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UNITED STATES

FORM 10-K

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

For the fiscal year ended December 26, 2000

Commission file numbers 33-89818, 33-96568, 333-08041, 333-57107 and 333-52612

CLUBCORP, INC.

Registrant’s telephone number, including area code: (972) 243-6191

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

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

         The aggregate market value of the Registrant’s voting stock held by non-affiliates of the Registrant at December 26, 2000 (the most recent date on which an appraisal was available), based on the most recent appraised price of the Registrant’s Common Stock, was $85,543,644.

         The number of shares of the Registrant’s Common Stock outstanding as of March 11, 2001 was 94,086,686.

TABLE OF CONTENTS

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Part I

Item 1.  Business

General

      ClubCorp, Inc. (referred to as ClubCorp® or the Company) is a holding company incorporated under the laws of the State of Delaware that, through its subsidiaries, owns, operates or manages country clubs, golf clubs, public golf courses, business clubs, business/ sports clubs, sports clubs, resorts and certain related real estate through sole ownership, partial ownership (including joint venture interests) and management agreements. The Company’s operations are organized into three principal business segments according to the type of facility or service: country club and golf facilities, business and sports clubs and resorts. The Company’s primary sources of revenue include membership dues, membership fees and deposits, food and beverage operations, golf operations and lodging.

      ClubCorp is one of the world’s most respected leaders in the seamless delivery of premier private club, resort and golf experiences for its members and guests. As of December 26, 2000, the Company’s operations and ventures spanned 30 states and 11 countries. The Company’s portfolio of 221 facilities included (i) 141 country clubs, golf clubs, public golf facilities and resorts, with a total of 192 golf courses and (ii) 80 business, sports and business/ sports clubs and its membership base exceeded 235,000 memberships. Trophy resorts and clubs in the Company’s portfolio include Pinehurst® Resort and Country Club in North Carolina, The Homestead® Resort in Virginia, Barton Creek Resort and Country Club in Austin, Texas, Firestone Country Club® in Akron, Ohio, Mission Hills Country Club near Palm Springs, California, The Metropolitan Club in Chicago and Lakelands Golf Club in Brisbane, Australia. Golf Digest, Golf Travel and other golf industry publications consistently rank golf courses at Pinehurst, Barton Creek and The Homestead among the best in the United States.

      The predecessor corporation to ClubCorp was organized in 1957 under the name Country Clubs, Inc. All references herein to ClubCorp shall also include Country Clubs, Inc. and its successor corporations. For purposes of this document, references to the “Company” include ClubCorp’s various subsidiaries. However, ClubCorp and each of its subsidiaries are careful to maintain separate legal existence, and general references to the Company should not be interpreted in any way to reduce the legal distinctions between subsidiaries or between ClubCorp and its subsidiaries.

      There is currently no public market for the Company’s common stock. The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934, pursuant to Section 15(d) thereof, because the Company has filed a registration statement on Form S-1, which became effective October 24, 1994 pursuant to the Securities Act of 1933 (the Registration Statement). The Registration Statement registered participation interests in the ClubCorp Stock Investment Plan (the “Plan”) and the Company’s common stock, $.01 par value per share (the Common Stock), to be sold to the Plan, which was amended and restated on January 1, 1999, to become the ClubCorp Employee Stock Ownership Plan (the Amended Plan).

Operations

Background and Philosophy

      ClubCorp was founded in 1957 to develop Brookhaven Country Club in the north Dallas area. In the mid-1960s, the Company established its first business club on the belief that it could profitably expand its operations by applying its club management skills and member-oriented philosophy to a related line of business. The Company commenced international operations in 1980 and currently operates a number of facilities in, among other countries and regions, Europe, Mexico and Australia. In the mid-1980s, the Company entered the resort industry when it capitalized on a turn-around opportunity by acquiring Pinehurst and further diversified its participation in the golf industry when it began developing, owning and operating public golf facilities in 1986. The Company entered the residential real estate market through its Owners Club program in 1994 by selling units in connection with its existing properties in Hilton Head, South Carolina. On March 31, 1999, the Company completed its largest acquisition to date by acquiring 22 facilities of the Cobblestone Golf Group.

      Mr. Robert H. Dedman, Sr. established ClubCorp on the belief that private clubs represented a significant business opportunity for a company that could combine professional development and management skills with the dedication to personal service necessary to attract and retain members. This commitment to professionalism and personal service is reflected in the Company’s member-oriented philosophy: create lasting value for members, guests, employees and financial partners by delivering personalized service and experiences that facilitate life-enhancing relationships, achieve world class results and create pride in belonging. ClubCorp’s management and employees recognize that the Company is in a relationship business where member and guest satisfaction are essential to long-term growth and profitability. The Company is committed to maintaining its leadership position in the golf-related and business club segments by creating an environment where members, guests and employees are

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      In directing the Company’s growth since its formation, Mr. Dedman has emphasized quality service and facilities, endeavoring to exceed the expectations of the Company’s members and guests. Senior management believes that the Company’s success depends greatly upon the motivation, training and experience of its employees. See—“Employees”.

      From the beginning of the Company, Mr. Dedman focused on assembling an experienced management team to lead the Company. ClubCorp’s 10 executive officers, including the Chairman of the Board, possess an average of 21 years of experience with the Company. The Company has also attempted to attract and retain qualified, dedicated managers for its country club, golf club and public golf facilities, business and sports clubs and resorts. These managers possess an average of nine years of experience with the facilities of the Company. The Company provides an extensive, proprietary system of in-house training and education for all of its employees that is designed to improve the quality of services provided to members and guests.

      The Company believes that a factor in its attaining a leadership position in the industry is the Company’s member-oriented philosophy. Underlying this philosophy are progressive human resource values and goals which the Company believes have resulted in superior customer service. The Company’s managers and employees participate in extensive, internally developed and administered training and educational programs. Management believes that the Company’s member-oriented philosophy and culture set it apart from many of its competitors that focus on short-term returns which may jeopardize member satisfaction and long-term profitability.

