FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

For Quarter Ended ~~June~~September 30, 2003

Commission File no. 2-64309

GOLF HOST RESORTS, INC.

(Exact name of registrant as specified in its charter)

Colorado		84-0631130
(State or other jurisdiction of		(I.R.S. Employer
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
incorporation or organization)		Identification No.)

36750 US 19 N., Palm Harbor, Florida 34684 (Address of principal executive offices) (Zip Code)


36750 US 19 N., Palm Harbor, Florida			34684
(Address of principal executive offices)			(Zip Code)


(727) 942-2000 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (~~727~~1) has ~~942-2000~~filed all reports required to Section 13 or 15 (~~Registrant’s~~d) of ~~telephone~~the ~~number,~~Securities ~~including~~Exchange ~~area~~Act ~~code~~of 1934 during the preceding twelve months, and (2) has been subject to the filing requirements for the past 90 days. — Yes X No

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

Issuer has no common stock subject to this report.

~~Page~~ 1 ~~of 19~~

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II — OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
302 CEO Certification
Ex-31.2 302 CFO Certification
Ex-32.1 906 CEO Certification
Ex-32.2 906 CFO Certification


PART I — FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S DEFICIT
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
PART II -- OTHER INFORMATION
SIGNATURES
Ex-31.1 Section 302 CEO Certification
Ex-31.2 Section 302 CFO Certification
Ex-32.1 Section 906 CEO Certification
Ex-32.2 Section 906 CFO Certification

~~TABLE~~PART OFI ~~CONTENTS~~— FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION		2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17
PART II - OTHER INFORMATION		18
Item 1.	Legal Proceedings	18
Item 2.	Changes in Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Submission of Matters to a Vote of Security Holders	18
Item 5.	Other Information	18
Item 6.	Exhibits and Reports on Form 8-K	18
31.1	Section 302 CEO Certification
31.2	Section 302 Principal Financial Officer Certification
32.1	Section 906 CEO Certification
32.2	Section 906 Principal Financial Officer Certification
SIGNATURES		19

PART I - FINANCIAL INFORMATION

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
CONSOLIDATED BALANCE SHEETS

ASSETS
(Substantially all pledged)

				June 30,			December 31,
			September 30,			December 31,
			2003	~~2003~~		2002	~~2002~~
			(unaudited)	~~(unaudited)~~
CURRENT ASSETS:
	Cash		$	$139,518	~~259,892~~	$	$—	—
	Restricted cash			2,670,865	~~2,740,377~~		2,520,849	~~2,520,849~~
	Accounts receivable, net			1,397,783	~~1,635,328~~		2,069,962	~~2,069,962~~
	Other receivables			180,373	~~64,337~~		61,554	~~61,554~~
	Inventories and supplies			1,362,136	~~1,144,731~~		1,157,792	~~1,157,792~~
	Prepaid expenses and other assets			427,684	~~560,240~~		514,493	~~514,493~~
	Total current assets	~~Total current assets~~		6,178,359	~~6,404,905~~		6,324,650	~~6,324,650~~
INTANGIBLES, net				11,817,643	~~12,033,091~~		12,463,987	~~12,463,987~~
PROPERTY AND EQUIPMENT, net				37,428,334	~~37,638,597~~		38,025,063	~~38,025,063~~
OTHER ASSETS				5,181,886	~~5,382,243~~		5,701,950	~~5,701,950~~
			$	$60,606,222	~~61,458,836~~	$	$62,515,650	~~62,515,650~~

The accompanying notes are an integral part of these consolidated financial statements.

Page 2

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
CONSOLIDATED BALANCE SHEETS

LIABILITIES AND SHAREHOLDER’S DEFICIT

				June 30,				December 31,
			September 30,				December 31,
			2003	~~2003~~			2002	~~2002~~
			(unaudited)	~~(unaudited)~~
CURRENT LIABILITIES:
	Cash overdrafts		$	$480,771	—		$	$69,846	~~69,846~~
	Debt due within one year			79,001,205	~~79,000,592~~			79,003,552	~~79,003,552~~
	Accounts payable			3,768,698	~~3,278,629~~			4,973,036	~~4,973,036~~
	Accrued payroll costs			1,150,735	~~975,509~~			893,224	~~893,224~~
	Accrued interest			21,451,823	~~19,130,230~~			14,538,319	~~14,538,319~~
	Other payables and accrued expenses			3,006,963	~~2,852,623~~			2,721,823	~~2,721,823~~
	Deposits and deferred revenues			2,174,310	~~1,549,147~~			2,003,938	~~2,003,938~~
	Due to related parties			598,013	~~513,009~~			198,802	~~198,802~~
	Total current liabilities	~~Total current liabilities~~		111,632,518	~~107,299,739~~			104,402,540	~~104,402,540~~
DEBT DUE AFTER ONE YEAR				88,330	~~95,115~~			—	—
OTHER LONG-TERM LIABILITIES				10,265,009	~~10,265,009~~			10,265,009	~~10,265,009~~
LONG TERM REFURBISHMENT				5,623,095	~~5,623,095~~			5,548,514	~~5,548,514~~
DEFERRED INCOME TAXES				1,255,000	~~1,255,000~~			1,255,000	~~1,255,000~~
	Total liabilities	~~Total liabilities~~		128,863,952	~~124,537,958~~			121,471,063	~~121,471,063~~
SHAREHOLDER’S DEFICIT
	Common stock, $1 par, 5,000 shares authorized, issued, and outstanding			5,000	~~5,000~~			5,000	~~5,000~~
	5.6% cumulative preferred stock, $1 par, 4,577,000 shares authorized, issued, and outstanding			4,577,000	~~4,577,000~~			4,577,000	~~4,577,000~~
	Paid-in capital			(8,487,323	~~(8,487,323~~)	)		(8,487,323	~~(8,487,323~~)	)
	Shareholder receivable			(219,784	~~(219,784~~)	)		—	—
	Accumulated deficit			(64,132,623	~~(58,954,015~~)	)		(55,050,090	~~(55,050,090~~)	)
	Total shareholder’s deficit			(68,257,730	~~(63,079,122~~)	)		(58,955,413	~~(58,955,413~~)	)
	Total liabilities and shareholder’s deficit		$	$60,606,222	~~61,458,836~~		$	$62,515,650	~~62,515,650~~

The accompanying notes are an integral part of these consolidated financial statements.

Page 3

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Quarters Ended June 30,

Six months ended June 30,

Quarters Ended September 30,

Nine months ended September 30,

2003

2002

2003

2002

REVENUES:

Resort facilities

2,~~537~~015,~~629~~046

31,~~378~~752,~~897~~027

68,~~613~~628,~~206~~252

810,~~397~~149,~~062~~089

Food and beverage

21,~~871~~623,~~574~~538

31,~~806~~675,~~922~~795

67,~~297~~921,~~775~~313

79,~~400~~076,~~352~~147

Golf

21,~~869~~717,~~517~~147

21,~~915~~715,~~347~~605

68,~~630~~347,~~710~~857

79,~~472~~187,~~088~~693

Other

1870,~~094,184~~351

1,~~635~~327,~~313~~330

23,~~393~~264,~~916~~267

24,~~937~~265,~~805~~135

9,372,904

11,736,479

21,935,607

26,207,307

6,226,082

6,470,757

28,161,689

32,678,064

COST AND OPERATION EXPENSES:

Resort facilities

21,~~146~~544,~~932~~593

21,~~785~~333,~~709~~655

56,~~243~~788,~~711~~304

67,~~126~~562,~~672~~081

Food and beverage

21,~~041~~515,~~635~~733

21,~~374~~426,~~933~~942

45,~~301~~817,~~900~~633

46,~~767~~194,~~309~~251

Golf

1,~~747~~734,~~929~~641

1,~~673~~440,~~007~~819

35,~~453~~188,~~462~~103

34,~~258~~699,~~607~~426

Other

2,~~238~~148,~~575~~252

21,~~277~~910,~~235~~170

46,~~579~~728,~~995~~247

46,~~701~~611,~~374~~544

General and administrative

~~970~~763,~~086~~045

1,~~108~~053,~~359~~885

2,~~069~~832,~~621~~666

23,~~325~~379,~~537~~422

Depreciation and amortization

~~747~~1,~~198~~358,480

~~860~~1,~~448~~311,941

12,~~494~~852,~~396~~876

12,~~733~~943,~~277~~464

9,892,355

11,079,691

21,143,085

22,912,776

9,064,744

8,477,412

30,207,829

31,390,188

OPERATING (LOSS)/INCOME

(~~519~~2,~~451~~838,662

)

~~656~~(2,~~788~~006,655

)

~~792~~(2,~~522~~046,140

)

31,~~294~~287,~~531~~876

INTEREST, NET

2,~~338~~275,~~834~~869

2,~~236~~256,~~275~~235

46,~~568~~844,~~293~~162

46,~~606~~862,~~710~~945

LOSS BEFORE PREFERRED STOCK DIVIDEND

(25,~~858~~114,~~285~~531

)

(14,~~579~~262,~~487~~890

)

(38,~~775~~890,~~771~~302

)

(15,~~312~~575,~~179~~069

)

DIVIDEND REQUIREMENTS ON PREFERRED STOCK

64,077

~~128~~192,~~154~~231

LOSS AVAILABLE TO COMMON SHAREHOLDER

(25,~~922~~178,~~362~~608

)

(14,~~643~~326,~~564~~967

)

(39,~~903~~082,~~925~~533

)

(15,~~440~~767,~~333~~300

)

The accompanying notes are an integral part of these consolidated financial statements.

Page 4

GOLF HOST RESORTS, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDER’S DEFICIT

	$1 Par Value				5.6% Cumulative										~~Total~~
	Common Stock				Preferred Stock				~~Paid-In~~			~~Retained~~			~~Shareholder’s~~
	Shares		Amount		Shares		Amount		Capital			Deficit			Deficit
									Paid-In			Shareholder			Retained
Balance, December 31, 2002		5,000	$	5,000		4,577,000	$	4,577,000	$	(8,487,323	)	$	(55,050,090	)	$	(58,955,413	)
	Shares		Amount		Shares		Amount		Capital			Receivable			Deficit
Shareholder receivable		—		—		—		—		—			(219,784	)		(219,784	)
Balance, December 31, 2002		5,000	$	5,000		4,577,000	$	4,577,000	$	(8,487,323	)	$	0		$	(55,050,090	)
Loss available to common shareholder		—		—		—		—		—			(3,903,925	)		(3,903,925	)
Shareholder receivable		—		—		—		—		—			(219,784	)		—
Balance, June 30, 2003 (unaudited)		5,000	$	5,000		4,577,000	$	4,577,000	$	(8,487,323	)	$	(59,173,799	)	$	(63,079,122	)
Loss available to common shareholder (unaudited)		—		—		—		—		—			—			(9,082,533	)
Balance, September 30, 2003		5,000	$	5,000		4,577,000	$	4,577,000	$	(8,487,323	)	$	(219,784	)	$	(64,132,623	)

[Additional columns below]

[Continued from above table, first column(s) repeated]


	Total
	Shareholders’
	Deficit

Balance, December 31, 2002	$	(58,955,413	)




Shareholder receivable		(219,784	)




Loss available to common shareholder (unaudited)		(9,082,533	)

Balance, September 30, 2003	$	(68,257,730	)

The accompanying notes are an integral part of these consolidated financial statements.

Page 5

GOLF HOST RESORTS, INC. AND SUBSIDIARY (a wholly owned subsidiary of Golf Hosts, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE ~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, (unaudited)

				~~2003~~	2003			~~2002~~	2002
CASH FLOWS FROM OPERATING ACTIVITIES:
	(Loss)/income before dividend requirements on preferred stock			$	~~(3,775,771~~$	)(8,890,302	)	$	~~(1,312,179~~$	)(5,575,069	)
	Adjustments to reconcile net income to net cash provided by operations:
		Depreciation and amortization			1,494,396				1,733,277
		Management company contribution				—				(425,688	)
		Provision for bad debts			(75,520	)			181,869
		Depreciation and amortization				2,241,594				2,638,202
		Gain on disposal of capital lease			(27,739	)			(294,822	)
		Provision for bad debts				(159,349	)			212,449
		Rental pool expense			390,919				203,508
		Gain on disposal of capital lease				(27,739	)			(294,822	)
		Changes in operating working capital			2,807,375				4,118,337
		Rental pool expense				611,282				305,262
		Cash provided by operations			813,660				4,629,990
		Changes in operating working capital				7,265,465				5,659,421
CASH FLOWS FROM INVESTING ACTIVITIES:
			Cash provided by operations			1,040,951				2,519,755
	Increase in other assets				3,369				(21,794	)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of property and equipment				(627,492	)			(200,904	)
	Increase in other assets					(16,637	)			(34,235	)
		Cash used in investing activities			(624,123	)			(222,698	)
	Purchases of property and equipment					(948,979	)			(282,945	)
CASH FLOWS FROM FINANCING ACTIVITIES:
			Cash used in investing activities			(965,616	)			(317,180	)
	Contribution from owners				—				21,239
CASH FLOWS FROM FINANCING ACTIVITIES:
	Repayment of existing debt				(62,245	)			(91,970	)
	Contribution from owners					—				21,239
	Additional borrowings on existing debt				132,600				—
	Repayment of existing debt					(68,417	)			(133,645	)
	Decreases in other long-term liabilities				—				(3,190,194	)
	Additional borrowings on existing debt					132,600				—
		Cash used in financing activities			70,355				(3,260,925	)
	Increase/(decrease) in other long-term liabilities					—				(1,940,194	)
NET INCREASE IN CASH					259,892				1,146,367
			Cash used in financing activities			64,183				(2,052,600	)
CASH, BEGINNING OF PERIOD					—				665,402
NET INCREASE IN CASH						139,518				149,975
CASH, END OF PERIOD				$	259,892			$	1,811,769
CASH, BEGINNING OF PERIOD						—				665,402
NONCASH FINANCING AND INVESTING ACTIVITIES:
CASH, END OF PERIOD					$	139,518			$	815,377
The Company satisfied its preferred stock dividend liability to GHI through the intercompany account				$	128,154			$	128,154
NONCASH FINANCING AND INVESTING ACTIVITIES:
Master lease agreement refurbishment program				$	5,877,702			$	3,256,120
The Company satisfied its preferred stock dividend liability to GHI through the intercompany account					$	192,231			$	192,231
Master lease agreement refurbishment program					$	5,623,095			$	3,256,120
Capital lease extension					$	49,542			$	—

