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

                              --------------------

                                    FORM 10-Q

                              --------------------

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1999

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                              --------------------

                        Commission File Number: 000-24331

                      Raintree Resorts International, Inc.
                     CR Resorts Capital, S. de R.L. de C.V. *
             (Exact name of Registrant as Specified in its Charter)

                              --------------------

                Nevada                                       76-0549149
    (State or other jurisdiction                          (I.R.S. Employer
  of incorporation  or organization)                     Identification No.)


                         10000 Memorial Drive, Suite 480
                              Houston, Texas 77024
          (Address of principal executive offices, including zip code)

                                 (713) 613-2800
              (Registrant's telephone number, including area code)


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


     As of June 30, 1999, the  Registrant had 10,766,300  shares of Common Stock
outstanding and Warrants to purchase  1,869,962  shares of Common Stock at $0.01
per share.


     *CR Resorts  Capital,  S. de R.L. de C.V., a subsidiary of Raintree Resorts
International,  Inc.,  is a  co-registrant,  formed under the laws of the United
Mexican States (Mexican tax identification number CRC 970811E5A).

                              --------------------




                                       1
<PAGE>

<TABLE>
<CAPTION>

              RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS



                                                                                                                   Page
<S>                                                                                                                <C>

PART I. FINANCIAL INFORMATION

     ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
         Consolidated Balance Sheets as of
              December 31, 1998 and June 30, 1999 (Unaudited) ................................................      3
         Consolidated Statements of Operations and Comprehensive Loss
              for the Three and Six Months ended June 30, 1998 and 1999 (Unaudited) ..........................      4
         Consolidated Statements of Cash Flows
              for the Six Months ended June 30, 1998 and 1999 (Unaudited).....................................      5
         Notes to Consolidated Financial Statements (Unaudited) ..............................................      6

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS........................................................     11

     ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.......................................     15

PART II. OTHER INFORMATION

     ITEM 1. LEGAL PROCEEDINGS................................................................................     16
     ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS........................................................     16
     ITEM 3. DEFAULTS UPON SENIOR SECURITIES..................................................................     16
     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............................................     16
     ITEM 5. OTHER INFORMATION ...............................................................................     16
     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................................................................     16

SIGNATURES....................................................................................................     17











</TABLE>










                                       2
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<TABLE>
<CAPTION>
                                                    PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                                        RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES

                                                     CONSOLIDATED BALANCE SHEETS
                                           (in thousands except share and per share data)



                                                                                                                (Unaudited)
                                                                                           December 31,           June 30,
                                                                                               1998                 1999
                                                                                          --------------       --------------
<S>                                                                                          <C>                  <C>

Assets
    Cash and cash equivalents ...............................................                $  2,960             $  2,857
    Vacation Interval receivables and other trade receivables, net...........                  51,835               58,989
    Inventories .............................................................                     775                1,023
    Refundable Mexican taxes ................................................                   3,488                4,324
    Office furniture and equipment ..........................................                   3,046                3,297
    Land held for vacation ownership development ............................                  22,170               22,654
    Equity investments.......................................................                   2,949                3,890
    Cost of unsold vacation ownership intervals and related club memberships.                  27,606               23,011
    Retained interest in hotel cash flows ...................................                   4,000                4,000
    Deferred loan costs, net ................................................                   7,413                7,177
    Goodwill, net  ..........................................................                   1,240                   --
    Prepaid and other assets  ...............................................                   2,185                2,779
                                                                                             --------             --------
Total assets ................................................................                $129,667             $134,001
                                                                                             ========             ========

Liabilities and Shareholders' Investment
Liabilities
    Accounts payable and accrued liabilities  ...............................                $ 11,850             $ 13,934
    Notes payable  ..........................................................                  17,135               22,924
    Senior Notes, due 2004, net of unamortized original issue
       discount of $7,907 and $7,240, respectively ..........................                  92,093               92,760
    Taxes payable  ..........................................................                   1,618                1,679
    Unearned services fees ..................................................                   2,028                3,679
                                                                                             --------             --------
Total liabilities  ..........................................................                 124,724              134,976

Commitments and Contingencies

Shareholders' Investment
    Preferred stock; par value $.001; 5,000,000 shares authorized, shares
       issued and outstanding 37,500 at December 31, 1998
       and June 30, 1999.....................................................                      --                   --
    Convertible preferred stock; $100 per share liquidation value;
       20,775 and 15,775 shares issued and outstanding at December 31, 1998
       and June 30, 1999, respectively.......................................                   2,078                1,578
    Common stock; par value $.001; 45,000,000 shares authorized, shares
       Issued and outstanding 10,766,300 at December 31, 1998 and
       June 30, 1999 ........................................................                      11                   11
    Additional paid-in capital ..............................................                   7,371                7,371
    Warrants to purchase 1,869,962 shares of common stock....................                   9,331                9,331
    Accumulated deficit .....................................................                 (13,737)             (19,340)
    Cumulative translation adjustment .......................................                    (111)                  74
                                                                                             --------             --------
Total shareholders' investment (deficit).....................................                   4,943                 (975)
                                                                                             --------             --------
Total liabilities and shareholders' investment ..............................                $129,667             $134,001
                                                                                             ========             ========




                             The accompanying notes are an integral part of these financial statements.
</TABLE>


                                       3
<PAGE>


<TABLE>
<CAPTION>

                                        RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES

                                   CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                                (in thousands except per share data)
                                                             (Unaudited)



                                                                   Six Months Ended                 Three Months Ended
                                                                       June 30,                          June 30,
                                                            ------------------------------    ------------------------------
                                                                1998              1999            1998              1999
                                                            ------------      ------------    ------------      ------------
<S>                                                           <C>               <C>             <C>               <C>
Statement of Operations
Revenues
   Vacation Interval sales ........................           $ 26,512          $ 32,300        $ 12,389          $ 15,258
   Rental and service fee income ..................              4,440             5,022           1,947             2,527
   Interest income on Vacation Interval receivables              2,869             3,715           1,305             1,638
   Other income ...................................              1,424             1,382             541               649
                                                              --------          --------        --------          --------
     Total revenues ...............................             35,245            42,419          16,182            20,072