Nature of Operations

      The Company operates country club and golf facilities, business and sports clubs and resorts through sole ownership, partial ownership and management agreements. In addition, the Company performs various corporate services internally and for third parties and develops and sells real estate. See—“Other Operations.” With respect to its wholly-owned operations, in some cases the Company owns the real property where the facility is operated and in other cases the Company leases the real property from third parties.

      Management believes that the Company’s existing club, resort and other facilities and its base of club members represent a significant value to the Company. For example, certain of the Company’s country clubs that were developed many years ago are now located in highly populated areas where development of a new facility would be prohibitively expensive.

      The success of the Company’s private club and golf club business is dependent on the Company’s ability to attract new members, retain existing members and maintain or increase levels of club usage. The success of the Company’s country club, golf club, public golf and resort operations is also dependent on levels of usage by the Company’s members and guests. Although the Company devotes significant resources to promote its facilities and services, many of the factors affecting club membership and usage are beyond the control of the Company. Local and federal government laws, including income tax regulations applicable to the Company and its club members and guests, can adversely influence membership activity. See—“Government Regulation.” Changes in consumer tastes and preferences, local, regional and national economic conditions, including levels of disposable income, weather and demographic trends can also have an adverse impact on club membership and usage. See Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Seasonality of Demand; Fluctuations in Quarterly Results”.

      The Company’s operations are organized into three principal business segments according to the type of facility or service: country club and golf facilities, business and sports clubs and resorts. Lines of business not assigned to a principal business segment include international operations and real estate.

Country Club and Golf Facilities

      The Company’s domestic portfolio includes 125 private country clubs, golf clubs or public golf facilities. Private country clubs generally provide at least one golf course and a combination of one or more of the following: dining rooms, lounge areas, meeting rooms, grills and ballrooms, tennis courts, swimming pools and pro shops. The Company’s private country clubs include Firestone Country Club, host of the NEC Invitational, one of the two U.S. stops on the 2000 World Golf Championship Tour, Mission Hills Country Club, home of the Nabisco Championship, Indian Wells Country Club near Palm Springs, California, one of the four golf courses used in the Bob Hope Chrysler Classic, Gleneagles Country Club near Dallas and Kingwood Country Club near Houston. The Company’s golf clubs generally offer both private and public play, a driving range and food and beverage concessions. Golf clubs include Nags Head Golf Links In North Carolina and Golden Bear Golf Club at Indigo Run in South Carolina. Public golf facilities are daily fee facilities that offer a “member for the day” experience and generally provide the same facilities and services as the Company’s golf clubs. The Company’s public golf facilities include Kingwood Cove Golf Club near Houston and Teal Bend

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Business and Sports Clubs

      The Company positions its business clubs as the “office away from the office” where members and guests can conduct business and business entertaining. Business clubs provide private and sophisticated settings in metropolitan locations to fulfill the dining, business or social entertainment needs of the business professional. Sports clubs provide an array of facilities, which generally include racquetball and squash courts, jogging tracks, exercise areas, weight machines, aerobic studios, swimming pools and, occasionally, tennis and basketball courts. Business/sports clubs combine the ambiance and amenities of a business club with the facilities of premier sports clubs. The Company’s 77 domestic business and sports clubs include The Metropolitan Club in Chicago, The Columbia Tower Club in Seattle, The City Club of San Francisco, The Athletic and Swim Club at Equitable Center in New York City and The University Club in Houston. Operating revenues for business and sports clubs consist primarily of membership revenues and dining sales. In 2000, the Company’s business and sports clubs segment generated operating revenues of $258.3 million (24.2% of total Company revenues) and segment operating income before impairment loss of $20.1 million. See Note 10 to the Consolidated Financial Statements of the Company included in Item 8.

Resorts

      The Company’s five destination resorts typically offer lodging and conference facilities, dining and lounge areas, golf, tennis, recreational facilities, European style spas and other resort amenities. They are grouped under “The Pinehurst Company” brand with the goal of being the world leader in delivering quality golf resort lifestyle experiences. Pinehurst, the largest golf resort in the world, with eight golf courses, hosted the 1999 United States Golf Association Open Championship (the “U.S. Open”) and will once again host the U.S. Open in 2005. In addition to Pinehurst, the Company’s resorts include The Homestead in Virginia, Barton Creek in Austin, Texas, Daufuskie Island in South Carolina and Palmilla in Los Cabos, Mexico. Operating revenues for the Company’s resorts are primarily comprised of lodging and golf revenues, food and beverage sales and membership fees. In 2000, the Company’s resort segment generated operating revenues totaling $217.8 million (20.4% of total Company revenues) and segment operating income before impairment loss of $24.3 million. See Note 10 to the Consolidated Financial Statements of the Company included in Item 8.

Other Operations

      ClubCorp develops and sells residential real estate adjacent to its golf facilities and sells ownership units at destination golf clubs and resorts through its Owners Club program. This concept was implemented by ClubCorp as a way to combine membership in its private clubs with ownership interest in vacation homes. Members may reserve vacation time at their home club or at affiliate Owners Clubs based on availability. In addition, membership provides such amenities as golf privileges, snowskiing, tennis, dining and spa facilities. Owners Club members now enjoy five locations including the Telluride Club in Colorado and The Homestead in Virginia.

      The Company’s international division operates 11 golf facilities, including two currently under construction, and three business and sports clubs. The Company plans to divest certain of its international holdings and focus on the “clustering” of properties in order to achieve significant efficiencies in operations in certain countries such as Australia and Mexico. The Company’s international operations include Marina Vallarta Club de Golf in Puerto Vallarta, Mexico, Lakelands Golf Club near Brisbane, Australia and Paris International Golf Club in France.

      In 2000, the Company’s real estate and international operations had combined operating revenues of $80.4 million (7.5% of total) and operating income before impairment loss of $9.6 million. See Notes 10 and 11 to the Consolidated Financial Statements of the Company included in Item 8.

Other Services

      ClubCorp performs a number of services on a company-wide basis, including certain centralized marketing, accounting, technology support, purchasing and disbursement functions. The Company publishes Private Clubs ®, an award winning bi-monthly magazine provided to club members and resort guests which showcases ClubCorp’s facilities. The Company also has a sports marketing division, Pinehurst Championship Management, which manages the operations of major golf tournaments at Pinehurst and other locations.

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Equity Investments

      The Company owns a 29.9% interest in PGA European Tour Courses, PLC (referred to as ETC), a publicly traded English company which owns and operates golf facilities in England, Sweden, Spain and Portugal, many of which have hosted premier golf tournaments, including the British Masters. Two of the Company’s Executive Officers are members of the Board of Directors of ETC.

      The Company owns a 26.1% interest in ClubLink Corporation, the largest owner and operator of high quality golf facilities in Canada. ClubLink is a publicly traded company that owns and operates golf facilities and resorts. Two of the Company’s Executive Officers are members of the Board of Directors of ClubLink.

      During 2000, the Company invested $6.5 million for an 8.8% common stock and 100.0% preferred stock interest in Lifecast.com, a web development company charged with creating members-only web sites for each of its private clubs worldwide. The web sites deliver club-related and lifestyle content for members. During 2000, three of the Company’s Executive Officers were appointed to the Board of Directors of Lifecast.com.

      ClubCorp’s other investments include joint ventures for the operation of three real estate developments, four country clubs, two golf clubs and two business clubs. The results of operations of these other investments are included in the operating segment to which they relate.

Expansion and Development

      The Company continually evaluates opportunities to increase the number of properties that it owns and operates both domestically and internationally, through acquisitions, joint ventures and development. ClubCorp’s executive officers routinely participate in the evaluation of strategic opportunities. The Company added 11 facilities in 2000, five of which are currently under construction. During 2000, the Company also continued to execute its external growth strategy through its joint venture agreement with Jack Nicklaus’ Golden Bear Golf, Inc. The joint venture was formed in 1998 to build and operate a variety of private and public golf facilities, including “The Bear’s Best”® concept, a series of courses that will feature replicas of the best Nicklaus-designed golf holes. The Golden Bear joint venture has resulted in one completed facility, the Nicklaus Golf Club at Birchriver near Atlanta, Georgia. Six additional Nicklaus-designed facilities (including expansion of existing ClubCorp facilities) are currently under construction and are expected to open in the next two years.

      In 2000, ClubCorp entered into the growing golf instruction business through agreements with David Leadbetter Enterprises (“Leadbetter”) and Dave Pelz’s (“Pelz”) Company, Independent Golf Research Corp., two leaders in the golf instruction business. The Leadbetter agreement gives the Company control of a golf academy in Naples, Florida, and the right to develop additional schools in the next two years. ClubCorp plans to add Leadbetter facilities at Pinehurst and The Homestead, and other locations. The Company began offering Dave Pelz Scoring Game Schools at Pinehurst in 2000. Pelz is widely considered to be golf’s foremost expert on the short game and putting aspects of golf instruction.

      The success of the Company’s future external growth strategy will depend in part upon the availability of suitable facilities on acceptable terms, the availability of adequate financing, equity capital and other factors beyond the Company’s control. The Company has a committed staff to constantly evaluate opportunities to execute this strategy. The success of the Company’s external growth strategy also will depend on the Company’s ability to effectively integrate acquired facilities and development projects into existing operations, including achieving synergies between new and existing operations and instilling its member-oriented philosophy. See Note 2 in the Notes to the Company’s Consolidated Financial Statements.

      Another core component of the Company’s growth is its internal growth strategy which involves the expansion of existing facilities in order to increase profitability. Management believes that many of its facilities have unused capacity and that the Company has the experience and management skills necessary to increase the utilization of these facilities while maintaining member satisfaction. During 2000, the Company demonstrated the success of its internal growth strategy with the construction of an additional Tom Fazio designed golf course at Pinehurst and room expansion at Barton Creek. For some of its facilities, management believes it can grow revenues by adding additional non-traditional amenities aimed at golfers and non-golfers, such as spa and salon facilities. An example of this strategy is The Spa at Pinehurst, a full-service facility that is scheduled to open in spring 2002.

Sales and Marketing

      The Company advertises and markets its golf facilities, business and sports clubs and resorts through diverse media. Among other things, the Company sponsors the Associate Clubs® Program, which provides members of clubs owned, leased or managed by the Company with access to other clubs outside a certain radius of the member’s club. Associate Gold was added as a new level of Associate membership, providing enhanced golf, social and athletic privileges at Associate Club properties. In cities where

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      The Company hosts a number of professional golf tournaments that provide publicity for the Company’s facilities. Some of the most notable tournaments the Company hosted during 2000 were the NEC Invitational at Firestone Country Club, the Bob Hope Chrysler Classic at Indian Wells Country Club and the Nabisco Championship at Mission Hills Country Club. Pinehurst Championship Management, which was created in conjunction with the Company’s hosting of the 1999 U.S. Open at Pinehurst, was selected to manage the 2001 U.S. Women’s Open Championship at the Pine Needles Golf Resort in Southern Pines, North Carolina. Pinehurst was also selected for the 2005 U.S. Open, which will be held at the resort for the second time in six years.

      The Company believes it has established a strong rapport with numerous professional organizations including the following:

	•	United States Golf Association;
	•	Professional Golf Association and Ladies Professional Golf Association Tours;
	•	American Junior Golf Association;
	•	National Golf Course Owners Association;
	•	Club Managers Association of America;
	•	National Club Association;
	•	International Health, Racquet & Sports Club Association;
	•	National Restaurant Association, and
	•	National Golf Foundation

      Additionally, in March 2000, it was announced that Robert H. Dedman, Jr. will serve a three year term on the Board of Directors of the National Golf Foundation, which is a nonprofit organization that provides information, consulting and research for the golf industry. These special relationships have enabled the Company to bring distinctive tournaments and events, such as the U.S. Open and the PGA Tour Championship, as well as numerous other prestigious events, to the Company’s clubs and resorts throughout the world. The Company also hosts many United States Tennis Association and Intercollegiate Tennis Association events, including the Rolex Indoor Collegiate Tennis Tournament, along with other athletic activities such as swimming, diving, lawn bowling and croquet. In addition, the Company’s clubs have been recognized for their culinary artistry. Many have earned distinctive awards from the American Culinary Federation.

Government Regulation

      The Company’s operations are subject to numerous laws and government regulations, including environmental, occupational health and safety, labor and alcoholic beverage control laws and laws relating to access for disabled persons. Changes to these laws or regulations could adversely affect the Company. The Company has in place policies designed to bring or keep its facilities in compliance, and audit procedures to inspect for compliance, with all current federal, state and local environmental laws.

      Operations at the Company’s golf courses involve the use and storage of various hazardous materials such as herbicides, pesticides, fertilizers, motor oil and gasoline. Under various federal, state and local laws, ordinances and regulations, an owner or operator of real property may become liable for the costs of removing such hazardous substances that are released on, or in, its property and for remediation of its property. Such laws often impose liability regardless of whether a property owner or operator knew of, or was responsible for, the release of hazardous materials. In addition, the presence of such hazardous substances, or the failure to remediate the surrounding soil when such substances are released, may adversely affect the ability of a property owner to sell such real estate or to pledge such property as collateral for a loan. The Company has not been informed by the Environmental Protection Agency or any state or local governmental authority of any non-compliance or violation of any environmental laws, ordinances or regulations likely to be material to the Company, and the Company believes that it is in substantial compliance with all such laws, ordinances and regulations applicable to its facilities and operations. See Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Future Operating Results”.

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      The Company is also subject to the Fair Labor Standards Act and various federal and state laws governing such matters as minimum wage requirements, overtime and other working conditions and citizenship requirements. The salaries of certain of the Company’s personnel are based on the federal minimum wage and adopted increases in the minimum wage have historically increased the Company’s labor costs. In addition, the Company is subject to certain state “dram-shop” laws, which provide a person injured by an intoxicated individual the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual. The Company is also subject to the Americans with Disabilities Act of 1990, which, among other things, may require certain minor renovations to various of the Company’s facilities to meet federally mandated access and use requirements. The Company believes it is operating in substantial compliance with applicable laws and regulations governing its operations.

      The Company has operations in a number of states which regulate the licensing of restaurants and resorts, including liquor license grants, by requiring registration, disclosure statements and compliance with specific standards of conduct. While the Company believes that it is, and will continue to be, in substantial compliance with these requirements, there can be no assurance that these requirements will not change or that any such change will not adversely affect the Company.

Competition

      The Company operates in a highly competitive industry. The Company’s clubs and resorts compete primarily on the basis of price, management expertise, featured facilities and quality and breadth of services. With respect to resorts, the Company competes on a national and international level with numerous hotel and resort companies. Competition in this part of the industry is intense and there can be no assurance that such competition will not adversely affect revenues, costs or operating income of the Company’s resorts. The Company’s country club and golf facilities compete on a local and regional level with other country club and golf facilities and the Company’s business and sports clubs compete on a local and regional level with dining establishments and other clubs. The level of competition in these lines of business varies from region to region and is subject to change as existing facilities are renovated or new facilities are developed. An increase in the number or quality of similar clubs and other facilities in a particular region could significantly increase competition, which could have a material adverse effect on the Company’s results from that region. The Company’s results of operations also could be affected by a number of additional competitive factors, including the availability of, and demand for, alternative forms of recreation. In addition, many of the Company’s public golf and destination resort facility competitors have substantially greater financial and other resources than the Company.

      The Company also competes for the operation of golf courses with national and regional golf course management companies, including American Golf Corporation, real estate investment trusts such as National Golf Properties, and, less frequently, with individuals and small ventures that typically own one or more golf courses. There are many opportunities for consolidation in the highly fragmented golf course ownership industry in the U.S. and the industry has seen a high level of consolidation in the last few years. As a result of these consolidations the Company has and may continue to experience increased competition in the acquisition of premier properties. In the acquisition of golf courses, companies compete primarily on the basis of price and their reputation for operating golf courses. Many of these investors have significant equity resources available to them, sometimes providing the ability to pay substantially more for the type of facilities consistent with those in the Company’s portfolio and strategy.

      Acquisitions are based not only upon the value of the facility, but on the strategic positioning of the transaction, such as concentration in a geographical area and in markets that represent the best investment opportunity. Management believes that it is uniquely prepared to capitalize on consolidation opportunities due to its external growth experience with large acquisitions such as Cobblestone, and its ability to apply economies of scale and other advantages associated with having a substantial portfolio of facilities. The Company is focusing on “clustering” potential acquisitions in geographic proximity with existing clubs in order to experience significant operating efficiencies, thereby allowing the Company to compete more efficiently than its competitors in the operation of these facilities. Historically, the Company has demonstrated the ability to fulfill this concept by concentrating a significant portion of its properties in markets such as Texas, California and Florida.

      Recently, there has been a substantial increase in the development of golf facilities throughout the U.S. Significant numbers of the new courses being built are open to the public for a daily fee. Competition in this market has intensified and the increase in availability of daily fee courses has adversely affected demand in portions of the private club market. According to the National Golf Foundation, the ratio of average number of golfers per course (18-hole equivalent) has declined and new course development has outpaced growth in demand in recent years. Continued substantial increases in the number of available golf facilities and additional decreases in the ratio of average number of golfers per course could adversely affect the Company’s business and results of operations.

      In the operation of its facilities, the Company competes on the basis of its reputation to deliver value through the quality of the facility and quality of services provided to its members and guests. The Company believes it competes favorably with respect to

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Employees

      As of December 26, 2000, the Company employed approximately 16,000 full-time and 8,000 part-time employees in its operations.

      The success of the Company’s business is dependent in part on the Company’s ability to attract and retain experienced management and other employees on economical terms. Management believes that the Company’s employees represent an important asset; however, the Company is not dependent upon any single employee, or a small group of employees, whose loss would have a material adverse effect on the Company. Although the Company believes that its labor relations are good, increased labor and benefit costs or a deterioration in the Company’s labor relations could adversely affect the Company’s operating results.

Customers

      The Company is not dependent upon a single customer, or a few customers, whose loss would have a material adverse effect on the Company. In addition, as of December 26, 2000, there is no customer to which the Company has sales equal to 10.0% or more of the Company’s consolidated revenues and whose loss would have a material adverse effect on the Company as a whole.

