Quarterly Comparison to Prior Year

Leisure and recreation revenue totaled $75.8 million and $72.1 million for the three months ended June 30, 2002 and 2001, respectively.  The $3.7 million increase in revenue was primarily the result of a strong financial performance at the Boca Raton Resort & Club which yielded period over period advances in occupancy, average daily rate and ancillary (non-room) customer spending.  While the Boca Raton Resort & Club's business has rebounded post September 11, the Company continues to experience a slower recovery at its other properties.

Operating expenses totaled $66.0 million and $60.3 million for the three months ended June 30, 2002 and 2001, respectively.  The increase in operating expenses primarily consisted of a $1.4 million rise in depreciation expense following the completion of several capital projects at the Company's resorts and the acceleration of depreciation for certain property and equipment.  In addition, the Company continues to ramp up operations at its recently opened marina hotel wing named the Yacht Club and spa complex at the Boca Raton Resort & Club.

Interest expense, net of interest income, totaled $5.6 million for the three months ended June 30, 2002, down from $7.6 million for the three months ended June 30, 2001.  The decrease was due to the Company's reduction of debt with the proceeds from the sale of the Arizona Biltmore Resort & Spa and entertainment and sports business.

A provision for income taxes totaling $691,000 and $4.7 million was recorded for the three months ended June 30, 2002 and 2001, respectively.  The decrease in the provision for income taxes is primarily due to the fact that in the prior year the Company's full year income tax provision was generated during the fourth quarter.

During the three months ended June 30, 2002, the Company recognized an additional $2.5 million gain, net of income taxes, from the disposition of its discontinued operations (which primarily consisted of the Florida Panthers Hockey Club and related arena operations), which was sold in July 2001.  The fourth quarter gain resulted from a reduction to the original estimate of income taxes payable and other costs expected to be incurred in connection with the disposal of this operation.  During the three months ended June 30, 2001, the Company recognized income from discontinued operations of $3.2 million.

During the three months ended June 30, 2002, the Company recognized an $876,000 extraordinary loss, net of a benefit for income taxes, on the early extinguishment of debt relating to the repurchase of $23.1 million of its senior subordinated notes.  The extraordinary loss represents the non-cash charge-off of a pro rata portion of the debt issuance costs previously capitalized when the notes were issued, together with the premium paid to repurchase the notes.

Twelve-Month Comparison to Prior Year

Leisure and recreation revenue totaled $273.0 million and $329.2 million for the year ended June 30, 2002 and 2001, respectively.  Leisure and recreation revenue for the year ended June 30, 2001 included $39.9 million in revenue from the Arizona Biltmore Resort & Spa, which was sold in December 2000.  In addition, leisure and recreation revenue decreased for the year ended June 30, 2002 due to a decline in same-hotel occupancy to 62.5%, from 71.7% for the same period of the prior year as a result of travel disruption and short-term cancellations of group business in the wake of the September 11 terrorist attacks and economic recession.

Operating expenses totaled $241.5 million and $268.7 million for the year ended June 30, 2002 and 2001, respectively.  The $27.2 million decrease in operating expenses during the recently concluded twelve-month period compared to the year ended June 30, 2001 was primarily because the prior year period included $31.8 million in operating expenses from the Arizona Biltmore Resort & Spa, partially offset by an increase in current year depreciation expense following the completion of several capital projects at the Company's resorts.

Interest expense, net of interest income, totaled $22.7 million for the year ended June 30, 2002, down from $42.0 million for the year ended June 30, 2001.  The decrease was due to the Company's reduction of debt with the proceeds from the sale of the Arizona Biltmore Resort & Spa and entertainment and sports business.

The Company recorded a gain on the disposition of the entertainment and sports business totaling $26.2 million, net of income taxes, during the year ended June 30, 2002 and incurred a loss from discontinued operations of $8.9 million, net of a benefit for income taxes during the year ended June 30, 2001.  The Company also recognized extraordinary losses, net of income tax benefits, on the early extinguishment of debt relating to the repurchase of a portion of its senior subordinated notes in the amounts of $1.8 million and $1.2 million during the years ended June 30, 2002 and 2001, respectively.

Balance Sheet Data

At June 30, 2002, the Company had cash and cash equivalents of $3.7 million and indebtedness totaling $211.9 million.  The Company also maintains a revolving credit line, which expires in October 2003 that represents an additional and immediate potential source of liquidity.  As of June 30, 2002, the Company's credit facility had $18.7 million outstanding with $99.9 million in availability for additional future borrowings.   In addition, a cash tender offer to purchase up to $26.3 million in senior subordinated notes at par (pursuant to the asset sale provisions of the indenture under which the notes were issued) expired on August 23, 2002 with no notes tendered.

Capital Enhancement Update

Capital enhancements totaled $67.0 million during the year ended June 30, 2002.  At the Boca Raton Resort & Club, a new state-of-the-art 50,000 square foot spa complex, as well as a new golf clubhouse with casual restaurant, opened in December 2001 and the Yacht Club with 112 water-view rooms opened in January 2002.  Work has begun on a number of additional capital development initiatives including a comprehensive room renovation of the tower rooms at the Registry Resort located in Naples, Florida and a marina renovation at the Radisson Bahia Mar Resort and Yachting Center located in Fort Lauderdale, Florida.

David S. Feder, President and Chief Operating Officer of Boca Resorts, Inc. commented, "I am pleased with the financial performance at the Boca Raton Resort & Club where occupancy approached 77% during the recently concluded quarter, historically a non-peak operating season.  With our industry still in the midst of a very challenging business environment, our Company remains focused on achieving our targeted financial results for the ensuing fiscal year.  We are managing our costs, running our hotels effectively and exceeding our customers' expectations. Our balance sheet is extremely solid and our resort portfolio continues to be well positioned particularly following the completion of several capital enhancements."
 
 

Boca Resorts, Inc. owns luxury resort properties and golf courses in Florida.  The Company's Florida resort and golf portfolio includes the Boca Raton Resort & Club in Boca Raton; the Registry Resort at Pelican Bay, the Edgewater Beach Hotel and Naples Grande Golf Club in Naples; and the Hyatt Regency Pier 66 Hotel and Marina, the Radisson Bahia Mar Resort and Yachting Center and Grande Oaks Golf Club in Fort Lauderdale.

Statements in this press release regarding Boca Resorts, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties.