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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

(Mark One)

     
x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
OR
 
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                      to                                     

Commission file number: 1-13173

BOCA RESORTS, INC.

(Exact Name of Registrant as Specified in its Charter)
     
Delaware
  65-0676005
(State of Incorporation)   (I.R.S. Employer Identification No.)
 
501 East Camino Real
Boca Raton, Florida
(Address of Principal Executive Offices)
  33432
(Zip Code)

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

      Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: Not Applicable

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

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x          No o

      As of November 3, 2003, there were 39,095,578 shares of Class A Common Stock, $.01 par value per share, and 255,000 shares of Class B Common Stock, $.01 par value per share, outstanding.




TABLE OF CONTENTS

PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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
CERTIFICATION PURSUANT SECTION 302
CERTIFICATION PURSUANT SECTION 302
CERTIFICATION PURSUANT SECTION 906


Table of Contents

PART I — FINANCIAL INFORMATION

Item 1.     Financial Statements

BOCA RESORTS, INC.

 
CONDENSED CONSOLIDATED BALANCE SHEETS
(000’s omitted, except share data)
(Unaudited)
                     
September 30, June 30,
2003 2003


ASSETS
Current assets:
               
 
Cash and cash equivalents
  $ 7,198     $ 8,110  
 
Restricted cash
    613       641  
 
Accounts receivable, net
    16,184       20,960  
 
Inventory
    6,472       6,616  
 
Current portion of Premier Club notes receivable
    3,688       3,631  
 
Other current assets
    3,424       3,238  
     
     
 
   
Total current assets
    37,579       43,196  
Property and equipment, net
    822,096       823,681  
Intangible assets, net
    35,937       35,937  
Long-term portion of Premier Club notes receivable
    8,522       8,157  
Other assets
    8,900       9,179  
     
     
 
   
Total assets
  $ 913,034     $ 920,150  
     
     
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
               
 
Accounts payable and accrued expenses
  $ 35,410     $ 33,515  
 
Current portion of deferred revenue and advance deposits
    32,446       23,288  
 
Net liabilities of discontinued operations
    1,074       1,074  
 
Current portion of credit line and note payable
    20       79  
     
     
 
   
Total current liabilities
    68,950       57,956  
Credit line and note payable
    15,000       18,000  
Deferred revenue, net of current portion
    33,431       33,498  
Other liabilities
    9,560       9,560  
Deferred income taxes
    28,194       34,242  
Senior subordinated notes payable
    190,145       190,145  
Premier Club refundable membership fees
    56,117       56,700  
     
     
 
   
Total liabilities
    401,397       400,101  
     
     
 
Commitments and contingencies
               
Shareholders’ equity:
               
 
Class A Common Stock, $.01 par value, 100,000,000 shares authorized and 39,095,578 and 39,035,078 shares issued and outstanding at September 30, 2003 and June 30, 2003, respectively
    391       390  
 
Class B Common Stock, $.01 par value, 10,000,000 shares authorized and 255,000 shares issued and outstanding at September 30, 2003 and June 30, 2003.
    3       3  
 
Contributed capital
    460,667       459,548  
 
Retained earnings
    50,576       60,108  
     
     
 
   
Total shareholders’ equity
    511,637       520,049  
     
     
 
   
Total liabilities and shareholders’ equity
  $ 913,034     $ 920,150  
     
     
 

See accompanying notes to consolidated financial statements.

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BOCA RESORTS, INC.

 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30
(000’s omitted, except per share data)
(Unaudited)
                     
2003 2002


Leisure and recreation revenue
  $ 46,989     $ 46,292  
Operating expenses:
               
 
Cost of leisure and recreation services
    26,614       26,401  
 
Selling, general and administrative expenses
    20,889       20,114  
 
Depreciation
    9,962       8,946  
     
     
 
   
Total operating expenses
    57,465       55,461  
     
     
 
Operating loss
    (10,476 )     (9,169 )
Interest and other income
    59       30  
Interest expense
    (5,082 )     (5,611 )
     
     
 
Loss before benefit for income taxes
    (15,499 )     (14,750 )
Benefit for income taxes
    5,967       5,679  
     
     
 
Net loss
  $ (9,532 )   $ (9,071 )
     
     
 
Net loss per share — basic and diluted
  $ (.24 )   $ (.23 )
     
     
 
Weighted average shares used in computing net loss per share — basic and diluted
    39,325       39,651  
     
     
 

See accompanying notes to consolidated financial statements.

