Memo. Hot Springs Village Property Owners Association Board of Directors Report

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1 Hot Springs Village Property Owners Association Board of Directors Report Memo To: David Twiggs, COO From: Lesley Nalley, CFO LAN Date: February 18, 2015 Re: January 2015 Financial Report The January 2015 financial report is attached and includes the following items: Executive Summary & Financial Dashboard Statement of Financial Position Statement of Revenue and Expenses Statement of Capital Additions Annual Sales Recap Golf Reports

2 Hot Springs Village POA Executive Summary & Financial Dashboard CASH: HSVPOA ended the month of January with $7.4mil (1) of cash/cash equivalents and planned future spending according to the reconciliation below. The $2.6mil year over year decrease in cash correlates to the increased assets from capital projects (mainly water plant) and the outstanding assessments receivable. The 2015 budget forcasts adding $3.806mil(14) in cash from operations before capital purchases of $4.672mil.(15) POA LOTS: The current listed value for real estate held for sale is $2.1mil(19). Beginning in 2015, assessments will not be calculated and then reversed on POA owned lots. This line item will be reviewed with auditors. LIABILITIES: Total liabilities equal $8.1mil (2), with $2.5mil (3) relating to 2015 prepaids, $2.7mil (4) in outstanding operating liabilities, and $1.8mil (5) in bond debt. REVENUE: January Gross Revenues total $3.2 (6), with $340k(7) accrued for assessment bad debt. Although there was a 2.3% CPI increase in effect as of January 1st, net assessment revenues were $35k less than January As mentioned above, assessments on POA owned lots will no longer be included in revenue calculations Golf revenue is lower than 2014 by $11k(12) although rounds are up 2,210. Annual greens fees and cart leases are currently running behind January Member cart fees are currently higher, possibly reflecting a shift in cart ownership. Recreation revenue is lower than 2014 by $10k(20) due to lower Ponce ticket sales at this point in EXPENSE: January Operational Expenses total $1.7mil (13), which was $188k more than in The $30.9k(21) increase in Administration reflects the second assessment vote expenses. The $175k(22) increase in Golf should not be misinterpreted as overspending, but rather a timing difference between when course fertilizer and chemicals were purchased vs. used from year to year. As noted previously, the Troon discounting model allows us to purchase what we need throughout the year, rather than all up front. As the treatment season continues, we should see a net decrease for the year. NET OPERATING RESULTS: Net excess before depreciation and capital was $1.15mil (14), as compared to $1.36mil in 2014 and is mainly a reflection of fertilizer & chemical usage from year to year (i.e. course closures & weather) CAPITAL: Capital Spending totals $29k(15) of the $4.6mil budgeted for 2015 and $57k(16) carried forward from HSVPOA's Net Worth is $72.6mil(18). As a reflection of assets minus liabilities, this number will continue to be analyzed against any fluctuations in the valuation of common property and POA owned lots.

3 Hot Springs Village POA Executive Summary & Financial Dashboard Reconciliation of Projected Cash Usage January 2015 Cash & Cash Equivalent Balance $ 7,418,354 Petty Cash Funds (15,075) Accrued Operating Expenses, includes health & WC (2,721,388) *These items were identified in the 2015 Bond Reserve (298,200) budget as desired reserves. A bottom 2014 Carryover Capital (57,000) line deficit means reserves are not yet fully Remaining 2015 Capital (4,643,537) funded. Deferred Vehicle & Equipment Purchase Reserves (750,000) * Deferred Road & Culvert Maintenance Reserve (350,000) * Reserve & spending prioritization will be discussed Building Failure Reserve (300,000) * throughout 2015, in accordance with actual Balboa Projects Reserve (750,000) * operational results. Pickleball Reserve (174,000) * Desired Emergency Reserve (600,000) * Remaining Projected Cash Yield from Operations 2,654,266 Forecasted Available Excess (Deficit) Funds $ (586,580) * At a Glance Comparison of Select Financial Data YTD 2015 vs. YTD YTD 2015 YTD Inc/(Decr) %Change $ 1,525,960 $ 1,790,439 Assessments Received $ 264, % $ 1,915,772 $ 1,924,100 Operational Revenue* $ 8, % $ 1,520,487 $ 1,708,881 Operating Expenses* $ 188, % $ 67,221 $ 29,423 Capital Spending $ (37,798) % $ 10,033,088 $ 7,418,354 Cash and Cash Equivalents $ (2,614,734) % 7,664 9,874 Golf Rounds 2, % $ 1,249,650 $ 1,238,621 Golf Revenue $ (11,029) -0.88% 2 3 New Home Permits % Addition Permits % Home Sales % *Does not include penalty revenue, or bad debt expense

