Clubcorp Annual Report 2013 President’S Letter
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ClubCorp AnnuAl report 2013 President’s Letter o Our Shareholders, 2013 was an extraordinary year for ClubCorp. We completed our initial public offering and delivered record fiscal-year T results. In September, we closed our initial public offering. We sold 13.2 million shares at $14.00 per share and affiliates of KSL Capital Partners sold an additional 4.8 million shares. For the full-year, revenues increased $60.1 million or 8.0% in 2013, with approximately 20% of the growth coming from new acquisitions and the balance from existing same store clubs. Adjusted EBITDA increased 6.7% over 2012. At ClubCorp, our central mission is to build relationships and enrich the lives of our members and their guests. We 9MAY201417381212 believe our clubs are more relevant than ever as families and individuals are looking for great places to recreate, socialize, network and just spend time together. As a result, membership sales resulted in a second consecutive year of membership growth, and average annualized membership retention is now in excess of 80 percent. We have sought to ‘‘reinvent’’ the modern club experience to promote greater usage of our facilities. From fiscal year 2007 through 2013, we have invested approximately $410 million of capital to better position and maintain our clubs in their respective markets. During this period, we ‘‘reinvented’’ 19 golf and country clubs and 16 business, sports and alumni clubs through capital investment. We also plan to ‘‘reinvent’’ 11 additional clubs in 2014. Expanding and strengthening our portfolio of clubs through acquisitions remains an important strategic focus. This past year, we acquired three properties – the renowned Oak Tree Country Club located in Edmond, Oklahoma, Cherry Valley Country Club located in Skillman, New Jersey, and Chantilly Golf and Country Club in Centreville, Virginia. This momentum continues in 2014 with the acquisition of four additional properties: Prestonwood, The Creek in Dallas, Texas, Prestonwood, The Hills in Plano, Texas, the Tournament Players Club (TPC) Piper Glen in Charlotte, North Carolina, and TPC Michigan in Dearborn, Michigan. We welcome all of these clubs into the ClubCorp family. I would like to take this opportunity to extend our appreciation to investors, employee partners, business partners, and analysts who were involved in taking ClubCorp public. I would also like to thank our 370,000 plus members for choosing to belong to a ClubCorp club. It is truly our privilege and purpose to serve you. Thank you. Sincerely, Eric Affeldt President6MAY201419392196 and CEO 12MAY201415222772 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ፤ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2013. or អ 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 333-189912 ClubCorp Holdings, Inc. (Exact name of registrant as specified in its charter) Nevada 20-5818205 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3030 LBJ Freeway, Suite 600 Dallas, Texas 75234 (Address of principal executive offices) (Zip Code) (972) 243-6191 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $0.01 par value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None (Title of class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes អ No ፤ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes អ No ፤ 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 ፤ No អ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ፤ No អ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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. ፤ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of ‘‘large accelerated filer’’, ‘‘accelerated filer’’, and ‘‘smaller reporting company’’ in Rule 12b-2 of the Exchange Act. Large accelerated filer អ Accelerated filer អ Non-accelerated filer ፤ Smaller reporting company អ (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes អ No ፤ The aggregate market value of the voting common equity held by non-affiliates of the registrant on June 11, 2013 (the last business day of the registrant’s most recently completed second fiscal quarter) was $0.00. As of March 14, 2014, the registrant had 64,005,205 shares of common stock outstanding, with a par value of $0.01. DOCUMENTS INCORPORATED BY REFERENCE No items are incorporated by reference into this Form 10-K. TABLE OF CONTENTS Page PA RT I . Item 1. Business ........................................................ 1 Item 1A. Risk Factors ...................................................... 20 Item 1B. Unresolved Staff Comments .......................................... 41 Item 2. Properties ....................................................... 42 Item 3. Legal Proceedings ................................................. 45 Item 4. Mine Safety Disclosures ............................................. 45 PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ....................................... 46 Item 6. Selected Financial Data ............................................. 49 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ..................................................... 51 Item 7A. Quantitative and Qualitative Disclosures About Market Risk .................. 82 Item 8. Financial Statements and Supplementary Data ............................. 83 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ..................................................... 131 Item 9A. Controls and Procedures ............................................. 131 Item 9B. Other Information ................................................. 131 PART III. Item 10. Directors, Executive Officers and Corporate Governance ..................... 133 Item 11. Executive Compensation ............................................. 140 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .............................................. 153 Item 13. Certain Relationships and Related Transactions, and Director Independence ....... 155 Item 14. Principal Accountant Fees and Services .................................. 156 PART IV. Item 15. Exhibits and Financial Statement Schedules ............................... 157 Signatures ................................................................ 162 PART I—BUSINESS FACTORS ITEM 1. BUSINESS Throughout this annual report on Form 10-K (‘‘Form 10-K’’), we refer to ClubCorp Holdings, Inc., together with its subsidiaries, as ‘‘we’’, ‘‘us’’, ‘‘our’’, ‘‘ClubCorp’’ or the ‘‘Company’’. Our fiscal year consists of a 52⁄53 week period ending on the last Tuesday of December. References to 2013, 2012 and 2011 relate to the 53-week fiscal year ended December 31, 2013 and the 52-week fiscal years ended December 25, 2012 and December 27, 2011, respectively. The business section and other parts of this report may contain certain statements which may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and other factors, which without limitation, are set forth in Item 1A.’’Risk Factors’’ section of this Form 10-K. These forward-looking statements can be identified by the fact that they do not relate strictly to current or historical facts and often include words such as ‘‘expects’’, ‘‘intends’’, ‘‘anticipates’’, ‘‘plans’’, ‘‘believes’’, ‘‘estimates’’, ‘‘projects’’, ‘‘predicts’’, and other similar expressions. Our actual results could differ materially from the results anticipated by the forward-looking statements as a result of various factors, including, but not limited to, those identified in Item 1A.’’Risk Factors’’ or in other sections of this report. The Company assumes no obligation to update these forward looking statements. General Founded in 1957, we are