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BOCA RESORTS, INC.

 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended September 30
(000’s omitted)
(Unaudited)
                       
2003 2002


Operating activities:
               
 
Net loss
  $ (9,532 )   $ (9,071 )
 
Adjustments to reconcile net loss to net cash provided by operating activities:
               
   
Depreciation
    9,962       8,946  
   
Impairment loss on land parcel
          2,341  
   
Gain on sale of land parcel
          (2,291 )
   
Non-cash compensation expense
    453        
   
Benefit for deferred income taxes
    (5,967 )     (5,679 )
 
Changes in operating assets and liabilities
               
   
Accounts receivable
    4,776       3,474  
   
Other assets
    (185 )     613  
   
Accounts payable and accrued expenses
    4,993       3,193  
   
Deferred revenue and other liabilities
    8,508       10,187  
   
Net liabilities of discontinued operations
          (498 )
     
     
 
     
Net cash provided by operating activities
    13,008       11,215  
     
     
 
Investing activities:
               
 
Capital expenditures
    (11,475 )     (11,250 )
 
Change in restricted cash
    28       72  
 
Net proceeds from the sale of land parcel
          5,641  
     
     
 
     
Net cash used in investing activities
    (11,447 )     (5,537 )
     
     
 
Financing activities:
               
 
Borrowings under credit facilities
    5,000       6,000  
 
Payments under long-term debt agreements and credit facility
    (8,059 )     (2,555 )
 
Repurchases of common stock
          (3,147 )
 
Proceeds from exercise of stock options
    586        
     
     
 
     
Net cash provided by (used in) financing activities
    (2,473 )     298  
     
     
 
Cash provided by (used in) continuing operations
    (912 )     6,474  
Cash used in discontinued operations
          (498 )
Cash and cash equivalents, at beginning of period
    8,110       3,691  
     
     
 
Cash and cash equivalents, at end of period
  $ 7,198     $ 9,667  
     
     
 

See accompanying notes to consolidated financial statements.

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BOCA RESORTS, INC.

 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

1.     Basis of Presentation

      The accompanying Unaudited Condensed Consolidated Financial Statements of Boca Resorts, Inc. and subsidiaries (the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

      In the opinion of management, the financial information furnished in this report reflects all material adjustments (including normal recurring accruals) necessary for a fair presentation of the results for the interim periods presented. The results of operations for the three months ended September 30, 2003 are not necessarily indicative of the results to be expected for the entire year primarily due to seasonal variations. All significant intercompany accounts have been eliminated.

2.     Nature of Operations

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

3.     Earnings/(Loss) Per Common Share

      Basic earnings/(loss) per share equals net income/(loss) divided by the number of weighted average common shares outstanding. Diluted earnings/(loss) per share includes the effects of common stock equivalents to the extent they are dilutive.

      Options to purchase shares of common stock totaling 6.8 million and 6.5 million were outstanding during the three months ended September 30, 2003 and 2002, respectively, but were not included in the computation of loss per share because the effect would be antidilutive.

4.     Stock Option Plan

      The Company grants stock options for a fixed number of shares to employees with an exercise price equal to the fair value of the shares at the date of grant. The Company accounts for the options granted under the intrinsic value method, which follows the recognition and measurement principles of Accounting Principals Board Opinion No. 25, “Accounting for Stock Issued to Employees.” No stock-based employee compensation cost is reflected in net loss, except for certain non-cash, non-recurring compensation expense associated with the modification in terms of certain stock option awards which totaled $453,000 (or $279,000 net of benefit for income taxes) during the three months ended September 30, 2003. The following table summarizes the effect of accounting for stock option awards as if the fair value recognition provisions of Statement of Financial

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BOCA RESORTS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (Continued)

Accounting Standard (“SFAS”) No. 123, as amended by SFAS No. 148, had been applied for the three months ended September 30 (000’s omitted):

                 
2003 2002


Net loss as reported
  $ (9,532 )   $ (9,071 )
Less: total stock based compensation determined under fair value based method for awards, net of related tax effects
    (377 )     (408 )
     
     
 
Pro forma net loss
  $ (9,909 )   $ (9,479 )
     
     
 
Net loss per share — basic and diluted, as reported
  $ (.24 )   $ (.23 )
     
     
 
Net loss per share — basic and diluted, Pro forma
  $ (.25 )   $ (.24 )
     
     
 

      The fair value for these options was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions for the three months ended September 30:

                 
2003 2002


Risk free interest rate
    1.00 %     1.50 %
Expected lives
    6 years       6 years  
Expected volatility
    30 %     30 %

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

      This report may not contain all the information that is important to you and should be read together with the Annual Report on Form 10-K for the fiscal year ended June 30, 2003, including the disclosure relating to critical accounting policies in Management’s Discussion and Analysis.

Business Philosophy

      The Company’s business strategy is to focus on internal expansion and development opportunities at its existing resort properties. However, management continuously evaluates ownership, acquisition and divestiture alternatives with the intention of maximizing shareholder value.

Seasonality

      The resort operations are generally seasonal. The resorts historically experience greater revenue, costs and income in the second and third quarters of the fiscal year ended June 30 due to increased occupancy and room rates during the winter months. Historically, 16%, 25%, 35% and 24% of annual revenue has been derived during the first, second, third and fourth fiscal quarters, respectively.

Events of September 11, 2001

      During the three-month period following the September 11, 2001 terrorist attacks on New York’s World Trade Center towers and on the Pentagon, the Company’s results of operations were adversely affected by travel disruption and short-term cancellation of group bookings at its properties. The Company’s operating results continue to track modestly below pre-September 11, 2001 levels.

Non-GAAP Financial Measures

      This quarterly report on Form 10-Q contains a non-GAAP financial measure, within the meaning of applicable Securities and Exchange Commission rules, which we believe is useful to investors. This financial measure is loss before extraordinary and non-recurring items, interest expense, interest income, income taxes, depreciation and amortization (“LBITDA”). LBITDA is used by management, the lodging industry and certain investors as an indicator of the Company’s historical ability to service debt, to sustain potential future increases in debt and to satisfy capital requirements. However, LBITDA is not intended to represent cash flows for the period. In addition, it has not been presented as an alternative to either (a) operating income or loss (as determined by GAAP) as an indicator of operating performance or (b) cash flows from operating, investing and financing activities (as determined by GAAP) and is thus susceptible to varying calculations. LBITDA as presented may not be comparable to other similarly titled measures of other companies.

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      The accompanying table sets forth the operating results for the three months ended September 30 (000’s omitted):

                       
2003 2002


Leisure and recreation revenue
  $ 46,989     $ 46,292  
Operating expenses:
               
 
Cost of leisure and recreation services
    26,614       26,401  
 
Selling, general and administrative expenses:
               
   
Leisure and recreation
    18,865       18,789  
   
Corporate
    2,024       1,325  
 
Amortization and depreciation:
               
   
Leisure and recreation
    9,909       8,893  
   
Corporate
    53       53  
     
     
 
     
Total operating expenses
    57,465       55,461  
     
     
 
 
Operating loss:
               
   
Leisure and recreation
    (8,399 )     (7,791 )
   
Corporate
    (2,077 )     (1,378 )
     
     
 
     
Total operating loss
    (10,476 )     (9,169 )
Interest and other income
    59       30  
Interest expense
    (5,082 )     (5,611 )
     
     
 
Loss before benefit for income taxes
    (15,499 )     (14,750 )
Benefit for income taxes
    5,967       5,679  
     
     
 
Net loss
  $ (9,532 )   $ (9,071 )
     
     
 
Net cash provided by operating activities
  $ 13,008     $ 11,215  
     
     
 
Net cash used in investing activities
  $ (11,447 )   $ (5,537 )
     
     
 
Net cash provided by (used in) financing activities
  $ (2,473 )   $ 298  
     
     
 
LBITDA
  $ (61 )   $ (223 )
     
     
 

      The accompanying table reconciles LBITDA to loss before benefit for income taxes, the most comparable GAAP measure, for the three months ended September 30 (000’s omitted):

                 
2003 2002


LBITDA
  $ (61 )   $ (223 )
Less: Depreciation
    (9,962 )     (8,946 )
Less: Interest expense
    (5,082 )     (5,611 )
Less: Non-recurring, non-cash compensation expense
    (453 )      
Plus: Interest income
    59       30  
     
     
 
Loss before benefit for income taxes
  $ (15,499 )   $ (14,750 )
     
     
 

      The accompanying table sets forth additional operating data for the three months ended September 30 (000’s omitted, except operating statistics):

                             
2003 2002 % Change



Revenue:
                       