Costs and Operating Expenses
   Cost of Vacation Interval sales.................              5,851             8,609           2,704             4,272
   Provision for doubtful accounts ................              2,085             2,518             861             1,341
   Advertising, sales and marketing ...............             10,572            14,743           5,289             7,300
   Maintenance and energy .........................              3,953             4,931           2,164             2,824
   General and administrative .....................              4,854             5,651           2,728             2,723
   Depreciation ...................................                219               467             139               243
   Amortization of goodwill .......................                 --             1,264              --               168
                                                              --------          --------        --------          --------
     Total costs and operating expenses ...........             27,534            38,183          13,885            18,871
                                                              --------          --------        --------          --------
Operating income ..................................              7,711             4,236           2,297             1,201
   Interest expense, net ..........................              7,239             8,723           3,617             4,347
   Equity in losses on equity investments .........                 12               192              12                96
   Foreign currency exchange losses, net...........              1,927               198           1,098               727
                                                              --------          --------        --------          --------
Net loss before taxes .............................             (1,467)           (4,877)         (2,430)           (3,969)
   Foreign income and asset taxes..................                600               726             303               470
                                                              --------          --------        --------          --------
Net loss before preferred dividends ...............             (2,067)           (5,603)         (2,733)           (4,439)
   Preferred stock dividends ......................                309               401             154               194
                                                              --------          --------        --------          --------
Net loss available to common shareholders .........           $ (2,376)         $ (6,004)       $ (2,887)         $ (4,633)
                                                              ========          ========        ========          ========

Net loss per share
    (Basic and Diluted)............................           $   (.22)         $   (.56)       $   (.27)         $   (.43)
Weighted average number of common shares
    (Basic and Diluted)............................             10,729            10,766          10,756            10,766


Comprehensive Loss
Net loss before preferred stock dividends .........           $ (2,067)         $ (5,603)       $ (2,733)         $ (4,439)
Other comprehensive income:
   Foreign currency translation adjustment ........                 --               185              --               120
                                                              --------          --------        --------          --------
Comprehensive loss ................................           $ (2,067)         $ (5,418)       $ (2,733)         $ (4,319)
                                                              ========          ========        ========          ========





                             The accompanying notes are an integral part of these financial statements.
</TABLE>




                                       4
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<TABLE>
<CAPTION>


                                        RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES

                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (in thousands)
                                                             (Unaudited)

                                                                                                   Six Months Ended
                                                                                                        June 30,
                                                                                          -----------------------------------
                                                                                               1998                1999
                                                                                          --------------       --------------
<S>                                                                                          <C>                  <C>
Operating activities
   Net loss ....................................................................             $ (2,067)            $ (5,603)
   Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization .............................................                1,866                3,056
     Provision for doubtful accounts ...........................................                2,085                2,518
     Equity in losses on equity investments ....................................                   12                  192
   Changes in other operating assets and liabilities:
     Vacation Interval receivables and other trade receivables .................               (9,187)              (9,461)
     Inventories ...............................................................                   --                 (213)
     Cost of unsold vacation ownership intervals and related club memberships ..                4,458                4,603
     Prepaid and other assets ..................................................               (2,598)                (989)
     Accounts payable and accrued liabilities ..................................                2,179                1,970
     Taxes payable/refundable ..................................................                1,217                 (805)
     Unearned services fees ....................................................                  629                1,650
                                                                                             --------             --------
Net cash used in operating activities...........................................               (1,352)              (3,082)

Investing activities
   Purchase of land and other assets held for vacation ownership development ...                 (959)              (1,617)
   Additions to office furniture and equipment .................................               (1,667)                (637)
                                                                                             --------             --------
Net cash used in investing activities ..........................................               (2,626)              (2,254)

Financing activities
   Additional bank and other loans .............................................                2,000               12,884
   Repayment of bank loans......................................................                   --               (7,247)
   Redemption of convertible preferred stock ...................................                   --                 (500)
   Capital contributions .......................................................                  360                   --
                                                                                             --------             --------
Net cash provided by financing activities ......................................                2,360                5,137

Decrease in cash and cash equivalents ..........................................               (1,618)                (199)
Effect of exchange rate changes on cash ........................................                   --                   96
Cash and cash equivalents, at beginning of the period ..........................                8,995                2,960
                                                                                             --------             --------
Cash and cash equivalents, at end of the period ................................             $  7,377             $  2,857
                                                                                             ========             ========

Supplemental disclosures of cash flow information
   Cash paid during the period for interest ....................................             $  6,402             $  7,674
   Cash paid during the period for income and asset taxes ......................                  772                1,042



                             The accompanying notes are an integral part of these financial statements.
</TABLE>




                                       5
<PAGE>




              RAINTREE RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
                                  June 30, 1999


NOTE 1.  GENERAL INFORMATION

General

     The  financial   statements   include  the  accounts  of  Raintree  Resorts
International,  Inc., a Nevada  corporation,  (the "Ultimate Parent") and all of
its wholly owned  subsidiaries (the "Company").  The Company develops,  markets,
and operates vacation ownership resorts in North America with resorts in Mexico,
Canada and the United States. The Company's headquarters are located in Houston,
Texas with administrative  offices in Mexico City, Mexico and Whistler,  British
Columbia, Canada.

Organizational Structure

     On August 18, 1997,  Raintree Resorts  International,  Inc.  (formerly Club
Regina  Resorts,  Inc.)  purchased  all of the stock of  Desarrollos  Turisticos
Regina S. de R.L. de C.V.  and its  subsidiaries  (the  "Predecessor  Business")
representing  net vacation  ownership  assets of  approximately  $86.8  million.
Concurrent with the purchase, the real property of the Predecessor Business, the
Regina Resorts and Westin Hotels, was segregated such that each would be able to
be owned by separate companies.  The Westin Hotels were then sold by the Company
to an  affiliate of Starwood  Lodging  Trust and  Starwood  Lodging  Corporation
(collectively  "Starwood").  These transactions are referred to as the "Purchase
Transactions." As a result of these Purchase Transactions,  the Company owns and
operates  three luxury  Mexican  vacation  ownership  resorts in Cancun,  Puerto
Vallarta and Cabo San Lucas,  Mexico. The Company's principal operations consist
of (1) acquiring and developing  vacation ownership  resorts,  (2) marketing and
selling  vacation  ownership  intervals  ("Vacation  Intervals"),  (3) providing
consumer  financing  for the  purchase of vacation  ownership  intervals  at its
resorts,  and (4) managing the  operations  of its resorts.  Prior to August 18,
1997 the Company did not have significant operations or revenues.

     On July 24,  1998,  the Company  acquired  the assets and  assumed  certain
liabilities of Whiski Jack Resorts Ltd. ("Whiski Jack") for  approximately  $6.6
million. The acquisition was accounted for as a purchase and,  accordingly,  the
results of  operations  are included in the  financial  statements  only for the
periods  subsequent  to the date of  acquisition.  The  purchase  price has been
allocated to the assets and  liabilities  assumed  based upon the fair values at
the date of  acquisition.  The excess purchase price over the fair values of the
net assets acquired has been recorded as goodwill,  totaling  approximately $4.2
million,  to be  amortized  pro rata as the  individual  weeks  acquired  in the
acquisition are sold.  Amortization  expense was $1.3 million for the six months
ended June 30, 1999, and $0.2 million for the three months ended June 30, 1999.

