raton), the Registry Resort at
Pelican Bay (Naples), the Edgewater Beach Hotel (Naples), the
Hyatt Regency Pier 66 Hotel and Marina (Fort Lauderdale), and
the Radisson Bahia Mar Resort and Yachting Center (Fort
Lauderdale). The Company also owns and operates two championship
golf courses located in Florida, Grande Oaks Golf Club in Davie
and Naples Grande Golf Club in Naples.

As discussed in Note 5, the Company sold the
Arizona Biltmore Resort & Spa on December 22, 2000. In
addition, on July 25, 2001, the Company sold its
entertainment and sports business, which primarily consisted of
the operations of the Florida Panthers Hockey Club (the
Panthers) and related arena management operations.
Accordingly, the Companys entertainment and sports
business has been accounted for as discontinued operations and
the accompanying Consolidated Financial Statements presented
herein have been restated to report separately the net assets
and operating results of this discontinued operation.

2. Summary of Significant Accounting
Policies

Principles
of Consolidation

The accompanying Consolidated Financial
Statements include the accounts of the Company and its wholly
owned subsidiaries after the elimination of significant
intercompany accounts and transactions.

Use
of Estimates

The preparation of the Consolidated Financial
Statements in conformity with accounting principles generally
accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in
the Consolidated Financial Statements and accompanying Notes.
Actual results may differ from those estimates.

Cash
and Cash Equivalents/Restricted Cash

Cash and cash equivalents consist primarily of
cash in banks and highly liquid investments with original
maturities of 90 days or less. At June 30, 2001,
restricted cash consisted of purchased guarantees (letters of
credit) that ensure the Companys payment to third parties
under certain lease agreements. At June 30, 2000,
restricted cash primarily consisted of escrow accounts
maintained in accordance with the terms of mortgage-note
agreements, which notes were subsequently paid by the Company.
Concentration of credit risk and market risk associated with
cash, cash equivalents and restricted cash are considered low
due to the credit quality of the issuers of the financial
instruments held by the Company and due to their short-term
nature.

Accounts
Receivable

Accounts receivable are primarily from major
credit card companies and other large corporations. The Company
performs ongoing credit evaluations of its significant customers
and generally does not require collateral or a significant
allowance for uncollectible balances.

Inventory

Inventory is stated at the lower of cost or
market value and primarily consists of food, beverages, marina
fuel, retail merchandise and operating supplies. Cost is
determined using the first-in, first-out method.

30



---



##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Premier
Club Notes Receivable

Premier Club notes receivable are carried at
cost. The accrual of interest income is suspended on all notes
receivable when principal or interest payments are more than
three months contractually past due and is not resumed until
such loans become contractually current. The amount of loans
more than three months contractually past due was not material
at June 30, 2001. The Company performs credit evaluations
of customers who finance their Premier Club membership and
generally does not require additional security or establish a
significant allowance for uncollectible balances.

Property
and Equipment

Property and equipment is stated at cost less
accumulated depreciation and amortization. Expenditures for
maintenance, repairs and renewals of relatively minor items are
charged to expense as incurred. Significant additions, along
with interest incurred during the construction period for
expansion at the Companys resorts, are capitalized.
Interest has been capitalized using the average borrowing rate
of the Company. Interest capitalized for the years ended
June 30, 2001, 2000 and 1999 totaled $1.1 million, $2.8
million and $5.2 million, respectively. Depreciation and
amortization has been computed using the straight-line method
over the following estimated useful lives:

|                                  |  |       |      | 
|--------------------------------- |  | ----- | ---- | 
|                                  |  | Years
|                                  |  |      
|Building and improvements         |  |       | 40   | 
|Land improvements                 |  |       | 15   | 
|Leasehold improvements            |  |       | 5-20 | 
|Furniture, fixtures and equipment |  |       | 3-7  | 

Debt
Issuance Costs

Costs associated with obtaining financing have
been capitalized and are amortized on a straight-line basis
(which approximates the effective interest method) over the
terms of the related debt. Debt issuance costs are included in
other assets in the accompanying Consolidated Balance Sheets.

Intangible
Assets

Intangible assets consist of goodwill, which
represents the excess of the cost over the fair value of net
assets of the acquired business. Goodwill is stated at amortized
cost and is amortized on a straight-line basis over 40 years.
Accumulated amortization at June 30, 2001 and 2000 totaled
$3.6 million and $4.4 million, respectively. The Company
continually evaluates whether events and changes in
circumstances warrant revised estimates of useful lives or
recognition of an impairment loss of unamortized goodwill. The
conditions that would trigger an impairment assessment of
unamortized goodwill include a significant negative trend in the
Companys operating results or cash flows, a decrease in
demand for the Companys services, change in the
competitive environment and other industry and economic factors.
The Company measures impairment of unamortized goodwill
utilizing the discounted cash flow method. The present value of
those estimated cash flows is then compared to the
Companys net book value; if the book value exceeds the
present value of those cash flows, the excess of the unamortized
goodwill is written off. The discount rate used in determining
the present value of those cash flows would be based on the
Companys weighted average cost of capital commensurate
with the risk involved. As of June 30, 2001, the Company
determined that there has been no impairment of goodwill.

Accounting
for Impairment of Long-Lived Assets

The carrying value of long-lived assets is
reviewed if the facts and circumstances suggest that it may be
impaired. If this review indicates that long-lived assets will
not be recoverable based on the undiscounted cash

31



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##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

flows of the entity acquired over the remaining
amortization period, the carrying value of the long-lived assets
will be reduced by the amount by which the carrying value
exceeds fair value. Fair value is determined using
managements best estimate of the discounted net operating
cash flows over the remaining life of the assets.

Financial
Instruments

Statement of Financial Accounting Standards
(SFAS) No. 107, Disclosures about Fair
Value of Financial Instruments requires disclosure of the
fair value of financial instruments held by the Company. The
carrying amounts of cash and cash equivalents, restricted cash,
accounts receivable, accounts payable and short-term debt
approximates fair value due to their short-term nature. The
carrying amounts of Premier Club notes receivable and long-term
debt approximates fair value based on discounted future cash
flows. The carrying amount of the Companys senior
subordinated notes payable is $273.0 million, compared to an
estimated fair value of $276.9 million, which is based on the
quoted market price as of June 30, 2001 in the
over-the-counter bond market. The fair value of Premier Club
refundable membership fees cannot be reasonably estimated based
on the uncertainty of the maturity.

Revenue
Recognition

Revenue associated with room rentals, food and
beverage sales and other recreational amenity use at the
Companys resort properties is recognized when services are
rendered. Deferred revenue arises as a normal part of business
for advance payments for resort accommodations, club membership
dues and club initiation fees. Annual membership dues from the
Companys Premier Clubs are recognized ratably over the
membership year. Initiation fees associated with Premier Club
memberships originating after December 31, 1997 are
non-refundable and are deferred and recognized as revenue over
the estimated life of the membership. Initiation fees relating
to club memberships originating prior to December 31, 1997
are fully refundable and, accordingly, are reflected as a
liability captioned Premier Club refundable membership fees in
the accompanying Consolidated Balance Sheets. See Note 10.

Advertising
Expense

The Company expenses advertising costs the first
time the advertising takes place. Advertising expense was $5.3
million, $7.0 million and $6.4 million for the years ended
June 30, 2001, 2000 and 1999, respectively. Prepaid
advertising for each of the periods presented was not material.

Costs
of Start-Up Activities

Pre-operating, pre-opening, research and
development and organization costs are expensed as incurred.

Income
Taxes

The Company accounts for income taxes under the
asset and liability method in accordance with SFAS No. 109,
Accounting for Income Taxes. See Note 15.

Stock-Based
Compensation

The Company grants stock options for a fixed
number of shares to employees with an exercise price equal to
the fair value of the shares at the date of grant. The Company
has elected to account for stock option grants in accordance
with APB No. 25 Accounting for Stock Issued to
Employees and as interpreted in FASB Interpretation
No. 44, Accounting for Certain Transactions Involving
Stock Compensation and, accordingly, recognizes no
compensation expense in connection with stock option grants made
to employees. See Note 11.

32



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##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Earnings
Per Common Share

SFAS No. 128, Earnings Per Share
requires a dual presentation of basic and diluted earnings per
share. Basic earnings per share equals net income divided by the
number of weighted average common shares outstanding. Diluted
earnings per share includes the effects of common stock
equivalents to the extent they are dilutive. Warrants totaling
325,000 for both the years ended June 30, 2001 and 2000
were antidilutive and have been excluded. Warrants totaling
1,259,905 for the year ended June 30, 1999 were
antidilutive and have been excluded. Options totaling 5,513,553,
5,135,273 and 4,357,476 for the years ended June 30, 2001,
2000 and 1999, respectively, were antidilutive and have been
excluded. The following table sets forth weighted average shares
used to compute basic and diluted earnings per share (in
000s):

|                                            |  |      |        |      |  |      |        |  |  |  |        | 
|------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                            |  | 2001 |        | 2000 |  | 1999
|                                            |  |      |        |      |  |     
|Basic weighted average shares outstanding   |  |      | 40,317 |      |  |      | 40,861 |  |  |  | 36,993 | 
|Stock options                               |  |      | 641    |      |  |      | 7      |  |  |  | 153    | 
|                                            |  |      |        |      |  |      |        |  |  |  |        | 
|Diluted weighted average shares outstanding |  |      | 40,958 |      |  |      | 40,868 |  |  |  | 37,146 | 
|                                            |  |      |        |      |  |      |        |  |  |  |        | 

Shareholders
Equity

The Company has two classes of common stock,
Class A Common Stock and Class B Common Stock. On each
matter submitted for stockholder approval each share of
Class A Common Stock is entitled to one vote, and each
share of Class B Common Stock is entitled to 10,000 votes.

In connection with the acquisition of the Boca
Raton Resort and Club, the Company issued rights to the
predecessor owners of the property entitling them to acquire
4,242,586 shares of Class A Common Stock at any time up
through April 30, 2001 for no additional consideration. All
such shares were reflected as issued in the accompanying
Consolidated Balance Sheet as of June 30, 2000 because the
Company believed it was probable that all predecessor owners
would exchange their interests for freely tradable Class A
Common Stock of the Company. However, at June 30, 2001,
shareholders equity has been reduced to exclude the
447,892 expired, unexercised exchange rights. Upon issuance of
the shares relating to rights that were exercised, the tax
effect of the book-tax bases difference resulting from the
exchange is reflected as an adjustment to contributed capital in
the accompanying Consolidated Statements of Shareholders
Equity.

Treasury
Stock

In May 2001, the Companys Board of
Directors approved a share repurchase program authorizing the
Company to purchase up to $30 million of its outstanding
Class A Common Stock over the ensuing 24 months. As of
June 30, 2001, the Company had repurchased 592,766 shares
of Class A Common Stock for $6.8 million. The Company
accounts for repurchases of its Class A Common Stock using
the cost method with common stock in treasury classified in the
Consolidated Balance Sheets as a reduction of shareholders
equity.

Comprehensive
Income

Comprehensive income was the same as net income
for the years ended June 30, 2001, 2000 and 1999.

Impact
of Recently Issued Accounting Standards

SFAS No. 141, Business
Combinations prohibits the pooling method of accounting
for business combinations and requires business combinations to
be accounted for using the purchase method of accounting. The
requirements of this statement should be applied to business
combinations initiated after June 30, 2001. The Company believes
the adoption of SFAS No. 141 will not have a material
impact on its results of operations or financial position.

33



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##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

SFAS No. 142, Goodwill and Other
Intangible Assets addresses financial accounting and
reporting for acquired goodwill and other intangible assets and
supercedes APB Opinion No. 17, Intangible
Assets. SFAS No. 142 addresses how intangible assets
that are acquired individually, or with a group of assets,
should be accounted for in financial statements upon their
acquisition. It also addresses how goodwill and other intangible
assets should be accounted for after they have been initially
recognized in the financial statements. Under SFAS No. 142,
goodwill shall not be amortized. Goodwill shall be tested for
impairment at a level of reporting referred to as a reporting
unit. If the carrying amount of reporting unit goodwill exceeds
the implied fair value of that goodwill, an impairment loss
shall be recognized in an amount equal to that excess. The
provisions of this statement are required to be applied starting
with fiscal years beginning after December 15, 2001. Early
adoption is permitted for entities with fiscal years beginning
after March 15, 2001, provided that the first interim
financial statements have not previously been issued. This
statement is required to be applied at the beginning of an
entitys fiscal year and to be applied to all goodwill and
other intangible assets recognized in its financial statements
at that date. Impairment losses for goodwill and
indefinite-lived intangible assets that arise due to the initial
application of this statement (resulting from a transitional
impairment test) are to be reported as resulting from a change
in accounting principle. The Company is currently evaluating
whether it will early adopt the provisions of SFAS No. 142
and will not be able to determine the ultimate impact of this
statement on its results of operations or financial position
until such time as the Company applies its provisions.
Amortization of goodwill totaled $1.7 million for the year ended
June 30, 2001, however, this is not intended to be
indicative of the expected impact on the Companys future
results of operations.

SFAS No. 143, Accounting for Asset
Retirement Obligations addresses financial accounting and
reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement
costs. SFAS No. 143 is effective for financial statements
issued for fiscal years beginning after June 15, 2002. The
Company believes the adoption of SFAS No. 143 will not have
a material impact on its results of operations or financial
position and will adopt such standards on July 1, 2002, as
required.

3. Supplemental Cash Flow
Information

Interest
and Income Taxes Paid

Interest paid totaled $48.3 million, $53.1
million and $51.1 million during the years ended June 30,
2001, 2000 and 1999, respectively. Income taxes paid totaled
$9.9 million, $54,000 and $380,000 during the years ended
June 30, 2001, 2000 and 1999 respectively. The income taxes
paid during 2001 included certain estimated quarterly tax
payments for fiscal 2001 as well as actual income taxes incurred
for fiscal 2000. The income taxes paid for fiscal 1999 were
nominal because the Company had available net operating losses
to offset taxable income for that year. See Note 15.

Non-Cash
Investing and Financing Activities

The Company sold the Arizona Biltmore Resort
& Spa in December 2000. In connection with such transaction,
the buyer of the property assumed indebtedness totaling $59.4
million. The Company issued shares of Class A Common Stock
totaling 50,000 (which were valued at $539,000) and 62,830
(which were valued at $550,000) in connection with business
acquisitions during the years ended June 30, 2000 and 1999,
respectively.