 
Room revenue
  $ 16,297     $ 16,207       1 %
 
Non-room related revenue
    30,692       30,085       2 %
     
     
         
   
Total leisure and recreation revenue
  $ 46,989     $ 46,292       2 %
Operating Statistics:
                       
Available room nights
    213,164       213,164        
Average daily rate
  $ 132.61     $ 138.44       (4 )%
Occupancy
    57.7 %     54.9 %     5 %
Room revenue per available room
  $ 76.45     $ 76.03       1 %
Total leisure and recreation revenue per available room
  $ 220.43     $ 217.17       2 %

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Leisure and Recreation Revenue

      Leisure and recreation revenue totaled $47.0 million and $46.3 million for the three months ended September 30, 2003 and 2002, respectively. The slight increase in revenue for the three months ended September 30, 2003, compared to the three months ended September 30, 2002, followed increases in revenue at each of the Company’s properties, except for the Boca Raton Resort & Club.

      Revenue increases at the Company’s Naples properties during the three months ended September 30, 2003, versus the three months ended September 30, 2002, were primarily a result of room renovations being performed during the prior period at both the Registry Resort and Edgewater Beach Hotel. An increase in revenue at the Company’s Fort Lauderdale properties during the three months ended September 30, 2003, compared to the three months ended September 30, 2002, was primarily the result of more group business. Group business represented 30% and 29% of the total occupied rooms at the Company’s Fort Lauderdale resorts during the three months ended September 30, 2003 and 2002, respectively. Despite an increase in leisure bookings at the Boca Raton Resort & Club, group business was down during the three months ended September 30, 2003, versus the three months ended September 30, 2002. Group business represented 68% and 72% of the total occupied rooms at the Boca Raton Resort & Club during the three months ended September 30, 2003 and 2002, respectively.

Leisure and Recreation Operating Expenses

      Cost of leisure and recreation services totaled $26.6 million, or 57% of revenue, for the three months ended September 30, 2003, compared to cost of leisure and recreation services of $26.4 million, or 57% of revenue, for the three months ended September 30, 2002. Cost of leisure and recreation services primarily consisted of direct costs to service rooms, marinas, food and beverage operations, retail establishments, spas and other amenities at the resorts.

      Leisure and recreation selling, general and administrative expenses (“S,G&A”) totaled $18.9 million, or 40% of revenue, for the three months ended September 30, 2003, compared to S,G&A of $18.8 million, or 41% of revenue, for the three months ended September 30, 2002. Leisure and recreation S,G&A includes, among other items, administrative payroll costs, selling and marketing expenses, energy and property costs, insurance, real estate taxes, franchise agreement fees and other administrative expenses. Although leisure and recreation S,G&A as a percent of revenue decreased slightly for the three months ended September 30, 2003, compared to the three months ended September 30, 2002, the Company continues to be adversely affected by an increase in energy and insurance costs, which was offset by a decrease in costs associated with a golf course lease with a third party which recently expired.

      Leisure and recreation depreciation expense totaled $9.9 million and $8.9 million for the three months ended September 30, 2003 and 2002, respectively. The increase in depreciation expense for the three months ended September 30, 2003, compared to the three months ended September 30, 2002, was primarily the result of an increase in depreciation expense following the completion of room renovations at the Registry Resort and Edgewater Beach Hotel.

Leisure and Recreation Operating Loss

      Leisure and recreation operations reported operating losses of $8.4 million and $7.8 million for the three months ended September 30, 2003 and 2002, respectively. The decrease in operating results for the three months ended September 30, 2003, versus the three months ended September 30, 2002, was primarily due to an increase in depreciation expense.

Corporate General and Administrative Expenses

      Corporate general and administrative expenses totaled $2.0 million and $1.3 million for the three months ended September 30, 2003 and 2002, respectively. The increase in corporate general and administrative expense during the three months ended September 30, 2003, compared to the three months ended

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September 30, 2002, was primarily because the 2003 period included certain non-cash, non-recurring compensation expense associated with stock options totaling $453,000.

Interest Expense

      Interest expense totaled $5.1 million and $5.6 million for the three months ended September 30, 2003 and 2002, respectively. The decrease in interest expense during the three months ended September 30, 2003, versus the three months ended September 30, 2002, was the result of a $207,000 increase in the amount of interest capitalized on projects under construction together with a $254,000 decrease in interest expense resulting from lower average outstanding indebtedness during the 2003 period.