Intellectual Property

      The Company has registered various service marks, including the names CLUBCORP, CCA, CLUB RESORTS, ASSOCIATE CLUBS, and PINEHURST with the U.S. Patent and Trademark Office, and has applied with the United States Patent and Trademark Office for the registration of various other service marks. In addition, the Company has registered certain of its service marks in a number of foreign countries. The Company regards its service marks as valuable assets and intends to protect such service marks vigorously against infringement.

Available Information

      ClubCorp, Inc. files annual, quarterly and special reports and other information with the Securities and Exchange Commission (the “SEC”). All documents may be located at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549 or you may obtain information on the operation of the Public Reference Room by calling 1-800-SEC-0330. ClubCorp’s SEC filings are also available to the public at ClubCorp’s internet site www.clubcorp.com or at the SEC’s internet site www.sec.gov.

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Item 2.  Properties

      The Company owned and/or operated 221 golf facilities, business and sports clubs and resorts as of December 26, 2000. The following table provides a profile of the composition of the Company’s portfolio of facilities from December 31, 1997 to December 26, 2000:

Additions, Divestitures and Reclassifications of Facilities (1)

(1)	Facilities added includes acquisitions of owned, leased, partially owned or managed facilities, joint ventures and other investments. Facilities divested includes sales of owned or partially owned facilities and other investments and terminated leases and management agreements that are not renewed or replaced.

     Facilities divested include expired or terminated lease arrangements or management agreements which generally have shorter terms than leases, joint venture agreements or other forms of ownership. The Company generally includes a termination clause in its management agreements which imposes a financial penalty, paid to the Company by the managed owner, to discourage early termination of management agreements.

      The Company’s properties are located throughout the U.S. and several countries internationally. In the U.S., a significant portion of these properties are located in Texas, California, Florida and the Southeastern U.S. Due to the Company’s concentration of golf facilities in these markets, ClubCorp’s operating and financial performance is subject to the regional weather patterns and economic conditions in these areas.

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      The Company owns, leases or manages the facilities in its portfolio. The following table summarizes the number and reclassifications in the type of the Company’s facilities operated for the periods indicated:

      As of December 26, 2000, the Company leases its executive offices in Dallas, Texas, as well as two international regional offices.

      With respect to leased facilities, the Company generally pays a monthly base rent, as well as charges for real estate taxes, common area maintenance and various other items. In some cases, the Company must also pay a percentage of gross receipts or positive net cash flow. In most instances, the Company has full authority over the operation of the leased facilities, operating on a fully net basis, except in some cases where the owner remains responsible for major structural repairs or for property insurance or real estate taxes.

      Certain real and personal property and equipment of ClubCorp’s subsidiaries are pledged as collateral on their long-term debt. See Note 7 of the Notes to Consolidated Financial Statements included under Item 8.

Item 3.  Legal Proceedings

      The Company is subject to certain pending or threatened litigation and other claims. Management, after review and consultation with legal counsel, believes that any potential liability from these matters would not materially affect the Company’s consolidated financial position and results of operations. See Note 13 of the Notes to Consolidated Financial Statements included under Item 8.

Item 4.  Submission Of Matters To A Vote Of Security Holders

      During the fourth quarter of 2000, no matter was submitted to a vote of security holders through the solicitation of proxies or otherwise.

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Part II

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

      There is currently no public market or publicly available quotations of value for the Company’s Common Stock. In connection with certain employee benefit plans (including the Plan and the Amended Plan), ClubCorp has periodically established a formula price for the Common Stock (the “Formula Price”). Based upon independent appraisals, Houlihan Lokey Howard and Zukin Financial Advisors, Inc., an independent financial advisory firm (the “Financial Advisor”) confirms the fairness of the Formula Price in relation to the fair market value of the Common Stock (as determined by the Financial Advisor) on the date of each appraisal. If there is any discrepancy between the Formula Price and the range of fair market value of the Common Stock, the Company expects that it would adjust the Formula Price so that it falls within the range of fair market value as determined by the Financial Advisor. The Formula Price, and thus, the fair market value, is based upon a multiple of the Company’s recurring cash flows from operations, with certain exceptions for specific assets, including certain long-term investments valued at the lower of cost or market.

      Beginning with year-end 2000, the Financial Advisor will be engaged by the Company to render a semi-annual opinion on the fair market value of the Common Stock (at the end of the Company’s second quarter and year-end). Under this arrangement, the Formula Price will no longer be determined by the Company and the stock valuation process will be independent of the Company’s Board of Directors and Management.

      The Company has historically purchased stock from shareholders when offered for sale back to the Company. During 2000, Company purchases of stock from shareholders were approximately $7.8 million. The Company’s primary long-term debt agreement limits repurchases of Common Stock to $15.0 to $20.0 million per fiscal year, dependent on whether stock is issued in the given year in connection with acquisition activity of the Company. The Stockholder’s Agreement with The Cypress Group L.L.C. (see Item 7—“Liquidity and Capital Resources”) limits stock repurchases by the Company to $2.5 million per year from the Dedman Stockholders (Robert H. Dedman, Sr., Robert H. Dedman, Jr., Patricia Dedman Dietz, and the Dedman Foundation and related trusts), $5.0 million per year for certain charitable and non-profit organizations, and $2.5 million per year from all other shareholder groups. The Redemption Right of the Amended Plan is not limited by this agreement.

      ClubCorp has never paid cash dividends on the Common Stock. Management expects to continue its policy of retaining earnings for use in the Company’s business, and accordingly, does not expect to pay cash dividends in the foreseeable future. As of March 11, 2001, there were approximately 345 holders of record of the Common Stock.

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Item 6.  Selected Financial Data

      Set forth below are the selected Consolidated Statement of Operations and balance sheet data for each of the years in the five year period ended December 26, 2000 (1). The table presented below should be read in conjunction with Item 7— “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7a—“Quantitative and Qualitative Disclosures about Market Risk” and Item 8—“Financial Statements and Supplementary Data” (dollars in thousands, except per share data).

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

      The following discussion and analysis should be read in conjunction with Item 6—“Selected Financial Data,” Item 7a—“Quantitative and Qualitative Disclosure about Market Risk” as well as Item 8—“Financial Statements and Supplementary Data”.