The accompanying notes are an integral part of these consolidated financial statements.

Page 6

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)		BASIS OF PRESENTATION
		The financial statements for December 31, 2002 were prepared assuming the Company will continue as a going concern. As discussed in the notes to consolidated financial statements on Form 10-K dated December 31, 2002, the Company has suffered recurring losses from operations, has negative working capital and has a shareholder’s deficit. These issues raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in the footnotes. Additionally, as described in Note 6 of the notes to consolidated financial statements on Form 10-K, the Company has defaulted under the terms of its debt agreement and Golf Host, Inc. (the Company’s parent company) is a defendant to a class action lawsuit. These financial statements do not include any adjustments that might result from the outcome of the uncertainties.
		These financial statements and related notes are presented for interim periods in accordance with the requirements of Form 10-Q and, consequently, do not include all disclosures normally provided in the Company’s Annual Report on Form 10-K. Accordingly, these financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.
		The accompanying consolidated balance sheet for June 30, 2003, and consolidated statements of operations and cash flows for the periods ended June 30, 2003 and 2002, are unaudited but reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature.
		The Company’s business is seasonal. Therefore, the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal years.
2)		INTANGIBLE ASSETS
		The Company recorded at closing in 1997, a resort intangible asset of approximately $30,400,000. This intangible related to the purchase of the Innisbrook Resort, which contained an existing rental pool agreement and a recently executed management agreement with Westin Hotels. The intangible is being amortized over twenty years on a straight-line basis. Amortization expense for all intangible assets was approximately $431,000 and $383,000 for the six months ended June 30, 2003 and June 30, 2002, respectively.

(1)

BASIS OF PRESENTATION

The financial statements for December 31, 2002 were prepared assuming the Company will continue as a going concern. As discussed in the notes to consolidated financial statements on Form 10-K dated December 31, 2002, the Company has suffered recurring losses from operations, has negative working capital and has a shareholder’s deficit. These issues raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in the footnotes. Additionally, as described in Note 6 of the notes to consolidated financial statements on Form 10-K, the Company has defaulted under the terms of its debt agreement and Golf Host, Inc. (the Company’s parent company) is a defendant to a class action lawsuit. These financial statements do not include any adjustments that might result from the outcome of the uncertainties.

These financial statements and related notes are presented for interim periods in accordance with the requirements of Form 10-Q and, consequently, do not include all disclosures normally provided in the Company’s Annual Report on Form 10-K. Accordingly, these financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

Certain prior year amounts have been reclassified within the Form 10-Q to conform with the current year presentation.

The accompanying consolidated balance sheet for September 30, 2003, and consolidated statements of operations and cash flows for the periods ended September 30, 2003 and 2002, are unaudited but reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature.

The Company’s business is seasonal. Therefore, the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal years.

INTANGIBLE ASSETS

The Company recorded at closing in 1997, a resort intangible asset of approximately $30,400,000. This intangible related to the purchase of the Innisbrook Resort, which contained an existing rental pool agreement and a recently executed management agreement with Westin Hotels. The intangible is being amortized over twenty years on a straight-line basis. Amortization expense for all intangible assets was approximately $646,000 and $644,000 for the nine months ended September 30, 2003 and September 30, 2002, respectively.

Page 7

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2)		INTANGIBLE ASSETS
		During 2002 and as of June 30, 2003, the Company reviewed the carrying value of the intangible asset and determined that further impairment had not occurred. Advance booking and rental pool participation have stabilized from a historical perspective, and pro-forma cash flows, based upon advance bookings indicate that no further deterioration in the carrying value needs to be recognized.
(3)		DEBT
		Debt consists of the following:

INTANGIBLE ASSETS

	June 30,			December 31,
	2003			2002
Participating mortgage note at varying pay rates maturing in 2027 (in default)	$	69,975,000		$	69,975,000
$9,000,000 participating mortgage note credit facility maturing in 2007 (in default)		9,000,000			9,000,000
Capital leases ranging from 1.89% to 17.37%		120,707			28,552
		79,095,707			79,003,552
Less current maturities		(79,000,592	)		(79,003,552	)
	$	95,115		$	—

During 2002 and through September 30, 2003, the Company reviewed the carrying value of the intangible asset and determined that further impairment had not occurred. Advance booking and rental pool participation have stabilized from a historical perspective, and pro-forma cash flows, based upon advance bookings indicate that no further deterioration in the carrying value needs to be recognized.