Benefit for Income Taxes

      The Company recorded a benefit for income taxes totaling $6.0 million, or 38.5% of pretax loss, and $5.7 million, or 38.5% of pretax loss, for the three months ended September 30, 2003 and 2002, respectively.

Net Loss

      Net loss totaled $9.5 million and $9.1 million for the three months ended September 30, 2003 and 2002, respectively. The decrease in operating results for the three months ended September 30, 2003, versus the three months ended September 30, 2002, was primarily due to an increase in depreciation expense.

Liquidity and Capital Resources

      Unrestricted cash and cash equivalents decreased to $7.2 million at September 30, 2003, from $8.1 million at June 30, 2003. The major components of the change are discussed below.

 
Net Cash Provided by Operating Activities

      Net cash provided by operating activities totaled $13.0 million and $11.2 million for the three months ended September 30, 2003 and 2002, respectively. The slight increase in net cash provided by operating activities for the three months ended September 30, 2003, compared to the three months ended September 30, 2002, was primarily because during the prior year three-month period the Company settled certain litigation (that had been accrued for) relating to the Arizona Biltmore Resort & Spa, which was formerly owned by the Company.

 
Net Cash Used In Investing Activities

      Net cash used in investing activities totaled $11.4 million and $5.5 million for the three months ended September 30, 2003 and 2002, respectively. The change was primarily because the Company received $5.6 million from the sale of a land parcel located in Naples, Florida during the prior year three-month period. Additionally, capital expenditures totaled $11.5 million and $11.3 million for the three months ended September 30, 2003 and 2002, respectively.

      During the three months ended September 30, 2003, the Company was nearing completion on a marina renovation at the Bahia Mar Resort and Yachting Center, which includes the reconfiguration of the existing boat slips. This extensive marina renovation, which is being funded substantially from operations, will result in a state-of-the art yachting center with 242 reconfigured boat slips, sized to accommodate larger yachts ranging from 80 feet to over 200 feet, without reducing the rentable linear feet. The Company also completed, or is nearing completion, on a number of smaller initiatives during the three-month period including the renovation of the pool area at the Boca Raton Resort & Club and a new themed restaurant at Pier 66 Resort and Marina.

      During the three months ended September 30, 2002, the Company commenced work on a comprehensive room renovation at the Registry Resort covering 395 guestrooms, which included all new furnishings and new five fixture bathrooms. The Company was also renovating approximately 60 guest suites at the Edgewater Beach Hotel.

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      The change in restricted cash was not material from June 30, 2003 to September 30, 2003 or from June 30, 2002 to September 30, 2002.

 
Net Cash Provided by (Used in) Financing Activities

      Net cash used in financing activities totaled $2.5 million during the three months ended September 30, 2003, compared to net cash provided by financing activities of $298,000 during the three months ended September 30, 2002. Financing activities for the periods presented primarily includes borrowings, net of repayments, under the Company’s revolving credit facility, as well as, repurchases of the Company’s common stock.

 
Capital Resources

      The Company’s capital resources are provided from both internal and external sources. The primary capital resources from internal operations include (1) room rentals, food and beverage sales, retail sales, spa revenue, golf revenue, tennis revenue, marina and conference service revenue at the resorts and (2) Premier Club membership revenue. The primary external sources of liquidity have been the issuance of debt securities, borrowing under term loans and credit lines, the issuance of Company stock for property acquisitions and the exercise of non-qualified stock options by employees pursuant to the Company’s stock option plan.

      As of September 30, 2003, the Company had $15.0 million outstanding under its revolving credit line (which matures on June 30, 2005) and had $77.9 million in immediate availability. As a result of the current availability under this credit line, combined with cash on hand, management believes the Company has sufficient funds to continue its capital enhancement plans during fiscal 2004 and support on-going operations, including meeting debt service obligations as they come due.

Financial Condition

      Significant changes in balance sheet data from June 30, 2003 to September 30, 2003 are discussed below.

 
Accounts Receivable

      Accounts receivable decreased to $16.2 million at September 30, 2003, from $21.0 million at June 30, 2003. It is customary for the Company’s trade receivables to be lowest following the September 30 operating quarter as a result of the seasonality of its business.