Overview

General

      ClubCorp is a holding company incorporated under the laws of the State of Delaware that, through its subsidiaries, has historically operated in one distinct business industry: hospitality services. ClubCorp’s operations in the hospitality industry involve the operation of country club and golf facilities, business and sports clubs and resorts through sole ownership, partial ownership (including joint venture interests), operating leases and management agreements. In addition, the Company owns a limited number of international properties and real estate held for sale.

      The Consolidated Financial Statements of the Company are presented on a 52/53 week fiscal year, with the first three quarters consisting of 12 weeks each and the fourth quarter consisting of 16 or 17 weeks. The financial statements included in Item 8 for the year ended December 26, 2000 are comprised of 52 weeks, with the first three quarters consisting of 12 weeks each and the fourth quarter consisting of 16 weeks. The Company’s main revenue streams are membership revenues, golf revenues, food and beverage sales, and lodging revenues. The Company seeks to achieve revenue growth through the management and expansion of existing facilities and through the acquisition and development of new facilities. This growth is financed through cash flows from operations and long-term debt. See “Liquidity and Capital Resources” within this Item.

      The Company seeks to improve financial performance of existing facilities by determining an optimal business plan. If efforts to improve the facility performance to Company standards are not successful or the financial goals of the Company are not being achieved, alternatives such as restructuring the ownership position are considered. Facilities generally are divested when management determines they will be unable to provide a positive contribution to profitability, when they no longer represent a strategic facility in the Company’s network of affiliated clubs and resorts, when members no longer support the facility or, in the case of leases, joint ventures and management agreements, when their contractual terms expire without being renewed or are terminated.

Significant Accounting Policies

      Operating revenues consist primarily of revenues derived from membership dues and recognition of deferred membership fees and deposits, golf operations, food and beverage operations, and lodging. Membership deposits represent advance initiation deposits paid by members and are refundable a fixed number of years after the date of acceptance as a member. The difference between the amount of the membership deposit and the present value of the obligation is deferred and recognized as revenue on a straight-line basis over the average expected life of an active membership. Nonrefundable initiation fees and related incremental direct selling costs of membership initiation deposits and fees are recorded in the same manner. All other revenue sources are recognized in the period earned, which is generally at the time of sale or when the service is provided.

      Operating expenses consist of direct operating costs, including preopening costs incurred in anticipation of a club opening, and facility rentals and maintenance. These costs are expensed as incurred.

      Long-lived assets and certain identifiable intangibles to be held and used and to be disposed of by an entity are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment charges are recorded as a component of operating income in the Company’s Consolidated Statement of Operations.

      Certain amounts that were previously reported have been reclassified to conform with current year presentation.

Results of Operations

      ClubCorp analyzes operating results and manages its business segments using the following concepts and definitions:

      The Company employs “same store” analysis techniques for a variety of management purposes. By ClubCorp’s definition, facilities are evaluated yearly and considered “same store” once they have been fully operational for one year or if they are management agreement properties. Developing facilities are not classified as same store. This distinction between developing and same store facilities allows ClubCorp to separately analyze the operating results of its established and new facilities. Management believes this ability provides an effective analysis tool because it allows the Company to assess the results of its core growth strategies by tracking the performance of its same store facilities without the distortions that would be caused by the inclusion of

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      Management also uses Adjusted EBITDA to monitor the performance of the Company and its facilities. Adjusted EBITDA consists of operating income, depreciation and amortization from wholly owned entities, net membership deposits and fees, an adjustment for joint ventures, and excludes impairment losses. Net membership deposits and fees represent the difference between current period sales of initiation deposits and fees and the revenue recognized from initiation deposits and fees, less incremental direct selling costs. The joint venture adjustment is comprised of depreciation, amortization, interest, income taxes and net membership deposits and fees for joint venture entities at the Company’s ownership percentage. Revenues from membership deposits are calculated as the difference between the amount of the membership deposits sold and the present value of the obligation. Adjusted EBITDA is not intended to represent cash flow in accordance with generally accepted accounting principles and is not necessarily a measure of the Company’s ability to fund its cash needs. The Company’s Adjusted EBITDA from continuing operations may not be comparable to similarly titled measures reported by other companies. See Note 10 to the Company’s Consolidated Financial Statements included under Item 8.

Year Ended December 26, 2000 Compared to Year Ended December 28, 1999

Consolidated Operations

      Operating revenues increased to $1,068.8 million in 2000 from $1,035.8 million in 1999 primarily due to the inclusion of a full year of revenues from the facilities of the Cobblestone Golf Group (referred to as Cobblestone), which were acquired on March 31, 1999, increased membership revenue at total country club and golf facilities, increased lodging revenue at same store resorts and increased real estate sales. These increases exceed the offsetting decrease of approximately $37.0 million of revenues associated with the hosting of the 1999 U.S. Open at Pinehurst. The increase in membership revenue at total country club and golf facilities is partially attributable to increased revenues from Associate Gold memberships (see Item 1, —“Operations— Sales and Marketing”). The increase in lodging revenue is attributable to increased capacity and room nights at same store resorts. The increase in real estate sales is primarily due to increased sales through the Company’s Owners Club program. Excluding the effect of the 1999 U.S. Open at Pinehurst, operating revenues of same store facilities increased $38.7 million to $857.0 million in 2000 from $818.3 million in 1999.

      Operating income decreased $18.8 million from $59.5 million in 1999 to $40.7 million in 2000, primarily due to increased operating costs and expenses and depreciation and amortization, offset by a decrease in impairment loss. Operating costs and expenses such as payroll and maintenance increased at same store facilities due to increased revenues at these facilities, and the inclusion of a full year of the operating costs and expenses of the Cobblestone facilities. These operating costs are partially offset by decreases at same store resorts due to non-recurring costs incurred in 1999 as a result of hosting the U.S. Open at Pinehurst. Depreciation and amortization increased primarily due to capital expansions and renovations at existing facilities, increases in technology related assets and the addition of the Cobblestone facilities. Gross margins (defined as operating revenues minus operating costs and expenses divided by operating revenues) have decreased slightly in 2000 compared to 1999 due primarily to adverse weather conditions for much of the year that negatively affected golf revenues, in addition to renovations and construction that limited golf revenues at certain properties in 2000. In 2000 and 1999, the Company recorded impairment losses on long-lived assets of $9.4 million and $13.5 million, respectively.