(43) CONTINGENCIES Golf Hosts, Inc., the Company’s parent, was named as a defendant in a consolidated class action lawsuit whereby the plaintiffs allege breaches of contract, including breaches in connection with the Rental Pool Master Lease Agreement. By order dated April 3, 2003, the Company was substituted in place of Golf Hosts, Inc. as the defendant in the lawsuit. The plaintiffs are seeking unspecified damages and declaratory judgment stating that the plaintiffs are entitled to participate in the rental pool if one exists, a restriction of golf course access to persons who are either condominium owners, members, their accompanied guests, or guests of the resort and a restriction of the total number of club memberships. Deposition of class members and others, including depositions of prior executives of Golf Host Resorts, have been taken and additional discovery remains. The previously scheduled trial date of February 3, 2003 has been postponed by the Court; a new trialDEBT

Debt consists of the following:


	September 30,			December 31,
	2003			2002

Participating mortgage note at varying pay rates maturing in 2027 (in default)	$	69,975,000		$	69,975,000
$9,000,000 participating mortgage note credit facility maturing in 2007 (in default)		9,000,000			9,000,000
Capital leases ranging from 9.0% to 9.51%		114,535			28,552

		79,089,535			79,003,552
Less current maturities		(79,001,205	)		(79,003,552	)

	$	88,330		$	—

(4)

CONTINGENCIES

Golf Hosts, Inc., the Company’s parent, was named as a defendant in a consolidated class action lawsuit whereby the plaintiffs allege breaches of contract, including breaches in connection with the Rental Pool Master Lease Agreement. By order dated April 2, 2003, the Company was substituted in place of Golf Hosts, Inc. as the defendant in the lawsuit. The plaintiffs are seeking unspecified damages and declaratory judgment stating that the plaintiffs are entitled to participate in the rental pool if one exists, a restriction of golf course access to persons who are either condominium owners, members, their accompanied guests, or guests of the resort and a restriction of the total number of club memberships. Deposition of class members and others, including depositions of prior executives of Golf Host Resorts, have been taken and additional discovery remains. The previously scheduled trial date of February 3, 2003 has been postponed by the Court;

Page 8

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4)		CONTINGENCIES (continued)
		date has not yet been set. In July 2003, the lawsuit class was de-certified leaving approximately 80 plaintiffs in the lawsuit. Plaintiffs have filed a notice of appeal regarding the de-certification decision. As this litigation is still in progress, the Company is not yet able to determine whether the resolution of this matter will have a material adverse effect on the Company’s financial condition or results of operations. The Company believes Golf Hosts, Inc. has successful defenses based upon consultations with legal counsel and intends to vigorously defend this action.
		The Company has recorded a liability and related asset in the approximate amount of $5,623,000, in recognition of the Master Lease Agreement refurbishment reimbursement program. The liability will be settled in accordance with the terms of the agreement and the asset will be amortized on a straight line basis beginning in 2002 and ending December 31, 2009. Amortization expense for the asset was approximately $391,000 and $204,000 for the periods ended June 30, 2003 and June 30, 2002, respectively.
		As noted in the Company's 10-K filed as of December 31, 2002, the Company has defaulted on its primary mortgage with Golf Trust of America ("GTA"). The Company is engaged in negotiations with "GTA" and is seeking a resolution to its current default status. As of the time of this publication, no definite or final agreement has been reached.

(4)

CONTINGENCIES (continued)

a new trial date has not yet been set. In July 2003, the lawsuit class was de-certified leaving approximately 80 plaintiffs in the lawsuit. Plaintiffs have filed a notice of appeal regarding the de-certification decision. As this litigation is still in progress, the Company is not yet able to determine whether the resolution of this matter will have a material adverse effect on the Company’s financial condition or results of operations. The Company believes it has successful defenses based upon consultations with legal counsel and intends to vigorously defend this action.

The Company has recorded a liability and related asset in the approximate amount of $5,623,000, in recognition of the Master Lease Agreement refurbishment reimbursement program. The liability will be settled in accordance with the terms of the agreement and the asset will be amortized on a straight line basis beginning in 2002 and ending December 31, 2009. Amortization expense for the asset was approximately $611,000 and $305,000 for the periods ended September 30, 2003 and September 30, 2002, respectively.

As noted in the Company’s 10K filed as of December 31, 2002, the Company has defaulted on its primary mortgage with Golf Trust of America (“GTA”). The Company is engaged in negotiations with “GTA” and is seeking a solution to its default status. At the time of this publication, no definite or final agreement has been reached.

Page 9

RENTAL POOL LEASE OPERATION

The following unaudited financial statements of the Innisbrook Rental Pool Lease Operation (the Rental Pool) are for the quarters ended ~~June~~September 30, 2003 and 2002.

The operation of the Rental Pool is tied closely to that of Golf Host Resorts, Inc. (the Company), and provides for distribution of a percentage of the Company’s room revenues, as defined in the Rental Pool Master Lease Agreements, to participating condominium owners (Participants).

The Innisbrook Rental Pool Operation is party to lease agreements with an affiliated entity, whose ability to continue as a going concern is in substantial doubt. ~~The operation of the Rental Pool is more fully discussed in Form 10-K, for the~~ ~~fiscal year ended December 31, 2002 (file No. 2-64309).~~

The operation of the Rental Pool is more fully discussed in Form 10-K, for the fiscal year ended December 31, 2002 (file No. 2-64309).

Page 10

INNISBROOK RENTAL POOL LEASE OPERATION
BALANCE SHEETS

DISTRIBUTION FUND

				June 30,
		September 30,				December 31,
		2003		~~2003~~		2002		~~December 31,~~
		(unaudited)		~~(unaudited)~~				~~2002~~
ASSETS	~~ASSETS~~
LIFE SAFETY RECEIVABLE FROM PARTICIPANTS		$	44,271	$	~~66,407~~	$	—	$	—
RECEIVABLE FROM GOLF HOST RESORTS, INC. FOR DISTRIBUTION			680,446		~~846,233~~		1,790,798		~~1,790,798~~
INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND			8,314		~~14,068~~		15,856		~~15,856~~
		$	733,031	$	~~926,708~~	$	1,806,654	$	~~1,806,654~~
LIABILITIES AND PARTICIPANTS’ FUND BALANCES	~~LIABILITIES AND PARTICIPANTS’ FUND BALANCES~~
DUE TO PARTICIPANTS FOR DISTRIBUTION		$	470,319	$	~~622,555~~	$	1,480,977	$	~~1,480,977~~
DUE TO MAINTENANCE ESCROW FUND			218,441		~~237,746~~		325,677		~~325,677~~
LIFE SAFETY SETTLEMENT LIABILITY			44,271		~~66,407~~		—		—
		$	733,031	$	~~926,708~~	$	1,806,654	$	~~1,806,654~~
MAINTENANCE ESCROW FUND
ASSETS	~~ASSETS~~
CASH AND CASH EQUIVALENTS		$	1,888,015	$	~~3,486,445~~	$	4,991,956	$	~~4,991,956~~
RECEIVABLE FROM DISTRIBUTION FUND			218,441		~~237,746~~		325,677		~~325,677~~
CONSTRUCTION WORK IN PROGRESS			39,421		—		7,284		~~7,284~~
CARPET CARE RECEIVABLE			9,018		~~12,110~~		23,576		~~23,576~~
INTEREST RECEIVABLE			13,519		~~16,944~~		9,012		~~9,012~~
		$	2,168,414	$	~~3,753,245~~	$	5,357,505	$	~~5,357,505~~
LIABILITIES AND PARTICIPANTS’ FUND BALANCES		~~LIABILITIES AND PARTICIPANTS’ FUND BALANCES~~
ACCOUNTS PAYABLE		$	108,387	$	~~659,190~~	$	2,820	$	~~2,820~~
INTEREST PAYABLE TO DISTRIBUTION FUND					14,068				15,856
CONSTRUCTION RETAINAGE			4,302				—
PARTICIPANTS’ FUND BALANCES - ESCROW A					1,634,853				1,366,611
INTEREST PAYABLE TO DISTRIBUTION FUND			8,314				15,856
PARTICIPANTS’ FUND BALANCES - ESCROW B					1,445,134				3,972,218
PARTICIPANTS’ FUND BALANCES — ESCROW A			1,601,935				1,366,611
				$	3,753,245			$	5,357,505
PARTICIPANTS’ FUND BALANCES — ESCROW B			445,476				3,972,218
		$	2,168,414			$	5,357,505

These statements were prepared from the books and records of the Rental Pool without audit and, in the opinion of the Rental Pool Operators, include all adjustments which are necessary for a fair presentation.

Page 11

STATEMENTS OF OPERATIONS FOR THE QUARTERS ENDED ~~JUNE~~SEPTEMBER 30, 2003 AND 2002

DISTRIBUTION FUND (~~Unaudited~~unaudited)

		Current quarter						Year-to-Date
		2003			2002			2003			2002
GROSS REVENUES		$	21,~~485~~965,~~774~~259		$	31,~~325~~728,~~678~~450		$	68,~~498~~463,~~035~~294		$	89,~~253~~981,~~420~~870
DEDUCTIONS:
	Agents’ commissions		8256,~~033~~349			~~178~~47,~~326~~699			~~260~~316,~~468~~817			~~373~~420,~~116~~815
	Credit card fees		5845,~~723~~388			7940,~~187~~776			~~153~~199,~~920~~308			~~195~~236,~~506~~282
	Audit fees		5,387			3,813			1016,~~774~~161			812,~~375~~187
	Uncollectable room rents		—			82,~~239~~295			2,119			2426,~~371~~666
	Linen replacements		2128,~~290~~655			6617,~~107~~351			74102,~~197~~852			~~109~~126,~~028~~379
	Rental pool complimentary fees		~~654~~824			12,~~025~~413			12,~~629~~453			14,~~820~~233
			168,087			336,697			503,107			712,216
			136,603			114,347			639,710			826,562
ADJUSTED GROSS REVENUES			21,~~317~~828,~~687~~656			21,~~988~~614,~~981~~103			57,~~994~~823,~~928~~584			79,~~541~~155,~~204~~308
MANAGEMENT FEE			(1,~~390~~096,~~231~~909	)		(1967,~~791,923~~743	)		(34,~~595~~692,~~979~~888	)		(45,~~520~~488,~~854~~598	)
GROSS INCOME DISTRIBUTION			~~927~~731,~~456~~747			1646,~~197,058~~360			23,~~398~~130,~~949~~696			3,~~020~~666,~~350~~710
ADJUSTMENTS TO GROSS INCOME DISTRIBUTION:
	Management fee		(~~223~~172	)		(~~876~~417	)		(~~575~~747	)		(2,~~288~~705	)
	Marketing fee		(~~121~~94	)		(~~478~~228	)		(~~313~~407	)		(1,~~248~~476	)
	General pooled expense		—			~~(12,355~~—	)		—			(12,355	)
	Miscellaneous pooled expense		~~(21~~—	)		(7749	)		(45	)		(~~169~~218	)
	Corporate complimentary occupancy fees		56,~~040~~526			47,~~899~~705			714,~~802~~328			816,~~717~~422
	Interest (Paragraph 3.1 (3))		(3,183	)		(3,183	)		(69,~~366~~549	)		(69,~~366~~549	)
	Gtd MLA guaranteed payment		—			—			1,592			—
	Occupancy fees		(~~264~~242,~~162~~777	)		(~~329~~223,~~087~~879	)		(~~571~~814,~~531~~308	)		(~~690~~914,~~951~~830	)
	Advisory Committee expenses		(5447,~~143~~068	)		(4850,~~314~~641	)		(~~101~~148,~~537~~605	)		(~~103~~154,~~765~~406	)
	Life-safety reimbursement		(4622,~~284~~135	)		—			(~~134~~156,~~827~~962	)		—
NET INCOME DISTRIBUTION			~~564~~422,~~359~~844			~~807~~375,~~587~~668			12,~~593~~015,~~149~~993			2,~~211~~587,~~925~~593
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
	Occupancy fees		~~264~~242,~~162~~777			~~329~~223,~~087~~879			~~571~~814,~~531~~308			~~690~~914,~~951~~830
	Hospitality suite fees		~~2,424~~370			1,~~157~~216			34,~~864~~234			34,~~019~~234
	Westin Associate room fees		1514,~~288~~455			1622,~~709~~393			3953,~~444~~899			3961,~~445~~838
	Interest		—			—			2,890			—
AMOUNT AVAILABLE FOR DISTRIBUTION TO PARTICIPANTS		$	~~846~~680,~~233~~446		$	1623,~~154,540~~156		$	2,~~210~~891,~~878~~324		$	23,~~945~~568,~~340~~495
Average daily distribution		$	1512.8517		$	2111.7653		$	2117.0093		$	2822.3861
Average room rate		$	~~119~~102.7489		$	~~125~~94.6131		$	~~143~~131.3234		$	~~148~~134.3394
Occupied room nights			2019,~~760~~101			2618,~~476~~326			4564,~~339~~440			5573,~~642~~970
Available room nights			5355,~~379~~927			5354,~~068~~040			~~105~~161,~~286~~213			~~103~~157,~~775~~815
Occupancy percentage			3834.92	%		4933.9	%		4340.10	%		5346.69	%
Average number of available units			~~587~~608			~~583~~587			~~582~~591			~~573~~578

Page 12

INNISBROOK RENTAL POOL LEASE OPERATION STATEMENTS OF CHANGES IN PARTICIPANTS’ FUND BALANCES FOR THE QUARTERS ENDED ~~JUNE~~SEPTEMBER 30, 2003 AND 2002

DISTRIBUTION FUND (~~Unaudited~~unaudited)