34



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##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

4. Premier Club Notes
Receivable

The Company offers internal financing to
qualified purchasers of Premier Club memberships. Based on the
terms of the agreements, the membership notes will be collected
as follows (in 000s):

|           |  |   |        | 
|---------- |  | - | ------ | 
|2002       |  | $ | 4,009  | 
|2003       |  |   | 3,081  | 
|2004       |  |   | 2,373  | 
|2005       |  |   | 1,708  | 
|2006       |  |   | 895    | 
|Thereafter |  |   | 167    | 
|           |  |   |        | 
|           |  | $ | 12,233 | 
|           |  |   |        | 

5. Discontinued Operations and
Divestiture

On July 25, 2001, the Company sold its
entertainment and sports business. The purchase price for the
business, which incorporated certain working capital
adjustments, consisted of $83.5 million in cash, an $11.2
million secured promissory note and the assumption by the
purchasers of certain off-balance sheet contingencies including
a $10 million construction obligation secured by a performance
bond. The net proceeds from the sale of the business after
payment of disposal costs and income taxes is estimated to be
between $67.0 million and $69.0 million, and the gain on
disposition, which will be recorded during the three months
ended September 30, 2001, is estimated to be between $23.0
million and $25.0 million. Accordingly, the Companys
entertainment and sports business has been accounted for as
discontinued operations and the accompanying Consolidated
Financial Statements presented herein have been restated to
report separately the net assets and operating results of this
discontinued operation. Operating losses totaling $2.9 million
from the measurement date through June 30, 2001 have been
deferred and will be recognized during the quarter ended
September 30, 2001 (the quarter in which the gain on sale
is recognized). A portion of the Companys interest expense
has been allocated to discontinued operations based upon its
average borrowing cost and the average funds the discontinued
operations borrowed from the parent. Certain selling, general
and administrative expenses incurred by the Company have been
allocated to discontinued operations based upon the specific
identification method. Summary operating results of the
discontinued operations for the year ended June 30 are as
follows (in 000s):

|                                                       |  |      |         |      |  |      |        |   |  |   |        |  
|------------------------------------------------------ |  | ---- | ------- | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                       |  | 2001 |         | 2000 |  | 1999
|                                                       |  |      |         |      |  |     
|Revenue                                                |  | $    | 55,213  |      |  | $    | 60,187 |   |  | $ | 62,608 |  
|Loss from discontinued operations before income
	taxes |  | $    | (14,217 | )    |  | $    | (4,576 | ) |  | $ | (107   | )
|Benefit (provision) for income taxes                   |  |      | 5,355   |      |  |      | 805    |   |  |   | (329   | )
|                                                       |  |      |         |      |  |      |        |   |  |   |        |  
|Loss from discontinued operations                      |  | $    | (8,862  | )    |  | $    | (3,771 | ) |  | $ | (436   | )
|                                                       |  |      |         |      |  |      |        |   |  |   |        |  

35



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##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The net assets of the discontinued operations in
the Consolidated Balance Sheets at June 30 include the
following (in 000s):

|                                      |                                       |      |        |        |  |   |         |        | 
|------------------------------------- | ------------------------------------- | ---- | ------ | ------ |  | - | ------- | ------ | 
|                                      |                                       | 2001 |        | 2000  
|                                      |                                       |      |        |       
|Cash and cash equivalents             |                                       | $    | 2,344  |        |  | $ | 11,599  |       
|Restricted cash                       |                                       |      | 16,644 |        |  |   | 14,599  |       
|Accounts receivable, net              |                                       |      | 2,708  |        |  |   | 3,963   |       
|Inventory                             |                                       |      | 459    |        |  |   | 492     |       
|Other current assets                  |                                       |      | 1,893  |        |  |   | 1,494   |       
|Property and equipment, net           |                                       |      | 7,566  |        |  |   | 8,089   |       
|Intangible assets, net                |                                       |      | 24,915 |        |  |   | 25,676  |       
|Other non-current assets              |                                       |      | 10,193 |        |  |   | 7,761   |       
|Accounts payable and accrued expenses |                                       |      | (5,741 | )      |  |   | (11,067 | )     
|Current portion of deferred revenue   |                                       |      | (3,431 | )      |  |   | (8,066  | )     
|Other current liabilities             |                                       |      | (8,982 | )      |  |   | (4,873  | )     
|Other non-current liabilities         |                                       |      | (2,857 | )      |  |   | (3,402  | )     
|                                      |                                       |      |        |        |  |   |         |       
|                                      | Net assets of discontinued operations |      | $      | 45,711 |  |   | $       | 46,265 | 
|                                      |                                       |      |        |        |  |   |         |       

On December 22, 2000, the Company executed a
definitive agreement and closed on the sale of the Arizona
Biltmore Resort & Spa for $335.0 million, plus certain
working capital adjustments. The Company received $283.0 million
in gross cash proceeds and the buyer of the property assumed
$59.4 million in indebtedness. The net proceeds from the asset
sale amounted to $279.0 million and was substantially used to
repay indebtedness. The gain on the asset sale was nominal and
is included in interest and other income in the Consolidated
Statement of Operations for the year ended June 30, 2001.
The Company is contingently liable for certain litigation
relating to the Arizona Biltmore Resort & Spa. While the
results of such proceedings cannot be predicted with certainty,
management believes that losses, if any, resulting from the
ultimate resolution of these matters will not have a material
adverse effect on the Companys results of operations, cash
flows or financial position. A portion of the Companys
interest expense has been allocated to the Arizona Biltmore
Resort & Spa based upon the debt balance attributable to it
operations. Certain selling, general and administrative expenses
incurred by the Company have been allocated based upon the
specific identification method. Summary operating results of the
Arizona Biltmore Resort & Spa for the period owned during
the following years ended June 30 are (in 000s):

|                 |  |      |        |      |  |      |        |  |  |   |        | 
|---------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                 |  | 2001 |        | 2000 |  | 1999
|                 |  |      |        |      |  |     
|Revenue          |  | $    | 39,856 |      |  | $    | 93,616 |  |  | $ | 73,614 | 
|Operating income |  | $    | 8,446  |      |  | $    | 26,072 |  |  | $ | 15,380 | 



|   |                            
|-- | ---------------------------
|6. | Property and Equipment, net

A summary of property and equipment at
June 30 is as follows (in 000s):

|                                                |  |      |         |      |  |   |           |  
|----------------------------------------------- |  | ---- | ------- | ---- |  | - | --------- | -
|                                                |  | 2001 |         | 2000
|                                                |  |      |         |     
|Land and land improvements                      |  | $    | 283,546 |      |  | $ | 336,681   |  
|Buildings and improvements                      |  |      | 482,187 |      |  |   | 694,230   |  
|Furniture, fixtures and equipment               |  |      | 87,954  |      |  |   | 84,056    |  
|Construction in progress                        |  |      | 22,566  |      |  |   | 13,960    |  
|                                                |  |      |         |      |  |   |           |  
|                                                |  |      | 876,253 |      |  |   | 1,128,927 |  
|Less: accumulated depreciation and amortization |  |      | (84,159 | )    |  |   | (74,374   | )
|                                                |  |      |         |      |  |   |           |  
|                                                |  | $    | 792,094 |      |  | $ | 1,054,553 |  
|                                                |  |      |         |      |  |   |           |  

36



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##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Depreciation and amortization expense on property
and equipment included in the Consolidated Statements of
Operations was approximately $33.8 million, $32.0 million and
$27.6 million for the years ended June 30, 2001, 2000 and
1999, respectively.