 
Accounts Payable and Accrued Expenses

      Accounts payable and accrued expenses increased to $35.4 million at September 30, 2003, from $33.5 million at June 30, 2003. The increase in accounts payable and accrued expenses was primarily because of an increase in accrued interest on the Company’s 9.875% senior subordinated notes, partially offset by a decrease in trade payables due to the seasonality of the Company’s business. Interest on the senior subordinated notes is paid semi-annually on October 15 and April 15. At June 30, 2003, the accrual for interest on such notes totaled $4.0 million (and represented interest for 76 days on $190.1 million outstanding notes). At September 30, 2003, the accrual for interest totaled $8.6 million (and represented interest for 168 days on $190.1 million outstanding notes).

 
Current Portion of Deferred Revenue and Advance Deposits

      Current portion of deferred revenue and advance deposits increased to $32.4 million at September 30, 2003, from $23.3 million at June 30, 2003. The increase substantially related to the collection of annual Premier Club dues at the Boca Raton Resort & Club. The annual dues will be recognized as revenue ratably over the membership year, which commenced on October 1.

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Working Capital

      Current liabilities exceeded current assets by $31.4 million and $14.8 million at September 30, 2003 and June 30, 2003, respectively. Current liabilities exceeded current assets at each September 30, 2003 and June 30, 2003 primarily because the Company repurchased $149.9 million principal amount of senior subordinated notes over the past three years and such notes would have otherwise matured in April 2009. The repurchase of the notes resulted in, among other things, a decrease in the Company average cost of borrowing. However, the ratio of current liabilities to current assets is not indicative of a lack of liquidity as the Company maintains a revolving credit line that represents an additional and immediate potential source of liquidity. See “Capital Resources”.

Forward-Looking Statements

      Some of the information in this report may contain forward-looking statements. These statements discuss future expectations, contain projections of results of operations or of financial position, or state other “forward-looking” information. When considering such forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this report. The risk factors include certain known and unknown risks and uncertainties, and could cause the Company’s actual results to differ materially from those contained in any forward looking statement.

      These risk factors include, among others, risks relating to travel; risks associated with construction and development at the Company’s properties; competition in the Company’s principal business; the availability of financing on terms suitable to the Company and the Company’s dependence on key personnel, as well as other risk factors discussed from time to time in the Company’s Securities and Exchange Commission filings. Risks relating to travel include a change in travel patterns resulting from slowing economic conditions and geopolitical conditions, as well as changes in corporate policies relating to group meetings and air or other travel disruption.

 
Item 3.      Quantitative and Qualitative Disclosures About Market Risk

      Not Applicable.

 
Item 4.      Controls and Procedures

      Within the 90 days prior to the filing date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s chairman of the board (the Company’s principal executive officer) and chief financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in its periodic filings with the Securities and Exchange Commission (“SEC”) is effectively recorded, processed and reported within the time periods specified in the SEC’s rules and forms. In designing and evaluating the disclosure controls and procedures, the Company’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Based on the foregoing, the Company’s chairman of the board and chief financial officer concluded that the Company’s disclosure controls and procedures were effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings. Additionally, there have been no significant changes in the Company’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation.

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Part II — OTHER INFORMATION

 
Item 1.      Legal Proceedings

      The Company is not currently involved in any material legal proceedings. However, the Company may from time to time become a party to legal proceedings arising in the ordinary course of business, which are incidental to the business. While the results of proceedings which arise in the normal course of business cannot be predicted with certainty, management believes that losses, if any, resulting from the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated results of operations, consolidated cash flows or consolidated financial position.

 
Item 2.      Changes in Securities and Use of Proceeds

      None.

 
Item 3.      Defaults Upon Senior Securities

      None.

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

      None.

 
Item 5.      Other Information

      None.

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

     (a) Exhibits

         
Exhibits Description Of Exhibit


31.1
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act — H. Wayne Huizenga.
31.2
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act — Wayne Moor.
32.1
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act.

     (b) Reports on Form 8-K

      The Company filed a Current Report on Form 8-K on September 29, 2003 to furnish its earnings release for the fiscal fourth quarter and fiscal year ended June 30, 2003.

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SIGNATURES

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

     
    BOCA RESORTS, INC.
 
Date: November 4, 2003
  By: /s/ WAYNE MOOR

Wayne Moor
Senior Vice President, Treasurer and Chief
Financial Officer (Principal Financial Officer)
 
    By: /s/ MARYJO FINOCCHIARO

MaryJo Finocchiaro
Vice President and Corporate Controller
(Principal Accounting Officer)

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