     In  connection  with  the  Purchase  Transactions,   the  Company  borrowed
approximately $83 million and replaced such borrowing with its Senior Notes. The
Company is, and will continue to be, highly  leveraged,  with  substantial  debt
service  requirements.  The Company has incurred  losses since its inception and
expects to incur a net loss for fiscal 1999.  To achieve  profitable  operations
the  Company is  dependent  upon a number of factors,  including  its ability to
increase  its  Vacation  Interval  inventory  on  an  economical  basis  through
development  projects or through the acquisition of existing resort  properties.
The  Company  expects,  although  no  assurance  can be made,  that  its  credit
capacity, and its ability to obtain capital financing,  as well as the Company's
anticipated  results  of  operations,  will be  sufficient  to fund its  capital
requirements during the next twelve months.

Basis of Presentation

     The  information  contained  in the  following  notes  to the  accompanying
consolidated  financial  statements is condensed from that which would appear in
the annual audited financial statements. Accordingly, the consolidated financial
statements   included  herein  should  be  reviewed  in  conjunction   with  the
consolidated  financial  statements  and related notes thereto  contained in the
Form 10-K  Annual  Report for the year ended  December  31,  1998,  filed by the
Company with the Securities and Exchange Commission.


                                       6
<PAGE>

     The condensed  consolidated  financial statements included herein have been
prepared by the Company, pursuant to the rules and regulations of the Securities
and Exchange  Commission  (the  "SEC").  Pursuant to such  regulations,  certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted.  The Company  believes the  presentation  and  disclosures
herein are  adequate  to make the  information  not  misleading.  The  financial
statements  reflect  all  elimination  entries and normal  adjustments  that are
necessary  for a fair  presentation  of the results for the three and  six-month
periods ended June 30, 1998 and 1999.

Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.

     Certain  items in the  December  31, 1998  financial  statements  have been
reclassified to conform with the June 30, 1999 presentation.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Foreign Currency Fluctuations

     The Company  maintains  its Mexican  accounting  records and  prepares  its
financial  statements for its Mexican subsidiaries in Mexican pesos. The Mexican
pesos are translated to U.S. dollars for financial  reporting purposes using the
U.S. dollar as the functional  currency and exchange gains and losses as well as
translation  gains and losses are reported in income and expense.  The net gains
and losses are  primarily  related to the  increases or declines in the value of
the peso to the U.S. dollar during such periods.  The resulting net exchange and
translation  losses  for the six months  ended June 30,  1998 and 1999 were $1.9
million and $0.2 million, respectively.
<TABLE>
<CAPTION>

        Exchange rates                                                                 Pesos         US Dollar
        --------------                                                               ---------       ---------
        <S>                                                                           <C>       <C>    <C>
        December 31, 1997......................................................        8.083    =      $1.00
        March 31, 1998.........................................................        8.517    =      $1.00
        June 30, 1998 .........................................................        9.041    =      $1.00
        September 30, 1998 ....................................................       10.112    =      $1.00
        December 31, 1998......................................................        9.865    =      $1.00
        March 31, 1999.........................................................        9.516    =      $1.00
        June 30, 1999..........................................................        9.488    =      $1.00

</TABLE>

     The future  valuation of the Mexican peso related to the U.S. dollar cannot
be determined, estimated or projected.

Cash and Cash Equivalents

     The Company  considers  demand  accounts and  short-term  investments  with
maturities of three months or less when purchased to be cash  equivalents.  Cash
and cash equivalents include $1.4 million in restricted funds at June 30, 1999.

Land Held for Vacation Ownership Development

     The Company owns a parcel of  undeveloped  beachfront  property  located in
Cozumel,  Mexico and a parcel of land adjacent to its Regina  Resort  located in
Cabo San Lucas,  Mexico.  The Company  plans to  construct  additional  vacation
ownership   facilities   on  these   parcels  of  land.   Although   preliminary
architectural and engineering  planning has commenced,  no commitments have been
made regarding these planned expansion projects. While preliminary architectural
and engineering planning continues on the Cabo San Lucas property,  further work
on the Cozumel property will likely occur in late 2000 or later.

     Land held for vacation ownership development includes the cost of land, and
additionally,  development costs and capitalized  interest.  Interest related to
these developmental  properties of $0.5 million and $1.0 million was capitalized
for the three and six months  ended June 30,  1998,  and $0.2  million  and $0.3
million for the three and six months ended June 30, 1999.


                                       7
<PAGE>
Earnings (Loss) Per Share

     Basic earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for the
period.  Diluted earnings per share also includes the assumed  conversion of all
securities,  such  as  options,  warrants,   convertible  debt  and  convertible
preferred stock, if dilutive. Since the Company has a net loss for the three and
six months  ended June 30,  1998 and June 30,  1999,  no  conversion  is assumed
during these periods as  conversion of the Company's  warrants and stock options
would be  anti-dilutive.  Additionally,  the  preferred  stock  and  convertible
preferred stock are convertible  only upon the consummation of an initial public
offering and are,  therefore,  not included in weighted average number of common
shares.

Proforma Financial Information

     The following  unaudited pro forma  consolidated  results of operations for
the six  months and three  months  ended June 30,  1998  assume the Whiski  Jack
acquisition  occurred  as of  January  1, 1998 (in  thousands,  except per share
data):
<TABLE>
<CAPTION>

                                                                        Six Months             Three Months
                                                                      Ended June 30,          Ended June 30,
                                                                           1998                    1998
                                                                    ------------------      ------------------
    <S>                                                                <C>                      <C>
    Net revenues ........................................              $  40,317                $  18,781
    Net loss ............................................                 (3,739)                  (2,239)
    Net loss available to common shareholders ...........                 (4,049)                  (2,703)
    Basic and diluted loss per common share .............                   (.38)                    (.25)
</TABLE>

     The pro forma  adjustments  include the  pre-acquisition  results of Whiski
Jack for the period  from  January  1, 1998 to June 30,  1998.  The  adjustments
include the amortization of goodwill  generated from the  acquisition,  interest
expense on the debt assumed to be issued to finance the purchase, and the effect
of the acquisition on income taxes. The pro forma amounts are based upon certain
assumptions  and  estimates and do not reflect any benefit from  economies  that
might have been achieved from combined operations.  The pro forma results do not
necessarily represent results,  which would have occurred if the acquisition had
taken place at the beginning of the period presented, nor are they indicative of
the results that will be obtained in the future.

NOTE 3. VACATION INTERVAL RECEIVABLES AND OTHER TRADE RECEIVABLES

     Vacation  Interval  receivables and other trade receivables were as follows
(in thousands):

<TABLE>
<CAPTION>
                                                                                 December 31,           June 30,
                                                                                     1998                 1999
                                                                                --------------       --------------
     <S>                                                                           <C>                  <C>
     Vacation Interval receivables .......................................         $ 53,563             $ 58,917
     Service fee receivables .............................................            1,047                1,484
     Other trade receivables .............................................            4,787                6,604
     Less - allowances for uncollectible accounts ........................           (7,562)              (8,016)
                                                                                   --------             --------
            Total  .......................................................         $ 51,835             $ 58,989
                                                                                   ========             ========
</TABLE>
     Allowances  for  uncollectible  accounts  increased  by  $2.5  million  for
additional estimated reserves, and decreased by $2.0 million for cancellation of
contracts and receivable write-offs during the first six months of 1999.

     The  Company  estimates  that at December  31,  1998 and at June 30,  1999,
approximately  57%  and  53%,  respectively,  of all of  the  Vacation  Interval
receivables were U.S. dollar denominated, 28% and 30%, respectively, of Vacation
Interval  receivables  were  denominated  in UDIs, an obligation  denominated in
pesos which is adjusted for Mexican inflation  ("UDI"),  10% during both periods
of Vacation  Interval  receivables were denominated in Mexican pesos, and 5% and
7%, respectively,  of Vacation Interval receivables were denominated in Canadian
dollars.

                                       8
<PAGE>

NOTE 4. NOTES PAYABLE

Notes Payable were as follows (in thousands):
<TABLE>
<CAPTION>
                                                                                 December 31,           June 30,
                                                                                     1998                 1999
                                                                                --------------       --------------
     <S>                                                                           <C>                  <C>
     Notes Payable to a Bank .............................................         $    276             $    741
     Cabos West Notes Payable  ...........................................            5,000                2,500
     Credit Agreement Notes ..............................................            9,086               16,473
     Mortgages Payable ...................................................            2,773                3,210
                                                                                   --------             --------
                                                                                   $ 17,135             $ 22,924
                                                                                   ========             ========
</TABLE>
     Credit  Agreement  Notes - The  November  1998 FINOVA  Capital  Corporation
("FINOVA") credit agreement  provides a receivables based credit facility of $20
million.  In May 1999, the Company and FINOVA finalized the non-revolving  $13.5
million  inventory based portion of the facility.  Together,  the receivable and
the inventory portions of the facility provide for an aggregate  borrowing limit
of $32  million and limits the use of  proceeds  to  acquisitions,  development,
working capital,  and repayment of existing  obligations,  and requires that the
Company maintain certain minimum financial ratios.  The outstanding loan balance
of the receivables  based credit  facility bears interest at a fluctuating  base
rate plus 175 points,  which at June 30, 1999, was 9.5% per annum. The inventory
loan bears interest at a fluctuating base rate plus 225 points which at June 30,
1999, was 10% per annum.  The fluctuating base rate is the "Corporate Base" rate
of Citibank,  N.A.,  New York,  which the bank publicly  announces  from time to
time,  and is a rate  charged by the bank to it's most  creditworthy  commercial
borrowers.  The inventory loan provides for borrowings in two installments  that
are collateralized and secured by Company-owned rights representing ownership of
unsold weekly intervals.  Amounts of the two advances and the monthly repayments
are based on formulas  involving the number of unsold timeshare  interests,  the
average number of timeshare interests sold per month and average sales price per
interval  sold. The inventory loan will mature on the earlier of April 30, 2001,
or 24 months from the date of the first advance.

NOTE 5. OPERATIONS BY INDUSTRY SEGMENT AND GEOGRAPHIC AREA

     The  Company has only one line of  business,  which  develops,  markets and
operates luxury vacation ownership resorts.  The Company has operations in three
geographic  areas.  The  following  is a  breakdown  of  revenues  and assets by
geographic area (in thousands):

<TABLE>
<CAPTION>

                                                  Three Months                              Three Months
                                              Ended June 30, 1998                       Ended June 30, 1999
                                       --------------------------------     -------------------------------------------
                                         Mexico      U.S.      Total          Mexico     Canada      U.S.      Total
                                       ---------- ---------- ----------     ---------- ---------- ---------- ----------
  <S>                                    <C>        <C>        <C>            <C>        <C>        <C>        <C>
  Revenues from external customers ....  $ 15,636        546   $ 16,182       $ 15,664   $  4,404   $      4   $ 20,072
  Operating income (loss) .............     2,511       (214)     2,297          1,291        865       (955)     1,201
  Capital expenditures ................     1,150         81      1,231            578         91        435      1,104


                                                   Six Months                                Six Months
                                              Ended June 30, 1998                       Ended June 30, 1999
                                       --------------------------------     -------------------------------------------
                                         Mexico      U.S.      Total          Mexico     Canada      U.S.      Total
                                       ---------- ---------- ----------     ---------- ---------- ---------- ----------
  Revenues from external customers.....  $ 34,124   $  1,121   $ 35,245       $ 34,731   $  7,680   $      8   $ 42,419
  Operating income (loss) .............     8,357       (646)     7,711          5,918        142     (1,824)     4,236
  Capital expenditures ................     2,425        201      2,626            963        156      1,135      2,254
  Total assets (at end of period) .....   114,137     10,226    124,363        119,943     10,671      3,387    134,001
</TABLE>


Revenues  are  attributed  to  countries  based on the  location of the vacation
ownership resorts.


                                       9
<PAGE>

NOTE 6. SHAREHOLDERS' INVESTMENT

Preferred Stock

     The Class A Preferred Stock provides for  preferential  annual dividends at
16.5%.  Cumulative unpaid dividends totaled  approximately  $1.2 million at June
30, 1999. As of July 1, 1999 all Class A Preferred Stock was exchanged for a new
class of Senior  Preferred  Stock which provides for annual  dividends at 9%. No
cash  dividends  are required to be paid on the new class of preferred  prior to
the earlier of (i)  December 1, 2004 or (ii) an initial  public  offering of the
Company's  common  stock  or the sale of the  Company.  Upon an  initial  public
offering or stock  merger by the  Company,  the  Company may redeem,  based on a
formula,  all  cumulative  dividends in exchange for either cash or stock of the
Company.  The number of shares of the new Senior Preferred Stock to be issued is
50,000 (or  $5,000,000).  As part of the  exchange,  the holders  also  received
500,000  five-year  warrants to purchase the Company's common stock at $5.00 per
share.