7. Accounts Payable and Accrued
Expenses

Accounts payable and accrued expenses as of
June 30 consists of the following (in 000s):

|                                  |  |      |        |      |  |   |        | 
|--------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                                  |  | 2001 |        | 2000
|                                  |  |      |        |     
|Accrued payroll and related costs |  | $    | 7,439  |      |  | $ | 6,464  | 
|Accounts payable                  |  |      | 6,900  |      |  |   | 11,757 | 
|Other accrued liabilities         |  |      | 6,619  |      |  |   | 10,318 | 
|Accrued interest payable          |  |      | 5,690  |      |  |   | 7,260  | 
|Accrued property taxes            |  |      | 4,528  |      |  |   | 5,865  | 
|Income taxes payable              |  |      | 1,226  |      |  |   | 4,228  | 
|                                  |  |      |        |      |  |   |        | 
|                                  |  | $    | 32,402 |      |  | $ | 45,892 | 
|                                  |  |      |        |      |  |   |        | 

8. Credit Lines and Notes
Payable

As discussed in Note 5, the Company repaid a
substantial amount of indebtedness during the year ended
June 30, 2001 with the proceeds from the sale of the
Arizona Biltmore Resort & Spa. Credit lines and notes
payable at June 30 is as follows (in 000s):

|                                                                                                                                                                  |                                             |      |     |      |  |   |         |         | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------- | ---- | --- | ---- |  | - | ------- | ------- | 
|                                                                                                                                                                  |                                             | 2001 |     | 2000
|                                                                                                                                                                  |                                             |      |     |     
|Revolving credit line collateralized by all
	assets of Pier 66, Bahia Mar, Registry Resort and Edgewater
	Beach Hotel, variable interest rate due April 20, 2002. |                                             | $    |    |      |  | $ | 18,070  |        
|Note payable to seller, no stated interest rate,
	8.8% imputed interest rate                                                                                      |                                             |      |    |      |  |   | 15,942  |        
|Mortgage note payable, collateralized by
	substantially all Arizona Biltmore property and equipment, fixed
	interest rate of 8.25%                                |                                             |      |    |      |  |   | 60,040  |        
|Senior note payable to bank, secured by a first
	mortgage and lien on all Boca Resort assets, fixed interest rate
	of 9.0%                                        |                                             |      |    |      |  |   | 102,000 |        
|Construction loan with bank, secured by certain
	land, fixed interest rate of 7.6%                                                                                |                                             |      |    |      |  |   | 11,700  |        
|Capital lease on operating equipment, fixed
	interest rate of 8.0%, due on November 15, 2003.                                                                     |                                             |      | 551 |      |  |   | 743     |        
|Revolving credit facility with bank, variable
	interest rate                                                                                                      |                                             |      |    |      |  |   | 34,700  |        
|                                                                                                                                                                  |                                             |      |     |      |  |   |         |        
|                                                                                                                                                                  | Total outstanding including current portion |      | $   | 551  |  |   | $       | 243,195 | 
|                                                                                                                                                                  |                                             |      |     |      |  |   |         |        

The Companys revolving credit line, which
matures in April 2002, requires the maintenance of customary
capital expenditure reserves for the replacement of assets. In
addition, the Company is required to comply with certain
covenants, including without limitation, requirements to
maintain a minimum net worth and maintain certain leverage
ratios. The Company was in compliance with these covenants at
June 30, 2001. The Companys availability under its
revolving credit line at June 30, 2001 was $144.7 million.
Minimum principal payments required on the Companys credit
lines and notes payable for fiscal years subsequent to 2001 are
as follows (in 000s):

|     |  |   |     | 
|---- |  | - | --- | 
|2002 |  | $ | 209 | 
|2003 |  |   | 225 | 
|2004 |  |   | 117 | 
|     |  |   |     | 
|     |  | $ | 551 | 
|     |  |   |     | 

37



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##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

9. Senior Subordinated Notes
Payable

On April 21, 1999, the Company issued $340.0
million aggregate principal amount of 9.875% senior subordinated
notes due April 15, 2009 (the Notes) in a
private placement offering (the Offering). The Notes
were subsequently registered with the Securities and Exchange
Commission. Interest on the Notes is payable semiannually on
April 15 and October 15 of each year. The Notes are
redeemable at the option of the Company, in whole or in part, in
cash, on or after April 15, 2004, together with accrued and
unpaid interest, if any, to the date of redemption. The optional
redemption prices for the twelve month periods beginning
April 15 are: 2004  104.9375%; 2005 
103.2910%; 2006  101.6450% and 2007 and
thereafter  100.00%.

During the year ended June 30, 2001 the
Company repurchased $67.0 million principal amount of Notes and
recognized an extraordinary loss of $2.0 million (or $1.2
million, net of a benefit for income taxes). The extraordinary
loss substantially represents the non-cash charge-off of a
pro rata portion of the debt issuance costs previously
capitalized when the Notes were issued.

Prior to April 15, 2002, the Company may
redeem up to 35% of the aggregate principal amount of the Notes
with the proceeds of one or more public equity offerings, at a
redemption price equal to 109.875% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date
of redemption, provided that at least 65% of the Notes remains
outstanding after any such redemption. The Notes are senior
obligations of the Company and rank pari passu in right of
payment with all existing and future senior indebtedness of the
Company and rank senior in right of payment to all existing and
future subordinated obligations of the Company. None of the
assets of the Company secure its obligations under the Notes,
and the Notes are effectively subordinated to secured
indebtedness of the Company to any third party to the extent of
assets serving as security.

The Notes are unconditionally guaranteed, jointly
and severally, by each of the Companys existing and future
domestic subsidiaries (the Subsidiary Guarantors).
The Note guarantees are senior obligations of the Subsidiary
Guarantors and rank pari passu in right of payment with all
existing and future senior indebtedness of such Subsidiary
Guarantors and senior in right of payment to all existing and
future subordinated indebtedness of such Subsidiary Guarantors.

The Notes contain certain covenants limiting the
Companys ability to incur additional indebtedness, pay
dividends and make investments and other restricted payments,
enter into transactions with 5% stockholders or affiliates,
create liens, and sell assets. The Company was in compliance
with these covenants at June 30, 2001. Additionally,
certain asset sales or specific kinds of change of control may
require the Company to offer to repurchase the Notes. In
connection with the Offering, the Company charged to operations
debt issuance costs relating to certain extinguished debt and
recognized a $4.3 million extraordinary loss (or
$2.7 million, net of a benefit for income taxes) during the
year ended June 30, 1999.

10. Premier Club Refundable Membership
Fees

Fully paid initiation fees associated with
Premier Club memberships at the Boca Raton Resort and Club
executed prior to December 31, 1997 are refundable upon the
death of a member or a members spouse and upon the
expiration of the 30-year membership term (subject to renewal at
the members option). The fee is also refundable upon a
members resignation from the Premier Club, but only out of
the proceeds of subsequent new members to join the Premier Club
following refund of all previously resigned members fees.
If any member paying over time suspends payment, amounts paid to
date are forfeited and recognized as income. Amounts forfeited
to date have not been material. Premier Club refundable
membership fees of approximately $57.8 million and
$60.4 million at June 30, 2001 and 2000, respectively,
have been reflected as a non-current liability in the
accompanying Consolidated Balance Sheets.