      Income (loss) from operations before extraordinary item decreased to ($16.5) million in 2000 from $11.6 million in 1999 due primarily to the decreases in operating income described above, as well as an increase in interest expense and losses on the divestiture and disposal of assets. Interest expense increased primarily due to increases in outstanding debt and higher interest rates in 2000 compared to 1999. The increase in outstanding debt is primarily attributable to financing needs for capital expenditures at existing facilities, in addition to the development and expansion of new facilities.

      Excluding the $10.5 million impact of the U.S. Open, Consolidated Adjusted EBITDA would have increased $12.2 million from $156.8 million in 1999 to $169.0 million in 2000. This change is primarily attributable to the items mentioned above affecting operating income, in addition to an increase in net membership deposits and fees due to the increase in initiation fees sold at developing country club and golf facilities in 2000.

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Segment and Other Information

Country Club and Golf Facilities

      The following tables present certain summary financial and membership information for the Company’s country club and golf facilities segment for 1999 and 2000 (dollars in thousands, except facility and membership data):

     Operating revenues at total country club and golf facilities increased 8.1% in 2000 compared to 1999 primarily due to the inclusion of a full year of revenues of the Cobblestone properties and increased membership revenues at same store and developing facilities. Same store country club and golf facilities’ operating revenues increased $11.3 million primarily due to increases in membership and private party food and beverage revenues, offset by decreases in golf operations revenues mainly attributable to renovations and overall poor weather conditions throughout the year. Operating costs and expenses for total country club and golf facilities increased 10.5% primarily due to the inclusion of a full year of the Cobblestone facilities and other developing facilities. The decrease in gross margin at same store facilities is due to the decrease in golf operations revenue mentioned above as well as increased maintenance and repair expenses and general and administrative costs at these facilities. The increase in depreciation and amortization for total country club and golf facilities is primarily due to the inclusion of a full year of the Cobblestone facilities. In addition, the Company invested in higher levels of technology related assets and renovations at same store clubs.

      Included in 2000 total country club and golf segment operating income is an impairment charge of $8.4 million for long-lived assets at certain of the Company’s properties to be disposed. The Company recorded the impairment charge in 2000 to write down the carrying value of certain properties to be disposed based on their estimated sales values less estimated costs of disposal. These losses are reported separately as components of operating income in the Company’s Consolidated Statement of Operations.

      The increase in Adjusted EBITDA at total country club and golf facilities is primarily a result of an increase in net membership deposits and fees offset by increases in operating expenses in 2000 as compared to 1999. The decrease in Adjusted EBITDA at same store country club and golf facilities in 2000 is mainly attributable to the aforementioned decrease in segment margins.

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Business and Sports Clubs

      The following tables present certain summary financial and membership information for the Company’s business and sports clubs segment for 1999 and 2000 (dollars in thousands, except facility and membership data):

     Segment operating income before impairment loss for same store business and sports clubs was relatively flat due to increased depreciation and amortization resulting from increased investment in technology related assets, partially offset by increases in membership dues and dining revenues. The increase in segment gross margin and the related decrease in operating revenues and expenses for total business and sports clubs is primarily due to the divestiture of underperforming facilities in 1999 and 2000.

      Included in 2000 same store business and sports clubs segment operating income is an impairment of long-lived assets of $0.7 million related to one of the Company’s business clubs. Management assessed the recoverability of the long-lived assets by determining whether such assets could be recovered over their remaining estimated life through estimated future cash flows and determined a write down was necessary. This loss is reported separately as a component of operating income in the Company’s Consolidated Statement of Operations.

      The increase in Adjusted EBITDA for same store and total business and sports clubs is primarily due to increased overall margins due to the divestiture of underperforming facilities in 1999 and 2000.

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Resorts

      The following tables present certain summary financial data and lodging data for the Company’s resort segment for 1999 and 2000 (dollars in thousands, except facility and lodging data):

     In 1999, operating revenues included approximately $37.0 million of merchandise sales, ticket sales and corporate hospitality revenue related to the hosting of the 1999 U.S. Open at Pinehurst. Excluding the impact of this event, operating revenues from same store resorts would have increased approximately 11.3% from $194.6 million in 1999 to $216.6 million in 2000. The increase is attributable to increased membership, golf, lodging and food and beverage revenues at same store resorts. The increases in membership and golf revenues are primarily attributable to the opening of a new golf course at Barton Creek. Increased room nights are attributable to added lodging capacity at Barton Creek and Pinehurst, and increased lodging and food and beverage revenues are attributable to increased occupancy rates at The Homestead and Daufuskie Island. These increases are offset by decreases in average daily revenue per occupied room at Barton Creek and Pinehurst, reflecting decreased marginal spending by guests on various resort amenities.

      Also included in 1999 and 2000 same store results are operating costs and expenses related to the hosting of the U.S. Open of approximately $27.0 million and $0.5 million, respectively. Excluding the impact of this event, operating costs and expenses in 2000 would have increased approximately 8.9% from $163.4 million in 1999 to $178.0 million in 2000 due to increased payroll and related expenses in golf operations, lodging and food and beverage resulting from increased revenues in these areas. In addition, depreciation and amortization has increased approximately 39.1% from $10.2 million to $14.1 million primarily due to capital expansions and improvements at the Company’s same store resorts. Also included in 1999 same store resorts segment operating income is an impairment loss of $13.5 million related to long-lived assets at Daufuskie Island.

      Excluding the $10.5 million impact of the U.S. Open, Adjusted EBITDA for same store resorts would have increased 12.0% from $36.8 million in 1999 to $41.2 million in 2000. This increase is primarily due to the leveraging of the increase in operating revenues for golf, lodging, and food and beverage operations, causing an increase in segment margins.