Convertible Preferred Stock

     In connection  with the purchase of Whiski Jack,  the Company issued 20,775
shares of redeemable convertible preferred stock (Convertible Preferred) through
its  wholly  owned  subsidiary,  Raintree  Resorts  International  Canada,  Ltd.
(Raintree  Canada).  As of June 30, 1999,  15,775 shares were  outstanding.  The
shares  accrue  dividends  at the rate of 10% per  annum and  cumulative  unpaid
dividends  totaled  $0.2  million  at  June  30,  1999.  As a  condition  of the
Convertible Preferred, the Company redeemed 5,000 shares ($0.5 million) on April
1, 1999. The Company will redeem $0.5 million on July 31, 1999, October 31, 1999
and January 31, 2000 and will redeem the balance on April 30, 2000.

NOTE 7. CONTINGENCIES AND COMMITMENTS

General

     The Company is subject to various claims arising in the ordinary  course of
business, and is a party to various legal proceedings, which constitute ordinary
routine  litigation  incidental  to the  Company's  business.  In the opinion of
management,  all such matters are either adequately  covered by insurance or are
not expected to have a material adverse effect on the Company.

Villa Vera Acquisitions

     The Company has executed a letter of intent and has made an advance payment
of $0.5  million to acquire  the land and  facilities  of the Villa Vera Hotel &
Racquet  Club (the  "Villa  Vera") in  Acapulco,  Mexico.  The  purchase  price,
estimated at $6.7 million,  includes the cost of renovation and conversion  that
will enable the Company to use the facilities for its intended purpose.  Closing
of this acquisition is expected in late 1999.

Canadian Condominium Acquisitions

     The Company has  committed  to purchase 21  condominium  units in Whistler,
British  Columbia at an aggregate  purchase  price of $4.0 million.  Deposits of
$0.6  million  have been paid as of June 30,  1999,  with the balance to be paid
during 1999, or thereafter,  based on completion of construction and transfer of
ownership.

NOTE 8. SUBSEQUENT EVENT

     The Teton Club, LLC ("Teton Club"), a joint venture between the Company and
JHSC  Properties,  Inc.,  finalized  during  July,  1999 the  financing  for the
construction  of the Teton Club's 37 condominium  units.  The financing  between
FINOVA and the Teton Club consists of $33.3 million for construction  financing,
$7.5  million for  pre-sale  working  capital  requirements  and $20 million for
receivables   financing.   The   receivable   financing   is   a   hypothecation
line-of-credit and will be used to repay the construction and pre-sale loans and
fund operating expenses.  As part of the financing  arrangement,  the Company is
directly  obligated for $8.3 million of the  construction  loan, $1.9 million of
the pre-sale working capital loan and $5 million of the receivables loan.


                                       10
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     This  report  contains  forward-looking  statements  within the  meaning of
Section 21E of the Securities Exchange Act of 1934, as amended,  which represent
the Company's  expectations  and beliefs  concerning  future events that involve
risks and  uncertainties,  including  those  associated  with the effects of (i)
international,  national and regional economic  conditions and conditions in the
international  tourism  and  vacation  ownership  markets,  (ii)  the  Company's
capacity to integrate  acquisitions that it has made, and (iii) the availability
of capital resources necessary for the Company to execute its business strategy.
Investors are cautioned that all  forward-looking  statements  involve risks and
uncertainty. Discussions containing such forward-looking statements may be found
in the  material  set forth  under  "Management's  Discussion  and  Analysis  of
Financial  Condition  and Results of  Operations"  as well as elsewhere  herein.
Actual results may differ materially from those projected in the forward-looking
statements.  Although the company  believes that the assumptions  underlying the
forward-looking   statements  contained  herein  are  reasonable,   any  of  the
assumptions could be inaccurate,  and therefore,  there can be no assurance that
the  forward-looking  statements  included  in  this  report  will  prove  to be
accurate. Important factors that could cause actual results to differ materially
from the Company's  expectations  are disclosed in this report.  Considering the
significant  uncertainties  inherent in the forward-looking  statements included
herein,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation  by the Company or any other person that the objectives and plans
of the Company  will be achieved.  The  following  discussion  should be read in
conjunction  with the financial  statements of Raintree  Resorts  International,
Inc. and related notes thereto, the management's discussion and analysis related
thereto,  all of which are included in the Form 10-K Annual  Report for the year
ended  December 31, 1998,  filed by the Company with the Securities and Exchange
Commission and the financial statements and notes thereto contained herein.

COMPARISONS  OF THE SIX MONTHS  ENDED JUNE 30, 1998 TO THE SIX MONTHS ENDED JUNE
30, 1999.

     Vacation Interval sales increased by approximately $5.8 million,  or 21.8%,
from  approximately  $26.5  million  for the six months  ended June 30,  1998 to
approximately  $32.3  million  for the six  months  ended  June  30,  1999.  The
acquisition  of Whiski  Jack  contributed  approximately  $6.2  million  of this
increase.  In Mexico vacation interval sales decreased slightly by approximately
$0.4 million, or 1.5%, from approximately $26.5 million for the six months ended
June 30, 1998 to  approximately  $26.1 million for the six months ended June 30,
1999.

     The number of  intervals  sold in Mexico  increased  from 2,162 for the six
months ended June 30, 1998, to 2,318 for the six months ended June 30, 1999. The
average price per interval sold in Mexico decreased $254 per interval,  or 2.2%,
from  $11,574  for the six months  ended June 30,  1998,  to $11,320 for the six
months ended June 30, 1999. The decreases in the average price per interval sold
is a result of a  decrease  in the  number of higher  priced  prime and  holiday
season  intervals  owned by the Company for sale. In Mexico,  substantially  all
prime season  intervals have been sold, and only 36% of the  one-bedroom and 12%
of the two-bedroom holiday interval inventory remains unsold.

     Rental and service fee income  increased  approximately  $0.6  million,  or
13.1%, from approximately $4.4 million for the six months ended June 30, 1998 to
approximately  $5.0  million  for  the six  months  ended  June  30,  1999.  The
acquisition of Whiski Jack provided  additional rental and service fee income of
approximately $1.1 million.  In Mexico,  rental and service fee income decreased
by approximately  $0.5 million,  or 11.5%. The decrease was due to the rental of
units to Westin at an average  rate lower than that  experienced  by the Company
during the first six months of 1998.  This lower rate  resulted  from a one-time
fee program  available  during the first  quarter of 1998,  but not available in
1999. Also, a higher rate of occupancy by members during the first six months of
1999  compared  to the  comparable  prior year  period  resulted  in fewer rooms
available for rent.

     Interest income on Vacation Interval receivables increased by approximately
$0.8 million, or 29.5%, from approximately $2.9 million for the six months ended
June 30, 1998, to  approximately  $3.7 million for the six months ended June 30,
1999. This increase in interest income is due to the  corresponding  increase in
the Mexican Vacation  Interval  receivables of  approximately  $4.5 million from
approximately  $43.2 million at June 30, 1998, to approximately $47.7 million at
June 30, 1999, and additional  interest  income of $0.2 million  associated with
the additional  Vacation  Interval  receivables  acquired in the  acquisition of
Whiski Jack.



                                       11
<PAGE>

     Cost of Vacation Interval sales increased by approximately $2.7 million, or
47.1%, from  approximately  $5.9 million for the six months ended June 30, 1998,
to  approximately  $8.6  million  for the six months  ended June 30,  1999.  The
acquisition  of Whiski Jack  accounted  for  approximately  $2.1 million of this
increase.  In Mexico,  cost of vacation  interval sales increased  approximately
$0.6 million, or 10.6%, from approximately $5.9 million for the six months ended
June 30, 1998, to  approximately  $6.5 million for the six months ended June 30,
1999.

     Provision for doubtful accounts increased by approximately 0.4 million,  or
20.8%, from  approximately  $2.1 million for the six months ended June 30, 1998,
to  approximately  $2.5  million  for the six months  ended June 30,  1999.  The
Company  provides a provision  for doubtful  accounts to achieve a balance sheet
reserve of around 12% of Vacation  Interval  receivables.  The Company  believes
that this  reserve  provides  adequate  coverage of default  risk under  current
market conditions.

     Advertising,  sales and  marketing  expense  increased  approximately  $4.1
million,  or 39.5%,  from  approximately  $10.6 million for the six months ended
June 30, 1998, to approximately  $14.7 million for the six months ended June 30,
1999. The acquisition of Whiski Jack contributed  approximately  $2.3 million of
this  increase.  In  Mexico,  the  advertising,  sales  and  marketing  expenses
increased approximately $1.6 million, as a result of overall greater selling and
marketing  efforts during the first six months of 1999. The increased  sales and
marketing efforts are primarily due to the relative low level in availability of
higher, and therefore higher priced, prime and holiday season interval inventory
as compared to the level of unsold  inventory  represented  by lower demand time
periods.

     Maintenance and energy expenses increased  approximately  $1.0 million,  or
24.7%, from  approximately  $4.0 million for the six months ended June 30, 1998,
to  approximately  $5.0  million  for the six months  ended June 30,  1999.  The
acquisition  of  Whiski  Jack  increased  maintenance  and  energy  expenses  by
approximately $0.8 million.

     General and administrative  expenses increased  approximately $0.8 million,
or 16.4%,  from  approximately  $4.9  million for the six months  ended June 30,
1998, to approximately  $5.7 million for the six months ended June 30, 1999. The
acquisition  of  Whiski  Jack  increased  general  and  administrative  expenses
approximately $0.9 million.

     The first six  months  of 1999  amortization  of  goodwill  relates  to the
goodwill resulting from the acquisition of Whiski Jack, which is being amortized
in proportion to sales of units acquired in the acquisition.

     Interest  expense  was  approximately  $1.5  million  more in the first six
months of 1999 as  compared to the first six months of 1998 due  primarily  to a
higher level of debt  outstanding  between the  periods,  which  increased  from
$103.0 million at June 30, 1998 to $122.9 million at June 30, 1999, and also due
to a decrease in interest capitalized.

     Foreign currency exchange losses totaled  approximately $0.2 million during
the first six months of 1999  compared to a loss of  approximately  $1.9 million
during  the first six  months of 1998.  The  decrease  in loss  between  periods
occurred  due to a stronger  peso against the U.S.  dollar  during the first six
months  of  1999.  The  Company   maintains  a  portfolio  of  UDI   receivables
(receivables  denominated in an alternate  Mexican currency that is adjusted for
inflation  on a daily  basis) to  partially  offset  peso  devaluation.  The UDI
inflation  adjustments  are  expected  to offset  the  long-term  effect of peso
devaluation on UDI  receivables  but may not offset losses in the near term. The
amount of UDI inflation adjustments,  which is included under interest income on
vacation interval  receivables,  was approximately $1.0 million during the first
six months of 1998 and approximately $1.1 million during the first six months of
1999.

COMPARISONS  OF THE THREE  MONTHS  ENDED JUNE 30, 1998 TO THE THREE MONTHS ENDED
JUNE 30, 1999.

     Vacation  Interval sales increased by approximately  $2.9 million or 23.2%,
from  approximately  $12.4  million for the three  months ended June 30, 1998 to
approximately  $15.3  million  for the three  months  ended June 30,  1999.  The
acquisition of Whiski Jack added approximately $3.6 million of Vacation Interval
sales.  In Mexico  vacation  interval  sales  decreased  by  approximately  $0.7
million,  or 5.9%, from  approximately  $12.4 million for the three months ended
June 30, 1998 to approximately $11.7 million for the three months ended June 30,
1999.


                                       12
<PAGE>
     The number of  intervals  sold in Mexico  increased  from 947 for the three
months ended June 30,  1998,  to 1,067 for the three months ended June 30, 1999.
The average price per interval sold in Mexico  decreased  $380 per interval,  or
3.2%,  from $11,729 for the three months ended June 30, 1998, to $11,349 for the
three  months  ended June 30, 1999.  See the  discussion  of the decrease in the
average price per interval above under the comparison for the six months.

     Rental and service fee income  increased  approximately  $0.6  million,  or
29.8%, from  approximately $1.9 million for the three months ended June 30, 1998
to  approximately  $2.5 million for the three  months ended June 30, 1999.  This
increase was due to the acquisition of Whiski Jack.

     Interest income on Vacation Interval receivables increased by approximately
$0.3 million,  or 25.5%,  from  approximately  $1.3 million for the three months
ended June 30, 1998,  to  approximately  $1.6 million for the three months ended
June 30, 1999.  This increase in interest  income is associated with the Mexican
Vacation  Interval  receivables  increasing by  approximately  $4.5 million from
approximately  $43.2 million at June 30, 1998, to approximately $47.7 million at
June 30, 1999, and additional  interest  income of $0.1 million  associated with
the additional  Vacation  Interval  receivables  acquired in the  acquisition of
Whiski Jack.