38



---



##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

11. Stock Options

The Company has a stock option plan under which
options to purchase shares of common stock may be granted to key
employees and directors of the Company. Options granted under
the plan are non-qualified and are granted at a price equal to
the fair market value of the common stock at the date of grant.
Generally, options granted will have a term of ten years from
the date of grant, and will vest in increments of 25% per year
over a four-year period on the annual anniversary of the date of
grant. A summary of stock option transactions for the three
years ended June 30, 2001 is as follows:

|                         |                                       |           |           |             |   |               |           |             |   |   |                |                |  |  |           |  | 
|------------------------ | ------------------------------------- | --------- | --------- | ----------- | - | ------------- | --------- | ----------- | - | - | -------------- | -------------- |  |  | --------- |  | 
|                         |                                       | Number of |           | Number of   |   |               |           | Number of  
|                         |                                       | Shares    |           | Options     |   | Range in      |           | Options    
|                         |                                       | Reserved  |           | Outstanding |   | Option Prices |           | Exercisable
|                         |                                       |           |           |             |   |               |           |            
|Balance at June 30, 1998 |                                       |           | 1,663,192 |             |   |               | 3,296,194 |             |   | $ | 10.00 - $27.30 |                |  |  | 466,422   | 
|                         | Granted                               |           |           | (1,293,433  | ) |               |           | 1,293,433   |   |   | $              | 9.31 - $10.38  |  |  |           |  | 
|                         | Exercised                             |           |           |            |   |               |           | (2,000      | ) |   | $              | 10.00          |  |  |           |  | 
|                         | Forfeited                             |           |           | 132,743     |   |               |           | (132,743    | ) |   | $              | 10.00 - $26.38 |  |  |           |  | 
|                         |                                       |           |           |             |   |               |           |             |   |   |                |                |  |  |           | 
|Balance at June 30, 1999 |                                       |           | 502,502   |             |   |               | 4,454,884 |             |   | $ | 9.31 - $27.30  |                |  |  | 1,247,273 | 
|                         | Additional shares reserved under plan |           |           | 2,500,000   |   |               |           |            |   |   |                |               |  |  |           |  | 
|                         | Granted                               |           |           | (855,000    | ) |               |           | 855,000     |   |   | $              | 9.50 - $ 9.75  |  |  |           |  | 
|                         | Exercised                             |           |           |            |   |               |           | (4,702      | ) |   | $              | 10.00          |  |  |           |  | 
|                         | Forfeited                             |           |           | 162,538     |   |               |           | (162,538    | ) |   | $              | 9.75 - $27.30  |  |  |           |  | 
|                         |                                       |           |           |             |   |               |           |             |   |   |                |                |  |  |           | 
|Balance at June 30, 2000 |                                       |           | 2,310,040 |             |   |               | 5,142,644 |             |   | $ | 9.31 - $26.38  |                |  |  | 2,269,633 | 
|                         | Granted                               |           |           | (1,140,000  | ) |               |           | 1,140,000   |   |   | $              | 13.69          |  |  |           |  | 
|                         | Exercised                             |           |           |            |   |               |           | (55,613     | ) |   | $              | 9.31 - $10.00  |  |  |           |  | 
|                         | Forfeited                             |           |           | 71,062      |   |               |           | (71,062     | ) |   | $              | 9.31 - $13.69  |  |  |           |  | 
|                         |                                       |           |           |             |   |               |           |             |   |   |                |                |  |  |           | 
|Balance at June 30, 2001 |                                       |           | 1,241,102 |             |   |               | 6,155,969 |             |   | $ | 9.31 - $26.38  |                |  |  | 3,480,986 | 
|                         |                                       |           |           |             |   |               |           |             |   |   |                |                |  |  |           | 

The weighted average exercise price and weighted
average remaining contractual life of the Companys
outstanding options at June 30, 2001 is set forth below.

|                         |  |             |           |             |  |          |           |             |  |               |       |  |  |  |           |  |  |   |       | 
|------------------------ |  | ----------- | --------- | ----------- |  | -------- | --------- | ----------- |  | ------------- | ----- |  |  |  | --------- |  |  | - | ----- | 
|                         |  |             |           | Weighted    |  |          |           |             |  | (Vested Only)
|                         |  |             |           | Average     |  | Weighted |           |             |  | Weighted     
|                         |  | Number of   |           | Remaining   |  | Average  |           |             |  | Average      
|                         |  | Options     |           | Contractual |  | Exercise |           | Options     |  | Exercise     
|Range of Exercise Prices |  | Outstanding |           | Life        |  | Price    |           | Exercisable |  | Price        
|                         |  |             |           |             |  |          |           |             |  |              
|$9.31 - $13.69           |  |             | 3,909,228 |             |  |          | 7.8 years |             |  | $             | 10.81 |  |  |  | 1,552,569 |  |  | $ | 9.73  | 
|$16.63 - $19.19          |  |             | 1,284,904 |             |  |          | 6.5 years |             |  | $             | 17.39 |  |  |  | 968,178   |  |  | $ | 17.39 | 
|$21.13 - $27.30          |  |             | 961,837   |             |  |          | 5.9 years |             |  | $             | 25.53 |  |  |  | 960,239   |  |  | $ | 25.54 | 
|                         |  |             |           |             |  |          |           |             |  |               |       |  |  |  |           |  |  |   |       | 
|                         |  |             | 6,155,969 |             |  |          |           |             |  |               |       |  |  |  | 3,480,986 |  |  |   |       | 
|                         |  |             |           |             |  |          |           |             |  |               |       |  |  |  |           |  |  |   |       | 

39



---



##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The weighted average exercise price of all
options at June 30, 2001, 2000 and 1999 was $14.49, $14.56
and $15.53, respectively. Pro forma information relating to net
income and earnings per share is required by SFAS No. 123,
and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that
statement. The fair value for these options was estimated at the
date of grant using a Black-Scholes option pricing model with
the following assumptions for the year ended June 30:

|                                                          |  |      |          |      |  |      |           |   |  |   |            |  
|--------------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | --------- | - |  | - | ---------- | -
|                                                          |  | 2001 |          | 2000 |  | 1999
|                                                          |  |      |          |      |  |     
|Pro forma net income (loss)                               |  | $    | (730,000 | )    |  | $    | 8,390,000 |   |  | $ | (2,210,000 | )
|Pro forma net income (loss) per share                     |  | $    | (0.02    | )    |  | $    | 0.21      |   |  | $ | (0.06      | )
|Pro forma weighted average fair value of options
	granted |  | $    | 5.41     |      |  | $    | 6.99      |   |  | $ | 7.83       |  
|Risk free interest rate                                   |  |      | 4.00     | %    |  |      | 6.00      | % |  |   | 6.35       | %
|Expected lives                                            |  |      | 6 years  |      |  |      | 6 years   |   |  |   | 6 years    |  
|Expected volatility                                       |  |      | 30       | %    |  |      | 30        | % |  |   | 42         | %

12. Commitments and
Contingencies

Capital
Expenditures

At June 30, 2001, the Company had
commitments outstanding for capital expenditures under purchase
orders and contracts of approximately $35.5 million
associated with expansion projects at the Boca Raton Resort and
Club.

Leases

The Company leases the site of the Radisson Bahia
Mar Resort and Yachting Center from the City of Fort Lauderdale
under an operating lease, which has a term through
August 31, 2062. Under the lease agreement, the Company is
required to pay annual rent equal to the greater of a percentage
(4.0% through September 30, 2012 and 4.25% thereafter) of
annual gross operating revenue, as defined, or a $300,000
minimum annual rent (escalating after September 2037). Rent
expense under this lease totaled $891,000, $850,000 and $785,000
for the years ended June 30, 2001, 2000 and 1999,
respectively. The lease agreement also requires the Company to
set aside 3% of Bahia Mars revenue annually, as defined in
the lease agreement, for the purchase, replacement and upgrade
of furniture, fixtures and equipment. All such restricted funds
have been spent on their required purpose through June 30,
2001.