4 Hot Springs Village POA Executive Summary & Financial Dashboard Property & Population Statistics Total Commercial & Residential Properties Subject To Assessments 34,418 Total Standing Current Deeded Lots Not Owned by the POA 31,661 24,561 7,100 Lots Owned by the POA 2,364 2,364 - Mortgage held by CCI (Class B) Lots Owned by CCI Time share units Good Samaritan Units Mt Carmel Units ,418 27,303 7,115 Improved vs. Unimproved Lots Improved Lots 8,952 8, Unimproved Lots Not Owned by the POA 23,102 16,137 6,965 Unimproved Lots Owned by the POA 2,364 2,364-34,418 27,303 7,115 Cooper's Commercial Reserved Property (no voting rights, pays a square footage fee) 8 Water Meters Sanitation Service Residential Meters 8,703 At House 560 Under Construction 16 Curbside 8,143 Commercial 152 Commercial 152 Sprinkler Svc only 76 Sprinkler Svc Only 76 POA & Other 113 POA & Other 113 Good Sam 1 Good Sam 1 Mt Carmel 1 Mt Carmel 1 Total Water Meters 9,062 Under construction 16 Total Sanitation 9,062 Population Estimate Residential Meters 8,703 GAC Population Formula 1.60 Estimated Population 13,925 Good Not

Hot Springs Village POA Executive Summary & Financial Dashboard Assessments Received & Cash Trending 3 Year Comparison $2,100,000 $1,600,000 $1,100,000 $600,000 $100,000 January February March

$1,525,960 $728,173 $822,844 $866,220 $627,975 $900,293 $1,120,375 $599,342 $766,794 $803,869 $519,045 $1,981,421 2015 $1,790,439 Assessment Aging 74,976 45,662 Note: The total under 365 days

5 Hot Springs Village POA Executive Summary & Financial Dashboard Assessments Received & Cash Trending 3 Year Comparison $2,100,000 $1,600,000 $1,100,000 $600,000 $100,000 January February March April May June July August September October November December 2013 $1,626,021 $719,069 $834,990 $876,381 $656,413 $936,276 $1,132,871 $623,734 $733,083 $812,278 $584,739 $2,176, $1,525,960 $728,173 $822,844 $866,220 $627,975 $900,293 $1,120,375 $599,342 $766,794 $803,869 $519,045 $1,981, $1,790,439 Assessment Aging 74,976 45,662 Note: The total under 365 days (with penalties) equals $302.5k of the $14.3mil outstanding. 69,966 91,676 90,202 Under , ,367 76,523 11,785,075 14,084,626 Assessment Only Assessment w/ Penalties & Interest Over 365

6 HOT SPRINGS VILLAGE POA Statement of Financial Position January January ASSETS CASH AND CASH EQUIVALENTS (1) $ 7,418,354 $ 10,033,088 MEMBERSHIP ASSESSMENT RECEIVABLE GROSS 14,387,495 11,172,671 LESS ALLOWANCE FOR DOUBTFUL ACCOUNTS (14,084,626) (10,866,380) OTHER MEMBERSHIP RECEIVABLES 512, ,043 OTHER RECEIVABLES 7,295 8,657 INVENTORIES 566, ,743 PREPAID EXPENSES 165, ,464 REAL ESTATE HELD FOR SALE, NET REALIZABLE VALUE (19) 2,151,110 1,727,288 RECOVERABLE ELECTRIC COSTS GROSS 8,000,000 8,000,000 LESS ALLOWANCE FOR UNCOLLECTIBILITY (4,000,000) (4,000,000) PROPERTY AND EQUIPMENT, Net of Accumulated Depr. 66,020,851 65,435,623 TOTAL ASSETS $ 81,144,851 $ 82,589,198 LIABILITIES AND MEMBERSHIP EQUITY LIABILITIES ACCOUNTS PAYABLE (4) $ 417,399 $ 559,617 ACCRUED EXPENSES (4) 2,303,990 1,708,325 PREPAID MEMBERSHIP ASSESSMENTS AND OTHER FEES (3) 2,546,436 2,556,359 SECURITY DEPOSITS & OTHER DEPOSITS 1,050, ,502 BONDS PAYABLE (5) 1,815,000 2,085,000 TOTAL LIABILITIES (2) 8,133,796 7,661,803 MEMBERSHIP EQUITY UNDESIGNATED 71,914,279 71,914,279 DESIGNATED FOR FUTURE REPAIRS & REPLACEMENT 705,842 3,013,115 TOTAL MEMBERSHIP EQUITY (18) 72,620,121 74,927,395 TOTAL LIABILITIES AND MEMBERSHIP EQUITY $ 80,753,916 $ 82,589,198