		Current Quarter						Year-to-date
		2003			2002			2003			2002
BALANCE, beginning of period		$	—		$	—		$	—		$	—
ADDITIONS:
	Amount available for distribution		~~846~~680,~~233~~446			1623,~~154,542~~156			2,~~210~~891,~~878~~324			23,~~945~~568,~~340~~495
	Interest received or receivable from Maintenance Escrow Fund		148,~~068~~314			2119,~~862~~303			2533,~~040~~354			3757,~~718~~021
REDUCTIONS:
	Amounts withheld for Maintenance Escrow Fund		(~~237~~218,~~746~~441	)		(~~296~~211,~~179~~923	)		(~~514~~733,~~698~~409	)		(~~621~~833,~~856~~779	)
	Amounts accrued or paid to participants		(~~622~~470,~~555~~319	)		(~~880~~430,~~225~~536	)		(12,~~721~~191,~~220~~269	)		(2,~~361~~791,~~202~~737	)
BALANCE, end of period		$	—		$	—		$	—		$	—
MAINTENANCE ESCROW FUND
BALANCE, beginning of period		$	43,~~568~~079,~~662~~987		$	54,~~338~~943,~~829~~836		$	3,444,280		$	2,726,458
ADDITIONS:
	Amounts withheld from occupancy fees		~~237~~218,~~746~~441			~~296~~211,~~179~~923			~~514~~733,~~698~~409			~~621~~833,~~856~~779
	Interest earned		148,~~068~~314			2119,~~862~~303			2533,~~040~~354			3757,~~718~~021
	Charges to participants to establish or restore escrow balances		~~249~~35,~~203~~032			~~314~~74,~~934~~749			1,~~788~~823,~~251~~283			4,~~491~~565,~~168~~917
REDUCTIONS:
	Maintenance charges		(~~188~~232,~~829~~585	)		(~~115~~163,~~573~~948	)		(~~438~~671,~~815~~400	)		(~~288~~452,~~311~~259	)
	Refurbishment Phase II		(1,~~611~~000,~~768~~928	)		(~~818~~1,~~942~~310,243	)		(23,012,~~025~~953	)		(13,~~971~~281,~~409~~652	)
	Carpet care reserve deposit		(1314,~~208~~562	)		(1611,~~455~~774	)		(2843,~~576~~138	)		(3042,~~930~~704	)
	Interest accrued or paid to Distribution Fund		(148,~~068~~314	)		(2119,~~862~~303	)		(2533,~~040~~354	)		(3757,~~718~~021	)
	Refunds to participants as prescribed by the master lease agreements		(~~161~~37,~~819~~974	)		(55108,~~136~~881	)		(~~188~~226,~~096~~070	)		(~~604~~713,~~996~~877	)
BALANCE, end of period		$	32,~~079~~047,~~987~~411		$	43,~~943~~635,~~836~~662		$	32,~~079~~047,~~717~~411		$	43,~~943~~635,~~836~~662

Page 13

GOLF HOST RESORTS, INC.


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

Quarter ended ~~June~~September 30, 2003

During the ~~second~~third quarter of 2003, ~~The~~the Company’s results of operations ~~continued~~ continued to reflect the downward trend in the hospitality industry and the ~~destination~~ destination golf resort segment of that industry. Occupancy percentages at the ~~Innisbrook~~ Innisbrook resort were 214.62% ~~less~~greater than the same three-month period for the prior year. Total room nights were ~~down~~773 ~~5,716~~greater for the period ended ~~June~~September 30, ~~2003~~ ~~and~~ 2003 compared to the three months ended ~~June~~September 30, 2002. Group room nights were up ~~down 6~~1,~~064~~933 while transient rooms ~~increased~~decreased by ~~348~~1,160 room nights, as compared to to the same period last year. Total revenue per room night ~~increased~~decreased by 127.17% or or $6727.0710 ~~over~~as compared to the prior year. Gross revenue per room night for the ~~three~~ three months ended ~~June~~September 30, 2003 was $~~623~~325.2096 as compared to $~~556~~353.1305 for the three months ended ~~June~~September 30, 2002. ~~These~~Despite ~~net~~increases ~~reductions~~ in room nights, ~~coupled with~~ the ~~increase~~decrease in ~~room~~total ~~night~~revenue ~~spending~~per ~~levels~~room ~~produced~~night aresulted in net decrease in gross revenue of approximately $2245,~~364,~~000 or 203.18%.

All expenses have been managed to respond to the reduced demand in the market place, ~~excluding~~including the day-to-day maintenance costs of the four golf courses. ~~Operating~~ Operating expenses, exclusive of depreciation and amortization, ~~decreased~~increased approximately $1541,~~074,~~000 or 117.6%. Depreciation and amortization also ~~decreased~~ increased by approximately $~~113~~47,000 or 133.26%.

The decrease in revenue combined with the ~~decreases~~increases in operating expenses and depreciation and amortization noted above, produced a net reduction in the comparative three month operating income of approximately $1832,~~176,~~000. ~~Operating~~ Operating income, before interest expense and preferred dividend requirements, was a loss of approximately $~~519~~2,839,000 versus ~~income~~a loss of approximately $~~657~~2,007,000 for the three months ended ~~June~~September 30, 2003 and ~~June~~September 30, 2002, respectively.

Interest expense, net of interest income, reflects the continued accrual of the Company’s GTA interest obligations. Total interest expense increased by approximately $~~103~~20,000 or ~~4.6~~1%. This increase was the result of ~~effective~~ effective interest rate changes on the GTA mortgage.

Capital expenditure reserves in the amount of approximately $603,000 were set-aside during the quarter ended ~~June~~September 30, 2003. Of this amount, approximately $~~101~~184,000 was used to fund capital lease payments on operating assets such as golf carts, golf grounds equipment and computer equipment while $73239,000 was used to replace and repair the conference center and ~~clubhouse~~ clubhouse HVAC, clubhouse roofing, systems and miscellaneous deferred maintenance projects. The balance is being held in reserve to fund the new telephone switch and additional golf course equipment, both of which will be installed and or delivered before the end of the ~~year~~first ~~2003~~quarter of 2004.

~~Six~~Nine months ended ~~June~~September 30, 2003

During the ~~six~~nine months ended ~~June~~September 30, 2003, ~~The~~the Company’s results of ~~operations~~ operations continued to reflect the downward trend in the hospitality industry and the destination golf resort segment of that industry as noted above. ~~Occupancy~~ Occupancy percentages at the Innisbrook resort were 1812.59% less than the same ~~six~~ nine-month period for the prior year. Total room nights were down 109,~~303~~530 for the ~~period~~ period ended ~~June~~September 30, 2003 as compared to the ~~six~~nine months ended ~~June~~ September 30, 2002. Group and transient room nights were down 86,~~911~~978 and 12,~~392~~552 room nights respectively, as compared to the same period last ~~year. Total revenue per room night~~ ~~increased by $37.97 or 6.1% over the prior year. Gross revenue per room night~~ ~~for the six months ended June 30, 2003 was $659.14 as compared to $621.17 for~~ ~~the six months ended June 30, 2002. These reductions in room nights coupled~~ ~~with the increase in room night spending levels produced a net decrease in~~ ~~gross revenue of approximately $4,272,000 or 16.3%.~~

Page 14

GOLF HOST RESORTS, INC.