Future minimum lease obligations under various
noncancellable operating leases with initial terms in excess of
one year at June 30, 2001 (including the lease described in
the preceding paragraph) are as follows (in 000s):

|           |  |   |        | 
|---------- |  | - | ------ | 
|2002       |  | $ | 1,976  | 
|2003       |  |   | 1,211  | 
|2004       |  |   | 508    | 
|2005       |  |   | 300    | 
|2006       |  |   | 300    | 
|Thereafter |  |   | 16,800 | 
|           |  |   |        | 
|           |  | $ | 21,095 | 
|           |  |   |        | 

As of June 30, 2001, the Company has two
letters of credit, which secure two operating leases. The
letters of credit are collateralized by certificates of deposit
totaling $500,000, which mature in November 2001 and are
included in restricted cash in the accompanying Consolidated
Balance Sheets.

40



---



##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Litigation

The Company is not involved in any material legal
proceedings. However, the Company may from time to time become a
party to legal proceedings arising in the ordinary course of
business, which are incidental to its business.

Environmental
Matters

Under various federal, state, and local
environmental laws and regulations, an owner or operator of real
property may be liable for the costs of removal or remediation
of certain hazardous or toxic substances on such real property,
as well as for the costs of complying with environmental laws
regulating on-going operations. The Company may be potentially
liable for any such costs in connection with the ownership and
operation of its properties. The Company has obtained
Phase I environmental site assessments for the real
property on which each of the resorts is located. In addition,
Phase II environmental assessments have been conducted at
several properties. Phase I assessments are intended to
identify existing, potential and suspected environmental
contamination and regulatory compliance concerns, and generally
include historical reviews of the property, reviews of certain
public records, preliminary visual investigations of the site
and surrounding properties and the preparation and issuance of
written reports. Phase II assessments involve the sampling
of environmental media, such as subsurface soil and groundwater,
to confirm whether contamination is present at areas of concern
identified during the course of a Phase I assessment.

The Phase I and Phase II assessments
have not revealed any environmental liability or compliance
concerns that the Company believes would have a material adverse
effect on its business, nor is the Company aware of any such
material liability or concern. Phase I and Phase II
assessments cannot provide full and complete knowledge of
environmental conditions and compliance matters. Therefore,
there can be no assurances that: (1) material environmental
liabilities or compliance concerns do not exist; (2) an
identified matter that does not appear reasonably likely to be
material will not result in significantly greater expenditures
than is currently anticipated; or (3) there are no material
environmental liabilities or compliance concerns of which the
Company is unaware.

13. License and Franchise
Agreements

Upon the acquisition of the Hyatt Regency Pier 66
Hotel and Marina, the Company assumed the rights of the
franchise agreement with Hyatt Franchise Corporation. The
franchise agreement expires in November 2014 with various early
termination provisions and liquidated damages for early
termination. The franchise agreement provides for payments of
monthly royalty fees equal to 5.0% of gross room revenue. The
franchise agreement also provides for the payment of certain
Hyatt allocable chain expenses primarily relating to
sales and marketing. Aggregate Hyatt fees and expenses amounted
to $1.6 million, $1.4 million and $1.4 million
for the years ended June 30, 2001, 2000 and 1999,
respectively. The franchise agreement also requires maintenance
of a customary reserve for replacement of furniture, fixtures
and equipment equal to 4.0% of gross room revenue. All such
restricted funds have been spent for their required purpose
through June 30, 2001.

Upon the acquisition of Radisson Bahia Mar Resort
and Yachting Center, the Company assumed the rights of a
ten-year license agreement with Radisson Hotels International,
Inc. (Radisson). The terms of the agreement allow
the Company to operate the resort using the Radisson system.
Annual fees payable to Radisson pursuant to the agreement equal
5.0% of gross room sales. Fees paid to Radisson pursuant to the
license agreement totaled $469,000, $469,000 and $436,000 for
the years ended June 30, 2001, 2000 and 1999, respectively.

41



---



##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

14. Related Party Transactions

The following is a summary of certain agreements
and transactions between or among the Company and certain
related parties. It is the Companys policy to enter into
any such transactions with related parties on terms that, on the
whole, are no less favorable than those that would be available
from unaffiliated parties.

The Company pays a management fee to Huizenga
Holdings, Inc., a corporation whose sole shareholder is the
Companys Chief Executive Officer and Chairman,
H. Wayne Huizenga, equal to 1% of total revenue, excluding
all NHL national television revenue, enterprise rights and
expansion fees. Pursuant to the agreement, Huizenga Holdings,
Inc. primarily provides certain administrative, financing, tax,
investor relations and strategy related services to the Company.
The Company incurred management fees of approximately
$3.7 million, $4.1 million and $3.9 million for
the years ended June 30, 2001, 2000 and 1999, respectively.
Such management fees are included as a component of selling,
general and administrative expense in the accompanying
Consolidated Statements of Operations.

The Company paid Callaghan & Partners, Ltd.
$448,000, $501,000 and $1.0 million for construction and
development services during the years ended June 30, 2001,
2000 and 1999, respectively. The Company is obligated to pay
Callaghan & Partners, Ltd. 1.5% of the budgeted construction
and development cost of certain approved projects. As of
June 30, 2001, unpaid amounts associated with such approved
projects totaled $326,000. Dennis J. Callaghan, a director
of the Company, is President of Callaghan & Partners, Ltd.,
an entity founded by Mr. Callaghan to acquire, develop,
finance, renovate and manage resorts, hotels and residential and
commercial properties in the United States and abroad.

Until June 30, 2000, Leisure Management
International, Inc. (LMI), an entity that was 50%
owned by Mr. Huizenga, managed the Miami Arena under a
management agreement with Decoma Miami Associates, Ltd., a
company in which the Company owns a 78% interest
(Decoma). Under the management agreement, LMI
received from Decoma management fees of approximately $142,000
and $150,000 for the years ended June 30, 2000 and 1999,
respectively. On June 30, 2000, Decomas contract with
the Miami Sports and Exhibition Authority (MSEA) was
terminated and the Company was paid a termination fee by MSEA of
$10.5 million. Following termination of Decomas
contract with MSEA, Decoma terminated its agreement with LMI and
paid LMI a termination fee of $400,000. The Company also entered
into an agreement with LMI to manage the National Car Rental
Center, home of the Panthers (which were sold by the Company in
July 2001), and incurred management fees of approximately
$205,000 and $200,000 for the years ended June 30, 2000 and
1999, respectively. Mr. Huizenga disposed of his interest
in LMIs ongoing operations in March 2000.

The Panthers had a contract with SportsChannel
Florida, a Florida limited partnership, 70% of which was owned
by Mr. Huizenga until January 2000, when such entity was
sold. Under the terms of the contract, the Panthers granted
local television broadcast and pay television rights,
exclusively to SportsChannel Florida. Aggregate payments by
SportsChannel Florida totaled $5.5 million ($2.5 million of
which was paid before SportsChannel Florida was sold to the
unrelated party) for the year ended June 30, 2000 and $3.1
million for the year ended June 30, 1999.