7 HOT SPRINGS VILLAGE POA Comparative Statements of Revenue and Expenses Months ended January 31, 2015 and January 31, 2014 Actual MTD 2015 Increase Budget Budget Jan Jan (Decrease) Remaining Membership Assessment Revenue 15,377,638 1,202,666 1,260,582 (57,915) 14,174,972 Assessment Penalties & Other 1,024,000 75,269 82,226 (6,956) 948,731 Provision for future Bad Debt (7) (3,393,080) (340,517) (370,498) (29,980) 3,052,563 Net Assessment Revenue 13,008, , ,310 Administration REVENUE 451,600 49,630 52,612 (2,982) 401,970 EXPENSE(21) (2,989,960) (299,707) (268,792) 30,915 2,690,253 Net Administration (2,538,360) (250,077) (216,180) Public Safety REVENUE 755,620 18,810 18, ,810 EXPENSE (4,249,271) (341,421) (356,800) (15,379) 3,907,850 Net Public Safety (3,493,651) (322,611) (338,138) Public Works REVENUE 6,828, , ,107 38,290 6,496,073 EXPENSE (7,345,846) (472,686) (464,001) 8,685 6,873,160 Net Public Works (517,376) (140,288) (169,894) Planning & Inspection REVENUE 140,000 12,949 18,742 (5,793) 127,051 EXPENSE (400,270) (20,450) (21,962) (1,512) 379,820 Net Planning & Inspection (260,270) (7,502) (3,220) Food & Beverage REVENUE 244,400 10,949 10, ,451 EXPENSE (402,560) (19,178) (29,891) (10,714) 383,382 Net Food & Beverage (158,160) (8,229) (18,955) Golf REVENUE (12) 6,501,540 1,238,621 1,249,650 (11,029) 5,262,919 EXPENSE (22) (7,669,548) (372,355) (196,868) 175,488 7,297,193 Net Golf (1,168,008) 866,266 1,052,783 Recreation REVENUE(20) 1,470, , ,062 (10,318) 1,209,409 EXPENSE (2,535,983) (183,085) (182,173) 912 2,352,898 Net Recreation (1,065,830) 77,659 88, Budget 15 Actual 14 Actual Inc/(Decr) Budg. Rem. Gross Revenue (6) $ 32,793,421 $ 3,202,035 $ 3,258,579 $ (56,544) 29,591,386 Bad Debt Expense (3,393,080) (340,517) (370,498) (29,980) 3,052,563 Operational Expense (13) (25,593,438) (1,708,881) (1,520,487) 188,394 23,884,557 Excess (Deficit) Before Depr. (14) $ 3,806,903 $ 1,152,637 $ 1,367,595 2,654,266 Depreciation $ (300,026) $ - $ 300,026 $ 300,026

8 HOT SPRINGS VILLAGE POA Statement of Capital Additions YTD Annual Budget 2015 Budget Remaining Administration $ 4,440 $ 506,000 $ 501,560 Public Safety 58,000 58,000 Public Works 10, , ,215 Club Services and Facilities 2,211,100 2,211,100 Golf 849, ,680 Parks and Recreation 10, , ,034 Construction 4, , ,948 Total Capital Additions (15) $ 29,423 $ 4,672,960 $ 4,643,537 Projects carried over from 2014: PW Striping Machine $ 5,000 IT - Total e Budgeted but not yet billed 35,000 Recreation Bridge Project 17,000 Total 2014 Capital to be Carried forward to 2015 (16) 57,000 Total Remaining 2015 Capital Spending $ 4,700,537

9 HOT SPRINGS VILLAGE POA Annual Sales Recap Final 2014 Cumulative Numbers through 2/28/14; Preliminary 2015 Numbers as of 1/31/ Highest FINAL Year 11/30/ /31/2013 1/31/2014 2/28/ /31/2014 1/31/2015 GREEN FEES* Yr 2010: GREEN FEES 6 MO* Yr 2013: CART LEASE~ Yr 2010: CART LEASE 6 MO~ Yr 2013: HANDICAP Yr 2010: PRIVATE CART DAILY Yr 2011: PRIVATE CART Yr 2012: PRIVATE CART Grandfather Yr 2013: CORONADO FITNESS CENTER Yr 2011: CORONADO TENNIS Yr 2010: PICKLE, BOCCE & LAWN BOWLING Yr 2014: MOTORIZED BOATS Yr 2010: NON-MOTORIZED BOATS Yr 2014: VEHICLES REGISTERED PET REGISTRATIONS *Total Green Fees ~Total Cart Lease Note: The 2015 totals do not include any no charge items such as employee decals, fitness center volunteers, etc. The 2014 totals were taken as presented in the previous CFO's reports.