Other Operations

      Realty operating revenues increased to $62.2 million in 2000 from $38.8 million in 1999 primarily due to increased sales of units in the Owners Club program at Telluride, The Homestead and Barton Creek. Total closings increased by 204 units from 267 units in 1999 to 471 units in 2000, and the average sales price per unit increased 37.3% from 1999 to 2000.

      Operating revenues for international operations increased to $18.2 million in 2000 from $11.7 million in 1999, primarily due to the addition of facilities in Europe and Australia offset by the divestiture of an underperforming facility in Panama. Operating income for international operations increased approximately $2.3 million primarily due to increased equity in earnings from the Company’s investment in ClubLink and increased revenues at developing clubs.

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Year Ended December 28, 1999 Compared to Year Ended December 29, 1998

Consolidated Operations

      Operating revenues increased 20.3% to $1,035.8 million in 1999 from $861.1 million in 1998 primarily due to the acquisition of the Cobblestone properties, increased revenues at Pinehurst related to the hosting of the 1999 U.S. Open and increased golf operations and membership revenue at same store facilities. The increase in membership revenue at same store facilities is partially attributable to the addition and promotion of Associate Gold memberships. The golf operations revenue increase is primarily attributable to merchandise sales from certain pro shops the Company purchased during 1999 at same store facilities. Approximately $37.0 million of operating revenues are directly associated with hosting the 1999 U.S. Open at Pinehurst.

      Operating income decreased 15.7% from $70.6 million in 1998 to $59.5 million in 1999 primarily due to increased operating costs and expenses, depreciation and amortization and impairment losses. Operating costs and expenses increased due to the addition of the Cobblestone facilities and approximately $27.0 million in costs incurred to prepare and produce the 1999 U.S. Open. In addition, operating costs increased at same store country clubs, golf facilities and resorts which were related to the increases in revenues at these facilities, including increased payroll costs as a result of a more competitive labor market and costs associated with the cost of merchandise for the pro shops purchased during 1999. Depreciation and amortization increased primarily due to the addition of the Cobblestone facilities. Selling, general and administrative expenses increased primarily due to expenses for information systems staffing, the company-wide upgrade of technology (including costs associated with the Year 2000 remediation plan), severance costs and other administrative costs. The Company recorded an impairment loss of approximately $13.5 million related to long-lived assets to be held and used at a resort facility.

      Income from operations before extraordinary item decreased to $11.6 million in 1999 from $39.5 million in 1998 due primarily to the 1998 decrease of the Company’s valuation allowance on its deferred tax assets, and increases in interest expense offset by gains on the divestiture and disposal of assets. Interest expense increased due to the increase in outstanding debt as a result of the Cobblestone acquisition. This increase was partially offset by a lower interest rate on the outstanding debt in 1999 than was experienced during the first two quarters of 1998. Gain (loss) on divestitures and disposal of assets increased due to the divestiture and/or sale of wholly owned and leased facilities during 1999 consisting of 12 golf facilities, 10 business clubs and one resort. Income tax provision increased mainly due to decrease of $14.2 million in 1998 in the Company’s valuation allowance on its deferred tax assets, which was partially offset by a decrease in income from operations in 1999. See—“ Factors That May Affect Future Operating Results” and Note 15 to the Company’s Consolidated Financial Statements included under Item 8.

      Adjusted EBITDA increased $28.4 million to $166.8 million in 1999 from $138.4 million in 1998, due primarily to the increases in operating income resulting principally from the acquisition of the Cobblestone facilities, increased operating income at resort facilities and an increase in net membership deposits and fees. The increase in net membership deposits and fees is primarily due to the increase in initiation fees at developing golf facilities acquired during 1999 and at a resort facility.

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Segment and Other Information

Country Club and Golf Facilities

      The following tables present certain summary financial and membership information for the Company’s country club and golf facilities segment for 1998 and 1999 (dollars in thousands, except facility and membership data):

     Total country club and golf facilities’ operating revenues increased 22.0% in 1999 compared to 1998 due primarily to the addition of the Cobblestone properties and an increase in golf operations revenue at same store facilities. Same store country club and golf facilities’ operating revenues increased 8.9% primarily due to merchandise sales from pro shops the Company purchased during 1999 and increased membership revenue. Total country club and golf facilities’ operating costs and expenses increased 23.1% due primarily to the addition of the operating costs and expenses of the Cobblestone properties and increased costs associated with pro shop operations the Company purchased during 1999 at same store facilities together with increased payroll costs at total and same store facilities due to a more competitive labor market. The slight increase in segment operating income for total country clubs and golf facilities is primarily due to lower margins at developing facilities and increases in general and administrative costs at same store facilities.

      Total country club and golf facilities’ depreciation and amortization increased 46.9% from 1998 to 1999 primarily due to the addition of the Cobblestone facilities.

      The increase of 24.1% in Adjusted EBITDA at total country club and golf facilities is predominantly a result of the factors discussed in the preceding paragraph and initiation fees at developing facilities acquired during 1999. The slight increase in Adjusted EBITDA at same store country club and golf facilities is primarily due to increases in operating costs and expenses related to increased revenues, the reacquiring of the pro shops, increased payroll costs and increased general and administrative costs coupled with greater sales of initiation fees in 1998 than was experienced during 1999 at a joint venture facility during the initial opening of the club.

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Business and Sports Clubs

      The following tables present certain summary financial and membership information for the Company’s business and sports clubs segment for 1998 and 1999 (dollars in thousands, except facility and membership data):

     Segment operating income from same store business and sports clubs decreased $8.4 million, primarily due to the write off of a liability of $6.2 million recorded during 1998 that did not occur in 1999. Excluding the effect of this item, segment operating income from same store business and sports clubs would have decreased $2.2 million. This decrease is primarily due to increased labor costs as a result of a more competitive labor market and increased general and administrative costs related to member support services. The difference between segment operating income at same store facilities and total facilities is current year divestitures and facilities in development.

      Adjusted EBITDA from total business and sports clubs decreased 18.6% primarily due to the write off of a liability as discussed above.

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Resorts

      The following tables present certain summary financial data and lodging data for the Company’s resorts segment for 1998 and 1999 (dollars in thousands, except facility and lodging data):