42



---



##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

15. Income Taxes

The income tax effect of temporary differences
comprising the deferred tax assets and deferred tax liabilities
in the accompanying Consolidated Balance Sheets is set forth
below (in 000s):

|                                                                           |  |      |         |      |  |   |         |  
|-------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                                                           |  | 2001 |         | 2000
|                                                                           |  |      |         |     
|Deferred tax assets:                                                       |  |      |         |      |  |   |         |  
|Federal and state tax operating loss and general
	tax credit carryforwards |  | $    | 3,679   |      |  | $ | 1,635   |  
|Deferred revenue and other                                                 |  |      | 16,411  |      |  |   | 11,408  |  
|Deferred tax liabilities:                                                  |  |      |         |      |  |   |         |  
|Book basis in property over tax basis                                      |  |      | (52,526 | )    |  |   | (45,939 | )
|Valuation allowance                                                        |  |      |        |      |  |   | (2,747  | )
|                                                                           |  |      |         |      |  |   |         |  
|Net deferred tax liabilities                                               |  | $    | (32,436 | )    |  | $ | (35,643 | )
|                                                                           |  |      |         |      |  |   |         |  

The components of the provision for income taxes
relating to continuing operations for the years ended
June 30 is set forth below (in 000s).

|                                   |         |      |        |        |  |      |        |       |  |   |        |       | 
|---------------------------------- | ------- | ---- | ------ | ------ |  | ---- | ------ | ----- |  | - | ------ | ----- | 
|                                   |         | 2001 |        | 2000   |  | 1999
|                                   |         |      |        |        |  |     
|Current:                           |         |      |        |        |  |      |        |       |  |   |        |      
|                                   | Federal |      | $      | 12,722 |  |      | $      | 6,290 |  |   | $      | 4,917 | 
|                                   | State   |      |        | 1,528  |  |      |        | 717   |  |   |        | 578   | 
|Federal and state deferred benefit |         |      | (6,779 | )      |  |      | (1,551 | )     |  |   | (1,185 | )    
|Change in valuation allowance      |         |      | (2,747 | )      |  |      | (4,651 | )     |  |   | (3,010 | )    
|                                   |         |      |        |        |  |      |        |       |  |   |        |      
|Provision for income taxes         |         | $    | 4,724  |        |  | $    | 805    |       |  | $ | 1,300  |      
|                                   |         |      |        |        |  |      |        |       |  |   |        |      

Realization of future tax benefits related to
deferred tax assets is dependent on many factors, including the
Companys ability to generate future taxable income. The
valuation allowance is adjusted in the period management
determines it is more likely than not that deferred tax assets
will or will not be realized. Management has considered these
factors in reaching its conclusion to release the valuation
allowance during the year ended June 30, 2001.

A reconciliation between the statutory federal
income tax expense relating to continuing operations and the
income tax expense at the Companys effective rate for the
year ended June 30, 2001, 2000 and 1999 is set forth below
(in 000s).

|                                                                                 |  |      |        |      |  |      |        |   |  |   |        |  
|-------------------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                                                 |  | 2001 |        | 2000 |  | 1999
|                                                                                 |  |      |        |      |  |     
|Computed expected income tax expense based on
	statutory federal income tax rate |  | $    | 6,477  |      |  | $    | 6,322  |   |  | $ | 3,330  |  
|State income taxes, net of federal benefit                                       |  |      | 740    |      |  |      | 722    |   |  |   | 660    |  
|Non-deductible amortization                                                      |  |      | 365    |      |  |      | 345    |   |  |   |       |  
|Non-deductible expenses                                                          |  |      | 449    |      |  |      |       |   |  |   |       |  
|Credit for employer taxes                                                        |  |      | (648   | )    |  |      | (703   | ) |  |   |       |  
|Decrease in valuation allowance                                                  |  |      | (2,747 | )    |  |      | (4,651 | ) |  |   | (3,010 | )
|Other, net                                                                       |  |      | 88     |      |  |      | (1,230 | ) |  |   | 320    |  
|                                                                                 |  |      |        |      |  |      |        |   |  |   |        |  
|Provision for income taxes                                                       |  | $    | 4,724  |      |  | $    | 805    |   |  | $ | 1,300  |  
|                                                                                 |  |      |        |      |  |      |        |   |  |   |        |  

16. Employee Benefits

Certain of the Companys employees are
participants in a qualified 401(k) Savings and Retirement Plan
(the 401(k)), a defined contribution plan. The
401(k) is available to employees over the age of 21 with at

43



---



##### 



BOCA RESORTS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

least one year of service who work a minimum of
1,000 hours per year. The Company may match a discretionary
percentage of the amount contributed by the participant up to a
limit of 6% of annual compensation. Employees may contribute up
to 10% of their annual compensation subject to a maximum dollar
amount as specified by applicable regulations. Participants are
automatically vested in compensation deferrals. Vesting in
Company matching contributions is at the rate of 20% each year,
after one year of plan participation, reaching 100% after five
years. The Company did not make any matching contributions
during the years ended June 30, 2001, 2000 or 1999.

The Boca Raton Resort and Club has in place a
non-qualified 401(a) Plan (the Boca Plan). The Boca
Plan is available to employees with at least one year of service
who work a minimum of 1,000 hours per year. The Boca Plan allows
participants to contribute up to 16% of their total
compensation. The Company is required to contribute 50% of the
first 6% of the employees earnings. The Companys
matching contribution totaled $698,000, $659,000 and $489,000
for the years ended June 30, 2001, 2000 and 1999,
respectively.

17. Quarterly Financial Information
(Unaudited and in thousands except per share data)

|                                                            |  |  |      |         |  |         |         |         |  |         |        |      |  |   |         |  |  |   |        |   |  |   |         | 
|----------------------------------------------------------- |  |  | ---- | ------- |  | ------- | ------- | ------- |  | ------- | ------ | ---- |  | - | ------- |  |  | - | ------ | - |  | - | ------- | 
|                                                            |  |  |      | First   |  | Second  |         | Third   |  | Fourth  |        |     
|                                                            |  |  |      | Quarter |  | Quarter |         | Quarter |  | Quarter |        | Year
|                                                            |  |  |      |         |  |         |         |         |  |         |        |     
|Revenue                                                     |  |  | 2001 |         |  | $       | 59,586  |         |  | $       | 95,545 |      |  | $ | 101,986 |  |  | $ | 72,054 |   |  | $ | 329,171 | 
|                                                            |  |  | 2000 |         |  | $       | 51,417  |         |  | $       | 91,478 |      |  | $ | 126,035 |  |  | $ | 92,430 |   |  | $ | 361,360 | 
|                                                           
|Operating income (loss)                                     |  |  | 2001 |         |  | $       | (7,498  | )       |  | $       | 18,616 |      |  | $ | 37,604  |  |  | $ | 11,768 |   |  | $ | 60,490  | 
|                                                            |  |  | 2000 |         |  | $       | (9,978  | )       |  | $       | 17,767 |      |  | $ | 45,805  |  |  | $ | 17,979 |   |  | $ | 71,573  | 
|                                                           
|Income (loss) from continuing operations                    |  |  | 2001 |         |  | $       | (21,347 | )       |  | $       | 5,999  |      |  | $ | 29,672  |  |  | $ | (544   | ) |  | $ | 13,780  | 
|                                                            |  |  | 2000 |         |  | $       | (22,983 | )       |  | $       | 4,679  |      |  | $ | 31,761  |  |  | $ | 3,800  |   |  | $ | 17,257  | 
|                                                           
|Net income (loss)                                           |  |  | 2001 |         |  | $       | (27,583 | )       |  | $       | 1,433  |      |  | $ | 26,576  |  |  | $ | 3,256  |   |  | $ | 3,682   | 
|                                                            |  |  | 2000 |         |  | $       | (31,034 | )       |  | $       | 3,532  |      |  | $ | 33,161  |  |  | $ | 7,827  |   |  | $ | 13,486  | 
|                                                           
|Basic income (loss) per share from continuing
	operations   |  |  | 2001 |         |  | $       | (0.52   | )       |  | $       | 0.15   |      |  | $ | 0.73    |  |  | $ | (0.01  | ) |  | $ | 0.34    | 
|                                                            |  |  | 2000 |         |  | $       | (0.56   | )       |  | $       | 0.11   |      |  | $ | 0.78    |  |  | $ | 0.09   |   |  | $ | 0.42    | 
|                                                           
|Diluted income (loss) per share from continuing
	operations |  |  | 2001 |         |  | $       | (0.52   | )       |  | $       | 0.14   |      |  | $ | 0.71    |  |  | $ | (0.01  | ) |  | $ | 0.34    | 
|                                                            |  |  | 2000 |         |  | $       | (0.56   | )       |  | $       | 0.11   |      |  | $ | 0.78    |  |  | $ | 0.09   |   |  | $ | 0.42    | 
|                                                           
|Basic net income (loss) per share                           |  |  | 2001 |         |  | $       | (0.68   | )       |  | $       | 0.04   |      |  | $ | 0.65    |  |  | $ | 0.08   |   |  | $ | 0.09    | 
|                                                            |  |  | 2000 |         |  | $       | (0.76   | )       |  | $       | 0.09   |      |  | $ | 0.81    |  |  | $ | 0.19   |   |  | $ | 0.33    | 
|                                                           
|Diluted net income (loss) per share                         |  |  | 2001 |         |  | $       | (0.68   | )       |  | $       | 0.03   |      |  | $ | 0.64    |  |  | $ | 0.08   |   |  | $ | 0.09    | 
|                                                            |  |  | 2000 |         |  | $       | (0.76   | )       |  | $       | 0.09   |      |  | $ | 0.81    |  |  | $ | 0.19   |   |  | $ | 0.33    | 