     Cost of Vacation Interval sales increased by approximately $1.6 million, or
58.0%, from approximately $2.7 million for the three months ended June 30, 1998,
to  approximately  $4.3 million for the three  months ended June 30, 1999.  This
increase results primarily from the acquisition of Whiski Jack.

     Provision for doubtful accounts increased by approximately $0.5 million, or
55.7%, from  approximately $0.8 million for the three months ended June 30, 1998
to  approximately  $1.3 million for the three  months  ended June 30, 1999.  The
Company  provides a provision  for doubtful  accounts to achieve a balance sheet
reserve of around 12% of  Vacation  Interval  receivables.  This  reserve  level
provides adequate coverage of default risk given current market conditions.

     Advertising,  sales and  marketing  expense  increased  approximately  $2.0
million,  or 38.0%, from  approximately  $5.3 million for the three months ended
June 30, 1998, to approximately $7.3 million for the three months ended June 30,
1999. The acquisition of Whiski Jack contributed  approximately  $1.2 million of
this  increase.  In  Mexico,  the  advertising,  sales  and  marketing  expenses
increased approximately $0.6 million, as a result of overall greater selling and
marketing  efforts during the second  quarter of 1999.  The increased  sales and
marketing  efforts are primarily due to the reduction in  availability of higher
demand prime and holiday season interval inventory.

     Maintenance and energy expenses increased  approximately  $0.7 million,  or
30.5%, from approximately $2.2 million for the three months ended June 30, 1998,
to  approximately  $2.8 million for the three  months  ended June 30, 1999.  The
acquisition  of  Whiski  Jack  increased  maintenance  and  energy  expenses  by
approximately $0.4 million.

     General and  administrative  expenses were unchanged from prior year second
quarter. The additional general and administrative expenses from the acquisition
of Whiski  Jack of  approximately  $0.5  million  were  offset by  decreases  in
third-party professional services.

     The second quarter 1999  amortization  of goodwill  relates to the goodwill
resulting from the  acquisition of Whiski Jack.  Goodwill is being  amortized in
proportion to sales of units acquired in the acquisition.

     Interest  expense  was  approximately  $0.7  million  more during the three
months  ended June 30, 1999 as compared to the similar  three months of 1998 due
primarily to a higher level of debt  outstanding,  up $19.9 million  between the
periods, and due to a marginal decrease in interest capitalized.

     Foreign currency exchange loss totaled  approximately  $0.7 million for the
three  months  ended June 30,  1999,  compared to a loss of  approximately  $1.1
million  during the three  months  ended June 30,  1998.  The  decrease  in loss
between  periods  occurred due to a stronger peso against the U.S. dollar during
the second  quarter of 1999. The amount of UDI inflation  adjustments,  which is
included in interest income on vacation interval receivables,  was approximately
$0.3 million during the three months ended June 30, 1998 and 1999.


                                       13
<PAGE>
COMPARISONS  OF JUNE 30, 1999 BALANCE SHEET AMOUNTS TO DECEMBER 31, 1998 BALANCE
SHEET AMOUNTS

     Vacation  Interval  receivables  and  other  trade  receivables   increased
approximately $7.2 million from  approximately  $51.8 million as of December 31,
1998 to  approximately  $59.0  million as of June 30,  1999.  The  increase  was
attributable to an increase in the level of sales  financing with  approximately
500 new loans, UDI inflation  adjustments of $1.1 million and the annual service
fee billing issued during the first quarter.

     Equity  investments  increased $1.0 million from approximately $2.9 million
as of December 31, 1998 to  approximately  $3.9 million as of June 30, 1999. The
increase was primarily  attributable  to the  Company's  investment in the Teton
Club. The Company and its joint venture partner  contributed cash for operations
prior to the Teton  Club's  closing  on its  construction  and  working  capital
financing.

     Cost of unsold vacation  ownership  intervals and related club  memberships
(unit inventory)  decreased  approximately $4.6 million from approximately $23.0
million as of December 31, 1998 to  approximately  $27.6  million as of June 30,
1999.  The sale of units reduced unit inventory by  approximately  $8.6 million,
which was offset by  purchases in Canada of  approximately  $2.4 million and the
remainder primarily for reinstatement of inventory previously sold in Mexico.

     Accounts  payable  and accrued  liabilities  increased  approximately  $2.0
million  from   approximately   $11.9   million  as  of  December  31,  1998  to
approximately  $13.9  million as of June 30, 1999.  The variance is caused by an
increase in the refurbishment reserve of $0.8 million and an increase in amounts
owed to an affiliate.

     Unearned   service   fees   increased   approximately   $1.7  million  from
approximately $2.0 million as of December 31, 1998 to approximately $3.7 million
as of June 30,  1999.  This  balance  was  higher  at the end of  June,  1999 as
compared to December,  1998 because a majority of the related fees are typically
invoiced at the  beginning of each year and then earned  during the remainder of
that year.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company  generates  cash  for  operations  primarily  from the sale of
Vacation  Intervals,  receipt of payments on the Vacation Interval  receivables,
and the receipt of service fees charged to members.  With respect to the sale of
Vacation Intervals,  the Company generates cash from all-cash purchases and from
receipt of down  payments  on financed  Vacation  Intervals.  The  Company  also
generates cash from financing  Vacation  Interval sales and receiving  principal
and  interest  payments.   Additionally,  the  Company  uses  Vacation  Interval
receivables as collateral in order to obtain loans.

     At June 30, 1999,  the Company has $122.9 million of debt  outstanding,  an
increase  of $5.8  million  as  compared  to year  end  1998.  Debt  outstanding
consisted primarily of $100 million in Senior Notes payable, $16.5 million drawn
on the FINOVA credit  facility,  $2.5 million Cabos West note payable,  and $3.9
million  mortgage notes payable to a bank. In addition to such debt, the Company
has outstanding $1.6 million in redeemable  convertible  preferred  stock,  $0.5
million of which the Company redeemed on April 1, 1999. Furthermore, the Company
will redeem $0.5 million each on July 31, 1999, October 31, 1999 and January 31,
2000 and will redeem the balance on April 30, 2000.

     The  Company's  borrowing  capacity  under the FINOVA  credit  facility was
expanded with the  finalization  of the inventory  based  non-revolving  line of
credit.  This,  along with the existing $20 million  accounts  receivable  based
credit facility, will complete the FINOVA credit agreement,  and will provide an
aggregate borrowing limit of $32 million.

     At June 30, 1999, the Company had an inventory of approximately 4,700 weeks
in Mexico  and over 400 weeks in  Canada.  The  Company  believes  its  existing
inventory will provide it with  approximately  one year of product available for
sale under existing or planned marketing  programs and its' sales  organization.
The  Company  plans  to  increase  its  Vacation   Interval   inventory  through
development  of additional  properties and by making  acquisitions  in the short
term,  by  purchasing  the Villa Vera,  by acquiring  condominiums  in Whistler,
British Columbia, by

                                       14
<PAGE>

developing the Teton Club joint venture,  its land in Los Cabos, and its land in
Cozumel, and by making acquisitions in Mexico, the United States and Canada.

     To finance its growth,  in addition to  accessing  the lines of credit with
FINOVA, the Company may from time to time consider issuing debt, equity or other
securities,   entering  into  traditional   construction   financing  or  credit
agreements,  entering into joint venture or development  agreements with respect
to  its  undeveloped   property,   or  factoring  additional  Vacation  Interval
receivables. The Company is highly leveraged and, under the Indenture, there are
limitations on the Company's  ability to borrow funds and to make certain equity
investments.  Additionally,  the FINOVA credit agreement requires the Company to
maintain  certain   financial   covenants,   including  minimum  equity  levels.
Accordingly, there can be no assurance that the Company will be able to use debt
to  finance  any  expansion  plans  beyond  its  plans to  finance  its  current
commitments.

     At June  30,  1999,  the  Company  is,  and  will  continue  to be,  highly
leveraged, with substantial debt service requirements.  The Company has incurred
losses since its  inception  and expects to incur a net loss for fiscal 1999. To
achieve profitable operations the Company is dependent upon a number of factors,
including  its  ability  to  increase  its  Vacation  Interval  inventory  on an
economical  basis through  development  projects or through the  acquisition  of
existing resort  properties.  The Company expects,  although no assurance can be
made, that its credit capacity, and its ability to obtain capital financing,  as
well as the Company's  anticipated results of operations,  will be sufficient to
fund its capital requirements during the next twelve months.

IMPACT OF YEAR 2000

     In Mexico, the Company uses Resort Computer  Corporation's ("RCC") software
to manage its vacation ownership  operations,  including  marketing  activities,
sales presentations,  contract management,  collections, member reservations and
hotel  operations.  In  contrast  with  traditional  software  run on  mainframe
systems,  the RCC software was  developed in the late 1980's,  and has been Year
2000  compliant  since 1994.  The Company  completed  installing a new financial
system to be used in conjunction with the operating system.  This system is also
Year 2000 compliant.

     In Canada, the Company anticipates that the financial and operating systems
will be Year 2000 compliant by the end of the third quarter of 1999.

     Additionally,  the Company has initiated  discussions  with all significant
suppliers including the Westin Hotels in Mexico. No significant Year 2000 issues
have been  identified.  The Company  believes that there are no significant Year
2000 issues,  which conclusion is based on a comprehensive  study of this issue.
Accordingly, management has concluded that no significant costs will be incurred
to address the issue.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable


                                       15
<PAGE>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     None

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None


ITEM 5. OTHER INFORMATION

     None


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     The following is a list of exhibits filed as part of this quarterly report.

Exhibit No.         Description

     10.1           First Amended and Restated  Loan and Security  Agreement for
                    $20,000,000 Receivables Loan and $13,500,000 Inventory Loan,
                    dated  April  23,  1999,  by  and  between   FINOVA  Capital
                    Corporation  and CR Resorts  Cancun,  S. de R.L. de C.V.; CR
                    Resorts  Los Cabos,  S. de R.L. de C.V.;  CR Resorts  Puerto
                    Vallarta,  S. de R.L. de C.V.;  CR Resorts  Cabos  Timeshare
                    Trust,  S. de R.L. de C.V.  and CR Resorts  Puerto  Vallarta
                    Timeshare Trust, S. de R.L. de C.V.

     10.2           Consent  of  Guarantor  and  Amendment  No.  1 to  Corporate
                    Guarantee  and  Subordination  Agreement  to  the  Loan  and
                    Security Agreement for $20,000,000 with FINOVA,  dated April
                    23, 1999,  by and between  FINOVA  Capital  Corporation  and
                    Raintree Resorts International, Inc.

     10.3           Loan and Security  Agreement  for  $33,250,000  Construction
                    Loan,   $7,500,000  Working  Capital  Loan  and  $20,000,000
                    Receivables Loan, dated June 29, 1999, by and between FINOVA
                    Capital  Corporation and The Teton Club, L.L.C. and Raintree
                    Resorts International, Inc.

     27.1           Financial Data Schedule


(b)  Reports on Form 8-K.

     None



                                       16
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                                   SIGNATURES


     Pursuant  to  the   requirements   of  the  Securities  Act  of  1934,  the
Registrants,  Raintree Resorts International, Inc. and CR Resorts Capital, S. de
R.L. de C.V.,  have duly caused this report to be signed on their  behalf by the
undersigned, thereunto duly authorized.


                                            RAINTREE RESORTS INTERNATIONAL, INC.
                                          CR RESORTS CAPITAL, S. DE R.L. DE C.V.




Date:  8/12/99                By:           /s/ GEORGE E. ALDRICH
                                  ----------------------------------------------
                                                George E. Aldrich
                                  Senior Vice President - Finance and Accounting
                                  (Principal Accounting Officer)

















                                       17
<PAGE>


                                  EXHIBIT INDEX


  Exhibit No.         Description

     10.1           First Amended and Restated  Loan and Security  Agreement for
                    $20,000,000 Receivables Loan and $13,500,000 Inventory Loan,
                    dated  April  23,  1999,  by  and  between   FINOVA  Capital
                    Corporation  and CR Resorts  Cancun,  S. de R.L. de C.V.; CR
                    Resorts  Los Cabos,  S. de R.L. de C.V.;  CR Resorts  Puerto
                    Vallarta,  S. de R.L. de C.V.;  CR Resorts  Cabos  Timeshare
                    Trust,  S. de R.L. de C.V.  and CR Resorts  Puerto  Vallarta
                    Timeshare Trust, S. de R.L. de C.V.

     10.2           Consent  of  Guarantor  and  Amendment  No.  1 to  Corporate
                    Guarantee  and  Subordination  Agreement  to  the  Loan  and
                    Security Agreement for $20,000,000 with FINOVA,  dated April
                    23, 1999,  by and between  FINOVA  Capital  Corporation  and
                    Raintree Resorts International, Inc.

     10.3           Loan and Security  Agreement  for  $33,250,000  Construction
                    Loan,   $7,500,000  Working  Capital  Loan  and  $20,000,000
                    Receivables Loan, dated June 29, 1999, by and between FINOVA
                    Capital  Corporation and The Teton Club, L.L.C. and Raintree
                    Resorts International, Inc.

     27.1           Financial Data Schedule












                                       18
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