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

~~Due~~year. toTotal ~~managements~~revenue ~~reducing~~per ~~operating expenses~~room innight ~~response~~decreased toby ~~reduced~~$4.75 ~~demand,~~or ~~operating~~1.1% ~~expenses,~~over ~~exclusive~~the ofprior ~~depreciation~~year. ~~and~~Gross ~~amortization~~revenue per room night for the nine months ended September 30, 2003 ~~decreased~~was ~~approximately~~$437.02 as compared to $~~1,531,000~~441.77 orfor the nine months ended September 30, 72002.~~2%.~~ ~~Depreciation~~These ~~and~~reductions ~~amortization~~in ~~also~~room ~~declined~~nights coupled with the decrease in room night byspending ~~approximately~~levels produced a net decrease in gross revenue of approximately $~~239~~4,516,000 or 13.8%.

~~The~~Due ~~decrease~~to inmanagement’s ~~revenue~~reducing ~~combined with the decreases in~~ operating expenses ~~and depreciation~~in ~~and~~response ~~amortization~~to ~~noted~~reduced ~~above~~demands, ~~produced a net reduction~~ ~~in the comparative six month~~ operating ~~income of approximately $2~~expenses,~~502,000.~~ ~~Operating income,~~exclusive ~~before~~of ~~interest~~depreciation ~~expense~~ and ~~preferred dividend requirements~~amortization, ~~was~~decrease approximately $~~793~~1,092,000 ~~versus~~or ~~income of approximately $~~3~~,295,000~~.8%. ~~for~~Depreciation ~~the~~and ~~six~~amortization ~~months~~decreased ~~ended~~by approximately ~~June 30~~$90,000 ~~2003~~or ~~and June 30, 2002, respectively~~3.1%.

~~Interest~~The ~~expense,~~decrease ~~net~~in ofrevenue ~~interest~~combined with the decreases in operating expenses and ~~income~~increase in depreciation and amortization noted above, ~~reflects~~produced ~~change~~a net reduction in the ~~effective~~comparative ~~interest~~nine ~~rates~~month ~~related~~operating ~~to the~~income ~~GTA~~of ~~interest~~approximately ~~obligations~~$3,334,000. Operating ~~Total~~income, before interest expense ~~decreased~~and bypreferred dividend requirements, was a loss of approximately $382,046,000 orversus 0income of approximately $1,288,000 for the nine months ended September 30, 2003 and September 30, 2002, respectively.~~8%.~~

~~Capital~~Interest ~~expenditure~~expense, ~~reserves~~net ~~in the amount~~ of ~~approximately~~interest $1income,~~212,000~~ ~~were set-aside~~reflects ~~during~~change in the ~~six months ended June 30, 2003. Of this amount,~~effective ~~approximately~~interest ~~$479,000~~rates ~~was~~related ~~used~~ to ~~fund~~the ~~capital~~GTA ~~lease~~interest ~~payments~~obligations. onTotal ~~operating~~interest ~~assets~~expense ~~such~~decreased asby ~~golf~~approximately ~~carts, golf grounds equipment and computer equipment while~~ $~~200~~19,000 was used to replace and repair the conference center and clubhouse HVAC, roofing systems and miscellaneous deferred maintenance projects. The balance is being held in reserve to fund the new telephone switch and golf course equipment, both of which will be installed and or ~~delivered before the end of the year 2003~~.3%.

Capital expenditure reserves in the amount of approximately $1,808,000 were set-aside during the nine months ended September 30, 2003. Of this amount, approximately $663,000 was used to fund capital lease payments on operating assets such as golf carts, golf grounds equipment and computer equipment while $439,000 was used to replace and repair the conference center and clubhouse HVAC, roofing systems and miscellaneous deferred maintenance projects. The balance is being held in reserve to fund the new telephone switch and golf course equipment, both of which are expected be installed and or delivered before the end of the first quarter of 2004.

The following information may contain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. Such statements may be identified by the inclusion of terms such as “believe,” “expect,” “hope” or “may.” Although the Company believes that such forward-looking statements are based upon sound and reasonable assumptions, given the circumstances in which the statements are made, the actual results could differ significantly from those described in the forward-looking statements.

Certain factors that might cause such a difference include the following: changes in general economic conditions that may influence group conferences and guests’ vacations plans; changes in travel patterns; changes in consumer tastes in destinations or accommodations for group conferences and vacations; changes in rental pool participation by the current condominium owners; reaching a settlement agreement with the Company’s primary lender; settlement of the Class Action Lawsuit; the ability of the Company to continue to operate the Innisbrook property under its management contracts; and the resale of condominiums to owners who elect neither to participate in the rental pool nor to become Club members. Given these uncertainties, readers are cautioned not to put undue reliance on such statements.

Page 15

GOLF HOST RESORTS, INC.


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Liquidity and Capital Resources

The Company’s working capital position has decreased to a deficit of approximately $~~107~~105,~~300~~454,000. This is a reduction of approximately $97,~~222~~376,000 in working capital from the December 31, 2002 deficit of approximately $98,078,000.

The Company continues to experience seasonal fluctuations in its net working capital position. These fluctuations have been managed in the past through the utilization of an accounts receivable revolving credit line. Effective May 23, 2002, the revolving credit line with Wells Fargo Business Credit was terminated by Wells Fargo as a result of the Company’s default on the participating mortgage with Golf Trust of America (GTA).

The Company was informed by GTA on November 29, 2001 that the Company is in default on the $78,975,000 mortgage and accrued interest, arising from the Company’s failure to pay the October 2001 interest and all subsequent monthly installments. GTA has asserted its right to accelerate payment of the total outstanding principal and interest amounts.

As of ~~August~~November 2003, the Company is seeking to negotiate a Settlement Agreement with GTA. In connection with the proposed Settlement Agreement, the Company would transfer to GTA the Innisbrook resort property, three condominium units located at the resort, the Company’s ownership interests in GTA stock, and all rights, title and interests of the Company under existing contracts and agreements. In addition, the Company would provide limited indemnity to defend and hold harmless GTA (and its affiliates) from and against any and all costs, liabilities, claims, losses, judgments or damages arising out of or in connection with the Class Action Lawsuit, as well as liabilities accruing on or before the closing date relating to employee benefits and liabilities for contracts or agreements not disclosed by the Company to GTA. In return, it is anticipated that GTA would deliver to the Company a duly executed release. No Settlement Agreement has yet been signed and no terms are definite. Neither GTA nor any of its affiliates are under any obligation to execute the Settlement Agreement and GTA could initiate foreclosure proceedings or pursue any other legal remedies available to it at any time.