The Companys revenue and income are
seasonal in nature and are directly affected by the strength and
seasonality of the tourism and leisure industry. Tourism is
dependent upon weather and the traditional seasons for travel.
Because of this variability in demand, the Companys
revenue fluctuates quarter-to-quarter, and revenue for the first
quarter of each year can be expected to be lower than the
remaining quarters. Although historically the trend in quarterly
revenue for the second, third and fourth quarters of each year
is generally higher than the first quarter, there can be no
assurance that this will occur in future periods. Accordingly,
quarterly or other interim results should not be considered
indicative of results to be expected for any quarter or for the
full year.

44



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##### 



Item 9.     Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

PART III

The information required by Items 10, 11, 12 and
13 of Part III of Form 10-K will be set forth in the Proxy
Statement of the Company relating to the Companys 2001
Annual Meeting of Stockholders and is incorporated herein by
reference.

PART IV

Item 14.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K

(a)(1) Financial Statements of the Company
are set forth in Part II, Item 8.



| |     |                                                                                                                                                                                                                                                                    
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | All Financial Statement Schedules are omitted
	because they are not applicable, are not present in amounts
	sufficient to require submission of the schedules or the
	required information is presented in the Consolidated Financial
	Statements or related notes.



| |                                                                   
| | ------------------------------------------------------------------
| | (3) Exhibits 
	(See Index to Exhibits included elsewhere herein.)

(b) Reports on Form 8-K

The Company filed a Current Report on
Form 8-K reporting that its entertainment and sports
business was under contract for sale. The sale closed on
July 25, 2001.

45



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##### 



SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this Annual Report on Form 10-K to be
signed on its behalf by the undersigned, thereunto duly
authorized.



| |                   
| | ------------------
| | BOCA RESORTS, INC.



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

| |                  
| | -----------------
| |                  
| | William M. Pierce
| | Attorney-In-Fact 

March 14, 2002


Pursuant to the requirements of the Securities
Exchange Act of 1934, this Annual Report on Form 10-K has
been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

|                                       |  |                                                                                                    |  |               
|-------------------------------------- |  | -------------------------------------------------------------------------------------------------- |  | --------------
|Signature                              |  | Title                                                                                              |  | Date          
|                                       |  |                                                                                                    |  |               
|/s/ WILLIAM M. PIERCEWilliam M. Pierce |  | Chief Financial Officer, Treasurer and Senior
        Vice President (Principal Financial Officer) |  | March 14, 2002
|/s/ STEVEN M. DAURIASteven M. Dauria   |  | Vice President and Corporate Controller
        (Principal Accounting Officer)                     |  | March 14, 2002

46



---



##### 



EXHIBIT INDEX

|         |       |  |  |                        |  |                                                                                                                                                                                                                                                
|-------- | ----- |  |  | ---------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |       |  |  | Description of Exhibit
|         |       |  |  |                       
|         | 2.1   |  |  |                       |  | Exchange Agreement dated October 25, 1996 by
	and between the Company and H. Wayne Huizenga.(1)                                                                                                                                                
|         | 2.3   |  |  |                       |  | Partnership Exchange Agreement dated
	October 25, 1996 by and between Florida Panthers Hockey
	Club, Ltd. and H. Wayne Huizenga.(1)                                                                                                            
|         | 2.9   |  |  |                       |  | Amended and Restated Contribution and Exchange
	Agreement, dated as of March 20, 1997, by and among Florida
	Panthers Holdings, Inc., Panthers BRHC Limited, Boca Raton Hotel
	and Club Limited Partnership, BRMC, L.P. and BRMC Corporation(2)
|         | 2.10  |  |  |                       |  | Merger Agreement, dated July 8, 1997, by and
	among the Company, FPH/RHI Merger Corp., Inc., ResortHill, Inc.
	and Gary V. Chensoff.(3)                                                                                                        
|         | 2.11  |  |  |                       |  | Agreement and Plan of Merger dated as of
	November 17, 1997 by Boca Resorts, Inc. (formerly Florida
	Panthers Holdings, Inc.), a Delaware corporation.(2)                                                                                      
|         | 3.2   |  |  |                       |  | Amended and Restated By-Laws of the Registrant                                                                                                                                                                                                 
|         | 10.6  |  |  |                       |  | Management Agreement by and between the Company
	and Huizenga Holdings, Inc.(1)                                                                                                                                                                
|         | 10.10 |  |  |                       |  | Second Amended and Restated 1996 Stock Option
	Plan.(4)                                                                                                                                                                                        
|         | 10.15 |  |  |                       |  | Indenture dated April 21, 1999 between Boca
	Resorts, Inc. (formerly Florida Panthers Holdings, Inc.), The
	Guarantors and The Bank of New York as Trustee(5)                                                                                  
|         | 10.16 |  |  |                       |  | Credit Agreement dated April 21, 1999
	between Florida Panthers Hotel Corporation, the Initial Lenders
	named therein, Bear, Stearns & Co. Inc. as Syndication Agent
	and Bankers Trust Company as Administrative Agent(5)                     
|         | 21.1  |  |  |                       |  | Subsidiaries of the Company(6)                                                                                                                                                                                                                 
|         | 23.1  |  |  |                       |  | Consent of Arthur Andersen LLP                                                                                                                                                                                                                 
|         | 24.1  |  |  |                       |  | Powers of Attorney (included as part of the
	signature page of this Annual Report on Form 10-K).                                                                                                                                               






|    |                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to the Companys
	Registration Statement on Form S-1  SEC File
	No. 333-12191.                              
|(2) | Incorporated by reference to the Companys
	Registration Statement on Form S-4  SEC File
	333-28951.                                  
|(3) | Incorporated by reference to the Companys
	Registration Statement on Form S-1  SEC File
	No. 333-30925.                              
|(4) | Incorporated by reference to the Companys
	Registration Statement on Form S-8  SEC File
	No. 333-92227.                              
|(5) | Incorporated by reference to the Companys
	Registration Statement on Form S-4  SEC File
	No. 333-77945.                              
|(6) | Incorporated by reference to the Companys
	Annual Report on Form 10-K For the Fiscal Year Ended
	June 30, 1999  SEC File No. 1-13173.