10 JANUARY 2014 MTD 2015 MTD Difference 2014 YTD 2015 YTD Difference Member Green Fee $64,751 $90,798 $26,047 $64,751 $90,798 $26,047 Family Green Fee $776 $3,023 $2,247 $776 $3,023 $2,247 NPO Green Fee $2,539 $1,185 ($1,354) $2,539 $1,185 ($1,354) Annual Greens Fee $644,944 $629,800 ($15,144) $644,944 $629,800 ($15,144) Semi-annual Greens Fee $101,472 $87,048 ($14,424) $101,472 $87,048 ($14,424) Total Annual Greens Fee $746,416 $716,848 ($29,568) $746,416 $716,848 ($29,568) Driving Range $5,055 $7,803 $2,748 $5,055 $7,803 $2,748 Cart Flags $72 ($72) $72 ($72) Member Carts $30,356 $40,508 $10,152 $30,356 $40,508 $10,152 Family Carts $366 $1,600 $1,234 $366 $1,600 $1,234 NPO Carts $1,356 $708 ($648) $1,356 $708 ($648) Unlimited Annual Cart Reg. $130,616 $124,832 ($5,784) $130,616 $124,832 ($5,784) Daily Annual Cart Reg. $17,680 $18,664 $984 $17,680 $18,664 $984 Daily Use Cart Fee $1,341 $2,012 $671 $1,341 $2,012 $671 Annual Cart Seat Lease $180,776 $165,032 ($15,744) $180,776 $165,032 Semi-annual Cart Seat Lease $32,512 $29,680 ($2,832) $32,512 $29,680 Total Annual Cart Seat Lease $213,288 $194,712 ($18,576) $213,288 $194,712 ($18,576) Handicap $34,912 $35,504 $592 $34,912 $35,504 $592 Vending Income $83 $219 $136 $83 $219 $136 Contractual Receipts/Misc. $43 $205 $162 $43 $205 $162 Administration Revenue Total $1,249,650 $1,238,621 ($11,029) $1,249,650 $1,238,621 ($11,029) Rounds 2014 MTD 2015 MTD Difference 2014 YTD 2015 YTD Difference DeSoto 0 1,081 1, ,081 1,081 Cortez 1,544 1, ,544 1,546 2 Coronado Balboa 818 1, , Ponce de Leon 1,067 1, ,067 1, Magellan Isabella 1,695 1, ,695 1, Granada 1,357 1,338 (19) 1,357 1,338 (19) Total 7,664 9,874 2,210 7,664 9,874 2, Golf Reports.xlsx Printed 2/11/2015 3:33 PM

11 Rounds and Revenue 2015 Budget vs. Actual 2014 Budget vs. Actual 2015 January YTD January YTD Rounds Rounds Revenue Revenue Budget Actual Budget Actual Budget Actual Budget Actual Desoto 849 1, ,081 $149,269 $149,269 Cortez 1,309 1,546 1,309 1,546 $155,970 $155,970 Coronado $142,929 $142,929 Balboa 845 1, ,079 $147,037 $147,037 Ponce 1,146 1,499 1,146 1,499 $155,828 $155,828 Magellan 1, , $144,046 $144,046 Isabella 1,641 1,749 1,641 1,749 $157,109 $157,109 Granada 1,683 1,338 1,683 1,338 $150,927 $150,927 Admin $35,508 $35,508 Misc Totals 9,713 9,874 9,713 9,874 $0 $1,238,621 $0 $1,238, vs vs January YTD January YTD 2015 Rounds Rounds Revenue Revenue Desoto - 1,081-1,081 $138,509 $149,269 $138,509 $149,269 Cortez 1,544 1,546 1,544 1,546 $159,579 $155,970 $159,579 $155,970 Coronado $145,832 $142,929 $145,832 $142,929 Balboa 818 1, ,079 $149,693 $147,037 $149,693 $147,037 Ponce 1,067 1,499 1,067 1,499 $154,498 $155,828 $154,498 $155,828 Magellan $146,528 $144,046 $146,528 $144,046 Isabella 1,695 1,749 1,695 1,749 $163,686 $157,109 $163,686 $157,109 Granada 1,357 1,338 1,357 1,338 $156,341 $150,927 $156,341 $150,927 Admin $34,986 $35,508 $34,986 $35,508 Misc $0 $0 Totals 7,664 9,874 7,664 9,874 $1,249,650 $1,238,621 $1,249,650 $1,238, Golf Reports.xlsx Printed 2/11/2015 3:33 PM

Memo. Hot Springs Village Property Owners Association Board of Directors Report

Memo. Hot Springs Village Property Owners Association Board of Directors Report Hot Springs Village Property Owners Association Board of Directors Report Memo To: David Twiggs, COO From: Lesley Nalley, CFO LAN Date: March 18, 2015 Re: February 2015 Financial Report The February 2015