During October 2003, Westin Hotel Company, the manager of the Innisbrook Resort, provided ownership with updated net cash flow projections for the fourth quarter of 2003 and for the year 2004. Due to continuing softness in the general economy and specifically the destination resort industry, these net cash flow projections are significantly less favorable than previously projected for these periods, and will result in operating deficits for such periods.

As described in Note 4 of the notes to consolidated financial statements on the Company’s Form 10-K for December 31, 2002, management had determined that due to declining demand in the hotel golf resort business and related rental pool participation, which led to declines in operating results, impairment of the intangible asset had occurred. At December 31, 2000, an impairment charge of $7,441,000 was recorded. As a result of the continued decline in destination golf resort business during 2001 and the events of September 11, 2001, the Company had determined that further impairment had occurred and consequently recorded an additional $3,000,000 impairment charge during the quarter ended September 30, 2001. No further impairment has been recognized subsequent to the period ended September 30, 2001.

Page 16

GOLF HOST RESORTS, INC.


Item 3.		Quantitative and Qualitative Disclosures About Market Risk

		The Registrant does not have significant market risk with respect to foreign currency exchanges or other market rates. The Registrant’s debt has a fixed contractual interest rate through the year 2027 and, accordingly, fluctuations in interest rates are not expected to affect financial results.

Item 4.		Controls and Procedures

		Within the 90 days prior to the date of this report, the Registrant’s management, including the Chief Executive Officer, the Principal Financial Officer and the Registrant’s agent (Westin North American Management Company), carried out an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the evaluation, the Registrant’s Chief Executive Officer and the Principal Financial Officer concluded that the Registrant’s disclosure controls and procedures are effective in timely alerting them to material information to be included in the Registrant’s periodic SEC filings.

		There have been no significant changes in the Registrant’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer and the Principal Financial Officer carried out this evaluation.

Page 17

PART II -— OTHER INFORMATION

Item 1. Legal Proceedings Golf Hosts, Inc., the Company’s parent, was named as a defendant in a consolidated class action lawsuit whereby the plaintiffs allege breaches of contract, including breaches in connection with the Rental Pool Lease Agreement. By order dated April 3, 2003, the Company was substituted in place of Golf Hosts, Inc. as the defendant in the lawsuit. The plaintiffs are seeking unspecified damages and declaratory judgment stating that the plaintiffs are entitled to participate in the rental pool if one exists, a limitation of golf course access to persons who are either condominium owners, members, their accompanied guest, or guests of the resort and a limitation of the total number of Club memberships. Deposition of class members and others, including depositions of prior executives of Golf Host Resorts, have been taken and additional discovery remains. The previously scheduled trial date of February 3, 2003 has been postponed by the Court; a new trial date has not yet been set. In July 2003, the lawsuit was de-certified leaving approximately 80 plaintiffs in the lawsuit. Plaintiffs have filed a notice of appeal regarding the de-certification decision. As this litigation is still in progress, the Company is not yet able to determine whether the resolution of this matter will have a material adverse effect on the Company’s financial condition or results of operations although the Company believes Golf Hosts, Inc. has successful defenses based upon consultations with legal counsel and intends to vigorously defend this action.


Item 1.		Legal Proceedings

		Golf Hosts, Inc., the Company’s parent, was named as a defendant in a consolidated class action lawsuit whereby the plaintiffs allege breaches of contract, including breaches in connection with the Rental Pool Lease Agreement. By order dated April 3, 2003, the Company was substituted in place of Golf Hosts, Inc. as the defendant in the lawsuit. The plaintiffs are seeking unspecified damages and a declaratory judgment stating that the plaintiffs are entitled to participate in the rental pool if one exists, a limitation of golf course access to persons who are either condominium owners, members, their accompanied guest, or guests of the resort and a limitation of the total number of Club memberships. Deposition of class members and others, including depositions of prior executives of Golf Host Resorts, have been taken and additional discovery remains. The previously scheduled trial date of February 3, 2003 has been postponed by the Court; a new trial date has not yet been set. In July 2003, the lawsuit was de-certified leaving approximately 80 plaintiffs in the lawsuit. Plaintiffs have filed a notice of appeal regarding the de-certification decision. As this litigation in still in progress, the Company is not yet able to determine whether the resolution of this matter will have a material adverse effect on the Company’s financial condition or results of operations although the Company believes it has successful defenses based upon consultations with legal counsel and intends to vigorously defend this action.

Item 2.		Changes in Securities and Use of Proceeds

		Not applicable.

Item 3.		Defaults Upon Senior Securities

		Not applicable

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

		Not applicable

Item 5.		Other Information

		Pursuant to an agreement with the SEC staff, included in the 10-Q filing are unaudited financial statements of the Innisbrook Rental Pool Lease Operation for the quarters ended March 31, 2003 and 2002.

Item 6.		Exhibits and Reports on Form 8-K

		(a) The following exhibits are included in this Form 10-Q:

		31.1 President Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

		31.2 Principal Financial Officer Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

		32.1 President Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

		32.2 Principal Financial Officer Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

		(b) The Registrant did not file Form 8-K during the three months ended March 31, 2003.

Item 2. Changes in Securities and Use of Proceeds Not applicable.

Item 3. Defaults Upon Senior Securities Not applicable

Item 4. Submission of Matters to a Vote of Security Holders Not applicable

Item 5. Other Information Pursuant to an agreement with the SEC staff, included in the 10-Q filing are unaudited financial statements of the Innisbrook Rental Pool Lease Operation for the quarters ended March 31, 2003 and 2002.

Item 6. Exhibits and Reports on Form 8-K (a) The following exhibits are included in this Form 10-Q:

31.1 President Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002. 31.2 Principal Financial Officer Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002. 32.1 President Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002. 32.2 Principal Financial Officer Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002. (b) The Registrant did not file Form 8-K during the three months ended March 31, 2003.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GOLF HOST RESORTS, INC.

Date: August 14, 2003	By: /s/ Merrick Kleeman
Date:	November 24, 2003	By: /s/ Merrick Kleeman Merrick Kleeman President
	Merrick Kleeman
Date:	November 24, 2003	By: /s/ R. Keith Wilt R. Keith Wilt Vice President and Treasurer (Principal Financial Officer)
	President
Date: August 14, 2003	By: /s/ R. Keith Wilt
	R. Keith Wilt
	Vice President and Treasurer
	(Principal Financial Officer)

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Filing Compare · GOLF HOST RESORTS INC